Optimal Advertising When Envisioning a Product-Harm Crisis

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Olivier Rubel; Prasad A. Naik; Shuba Srinivasan;
  • Journal: Marketing Science, volume 30, issue 6 November, pages 1,048-1,065
  • Related identifiers: doi: 10.1287/mksc.1110.0679
  • Subject: product-harm crisis, optimal advertising, stochastic optimal control, random stopping time problem, Kalman filter, Ford Explorer rollover

How should forward-looking managers plan advertising if they envision a product-harm crisis in the future? To address this question, we propose a dynamic model of brand advertising in which, at each instant, a nonzero probability exists for the occurrence of a crisis ev... View more
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