Business, Management and Accounting › Marketing

Consumer Market Behavior and Pricing

Works Count: 44566

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Description

This cluster of papers explores the economic analysis of retail and marketing strategies, focusing on topics such as consumer behavior, online advertising, price perception, brand loyalty, store brands, market competition, and e-commerce. It delves into the impact of various promotional tactics, the influence of store image on consumer perceptions, and the dynamics of consumer demand in the digital age.

Keywords

Retail Economics; Marketing Strategies; Consumer Behavior; Online Advertising; Price Perception; Brand Loyalty; Store Brands; Market Competition; Consumer Choice; E-commerce

Managing Channel Profits

1983-08-01

Abel P. Jeuland , Steven M. Shugan

A channel of distribution consists of different channel members each having his own decision variables. However, each channel member's decisions do affect the other channel members' profits and, as a … A channel of distribution consists of different channel members each having his own decision variables. However, each channel member's decisions do affect the other channel members' profits and, as a consequence, actions. A lack of coordination of these decisions can lead to undesirable consequences. For example, in the simple manufacturer-retailer-consumer channel, uncoordinated and independent channel members' decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated. In addition, the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer. This paper explores the problems inherent in channel coordination. We address the following questions. —What is the effect of channel coordination? —What causes a lack of coordination in the channel? —How difficult is it to achieve channel coordination? —What mechanisms exist which can achieve channel coordination? —What are the strengths and weaknesses of these mechanism? —What is the role of nonprice variables (e.g., manufacturer advertising, retailer shelf-space) in coordination? —Does the lack of coordination affect normative implications from in-store experimentation? —Can quantity discounts be a coordination mechanism? —Are some marketing practices actually disguised quantity discounts? We review the literature and present a simple formulation illustrating the roots of the coordination problem. We then derive the form of the quantity discount schedule that results in optimum channel profits.

A Theory of Demand for Products Distinguished by Place of Production (Une theorie de la demande de produits differencies d'apres leur origine) (Una teoria de la demanda de productos distinguiendolos segun el lugar de produccion)

1969-03-01

Paul S. Armington

Conditional Choice Probabilities and the Estimation of Dynamic Models

1993-07-01

V. Joseph Hotz , Robert A. Miller

Journal Article Conditional Choice Probabilities and the Estimation of Dynamic Models Get access V. Joseph Hotz, V. Joseph Hotz University of Chicago Search for other works by this author on: … Journal Article Conditional Choice Probabilities and the Estimation of Dynamic Models Get access V. Joseph Hotz, V. Joseph Hotz University of Chicago Search for other works by this author on: Oxford Academic Google Scholar Robert A. Miller Robert A. Miller Carnegie Mellon University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 60, Issue 3, July 1993, Pages 497–529, https://doi.org/10.2307/2298122 Published: 01 July 1993 Article history Received: 01 April 1989 Accepted: 01 January 1993 Published: 01 July 1993

Social Networks and Labor-Market Outcomes: Toward an Economic Analysis

1991-01-01

James D. Montgomery

Econometric Analysis of Count Data

2003-01-01

Rainer Winkelmann

An Empirical Pooling Approach for Estimating Marketing Mix Elasticities with PIMS Data

1993-02-01

Venkatram Ramaswamy , Wayne S. DeSarbo , David J. Reibstein +1 more

The PIMS (Profit Impact of Marketing Strategies) data entail sparse time-series observations for a large number of strategic business units (SBUs), In order to estimate disaggregate marketing mix elasticities of … The PIMS (Profit Impact of Marketing Strategies) data entail sparse time-series observations for a large number of strategic business units (SBUs), In order to estimate disaggregate marketing mix elasticities of demand, a natural solution is to pool different SBUs. The traditional, a priori approach is to pool together those SBUs which one believes in advance to be very similar with respect to their marketing mix elasticities. We propose an alternative maximum likelihood, latent-pooling method for simultaneously pooling, estimating, and testing linear regression models empirically. This method enables the determination of a “fuzzy” pooling scheme, while directly estimating a set of marketing mix elasticities and intertemporal covariances for each pool of SBUs. Our analyses reveal different magnitudes and patterns of marketing mix elasticities for the derived pools. Pool membership is influenced by demand characteristics, business scope, and order of market entry.

Applications of structural equation modeling in marketing and consumer research: A review

1996-04-01

Jennifer Brunet , Michael Chaiton , Gisèle Contreras +4 more

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Testing For "Monopoly" Equilibrium

1987-06-01

John C. Panzar , James N. Rosse

This paper develops a very general test for monopoly. Using standard comparative statics analysis, the authors derive testable restrictions on the firm's reduced-form revenue equation which must be satisfied by … This paper develops a very general test for monopoly. Using standard comparative statics analysis, the authors derive testable restrictions on the firm's reduced-form revenue equation which must be satisfied by any profit-maximizing firm whose choices are not affected by either strategic interactions or the threat of entry. For such an unfettered monopolist, the sum of the factor price elasticities of the reduced-form revenue equation must be nonpositive. The set of interesting alternative hypotheses is not empty. The authors develop simple models of oligopolistic, competitive, and monopolistically-competitive markets for which this test statistic may take on positive values. Copyright 1987 by Blackwell Publishing Ltd.

A Control Function Approach to Endogeneity in Consumer Choice Models

2010-01-14

Amil Petrin , Kenneth Train

Endogeneity arises for numerous reasons in models of consumer choice. It leads to inconsistency with standard estimation methods that maintain independence between the model's error and the included variables. The … Endogeneity arises for numerous reasons in models of consumer choice. It leads to inconsistency with standard estimation methods that maintain independence between the model's error and the included variables. The authors describe a control function approach for handling endogeneity in choice models. Observed variables and economic theory are used to derive controls for the dependence between the endogenous variable and the demand error. The theory points to the relationships that contain information on the unobserved demand factor, such as the pricing equation and the advertising equation. The authors’ approach is an alternative to Berry, Levinsohn, and Pakes's (1995) product-market controls for unobserved quality. The authors apply both methods to examine households’ choices among television options, including basic and premium cable packages, in which unobserved attributes, such as quality of programming, are expected to be correlated with price. Without correcting for endogeneity, aggregate demand is estimated to be upward-sloping, suggesting that omitted attributes are positively correlated with demand. Both the control function method and the product-market controls method produce downward-sloping demand estimates that are similar.

Automobile Prices in Market Equilibrium

1995-07-01

Steven Berry , James Levinsohn , Ariel Pakes

This paper develops techniques for empirically analyzing demand and supply in differentiated products markets and then applies these techniques to analyze equilibrium in the U.S. automobile industry. Our primary goal … This paper develops techniques for empirically analyzing demand and supply in differentiated products markets and then applies these techniques to analyze equilibrium in the U.S. automobile industry. Our primary goal is to present a framework which enables one to obtain estimates of demand and cost parameters for a class of oligopolistic differentiated products markets. These estimates can be obtained using only widely available product-level and aggregate consumer-level data, and they are consistent with a structural model of equilibrium in an oligopolistic industry. When we apply the tech- niques developed here to the U.S. automobile market, we obtain cost and demand parameters for (essentially) all models marketed over a twenty year period.

