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http://dx.doi.org/10.22937/IJCSNS.2021.21.7.34

Marketing to Competitors' Customers using Agent based Modelling and Simulation Driven Strategy  

Beyari, Hasan (Department of Administrative and Financial Sciences Makkah Community College Umm Al-Qura University)
Publication Information
International Journal of Computer Science & Network Security / v.21, no.7, 2021 , pp. 297-304 More about this Journal
Abstract
In a duopoly situation, one firm can gain competitive advantage by attracting the price-sensitive customers from its competitor leading to higher profits through higher sale revenue for the competing company. A simulation study in which there are two electric car manufacturers with agent based modelling was conducted in order to verify this contention. The first step consisted of defining the baseline. Simulations of 1000 times and agent-based modelling were conducted with the assumption that company 1 reduced its price to the maximum of 20% thereby contributing to the switch-over of a maximum of 40% of the price sensitive customers of company 2. The results of 1000 simulations and agent-based modelling highlighted that price reduction by company 1 resulted in a significant increase in the number of customers, presumably due to switch-over from company 2 and there was a corresponding increase in revenues from both of the sales avenues. Thus, Company 1 achieved competitive advantage by marketing its cars to the customers of Company 2 using price reduction strategy to attract them. This study has ramifications for companies that aim to sway the price sensitive customers from a competitor.
Keywords
Enterprise performance improvement; agent based modelling; simulation; marketing systems; marketing campaigns;
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