the benefits of advance booking discount programs model and analysis consider a retailer who sells perishable seasonal products with uncertain demand due to the short sales season and long replenishment lead times associated with such products the retailer is unable to update demand forecasts by using actual sales data generated from the early part of the season and to respond by replenishing stocks during the season to overcome this limitation we examine the case in which the retailer develops a program called the advance booking discount abd program that entices customers to commit to their orders at a discount price prior to the selling season the time between placement and fulfillment of these precommitted orders provides an opportunity for the retailer to update demand forecasts by utilizing information generated from the precommitted orders and to respond by placing a cost effective order at the beginning of the selling season in this paper we evaluate the benefits of the abd program and characterize the optimal discount price that maximizes the retailer s expected profit

optimal preorder strategy with endogenous information control in this paper we investigate the integrated information and pricing strategy for a seller who can take customer preorders before the release of a product the preorder option enables the seller to sell a product at an early stage when consumers are less certain about their valuations we find that the optimal pricing strategy may be highly dependent on the amount of information available at preorder and that a small change in the latter may cause a dramatic change in the proportion of consumers who preorder under optimal pricing furthermore the seller s optimal information strategy depends on a key measure the normalized margin which is the ratio between the expected profit margin and the standard deviation of consumer valuation although the seller may want to release some information or none she should never release all information finally under the optimal information and pricing strategy the benefit of preorder is most pronounced when the normalized margin is in a medium range this paper was accepted by martin lariviere operations management

forecasting demand for single period products a case study in the apparel industry the problem considered is that of forecasting demand for single period products before the period starts we study this problem for the case of a mail order apparel company that needs to order its products pre season the lack of historical demand data implies that other sources of data are needed advance order data can be obtained by allowing a selected group of customers to pre order at a discount from a preview catalogue judgments can be obtained from purchase managers or other company experts in this paper we compare several existing and new forecasting methods for both sources of data the methods are generic and can be used in any single period problem in the apparel or fashion industries among the pre order based methods a novel top flop approach provides promising results for a small group of products from the case company expert judgment methods perform better than the methods based on advance demand information the comparative results are obviously restricted to the specific case study and additional testing is required to determine whether they are valid in general

a model of how discounting high priced brands affects the sales of low priced brands drawing on a consumer preference distribution structure postulated in analytical modeling research the author develops a separate effects model that separates the total discount effect of a compet

contextual influences on perceptions of merchant supplied reference prices two contextual variables that have theoretical roots in information processing attribution and social judgment theories were manipulated along with three levels of merchant supplied reference price in a 2 2 3 analysis of variance design results support the hypothesized effects of consistency and distinctiveness as contextual variables that influence internal price standards and purchase evaluations the three price levels resulted in a curvilinear pattern of results for the purchase evaluation and source credibility dependent variables as hypothesized however contrary to assimilation contrast theory the impact of the merchant supplied reference price on estimates of normal and fair prices was monotonic

for love or money fairtrade business models in the uk supermarket sector sales in supermarkets have contributed greatly to growth in fairtrade but the literature suggests there may be tensions between fairtrade principles and the commercial practices which characterise uk supermarket value chains this article explores these tensions through an analysis of supermarket value chains for fairtrade coffee cocoa bananas and fresh fruit it finds considerable variation in uk supermarket approaches in terms of scale and scope of commitment to fairtrade and in the nature of relationships with fairtrade suppliers in some cases supermarket involvement has the potential both to expand and deepen the impact of fairtrade whereas in others it threatens to undermine the ability of fairtrade to support long term processes of development the findings indicate that a more nuanced approach to supermarket fairtrade is required with recommendations for actions that could be taken to maximise the opportunities and minimise the risks

promotion signal proxy for a price cut evidence suggests that some consumers react to promotion signals without considering relative price information we adopt petty and cacioppo s elaboration likelihood model elm to explain this behavior in terms of the elm s peripheral route to persuasion in which the promotion signal is taken as a cue for a price cut experimental results show that low need for cognition individuals react to the simple presence of a promotion signal whether or not the price of the promoted brand is reduced but that high need for cognition individuals react to a promotion signal only when it is accompanied by a substantive price reduction

consumer skepticism of advertising claims testing hypotheses from economics of information propositions regarding consumers differential skepticism for search experience and credence claims are tested in an experiment using adult consumers the results provide clear support for nelson s 1970 hypotheses that consumers are more skeptical of experience than search attribute claims and more skeptical of subjective than of objective claims no support is found however for the darby and kami 1973 hypothesis that consumers will be more skeptical of credence than of experience attribute claims or for the hypothesis that consumers will not be less skeptical of experience claims for low priced goods