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The Measurement and Determinants of Brand Equity: A Financial Approach

1993-02-01

Carol Simon , Mary W. Sullivan

This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash … This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products. The estimation technique extracts the value of brand equity from the value of the firm's other assets. This technique is useful for two purposes. First, the macro approach assigns an objective value to a company's brands and relates this value to the determinants of brand equity. Second, the micro approach isolates changes in brand equity at the individual brand level by measuring the response of brand equity to major marketing decisions. Empirically, we estimate brand equity using the macro approach for a sample of industries and companies. Then we use the micro approach to trace the brand equity of Coca-Cola and Pepsi over three major events in the soft drink industry from 1982 to 1986.

The Effect of Price, Brand Name, and Store Name on Buyers' Perceptions of Product Quality: An Integrative Review

1989-08-01

Akshay R. Rao , Kent B. Monroe

The authors integrate previous research that has investigated experimentally the influence of price, brand name, and/or store name on buyers’ evaluations of product quality. The meta-analysis sugge... The authors integrate previous research that has investigated experimentally the influence of price, brand name, and/or store name on buyers’ evaluations of product quality. The meta-analysis sugge...

Monopoly and product quality

1978-08-01

Michael Mussa , Sherwin Rosen

The Heckman Correction for Sample Selection and Its Critique

2000-02-01

Patrick A. Puhani

This paper gives a short overview of Monte Carlo studies on the usefulness of Heckman’s (1976, 1979) two‐step estimator for estimating selection models. Such models occur frequently in empirical work, … This paper gives a short overview of Monte Carlo studies on the usefulness of Heckman’s (1976, 1979) two‐step estimator for estimating selection models. Such models occur frequently in empirical work, especially in microeconometrics when estimating wage equations or consumer expenditures. It is shown that exploratory work to check for collinearity problems is strongly recommended before deciding on which estimator to apply. In the absence of collinearity problems, the full‐information maximum likelihood estimator is preferable to the limited‐information two‐step method of Heckman, although the latter also gives reasonable results. If, however, collinearity problems prevail, subsample OLS (or the Two‐Part Model) is the most robust amongst the simple‐to‐calculate estimators.

A model of price adjustment

1971-06-01

Peter Diamond

Equilibrium Price Dispersion

1983-07-01

Kenneth Burdett , Kenneth L. Judd

Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion

1977-10-01

Steven C. Salop , Joseph E. Stiglitz

Journal Article Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion Get access Steven Salop, Steven Salop Federal Reserve Board Search for other works by this author on: Oxford … Journal Article Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion Get access Steven Salop, Steven Salop Federal Reserve Board Search for other works by this author on: Oxford Academic Google Scholar Joseph Stiglitz Joseph Stiglitz Stanford University and Oxford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 3, October 1977, Pages 493–510, https://doi.org/10.2307/2296903 Published: 01 October 1977 Article history Received: 01 April 1975 Accepted: 01 October 1976 Published: 01 October 1977

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Advertising as Information

1974-07-01

Phillip Nelson

The Price Knowledge and Search of Supermarket Shoppers

1990-07-01

Peter R. Dickson , Alan G. Sawyer

A model of grocery shopper response to price and other point-of-purchase information was developed and hypotheses were tested by using observations and interviews. The findings suggest that shoppers tended to … A model of grocery shopper response to price and other point-of-purchase information was developed and hypotheses were tested by using observations and interviews. The findings suggest that shoppers tended to spend only a short time making their selection and many did not check the price of the item they selected. Perhaps as a consequence, more than half could not correctly name the price of the item just placed in the shopping cart and more than half of the shoppers who purchased an item that was on special were unaware that the price was reduced. Other results on point-of-purchase information processing and behavior are discussed.

Interaction terms in logit and probit models

2003-05-19

Chunrong Ai , Edward C. Norton

THE ECONOMICS OF JOB SEARCH: A SURVEY

1976-06-01

Steven A. Lippman , John J. McCall

Part I of this survey presents a comprehensive and inte- grated analysis of job search. The labor market is characterized by incomplete information and search is conducted in an optimal … Part I of this survey presents a comprehensive and inte- grated analysis of job search. The labor market is characterized by incomplete information and search is conducted in an optimal manner. A variety of job search models are studied in this microeconomic setting. The paper contains a number of new results. Part 11 of the survey [to appear in the September 1976 issue of Economic Inquiry] addresses the empirical and policy implications of search theory.

Information and Consumer Behavior

1970-03-01

Phillip Nelson

Real Wages, Employment, and Inflation

1969-09-01

Robert E. Lucas , Leonard A. Rapping

Premiums for High Quality Products as Returns to Reputations

1983-11-01

Carl Shapiro

This paper derives an equilibrium price-quality schedule for markets in which buyers cannot observe product quality prior to purchase. In such markets there is an incentive for sellers to reduce … This paper derives an equilibrium price-quality schedule for markets in which buyers cannot observe product quality prior to purchase. In such markets there is an incentive for sellers to reduce quality and take short-run gains before buyers catch on. In order to forestall such quality cutting, the price-quality schedule involves high quality items selling at a premium above their cost. This premium also serves the function of compensating sellers for their investment in reputation. The effects of improved consumer information and of a minimum quality standard on the equilibrium price-quality schedule are studied. In general, optimal quality standards exclude from the market items some consumers would like to buy.

Wage Differentials, Employer Size, and Unemployment

1998-05-01

Kenneth Burdett , Dale T. Mortensen

The unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set … The unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized. Wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed. The unique nondegenerate equilibrium distribution of wage offers is constructed for three cases: (1) identical workers and employers, (2) identical employers and an atomless distribution of worker supply prices, and (3) identical workers and an atomless distribution of job productivities. Copyright 1998 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Conjoint Analysis in Consumer Research: Issues and Outlook

1978-09-01

Paul E. Green , V. Srinivasan

Abstract Since 1971 conjoint analysis has been applied to a wide variety of problems in consumer research. This paper discusses various issues involved in implementing conjoint analysis and describes some … Abstract Since 1971 conjoint analysis has been applied to a wide variety of problems in consumer research. This paper discusses various issues involved in implementing conjoint analysis and describes some new technical developments and application areas for the methodology.

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A Logit Model of Brand Choice Calibrated on Scanner Data

1983-08-01

Peter M. Guadagni , John D. C. Little

A multinomial logit model of brand choice, calibrated on 32 weeks of purchases of regular ground coffee by 100 households, shows high statistical signficance for the explanatory variables of brand … A multinomial logit model of brand choice, calibrated on 32 weeks of purchases of regular ground coffee by 100 households, shows high statistical signficance for the explanatory variables of brand loyalty, size loyalty, presence/absence of store promotion, regular shelf price and promotional price cut. The model is parsimonious in that the coefficients of these variables are modeled to be the same for all coffee brand-sizes. The calibrated model predicts remarkably well the share of purchases by brand-size in a hold-out sample of 100 households over the 32-week calibration period and a subsequent 20-week forecast period. The success of the model is attributed in part to the level of detail and completeness of the household panel data employed, which has been collected through optical scanning of the Universal Product Code in supermarkets. Three short-term market response measures are calculated from the model: regular (depromoted) price elasticity of share, percent increase in share for a promotion with a median price cut, and promotional price cut elasticity of share. Response varies across brand-sizes in a systematic way with large share brand-sizes showing less response in percentage terms but greater in absolute terms. On the basis of the model a quantitative picture emerges of groups of loyal customers who are relatively insensitive to marketing actions and a pool of switchers who are quite sensitive.

