A quantitative analysis on e-books sampling optimization

Abstract

E-book sales have seen a slow growth in recent years. A major issue is how to attract consumers and promote sales. Motivated by the marketing strategy of free sampling, retailers start to offer free partial sampling of e-books. We propose a quantitative model for retailers to optimize the selection of e-books for sampling in their promotion campaign with a limited budget. Simulation-based numerical analysis shows that our model increases retailers’ profit by around 8% when the free partial sampling strategy can double the e-book demand. We also develop a dynamic programming model to help retailers better utilize a budget in relatively long period of time. An experiment analysis reflects an improvement of retailer’s profit of around 7%. Our model can be extended to other information goods such as digital music, video, and newspaper.