Rong DU;Qi Ying HU
Journal of Systems Science and Complexity. 2003, 16(1): 85-094.
Many dynamic optimal control models for advertising make efforts to solve the problem of determining optimal advertising expenditures and other variables of interest; over time for a firm or several competing firms. However, after analyzing the extant literature, one can find that few dynamic optimal advertising models available consider the problem within the product diffusion framework. Furthermore, the established models involving product disillusion are inspired by the Bass model, which has been out of date. This paper poses a dynamic optimal advertising model for new products, which considers the product diffusion based on the relative newly developed generalized version of the Bass model. In this paper, the optimal control model is used to derive the optimal advertising expenditure policy, which gives some implications to advertising practice.