Professional Documents
Culture Documents
Effects of Internet Sales Promotion
Effects of Internet Sales Promotion
Research Article
Effects of Internet Sales Promotion on a Differential
Advertising Model
Copyright © 2018 Hui Jiang and Junhai Ma. This is an open access article distributed under the Creative Commons Attribution
License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly
cited.
Advertising and sales promotion are two important specific marketing communications tools. In this paper, Internet sales
promotion is introduced into a differential advertising model and investigated quantitatively. The conditions for the existence and
stability of periodic solutions are obtained. Flip bifurcation of periodic solution is investigated analytically. The results show that the
sales promotion parameter can modify the stability of the differential advertising model and lead to chaos through flip bifurcation,
the sales level will eventually be no less than a given value by adjusting the value of the sales promotion parameter, and the optimal
sales promotion strategy can lead to maximum profit. Numerical results for periodic solutions, bifurcation diagrams, and the effects
of sales promotion strategies, which are illustrated with an example, are in good agreement with the theoretical analysis. These
results have certain significant theoretical and practical value in related markets.
diffusion like response). A differential game model is used to time and space, and spread around the world around the
obtain firms marketing communications decisions in markets clock. One successful case of Internet sales promotion is
with uncertainty and competition [12]. Krishnamoorthy et Alibaba’s annual global online shopping carnival (OSC) held
al. [13] consider a duopoly differential game model with every November 11 (also known as Double 11 Day or Single’s
joint advertising and pricing decisions and obtain the closed- Day). On Singles’ Day, this shopping carnival brought the
form Nash equilibria for both the game with symmetric entire Chinese electronic commerce industry an astonishing
competitors and that with asymmetric competitors by using record volume of transactions worth 91.2 billion RMB in 2015
the linear and isoelastic demand function forms (differen- and 120.7 billion RMB in 2016 [20].
tial game theory is used to analyze two different demand Advertising and sales promotion [21, 22], which are two
specifications—linear demand and isoelastic demand—for specific marketing communications tools, account for at
symmetric and asymmetric competitors). Despite the useful least 25% of UK marketing budgets [23]. From the above
results gained from differential game models in advertising, literature, Internet sales promotion is rarely considered into a
the complex dynamical behaviors such as periodic solution differential game model and studied quantitatively. Motivated
and bifurcation are rarely investigated in advertising models. by these facts, advertising and Internet sales promotion are
Su et al. [14] establish the trilateral game payoff matrix, build
introduced into a differential advertising model in this study.
up the replicator dynamic equations, and discuss possible
This research focuses on the complex dynamics of this model
evolutionary stable states.
and the effect of Internet sales promotion on sales level. We
Sales promotion [15] (this study proposes that the
responses of more and less deal-prone consumers to price hope to find a more intuitive way to show how Internet
discounts and premiums depend on the promotional benefit sales promotion affects the market share and optimal sales
level; low deal-prone consumers are concerned with obtain- promotion strategy.
ing price discounts), including things like contests and games, The paper is organized as follows. In Section 2, we intro-
sweepstakes, product giveaways, samples coupons, loyalty duce the basic model and make this link with practice. The
programs, and discounts, is another way to advertise. The existence and stability of periodic solutions and bifurcation of
ultimate goal of sales promotions is to stimulate potential periodic solutions are investigated in Section 3. In Section 4,
customers to action and create an immediate boost in sales different sales promotion strategies are discussed. Numerical
volume. Previous studies mainly use the methods of data- results, such as the time series of solutions, bifurcation dia-
analysis and quality analysis to discuss the role of sales gram, and largest Lyapunov exponent, are given in Section 5.
promotion. For example, the effects of sales promotions on Finally, some conclusions are drawn in Section 6.
brand preference are discussed and it is found that sales
promotions do not affect postpromotion brand preference 2. Model Description
by using meta-analysis [16]. Promotion cost is considered
in a model which shows that keeping the fractions of The following notations will be used in the paper.
promotion cost sharing within an appropriate range increases 𝑆(𝑡): sales level at time 𝑡;
profits for all parties [17] (this paper utilizes a mathematical
model for solving retailers promotion and replenishment ̇ the derivative of 𝑆(𝑡) at time 𝑡;
𝑆(𝑡):
decisions under retailer competition and promotional effort 𝑢(𝑡): the advertising expenditure at time 𝑡;
with the sales learning curve; an appropriate range for the Δ𝑆(𝑡): the increment of 𝑆(𝑡) at time 𝑡;
fraction of promotion cost sharing can achieve channel
coordination and determine the distribution of increasable 𝑀: the size of the potential market or saturation level;
profit). Andrews [18] examines the interplay between two 𝑇: the time between two consecutive Internet sales
marketing interventions that consumers encounter in retail promotions;
marketplaces, diagnostic product information, and multi- 𝐵: the advertising effectiveness of firm;
item sales promotions and discusses that the influence of
product information varies as a function of sales promotion 𝐻: sales promotion target;
format. The effect of sales promotion should be further 𝜌: decay constant;
investigated quantitatively. 𝜆: the characteristic root;
Internet sales promotion refers to various activities that
stimulate consumer demand, arouse the desire to buy, and 𝑟: response rate to advertising;
facilitate the purchase by using computers and network 𝑏: a sales promotion parameter reflecting the incre-
technology to deliver information about goods and services ment of sales level;
to the virtual market. With the development of technology, 𝑐: the maximum decay constant.
