AbstractFrequently, companies face the problem of allocating a given marketing budget in order to maximize their total returns. In this paper we examine the problem of allocating marketing effort, such as advertising, amongPsubstitutional products, distributed inNdifferent sales territories. Two models are discussed. In the first model it is assumed that at most one product is promoted in each sales territory. It is shown that a simple algorithm leads to at least a local optimum in a finite number of steps. In the second model, the restriction of one product per territory is eliminated. Applying a concept of effective effort, the model is transformed to an equivalent separable programming problem, solvable by a“single-pass”algorithm for various forms of response functions. Furthermore, a concept of successive modifications of the objective function is discussed.