The impact of the strategic advertising on luxury fashion brands with social influences

DOI10.1155/2013/534605MaRDI QIDQ473771zbMATH OpenOpenAlexWikidataFDO

Authors Jin-Hui Zheng, Bin Shen, Pui-Sze Chow, Chun-Hung Chiu

Publication date 24 November 2014

Published in Mathematical Problems in Engineering (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1155/2013/534605

Mathematics Subject Classification ID

Marketing, advertising (90B60) Consumer behavior, demand theory (91B42) Social networks; opinion dynamics (91D30)

Review text

Summary: It is well known that purchase of luxury fashion brands is strongly influenced by social needs such as the need for uniqueness and the need of conformity. The existence of these two competing social needs separates customers into two groups who exhibit different buying behaviors. This paper concerns the impacts of such social influences between different consumer groups on pricing and advertising strategies of luxury fashion brands with penalty of insufficient advertising. We start by considering different advertising allocation strategies and derive the corresponding local optimal pricing and advertising allocation policies, through which the global optimal policy that maximizes the company's profit can be obtained. Important insights on strategic advertising for luxury fashion brands are discussed.

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Cites work

• Optimal dynamic advertising with an adverse exogenous effect on brand goodwill
• The stochastic goodwill problem
• Vehicle routing problem for fashion supply chains with cross-docking

Cited in

(10)

• Supply chain contracts in fashion department stores: coordination and risk analysis
• Market targeting with social influences and risk aversion in a co-branding alliance
• Reference groups and product line decisions: an experimental investigation of limited editions and product proliferation
• Fashion brand purity and firm performance
• Selling luxury fashion to conspicuous consumers in the presence of discount sensitivity behavior
• Consumer's sport preference as a predictor for his/her response to brand personality
• Product strategy and pricing research of the luxury companies: considering the characteristics of consumers in the new era
• Network externalities in a vertically differentiated luxury goods market
• The impact of corporate sustainability performance on advertising efficiency
• Optimal pricing and lot-sizing policies under promotional expense for some Veblen products

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