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Consumer Choice between Hedonic and Utilitarian Goods

2000-02-01

Ravi Dhar , Klaus Wertenbroch

In this article, the authors examine how consumer choice between hedonic and utilitarian goods is influenced by the nature of the decision task. Building on research on elaboration, the authors … In this article, the authors examine how consumer choice between hedonic and utilitarian goods is influenced by the nature of the decision task. Building on research on elaboration, the authors propose that the relative salience of hedonic dimensions is greater when consumers decide which of several items to give up (forfeiture choices) than when they decide which item to acquire (acquisition choices). The resulting hypothesis that a hedonic item is relatively preferred over the same utilitarian item in forfeiture choices than in acquisition choices was supported in two choice experiments. In a subsequent experiment, these findings were extended to hypothetical choices in which the acquisition and forfeiture conditions were created by manipulating initial attribute-level reference states instead of ownership. Finally, consistent with the experimental findings, a field survey showed that, relative to market prices, owners of relatively hedonic cars value their vehicles more than do owners of relatively utilitarian cars. The authors discuss theoretical implications of these reference-dependent preference asymmetries and explore consequences for marketing managers and other decision makers.

Estimating Discrete-Choice Models of Product Differentiation

1994-01-01

Steven Berry

This article considers the problem of supply-and-demand analysis on a cross section of oligopoly markets with differentiated products. The primary methodology is to assume that demand can be described by … This article considers the problem of supply-and-demand analysis on a cross section of oligopoly markets with differentiated products. The primary methodology is to assume that demand can be described by a discrete-choice model and that prices are endogenously determined by price-setting firms. In contrast to some previous empirical work, the techniques explicitly allow for the possibility that prices are correlated with unobserved demand factors in the cross section of markets. The article proposes estimation by inverting the market-share equation to find the implied mean levels of utility for each good. This method allows for estimation by traditional instrumental variables techniques.

Conjoint Measurement- for Quantifying Judgmental Data

1971-08-01

Paul E. Green , Vithala R. Rao

Conjoint measurement is a new development in mathematical psychology that can be used to measure the joint effects of a set of independent variables on the ordering of a dependent … Conjoint measurement is a new development in mathematical psychology that can be used to measure the joint effects of a set of independent variables on the ordering of a dependent variable. In this (primarily expository) article, the techniques are applied to illustrative problems in marketing. In addition, a number of possible areas of application to marketing research are discussed, as well as some of the methodology's limitations.

Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets

1996-02-01

Tülin Erdem , Michael P. Keane

We construct two models of the behavior of consumers in an environment where there is uncertainty about brand attributes. In our models, both usage experience and advertising exposure give consumers … We construct two models of the behavior of consumers in an environment where there is uncertainty about brand attributes. In our models, both usage experience and advertising exposure give consumers noisy signals about brand attributes. Consumers use these signals to update their expectations of brand attributes in a Bayesian manner. The two models are (1) a dynamic model with immediate utility maximization, and (2) a dynamic “forward-looking” model in which consumers maximize the expected present value of utility over a planning horizon. Given this theoretical framework, we derive from the Bayesian learning framework how brand choice probabilities depend on past usage experience and advertising exposures. We then form likelihood functions for the models and estimate them on Nielsen scanner data for detergent. We find that the functional forms for experience and advertising effects that we derive from the Bayesian learning framework fit the data very well relative to flexible ad hoc functional forms such as exponential smoothing, and also perform better at out-of-sample prediction. Another finding is that in the context of consumer learning of product attributes, although the forward-looking model fits the data statistically better at conventional significance levels, both models produce similar parameter estimates and policy implications. Our estimates indicate that consumers are risk-averse with respect to variation in brand attributes, which discourages them from buying unfamiliar brands. Using the estimated behavioral models, we perform various scenario evaluations to find how changes in marketing strategy affect brand choice both in the short and long run. A key finding obtained from the policy experiments is that advertising intensity has only weak short run effects, but a strong cumulative effect in the long run. The substantive content of the paper is potentially of interest to academics in marketing, economics and decision sciences, as well as product managers, marketing research managers and analysts interested in studying the effectiveness of marketing mix strategies. Our paper will be of particular interest to those interested in the long run effects of advertising. Note that our estimation strategy requires us to specify explicit behavioral models of consumer choice behavior, derive the implied relationships among choice probabilities, past purchases and marketing mix variables, and then estimate the behavioral parameters of each model. Such an estimation strategy is referred to as “structural” estimation, and econometric models that are based explicitly on the consumer's maximization problem and whose parameters are parameters of the consumers' utility functions or of their constraints are referred to as “structural” models. A key benefit of the structural approach is its potential usefulness for policy evaluation. The parameters of structural models are invariant to policy, that is, they do not change due to a change in the policy. In contrast, the parameters of reduced form brand choice models are, in general, functions of marketing strategy variables (e.g., consumer response to price may depend on pricing policy). As a result, the predictions of reduced form models for the outcomes of policy experiments may be unreliable, because in making the prediction one must assume that the model parameters are unaffected by the policy change. Since the agents in our models choose among many alternative brands, their choice probabilities take the form of higher-order integrals. We employ Monte-Carlo methods to approximate these integrals and estimate our models using simulated maximum likelihood. Estimation of the dynamic forward-looking model also requires that a dynamic programming problem be solved in order to form the likelihood function. For this we use a new approximation method based on simulation and interpolation techniques. These estimation techniques may be of interest to researchers and policy makers in many fields where dynamic choice among discrete alternatives is important, such as marketing, decision sciences, labor and health economics, and industrial organization.

Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids

2000-02-01

Gerald Häubl , Valerie Trifts

Despite the explosive growth of electronic commerce and the rapidly increasing number of consumers who use interactive media (such as the World Wide Web) for prepurchase information search and online … Despite the explosive growth of electronic commerce and the rapidly increasing number of consumers who use interactive media (such as the World Wide Web) for prepurchase information search and online shopping, very little is known about how consumers make purchase decisions in such settings. A unique characteristic of online shopping environments is that they allow vendors to create retail interfaces with highly interactive features. One desirable form of interactivity from a consumer perspective is the implementation of sophisticated tools to assist shoppers in their purchase decisions by customizing the electronic shopping environment to their individual preferences. The availability of such tools, which we refer to as interactive decision aids for consumers, may lead to a transformation of the way in which shoppers search for product information and make purchase decisions. The primary objective of this paper is to investigate the nature of the effects that interactive decision aids may have on consumer decision making in online shopping environments. While making purchase decisions, consumers are often unable to evaluate all available alternatives in great depth and, thus, tend to use two-stage processes to reach their decisions. At the first stage, consumers typically screen a large set of available products and identify a subset of the most promising alternatives. Subsequently, they evaluate the latter in more depth, perform relative comparisons across products on important attributes, and make a purchase decision. Given the different tasks to be performed in such a two-stage process, interactive tools that provide support to consumers in the following respects are particularly valuable: (1) the initial screening of available products to determine which ones are worth considering further, and (2) the in-depth comparison of selected products before making the actual purchase decision. This paper examines the effects of two decision aids, each designed to assist consumers in performing one of the above tasks, on purchase decision making in an online store. The first interactive tool, a recommendation agent (RA), allows consumers to more efficiently screen the (potentially very large) set of alternatives available in an online shopping environment. Based on self-explicated information about a consumer's own utility function (attribute importance weights and minimum acceptable attribute levels), the RA generates a personalized list of recommended alternatives. The second decision aid, a comparison matrix (CM), is designed to help consumers make in-depth comparisons among selected alternatives. The CM allows consumers to organize attribute information about multiple products in an alternatives × attributes matrix and to have alternatives sorted by any attribute. Based on theoretical and empirical work in marketing, judgment and decision making, psychology, and decision support systems, we develop a set of hypotheses pertaining to the effects of these two decision aids on various aspects of consumer decision making. In particular, we focus on how use of the RA and CM affects consumers' search for product information, the size and quality of their consideration sets, and the quality of their purchase decisions in an online shopping environment. A controlled experiment using a simulated online store was conducted to test the hypotheses. The results indicate that both interactive decision aids have a substantial impact on consumer decision making. As predicted, use of the RA reduces consumers' search effort for product information, decreases the size but increases the quality of their consideration sets, and improves the quality of their purchase decisions. Use of the CM also leads to a decrease in the size but an increase in the quality of consumers' consideration sets, and has a favorable effect on some indicators of decision quality. In sum, our findings suggest that interactive tools designed to assist consumers in the initial screening of available alternatives and to facilitate in-depth comparisons among selected alternatives in an online shopping environment may have strong favorable effects on both the quality and the efficiency of purchase decisions—shoppers can make much better decisions while expending substantially less effort. This suggests that interactive decision aids have the potential to drastically transform the way in which consumers search for product information and make purchase decisions.

