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Author: | Shugan, S.M. Xie, J. |
Title: | Advance-selling as a competitive marketing tool |
Journal: | International Journal of Research in Marketing
2005 : SEP, VOL. 22:3, p. 351-373 |
Index terms: | marketing service marketing selling pricing competition |
Language: | eng |
Abstract: | Due to new technologies, advance selling (hereafter as: adv-sls.) before the time of consumption is possible for even very small service providers. Recent research has found that adv-sls. can substantially improve profits without traditional price discrimination (as: pr-dscr.) in monopoly settings (as: m-mrkt). This paper deals with the impact of competition on adv-sls. driven by consumer uncertainty about future consumption states rather than pr-dscr. Several different demand specifications are employed to provide three major findings: 1. Unlike yield management, the relative profit advantage from adv-sls. in a competitive market can be higher or the same as that in a m-mrkt. etc. 2. In some demand specifications, adv-sls. can create a win-win-win situation where the profits of two competitors increase while consumer surplus increases because adv-sls. allows greater market participation. 3. Competition can strengthen the conditions under which adv-sls. is advantageous compared with spot selling. |
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