Introduction

Abstract

The inherently dynamic nature of competition suggests that it would be inappropriate to derive recommendations for a firm’s marketing efforts by using a static or a period-by-period approach. In this regard, the use of differential games has been a significant contribution to marketing science literature (Rao (1990), Erickson (1992)). Over the last 25 years, an important stream of research on the optimal planning of marketing efforts in competitive, dynamic environments has emerged. The main body of this research is normative (prescriptive). The studies have mainly been concerned with competition among incumbent firms, although studies of problems of entry also exist. Prom another perspective, the research deals with competition among established (mature) brands as well as problems related to the diffusion of new products and services.