Optimal Advertising Campaign Duration of Successive Generation Product using Diffusion of Information

Abstract

In the today’s global environment , competition is stiff. Marketers are continuously introducing successive generations of product based on latest technology, either to continue to be the leading brands or due to market forces. Due to the dynamic nature of the market, it becomes essential to integrate technological substitution along with diffusion of new products. Advertising of multiple products or multiple generation of a present product involves selecting appropriate advertising medium, analyzing the target market and appropriate utilization of the available advertising budget. An advertising medium demands a huge proportion of the firms’ budget to be spent on advertising and therefore determination of an optimal duration of the advertising campaign becomes extremely important for any marketing manager. For an advanced technology product , advertising at right time become even more important. This study developed a mathematical model to determine the optimal duration of an advertising campaign for an advanced generation product based on diffusion of information in a social group. The optimal timing depends on diffusion coefficient, population size, ad cost per time unit, unit price etc. The model is based on the assumption that technological advancements do not essentially imply that existing generation products will be withdrawn from the market immediately.