Internet sales promotion has become a major promotion
strategy in business management [19]. It plays a positive Effective advertising strategy is a response to changes in
role in promoting the development of firms and can dis- market conditions and evolves with time. As such, differential
seminate promotion information to improve the sales level. models have been generally accepted as a viable approach
Internet sales promotion has many advantages compared to the study of advertising decisions. A differential model
to traditional sales promotion. It can push right promotion models the instantaneous variation of market share as a
information to right people, break through the limitation of function of the advertising expenditure levels and market
Discrete Dynamics in Nature and Society 3
S(0)
ΔS = (b − cS)S
S1+
S
ΔS
S1
b/(2c) BM/(B + ) b/c M
0 T 2T 3T 4T 0 S
t
(a) (b)
Figure 1: (a) The solutions of (1) and (4) from the initial point (0, 𝑆(0)); (b) sketch of Internet sales promotion strategy.
positions. To address the dynamics of advertising decisions, a schematic illustration of this Internet sales promotion
the following advertising model is well studied: strategy. The measures to promote sales level are supposed to
𝑆 (𝑡) be taken at moments 𝑡 = 𝑛𝑇 and the sales level 𝑆(𝑡) turns from
𝑆 ̇ (𝑡) = 𝑟𝑢 (𝑡) (1 − ) − 𝜌𝑆 (𝑡) . (1) 𝑆(𝑛𝑇) to 𝑆(𝑛𝑇+ ), where 𝑆(𝑛𝑇+ ) = 𝑆(𝑛𝑇) + (𝑏 − 𝑐𝑆(𝑛𝑇))𝑆(𝑛𝑇)
𝑀
and (𝑏 − 𝑐𝑆(𝑛𝑇))𝑆(𝑛𝑇) is the increment of sales.
Now consider uniform advertising policy [24], in which Now build the following advertising model with Internet
the firm advertises at a constant level, in this paper. Hence sales promotion:
𝑢(𝑡) = 𝑈, 𝑡 ≥ 0. Set the advertising effectiveness of firm to be
𝐵 = 𝑟𝑈/𝑀 and the initial value 𝑆(0) > 𝐵𝑀/(𝐵 + 𝜌). One can 𝑆 ̇ = −𝜌𝑆 + 𝐵 (𝑀 − 𝑆) , 𝑡 ≠ 𝑛𝑇,
easily calculate that the solution to system (1) with the initial (4)
value 𝑆(0) is 𝑆 (𝑡+ ) = 𝑆 (𝑡) + (𝑏 − 𝑐𝑆 (𝑡)) 𝑆 (𝑡) , 𝑡 = 𝑛𝑇.
𝐵𝑀 𝐵𝑀
𝑆 (𝑡) = (𝑆 (0) − ) exp [− (𝐵 + 𝜌) 𝑡] + , System (4) is an impulsive differential system [26]. Figure 1(a)
𝐵+𝜌 𝐵+𝜌 (2) also shows the graph of one solution to (4). The red line
𝑡 ≥ 0. shows the decreasing sales level under the influence of decay
constant 𝜌 while the blue line shows the change of sales
It is observed from Figure 1(a) that the sales level 𝑆(𝑡) level under Internet sales promotion strategy. The trajectory
decreases and tends to 𝐵𝑀/(𝐵 + 𝜌). originating from the initial point 𝐴 0 (0, 𝑆(0)) reaches the
The five parts of the promotional mix are advertising, point 𝐴 1 (𝑇, 𝑆(𝑇)) at 𝑡 = 𝑇 and next jumps to the point
sales promotion, personal selling, direct marketing, and 𝐴+1 (𝑇, 𝑆(𝑇+ )) due to the effect of sales promotion, and so on.
public relations. Advertising is the way a company informs
Hence,
potential customers about the products and services it offers
in the hope that they will buy eventually, while a sales 𝐵𝑀 𝐵𝑀
promotion is an incentive provided to consumers to motivate 𝑆 (𝑡) = (𝑆 (0) − ) exp [− (𝐵 + 𝜌) 𝑡] + ,
𝐵+𝜌 𝐵+𝜌
them to buy immediately. Internet sales promotion [25],
including things like online discount promotions, online gift 0 ≤ 𝑡 ≤ 𝑇.
promotions, online lottery promotion, bonus point promo-
tion, and online joint promotion, can stimulate potential 𝑆 (𝑇+ ) = 𝑆 (𝑇) + (𝑏 − 𝑐𝑆 (𝑇)) 𝑆 (𝑇) .
customers to action and create an immediate boost in sales (5)
volume. 𝐵𝑀
To improve sales, Internet sales promotion strategy is 𝑆 (𝑡) = (𝑆 (𝑇+ ) − ) exp [− (𝐵 + 𝜌) (𝑡 − 𝑇)]
𝐵+𝜌
applied here. Suppose that the act of Internet sales promotion
is held periodically to create an immediate boost in sales 𝐵𝑀
volume and the increment Δ𝑆(𝑡) depends on sales level 𝑆(𝑡), + , 𝑇 < 𝑡 ≤ 2𝑇.
