Academic Publications: Strategy

  • Dynamic Pricing on the Internet

    P. K. Kannan, Praveen K. Kopalle
    International Journal of Electronic Commerce, 5 (3) , 2001

    The pricing of products and services sold over the Internet channel is becoming more dynamic. In part this is due to the increasing use of auction models in business and consumer markets to sell commodities, excess inventories, used merchandise, rare items collectibles, and other items. Marketers are resorting to dynamic prices even for goods and services sold at posted prices, spurred partly by the lower menu cost of changing prices on the Internet and partly as a response to consumer use of price-comparison bots. This paper explains the relevance of dynamic pricing in the digital economy by comparing the physical value chain with the virtual-information-based value chain. It explores the implications of certain aspects of dynamic pricing in consumer markets (e.g., dynamic pricing of posted prices, reverse auction pricing of goods and services as used by Priceline) from the perspective of consumer price expectations, the role of information and consumer learning, and their impact on consumer responses to prices across different product categories. Several propositions are developed, and issues for research are identified.   More ›

    Topics: Customer, Internet / Connectivity, Marketing / Sales, Strategy

  • Postponement Strategies for Channel Derivatives

    Emily Anderson

    M. Eric Johnson
    International Journal of Logistics Management, 11, 2000

    The value of postponing product differentiation until final distribution for manufacturers who market a family of product derivatives through multiple channels is examined. A model is developed of a supply chain that distributes many short-lived products through different channels. Using the model, we find the postponement is particularly valuable for managing short-life products. Postponement increases distribution service levels while reducing costs and order fulfillment risk. Postponement is particularly valuable when there are many derivative products and forecast error is high. Trade-off curves are presented, that allow managers to evaluate the benefits of investing in postponement strategies.

    Paper in PDF Format (89K)

    Topics: Manufacturing, Operations, Strategy

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