Short answer

When developing market entry strategies for software products, utilize quantitative models to systematically evaluate and select the most promising market segments and promotion tactics based on a balance of profit, cost, and market potential.

Field: Innovation & Markets
Source: Business Informatics (2015)
Method: Mathematical modelling and algorithmic optimization
Evidence: Strong effect

A mathematical model can systematically identify the most profitable software promotion strategies by balancing profit maximization, cost minimization, and market segment attractiveness. This innovation & markets research insight is drawn from a 2015 study published in Business Informatics. Using Mathematical modelling and algorithmic optimization, researchers explored how this design variable affects real-world outcomes. The key design takeaway: When developing market entry strategies for software products, utilize quantitative models to systematically evaluate and select the most promising market segments and promotion tactics based on a balance of profit, cost, and market potential.

Study

Innovation & MarketsHigh ImpactStrong effect

Optimizing Software Promotion: A Multi-Objective Model for Market Segment Selection

A mathematical model can systematically identify the most profitable software promotion strategies by balancing profit maximization, cost minimization, and market segment attractiveness.

Business Informatics · 2015

Key Findings

01A multi-objective model can effectively integrate diverse criteria (profit, cost, attractiveness) for selecting promotion options.
02The successive concession method provides a viable algorithmic approach for solving this complex optimization problem.
03The model's application demonstrated its utility in real-world software product distribution decisions.

Application

Design takeaway

How to apply

For a new software product, define key market segments, estimate potential profit and promotion costs for each, assess segment attractiveness and competition, and then use a similar multi-objective optimization approach to prioritize target segments and promotional efforts.

Project actions

01When defining your market segments, be specific about the user needs and business models you are considering.
02Clearly articulate the objectives you are trying to optimize (e.g., profit, user satisfaction, market share).

Method & Evidence

AimHow can a multi-objective mathematical model be developed and applied to select optimal software promotion options across different market segments, considering factors like profit, expenses, and segment attractiveness?

MethodMathematical modelling and algorithmic optimization

ProcedureDeveloped a multi-objective mathematical model to evaluate software promotion options based on market segment attractiveness, competition, and company performance. An algorithm using the successive concession method was created to solve the model, aiming to maximize total profit, minimize promotion expenses, and optimize segment selection.

ContextSoftware product promotion and market strategy

Variables

IVSoftware promotion options, market segments, business models

DVTotal profit, promotion expenses, number of target segments, integrated measure of segment attractiveness

CVHuman resources capacity, single delivery option per segment

Strengths & Limitations

Strengths

+Provides a quantitative and systematic approach to complex strategic decisions.
+Integrates multiple, often conflicting, business objectives into a single decision-making framework.

Limitations

The complexity of real-world market dynamics can be difficult to fully capture in a mathematical model.

Reliability & validity

The reliability of the model depends on the accuracy of the input data (profit, cost, attractiveness estimates). Validity is supported by its application to a real-world case, though generalizability may vary.

Think critically

How might the 'successive concession method' be adapted or replaced if the company has very limited human resources for analysis?

Design Principles

"Strategic market selection should be guided by multi-objective optimization, balancing competing business goals."

In the competitive software industry, understanding which market segments to target and how to promote products is crucial for success. This research provides a structured approach to making these strategic decisions, moving beyond intuition to data-driven optimization.

What This Means for Your Design

This study shows how to use math to figure out the best way to sell software by looking at how much money you can make, how much it costs to promote, and how good the market is.

How to use in your project

1.Use the principles of multi-objective optimization to justify your target market selection and promotional strategy in your design project.

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Quick Cite

Paragraph starter

This research provides a framework for selecting optimal software promotion options by employing a multi-objective mathematical model that balances profit maximization, cost minimization, and market segment attractiveness. This approach can inform strategic decisions regarding market entry and resource allocation for new product launches.

Source

Business Informatics

Mathematical model and algorithm of selecting software promotion options differentiated by functionality and business models

journal · 2015

View source

Questions About This Research

What does the research say about optimizing software promotion: a multi-objective model for market segment selection?: When developing market entry strategies for software products, utilize quantitative models to systematically evaluate and select the most promising market segments and promotion tactics based on a balance of profit, cost, and market potential. Evidence: Business Informatics (2015).
Why does "Optimizing Software Promotion: A Multi-Objective Model for Market Segment Selection" matter for design?: In the competitive software industry, understanding which market segments to target and how to promote products is crucial for success. This research provides a structured approach to making these strategic decisions, moving beyond intuition to data-driven optimization.
How can designers apply this research?: When developing market entry strategies for software products, utilize quantitative models to systematically evaluate and select the most promising market segments and promotion tactics based on a balance of profit, cost, and market potential.
What were the main findings?: A multi-objective model can effectively integrate diverse criteria (profit, cost, attractiveness) for selecting promotion options.. The successive concession method provides a viable algorithmic approach for solving this complex optimization problem.. The model's application demonstrated its utility in real-world software product distribution decisions.
What research method was used?: Mathematical modelling and algorithmic optimization.
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2015 journal from Business Informatics.
What should I do differently in my next project?: For a new software product, define key market segments, estimate potential profit and promotion costs for each, assess segment attractiveness and competition, and then use a similar multi-objective optimization approach to prioritize target segments and promotional efforts.
What are the limitations?: The model's limitations include the constraint of available human resources within an IT company and the assumption of a single delivery model per market segment.