𝐵+𝜌
namely,
In the above, Internet sales promotion is introduced into
Δ𝑆 (𝑡) = 𝑆 (𝑡+ ) − 𝑆 (𝑡) = (𝑏 − 𝑐𝑆 (𝑡)) 𝑆 (𝑡) , 𝑡 = 𝑛𝑇, (3)
a differential advertising model. In the following paper, com-
where 𝑏 > 0, 𝑐 > 0, 𝑛 = 1, 2, . . ., 𝑆(𝑡+ ) = lim𝜏→0+ 𝑆(𝑡 + 𝜏), plex dynamic properties of system (4) and sales promotion
𝑏/2𝑐 ≤ 𝐵𝑀/(𝐵 + 𝜌) < 𝑏/𝑐 ≤ 𝑀. Figure 1(b) provides strategy will be investigated analytically.
4 Discrete Dynamics in Nature and Society
at (𝑆𝑘 , 𝑏) = (𝑆01 , 𝑏0 ). 𝐺13 𝑆04 + 2𝐺12 𝐺2 (𝑏) 𝑆03 + 𝐺1 (𝑏) 𝑆02 + (𝐺2 (𝑏) − 1) 𝑆0
Conditions (𝐶1 ) and (𝐶2 ) hold. So a flip bifurcation (18)
occurs in view of Lemma 2. A positive period-2𝑇 solution + 𝐺3 (𝑏) = 0.
bifurcates from the positive period-𝑇 solution at 𝑏 =
𝑏0 . Since 𝑎 > 0 in (𝐶2 ), then the positive period-2𝑇 It follows from the facts 𝑆01 = 𝐹(𝑆01 ) and 𝑆02 = 𝐹(𝑆02 ) that
𝑆01 = 𝐹2 (𝑆01 ) and 𝑆02 = 𝐹2 (𝑆02 ), where 𝑆01 and 𝑆02 are shown
solution is stable. It also means that, for some 𝜖 > 0,
in (10). Hence, 𝑆01 and 𝑆02 are also the fixed points of map
system (4) has a positive stable period-2𝑇 solution for 𝑏 ∈ (17). Furthermore,
(𝑏0 , 𝑏0 + 𝜖). At the same time, the positive period-𝑇 solution
loses its stability. The analysis above leads to the following 𝐺13 𝑆04 + 2𝐺12 𝐺2 (𝑏) 𝑆03 + 𝐺1 (𝑏) 𝑆02 + (𝐺2 (𝑏) − 1) 𝑆0
results.
Proposition 3. Suppose that 𝑏 = 𝑏0 , where 𝑏0 is shown in (15). + 𝐺3 (𝑏) = (𝑆0 − 𝑆01 ) (𝑆0 − 𝑆02 ) [𝐺12 𝑆02 (19)
Then a flip bifurcation occurs at 𝑏 = 𝑏0 . For some 𝜖 > 0, system
(4) has a positive stable period-2𝑇 solution for 𝑏 ∈ (𝑏0 , 𝑏0 + 𝜖). + (𝐺1 𝐺2 (𝑏) + 𝐺1 ) 𝑆0 + 𝐺1 𝐺3 + 𝐺2 (𝑏) + 1] .
The sales promotion parameter 𝑏 plays an important role It follows from (18) that
in advertising model. For some 𝑏 (𝑏 < 𝑏0 ), sales level 𝑆(𝑡)
changes periodically with period-𝑇. Proposition 3 shows that 𝐺12 𝑆02 + (𝐺1 𝐺2 (𝑏) + 𝐺1 ) 𝑆0 + 𝐺1 𝐺3 + 𝐺2 (𝑏) + 1 = 0. (20)
a flip bifurcation occurs at 𝑏 = 𝑏0 and sales level 𝑆(𝑡) changes
Suppose that
periodically with period-2𝑇 for 𝑏 ∈ (𝑏0 , 𝑏0 + 𝜖). Hence system
(4) changes from a steady state (period-𝑇) to another one 2
(𝐺2 (𝑏) − 1) − 4𝐺1 𝐺3 > 4 (21)
(period-2𝑇).
To study the period-2𝑇 solution in Proposition 3, con- holds. A straightforward calculation leads to the two positive
sider the following iterative map: roots to (20):
2
−𝐺1 𝐺2 (𝑏) − 𝐺1 + √[𝐺1 𝐺2 (𝑏) + 𝐺1 ] − 4𝐺12 (𝐺1 𝐺3 + 𝐺2 (𝑏) + 1)
𝑆03 = ,
2𝐺12
(22)
2
−𝐺1 𝐺2 (𝑏) − 𝐺1 − √[𝐺1 𝐺2 (𝑏) + 𝐺1 ] − 4𝐺12 (𝐺1 𝐺3 + 𝐺2 (𝑏) + 1)
𝑆04 = .
