Dynamic marketing-mix policies for subscription services: some theoretical and empirical results

摘要

Upon incorporating price and advertising into a well-known diffusion model for subscription services, optimal marketing-mix variables over time are characterized. A monopolistic market is analyzed for which customers' disadoption is allowed. The analytical findings indicate that the marketing - mix policies of the firm could be very different in the presence of customers' disadoption than their counterparts in its absence. Using Canadian Cable TV diffusion data, price is found to mostly affect market potential whereas advertising is found to affect the coefficient of innovation. Managerial implications of the study together with directions for future research are discussed.