Multistage multiproduct advertising budgeting

Multistage multiproduct advertising budgeting

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Article ID: iaor20127073
Volume: 225
Issue: 1
Start Page Number: 179
End Page Number: 188
Publication Date: Feb 2013
Journal: European Journal of Operational Research
Authors: , , ,
Keywords: budgeting
Abstract:

We propose and analyze an effective model for the Multistage Multiproduct Advertising Budgeting problem. This model optimizes the advertising investment for several products, by considering cross elasticities, different sales drivers and the whole planning horizon. We derive a simple procedure to compute the optimal advertising budget and its optimal allocation. The model was tested to plan a realistic advertising campaign. We observed that the multistage approach may significantly increase the advertising profit, compared to the successive application of the single stage approach.

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