2𝐺12
Thus, 𝑆03 and 𝑆04 are fixed points of map (17), 𝑆03 = 𝐹(𝑆04 ), 𝐵𝑀
𝑆 (𝑡) = 𝐹1 (𝑆03 ) exp [− (𝐵 + 𝜌) (𝑡 − 𝑛𝑇)] + ,
and 𝑆04 = 𝐹(𝑆03 ). 𝐵+𝜌
The positive fixed points 𝑆03 and 𝑆04 of map (17) corre- 𝑛𝑇 < 𝑡 ≤ (𝑛 + 1) 𝑇,
(23)
spond to a period-2𝑇 solution of system (4), which starts 𝑆 (𝑡) = 𝐹1 (𝑆04 ) exp [− (𝐵 + 𝜌) (𝑡 − (𝑛 + 1) 𝑇)]
from the point (0, 𝑆03 (1 + 𝑏 − 𝑐𝑆03 )), reaches the point (𝑇, 𝑆04 ), 𝐵𝑀
jumps to the point (𝑇, 𝑆04 (1 + 𝑏 − 𝑐𝑆04 )) due to the effect of + , (𝑛 + 1) 𝑇 < 𝑡 ≤ (𝑛 + 2) 𝑇,
𝐵+𝜌
sales promotion, and reaches the point (2𝑇, 𝑆03 ). The period-
2𝑇 solution of system (4) is where 𝐹1 (𝑥) = (1 + 𝑏 − 𝑐𝑥)𝑥 − 𝐵𝑀/(𝐵 + 𝜌).
6 Discrete Dynamics in Nature and Society
Proposition 4. Suppose that (21) holds. Then system (4) has a √(𝐺2 (𝑏) − 1)2 − 4𝐺1 𝐺3 ≥ −2𝐺1 𝐻 − (𝐺2 (𝑏) − 1) ,
unique period-2𝑇 solution, which is shown in (23).
𝐺3 + 𝐺1 𝐻2
4. Sales Promotion Strategy 𝑏 ≥ (1 − ) exp [(𝐵 + 𝜌) 𝑇] − 1 fl 𝑏1 .
𝐻
Propositions 1 and 3 show that system (4) has stable periodic (26)
solutions. The solutions from different initial points will tend
to these stable periodic solutions.
Suppose the sales target is that the sales level 𝑆(𝑡) is no If 𝑏1 < min{𝑏0 , 𝑏0 }, the periodic solution (11) is stable for
less than 𝐻. Now, we discuss the sales promotion strategy to 𝑏1 ≤ 𝑏 ≤ min{𝑏0 , 𝑏0 } in view of Proposition 1. The analysis
achieve this goal. In the case of stable period-𝑇 solution, the above leads to the following results.
sales level 𝑆(𝑡) changes according to
Proposition 5. Suppose that 𝑏1 ≤ 𝑏 ≤ min{𝑏0 , 𝑏0 }, where 𝑏0 ,
𝐵𝑀 𝑏0 , and 𝑏1 are shown in (15), (25), and (26), respectively. Then
𝑆 (𝑡) = (𝑆01 + (𝑏 − 𝑐𝑆01 ) 𝑆01 − )
𝐵+𝜌 the sales level 𝑆(𝑡) will eventually be no less than 𝐻 and 𝑆(𝑡) ∈
𝐵𝑀 (24) [𝑆01 , 𝑆01 + (𝑏 − 𝑐𝑆01 )𝑆01 ).
⋅ exp [− (𝐵 + 𝜌) (𝑡 − 𝑛𝑇)] + ,
𝐵+𝜌 In the case of the period-2𝑇 solution, the sales level 𝑆(𝑡)
𝑛𝑇 < 𝑡 ≤ (𝑛 + 1) 𝑇, changes according to (23).
From (22), it follows that 𝑆03 > 𝑆04 > 0 and 𝑆(𝑡) ∈
and 𝑆(𝑡) ∈ [𝑆01 , 𝑆01 + (𝑏 − 𝑐𝑆01 )𝑆01 ). [𝑆04 , 𝑆04 + (𝑏 − 𝑐𝑆04 )𝑆04 ). To make sure the sales level 𝑆(𝑡)
To achieve the above sales target, it requires that 𝑆01 ≥ 𝐻. will eventually be no less than 𝐻 in the case of stable period-
Suppose that −2𝐺1 𝐻 − (𝐺2 (𝑏) − 1) > 0; namely, 2𝑇 solution, it requires that 𝑆04 ≥ 𝐻. Suppose that −2𝐺12 𝐻 −
𝑏 ≤ (1 − 2𝐺1 𝐻) exp [(𝐵 + 𝜌) 𝑇] − 1 fl 𝑏0 . (25) 𝐺1 𝐺2 (𝑏) − 𝐺1 > 0; namely,
It follows from 𝑆01 ≥ 𝐻 that 𝑏 ≥ (−1 − 2𝐺1 𝐻) exp [(𝐵 + 𝜌) 𝑇] − 1 fl 𝑏̃0 . (27)
2
1 − 𝐺2 (𝑏) − √(𝐺2 (𝑏) − 1) − 4𝐺1 𝐺3
≥ 𝐻, It follows from 𝑆04 ≥ 𝐻 that
2𝐺1
2
−𝐺1 𝐺2 (𝑏) − 𝐺1 − √[𝐺1 𝐺2 (𝑏) + 𝐺1 ] − 4𝐺12 (𝐺1 𝐺3 + 𝐺2 (𝑏) + 1)
≥ 𝐻,
2𝐺12 (28)
(1 + 𝐺1 𝐻) (𝐺2 (𝑏) + 1) ≥ −𝐺1 𝐺3 − 𝐺12 𝐻2 .
