Selection of Optimal Marketing Strategy in Competitive Markets by the Development of Game Theory Models

In competitive markets, selecting appropriate marketing strategy is effective in selling more products and success of organization. Decisions and strategies of competitors in the market influence the selection of appropriate marketing strategy. The purpose of this paper is to develop a mathematical tool for selecting the appropriate marketing strategy with respect to rival’s strategies. The game theory approach as a conflict resolution tool is suggested for choosing the optimal marketing strategy. Given the variety of game analysis methods, the static, limited, non-cooperative, static game has been developed for this issue and the implementation of the proposed model has been used to design optimal marketing strategies for two brands of beverage manufacturer. The adaptation of the stages and components of the game theory model to the problem of marketing strategic planning and the definition of the components and method of game solving designed for the market analysis problem are among the characteristics of this research. The results of this case study show that if each of the two well-known brands of beverages in Tehran chooses price or promotion strategies as their marketing strategy, they would have the maximum market share.