Optimal goodwill path to introduce a new product
type: Item
instance of: scholarly article
title: Optimal goodwill path to introduce a new product
zbMATH Open document ID: 1070.90065
author: S. Mosca
author: Bruno Viscolani
published in: Journal of Optimization Theory and Applications
publication date: 2005-04-07T00:00:00Z
review text: This article considers the best goodwill path to introduce a new product, which is modelled as an optimal control problem. The advertising expenditure rate is assumed to be the control variable and it affects the goodwill evolution. The problem is set out in a calculus of variations framework. In the second section after the introduction, the paper introduces the definitions of goodwill, cost and their relationship with the advertising expenditure intensity (rate). In the next section the (foreseen) profit maximisation problem is presented, followed by the optimality conditions. Several types of cost rate functions are considered, for example linear-quadratic, Nerlove-Arrow, power and exponential. The article concludes with suggestions for future expansions of the approach, for example in the case of multi-dimensional goodwill framework.
reviewed by: Efstratios Rappos
Mathematics Subject Classification ID: 90B60
Mathematics Subject Classification ID: 49N90
zbMATH DE Number: 2153861
zbMATH Keywords: marketing
zbMATH Keywords: goodwill
zbMATH Keywords: calculus of variations
MaRDI profile type: Publication
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full work available at URL: b:jota.0000043995.54900.1a
OpenAlex ID: W2079513678
DOI: 10.1023/B:JOTA.0000043995.54900.1A
description: scientific article; zbMATH DE number 2153861