Under condition 1 + 𝐺1 𝐻 < 0, one can calculate that where 𝜎 is firm’s unit profit margin, 𝑢 is constant advertising
𝐺1 𝐺3 + 𝐺12 𝐻2 expenditure, 𝑝 is unit promotion cost, 𝑆(𝑡) is shown in (11),
𝑏 ≤ (−1 − ) exp [(𝐵 + 𝜌) 𝑇] − 1 fl 𝑏2 . (29) 𝑏 < 𝑏0 , and 𝑆(𝑇) = 𝑆01 .
1 + 𝐺1 𝐻 It follows from (11) that
If the period-2𝑇 solution (23) is stable for max{𝑏0 , 𝑏̃0 } < 𝑏 < (𝑏 − 𝑐𝑆01 ) 𝑆01
𝑏2 , 𝑆(𝑡) will eventually be no less than the threshold 𝐻.
𝐵𝑀 (31)
= (𝑆01 − ) (exp ((𝐵 + 𝜌) 𝑇) − 1) ,
Proposition 6. Suppose that 1 + 𝐺1 𝐻 < 0 and the period- 𝐵+𝜌
2𝑇 solution (23) is stable for max{𝑏0 , 𝑏̃0 } < 𝑏 < 𝑏2 , where 𝑏0 , and then
𝑏̃0 , and 𝑏2 are shown in (15), (27), and (29), respectively. Then 𝑇
2
the sales level 𝑆(𝑡) will eventually be no less than 𝐻 and 𝑆(𝑡) ∈ 𝑃𝑆 (𝑏) = ∫ [𝜎𝑆 (𝑡) − 𝑢2 ] 𝑑𝑡 − 𝑝 [(𝑏 − 𝑐𝑆01 ) 𝑆01 ]
0
[𝑆04 , 𝑆04 + (𝑏 − 𝑐𝑆04 )𝑆04 ).
2
𝐵𝑀
Each firm cares about not only sales, but also profit. For = −𝑝 [(𝑆01 − ) (exp ((𝐵 + 𝜌) 𝑇) − 1)]
𝐵+𝜌
simplicity, stable period-𝑇 solution (𝑏 < 𝑏0 ) is used to discuss (32)
exp ((𝐵 + 𝜌) 𝑇) − 1 𝜎𝐵𝑀𝑇
firm’s profit. Set the profit function as + 𝜎𝑆01 + − 𝑈2 𝑇
𝑇 𝐵+𝜌 𝐵+𝜌
𝑃𝑆 (𝑏) = ∫ (𝜎𝑆 (𝑡) − 𝑢2 ) 𝑑𝑡 2
0 (30) (exp ((𝐵 + 𝜌) 𝑇) − 1) 𝜎𝐵𝑀
− 2
.
− 𝑝 [(𝑏 − 𝑐𝑆 (𝑇)) 𝑆 (𝑇)]2 , (𝐵 + 𝜌) exp ((𝐵 + 𝜌) 𝑇)
Discrete Dynamics in Nature and Society 7
Hence, Proposition 7. Given system (4) and profit function (30). The
optimal sales promotion strategy is
𝑃𝑆 (𝑏)
Δ𝑆 (𝑡) = (𝑏3 − 𝑐𝑆 (𝑡)) 𝑆 (𝑡) , 𝑡 = 𝑛𝑇, (38)
𝐵𝑀 2
= (−2𝑝 (𝑆01 − ) (exp ((𝐵 + 𝜌) 𝑇) − 1) where 𝑏3 is shown in (36).
𝐵+𝜌 (33)
exp ((𝐵 + 𝜌) 𝑇) − 1
5. Numerical Results
+ 𝜎) 𝑆01 (𝑏) .
