The Study Of Advertising Competing Modles In Duopoly Markets Based On The Product Differentiation

The differentiation strategy is an important way to achieve the competition strategy. When these differences are founded, the company should find a suitable way to transfer this kind of information to the customers, and advertising is an important way to transfer the information and found information barriers. In the reality, different industries present different advertising intensities. The advertising internsity is not only influenced by the market structure, but also has the relationship with the factors composing the market structure. So the study of the relation between the product differentiation and the advertising intensity has a great theoretical value and practical significance.This paper studies the problem from two main aspects: one is the game theory; the other is the empirical testing. Basing on Hotelling (1929)'s horizontal differentiation model, Mussa&Rosen (1978)'s vertical differentiation model, and the advertising cost model, we conduct the game result of the duopoly market to find out that the advertising intensity will increase with the product differentiation.After the model conduction, the typical duopoly markets from the real life are chosen to complete the empirical testing. As the actual key factors composing the product differentiation are multi-level and multi-fact, and meanwhile the assessment of it is ambiguous, it is suitable to use the analytic hierarchy process and fuzzy comprehensive evaluation to get the assessment. The advertising intensity is defined as the ratio of the advertising fee to the revenue.The paper is composed with six main parts. The first two chapters outlines the whole background and methods of the study and introduce the current study of the differentiate theory and advertising competition; the third chapter in the basis of the concept and classification of the product differentiation, the factors which influence the product differentiation are emphasized, and the key ones are found out; the fourth chapter assesses the factors effecting the advertisement investment; the fifth chapter conducts the models through the game theory, separately discussing the advertising input when the products are entirely homogeneous, horizontal and vertical different;The sixth chapter is the empirical testing. We choose the mobile communication industry and household electrical appliances retail chain industry to compare; at last, on the basis of the conclusion of the study, it aims to point out the shortcomings and give some suggestion on the following study.