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How do loyalty programs affect goodwill? An optimal control approach

dc.contributor.authorMachowska, Dominika
dc.contributor.authorGórajski, Mariusz
dc.date.accessioned2021-12-17T13:30:28Z
dc.date.available2021-12-17T13:30:28Z
dc.date.issued2019
dc.identifier.citationGórajski, M., Machowska, D. How do loyalty programs affect goodwill? An optimal control approach. 4OR-Q J Oper Res 17, 297–316 (2019). https://doi.org/10.1007/s10288-018-0386-2pl_PL
dc.identifier.issn1619-4500
dc.identifier.urihttp://hdl.handle.net/11089/40085
dc.description.abstractThis paper examines the long-term impact of loyalty programs on a company’s profit and reputation among customers, and with different durations of product use. We analyze how the launch of loyalty programs may change the profitability of optimal advertising activities. The basis of this study is a modified goodwill model where the market is segmented according to usage experience. The main novelty is the role of loyalty programs and consumer recommendations in the creation of product goodwill, and also their influence on optimal advertising. The dynamics of goodwill are described by a partial differential equation. The firm maximizes the sum of discounted profits by choosing a different advertising campaign for each market segment. For a high-quality product, we observe that there is a trade off between the loyalty program and optimal advertising strategies. For a low-quality product, the loyalty program causes more profitable companies to invest heavily in additional advertising efforts.pl_PL
dc.description.sponsorshipThe authors gratefully acknowledge financial support from the National Science Centre in Poland. Decision number: DEC-2011/03/D/HS4/04269.pl_PL
dc.language.isoenpl_PL
dc.publisherSpringerpl_PL
dc.relation.ispartofseriesA Quarterly Journal of Operations Research;17
dc.rightsUznanie autorstwa 4.0 Międzynarodowe*
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/*
dc.subjectLoyalty programpl_PL
dc.subjectGoodwillpl_PL
dc.subjectAdvertising effortspl_PL
dc.subjectOptimal controlpl_PL
dc.titleHow do loyalty programs affect goodwill? An optimal control approachpl_PL
dc.typeArticlepl_PL
dc.page.number297-316pl_PL
dc.contributor.authorAffiliationDepartment of Econometrics, Faculty of Economics and Sociology, University of Lodzpl_PL
dc.contributor.authorAffiliationDepartment of Econometrics, Faculty of Economics and Sociology, University of Lodzpl_PL
dc.identifier.eissn1614-2411
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dc.contributor.authorEmaildominika.machowska@uni.lodz.plpl_PL
dc.contributor.authorEmailmariusz.gorajski@uni.lodz.plpl_PL
dc.identifier.doi10.1007/s10288-018-0386-2
dc.disciplineekonomia i finansepl_PL
dc.disciplinenauki o zarządzaniu i jakościpl_PL


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