𝐵+𝜌 To show the effect of Internet sales promotion strategy and
complex dynamics of system (4), numerical results, such as
By using (10), it is easy to see that the time series of period-𝑇 solution and period-2𝑇 solution,
bifurcation diagram, and largest Lyapunov exponents (LLE),
are given in this section.
exp (− (𝐵 + 𝜌) 𝑇) Consider
𝑆01 (𝑏) = (1
2𝐺1
𝑆 ̇ = −0.9𝑆 + 0.1 (100 − 𝑆) , 𝑡 ≠ 𝑛,
(39)
𝑆 (𝑡+ ) = 𝑆 (𝑡) + (𝑏 − 0.2𝑆 (𝑡)) 𝑆 (𝑡) , 𝑡 = 𝑛,
𝐺2 (𝑏) − 1 (34)
− ) ≠ 0,
2
√(𝐺2 (𝑏) − 1) − 4𝐺1 𝐺3 where 𝜌 = 0.9, 𝐵 = 0.1, 𝑀 = 100, 𝑐 = 0.2, and 𝑇 = 1. One
can easily calculate that 𝐵𝑀/(𝐵 + 𝜌) = 10, 𝐺1 ≈ −0.0736,
𝐺2 (𝑏) = exp(−1)(1 + 𝑏), and 𝐺3 ≈ 6.3212.
2𝐺3 exp (−2 (𝐵 + 𝜌) 𝑇)
𝑆01 (𝑏) = > 0. Set 𝑏 = 4.8 in system (39). The positive fixed point of
2 3/2 +
[(𝐺2 (𝑏) − 1) − 4𝐺1 𝐺3 ] map (15) is 𝑆01 ≈ 19.7571, and hence 𝑆01 ≈ 36.52. Figure 2(a)
shows that system (39) has a period-𝑇 solution, which starts
from the initial point (0, 36.52) and reaches (1, 19.7571) at
Let 𝑃𝑆 (𝑏3 ) = 0. Then 𝑏 = 𝑏3 is the solution to equation
𝑡 = 1. Since (𝐺2 (𝑏) − 1)2 − 4𝐺1 𝐺3 ≈ 3.1456 < 4, condition
𝐵𝑀 2
(13) holds. Figure 2(b) shows that the solution starting from
− 2𝑝 (𝑆01 − ) ((exp ((𝐵 + 𝜌) 𝑇) − 1)) the point (0, 50) tends to the period-𝑇 solution in Figure 2(a).
𝐵+𝜌
(35) Illustrative simulations shown in Figure 2 are in agreement
exp ((𝐵 + 𝜌) 𝑇) − 1 with Proposition 1.
+ 𝜎 = 0. A straightforward calculation gives 𝑏0 = (1 +
𝐵+𝜌
√4 + 4𝐺1 𝐺3 ) exp[(𝐵 + 𝜌)𝑇] − 1 ≈ 5.6945. It follows from
Similar to the discussion to (26), one can calculate that Proposition 3 that flip period-doubling bifurcation occurs
at 𝑏 = 5.6945. One-dimensional bifurcation diagram and
𝐺3 + 𝐺1 𝐻12 largest Lyapunov exponents (LLE) in Figure 3(a) can well
𝑏3 = (1 − ) exp [(𝐵 + 𝜌) 𝑇] − 1, (36) show the dynamic characteristics of system (39) with the sales
𝐻1 promotion parameter 𝑏 changes. Along with the increase of 𝑏
from 5 to 5.6945, system (39) has a stable period-𝑇 solution
where 𝐻1 = 𝐵𝑀/(𝐵 + 𝜌) + 𝜎/2𝑝(𝐵 + 𝜌)(exp((𝐵 + 𝜌)𝑇) − 1), and hence is in stable state. System (39) is in stable state
𝑏̂0 = 𝑏 ≤ (1 − 2𝐺1 𝐻1 ) exp[(𝐵 + 𝜌)𝑇] − 1, and 𝑏3 < min{𝑏0 , 𝑏̂0 }. with period-2𝑇 when 𝑏 changes from 5.6945 to 7.25 while
Furthermore, system is in stable state with period-4𝑇 when 𝑏 changes
from 7.25 to 7.55. When the sales promotion parameter 𝑏 >
𝑃𝑆 (𝑏3 ) 7.85, system (39) will go into chaotic state. The LLE in
Figure 3(a) corresponding to the bifurcation diagram can also
𝐵𝑀 2 show the system stability features. The LLE equals zero for
= [−2𝑝 (𝑆01 − ) (exp ((𝐵 + 𝜌) 𝑇) − 1)
𝐵+𝜌 𝑏 = 5.6945, and flip bifurcation occurs. When the first time
LLE > 0, the system goes into chaotic state. Simulations
exp ((𝐵 + 𝜌) 𝑇) − 1 (37) shown in Figure 3(a) verify Proposition 3. In a word, the sales
+ 𝜎] 𝑆01 (𝑏3 ) promotion parameter 𝑏 can cause the advertising model to
𝐵+𝜌
demonstrate complicated character.
