This paper investigates the relationship between market share and promotional expenditures the long run. Using data that span a decade and 91 product categories we find that market shares are stationary for a majority of the products in the data base. We find that relative promotional...

Our objective in this paper is to explain the relationship between a manufacturer's brand advertising and its impact on wholesale and retail margins in consumer goods markets. We construct a model of re-tailers and manufacturers, and using tools from game theory explain why under some conditions...

In this paper, we use an agency theory framework to address the issue of delegating pricing responsibility to the salesperson. In this analysis, it is shown that delegating the pricing responsibility to the salesperson is as profitable as centralization when the salesperson and the sales manager...

In this paper, we explore the role of franchising arrangements in improving coordination between channel members. In particular we focus on two elements of the franchising contract, namely, the royalty structure and the monitoring technology. We begin with a simple analysis where a manufacturer...

A theory of salesforce compensation plans is presented where the sales of a product depend not only on the salesperson's effort but also on the uncertainty in the selling environment. The firm chooses a compensation plan to maximize its profit taking into account the salesperson's likely effort...

Every Day Low Pricing (EDLP) strategy has proved to be a successful innovation resulting in higher profits to supermarkets adopting it in competition with Promotional Pricing (PROMO). Conventional wisdom attributes this success either to lower costs or to EDLP better serving time constrained...

In this paper, we present a theory of salesforce compensation plans to provide insights into why it may be advantageous for a profit maximizing firm to offer members of its salesforce the opportunity to choose from a menu of compensation plans. Although such contractual arrangements are not...

In this paper, we explore equilibrium pricing strategies in an infinite horizon repeated game for an oligopoly. We model the interactions between three firms in a market of switchers and loyals. Our analysis shows that if, there are sufficiently large number of switchers in the market, the...

Manufacturer-supported trade deals remain one of the major competitive tools in today's marketplace. This is true despite the fact that such trade deals are often claimed to be unprofitable for manufacturers. The unprofitability is attributed to the fact that retailers forward buy and do not...

Conventional wisdom seems to claim that, by lowering the cost of distribution and by making search easier for consumer, the introduction of the Internet is likely to intensify price competition. This paper intends to challenge this view by asking: When and how is the Internet likely to decrease...