Behavioral Aspects of Pricing

Buyers sometimes exhibit seemingly “irrational” behavior with respect to prices and use socially embedded heuristics to simplify their purchase decisions. In some cases small changes in prices can lead to much larger than anticipated changes in sales and profitability. Sellers need to understand the heuristics consumers use, the situations in which they emerge, and recognize how they can respond in markets where information and knowledge of product attributes and competitive prices is increasingly available via the Internet. This chapter explores consumers’ behavioral reactions to price through a review of contemporary literature in the field of pricing. The chapter delineates the nature and scope of these effects based upon a critical review of the most up-to-date empirical research in the field, and concludes by providing implications for innovation in pricing, and guidance for managers to reduce the disconnect between themselves and consumers

Revenue Management and Demand Fulfillment: Matching Applications, Models, and Software

Recent years have seen great successes of revenue management, notably in the airline, hotel, and car rental business. Currently, an increasing number of industries, including manufacturers and retailers, are exploring ways to adopt similar concepts. Software companies are taking an active role in promoting the broadening range of applications. Also technological advances, including smart shelves and radio frequency identification (RFID), are removing many of the barriers to extended revenue management. The rapid developments in Supply Chain Planning and Revenue Management software solutions, scientific models, and industry applications have created a complex picture, which appears not yet to be well understood. It is not evident which scientific models fit which industry applications and which aspects are still missing. The relation between available software solutions and applications as well as scientific models appears equally unclear. The goal of this paper is to help overcome this confusion. To this end, we structure and review three dimensions, namely applications, models, and software. Subsequently, we relate these dimensions to each other and highlight commonalities and discrepancies. This comparison also provides a basis for identifying future research needs.Manufacturing;Revenue Management;Software;Advanced Planning Systems;Demand Fulfillment

Practices for strategic capacity management in Malaysian manufacturing firms

While the notion of manufacturing capabilities is a long-standing notion in research on operations management, its actual implementation and management has been hardly researched. Five case studies in Malaysia offered the opportunity to examine the practice of manufacturing managers with regard to strategic capability management. The data collection and analysis was structured by using the notion of Strategic Capacity Management. Whereas traditionally literature has demonstrated the beneficial impact of an appropriate manufacturing strategy on the business strategy and performance, the study highlights the difficulty of managers to set the strategy, let alone implementing it. This is partly caused by the immense pressure of customers in these dominantly Make-To-Order environments for SMEs. Current concepts for manufacturing capabilities have insufficiently accounted this phenomenon and an outline of a research agenda is presented

Perceptual mapping of practical ethics along the value chain: A multiple correspondence analysis with industry and cultural indices as supplementary variables

This paper presents findings from a study investigating a firm’s ethical practices along the value chain. In so doing we attempt to better understand potential relationships between a firm’s ethical stance with its customers and those of its suppliers within a supply chain and identify particular sectoral and cultural influences that might impinge on this. Drawing upon a database comprising of 667 industrial firms from 27 different countries, we found that ethical practices begin with the firm’s relationship with its customers, the characteristics of which then influence the ethical stance with the firm’s suppliers within the supply chain. Importantly, market structure along with some key cultural characteristics were also found to exert significant influence on the implementation of ethical policies in these firms.Practical Ethics, Value Chain, Multiple Correspondence Analysis

Multi-level processes of integration and disintegration. Proceedings of the Third Green Week Scientific Conference