− 2𝑝 [exp ((𝐵 + 𝜌) 𝑇) − 1] (𝑆01
2
(𝑏)) = 0
2 Set 𝑏 = 5.9 in (39). Then (𝐺2 (𝑏) − 1)2 − 4𝐺1 𝐺3 ≈ 4.3993 >
4, and condition (21) holds. One can calculate that 𝑆03 ≈
+
2 2 27.2830, 𝑆04 ≈ 20.8084, 𝑆04 = 𝑆04 + (5.9 − 0.2𝑆04 )𝑆04 ≈ 56.98,
− 2𝑝 [exp ((𝐵 + 𝜌) 𝑇) − 1] (𝑆01 (𝑏)) < 0. +
𝑆03 = 𝑆03 + (5.9 − 0.2𝑆03 )𝑆03 ≈ 39.38. Figure 3(b) shows
the unique period-2𝑇 solution, which starts from (0, 56.98),
In view of the facts 𝑃𝑆 (𝑏3 ) = 0 and 𝑃𝑆 (𝑏3 ) < 0, the profit reaches the point (1, 27.283), jumps to the point (1, 39.38)
function 𝑃𝑆(𝑏) reaches a maximal value at 𝑏 = 𝑏3 , which gives due to the effect of sales promotion, arrives at the point
the following optimal sales promotion strategy. (2, 20.8084), jumps to the point (2, 56.98) due to the effect of
8 Discrete Dynamics in Nature and Society
55 55
50 50
45 45
40 40
35 35
S
S
30 30
25 25
20 20
15 15
10 10
0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10
t t
Figure 2: (a) The period-𝑇 solution to (39) with 𝑏 = 4.8 and the initial point (0, 36.52); (b) two solutions to system (39) with the initial points
(0, 36.52) and (0, 50).
70
65
40 60
55
30
50
LLE and Sk
45
20
S
40
35
10
30
25
0
20
15
5 5.5 6 6.5 7 7.5 8 0 2 4 6 8 10
b t
S(0) = 56.98
(a) (b)
Figure 3: (a) The bifurcation diagram and largest Lyapunov exponent of system (39) for 𝑏 ∈ (5, 8); (b) the period-2𝑇 solution of (39) with
𝑏 = 5.9 and the initial point (0, 56.98).
sales promotion, and so on. Simulation shown in Figure 3(b) will be eventually larger than 𝐻 = 20, which is in agreement
is in agreement with Proposition 4. with Proposition 6.
Figure 3(a) also shows that the path to chaos is period- Set the profit function as
double bifurcation. The period-4𝑇 solution to system (39)
𝑇
with 𝑏 = 7.25 is shown in Figure 4(a) while the solution to 𝑃𝑆 (𝑏) = ∫ (20𝑆 (𝑡) − 200) 𝑑𝑡
system (39) with 𝑏 = 7.85 is shown in Figure 4(b). 0 (40)
The value of 𝑏1 (25) for 𝐻 ∈ (10, 23.5) is shown in 2
Figure 5(a). Choose 𝐻 = 20; it follows that 𝑏1 ≈ 4.859. Now − 𝑝 [(𝑏 − 0.2𝑆2 (𝑇)) 𝑆2 (𝑇)] .
set 𝑏 = 5 in system (39). It is observed from Figure 5(b) that
Take 𝑝 = 0.6. A straightforward calculation gives that 𝑏4 ≈
the value of 𝑆(𝑡) will be eventually larger than 𝐻 = 20, which
4.756 and the optional sales promotion strategy is
is in agreement with Proposition 5.
Figure 6(a) shows the value of 𝑏2 (27) for 𝐻 ∈ (18, 23). Δ𝑆 (𝑡) = (4.756 − 0.2𝑆 (𝑡)) 𝑆 (𝑡) , 𝑡 = 𝑛. (41)
Choose 𝐻 = 20; it follows that 𝑏2 ≈ 6.084. Now set 𝑏 = 6 in
system (39). Conditions 1 + 𝐺1 𝐻 ≈ −0.472 < 0 and 𝑏0 < 𝑏 < Figure 7(a) shows the value of the profit 𝑃𝑆 (40) for 𝑝 =
𝑏2 hold. It is observed from Figure 6(b) that the value of 𝑆(𝑡) 0.6 and 𝑏 ∈ (2, 5.7) while Figure 7(b) shows the value of
Discrete Dynamics in Nature and Society 9
90 110
100
80
70
60 70
S
S
50
40 40
30
20 10
0 4 8 12 16 300 305 310 315 320 325 330 335 340
t t
(a) (b)
Figure 4: (a) The period-4𝑇 solution of (39) with 𝑏 = 7.25; (b) the solution of (39) with 𝑏 = 7.85.
6 50
5.5 45
5 40
4.5 35
4 30
b1
3.5 25
3 20
H = 20
2.5 15
2 10
10 12 14 16 18 20 22 24 0 5 10 15 20
H t
(a) (b)
Figure 5: (a) The value of 𝑏1 for 𝐻 ∈ (10, 23.5); (b) the solution of (39) with 𝑏 = 5 and the initial point (0, 15).
65
60
7
55
6.8 50
6.6 45
40
6.4
b2
35
6.2 30
6 25
20
5.8 H = 20
15
5.6 10
18 19 20 21 22 23 0 5 10 15 20 25 30
H t
(a) (b)
Figure 6: (a) The value of 𝑏2 for 𝐻 ∈ (18, 23); (b) the solution of (39) with 𝑏 = 6 and the initial point (0, 30).