spatial interactions in multiple use forestry and substitution and wealth effects for the single stand abstract forestry models often ignore spatial relationships between forest stands this paper isolates the effects of stand interactions in multiple use forestry through a straightforward extension of the single stand model effects of stand interactions decompose into wealth and substitution effects and may cause time varying patterns of resource use for a forest stand simulations illustrate that a stand s role even in steady state may alternate an emphasis on timber with an emphasis on nontimber optimal management plans differ substantially depending on whether the manager values nonmarket goods from neighboring stands the model offers insights for improving heuristic forest level optimization models in current usage

nonparametric estimation of the effects of advertising the case of lydia pinkham this article reexamines some of the issues raised subsequent to the classical research by palda 1964 we use a nonparametric estimation method that allows us to incorporate both seasonal and smoothness constraints to estimate the parameters of a demand function using monthly data on lydia pinkham s vegetable compound the analysis indicates that the parameters of the estimated demand equation are not constant throughout the long period of the data which covers the whole life cycle of the product

asymmetric and neighborhood cross price effects some empirical generalizations this paper provides some empirical generalizations regarding how the relative prices of competing brands affect the cross price effects among them particular focus is on the asymmetric price effect and the neighborhood price effect the asymmetric price effect states that a price promotion by a higher priced brand affects the market share of a lower priced brand more so than the reverse the neighborhood price effect states that brands that are closer to each other in price have larger cross price effects than brands that are priced farther apart the main objective of this paper is to test if these two effects are generalizable across product categories and to assess which of these two effects is stronger while the neighborhood price effect has not been rigorously tested in past research the asymmetric price effect has been validated by several researchers however these tests of asymmetric price effect have predominantly used elasticity as the measure of cross price effect the cross price elasticity measures the percentage change in market share or sales of a brand for 1 change in price of a competing brand we show that asymmetries in cross price elasticities tend to favor the higher priced brand simply because of scaling effects due to considering percentage changes furthermore several researchers have used logit models to infer asymmetric patterns we also show that inferring asymmetries from conventional logit models is incorrect to account for potential scaling effects we consider the absolute cross price effect defined as the change in market share percentage points of a target brand when a competing brand s price changes by one percent of the product category price the advantage of this measure is that it is dimensionless hence comparable across categories and it avoids scaling effects we show that in the logit model with arbitrary heterogeneity in brand preferences and price sensitivities the absolute cross price effect is symmetric we develop an econometric model for simultaneously estimating the asymmetric and neighborhood price effects and assess their relative strengths we also estimate two alternate models that address the following questions i if i were managing the ith highest priced brand which brand do i impact the most by discounting and which brand hurts me the most through price discounts ii who hurts whom in national brand vs store brand competition based on a meta analysis of 1 060 cross price effects on 280 brands from 19 different grocery product categories we provide the following empirical generalizations 1 the asymmetric price effect holds with cross price elasticities but tends to disappear with absolute cross price effects 2 the neighborhood price effect holds with both cross price elasticities and absolute cross price effects and is significantly stronger than the asymmetric price effect on both measures of cross price effects 3 a brand is affected the most by discounts of its immediately higher priced brand followed closely by discounts of its immediately lower priced brand 4 national brands impact store brands more so than the reverse when the cross effect is measured in elasticities but the asymmetric effect does not hold with absolute effects store brands hurt and are in turn hurt the most by the lower priced national brands that are adjacent in price to the store brands 5 cross price effects are greater when there are fewer competing brands in the product category and among brands in nonfood household products than among brands in food products the implications of these findings are discussed

focus on fairtrade propositions for integrating fairtrade and supply chain management research driven by increased consumer interest and stakeholder pressure the number of fairtrade ft products has been steadily increasing the mainstreaming of ft means that the products are now facing stiff competition within the generic product categories in which they operate while consumers may pressure organizations for ethical conduct they are less willing to pay premium prices for fairly traded products for ft to continue to grow more efficient operating models are required to offset the premium prices paid to producers to ensure competitiveness in the market one such improvement approach may be the management of ft supply chains to investigate the feasibility of this approach this article systematically combines literature on ft with key supply chain management scm constructs and theories we discuss existing scm paradigms in the context of ft and demonstrate aspects where the efficiency of ft chains needs to be improved to ensure their viability we present propositions that demonstrate the key limitations of the ft model from the point of view of scm theory and practice and suggest the potential changes needed in the management of ft supply chains the article provides a timely first attempt to systematically combine ft with scm constructs thus establishing a basis for the further development of ft chains and for the improvement of the operating efficiency within them

