Dynamic Pricing Policies and Optimal Product Sampling for the Diffusion Model of new Product

Firms use product samples to increase the sales of almost all consumable goods. However, product sampling is also expensive. As a result, a firm needs to determine the optimal amount of samples that must be available for trial by the innovators, early adopters, and other key consumers who influence the adoption rate of the new product. For this purpose, this paper builds the optimal model group of product sampling by considering dynamic pricing and promotion strategies. Then the paper makes parametric analysis on the optimal sampling by using genetic algorithms. Finally, the paper gives out meaningful explanations which can be used for marketing, and presents a future research framework for determining optimal product sampling for the market diffusion of new product at time zero or over time.