A dynamic discount pricing strategy for viral marketing

Xiang Zhong, Juan Zhao, Lu-Xing Yang, Xiaofan Yang, Yingbo Wu and Yuan Yan Tang

PLOS ONE, 2018, vol. 13, issue 12, 1-19

Abstract: Viral marketing has been one of the main marketing modes. However, theoretical study of viral marketing is still lacking. This paper focuses on the problem of developing a cost-effective dynamic discount pricing strategy for a viral marketing campaign. First, based on a novel word-of-mouth propagation model, we model the original problem as an optimal control problem. Second, we show that the optimal control problem admits an optimal control and present the optimality system for solving the optimal control problem. Next, we solve some optimal control models to get their respective optimal dynamic discount pricing strategies. Finally, we examine the effect of some factors on the maximum marketing profit. These results contribute to gaining insight into viral marketing.

Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0208738

DOI: 10.1371/journal.pone.0208738

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