New product into a very competitive market

Assignment Help Management Theories

Reference no: EM131100381

A company will soon be introducing a new product into a very competitive market and is currently planning its marketing strategy. The decision has been made to introduce the product in three phases. Phase 1 will feature making a special introductory offer of the product to the public at a greatly reduced price to attract first-time buyers. Phase 2 will involve an intensive advertising campaign to persuade these first-time buyers to continue purchasing the product at a regular price. It is known that another company will be introducing a new competitive product at about the time that phase 2 will end. Therefore, phase 3 will involve a follow-up advertising and promotion campaign to try to keep the regular purchasers from switching to the competitive product. A total of $4 million has been budgeted for this marketing campaign. The problem now is to determine how to allocate this money most effectively to the three phases. Let denote the initial share of the market (expressed as a percentage) attained in phase 1, ₂ the fraction of this market share that is retained in phase 2, and ₃ the fraction of the remaining market share that is retained in phase 3. Given the following data, use dynamic programming to determine how to allocate the $4 million to maximize the final share of the market for the new product, i.e., to maximize ₂ ₃.

(a) Assume that the money must be spent in integer multiples of $1 million in each phase, where the minimum permissible multiple is 1 for phase 1 and 0 for phases 2 and 3. The following table gives the estimated effect of expenditures in each phase:

(b) Now assume that any amount within the total budget can be spent in each phase, where the estimated effect of spending an amount x_i (in units of millions of dollars) in phase i (i = 1, 2, 3) is

Reference no: EM131100381

Questions Cloud

What is the expected cost of the search : You are trying to locate a stolen car using a helicopter. The helicopter costs $350 per hour to rent. The number of hours to find the car follows a discrete uniform random variable with a = 3 and b =11. What is the expected cost of the search?

Evaluate any limitations that the item may have : Evaluate any limitations that the item may have (i.e. timeliness, small sample size, bias, etc.), identify what audience the item is intended for and discuss any conclusions the author(s) may have made, especially in relation to other studies.

Function for the new state income tax : The state income tax in Connecticut is modeled by the function below, where x is income in dollars. Suppose that Connecticut decided to increase its tax rates by 20% and add a filing fee of $100. Write a function for the new state income tax.

Topic of social constructionism theory : Specific aspect of the problem to focus on. In class you will create your thesis statement to use when doing your research and writing your paper - You must tie your paper into the theoretical base and ensure your topic fits in with those of your p..

New product into a very competitive market : A company will soon be introducing a new product into a very competitive market and is currently planning its marketing strategy. The decision has been made to introduce the product in three phases.

Implement the back-propagation algorithm : Download the xor_nnet.py file from the course webpage and complete the steps marked # TODO to implement the back-propagation algorithm described in the class handout for this simple network

Percent of error in measurement of the defective scale : Skeeter, the dog, weighs exactly 36.5 pounds. When weighed on a defective scale, he weighed 38 pounds. (a) What is the percent of error in measurement of the defective scale to the nearest tenth?

Create your justifications additional exciting remember to : Create your justifications additional exciting remember to. A number of avid gamers tried out guarding your adjust, declaring who's has not been censorship. Nearly all predetermined who's ended up being censorship.

A county chairwoman of a certain political party : A county chairwoman of a certain political party is making plans for an upcoming presidential election. She has received the services of six volunteer workers for precinct work, and she wants to assign them to four precincts in such a way as to ma..

User Account

All Pages