SYSTEM DYNAMICS MODELING OF MARKETING INNOVATION IN BUILDING AN ENTERPRISE’S INTERNATIONAL BRAND

Abstract

The article develops a system dynamics model of the impact of marketing innovations on the formation of an enterprise's international brand equity. The relevance of the study is determined by the need to account for non-linear dependencies, time delays, and feedback loops between investments in marketing innovations and their effects on brand equity in the context of globalization and the digital transformation of business. The methodological foundation of the research combines system dynamics, brand equity concepts, diffusion of innovations theory, and cross-cultural marketing. The model is implemented in the Insight Maker software environment using stock variables for brand equity accumulation, converters to calculate innovation impact, and links to represent feedback loops. The model is based on four core hypotheses: differentiated impact of various types of marketing innovations (digital, content, customer experience) on brand equity components; nonlinearity in investments and saturation effects; time delays in the manifestation of innovation impacts; and the possibility of managing cultural adaptation through localization investments. A distinctive feature of the developed model is the use of normalized, dimensionless variables, which ensure dimensional consistency and universal applicability across different market contexts. The results of simulation modeling demonstrate S-shaped dynamics in enterprise market share growth, confirming the model's correspondence with the classical diffusion of innovations theory. The model allows for calculating various scenarios of enterprise behavior in implementing marketing innovations and optimizing their impact on competitive positions through brand equity enhancement. The practical significance lies in the possibility of substantiating international brand management strategy and determining optimal investments in different types of marketing innovations, considering the specifics of target markets, cultural barriers, and competitive environment. The model has certain limitations related to its deterministic nature and aggregate representation of competition, which outlines promising directions for future research.