The Influence of the Herfindahl-Hirschman Index and Product Complexity on Search Behaviour: A Cross-sector Study of the U.S., Germany and U.K.

Consumer search is analysed in a cross-sector study of six markets in the US, Germany and UK using online panel data. Two constructs are used to measure the search process: the consideration set and use of price comparison engines. The consideration sets range from 2.3 to 3.1 in the US, from 2.3 to 2.6 in Germany and from 2.6 to 3.2 in the UK, regardless of the use of price comparison engines. These results are significantly smaller than expected compared to pre-Internet studies and theory predictions. However, they are consistent with the few published results that used online panel data. It is shown that the consideration set is a function of the Herfindahl-Hirschman Index. The use of price comparison engines is inversely related to product complexity. The theoretical and managerial implications of the research results are explained and the potential of using online panel data for future research into online consumer behaviour and strategy is outlined

Online Search Behavior in the Air Travel Market: Reconsidering the Consideration Set and Customer Journey Concepts

The online air travel market is a complex and dynamic multi-channel environment in which consumers use a range of decision criteria to search for their best flight options. Online Travel Agents and Price Comparison Engines have transformed the search process and enhanced market transparency. These Air Travel Intermediaries (ATIs) are sophisticated decision support tools that enable online search and booking across thousands of flight options for all users, regardless of user expertise. An experiment was conducted to explore the detailed search behavior and processes of 29 individuals. A revised model of the customer journey as search funnel and a different operationalization of the consideration set is described that are more realistic representations of actual search behavio

B2B analytics in the airline market: Harnessing the power of consumer big data

This paper utilizes market-level data to explore the relative performance of individual companies amongst defined competitors. We show the potential of using consumer clickstream data, an important type of big data, to create a new set of B2B analytical frameworks. In the markets where complex interactions between competitors, search intermediaries and consumers create a network, B2B relationships can be inferred from consumer search patterns, and can then be modeled to gauge the online performance. A commercial dataset from ComScore's US panel of one million users is used to illustrate a new approach to measure and evaluate the online performance of competitors in the US airline market. The methodology and associated performance framework demonstrate the potential for new forms of market intelligence based on the visualization of market networks, online performance calculated from matrix algorithms, the measurement of the impact of search intermediaries, and the identification of latent relationships. This research makes theoretical and empirical contributions to the debate on the use of big data for B2B market analytics. B2B managers can use this approach to extend their network horizon from an egocentric to a network view of competition and map out their competitive landscape from the perspective of the customer

Has the digitalisation of the leisure air travel search industry been enabled by the characteristics of multi-sided platforms (MSPs)?

The air travel industry has been a front-runner in the development and adoption of new technologies in the past half century. The entry of metasearch companies into the leisure air travel search industry has changed the dynamic of consumer search completely. These metasearch companies operate a multi-sided platform in which they provide end users a free service where they can search, compare and analyse all of the flight options available them. This research studies whether the distinctive characteristics of multi-sided platforms (MSPs) have been the key enablers for the leisure air travel search industry to go through digitalisation. The main theoretical basis for this research was built from literature on platform technologies, with a focus on multi-sided platforms, and digitalisation. Based on past literature, a theoretical lens was developed, in order to identify the specific MSP characteristics that would used to analyse the upcoming data. A plan was created to conduct a qualitative study aimed at obtaining personal views and opinions on various themes regarding digitalisation in the leisure air travel search industry. The qualitative data was obtained utilizing both semi-structured interviews, as well as, written questionnaires, and the data received from the research was analysed in order to find similarities and themes regarding the research topics. The key themes that were formed from the qualitative study were all analysed regarding why they were viewed as important factors within the industry and how they had an effect on the way that the industry has gone through its digitalisation. The themes that emerged were technological milestones, seamless communication, customer loyalty programs, knowing your customers, and ownership of data. Each theme was also analysed in connection to the research question, in order to get overall conclusions for the study. Generally, the results from the study reflected well the existing literature on areas such as the benefits of using multi-sided platforms, the utilisation of customer loyalty programs, and the ability to successfully utilise customer data. In addition, the study provided great insight on the importance for a company to know ones customer and having the ability to recognize and adapt to changing customer demands. This study provides a good basis for further research on the topic, which could include a more extensive study from the consumer side, on what they value the most during the search phase of their leisure flights, and how they see the developments within the industry have changed their entire user experience

The International Drivers of Domestic Airline Mergers in Twenty Nations: Integrating Industrial Organization and International Business

