Work

Dynamic Discount Pricing in Competitive Marketing

Year: 2019

Type: article

Abstract: 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.

Source: IEEE Access

DOI: 10.1109/access.2019.2945884

Authors: Jian Chen, Lu-Xing Yang, Da-Wen Huang, Xiaofan Yang, Yuan Yan Tang

Institutions: Chongqing University, Deakin University, University of Macau

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,750

Funder: National Natural Science Foundation of China