Untangling hotel industry’s inefficiency: An SFA approach applied to a renowned Portuguese hotel chain

The present paper explores the technical efficiency of four hotels from Teixeira Duarte Group - a renowned Portuguese hotel chain. An efficiency ranking is established from these four hotel units located in Portugal using Stochastic Frontier Analysis. This methodology allows to discriminate between measurement error and systematic inefficiencies in the estimation process enabling to investigate the main inefficiency causes. Several suggestions concerning efficiency improvement are undertaken for each hotel studied.info:eu-repo/semantics/publishedVersio

Sales Growth of New Pharmaceuticals Across the Globe: The Role of Regulatory Regimes

Prior marketing literature has overlooked the role of regulatory regimes in explaining international sales growth of new products. This paper addresses this gap in the context of new pharmaceuticals (15 new molecules in 34 countries) and sheds light on the effect regulatory regimes have on new drug sales across the globe. Based on a time-varying coefficient model, we find that differences in regulation substantially contribute to cross-country variation in sales. One of the regulatory constraints investigated, i.e. manufacturer price controls, has a positive effect on drug sales. The other forms of regulation such as restrictions of physician prescription budgets and the prohibition of direct-to-consumer advertising tend to hurt sales. The effect of manufacturer price controls is similar for newly launched and mature drugs. In contrast, regulations on physician prescription budget and direct-to-consumer advertising have a differential effect for newly launched and mature drugs. While the former hurts mature drugs more, the latter has a larger effect on newly launched drugs. In addition to these regulatory effects, we find that national culture, economic wealth, introduction timing, lagged sales and competition, also affect drug sales. Our findings may be used as input by managers for international launch and sales decisions. They may also be used by public policy administrators to compare drug sales in their country to other countries and to assess the role of regulatory regimes therein.economics;regulation;culture;drug;international new product growth;penalized splines;pharmaceutical;timevarying effects

An Empirical Investigation of Customer Retention: Addressing Unique Challenges in Customer-Firm Relationships

Effective customer retention is vital to the survival and prosperity of any customer-centric organization. Systematic examination of different aspects of the customer’s relationship with the firm has the potential to provide valuable insights to support retention efforts. However, the nature of the purchasing options and relationship patterns inherent in each industry require managers to shift their focus on varied aspects of the relationship, thus posing unique challenges. One such challenge is examined in the first essay of this dissertation, in a setting where customer-firm relationships are intermittent, with customers being lost to and won back again by the firm. A unifying model for joint estimation of the customers’ second lifetime duration, multiple repeat churn reasons, and heterogeneity in exhibiting a related churn reason is developed to study this relationship. The findings support the existence of a cured group of returning customers, defined as those who are not susceptible to churn due to a repeated reason. Another challenge is examined in the second essay, which involves a setting where the structure of the purchasing options is a combination of contractual and noncontractual services. The complexities and dynamics of the customer-firm relationship and customers’ underlying commitment to it are modeled through a hidden Markov model, incorporating the dependency between the two purchase processes. The findings suggest that contractual and noncontractual purchase behaviors are distinct but interrelated

ISBIS 2016: Meeting on Statistics in Business and Industry

This Book includes the abstracts of the talks presented at the 2016 International Symposium on Business and Industrial Statistics, held at Barcelona, June 8-10, 2016, hosted at the Universitat Politècnica de Catalunya - Barcelona TECH, by the Department of Statistics and Operations Research. The location of the meeting was at ETSEIB Building (Escola Tecnica Superior d'Enginyeria Industrial) at Avda Diagonal 647. The meeting organizers celebrated the continued success of ISBIS and ENBIS society, and the meeting draw together the international community of statisticians, both academics and industry professionals, who share the goal of making statistics the foundation for decision making in business and related applications. The Scientific Program Committee was constituted by: David Banks, Duke University Amílcar Oliveira, DCeT - Universidade Aberta and CEAUL Teresa A. Oliveira, DCeT - Universidade Aberta and CEAUL Nalini Ravishankar, University of Connecticut Xavier Tort Martorell, Universitat Politécnica de Catalunya, Barcelona TECH Martina Vandebroek, KU Leuven Vincenzo Esposito Vinzi, ESSEC Business Schoo