coupon value a signal for price in this article the author proposes that consumers use the value of a coupon to estimate price study 1 shows that the higher the percentage discount the higher the perceived price study 2 demon

reducing the cost of demand uncertainty through accurate response to early sales traditionally fashion products have incurred high losses due to stockouts and inventory obsolence because long lead times coupled with a concentrated selling season force all or at least most production to be committed before demand information is available under a quick response system lead times are shortened sufficiently to allow a greater portion of production to be scheduled in response to initial demand we model and analyze the decisions required under quick response and give a method for estimating the demand probability distributions needed in our model we applied these procedures with a major fashion skiwear firm and found that cost relative to the current informal response system was reduced by enough to increase profits by 60 relative to the cost that would have been incurred if no response were used optimized response reduces cost by enough to roughly quadruple profits

the formation of expected future price a reference price for forward looking consumers among numerous possible reference prices expected future price is important a consumer s expectation of the future price of a brand plays a crucial role in the decision to buy now or later failure to characterize reference price as a forward looking concept a common practice in the reference pricing literature violates premises of neoclassical economic theory and leads to questionable modeling applications explicit measures of future price expectations were obtained and used to test various models of expectations formation providing insight into the effect of expected future price on consumers responses to price promotions and brand choice decisions

advance booking discount programs under retail competition we model a situation in which two retailers consider launching an advance booking discount abd program in this program customers are enticed to precommit their orders at a discount price prior to the regular selling season however these precommitted orders are filled during the selling season while the abd program enables the retailers to lock in a portion of the customer demand and use this demand information to develop more accurate forecasts and supply plans the abd price reduces profit margin we analyze the four possible scenarios wherein each of the two firms offer an abd program or not and establish conditions under which the unique equilibrium calls for launching the abd program at both retailers

institutional solutions to market failure on the landscape scale abstract this paper offers an ecologically based view of land and land value building upon the multiproduct nature of ecosystems and upon landscape ecology the paper questions the ability of markets to create optimal landscapes even when traditional methods of internalizing externalities are applied and concludes that attempting a complete valuation of ecosystems is quixotic achieving sustainable landscapes requires both sufficient ecological knowledge and institutions capable of overcoming landscape scale market failure accordingly the paper examines forms of public and private ownership in the united states to assess how well particular institutional conditions might facilitate ecological adaptation there

institutional resource regimes towards sustainability through the combination of property rights theory and policy analysis abstract although the concept of sustainable development is gaining increasing political acknowledgement despite the implementation of environmental policies specifically intended to solve problems in this area environmental degradation resulting from the recurrent problems associated with the over exploitation of natural resources remains an important concern for most countries how can this situation be explained this article postulates that a combination of approaches from the political sciences in particular policy analysis and institutional economics would enable the identification of the most relevant regulatory dimensions which can explain the un sustainable uses of resources based on this starting point it develops an innovative theoretical framework i e that of the institutional resource regime irr the adopted approach facilitates the analysis of the regulatory measures and resource management practices associated with complex and competitive heterogeneous use situations from a perspective of sustainability indeed the two dimensions of extent and coherence enable the definition and categorization of the irr of a given resource the extent of an irr refers to the total number of goods and services in use that are actually regulated by the regime at a given time while the coherence measures the degree of coordination of the various user actors within the regime one of the major contributions of the irr framework is its ability to describe the different configurations of regimes both theoretically and empirically and to predict their effect on the sustainability of a resource based on the hypothesis that high levels of regime extent and coherence are necessary preconditions for sustainability by doing this the irr framework also enables the analysis of the actual use rights to the goods and services provided by resources as the result of the political strategies of actors who mobilize different legal provisions which stem either from formal property rights to resources or from policies that regulate the use and protection of these resources having developed the central research hypotheses and the empirical research procedure we present the lessons drawn from the first campaign of field research which was mainly conducted in switzerland from 1999 based on the evidence from these initial findings it is suggested that the scope of the irr framework could be far broader than evidenced by its application in the case of switzerland where it was initially developed

semiparametric analysis to estimate the deal effect curve abstract the marketing literature suggests several phenomena that may contribute to the nature of the relationship between sales and price discounts these phenomena can produce complex nonlinearities and interactions in the deal effect curve that are best captured with a flexible approach because a fully nonparametric regression model suffers from the curse of dimensionality the authors propose a semiparametric regression model store level sales over time are modeled as a nonparametric function of own and cross item price discounts and a parametric function of other predictors the authors compare the predictive validity of the semiparametric model with that of two parametric benchmark models and obtain superior performance the results for three product categories indicate threshold and saturation effects for both ownand cross item temporary price cuts the authors also find that the nature of the own item curve depends on other items price discounts comparisons with restricted model specification

