TITLE

Planning Marketing-Mix Strategies in the Presence of Interaction Effects

AUTHOR(S)
Naik, Prasad A.; Raman, Kalyan; Winer, Russell S.
PUB. DATE
January 2005
SOURCE
Marketing Science;Winter2005, Vol. 24 Issue 1, p25
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Companies spend millions of dollars on advertising to boost a brand's image and simultaneously spend millions of dollars on promotion that many believe calls attention to price and erodes brand equity. We believe this paradoxical situation exists because both advertising and promotion are necessary to compete effectively in dynamic markets. Consequently, brand managers need to account for interactions between marketing activities and interactions among competing brands. By recognizing interaction effects between activities, managers can consider interactivity trade-offs in planning the marketing-mix strategies. On the other hand, by recognizing interactions with competitors, managers can incorporate strategic foresight in their planning, which requires them to look forward and reason backward in making optimal decisions. Looking forward means that each brand manager anticipates how other competing brands are likely to make future decisions, and then by reasoning backward deduces one's own optimal decisions in response to the best decisions to be made by all other brands. The joint consideration of interaction effects and strategic foresight in planning marketing-mix strategies is a challenging and unsolved marketing problem, which motivates this paper. This paper investigates the problem of planning marketing mix in dynamic competitive markets. We extend the Lanchester model by incorporating interaction effects, constructing the marketing-mix algorithm that yields marketing-mix plans with strategic foresight, and developing the continuous-discrete estimation method to calibrate dynamic models of oligopoly using market data. Both the marketing-mix algorithm and the estimation method are general, so they can be applied to any other alternative model specifications for dynamic oligopoly markets. Thus, this dual methodology augments the decision-making toolkit of managers, empowering them to tackle realistic marketing problems in dynamic oligopoly markets. We...
ACCESSION #
16384142

 

Related Articles

  • What happens if the medium takes over from the message? Bayler, Michael // New Media Age;7/13/2006, p12 

    The article reflects on the things that might happen if advertising is not existing. The findings of a research conducted by American Express on the attitude of high-net-worth individuals are discussed. The significance of advertising and media constructs on brand name and market share and...

  • The Effect of Price and the Non-Price Promotions on Brand Loyality. Gedenk, Karen; Neslin, Scott // Schmalenbach Business Review (SBR);Apr2000, Vol. 52 Issue 2, p211 

    Focuses on a model for measuring the effects of sales promotion on purchase event feedback. Contribution of promotion purchases to the dynamic component; Association of price promotions with negative purchase event feedback compared to non-promotion purchases.

  • lastword. Mitchell, Peter // SupermarketNews;Dec2013/Jan2014, Vol. 7 Issue 1, p15 

    The article presents the author's perspectives on the certainty of promotional pricing and discounting programs among retail industries and supermarkets, in celebration of Christmas season in Australian in 2013.

  • Marketing for Dummies. Brodsky, Norm // Inc.;Oct2005, Vol. 27 Issue 10, p71 

    Presents an article on marketing to improve a corporate image. Way to develop a reputation in an industry; Disadvantage of a tour used as a sales tool; Purpose of a brochure.

  • Management skills: you'll need these to act as director. Williams, Bob // Accountancy;Aug1985, Vol. 96 Issue 1104, p83 

    This article emphasizes the importance for accountants to acquire marketing skills. As the commercial director, or advisor, to the company, it is not sufficient for the accountant to look backwards by auditing and examining the company's history, or to look forward just by budgeting and...

  • Exploring the effect of retail sector and firm characteristics on retail price promotion strategy. Voss, Glenn B.; Seiders, Kathleen // Journal of Retailing;Spring2003, Vol. 79 Issue 1, p37 

    This study examines why retail price promotion strategies vary across retail sectors and across firms within sectors. Using hierarchical linear modeling and a sample of 38 firms from 11 retail sectors, the authors investigate how two sector-level characteristics, related to product assortment...

  • AN INTERGRATIVE REVIEW OF PRICE MATCHING POLICIES. Sivakumar, K.; Weigand, Robert E. // AMA Winter Educators' Conference Proceedings;1996, Vol. 7, p275 

    Presents a survey of the history of Price Match Guarantees (PMG) and related pricing issues. Outline of the reactions buyers are likely to have when confronted with price differences among retailers; Suggested set of propositions relating to the variables that may have an impact on a retailer...

  • Free Market Economy. Lehrer, Jeremy // Print;Sep/Oct2000, Vol. 54 Issue 5, p38 

    Focuses on advertising-subsidized goods and services. Origin of the trend; Discussion on what advertisers could gain from such goods and services; Condition set by eVoice before one could get the free voice mail service it offers.

  • Ad Club winners to share success stories Wednesday.  // Westchester County Business Journal;9/20/2004, Vol. 43 Issue 38, p18 

    Reports on the sharing of successful marketing strategies among the winners of the Advertising Club of Westchester's Big W awards in New York. Recipients of the award; Accomplishments of the awardees in the company; Tips on sale presentations.

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sign out of this library

Other Topics