Optimal investment in age-structured goodwill

Silvia Faggian and Luca Grosset ()

No 194, Working Papers from Department of Applied Mathematics, Università Ca' Foscari Venezia

Abstract: Segmentation is a core strategy in modern marketing and age-specific segmentation, which is based on the age of the consumers, is very common in practice. A characteristic of age-specific segmentation is the change of the segments composition during time, which may be studied only using dynamic advertising models. Here, we assume that a firm wants to promote and sell a single product in an age segmented market and we model the awareness of this product using an infinite dimensional Nerlove- Arrow goodwill as a state variable. Assuming an infinite time horizon, we use some dynamic programming techniques to solve the problem and to characterize both the optimal advertising effort and the optimal goodwill path in the long run. An interesting feature of the optimal advertising effort is an anticipation effect with respect to the segments considered in the target market due to the time evolution of the segmentation.

Keywords: Segmentation; infinite dimensional Nerlove-Arrow goodwill. (search for similar items in EconPapers)
JEL-codes: C61 C62 E22 M37 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2009-11
New Economics Papers: this item is included in nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://virgo.unive.it/wpideas/storage/2009wp194.pdf First version, 2009 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to virgo.unive.it:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
Working Paper: Optimal Investment in Age-Structured Goodwill (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vnm:wpaper:194

Access Statistics for this paper

More papers in Working Papers from Department of Applied Mathematics, Università Ca' Foscari Venezia Contact information at EDIRC.
Bibliographic data for series maintained by Daria Arkhipova ().