Challenges and Opportunities in Multichannel Customer Management

2006-10-18

Scott A. Neslin , Dhruv Grewal , Robert Leghorn +4 more

Multichannel customer management is the design, deployment, coordination, and evaluation of channels through which firms and customers interact, with the goal of enhancing customer value through effective customer acquisition, retention, … Multichannel customer management is the design, deployment, coordination, and evaluation of channels through which firms and customers interact, with the goal of enhancing customer value through effective customer acquisition, retention, and development. The authors identify five major challenges practitioners must address to manage the multichannel environment more effectively: (a) data integration, (b) understanding consumer behavior, (c) channel evaluation, (d) allocation of resources across channels, and (e) coordination of channel strategies. The authors also propose a framework that shows the linkages among these challenges and provides a means to conceptualize the field of multichannel customer management. A review of academic research reveals that this field has experienced significant research growth, but the growth has not been distributed evenly across the five major challenges. The authors discuss what has been learned to date and identify emerging generalizations as appropriate. They conclude with a summary of where the research-generated knowledge base stands on several issues pertaining to the five challenges.

Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design

2003-01-01

Wei–yu Kevin Chiang , Dilip Chhajed , James D. Hess

The advent of e-commerce has prompted many manufacturers to redesign their traditional channel structures by engaging in direct sales. The model conceptualizes the impact of customer acceptance of a direct … The advent of e-commerce has prompted many manufacturers to redesign their traditional channel structures by engaging in direct sales. The model conceptualizes the impact of customer acceptance of a direct channel, the degree to which customers accept a direct channel as a substitute for shopping at a traditional store, on supply-chain design. The customer acceptance of a direct channel can be strong enough that an indepent manufacturer would open a direct channel to compete with its own retailers. Here, direct marketing is used for strategic channel control purposes even though it is inefficient on its own and, surprisingly, it can profit the manufacturer even when so direct sales occur. Specifically, we construct a price-setting game between a manufacturer and its independent retailer. Direct marketing, which indirectly increases the flow of profits through the retail channel, helps the manufacturer improve overall profitability by reducing the degree of inefficient price double marginalization. While operated by the manufacturer to constrain the retailer's pricing behavior, the direct channel may not always be detrimental to the retailer because it will be accompanied by a wholesale price reduction. This combination of manufacturer pull and push can benefit the retailer in equilibrium. Finally, we show that the mere threat of introducing the direct channel can increase the manufacturer's negotiated share of cooperative profits even if price efficiency is obtained by using other business practices.

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Exploring the value of online product reviews in forecasting sales: The case of motion pictures

2007-11-01

Chrysanthos Dellarocas , Xiaoquan Zhang , Neveen Awad

Reducing Buyer Search Costs: Implications for Electronic Marketplaces

1997-12-01

J. Yannis Bakos

Information systems can serve as intermediaries between the buyers and the sellers in a market creating an “electronic marketplace” that lowers the buyers' cost to acquire information about seller prices … Information systems can serve as intermediaries between the buyers and the sellers in a market creating an “electronic marketplace” that lowers the buyers' cost to acquire information about seller prices and product offerings. As a result, electronic marketplaces reduce the inefficiencies caused by buyer search costs, in the process reducing the ability of sellers to extract monopolistic profits while increasing the ability of markets to optimally allocate productive resources. This article models the role of buyer search costs in markets with differentiated product offerings. The impact of reducing these search costs is analyzed in the context of an electronic marketplace, and the allocational efficiencies such a reduction can bring to a differentiated market are formalized. The resulting implications for the incentives of buyers, sellers, and independent intermediaries to invest in electronic marketplaces are explored. Finally, the possibility to separate price information from product attribute information is introduced, and the implications of designing markets promoting competition along each of these dimensions are discussed.

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Equilibrium Distributions of Sales and Advertising Prices

1977-10-01

G Butters

Journal Article Equilibrium Distributions of Sales and Advertising Prices Get access Gerard R. Butters Gerard R. Butters Princeton University Search for other works by this author on: Oxford Academic Google … Journal Article Equilibrium Distributions of Sales and Advertising Prices Get access Gerard R. Butters Gerard R. Butters Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 3, October 1977, Pages 465–491, https://doi.org/10.2307/2296902 Published: 01 October 1977 Article history Received: 01 April 1975 Accepted: 01 October 1976 Published: 01 October 1977

Optimal Search for the Best Alternative

1979-05-01

Martin L. Weitzman

This paper completely characterizes the solution to the problem of searching for the best outcome from alternative sources with different properties.The optimal strategy is an elementary reservation price rule, where … This paper completely characterizes the solution to the problem of searching for the best outcome from alternative sources with different properties.The optimal strategy is an elementary reservation price rule, where the reservation prices are easy to calculate and have an intuitive economic interpretation.

On the Estimation of Beta-Pricing Models

1992-01-01

Jay Shanken

Journal Article On the Estimation of Beta-Pricing Models Get access Jay Shanken Jay Shanken University of Rochester Address reprint requests to Jay Shanken, William E. Simon Graduate School of Business … Journal Article On the Estimation of Beta-Pricing Models Get access Jay Shanken Jay Shanken University of Rochester Address reprint requests to Jay Shanken, William E. Simon Graduate School of Business Administration, University of Rochester, Rochester, NY 14627. Search for other works by this author on: Oxford Academic Google Scholar The Review of Financial Studies, Volume 5, Issue 1, January 1992, Pages 1–33, https://doi.org/10.1093/rfs/5.1.1 Published: 19 May 2015

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A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research

2003-09-01

Cheryl Burke Jarvis , Scott MacKenzie , Philip M. Podsakoff

Journal Article A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research Get access Cheryl Burke Jarvis, Cheryl Burke Jarvis Search for other works by … Journal Article A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research Get access Cheryl Burke Jarvis, Cheryl Burke Jarvis Search for other works by this author on: Oxford Academic PubMed Google Scholar Scott B. MacKenzie, Scott B. MacKenzie Search for other works by this author on: Oxford Academic PubMed Google Scholar Philip M. Podsakoff Philip M. Podsakoff Search for other works by this author on: Oxford Academic PubMed Google Scholar Journal of Consumer Research, Volume 30, Issue 2, September 2003, Pages 199–218, https://doi.org/10.1086/376806 Published: 01 September 2003

Return on Marketing: Using Customer Equity to Focus Marketing Strategy

2003-12-22

Roland T. Rust , Katherine N. Lemon , Valarie A. Zeithaml

The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change … The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm's customer equity relative to the incremental expenditure necessary to produce the change. The change in the firm's customer equity is the change in its current and future customers’ lifetime values, summed across all customers in the industry. Each customer's lifetime value results from the frequency of category purchases, average quantity of purchase, and brand-switching patterns combined with the firm's contribution margin. The brand-switching matrix can be estimated from either longitudinal panel data or cross-sectional survey data, using a logit choice model. Firms can analyze drivers that have the greatest impact, compare the drivers’ performance with that of competitors’ drivers, and project return on investment from improvements in the drivers. To demonstrate how the approach can be implemented in a specific corporate setting and to show the methods used to test and validate the model, the authors illustrate a detailed application of the approach by using data from the airline industry. Their framework enables what-if evaluation of marketing return on investment, which can include such criteria as return on quality, return on advertising, return on loyalty programs, and even return on corporate citizenship, given a particular shift in customer perceptions. This enables the firm to focus marketing efforts on strategic initiatives that generate the greatest return.

