A NOTE ON MULTI-REGIONAL MARKETING

This paper examines the profit maximizing behavior of a vertically int egrated firm that operates in ''n'' geographically distinct regions. A pair of alternative managerial decision scenarios are considered. In one scenario, all marketing mix variables are manipulated at the regio nal level, so that each region may choose different levels of each mar keting variable. In the second scenario, one marketing variable is man ipulated ''globally,'' so that its level is identical in all regions. The first scenario generates an n-region version of the ''Dorfman-Stei ner'' first-order conditions for profit maximization. However, under s ome cost structures the profits associated with this Dorfman-Steiner s cenario are dominated by those associated with the second, ''Global-Re gional'' scenario. This second scenario yields an optimal solution in which the global marketing variable may have a negative marginal impac t on sales in some regions. As a result, some managerial implications of the second scenario differ strikingly from those of the Dorfman-Ste iner scenario.