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AUTOMATICA
2006

Brand image and brand dilution in the fashion industry

10 years 2 months ago
Brand image and brand dilution in the fashion industry
We develop a dynamic optimal control model of a fashion designer's challenge of maintaining brand image in the face of short-term pro...t opportunities through expanded sales that risk brand dilution in the longer-run. The key state variable is the brand's reputation, and the key decision is sales volume. Depending on the brand's capacity to command higher prices, one of two regimes is observed. If the price mark-ups relative to production costs are modest, then the optimal solution may simply be to exploit whatever value can be derived from the brand in the short-run and retire the brand when that capacity is fully diluted. However, if the price markups are more substantial, then an existing brand should be preserved. 1
Peter M. Kort, Jonathan P. Caulkins, Richard F. Ha
Added 10 Dec 2010
Updated 10 Dec 2010
Type Journal
Year 2006
Where AUTOMATICA
Authors Peter M. Kort, Jonathan P. Caulkins, Richard F. Hartl, Gustav Feichtinger
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