Frictionless Commerce? A Comparison of Internet and Conventional Retailers

2000-04-01

Erik Brynjolfsson , Michael D. Smith

There have been many claims that the Internet represents a new nearly “frictionless market.” Our research empirically analyzes the characteristics of the Internet as a channel for two categories of … There have been many claims that the Internet represents a new nearly “frictionless market.” Our research empirically analyzes the characteristics of the Internet as a channel for two categories of homogeneous products—books and CDs. Using a data set of over 8,500 price observations collected over a period of 15 months, we compare pricing behavior at 41 Internet and conventional retail outlets. We find that prices on the Internet are 9–16% lower than prices in conventional outlets, depending on whether taxes, shipping, and shopping costs are included in the price. Additionally, we find that Internet retailers' price adjustments over time are up to 100 times smaller than conventional retailers' price adjustments—presumably reflecting lower menu costs in Internet channels. We also find that levels of price dispersion depend importantly on the measures employed. When we compare the prices posted by different Internet retailers we find substantial dispersion. Internet retailer prices differ by an average of 33% for books and 25% for CDs. However, when we weight these prices by proxies for market share, we find dispersion is lower in Internet channels than in conventional channels, reflecting the dominance of certain heavily branded retailers. We conclude that while there is lower friction in many dimensions of Internet competition, branding, awareness, and trust remain important sources of heterogeneity among Internet retailers.

The Price is Unfair! A Conceptual Framework of Price Fairness Perceptions

2004-09-13

Lan Xia , Kent B. Monroe , Jennifer L. Cox

Recent news coverage on pricing portrays the importance of price fairness. This article conceptually integrates the theoretical foundations of fairness perceptions and summarizes empirical findings on price fairness. The authors … Recent news coverage on pricing portrays the importance of price fairness. This article conceptually integrates the theoretical foundations of fairness perceptions and summarizes empirical findings on price fairness. The authors identify research issues and gaps in existing knowledge on buyers’ perceptions of price fairness. The article concludes with guidelines for managerial practice.

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Do Data Characteristics Change According to the Number of Scale Points Used? An Experiment Using 5-Point, 7-Point and 10-Point Scales

2008-01-01

John Dawes

This study examined how using Likert-type scales with either 5-point, 7-point or 10-point format affects the resultant data in terms of mean scores, and measures of dispersion and shape. Three … This study examined how using Likert-type scales with either 5-point, 7-point or 10-point format affects the resultant data in terms of mean scores, and measures of dispersion and shape. Three groups of respondents were administered a series of eight questions (group n’s = 300, 250, 185). Respondents were randomly selected members of the general public. A different scale format was administered to each group. The 5and 7-point scales were rescaled to a comparable mean score out of ten. The study found that the 5and 7-point scales produced the same mean score as each other, once they were rescaled. However, the 10-point format tended to produce slightly lower relative means than either the 5or 7point scales (after the latter were rescaled). The overall mean score of the eight questions was 0.3 scale points lower for the 10-point format compared to the rescaled 5and 7-point formats. This difference was statistically significant at p = 0.04. In terms of the other data characteristics, there was very little difference among the scale formats in terms of variation about the mean, skewness or kurtosis. This study is ‘good news’ for research departments or agencies who ponder whether changing scale format will destroy the comparability of historical data. 5and 7-point scales can easily be rescaled with the resultant data being quite comparable. In the case of comparing 5or 7-point data to 10-point data, a straightforward rescaling and arithmetic adjustment easily facilitates the comparison. The study suggests that indicators of customer sentiment – such as satisfaction surveys – may be partially dependent on the choice of scale format. A 5or 7-point scale is likely to produce slightly higher mean scores relative to the highest possible attainable score, compared to that produced from a 10-point scale. International Journal of Market Research Vol. 50 Issue 1

A Probabilistic Choice Model for Market Segmentation and Elasticity Structure

1989-11-01

Wagner A. Kamakura , Gary J. Russell

Marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching. Though the approach is useful, it typically ignores the destabilizing role of marketing variables … Marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching. Though the approach is useful, it typically ignores the destabilizing role of marketing variables (e.g., price) in switching behavior. The authors propose a flexible choice model that partitions the market into consumer segments differing in both brand preference and price sensitivity. The result is a unified description of market structure that links the pattern of brand switching to the magnitudes of own- and cross-price elasticities. The approach is applied in a study of competition between national brands and private labels in one product category.

Measuring Market Power in the Ready-to-Eat Cereal Industry

2001-03-01

Aviv Nevo

The ready-to-eat cereal industry is characterized by high concentration, high price-cost margins, large advertising-to-sales ratios, and numerous introductions of new products. Previous researchers have concluded that the ready-to-eat cereal industry … The ready-to-eat cereal industry is characterized by high concentration, high price-cost margins, large advertising-to-sales ratios, and numerous introductions of new products. Previous researchers have concluded that the ready-to-eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition. This paper empirically examines this conclusion. In particular, I estimate price-cost margins, but more importantly I am able empirically to separate these margins into three sources: (i) that which is due to product differentiation; (ii) that which is due to multi-product firm pricing; and (iii) that due to potential price collusion. The results suggest that given the demand for different brands of cereal, the first two effects explain most of the observed price-cost margins. I conclude that prices in the industry are consistent with noncollusive pricing behavior, despite the high price-cost margins. Leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality. It is these two factors that lead to high price-cost margins.

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A Benefit Congruency Framework of Sales Promotion Effectiveness

2000-10-01

Pierre Chandon , Brian Wansink , Gilles Laurent

Are monetary savings the only explanation for consumer response to a sales promotion? If not, how do the different consumer benefits of a sales promotion influence its effectiveness? To address … Are monetary savings the only explanation for consumer response to a sales promotion? If not, how do the different consumer benefits of a sales promotion influence its effectiveness? To address the first question, this research builds a framework of the multiple consumer benefits of a sales promotion. Through a series of measurement studies, the authors find that monetary and nonmonetary promotions provide consumers with different levels of three hedonic benefits (opportunities for value expression, entertainment, and exploration) and three utilitarian benefits (savings, higher product quality, and improved shopping convenience). To address the second question, the authors develop a benefit congruency framework, which argues that a sales promotion's effectiveness is determined by the utilitarian or hedonic nature of the benefits it delivers and the congruence these benefits have with the promoted product. Among other results, two choice experiments show that, as predicted for high-equity brands, monetary promotions are more effective for utilitarian products than for hedonic products. The authors then discuss the implications of the multibenefit and the benefit congruency frameworks for understanding consumer responses to sales promotions, reexamining the value of everyday-low-price policies, and designing more effective sales promotions.

