Marketing Management | Marketing | Strategic ManagementFirms invest a huge proportion of their resources in promotion to acquire higher adoption of their products. To get maximum possible returns from promotional resources judicious and effective spending is essential, especially in a segmented market. Mass and differentiated market promotion are typically two different techniques of promotion used in the segmented market. With mass promotion product is promoted in the entire market using a common strategy, thereby creating a spectrum effect in all segments. Differentiated market promotion targets the segments specifically. In this paper we formulate a mathematical programming problem to optimally allocate the limited promotional resources for mass market promotion and differentiated market promotion among various segments of the market, maximizing the total sales measured through product adoption under budgetary constraint and minimum target sales level constraints in each segment. A recent innovation diffusion model is used to measure the adoption in each segment which describes the sales through the combined effect of mass and differentiated promotion.
Philip Kotler: Marketing Strategy
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