Optimal advertising and price strategies

Optimal advertising and price strategies

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Article ID: iaor1992470
Country: Spain
Volume: 6
Start Page Number: 27
End Page Number: 43
Publication Date: Sep 1991
Journal: Trabajos de Investigacion Operativa
Authors: , ,
Keywords: control processes
Abstract:

The optimal control of the nonlinear model, considered in this paper, has one state variable x (proportion of customers) and two control variables: price p and advertising intensity u. Making a stability analysis in the different phase diagrams, it can be shown, under certain conditions, that it is optimal to enter the market with a low price and a high advertising budget at the start of the campaign.

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