Sugandha Aggarwal

Innovation Diffusion Model for a Product Incorporating Segment-specific Strategy and the Spectrum Effect of Promotion

Abstract Promotion is an important component of a firms marketing mix. It assists in dispersing the product information into minds of the customers and takes them to the final stage of purchase. Various promotional strategies are used by firms to capture maximum potential adopters in the market. Firms adopt segment driven marketing to best utilize its finite marketing resources. Mass market promotion and differentiated market promotion are amongst the two widely used techniques of promotion used in a heterogeneous market, segmented into homogeneous segments. Through mass market promotion, a product is promoted in the entire market, using a common promotional strategy, thereby creating a spectrum effect in all the segments of the market. Whereas, differentiated market promotion targets each segment of the market with distinct promotional strategies. In a segmented market, both types of promotional strategies play different and important roles for product adoption in the market. Innovation diffusion models are used to describe the adoption growth of durable technology products over their product life cycle. There is vast literature of innovation diffusion modeling. The existing literature mostly assumes a homogeneous market while formulating the model and effect of mass and differentiated promotion techniques on adoption growth in a segmented market is not yet analyzed. In this paper, we develop an innovation diffusion model for a durable technology consumer product considering the combined effect of mass and differentiated promotion along with the internal influence factors on adoption growth in segmented market. Model validity is tested on a real time data in four segments. Fairly good results have been obtained.

Effect of repeat purchase and dynamic market size on diffusion of an innovative technological consumer product in a segmented market

AbstractThis study develops diffusion models for technological consumer products under the marketing environment when a product is marketed in a segmented market and observes two distinctive promotional strategies of mass and differentiated promotion; an under explored study area. Mass promotion strategy creates a spectrum effect in market with an aim to create wider product awareness and influence the market size. Whereas the differentiated promotion strategy plays major role in external influence component in the respective segment and target for adoption by the current potential segment. Previous studies on segmented diffusion models assumed only first time purchase and constant market size which may yield underestimated results and fail to give appropriate insight of the diffusion process. The study develops and validates generalized diffusion models for segmented market incorporating the repurchase behaviour of the adopter population and dynamic potential market size considerations. Performance of th...

Optimal Placement of Advertisements on a Pixelated Web Banner

Abstract The widespread usage of web applications has made it a popular medium of advertising, at the same time creating competition for advertising space. Web publishers seek to get maximum revenues utilising the advertisement space optimally. In this paper, a mathematical model is proposed to schedule the competing advertisements on multiple web banners with varying cost bids per pixel with a revenue maximization objective. A case study has been discussed to illustrate the application of the model and is solved using optimization software LINGO.

Optimal advertising on a two-dimensional web banner

The rapid growth and proliferation of internet based services has opened up new avenues of interactions and corresponding business models. Advertisements shown within websites form a major source of revenue for web publishers. Naturally, the proper planning and allocation of advertisement space in the webpages becomes a major factor in the profitability of the business model. This paper addresses the problem of determining efficient placement of advertisements on a two-dimensional web banner with the objective of maximizing revenue. An integer programming mathematical model is developed here to optimally place advertisements on a two-dimensional banner. The performance of the new formulation is compared with models existing in the recent literature. The proposed model is also validated with computational analysis to prove its efficacy.

Multi Period Advertising Media Selection in a Segmented Market

A product passes through different life cycle phases once it comes in the market. During the launch phase it is promoted on mass level, second phase stresses on capturing maximum potential, and in later phases company emphasizes on retention of the product in the minds of the customers until its continuation in the market. The advertising budget and media mix used to advertise the product must be planned according to the current phase of the product. Thus it becomes imperative for a company to look at media planning problems in a dynamic manner over a planning period as the market conditions change and the product moves through its cycle with time. In this paper we have formulated a multi-period mathematical programming problem that dynamically computes the optimal number of insertions and allocates advertising budget in various media channels of a segmented market. The aim is to maximize the reach obtained through each media from all the segments in each time period under budgetary constraints and bounds on the decision variables. The reach in any period for a media is taken as a sum of current period reach and retention of the previous periods reach. Goal programming technique is used to solve the problem. A case study is presented to show the real life application of the model.

