Optimal strategy for selling on group-buying website

Purpose: The purpose of this paper is to help business marketers with offline channels to make decisions on whether to sell through Group-buying (GB) websites and how to set online price with the coordination of maximum deal size on GB websites. Design/methodology/approach: Considering the deal structure of GB websites especially for the service fee and minimum deal size limit required by GB websites, advertising effect of selling on GB websites, and interaction between online and offline markets, an analytical model is built to derive optimal online price and maximum deal size for sellers selling through GB website. This paper aims to answer four research questions: (1) How to make a decision on maximum deal size with coordination of the deal price? (2) Will selling on GB websites always be better than staying with offline channel only? (3) What kind of products is more appropriate to sell on GB website? (4)How could GB website operator induce sellers to offer deep discount in GB deals? Findings and Originality/value: This paper obtains optimal strategies for sellers selling on GB website and finds that: Even if a seller has sufficient capacity, he/she may still set a maximum deal size on the GB deal to take advantage of Advertisement with Limited Availability (ALA) effect; Selling through GB website may not bring a higher profit than selling only through offline channel when a GB site only has a small consumer base and/or if there is a big overlap between the online and offline markets; Low margin products are more suitable for being sold online with ALA strategies (LP-ALA or HP-ALA) than high margin ones; A GB site operator could set a small minimum deal size to induce deep discounts from the sellers selling through GB deals. Research limitations/implications: The present study assumed that the demand function is determinate and linear. It will be interesting to study how stochastic demand and a more general demand function affect the optimal strategies. Practical implications: This paper provides a very useful model framework and optimal strategies for sellers’ selling on GB website. It takes advantage of the analytical model to explain much typical practical phenomenon for E-commerce like free sale with limited availability and so forth. It also helps GB website operator to induce deep discount from sellers. Originality/value: This paper is a first attempt to examine the seller's GB sale decision problem regarding to price and bounds on deal sizes. It analyses how the minimum deal size set by the GB website affect the optimal decision of sellers’. Moreover, it also discusses the impact of the interactions between online and offline markets on sellers’ decisionPeer Reviewe

Direct versus indirect channels: Differentiated loss aversion in a high‐involvement, non‐frequently purchased hedonic product

Purpose – This article aims to investigate whether intermediaries reduce loss aversion in the context of a high-involvement non-frequently purchased hedonic product (tourism packages). Design/methodology/approach – The study incorporates the reference-dependent model into a multinomial logit model with random parameters, which controls for heterogeneity and allows representation of different correlation patterns between non-independent alternatives. Findings – Differentiated loss aversion is found: consumers buying high-involvement non-frequently purchased hedonic products are less loss averse when using an intermediary than when dealing with each provider separately and booking their services independently. This result can be taken as identifying consumer-based added value provided by the intermediaries. Practical implications – Knowing the effect of an increase in their prices is crucial for tourism collective brands (e.g. “sun and sea”, “inland”, “green destinations”, “World Heritage destinations”). This is especially applicable nowadays on account of the fact that many destinations have lowered prices to attract tourists (although, in the future, they will have to put prices back up to their normal levels). The negative effect of raising prices can be absorbed more easily via indirect channels when compared to individual providers, as the influence of loss aversion is lower for the former than the latter. The key implication is that intermediaries can – and should – add value in competition with direct e-tailing. Originality/value – Research on loss aversion in retailing has been prolific, exclusively focused on low-involvement and frequently purchased products without distinguishing the direct or indirect character of the distribution channel. However, less is known about other types of products such as high-involvement non-frequently purchased hedonic products. This article focuses on the latter and analyzes different patterns of loss aversion in direct and indirect channels

The evolution of large retail chains

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ONLINE RETAIL KEYWORD CHARACTERISTICS AND SEARCH MARKETING PERFORMANCE

To make judicious budget and resource allocation decisions, it is essential to understand the characteristics and performance of keywords used by target shoppers. Taking the approach of understanding consumers’ information needs, we construct a goal-related keyword characterization framework. Most search keywords exhibit more than one of the following characteristics - retailer specific, brand specific, product specific, feature related, or shopping intention. We analyze search engine ranking, click-through, and revenue data associated with visitor-disclosed search keywords from a top Web-only retailer over one year. Our findings show the interesting impacts of both keyword characteristics and dual-appearance of paid and organic advertisements on search marketing performance. The contributions of the research include a comprehensive search keyword characterization framework, and the analysis of the relationships between keyword characteristics and search performance. These findings have strong implications for search marketing decisions