price induced patterns of competition this research focuses on how price changes influence the observed pattern of brand competition the paper begins with a basic utility model formulation and examines the implications of three major classes of preference distributions on the expected patterns of competition a price tier model is proposed to operationalize the theory and to allow predictive testing the price tier model is estimated on 28 brands across four product categories the results show a specific asymmetric pattern of price competition higher price higher quality brands steal share from other brands in the same price quality tier as well as from brands in the tier below however lower price lower quality brands take sales from their own tier and the tier below brands but do not steal significant share from the tiers above the results are consistent with a bimodal preference distribution with the regular price indifference point being located toward the lower quality end of the preference distribution for the categories analyzed

an investigation of individual responses to tensile price claims this article describes the results of two studies investigating the effects of tensile price claims e g save up to 50 on consumers perceptions of offer value information value and price reduction the findings suggest that the use of tensile claims in conjunction with large advertised price reductions may result in decreased perceived offer value and substantial discounting of expected price reductions by the consumer

the effect of semantic cues on consumer perceptions of reference price ads this article examines the differential effects of two types of semantic cues 1 cues connoting that an advertised price discount exhibits low consistency over time and 2 cues connoting that an advertised discount is highly distinctive vis a vis competitors results suggest that for manipulations of external reference prices with offering price held constant semantic cues that connote high distinctiveness are more effective in influencing consumers price related evaluations when the external reference price is otherwise implausibly high than are semantic cues that connote low consistency for manipulations of offering prices with external reference price held constant however semantic cues connoting high distinctiveness exert more relative influence on price related cognitions when offering prices are high

the effects of an undisclosed regular price and a positive leadtime in a presale mechanism abstract a presale program is popular with manufacturers who wish to reduce the risk posed by uncertain demands we introduce a new price mechanism in which the manufacturer during the presale period does not disclose the exact regular price in the sale period although it is guaranteed to customers to be higher than the presale price as positive leadtime is much overlooked in presale models we analyze the rationality of including one the numerical results in this paper show that both the specific price mechanism and the positive leadtime have significant effects on the manufacturer s policy production quantity presale price regular price the expected profit and customer behaviors the optimal discount rate should be greater than 50 percent this conclusion is consistent with existing results of surveys on saturation points the manufacturer can take advantage of the latest information on demand gathered in the presale period to update their policy and increase their expected profit

optimal selection for direct mail direct marketing mail is a growing area of marketing practice yet the academic journals contain very little research on this topic the most important issue for direct marketers is how to sample targets from a population for a direct mail campaign although some selection methods are described in the literature there seems to be not a single paper discussing the analytical and statistical aspects involved the objective of this paper is to introduce a comprehensive methodology for the selection of targets from a mailing list for direct mail at least theoretically this methodology leads to more efficient selection procedures than the existing ones the latter are not based on an optimal selection strategy whereas we explicitly take the profit function into account by equating marginal costs and marginal returns we determine which households should receive a mailing in order to maximize expected profit in the empirical part we show that our methodology has great predictive accuracy and generates higher net returns than traditional approaches

reference prices and deception in newspaper advertising consumers were exposed to newspaper advertisements for four products and one of five different price representations regular price alone sale price alone regular price with manufacturer s suggested list price mslp sale price with regular price or sale price with mslp perceptions of the ordinary prices of the products were not affected by the presence or type of reference price but the subjects did have lower estimates of ordinary prices in the sale context the accuracy of consumer perceptions of ordinary prices was not related to the recency of subject shopping experience for the products as measured in the study

capacity allocation using past sales when to turn and earn consider a supplier selling to multiple retailers demand varies across periods but the supplier s capacity and wholesale price are fixed if demand is high the retailers needs exceed capacity and the supplier must implement an allocation mechanism to dole out production we examine how the choice of mechanism impacts retailer actions and supply chain performance in particular we analyze turn and earn allocation a method commonly used in the automobile industry this scheme bases current allocations on past sales and thus enables retailers to influence their future allocations they compete for scarce capacity even if they do not compete for customers we show that turn and earn induces the retailers to increase their sales when demand is low and the supplier s capacity is otherwise underutilized supplier profits thus increase the impact on the supply chain depends on how restrictive capacity is with mildly tight capacity the retailers higher sales rate does not significantly lower their profits but does reduce the cost of idle capacity supply chain performance improves with extremely tight capacity the retailers intense competition dissipates more profits than the supplier gains and supply chain performance suffers consequently turn and earn does not generally coordinate the system it is best characterized as a means for the supplier to increase her profits at the expense of the retailers and potentially even the supply chain furthermore these results hold even if the retailers can hold inventory in anticipation of scarce capacity

