Essential issues that must be addressed when designing a firm's marketing strategy are the strategic intertemporal interdependencies between the firm and its competitors in the market, the firm and the various agents in the firm's distribution channel, and the firm and its customers. Here, we confine our interest to the first two issues (which, however, does not mean that the third one is less important).

A firm often tries to attain its marketing objectives (e.g., sales revenue, market share) vis-à-vis its competitors through a range of direct marketing efforts (including, for example, price, advertising, quality, and distribution), but cost-reducing efforts or strategic investments can also increase a firm's competitive position. Any marketing strategy needs to be coordinated with investment and capacity plans (see chapter 9), financial planning, and R&D policy (see chapter 10).

The chapter proceeds as follows. First we present a game in which two duopolistic firms use their advertising efforts to compete for market share. Then we study an oligopoly pricing game of new product diffusion. Third, we introduce a game between the two parties in a vertical distribution channel: a manufacturer and a retailer. The area of marketing has been rather popular for differential game applications, and in section 11.4 we list a series of other applications. With respect to modelling, we introduce the following categories: market share models (section 11.1), cumulative sales models (section 11.2), and advertising goodwill models (section 11.3).