OPTIMAL PULSING IN AN ADVERTISING DIFFUSION-MODEL

Empirical evidence indicates that a given moderate number of ads per y ear may achieve higher effect when concentrated in flights than when s pread equally. In the control-theoretic literature a few approaches ha ve been developed for which the optimal policy is a pulsing schedule. The present communication analyses a two-state diffusion advertising m odel for repeat purchasing. Recognizing the interaction between custom ers and potential buyers, the optimal advertising policy turns out to be a persistent periodic oscillation. This provides a further interest ing example in marketing for the existence of a stable limit cycle.