A Eficácia da Publicidade em Jogos FPS

O desenvolvimento e a consequente popularidade das tecnologias digitais interativas e imersivas tem levado os consumidores a um maior poder seletivo, e as ferramentas multimédia passaram a ser mais apreciadas pelos diversos públicos. As tecnologias digitais levaram à criação de uma indústria de videojogos que se vem mantendo em elevado crescimento. Este crescimento dos videojogos tem vindo a despertar a curiosidade dos anunciantes que vêm neste meio uma alternativa para impactar o público que se vem afastando dos meios de comunicação tradicionais. Grandes empresas como a Apple, a Sony ou a Intel são presença constante nos videojogos, sobretudo nos que usam como suporte o computador. Uma presença sobre a forma de anúncio ou placement de produtos, sendo que um anúncio implementado de forma adequada pode levar a um crescimento nas vendas e/ou à reputação da marca. É neste contexto que o estudo incide na análise da eficácia da publicidade incorporada em videojogos ou que usa os videojogos como suporte da mensagem publicitária. O estudo faz uma revisão bibliográfica sobre a publicidade nos videojogos com o objetivo de melhor compreender a ascensão da publicidade nestas plataformas e respetivas caraterísticas, bem como aborda as principais variáveis representativas dos vários estilos de publicidade existentes neste meio de comunicação. O estudo recorre a um método que assenta no recurso a um projeto experimental, através da criação de um mapa de jogo específico para o estilo FPS, com anúncios customizados e colocados em vários locais do mapa, previamente definidos. O estudo investiga a relação que possa existir entre a eficácia dos anúncios e as experiências do jogador em reação ao conteúdo do jogo a partir da análise da retenção das marcas e do nível de intrusão da publicidade. O objetivo do estudo é poder, também, vir a contribuir para o aumento do conhecimento sobre o impacto da publicidade nos videojogos, e a criação de uma base para recomendações e sugestões de boas práticas que possam contribuir para o uso eficaz da publicidade neste novo meio de digital. Recorrendo a um focus group e a um questionário a jogadores de videojogos, após uma experiência de jogo, o estudo permite concluir que a publicidade do tipo interativo é a que garante maior taxa de recordação e que a publicidade em geral não só é aceite no jogo como é encarada como um elemento que torna o cenário de jogo mais realista. Por outro lado a existência de publicidade no jogo não é determinante na formação do processo de decisão de compra.The development and consequent popularity of interactive and immersive digital technologies has led consumers to increasingly selective power, and multimedia have become more appreciated by diverse audiences. Digital technologies have led to the creation of a gaming industry which has been keeping on high growth. This growth of video games aroused the curiosity of advertisers who viewed it as means of an alternative way to impact the public that has been moving away from traditional media. Big companies like Apple, Sony and Intel are constant presence in video games, particularly those games which use the computer as a support. A presence on the form of advertisement or product placement. An advertisement implemented correctly can lead to a growth in sales and or brand reputation. It is in this context that the study focuses on analyzing the effectiveness of in-game advertising or using video games as a medium for advertising a message. The study organizes a literature review with the aim of understanding the rise of advertising in video games and respective characteristics, and determine the main variables represented in the various styles of advertising in this medium. The study uses a method based on the use of an experimental project by the creation of a game map for the FPS style, with custom advertisements placed in various previously defined locations of the map. The study examines the relationship that may exist between the effectiveness of ads and player experiences in reaction to the game content, from the analysis of the brands recall and the level of intrusion manifested by the player. The objective of the study is also to be able to contribute to the increase of knowledge about the impact of marketing in video games, and creating a basis for recommendations and suggestions for best practices that can contribute to the effective use of advertising in this new digital medium. Using a focus group and a questionnaire to game players, after a game experience, the study allows to conclude that interactive advertising is the type of advertisement that ensures higher rate of recall and that the advertising in general is not only accepted in the game as it is seen as an element that contributes to a more realistic game. On the other hand the existence of in-game advertising is not decisive in the formation of the buying decision process

Prissättningsproblematik för multikanalföretag - Hur bemöter multikanalföretag den ökade pristransparensen på Internet