Bayesian Statistics and Marketing

2003-08-01

Peter E. Rossi , Greg M. Allenby

Bayesian methods have become widespread in marketing literature. We review the essence of the Bayesian approach and explain why it is particularly useful for marketing problems. While the appeal of … Bayesian methods have become widespread in marketing literature. We review the essence of the Bayesian approach and explain why it is particularly useful for marketing problems. While the appeal of the Bayesian approach has long been noted by researchers, recent developments in computational methods and expanded availability of detailed marketplace data has fueled the growth in application of Bayesian methods in marketing. We emphasize the modularity and flexibility of modern Bayesian approaches. The usefulness of Bayesian methods in situations in which there is limited information about a large number of units or where the information comes from different sources is noted. We include an extensive discussion of open issues and directions for future research.

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Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers

2003-11-01

Erik Brynjolfsson , Yu Jeffrey Hu , Michael D. Smith

We present a framework and empirical estimates that quantify the economic impact of increased product variety made available through electronic markets. While efficiency gains from increased competition significantly enhance consumer … We present a framework and empirical estimates that quantify the economic impact of increased product variety made available through electronic markets. While efficiency gains from increased competition significantly enhance consumer surplus, for instance, by leading to lower average selling prices, our present research shows that increased product variety made available through electronic markets can be a significantly larger source of consumer surplus gains. One reason for increased product variety on the Internet is the ability of online retailers to catalog, recommend, and provide a large number of products for sale. For example, the number of book titles available at Amazon.com is more than 23 times larger than the number of books on the shelves of a typical Barnes & Noble superstore, and 57 times greater than the number of books stocked in a typical large independent bookstore. Our analysis indicates that the increased product variety of online bookstores enhanced consumer welfare by $731 million to $1.03 billion in the year 2000, which is between 7 and 10 times as large as the consumer welfare gain from increased competition and lower prices in this market. There may also be large welfare gains in other SKU-intensive consumer goods such as music, movies, consumer electronics, and computer software and hardware.

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The substitutability between brick-and-mortar stores and e-Commerce: the case of books

2025-06-25

Georg Götz , Daniel Herold , Phil-Adrian Klotz +1 more | Journal of Cultural Economics

Mapping Consumer Stickiness: A <scp>SPAR</scp>‐4‐<scp>SLR</scp> Protocol Compliant Review and Future Directions

2025-06-25

Samiksha Vyas , Jitendra Singh Rathore , Sachin Kumar +1 more | International Journal of Consumer Studies

ABSTRACT In an era where customer retention and engagement are paramount for business success, consumer stickiness has emerged as a critical yet underexplored concept in marketing and consumer behavior research. … ABSTRACT In an era where customer retention and engagement are paramount for business success, consumer stickiness has emerged as a critical yet underexplored concept in marketing and consumer behavior research. The primary objective of this study is to conduct a systematic literature review to consolidate knowledge on consumer stickiness to offer an integrative framework and propose future research paths. To achieve this, the SPAR‐4‐SLR methodology, along with TCCM and bibliometric techniques, was used to analyze 46 studies from Web of Science and Scopus, identifying key advancements and research gaps in the field from 2002 to 2024. The study highlights a rising academic interest in consumer stickiness, identifying key contributors, influential publications, and thematic research clusters. The proposed integrative model consolidates frameworks and constructs used in studying consumer stickiness, revealing user engagement, functionality, and information quality as key drivers of satisfaction and continuance intention. The findings provide valuable insights for businesses to enhance retention, product development, engagement, and competitiveness through stickiness factors, while also offering implications for academics and practitioners to address research gaps and tailor user experiences. The review calls for further research on stickiness in consumer behavior and its impact on product innovation and marketing strategies, proposing future directions to deepen the understanding of increasing consumer stickiness.

Price strategies and entry deterrence in the municipal solid waste disposal industry: a signalling game

2025-06-23

Francesco Silvestri , Mattia Tassinari | Economia Politica

Estimation of High-Dimensional Contextual Pricing Models with Nonparametric Price Confounders

2025-06-20

Yining Wang , Quanquan Liu | Operations Research

Which factors affect an individual’s purchase behaviors more, and how would a retailer consistently and reliably identify such factors, with data collected on adaptively offered prices that might potentially interfere … Which factors affect an individual’s purchase behaviors more, and how would a retailer consistently and reliably identify such factors, with data collected on adaptively offered prices that might potentially interfere with such factors? Our research presents novel methods that effectively estimate demand models with many factors and covariates, consistent with adaptive and contextual pricing practice.

Retail rate design in the US: time-varying rates for residential customers

2025-06-19

Azhar Faruqui , Ziyi Tang | Edward Elgar Publishing eBooks

Destination live-streaming sales channels: a strategic decision-making model for hotels

2025-06-19

D Zhang , Jianchun Yang | International Journal of Contemporary Hospitality Management

Purpose This study aims to examine strategic decision-making between hotels and online travel agencies (OTAs) as hotels launch destination live-streaming sales (DLS) channels, focusing on channel expansion decisions, pricing strategies … Purpose This study aims to examine strategic decision-making between hotels and online travel agencies (OTAs) as hotels launch destination live-streaming sales (DLS) channels, focusing on channel expansion decisions, pricing strategies and market impact. Design/methodology/approach This study develops a game-theoretic model to examine the strategic interactions between hotels and OTAs in the tourism online-to-offline (O2O) supply chain, integrating the effects of information asymmetry and live-streaming e-commerce on the traditional O2O framework. Findings From a market expansion perspective, hotels are incentivised to launch DLS channels. However, this strategy may reduce demand for additional services. Secondly, launching DLS channels does not guarantee profitability for all hotels but proves beneficial when pricing strategies cannot adequately mitigate the adverse effects of information asymmetry. Furthermore, destination live-streaming e-commerce serves to mitigate double marginalisation and, under specific circumstances, facilitate Pareto improvements across the supply chain, thereby enhancing market efficiency and social welfare. Practical implications By launching DLS channels, hotels can engage directly with consumers, thereby reducing reliance on OTAs and enabling more flexible pricing and competitive strategies. To maximise overall profitability, hotels should evaluate the market potential and economic trade-offs of both room sales and additional services, and adjust their channel strategies and pricing mechanisms accordingly. Originality/value This study extends the theoretical frameworks underlying strategic decision-making in both hospitality management and live-streaming e-commerce by developing and analysing a game-theoretic model that captures the unique characteristics of live-streaming applications in the hospitality industry.

Consumer Responses to ``Favorite'' Product Removal: Evidence from Beverage Vending Machines

2025-06-19

Andrew T. Ching , Kohei Kawaguchi , Jia Liu +1 more

How do consumers react when their favorite product is removed? This paper sheds light on this question by studying consumer purchase behavior at vending machines located at Tokyo train stations, … How do consumers react when their favorite product is removed? This paper sheds light on this question by studying consumer purchase behavior at vending machines located at Tokyo train stations, where most vending machines experienced some product changes during our sample period.By applying synthetic difference-in-differences, we find evidence of consumers conducting both within- and between-vending machine substitutions. In particular, we observe an expansion of demand in their non-favorite machines, where the increase comes from not only their favorite product, but also other products. Most interestingly, we find evidence that consumers buy more products that are new to them and switch more often; such behavior is consistent with experimentation and learning. This suggests that, to some extent, consumers' persistent choice of the same product may be an outcome of habitual behavior, and the removal of their ``favorite'' product may break their habit and trigger them to experiment with new products. We also find that high variety-seeking consumers are more likely to choose a substitute at their favorite vending machine, whereas low variety-seeking consumers tend to seek their favorite product at another vending machine. However, consumers' experimentation and learning behavior does not vary with variety-seeking tendency.