Succeeding in Extremely Competitive Markets: Insights from the Mobile Appmarket

Some products and services today compete against hundreds or thousands of competitors. Faced with so much competition, developers offer their products and services for free, or at a very low price, to those who are interested in the hope of attracting a large group of users. We label such markets where producers give products away for free or charge a nominal price as extremely competitive markets. Businesses competing in extremely competitive markets need insights regarding how they can increase the interest in, and use of, their products by potential customers. Unfortunately, the literature provides few such insights. This is the gap that I address in this dissertation research using the mobile app category with a specific focus on three questions: (1) what factors affect the number of users who download an app (2) why do some apps generate more interest among their users in terms of the word of mouth that they generate than other apps and (3) why do some apps acquire users faster than other apps? In the first essay, I propose and empirically verify an implicit assumption to explain why businesses in extremely competitive market charge a zero or a very low price. The assumption is that a product with a large group of users will generate profits in the future through one or more mechanisms. For instance, the large user group could attract advertisers interested in targeting the users with promotions for their products. Alternatively, it may create network effects which could, in turn, increase the willingness of users to buy the product. Finally, a free product with a large user group may increase the developer’s ability to target the users with improved versions of that product, or other related new products, at a positive price. Findings from our investigation for essay I on the factors that affect the number of users who download an app suggest that the extent of interest of users in other apps offered by the developer has a significant positive effect on the ability of a currently offered app to attract users. Not surprisingly, charging a price rather than giving it away reduces the number of users and so does an increase in the app’s physical size, i.e., the memory that it requires on the phone. In terms of the app’s rating, interestingly, we find that apps that either have a low-maturity rating – meaning that they are approved for children as well – or have a high-maturity rating – meaning that their use by kids is not advised – do well in terms of the number of users they attract. Our findings also suggest that apps from some genres such as brain teasers, arcade games and sports gain more users than others. Competition-wise, we find that conversations among users who installed competing apps attract more users for the app while an increase in the price of competing apps that were installed reduces the number of users that an app attracts. Overall, therefore, our results suggest that developers with more experience and awareness among users can attract users more easily for new apps than those with no prior experience thus providing empirical support for one of the three mechanisms that the app industry seems to assume. While they are from one category that involves extreme competition, our results may also apply to other categories such as video channels and blogs in similar markets. From the first essay, we find that users’ discussion of apps developed by a certain developer will help in acquiring users for their future products. In the second essay, therefore, we investigate the issue of the factors that affect consumers’ word-of- mouth for apps. Our analysis of the word of mouth for apps also provides some surprising insights into why users discuss some apps more than others. Specifically, we find that users are more likely to post comments, reviews, and discuss apps that they paid for rather than those that they obtained for free. This is clearly a finding with significant implications for the pricing and promotion of apps: apps that are given away are less likely to attract users who are advocates that are willing to promote them to potential users. Developers of apps therefore need to take this into account in their pricing decisions. In addition to this immediate implication for the app category, our finding also raises the possibility that, in general, consumers are more likely to discuss products that they purchased than those that they received as promotional items. Other findings and managerial implications are discussed. In the third essay, I aim to jointly analyze the customer acquisition reached and the time to get there using a joint ordinal-survival analysis model. The focus in this research is on why, in the face of such extreme competition, some apps acquire customers faster than others. I investigate this question using data on the number of users acquired, and the acquisition growth, for about 2455 Apps from Google Play. I categorize the number of users acquired into ordered tiers and formulate a joint model of growth and customer acquisition using a survival model for the former and an ordinal logit model for the later. The explanatory variables include price, valence of customer rating, and other product attributes. Additionally, effects of competitive contexts and frames are considered. I also consider the role of information cascades on customer acquisition and growth in extremely competitive markets. The model is calibrated within a Bayesian framework using MCMC methods. Findings for the app category as well as generalizable implications for extremely competitive markets are discussed