Titel: Prissättningsproblematiken för multikanalföretag - Hur bemöter multikanalföretag den ökade pristransparensen på Internet Ämne: FEKH69, Examensarbete i redovisning på kandidatnivå, 15 HP Författare: Linn Boman och Emina Holmgren Handledare: Ola Mattisson Nyckelord: Multikanalföretag, marknadsvillkor, ”The Long Tail model” e-handel, prissättningsstrategi, värdebaserad, nischade produkter Syfte: Syftet med denna studie är undersöka hur multikanalföretag bemöter den ökade pristransparensen på Internet Metod: För att få svar på vårt syfte har vi valt att använda oss av en kvalitativ metod och gjort en multipel fallstudie. Vi har haft en deduktiv ansats då vi utgått från existerande teori. För att samla in nödvändig data har vi använt oss av semistrukturerade intervjuer och dokumentstudier. Teoretiska perspektiv : Teoriavsnittet börjar med en definition av termerna multikanal och omnikanal. I första kapitlet beskriver vi därefter förändringen av marknaden och ”The Long Tail model”. Vi fortsätter sedan med grundläggande pristeori i form av utbud, efterfråga och priselasticitet. Avslutningsvis går vi in på de tre olika prissättningsstrategierna, värdebaserad, kostnadsbaserad och konkurrensbaserad. Empiri: För att undersöka hur företag sätter pris på produkter när de arbetar med multikanalstrategi har vi valt att göra vår studie på Electa och Yokiono. Electa, ett företag som är verksamt inom skönhetsbranschen. De har ett nischat koncept men säljer även homogena produkter. Det andra företaget, Yokiono är verksamt inom klädesbranschen. De säljer nischade kläder men också homogena produkter. Slutsats: Genom att undersöka de två multikanalföretagen har vi kommit fram till att de fokuserar på försäljning av nischade produkter och på att utnyttja ”The Long Tail model”. De fokuserar på kundvärde och använder sig av en värdebaserad prissättningsstrategi

Structural changes in online retailing and the marketing mix: An analysis considering multichannel online retailing and voice dialog interfaces

The online retail environment is expanding, enhancing the possibilities for customers to shop online. On the one hand, a proliferation of online channels establishes a multichannel online retailing landscape, which offers customers more alternatives in terms of where to shop online. On the other hand, a change in the user interaction mode of existing customer touchpoints, from graphics to voice, creates new voice dialog interfaces, which enhance the way with regard to how customers can shop online. In this context, this publication-based dissertation aims to generate theoretical and practical contributions on these two most recent developments in online retailing, i.e., multichannel online retailing and voice dialog interfaces, to improve marketing mix decision-making

Exploring the omnichannel transformation of material-handling configurations and logistics capabilities in grocery retail

Grocery retail is going through a rapid shift. Consumers now expect to be able to shop online or in stores, get orders delivered when and where they want, and preferably as quickly as possible. This development is called omnichannel and means grocery retailers must transform their logistics networks to meet consumers’ evolving expectations and demands. The omnichannel transformation includes, for example, setting up new material handling (MH) nodes to pick online orders and investing in new automated systems. While this might sound straightforward, grocery retailers struggle to succeed with the omnichannel transformation, particularly in living up to consumers’ evolving expectations and becoming profitable. To develop theoretical and practical knowledge on this under-researched topic, this dissertation aimed to explore and understand the MH configurations and logistics capabilities needed in the omnichannel transformation of grocery retail and the dynamic capabilities required to manage such a transformation. In responding to this purpose, this dissertation makes several important contributions for researchers and practitioners who aim to understand how grocery retailers manage the omnichannel transformation and what they are doing to reconfigure MH configurations and logistics capabilities.The dissertation is based on the results of five articles from three separate but subsequent studies. The first study, a case study–inspired interview project, applied a contingency approach to explore the configurations of four manual online fulfillment centers (OFCs) in omnichannel grocery retail. The study captured key configurations, main challenges, and influential contextual factors. Study two, a multiple case study, focused on sorting in omnichannels. The study increased knowledge of sorting in omnichannels, and by combining empirical data with transvection theory, it also resulted in an artifact for analyzing and designing omnichannel sorting. The third and last study was a multiple case study of three grocery retailers and had a two-fold focus. First, this study moved beyond exploring specific aspects of the MH configurations and logistics capabilities in omnichannel grocery retail (OFC configuration and sorting) and focused on how and why grocery retailers manage the transformation by contextualizing dynamic capabilities. Second, study one revealed that investment in automation is as one key to being competitive in the omnichannel environment. Study three further explored automated online order picking systems and captured key configuration aspects, main performance objectives, and influential contextual factors. This dissertation contributes to the research by combining the findings from the three studies with literature on omnichannel logistics and MH in grocery retail, warehouse theory, and transvection theory to elaborate knowledge on what and dynamic capabilities to understand how. Moreover, a contingency approach helped investigate why grocery retailers invest in and reconfigure specific MH configurations and logistics capabilities, as well as why some grocery retailers are more successful than others with the omnichannel transformation. As a result, an elaborate and comprehensive framework arose that explains the what, how, and why of omnichannel grocery retail. The analysis and development of the framework revealed that omnichannel grocery retailers adapt their MH configurations and logistics capabilities to their external context to meet evolving customer expectations and requirements. Hence, the potential configurations and logistics capabilities that grocery retailers develop and invest in are influenced and constrained by the external context. The dynamic capabilities required to manage the omnichannel transformation could be identified by applying dynamic capabilities as a theoretical lens. The findings revealed that the identified dynamic capabilities enabling the transformation reside to a large extent on organization-level, both corporate and logistics

