PROMOTION FUND ALLOCATION OPTIMIZATION FOR DISCOUNTABLE PRODUCT USING MARKOWITZ MODEL

• Main Author: Arlinta Bangun, David
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/47713
• Institution: Institut Teknologi Bandung

Every business person always wants a maximum return in every endeavor. For example, a marketing manager will try to maximize returns by investing in promotional activities. The greater the promotional costs incurred, the greater the return they expect. Markowitz model as one of the models that are often used in financial investment, has helped investors to maximize portfolio returns. By making a few modifications, in this study the application of the Markowitz model does not only cover the financial sector, but also in the marketing field. In general, the appropriate allocation of promotional costs for product discounts can affect sales returns. Assuming that each discount level can be classified as an asset, the Markowitz model can be used to solve marketing problems. This study shows that the Markowitz model is able to build optimal portfolios from the allocation of promotional costs for discounted products at each level of risk.