Optimal Temporal Policies in Fluid Milk Advertising

This study develops an approach to obtain optimal temporal advertising strategies when consumers' response to advertising is asymmetric. Using this approach, optimal strategies for generic fluid milk advertising in New York City are determined. Results indicate that pulsed advertising policies are significantly more effective in increasing demand than a uniform advertising policy. Sensitivity analyses show that the optimal advertising policies are insensitive to reasonable variations in interest rates and the inclusion of milk demand seasonality in the model. Also less asymmetric responses to advertising are found to result in shorter optimal pulsing cycles and reduced intensity of advertising pulses. Copyright 2000, Oxford University Press.