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A Game-Theoretic Framework To Competitive Individual Targeting

Addo, Sandra E.
http://rave.ohiolink.edu/etdc/view?acc_num=akron1258403779

Abstract Details

2009, Master of Science, University of Akron, Applied Mathematics.
Individual targeting is the process whereby a firm offers promotional incentives to individuals that the firm deems potential customers. With today's information-intensive marketing environments, most firms have considerable information about consumers in their databases, allowing them to determine those that are loyal to them and those that are potential customers. Firms are taking advantage of this new found ability to target individuals with promotions in order to increase both patronage and their customer loyalty base. We develop a game-theoretic model to investigate simultaneous price and quality competition where the firms are allowed to both manipulate the quality of their product and target individuals with promotional incentives. The firms play a two-stage game of price and quality competition and promotions in which regular prices are chosen in the first stage and then strategies for promotion are chosen in the second stage.We find that in an industry where a larger firm is promoting, customers who are highly sensitive to quality should be targeted to ensure increasing profit. The smaller firm should focus its sales and marketing activities on customers who are less price sensitive and should focus on building customer loyalty.
Gerald Young, PhD (Advisor)
Michael Ferrara, PhD (Advisor)
Curtis Clemons, PhD (Advisor)
Marketing; Mathematics
Game Theory; Nash Equilibrium; Subgames; Customer loyalty; Perceived Price; Individual Targeting; Price-Quality Competition

Recommended Citations

Citations

  • Addo, S. E. (2009). A Game-Theoretic Framework To Competitive Individual Targeting [Master's thesis, University of Akron]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=akron1258403779

    APA Style (7th edition)

  • Addo, Sandra. A Game-Theoretic Framework To Competitive Individual Targeting. 2009. University of Akron, Master's thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=akron1258403779.

    MLA Style (8th edition)

  • Addo, Sandra. "A Game-Theoretic Framework To Competitive Individual Targeting." Master's thesis, University of Akron, 2009. http://rave.ohiolink.edu/etdc/view?acc_num=akron1258403779

    Chicago Manual of Style (17th edition)

akron1258403779
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© 2009, all rights reserved.
This open access ETD is published by University of Akron and OhioLINK.