Product-harm crisis are the nightmare of any firm as they have a disastrous effect on their sales and image. This paper proposes a new model to compute the optimal investment in quality and advertising in order to reduce the probability of occurrence of a possible product-harm crisis and mitigate its effects. This method uses stochastic control theory and can be used for both tangible products and services.
Title
Investing optimally in advertising and quality to mitigate product-harm crisis
Date
2015-05
Published in
Proceedings of the IE 2015 International Conference
Publisher
Bucharest , Bucharest University of Economic Studies
Pagination
Pp. 437-442
Presented at
14th International Conference on Informatics in Economy Education, Bucharest, Romania, 30/04/2015 / 03/05/2015
ISSN
2247 – 1480
Paper type
full paper
Faculty
Economie et Services
School
HEG - Genève
Institute
CRAG - Centre de Recherche Appliquée en Gestion