10 Discrete Dynamics in Nature and Society
400
400
350 350
p = 0.6
300 300
250
250
PS
200
PS
200
150
150 100
100 50
1
0.8 6
50 p 0.6 4 5
2 2.5 3 3.5 4 4.5 5 5.5 6 0.4 2 3
b
b
(a) (b)
Figure 7: (a) The value of 𝑃𝑆(𝑏) (40) for 𝑝 = 0.6 and 𝑏 ∈ (2, 5.7); (b) the value of 𝑃𝑆(𝑏) (40) for 𝑝 ∈ (0.4, 1) and 𝑏 ∈ (2, 5.7).
the profit 𝑃𝑆 (40) for 𝑝 ∈ (0.4, 1) and 𝑏 ∈ (2, 5.7). These from applications and in-application advertisements,” Indus-
numerical results are in agreement with Proposition 7. trial Marketing Management, vol. 48, pp. 111–120, 2015.
[2] C. Zhang and H. Zheng, “D3-Equivariant coupled advertising
6. Conclusions oscillators model,” Procedia Eng, vol. 192, pp. 342–347, 2011.
[3] C. F. Nicholson and H. M. Kaiser, “Dynamic market impacts of
In this paper, Internet sales promotion is introduced into a generic dairy advertising,” Journal of Business Research, vol. 61,
differential advertising model. Results show that the system no. 11, pp. 1125–1135, 2008.
possesses complex dynamic behavior. Advertising model has [4] A. Buratto, L. Grosset, and B. Viscolani, “Advertising channel
a unique stable period-𝑇 solution or period-2𝑇 solution for selection in a segmented market,” Automatica, vol. 42, no. 8, pp.
parameter 𝑏 satisfies some conditions. In these cases of peri- 1343–1347, 2006.
odic solutions, sales level 𝑆(𝑡) tends to a periodic solution and [5] G.-I. Bischi, L. Stefanini, and L. Gardini, “Synchronization,
eventually changes periodically, which provides regulation to intermittency and critical curves in a duopoly game,” Mathe-
direct manufacture. The sales promotion parameter 𝑏, which matics and Computers in Simulation, vol. 44, no. 6, pp. 559–585,
can modify the system stability and lead to chaos through flip 1998.
bifurcation, plays an important role in the sales promotion
[6] G. I. Bischi and M. Kopel, “Multistability and path dependence
strategy.
in a dynamic brand competition model,” Chaos, Solitons &
Internet sales promotion strategy is proposed to improve Fractals, vol. 18, no. 3, pp. 561–576, 2003.
sales level and maximize firm’s profit. Suppose the sales target
[7] F. Wu and J. Ma, “The complex dynamics of a multi-product
is that the sales level 𝑆(𝑡) is no less than 𝐻. The firm should
mixed duopoly model with partial privatization and cross-
choose the sales promotion parameter 𝑏 such that conditions
ownership,” Nonlinear Dynamics, vol. 80, no. 3, pp. 1391–1401,
in Propositions 5 and 6 hold. Profit is a key element in 2015.
firm’s decision to employ what sales promotion strategy. The
optimal sales promotion strategy is obtained and used to [8] J. Ma and Z. Guo, “The parameter basin and complex of
maximize firm’s profit in Proposition 7. These results have dynamic game with estimation and two-stage consideration,”
Applied Mathematics and Computation, vol. 248, pp. 131–142,
some significant theoretical and practical values in related
2014.
markets.
[9] J. Huang, M. Leng, and L. Liang, “Recent developments in
dynamic advertising research,” European Journal of Operational
Conflicts of Interest Research, vol. 220, no. 3, pp. 591–609, 2012.
The authors declare that there are no conflicts of interest [10] X. Su, H. Liu, and S. Hou, “The Trilateral Evolutionary Game of
regarding the publication of this paper. Agri-Food Quality in FARmer-Supermarket Direct Purchase:
A SIMulation APProach,” Complexity, Article ID 5185497, 11
pages, 2018.
Acknowledgments
[11] F. M. Feinberg, “On continuous-time optimal advertising under
This work is jointly supported by the Natural Science Founda- S-shaped response,” Management Science, vol. 47, no. 11, pp.
tion of China under no. 11662001 and the Science Foundation 1476–1487, 2001.
of Guangxi Province under no. 2016GXNSFDA380031. [12] A. Prasad and S. P. Sethi, “Integrated marketing communica-
tions in markets with uncertainty and competition,” Automat-
References ica, vol. 45, no. 3, pp. 601–610, 2009.
[13] A. Krishnamoorthy, A. Prasad, and S. P. Sethi, “Optimal pricing
[1] N. Fukawa and Y. Zhang, “Profit-sharing between an open- and advertising in a durable-good duopoly,” European Journal
source firm and application developers - maximizing profits of Operational Research, vol. 200, no. 2, pp. 486–497, 2010.
Discrete Dynamics in Nature and Society 11
International
Journal of
Mathematics and
Mathematical
Sciences
Journal of
Hindawi
Optimization
Hindawi
www.hindawi.com Volume 2018 www.hindawi.com Volume 2018
International Journal of
Engineering International Journal of
Mathematics
Hindawi
Analysis
Hindawi
www.hindawi.com Volume 2018 www.hindawi.com Volume 2018