Keywords
Service, Freeriding, Product Information, Return Policy, Retail Competition, Advertising, Media Mix, Consumer Dynamics, Acquisition, Retention.
Subject Categories
Business Administration, Management, and Operations | E-Commerce | Marketing
Abstract
This dissertation broadly examines how firms should optimize their marketing mix in competitive environments through service design, return policies, and dynamic advertising allocation. The first essay develops an analytical model of retail competition in markets characterized by heterogeneous consumers, service freeriding, and incomplete market coverage. The study investigates how retailers strategically choose prices, service levels, and return policies under varying market conditions. The findings demonstrate that in markets with high return rates and low service freeriding, high-service retailers benefit from shorter return windows and greater provision of product information, while low-service retailers prefer longer return windows to attract consumers seeking return flexibility. In markets with lower returns and pervasive service freeriding, high-service retailers should offer longer return windows to attract consumers who value return flexibility, while low-service retailers should choose shorter return windows and leverage the informational benefits arising from freeriding. The second essay develops a dynamic framework in which advertising induces transitions between latent consumer states, with sales arising endogenously from the evolving composition of the consumer base. The model accommodates multiple advertising channels with heterogeneous targeting precision and incorporates competitive advertising. Using sales and multichannel advertising data from the U.S. facial skincare category, the framework jointly recovers latent consumer dynamics and channel-specific transition effects through Bayesian estimation. The estimation reveals sharply differentiated channel roles and shows how competitive advertising reshapes consumer flows across brand networks. Closed-loop optimal advertising policies prescribe state-dependent media allocation and generate endogenous feedback between advertising, consumer composition, and sales. Finally, counterfactual analyses demonstrate a significant sales improvement under the optimal allocation. Together, these essays contribute to the marketing literature by integrating consumer dynamics, competitive interactions, and strategic firm decisions into unified analytical and empirical frameworks that provide managerial guidance for optimizing long-run profitability.
Completion Date
2026
Semester
Summer
Committee Chair
Krishnamoorthy, Anand
Degree
Doctor of Philosophy (Ph.D.)
College
Barry S. Miller College of Business
Department
Marketing
Format
Document Type
Dissertation
Language
English
Release Date
8-15-2028
STARS Citation
Sanaei, Fariba, "Two Essays On Marketing-Mix Optimization For Long-Run Profitability" (2026). Graduate Studies Theses and Dissertations 2026. 346.
https://stars.library.ucf.edu/gradstudies_etd_2026/346
Included in
Business Administration, Management, and Operations Commons, E-Commerce Commons, Marketing Commons
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