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Agent or merchant? Unpacking hotel-OTA selling formats with differential games

2025-06-18

Shigui Ma , Ran Gu , Sai Liang +1 more | Tourism Management

Applications of Reinforcement Learning in Dynamic Pricing Models for E-Commerce Businesses

2025-06-18

Balogun Segun Segbenu , Mariam Olateju , Adebayo Sulaimon Olawale +1 more | World Journal of Advanced Research and Reviews

Dynamic pricing has become a cornerstone strategy for e-commerce businesses seeking to optimize revenue while maintaining competitive advantage in rapidly changing digital markets. This review examines the integration of reinforcement … Dynamic pricing has become a cornerstone strategy for e-commerce businesses seeking to optimize revenue while maintaining competitive advantage in rapidly changing digital markets. This review examines the integration of reinforcement learning techniques into dynamic pricing models, exploring how these adaptive algorithms enable businesses to make real-time pricing decisions based on market conditions, consumer behavior, and competitive dynamics. The research synthesizes current methodologies, implementation frameworks, and performance outcomes across various e-commerce sectors. Reinforcement learning approaches, particularly Q-learning, deep reinforcement learning, and multi-agent systems, have demonstrated significant potential in addressing the complexity of modern pricing environments where traditional static models fail to capture market volatility. The review identifies key challenges including data quality requirements, computational complexity, and ethical considerations surrounding automated pricing decisions. Emerging trends indicate growing adoption of hybrid models that combine reinforcement learning with traditional economic theories, leading to more robust and interpretable pricing strategies. The findings suggest that while reinforcement learning offers substantial improvements in pricing optimization, successful implementation requires careful consideration of business context, regulatory constraints, and customer perception. Future research directions include developing more efficient algorithms for real-time applications and addressing fairness concerns in automated pricing systems.

Prizing

2025-06-17

Cathryn M. Mercier | Routledge eBooks

LUXURY VS BUDGET TRAVEL: HOW MARKETING STRATEGIES SHAPE CONSUMER BEHAVIOUR

2025-06-16

Sammad Chougale , Raviraj Shetty | EPRA International Journal of Multidisciplinary Research (IJMR)

In today’s rapidly evolving tourism landscape, travelers are increasingly segmented not only by their spending capacity but also by their behavioural responses to digital marketing strategies. This study examines how … In today’s rapidly evolving tourism landscape, travelers are increasingly segmented not only by their spending capacity but also by their behavioural responses to digital marketing strategies. This study examines how luxury and budget travellers differ in their receptiveness to four major digital marketing techniques: price promotions, social media influence, personalized marketing, and urgency-based offers. While luxury travelers often value exclusivity, brand identity, and curated digital experiences, budget travelers prioritize affordability, practicality, and time-sensitive deals. To empirically assess these differences, a structured survey was administered to 250 recent travelers, equally divided between luxury and budget segments. Statistical analysis using Chi-square tests and ANOVA validated four hypotheses, confirming that all examined marketing strategies significantly influence consumer behavior—though in different magnitudes for each group. Notably, budget travelers showed stronger sensitivity to price and urgency cues, whereas luxury travelers responded more to personalization and social media narratives. The findings underscore the need for a dual-strategy approach in travel marketing—one that goes beyond income classification and considers psychological triggers and digital touchpoint engagement. This paper contributes to the field by providing actionable insights for marketers and travel brands to tailor their campaigns based on behavioural segmentation, ultimately enhancing customer engagement and satisfaction. Keywords: Luxury travel, budget travel, digital marketing, consumer behavior, price promotions, personalization, social media influence, urgency marketing, behavioral segmentation, travel industry strategy

Multi-parameter Mechanisms for Consumer Surplus Maximization

2025-06-15

Tomer Ezra , Daniel Schoepflin , Ariel Shaulker

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Segmenting Consumer Location-Product Preferences for Assortment Localization

2025-06-14

Jia Liu , Kohei Kawaguchi , Tao Li

When managing multiple stores within the same marketplace, retailers must tailor product assortments to reflect the heterogeneous preferences of local communities. This paper introducesa consumer-centric, data-driven framework for interpretable market … When managing multiple stores within the same marketplace, retailers must tailor product assortments to reflect the heterogeneous preferences of local communities. This paper introducesa consumer-centric, data-driven framework for interpretable market structure discovery and supporting localized assortment planning. At the core of the framework is the dual Poisson Dynamic System with Multilayer Factorization (dPDS-MF), which integrates a probabilistic generative model with a tensor factorization architecture to estimate spatiotemporal supply and demand patterns across products and locations. Specifically, dPDS-MF can profile different consumer segments driven by store visiting preferences, measure relationships between store locations, and simultaneously estimate each segment’s product preferences. These model outputs are then used to formulate a choice process for the localized assortment optimization problem. We apply our proposed framework to the retail vending market in major train stations in Japan. We demonstrate the face validity of the model outputs for guiding the selections of products at each location. We also show that the localized assortments generated by our framework are more meaningful and practical than benchmark strategies in the literature. Beyond the core model, we introduce several methodological extensions, highlighting the flexibility of the framework in addressing real-world retail scenarios and laying a foundation for future research.

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Conflicts and optimization of multiple promotions combinations for merchants

2025-06-13

Rongxiao Huang , Zhiyong Zhang , Bing Lv +1 more | Expert Systems with Applications

The Sequential Hotelling Game with One Parameterized Location

2025-06-13

Luis García-Pérez , Juan Grau-Climent , Juan Carlos Losada +1 more | AppliedMath

This article studies the location–price Hotelling game. Numerous studies have been conducted on the Hotelling game with simultaneous decisions; however, in real-life scenarios, decisions are frequently sequential. Unfortunately, studies on … This article studies the location–price Hotelling game. Numerous studies have been conducted on the Hotelling game with simultaneous decisions; however, in real-life scenarios, decisions are frequently sequential. Unfortunately, studies on the sequential Hotelling (SHOT) game are quite scarce. This article contributes to the study of the SHOT game by considering the case in which the location of one of the players, either the leader or the follower, is externally fixed. The game is studied analytically and by numerical simulation to address scenarios where mathematical analysis is cumbersome due to the discontinuous nature of the game. Simulation is found to be particularly useful in evaluating the subgame perfect equilibrium (SPE) solution of these SHOT games, where the follower outperforms the leader as a very general rule, with very few exceptions. This article complements a previous study of the SHOT game where the two locations are parameterized and paves the way to address the analysis of more sophisticated formulations of the SHOT game, such as those with reservation cost and with elastic demand.