Optimal Media Selection for a Product in Segmented Market under Fuzzy Environment

Media planning & allocation has been a major concern while advertising a product. Appropriate media selection involves choosing the media that are effective to the target segments of the potential market. Effectiveness of the media can be judged through the target audience responses to a specific media. Predicting future audience responses as well as human capability to understand & analyze past audiences is a complex problem. Hence the statistical data of audience response is bound to be uncertain or imprecise. An appropriate method to deal with imprecise judgment or uncertainties in data is fuzzy logic. So far the cited literature confines itself to an exact or certain statistical data of audience’s responses. In this paper, a model has been developed which deals with optimal allocation of advertising budget for a product which is advertised through different media in a segmented market under fuzzy predictions of the audience impact. The problem is formulated as a fuzzy multi objective problem and is solved using fuzzy goal programming technique to arrive to a compromised solution. A case study is presented to show the real life application of the model.

Multi-period media planning for multi-products incorporating segment specific and mass media

Efficient budget allocation between different communication channels is one of the fundamental activities of any media planner. In this paper, we attempt to develop a multi-objective integer linear programming model to determine the optimal schedule of advertisements for a set of multiple products of a firm in a segmented market (influenced by both mass and segment-specific media) over a planning horizon. The objectives are to maximize the gross impressions of advertisements and simultaneously minimize the advertising expenditure. To incorporate continuous changes that occur in the market, the total planning horizon is divided into shorter time periods and decisions for each of the subsequent time periods are taken, bearing in mind the changes that have occurred in the preceding time periods. Based on the gap that exists in the extant literature, we also jointly consider, in our model, the notions of (a) carry-over effect of gross impressions, (b) spectrum effect of mass media on segments, and (c) cross-product effect. The model is solved through a goal programming approach to achieve the best trade-off between the conflicting objectives. Further, the model could be adapted to provide solutions in a wide variety of real-life situations. This is substantiated via a numerical analysis for a firm that advertises products in the Indian market through mass and segment-specific media.

Differential Evolution Approach to Determine the Promotion Duration for Durable Technology Product Under the Effect of Mass and Segment-Driven Strategies

Promotion plays an important role for the success of a product in the market and accounts for a large portion of the firm’s expenditure. This calls for judicious planning so that the promotion resources can be used efficiently at the same time creating maximum effectiveness. Firms use both mass and segment-driven promotion strategies to promote their product in a segmented market. Mass promotion spreads wider awareness of a product in the whole market with a spectrum effect while the segment-driven promotion is targeted to the distinct potential customers of the segments. This study proposes a mathematical model to determine the optimal length of a promotion campaign for a durable technology product, marketed in a segmented market under the joint effect of mass and segment-driven promotions. An application of the proposed model is demonstrated using real-life data. Differential evolution algorithm is used to solve the model.

Optimal Duration of Promotion for Durable Technology Product in a Segmented Market

ABSTRACT Firms develop segment driven promotional mix to target its potential customers selectively. As the marginal revenues from promotion decreases with time, it is important to determine the optimal stopping time of a promotional activity. In the literature, the studies carried in this domain do not consider market segmentation and assume a uniform promotional mix. In this study, alternative decision models are developed to determine the duration of promotion for a durable technology product applicable to a segmented market. A case study is discussed to validate the proposed models and to illustrate the solution methodology based on a differential evolution algorithm.

Optimal control promotional policy for consumer durable product in a segmented market incorporating goodwill

Owing to the competitive structure of the market, firms concentrate excessively on promotional activities to maximize their profit. In this paper, we formulate an optimal control problem to find promotional effort policies for the case when the firm promotes its product at mass and segment specific level in a segmented market. The adoption is measured through the innovation diffusion model with respect to mass and differentiated promotion. The objective of proposed model is profit maximization where the sales evolve through promotion which in turns built up goodwill described by Nerlove-Arrow Model. The solution of the proposed problem is obtained using maximum principle. Some special cases of the proposed optimal control problem are also discussed. The application of the discretized version of the proposed problem is illustrated through a numerical.