An Effective Promotion Policy to Maximize Profits

Kaizen

Authors: Anand Srinivasan, Tom Tang

Abstract

Marketing teams often face the challenge of designing an effective promotion policy to maximize return-on-investment without exceeding the allocated budget. Firms often fall short of designing effective promotion programs due to the inherent complexity of understanding their customers’ willingness-to-pay a price. This work presents a framework to design an effective promotions program considering customer willingness-to-pay using optimization. A case study is presented to demonstrate the approach and its effectiveness.

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