Identification of Dynamic Discrete Choice Models with Hyperbolic Discounting Using a Terminating Action

2025-06-12

Chao Wang , Stefan Weiergraeber , Ruli Xiao | Journal of Business and Economic Statistics

Store brand encroachment tactic considering asymmetric sales cost information

2025-06-12

Jianhu Cai , Zike Cao , Mengyi Zhu +2 more | Asia Pacific Journal of Marketing and Logistics

Purpose In the supply chain (SC), the retailer may have private sales cost information and the ability to encroach by introducing a store brand. This study aims to explore how … Purpose In the supply chain (SC), the retailer may have private sales cost information and the ability to encroach by introducing a store brand. This study aims to explore how store brand encroachment and information asymmetry affect SC performance. Design/methodology/approach An SC consisting of one national brand manufacturer and one retailer is considered. Four cases are developed according to the information structure (information symmetry or information asymmetry) and encroachment tactic (encroachment or no encroachment). Then, the equilibrium decisions and profits of the SC members are compared. Findings Under information symmetry, the manufacturer always favors store brand encroachment. Under information asymmetry, the manufacturer favors store brand encroachment only when the potential market demand is relatively high. Among the four cases, store brand encroachment under information asymmetry is most beneficial for the retailer. Under any information structure, store brand encroachment can achieve Pareto improvement under specific conditions. Originality/value This study provides insights into the intricate relationship between store brand encroachment and information structure in SC management.

Retail investors and herding behaviour in the Korean market

2025-06-11

Wonhee You , Doojin Ryu , Robert I. Webb | Applied Economics

Data Provision to an Informed Seller

2025-06-11

Shota Ichihashi , Alex Smolin | Games and Economic Behavior

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Strategic choices in live-streaming e-commerce: Balancing live-streaming selling mode and return-freight insurance strategy

2025-06-02

Zhongwei Chen , Chenlu Ji , Lin Zhang +1 more | Journal of Retailing and Consumer Services

Design and pricing of extended warranty menus with reference effects

2025-06-01

Xiaolin Wang , Chenglong Li , Junjie Wang | European Journal of Operational Research

Statistical Analysis of Motivational differences in Direct Selling across Generation

2025-06-01

Swati Jogi , Kamal Kant Vashisth , Bráulio Alturas +2 more | International Journal of Agricultural and Statistical Sciences

This research aims to investigate the motivational differences between Gen Y and Gen Z individuals in the direct selling industry, providing insights for tailored recruitment and retention strategies. By exploring … This research aims to investigate the motivational differences between Gen Y and Gen Z individuals in the direct selling industry, providing insights for tailored recruitment and retention strategies. By exploring these generational differences this research seeks to contribute to the development of effective approaches for attracting and retaining direct sellers, ultimately enhancing the industry's sustainability and success. A stratified random sampling technique was used to select 361 respondents (180 Gen Y and 181 Gen Z) from the Northern Region of India, ensuring representativeness and randomness. A structured questionnaire has been employed to collect primary data, which has been analyzed using SPSS software by the statistical technique Mann-Whitney U test. Gen Y is motivated by attractive compensation plans, quality products & services and joins because of trust in the introducer, while Gen Z prioritizes extra income, being their boss, getting rich quickly, and flexibility of the business. Both generations also share motivations for curiosity, low investment risk, financial security, company reputation, and no requirement of any qualification. However, Gen Z is more drawn to attractive rewards and recognition, peer pressure, to support their family, and reasonable prices of products while Gen Y is motivated towards entrepreneurial success. Concluding that modifications in recruitment strategies and marketing approaches to accommodate the unique motivations of Gen Y and Gen Z individuals can enhance recruitment success and consumer engagement within the direct selling industry. These adjustments will allow for effective targeting and communication strategies, contributing to the success and sustainability of the direct-selling business.. KEYWORDS :Direct selling, Multi-Level Marketing (MLM), Network marketing (NM), Independent business owner (IBO).

How live-streaming commerce interacts with two-period pricing when selling to strategic customers

2025-06-01

Pingping Chen , Lei Xie , Lu Dai +1 more | European Journal of Operational Research

A stricter canon: General Luce models for arbitrary menu sets

2025-06-01

José A. Rodrigues‐Neto , Matthew Ryan , James Taylor | Mathematical Social Sciences

Warming up to private labels: Temperature impacts private label performance

2025-06-01

Josh Lundberg , Daniel Chavez | Journal of Retailing

Decoding Discrepancies: Understanding Rating and Review Gaps in Best-Selling Products

2025-05-30

Jyoti Verma , Jaimin N. Undavia | Journal of Computer Science

An experimental study of nicotine product consumption in Poland

2025-05-30

Maciej Albinowski , Piotr Lewandowski , Karol Madoń +1 more | AEA Randomized Controlled Trials

An experimental study of nicotine product consumption in Poland

2025-05-30

Maciej Albinowski , Piotr Lewandowski , Karol Madoń +1 more | AEA Randomized Controlled Trials

Discrete Choice via Sequential Search

2025-05-30

Natalia Kosilova , Aydın Alptekinoğlu | Management Science

Essentially every choice involves an information collection or search phase prior to a decision-making phase that culminates in a choice. To study the information collection phase within an important class … Essentially every choice involves an information collection or search phase prior to a decision-making phase that culminates in a choice. To study the information collection phase within an important class of search problems and understand how it influences the final choice, we embed an analytically tractable discrete choice model in a classical model of sequential search with perfect recall. Although significant progress has been made in the theory literature in analyzing consumers’ discrete choice behavior using random utility models, discrete choice through a sequential search process has not received enough attention at least in part because of analytical intractability issues. We build on the seminal Pandora’s Problem as a model of sequential search with perfect recall and on Exponomial Choice as a model of discrete choice (with each choice specified by a deterministic or observable utility component minus a random or unobservable utility component following an exponential distribution). We derive the search path and final choice probabilities in closed form, develop all the analytical tools to optimize prices for a given assortment of products, and show that the optimal assortment must contain some number of highest-value products at optimal prices. These results enable joint optimization of assortment and prices efficiently. The structure of the solution features a distinct group of products that are priced just so they remain on the search path with higher probability. Through simulation studies, allowing us to control the ground truth, we also show that our model is competitive against the state of the art in empirical modeling of sequential search and that ignoring sequential search distorts both optimal variety and pricing decisions in an upward direction. This paper was accepted by Omar Besbes, revenue management and market analytics. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2023.01552 .

Pricing Experimental Design: Causal Effect, Expected Revenue and Tail Risk

2025-05-28

David Simchi-Levi , Chonghuan Wang | Management Science

When launching a new product, historical sales data are often not available, leaving price as a crucial experimental instrument for sellers to gauge market response. When designing pricing experiments, there … When launching a new product, historical sales data are often not available, leaving price as a crucial experimental instrument for sellers to gauge market response. When designing pricing experiments, there are three fundamental objectives: estimating the causal effect of price (i.e., price elasticity), maximizing the expected revenue through the experiment, and controlling the tail risk that, if not controlled, may lead to significant financial losses. In this paper, we reveal the relationship among such three objectives. Under a linear structural model, we investigate the trade-offs between causal effect estimation and expected revenue maximization, as well as between expected revenue maximization and tail risk control. Furthermore, we propose an optimal pricing experimental design, which can flexibly adapt to different desired levels of trade-offs. Through the optimal design, we also explore the relationship between causal effect estimation and tail risk control. Moreover, we establish an always-valid confidence sequence and a central limit theorem for the inference of the causal effect. Finally, we extend our results and the design to a misspecified setting, where the structural model is not necessarily linear but the seller still runs our design for linear structural models. The results demonstrate the robustness of our design and the wide existence of the relationships among the three objectives. This paper was accepted by George Shanthikumar, data science. Funding: The authors thank the Massachusetts Institute of Technology (MIT)-IBM partnership in Artificial Intelligence and the MIT Data Science Laboratory for support. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.03209 .