A Quality Function Deployment Inspired Mathematical Model for Optimal Allocation of the Promotional Budget

Abstract

The four marketing mix elements for goods are placement, product, price and promotion. Decisions related to all these elements should be carefully studied in order for a company to achieve its marketing and corporate objectives. This paper focuses on the promotional instruments and proposes a model that optimally allocates the promotional budget. The model can be used in computerized decision support system to help practitioners. A number of promotional instruments used to reach the public for messages about a product are considered in the model. In spite of the fact that the quantity of the product to be sold is previously forecasted, it is when assuring the image of the brand that the company can sell the forecasted quantity or even more. Otherwise, the company can lose a part of the market share that goes to the competition.