The domestic airline merger phenomenon of the late 1980s and early 1990s sparked a great deal of Industrial Organization (IO) literature; yet, that literature neglected non-US domestic mergers and potential for international competitive gains. Using an International Business perspective to complement an IO analysis, I argue that factoring international competitive incentives helps explain domestic airline merger activity. A Cournot model of airline competition illustrates that domestic mergers, via enhanced domestic networks and reduced domestic competition, generate international competitive gains. Further, empirical tests - using a structural-equations approach on panel data covering international city-pair market segments - support domestic mergers improving international competitiveness. ZUSAMMENFASSUNG - (Was die inländischen Fluglinien in 20 Ländern zur Fusion getrieben hat. Eine integrierte industrieökonomische und betriebswirtschaftliche Analyse des internationalen Wettbewerbs) In der Industrieökonomik hat das Phänomen von Fusionen inländischer Fluggesellschaften in den späten 1980er und frühen 1990er Jahren viel wissenschaftliche Literatur angeregt. Die einschlägigen Forschungsarbeiten behandeln jedoch ausschließlich inländische Fusionen in den U.S.A. und lassen damit den Aspekt des internationalen Wettbewerbs außer Acht. In dieser Untersuchung, die die industrieökonomische Analyse um die Perspektive der internationalen Betriebswirtschaft ergänzt, wird gezeigt, dass die Anreize des internationalen Wettbewerb in das Erklärungsmodell für nationale Fusionen von Fluglinien integriert werden können. Anhand eines Cournot-Modells des Wettbewerbs zwischen Fluggesellschaften kann dargelegt werden, wie Fusionen zu einem erweiterten inländischen Netz an Flugverbindungen und verminderten Konkurrenzdruck im Inland führen und so die Position der fusionierten Fluglinie im internationalen Wettbewerb stärken. Dieses Ergebnis wird von empirischen Tests, die eine Struckturvergleichsmethode für Paneldaten über einen internationalen Städtevergleich der Marktsegmente verwenden, gestützt.airline-mergers, imperfect-competition, international-determinants

Non-Sequential Search, Competition and Price Dispersion in Retail Electricity

We investigate the impact of consumer search and competition on pricing strategies in Germany's electricity retail. We utilize a unique panel dataset on spatially varying search requests at major online price comparison websites to construct a direct measure of search intensity and combine this information with zip code level data on electricity tariffs between 2011 and 2014. The paper stands out by explaining price dispersion by differing pricing strategies of former incumbents and entrant firms, which are distinct in their attributable shares in informed versus uninformed consumers. Our empirical results suggest causal evidence for an inverted U-shape effect of consumer search intensity on price dispersion in a clearinghouse environment as in Stahl (1989). The dispersion is caused by opposite pricing strategies of incumbents and entrants, with incumbents initially increasing and entrants initially decreasing tariffs as a reaction to more consumer search. We also find an inverted U-shape effect of competition on price dispersion, consistent with theoretical findings by Janssen and Moraga-González (2004). Again, the effect can be explained by opposing pricing strategies of incumbents and entrants. (authors' abstract)Series: Department of Economics Working Paper Serie

Information Technology Applications in Hospitality and Tourism: A Review of Publications from 2005 to 2007

The tourism and hospitality industries have widely adopted information technology (IT) to reduce costs, enhance operational efficiency, and most importantly to improve service quality and customer experience. This article offers a comprehensive review of articles that were published in 57 tourism and hospitality research journals from 2005 to 2007. Grouping the findings into the categories of consumers, technologies, and suppliers, the article sheds light on the evolution of IT applications in the tourism and hospitality industries. The article demonstrates that IT is increasingly becoming critical for the competitive operations of the tourism and hospitality organizations as well as for managing the distribution and marketing of organizations on a global scale

B2B analytics in the airline market: Harnessing the power of consumer big data

© 2019 The Authors This paper utilizes market-level data to explore the relative performance of individual companies amongst defined competitors. We show the potential of using consumer clickstream data, an important type of big data, to create a new set of B2B analytical frameworks. In the markets where complex interactions between competitors, search intermediaries and consumers create a network, B2B relationships can be inferred from consumer search patterns, and can then be modeled to gauge the online performance. A commercial dataset from ComScore's US panel of one million users is used to illustrate a new approach to measure and evaluate the online performance of competitors in the US airline market. The methodology and associated performance framework demonstrate the potential for new forms of market intelligence based on the visualization of market networks, online performance calculated from matrix algorithms, the measurement of the impact of search intermediaries, and the identification of latent relationships. This research makes theoretical and empirical contributions to the debate on the use of big data for B2B market analytics. B2B managers can use this approach to extend their network horizon from an egocentric to a network view of competition and map out their competitive landscape from the perspective of the customer

Switch on the competition; causes, consequences and policy implications of consumer switching costs

The success or failure of reforms aimed at liberalising markets depends to an important degree on consumer behaviour. If consumers do not base their choices on differences in prices and quality, competition between firms may be weak and the benefits of liberalisation to consumers may be small. One possible reason why consumers may respond only weakly to differences in price and quality is high costs of switching to another firm. This report presents a framework for analysing markets with switching costs and applies the framework in two empirical case studies. The first case study analyses the residential energy market, the second focuses on the market for social health insurance. In both markets, there are indications that switching costs are substantial. The report discusses policy options for reducing switching costs and for alleviating the consequences of switching costs.