Optimal targeted advertising strategies based on consumers' value attributes

To evaluate the effects of consumers＇ value attributes on a firm＇s marketing strategies with targeted advertising, each consumer＇s value is measured according to the consumer＇s consuming behavior and consumption features. The baseline model in which a firm sends targeted advertising to myopic consumers with constant valuations is established. The results showthat, when a firm sells products to consumers with distinct values using the strategies of targeted advertising and discriminative price, the firm＇s equilibrium profit with targeted advertising may not always be higher than that using mass advertising, which depends on the ratio of high-value and low-value consumers. Then, three extension models are constructed.First, the firm sends targeted advertising to consumers with different targeting precisions. Secondly, the firm invests in the targeting precision of targeted advertising. Finally, the deliberation cost of rational consumers accepting the discriminative price and targeted advertising is considered. The results indicate that it is profitable for a firm to send targeted advertising to consumers with different value attributes.