consumer perceptions of comparative price advertisements the authors analyze the issue of comparative price advertising from a behavioral perspective because public policy recognizes that comparative pricing may lead to consumer misperceptions the auth

a nonparametric density estimation method for brand choice using scanner data nonparametric density estimation using a kernel method is proposed to model consumer brand choice recent availability of large scanner panel data allows the use of nonparametric approach which has few or at least fewer underlying assumptions and affords greater structural flexibility by removing as many assumptions as possible the author constructs the ultimate nonparametric model radically departing from the traditional approaches to highlight the differences in implementation and performance the proposed model does not involve either parameters that approximate certain distributions as in stochastic models or latent concepts such as utility as in utility maximization models the performance criteria include prediction of market response and brand choice share tracking and robustness under violation of various assumptions involved in parametric choice models such as correlated disturbance and misspecification the method is compared with a popular parametric counterpart the multinomial logit model on simulated and actual scanner panel data the paper emphasizes the conceptual importance of the nonparametric approach by discussing its advantages limitations and its complementary role in developing refining and diagnosing parametric models this perspective affords insight to modeling philosophy and suggests the possibility of a hybrid approach

an empirical analysis of internal and external reference prices using scanner data single source yogurt data are used to examine whether both internal and external reference prices affect purchase decisions internal reference prices are memory resident prices based on actual fair or other price concepts external reference prices are observed stimuli such as regular prices that stores may display along with a sale price for comparability discrete choice models with variables representing the two types of reference prices are estimated and both types of variables are found to have significant effects on purchase probabilities this suggests that consumers may use multiple reference points in evaluating price in purchase decisions in addition a model using an indicator of a sale price discount explains purchase probabilities as well as one that models the actual discount which suggests that consumers may be reacting to the indication of savings rather than to the amount of the discount

electronic tickets smart cards and online prepayments when and how to advance sell advance selling occurs when sellers allow buyers to purchase at a time preceding consumption shugan and xie 2000 electronic tickets smart cards online prepayments and other technological advances make advance selling possible for many if not all service providers these technologies lower the cost of making complex transactions at a greater distance from the seller s site they also give sellers more control over advance selling by decreasing arbitrage as technology enhances the capability to advance sell more academic attention is vital this paper strives to exploit these technologies by developing advance selling strategies until recently advance selling research focused on the airline industry and specific characteristics of that industry these characteristics included the price insensitivity of late arrivals e g business travelers compared with early arrivals e g leisure travelers demand uncertainty across flights on the same day and capacity constraints recent findings by shugan and xie 2000 show that advance selling is a far more general marketing tool than previously thought it does not require these industry specific characteristics it only requires the existence of buyer uncertainty about future valuations moreover sellers without the ability to price discriminate can use advance selling to improve profits to the level of first degree price discrimination this finding is important because buyers are nearly always uncertain about their future valuations for most services e g the utility of next year s vacation or a future college education in this paper we take the next step from shugan and xie 2000 we show that advance selling profits do not come from buyer surplus but from more buyers being able to purchase we determine when and how to advance sell in a variety of situations including situations with limited capacity second period arrivals refunds buyer risk aversion exogenous credibility continuous preference distributions and premium pricing we determine when advance selling improves profits and when it does how to set advance prices we ask and answer seven questions first when should sellers advance sell second how much can advance selling improve profits compared with only spot selling third what factors impact the profitability of advance selling and how fourth should advance prices be higher or lower or the same as spot prices fifth how do capacity constraints impact advance selling strategies sixth should sellers limit the number of advance sales finally what is the possible impact of buyer risk aversion first we provide precise conditions when sellers should advance sell for example without capacity constraints we show that sellers should advance sell when marginal costs are sufficiently low to make it profitable to sell to buyers with low valuations and sufficiently high to convince buyers that the spot price will be higher than the advance price second we find that advance selling can almost double the profits from optimal spot selling to early arrivals we also show that advance selling has no impact on consumer surplus in markets with homogenous consumers and no capacity constraints therefore advance selling can increase social welfare because seller profits increase third we find that two very important factors impacting the profitability of advance selling are seller credibility and marginal costs buyers only advance buy when they expect an advantage from advance buying over spot buying without capacity constraints sellers must credibly convince buyers that the advance price is at a discount to the spot price we show that this condition is met under different circumstances for example large marginal costs can create credibility because buyers believe that these costs will lead to high spot prices fourth we find although optimal advance prices can be at a discount to the spot price that sometimes a premium is optimal premiums are optimal when capacity is large but limited and marginal costs are not too large buyers advance purchase at a premium to spot prices when capacity is limited and spot prices are low note that this is not a risk premium and risk aversion is not required no prior research has suggested this strategy because that research relies on the assumption that early arrivals are more price sensitive than later ones without that assumption premium advance pricing is sometimes optimal fifth we find that binding capacity constraints can impact the profitability of advance selling in opposite ways on one hand capacity constraints create seller credibility buyers believe that spot prices will be high when they know spot capacity is limited and perhaps more limited by advance sales on the other hand when capacity is limited the need to increase sales from discounted advance prices diminishes sixth consistent with desiraju and shugan 1999 we find that limiting advance sales can be profitable but only under restrictive conditions these conditions are 1 selling to all early arrivals would leave insufficient capacity in the spot period to sell to all second period arrivals with high valuations 2 the optimal spot price is high and 3 marginal costs are sufficiently small to make advance selling profitable finally we find that buyer risk aversion can sometimes increase the profitability of advance selling our findings provide precise guidelines for a large number of service providers that will have the technical capability to advance sell for those service providers advance selling provides a creative pricing strategy that can potentially provide substantial improvements in profits

