Dynamic Control of Product Innovation, Advertising Effort, and Strategic Transfer-Pricing in a Marketing-Operations Interface
Joint Authors
Yi, Yongxi
Fu, Chunyan
Cheng, Susu
Source
Mathematical Problems in Engineering
Issue
Vol. 2019, Issue 2019 (31 Dec. 2019), pp.1-14, 14 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2019-02-21
Country of Publication
Egypt
No. of Pages
14
Main Subjects
Abstract EN
We develop a dynamic control model of a monopolist composed of two profit centers, e.g., an operations department in charge of the product innovation and a marketing department controlling advertising effort as well as the retail price.
Meanwhile, knowledge accumulating in product innovation and advertising effort which lead to reducing the corresponding investment cost is considered.
The customer inverse demand function depends jointly on the quality level as well as the product goodwill which can be improved by product innovation and advertising efforts.
Our results show that the learning rates of product innovation and advertising effort affect the product innovation and advertising effort investments level.
In addition, compared with the administered transfer-pricing, the negotiation between the two departments results in a lower transfer price as well as a higher retail price.
In the meantime, the advertising effort is lower while the quality improvement effort is higher.
What is more, higher profits to both departments and the firm can be brought about by the negotiation means.
American Psychological Association (APA)
Fu, Chunyan& Cheng, Susu& Yi, Yongxi. 2019. Dynamic Control of Product Innovation, Advertising Effort, and Strategic Transfer-Pricing in a Marketing-Operations Interface. Mathematical Problems in Engineering،Vol. 2019, no. 2019, pp.1-14.
https://search.emarefa.net/detail/BIM-1197614
Modern Language Association (MLA)
Fu, Chunyan…[et al.]. Dynamic Control of Product Innovation, Advertising Effort, and Strategic Transfer-Pricing in a Marketing-Operations Interface. Mathematical Problems in Engineering No. 2019 (2019), pp.1-14.
https://search.emarefa.net/detail/BIM-1197614
American Medical Association (AMA)
Fu, Chunyan& Cheng, Susu& Yi, Yongxi. Dynamic Control of Product Innovation, Advertising Effort, and Strategic Transfer-Pricing in a Marketing-Operations Interface. Mathematical Problems in Engineering. 2019. Vol. 2019, no. 2019, pp.1-14.
https://search.emarefa.net/detail/BIM-1197614
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1197614