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Dynamic discount pricing in competitive marketing

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journal contribution
posted on 2019-01-01, 00:00 authored by J Chen, Luxing YangLuxing Yang, D W Huang, X Yang, Y Y Tang
© 2013 IEEE. Discount is a frequently used marketing tool. This paper is devoted to designing an effective dynamic discount pricing (DDP) strategy in competitive marketing. First, we introduce a competitive word-of-mouth (WOM) propagation model with DDP mechanism. On this basis, we model the original problem as an optimal control problem. Next, we derive the optimality system for the optimal control problem and, thereby, propose the concept of competitive DDP strategy. Finally, through comparative experiments, we find that the profit of a competitive DDP strategy is satisfactory. Our findings contribute to maximizing the marketing profit in the presence of commercial competitors.

History

Journal

IEEE Access

Volume

7

Pagination

145340 - 145347

Publisher

IEEE

Location

Piscataway, N.J.

ISSN

2169-3536

eISSN

2169-3536

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal