Open AccessA dynamic discount pricing strategy for viral marketing
Author(s) -
Xuefei Zhong,
Junhui Zhao,
LuXing Yang,
XinShe Yang,
Yingbo Wu,
Yuan Yan Tang
Publication year - 2018
Publication title -
plos one
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.99
H-Index - 332
ISSN - 1932-6203
DOI - 10.1371/journal.pone.0208738
Subject(s) - viral marketing , optimal control , dynamic pricing , profit (economics) , dynamic programming , marketing , control (management) , computer science , mathematical optimization , economics , microeconomics , business , mathematics , artificial intelligence , world wide web , social media
Viral marketing has been one of the main marketing modes. However, theoretical study of viral marketing is still lacking. This paper focuses on the problem of developing a cost-effective dynamic discount pricing strategy for a viral marketing campaign. First, based on a novel word-of-mouth propagation model, we model the original problem as an optimal control problem. Second, we show that the optimal control problem admits an optimal control and present the optimality system for solving the optimal control problem. Next, we solve some optimal control models to get their respective optimal dynamic discount pricing strategies. Finally, we examine the effect of some factors on the maximum marketing profit. These results contribute to gaining insight into viral marketing.