ZIPMAP — A Zero-One Integer Programming Model for Market Segmentation and Product Positioning

Abstract

An optimization model is proposed to aid marketing managers to search for and develop new product brand ideas. The model, which is founded on individual consumer behaviour constructs, determines a position for a new brand, in the consumers' perceptual space of product attributes, that maximizes company sales. The resulting mathematical model is stated as a large-scale, mixed, zero-one, integer, non-linear mathematical programming problem whose solution is sought through a two-stage optimization approach.