the effect of plausible and exaggerated reference prices on consumer perceptions and price search this article examines whether advertisers regular price claims affect consumer perceptions and price search behavior experiments involving simulated shopping via personal computers indicate that compared to an ad with no reference price an ad with a plausible reference price raised subjects estimates of the advertiser s regular price and the perceived offer value an exaggerated reference price had generally the same positive effects on perception as a plausible reference price even for the more skeptical subjects further when subjects were presented with an advertised sale price above the lowest expected price the exaggerated reference price increased the percentage of subjects who purchased the product from the advertiser without checking other stores prices

commercial use of upc scanner data industry and academic perspectives the authors report the findings from an exploratory investigation of the use of upc scanner data in the consumer packaged goods industry in the u s the study examines the practitioner community s view of the use of scanner data and compares these views with academic research forty one executives from ten data suppliers packaged goods manufacturers and consulting firms participated in wide ranging in person interviews conducted by the authors the interviews sought to uncover key questions practitioners would like to answer with scanner data how scanner data is applied to these questions and the industry s perspective regarding the success that the use of scanner data has had in each area the authors then compare and contrast practitioners views regarding the resolution of each issue with academic research this produces a 2 2 classification of each question as resolved or unresolved from the perspectives of industry and academia along the diagonal of the 2 2 issues viewed as unresolved by both groups are important topics for future research issues deemed resolved by both groups are correspondingly of lower priority in the off diagonal cells industry and academics disagree these topics should be given priority for discussion information exchange and possible further research practitioners reported that scanner data analysis has had the most success and been most widely adopted for decision making in consumer promotions i e coupons trade promotions and pricing for example logit and regression models applied to scanner data have revealed very low average consumer response to coupons which has directly led to reduced couponing activity managers also reported high levels of comfort with and impact from analyses of trade promotions and price elasticities while industry views most of the issues in these areas to be resolved academic research raises concerns about a number of practices in common commercial use these include price threshold analysis and trade promotion evaluation using baseline and incremental sales in product strategy advertising and distribution management practitioners reported that the use of scanner data has had more limited development success and impact in the case of new product decisions scanner data use has been slow to develop due to the inherent limitations of historicaldata for these decisions and a heavy reliance on traditional primary research methods in advertising scanner data is widely analyzed with models but confusion among practitioners is very high due to controversies about methods e g what level of data aggregation is best and conflicting results in distribution and retail management scanner data use has tremendous potential but a mixed track record to date thus practitioners view the use of scanner data as unresolved for most issues in product strategy advertising and distribution this view is largely though not entirely consistent with academic research which has only begun to address many of the key questions raised by practitioners in light of the large number of unresolved issues and mixed record of scanner data use to date the authors offer aseries of specific recommendations for immediate and long term research priorities that are likely to have the greatest impact on commercial utilization of upc scanner data topics of immediate priority include price thresholds and gaps baseline and incremental sales base price elasticity competitive reactions measurement of advertising effects management of brand equity rationalization of product assortments and category management long term priorities include a greater emphasis on profitability versus sales or market share developing prescriptive models versus descriptive models and the need for industry standards