CONTENTS: ACKNOWLEDGEMENTS ... I; ABOUT THE MACE PROJECT... III; PLENARY PRESENTATION ... 1; Landscape agroecology: Managing interactions between agriculture, nature and socio-economy... 3, Tommy Dalgaard; DEVELOPMENT CHALLENGES IN RURAL AREAS ... 13; Patterns of rural development in mountainous areas of the Mediterranean: Between innovation and tradition ... 15, Angela Guarino; Agro ecology: Hypothesis for a sustainable local development?... 22, Silvia Doneddu; The farmers' early retirement scheme as an instrument of structural changes in the rural areas after Poland's accession to the EU ... 29, Michal Dudek; FOOD MARKETS AND AGRICULTURAL MARKETING... 37; G/Local brand challenges in the Austrian agricultural food market ... 39, Bernadette Frech, Ana Azevedo, Hildegard Liebl; Willingness of food industry companies to co-finance collective agricultural marketing actions... 48, Anikó Tóth, Csaba Forgács; MULTIFUNCTIONAL AGRICULTURE ... 57; The role of multifunctional agriculture for rural development in Bulgaria... 59, Violeta Dirimanova; A methodological review of multifunctional agriculture ... 66, Concettina Guarino, Francesco Di Iacovo; A spatially explicit decision-making support tool for integral rural development ... 75, Catherine Pfeifer, Jetse Stoorvogel; AGRICULTURAL EXTENSION AND NETWORKS IN RURAL AREAS... 89; Feasibility and implementation strategies of dairy extension in Ulaanbaatar/Mongolia... 91, Baast Erdenebolor, Volker Hoffmann; The relevance of social networks for the implementation of the LEADER programme in Romania ... 99, Doris Marquardt, Gertrud Buchenrieder, Judith Möllers; Quality assessment problems of agricultural advisory centres' services... 113, Gunta Grinberga; INTEGRATION PROCESSES INTO INTERNATIONAL MARKETS... 125; Competition or market power in the Ukrainian meat supply chain? ... 127, Andriy Matyukha, Oleksandr Perekhozhuk; Integration of the Hungarian cereal market into EU 15 markets ... 138, Attila Jambor; Regional specialisation of agriculture and competitive advantages of East-European countries... 146, Oleksandr Zhemoyda, Stephan J. Goetz; GOVERNANCE AND USE OF NATURAL RESOURCES ... 155; An analysis of biodiversity governance in the Kiskunság National Park according to the GoverNat Framework... 157, Cordula Mertens, Eszter Kelemen, György Pataki; Hierarchical network modelling and multicriteria analysis for agri-environmental measures in Poland ... 168, Jadwiga Ziolkowska; Assessing rural livelihood development strategies combining socioeconomic and spatial methodologies ... 179, K.C. Krishna Bahadur; SUSTAINABLE AGRICULTURAL LAND USE... 189; Linking economic and energy modelling with environmental assessment when modelling the on-farm implementation of Anaerobic Digestion ... 191, Andreas Muskolus, Andrew M. Salter, Philip J. Jones; Phytoremediation of a heavy metal-contaminated agricultural area combined with energy production. Multifunctional use of energy maize, rapeseed and short rotation crops in the Campine (BE)... 200, Nele Witters, Stijn Van Slycken, Erik Meers, Kristin Adriaensen, Linda Meiresonne, Filip Tack, Theo Thewys, Jaco Vangronsveld --

Design Principles for Closed Loop Supply Chains

In this paper we study design principles for closed loop supply chains. Closed loop supply chains aim at closing material flows thereby limiting emission and residual waste, but also providing customer service at low cost. We study 'traditional' and 'new' design principles known in the literature. It appears that setting up closed loop supply chains requires some additional design principles because of sustainability requirements. At the same time however, we see that traditional principles also apply. Subsequently we look at a business situation at Honeywell. Here, only a subset of the relevant design principles is applied. The apparent low status of reverse logistics may provide an explanation for this. To some extent, the same mistakes are made again as were 20 years ago in, for instance, inbound logistics. Thus, obvious improvements can be made by applying traditional principles. Also new principles, which require a life cycle driven approach, need to be applied. This can be supported by advanced management tools such as LCA and LCC.reverse logistics;case-study;closed loop supply chains

The Effects of Imbalanced Competition on Demonstration Strategies

This paper analyzes the effect of competition on product demonstration decisions. Pre-purchase product demonstration enables marketers to differentiate products that are ex-post differentiated but are judged according to perceived fit, rather than actual fit, due to pre-purchase consumer uncertainty. Imbalanced competition accompanied by fit uncertainty motivates the follower to offer demonstrations to avoid a price war. This paper explores the conditions that lead the leader to retaliate. In addition to effects on quantity, competition may increase the quality of demonstrations offered by the leader. We analyze a business case, showing that competition may increase the demonstration intensity and that the leading manufacturer’s response to changes in competition is stronger than the responses of the followers. Our research has the potential to aid mangers in formulating demonstration strategies and in responding to competitors’ demonstration efforts.Imbalanced competition, product demonstration, differentiation, test-drive, price war, Political Economy, Production Economics,

Recent developments in empirical IO: dynamic demand and dynamic games

Empirically studying dynamic competition in oligopoly markets requires dealing with large states spaces and tackling difficult computational problems, while handling heterogeneity and multiple equilibria. In this paper, we discuss some of the ways recent work in Industrial Organization has dealt with these challenges. We illustrate problems and proposed solutions using as examples recent work on dynamic demand for differentiated products and on dynamic games of oligopoly competition. Our discussion of dynamic demand focuses on models for storable and durable goods and surveys how researchers have used the "inclusive value" to deal with dimensionality problems and reduce the computational burden. We clarify the assumptions needed for this approach to work, the implications for the treatment of heterogeneity and the different ways it has been used. In our discussion of the econometrics of dynamics games of oligopoly competition, we deal with challenges related to estimation and counterfactual experiments in models with multiple equilibria. We also examine methods for the estimation of models with persistent unobserved heterogeneity in product characteristics, firms’ costs, or local market profitability. Finally, we discuss different approaches to deal with large state spaces in dynamic games.Industrial Organization; Oligopoly competition; Dynamic demand; Dynamic games; Estimation; Counterfactual experiments; Multiple equilibria; Inclusive values; Unobserved heterogeneity.