On the impact of initial performance on the effectiveness of advertising pulsation policies

H I Mesak ()
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H I Mesak: Louisiana Tech University

Journal of the Operational Research Society, 2002, vol. 53, issue 11, 1247-1255

Abstract: Abstract Using a modified version of a Vidale–Wolfe model, proposed by Little, this paper examines the impact of initial sales rate on the performance of a variety of discrete, piecewise-continuous advertising policies for a finite planning horizon. The deployment of a non-discounted measure of performance reveals, irrespective of the shape of the advertising response function, that when the initial sales rate is different from zero at the beginning of the planning period: (1) a firm would be better off concentrating its advertising effort at the end rather than at the beginning of the planning period for a Blitz Policy (BP), (2) for an Advertising Pulsing/Maintenance Policy (APMP), it is more lucrative for a firm to alternate between a lower level of advertising followed by higher level (low–high) in a cyclic manner rather than to cycle the opposite way (high–low), and (3) in the presence of an initial sales rate, the pattern of the optimal advertising policy determined by dynamic programming can be significantly different from its alternative counterpart in its absence. In addition, it has been demonstrated, among other theoretical findings, that, for any given mean rate of advertising, the mean sales is bounded from below and is a decreasing function of the length of the planning horizon. Numerical examples are introduced to illustrate and reinforce the above research findings.

Keywords: advertising; dynamic programming; marketing; pulsation (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (2)

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DOI: 10.1057/palgrave.jors.2601449

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