Research On The Advertising Strategies In Competitive Environments

By employing methods of game theory, the selection of advertising budget incompetitive environments and cooperative advertising program in the supply chainare studied in the dissertation. The follow significant results are achieved:The economic effect of advertising is studied from the point of management andthe important and particular role of advertising in competition are analyzed. Thesystem of advertising competition strategies are presented.A two-stage game is constructed by employing game theory to investigatewhether a firm should set an advertising budgets or a target sales levels in duopolycompetition. The subgame perfect equilibrium of the two-stage game ischaracterized and the Nash equilibrium payoffs of the second-stage are compared.The optimal advertising spending strategies of the firms are given in symmetricadvertising effect.The dominant advertising spending strategies of firms are studied in asymmetricadvertising effect by expanding the two-stage game. The results show that one firmchoose advertising budget while the other firm choose target sales levels in thiscase.A three-stage game is established by extending the previous model toinvestigate the dominant strategies in a differentiated price competition as well asadvertising. The reaction functions of the two firms are depicted and the profitchanges along the players′ reaction curves are characterize by using backwardinduction. The results show that in this environment the optimal choice of a budgetor a sales level crucially depends on whether advertising is expansive or rivalrous aswell as the degree of substitutability between the two firms′ products.Dynamic cooperative advertising programs in a supply chain in which amanufacture and an exclusive retailer both can make advertising expenditures onshort and long term advertising are studies by employing differential games. Thestationary Feedback equilibrium of four scenarios are characterized and comparedby using dynamic programming principle. The sequence of the preference of theoptimal cooperative advertising programs is obtained.In view of the appearing problems that frequent promotions of the retailer candamage the manufacture′s brand image, the possibility and feasibility of thecooperative advertising programs is studied by establishing differential games. Theretailer have two kinds of behavior;one is myopic and the other is far-sighted. Theequilibrium advertising strategies in different cases are found and compared byusing dynamic programming principle. The options of cooperative advertisingprograms of the two members and the optimal behavior of the retailer aredetermined.The competition environment and the development trend of advertising industryin China are investigated and the advertising competition strategies are presentedbased on the brand perceived value.