ordering and pricing of service products in an advance sales system with price dependent demand this investigation addresses a service inventory control problem in which a firm orders and sells a service which will be used or consumed by customers on a specific future date the firm sells the product through an advance booking system aiming to optimize product price to maximize the total expected profit considering situations in which product demand is price dependent and customers with reservations may cancel advance orders this work develops a continuous time model to simultaneously determine the order quantity and selling prices the analytical results reveal that the optimal ordering quantity and prices are derived via closed form solutions in addition sensitivity analysis of the optimal prices with respect to the system parameters is also conducted to illustrate optimal decision characteristics

sustaining inter organizational relationships across institutional logics and power asymmetries the case of fair trade this paper explores an empirical puzzle namely how inter organizational relationships can be sustained between organizations that draw upon distinctive and potentially conflicting institutional logics under conditions of power asymmetry this research analyses cases of these relationships and suggests some key conditions underlying them examining relationships between fair trade organizations and corporate retailers a series of contingent factors behind the dynamic persistence of such relationships are proposed namely the presence of pre existing hybrid logics the use of boundary spanning discourses joint tolerance of conflict and co creation of common rules these four elements are supported by a fifth mediating factor i e the presence and use of a fair trade certification system in the collaboration the latter appears as a central vehicle facilitating cross logic relationships it can be seen as a boundary object embodying a series of narratives and discourses that are open to multiple interpretations corresponding to the dominant institutional logics of each partner organization

timber harvest adjacency economies hunting species protection and old growth value seeking the dynamic optimum abstract forests have the potential to provide ecosystem services timber mature growth aesthetics and wildlife and endangered species protection forest managers are faced with complex ecosystem management decisions due to competing and complementary social values and differential interactions of these social values with timber production as a result management strategies can have dramatic aggregate and intertemporal welfare implications this paper portrays the trade offs and externalities in choosing or changing the forest management objective and the resulting rankings of management policies in addition the paper analyzes the role of economies of scale in harvest area where larger harvest areas generate average cost savings in harvesting and reseeding thereby promoting more intensive harvesting at the expense of environmental benefits

the influence of prior beliefs frequency cues and magnitude cues on consumers perceptions of comparative price data a widespread practice in grocery store advertising is to compare the advertised store s prices to a competitor s prices on multiple items an important but largely unexplored issue is how this information is processed and used in conjunction with prior beliefs to influence price perceptions in our initial studies we manipulated prior beliefs and two data based cues frequency of price advantage and magnitude of price advantage to determine their relative influence on consumer price perceptions results indicate that prior beliefs affected price perceptions but that the frequency cue exerted a dominating influence several follow up studies demonstrate the robustness of this phenomenon across a variety of presentational and instructional conditions

advance selling when consumers regret we characterize the effect of anticipated regret on consumer decisions and on firm profits and policies in an advance selling context where buyers have uncertain valuations advance purchases trigger action regret if valuations turn out to be lower than the price paid whereas delaying purchase may cause inaction regret from missing a discount or facing a stockout consumers whom we describe as emotionally rational act strategically in response to the firm s policies and in anticipation of regret in this context regret explains two types of behavioral patterns inertia delayed purchase and frenzies buying early at negative surplus we show how firms should optimally respond to consumer regret and also characterize a normative regret threshold above which they should not advance sell action regret reduces profits as well as the value of advance selling and booking limit policies for price setting firms inaction regret has the opposite effects these effects are diminished by capacity constraints and are reversed for firms facing price pressure in the advance period owing e g to competition or market heterogeneity regret heterogeneity explains premium advance selling for the capacity constrained firm which may benefit from larger shares of regretful buyers finally we show how the negative effects of regret on profits can be mitigated by regret priming marketing campaigns and by offering refunds or options or allowing resales our results highlight the importance of assessing the relative strength of regret within and across market segments and of accounting for these factors in pricing and marketing policies this paper was accepted by christian terwiesch operations management

optimal ordering decisions with uncertain cost and demand forecast updating we determine the optimal ordering policy for a retailer who has two instants to order a seasonal product from a manufacturer prior to a single selling season while the demand is uncertain the retailer can improve the forecast by utilizing the market signals observed between the first and second instants however because of the nature of the manufacturing environment the unit cost at the second instant is uncertain and could be higher or lower than the unit cost at the first instant to determine the profit maximizing ordering strategies at both instants the retailer has to evaluate the trade off between a more accurate forecast and a potentially higher unit cost at the second instant we present a nested newsvendor model for determining the optimal order quantity at each instant and characterize the conditions under which it is optimal for the retailer to delay its order until the second instant

