Market Expansion and Elasticity Improvement as Complementary Marketing Activities

Mantovani, Andrea ; Amir, Rabah (2003) Market Expansion and Elasticity Improvement as Complementary Marketing Activities. Bologna: Dipartimento di Scienze economiche DSE, p. 11. DOI 10.6092/unibo/amsacta/4824. In: Quaderni - Working Paper DSE (470). ISSN 2282-6483.
Full text available as:
[img]
Preview
Text(pdf)
License: Creative Commons Attribution

Download (169kB) | Preview

Abstract

Consider a marketing division of a monopoly firm that faces two marketing options: Market enlargement and elasticity improvement. These options are conceived in terms of the target of the firm’s advertising campaigns: Potential new consumers versus existing consumers. Using a CES demand function in a simple model, we demonstrate that the two activities are complementary, so that for some cost configurations, the firm will find it profitable to implement the two options together when either option alone would result in a loss. This calls for the marketing division to be integrated, rather than decentralized.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Mantovani, Andrea
Amir, Rabah
Keywords
Complementarity, advertising, firm organization.
Subjects
ISSN
2282-6483
DOI
Deposit date
10 Mar 2016 09:46
Last modified
10 Mar 2016 09:46
URI

Other metadata

Downloads

Downloads

Staff only: View the document

^