Two essays on digital and multi-channel marketing pricing strategy

Pricing is the process whereby a business sets the price at which it will sell its products and must be considered as a core part of the business's marketing plan. In recent years, there has been a growing awareness of the complex nature of price as a determinant of consumer decision making process. Recent research indicates there is no simple explanation of how price influences firm performance and individual consumer purchase decisions. The pricing strategy in traditional brick-and-mortar stores has received consistent attention from both academia and industry. However, as the raising of digital technology, the evolving business circumstance changed, or even re-introduced, many practically and theoretically important questions. Given this importance, the two essays tackle the strategic pricing strategy in the two critical perspectives of marketing — advertising and retailing. In the first essay, I explore the effects of displayed product price on keyword advertising performance in online shopping websites, as well as on consumers’ decision processes. With a hierarchical Bayesian model using a unique data set from a leading electronic shopping platform and a simulated experiment, I empirically test the asymmetric effects of price rank on advertising performances (i.e., click-through rates and conversion rates) in study one and the underlying mechanism in study two. Specifically, I find that consumers tend to click more on extreme price options (i.e., highest or lowest) in the early phases of the purchase funnel, which serve as anchors to evaluate a broad range of options. Clicks at later stages, which tend to convert to purchases, instead are more likely for moderately priced options, which offer a compromise across different product features. The effects of price rank diminish among advertisements sponsoring more specific keywords but grow for those sponsoring more popular keywords. This essay demonstrates that the keyword advertisements provides a context for price comparison, which further influences consumers’ responses toward advertisements. While the first essay focuses on gaining competitiveness through enhancing the price competition in digital advertising context, the second essay focuses on avoiding price competition in multi-channel retailing context through switching the business focus. The second essay explores the causal effects of multi-channel retailer implementing cross-channel price integration. Leveraging a revised pricing policy implemented by one of the leading house appliance retailers, I empirically investigate how cross-channel price integration affects product sales and consumer preferences. This change of cross-channel pricing strategy reveals varying impact across time, products, channels, and customer segments. In the short term, price integration leads to a 14.70% decrease in sales of products without services but a 14.68% increase in sales of products with services. The price integration effect is more positive in the long run, such that sales of products increase by 10.07% without services and 36.07% with services. Further, using a latent class model with zero-inflated Poisson framework, I empirically differentiated the effects of price integration on three consumer segments with different preferences (i.e., lovers, haters and adaptors). The findings of the second essay contribute to the multi-channel pricing literature by providing an empirical examine of the effectiveness of cross-channel price integration and consumer migration. The findings of the two essays contribute to the pricing, keyword advertisements and multi-channel literature, and shed lights on the strategic implications of pricing activities. Specifically, the first essay connects the pricing literature, consumer search and keyword advertising literature by exploring the effects of contrast among displayed product prices in the keyword advertising context. This essay is among the first few to investigate how advertised product price affects advertising performance. The study suggests the advertised product price display two contrasting effects on consumers’ clicking and purchasing behaviors along their purchase funnel. In addition, the research extends understanding of two keyword characteristics by theoretically differentiating keyword specificity and keyword popularity. The second essay connects the multi-channel pricing literature and transaction value literature by empirically examine the effects of retailers implementing cross-channel price integration policy. Advancing prior research on perceived transaction value and multi-channel pricing literature, this research proposes two contrasting mechanisms (i.e., price change and pricing consistency), through which the cross-channel price integration affects the product sales and consumer sales. The empirical findings shed lights on managerial implications to multi-channel retailers