the value of a watershed as a series of linked multiproduct assets abstract this paper views ecosystem as long lived multiproduct factories increased use of one ecosystem good or service function often affects the supplies of other ecosystem functions the relationships between these functions can be modeled in terms of key variables related to ecosystem management thus the analyst can determine the different mixes of functions an ecosystem can perform watersheds can be viewed as a series of ecosystems linked spatially and temporally by the downward flow of water changes in the mix of upstream ecosystem functions change the mix of downstream ecosystem functions the paper presents an approach to valuing one ecosystem as a multiproduct factory using consumer surplus the author then proceeds to apply the same methodology to a watershed viewed as a series of linked multiproduct assets because the flow of water closely links upstream and downstream ecosystems a watershed can be treated as one unit and valued accordingly however this approach obscures a question of particular interest if erosion in an upstream ecosystem causes it to lose value but in turn causes the wetlend downstream to gain value does the value of the watershed rise or not the paper examines this issue in terms of boundaries redundancy and defensive expenditures sustainability and other factors which must be considered in the economic valuation of the watershed

on optimal service capacity allocation policy in an advance selling environment in continuous time abstract based on some general reasonable assumptions this paper employs the techniques of calculus of variations and optimal control theory to derive 10 main propositions associated with a service provider who aims at maximizing the present value of revenues profits over a planning horizon in continuous time employing an aggregate pricing response function that is dependent on excess capacity and a convex service cost formulation the results show that i for a zero discount rate and unanticipated competitive entry units of service capacity are allocated evenly over time ii for a zero discount rate and anticipated competitive entry units of allocated service capacity are increasing over time iii for a positive discount rate and unanticipated competitive entry units of allocated service capacity are decreasing over time and iv for a positive discount rate and anticipated competitive entry units of allocated service capacity are increasing over time or are decreasing at first then increasing later in addition the questions of how deep a service firm should advance sell whether advance selling is optimal in continuous time and whether excess capacity could be an optimal strategy have been addressed furthermore related sensitivity analyses are performed and endpoint constraints together with alternative shapes of the service cost function are discussed the managerial implications of the study s results have been demonstrated

advance selling effects of interdependent consumer valuations and seller s capacity we examine the impact of consumer valuation interdependence and capacity on a firm s optimal selling strategies we consider a seller who can offer a single product to consumers twice in advance and in spot consumers choose whether and when to buy but if they buy in advance they are uncertain about their own valuations whether they buy in advance or in spot consumers valuations are realized in the spot period and they may range from fully independent to perfectly correlated creating markets with different characteristics of aggregate demand for the seller facing these consumers the seller chooses a portion of the total capacity to offer in advance and prices in both periods we describe how the optimal strategy and benefits of advance selling depend on the interdependence of consumer valuation as well as capacity level and other market parameters we find that a change in valuation interdependence can lead to dramatically different policies for the seller for example when individual valuations are highly diverse and the consumer population is large the seller must offer a discount during advance selling but may limit the advance sales on the other hand when valuations are highly correlated the seller can charge a premium price during advance selling for the same valuation interdependence the qualitative nature of the optimal strategy changes with available capacity this paper was accepted by martin lariviere operations management

towards a framework for understanding fairtrade purchase intention in the mainstream environment of supermarkets despite growing interest in ethical consumer behaviour research ambiguity remains regarding what motivates consumers to purchase ethical products while researchers largely attribute the growth of ethical consumerism to an increase in ethical consumer concerns and motivations widened distribution mainstreaming of ethical products such as fairtrade questions these assumptions a model that integrates both individual and societal values into the theory of planned behaviour is presented and empirically tested to challenge the assumption that ethical consumption is driven by ethical considerations alone using data sourced from fairtrade shoppers across the uk structural equation modelling suggests that fairtrade purchase intention is driven by both societal and self interest values this dual value pathway helps address conceptual limitations inherent in the underlying assumptions of existing ethical purchasing behaviour models and helps advance understanding of consumers motivation to purchase ethical products

smooth quantile based modeling of brand sales price and promotional effects from retail scanner panels semiparametric quantile regression is employed to flexibly estimate sales response for frequently purchased consumer goods using retail store level data we compare the performance of models with and without monotonic smoothing for fit and prediction accuracy we find that a flexible models with monotonicity constraints imposed on price effects dominate both in sample and out of sample comparisons while being robust even at the boundaries of the price distribution when data is sparse b quantile based confidence intervals are much more accurate compared to least squares based intervals c specifications reflecting that managers may not have exact knowledge about future competitive pricing perform extremely well