Research On Advertising Competition Strategy Based On Dynamic Game Model

How to make use of advertisement to increase the market share and maximize the profit of oligopoly is a research problem with important theoretical and practical significance.In the fierce competitive environment of oligopoly enterprises,advertising can expand the market share of enterprises and increase potential customers,and establish product brand effect to help enterprises establish an image in the market.However,due to the existence of advertising spillover effect,an enterprise's advertising not only affects its own market size,but also exerts certain influence on its competitors.Therefore,when making advertising strategies,enterprises should consider the situation of themselves and their competitors,fully consider the spillover effect of advertising,and make decisions more conducive to the development of enterprises.More and more scholars have begun to pay attention to the advertising competition among enterprises in the oligopoly market,which will provide a theoretical basis for enterprises to make the optimal advertising strategy in the actual operation.Nowadays,with the popularity of advertising,advertising is an important part for oligopolistic enterprises to improve the market share.Game theory has become an important tool to study the competition between oligarchs.After combing the existing literature,it is found that there is no research on the combination of two-stage game and nonlinear dynamics to analyze the advertising competition between enterprises.Therefore,this paper establishes a two-stage game model to discuss the influence of the degree of advertising investment on the profits of enterprises.And the complexity of the system is analyzed by nonlinear dynamics.Numerical simulation and example analysis are used in this paper.Firstly,the game model is established,and the advertising competition is analyzed by numerical simulation based on the theoretical knowledge of nonlinear dynamics.Moreover,taking the second-hand car e-commerce industry as an example,and using the numerical simulation to get the conclusion of the combination of analysis and discussion.The following conclusions are drawn :(1)Only the strategies of two enterprises that do not invest in advertising are unstable,while other equilibrium strategies are likely to be asymptotically stable when the parameters meet certain conditions.Stable advertising strategies are beneficial to the development of enterprises.(2)Enterprises generally want to be able to operate stably,so generally do not make the adjustment speed is too large,meaning that the amount of advertising in each issue will not have too much change.The enterprise will make the advertising investment strategy within the advertising investment scope which can make the enterprise stable operation.(3)When companies advertise too heavily,their profits may fall.If the rate of adjustment of advertising is changed,the average profit of the enterprise may move up or down.In addition,we found that the real cause of the decline in average profits was excessive adjustment of advertising spending.Chaos is not always bad for the market,and companies with a low rate of adjustment can benefit from it.(4)The pre-advertising investment can make the second-hand car e-commerce enterprises have a certain degree of popularity,and some enterprises can profit from the chaotic situation of "burning money" to advertise,but the continuous advertising war will increase the operating cost of enterprises,and the enterprises will lose altogether.Finally,according to the analysis results,the author puts forward some strategic suggestions.