The “freemium” model for digital goods involves selling a base version of the product for free, and making premium product features available to users only on payment. The success of the model is predicated on the ability to profitably convert free users to paying ones. Price promotions (or...

Price promotions increase sales, at least in the short term, but the effect of price promotions on consumers' product evaluations is not well understood. We focus on the market for mobile apps, a category where price variation, including discounting to a zero price is common. We ask how price...

This paper provides a new and complementary explanation for a pricing puzzle for seasonal products, namely, counter-cyclical pricing, drawing on the category-expansion effects of price promotions. Our study emphasizes the seasonal fluctuation in promotion frequency rather than the change in...

To analyze consumers' purchase behavior and a firm's subsidy decision and profit under a trade-in program with a limited promotion period, this work builds a baseline model assuming that consumers are myopic, followed by a two-stage model for strategic consumers as an extension. Finally, this...

In retailing markets of storable goods, consumer behavior is typically characterized by stockpiling. While existing research has developed rich models for such strategic consumer behavior, little is known about how sellers should ideally respond to it. In this paper, we provide insights into how...

The current study aims to research the promotional strategies targeted to the consumer of a single-product category. Primarily, it focuses on the study of the influence made by the promotional strategies of Manufacturer brands (MB) in the sales of the whole category in general and, in the...

In retailing markets of storable goods, consumer behavior is typically characterized by stockpiling. While existing research has developed rich models for such strategic consumer behavior, little is known about how sellers should ideally respond to it. In this paper, we provide insights into how...

The extant literature on price promotions typically assumes that consumers loyal to a brand never switch to a competing brand, with Shilony (1977) and Raju et al (1990) being exceptions. Extending the Narasimhan (1988) model, we allow loyal consumers to hold finite brand loyalty. Our unique...

This paper deals with sales promotions in the form of consumer price discounts in fast-moving consumer goods. First, we show analytically that suboptimality is to be expected with respect to the size of the consumer price discount. This is due to the separate decision making of the retailer and...

Marketing researchers have traditionally modeled sales promotions by introducing a sales promotion dummy variable (sometimes accompanied by its interaction with prices) in the indirect utility specification. This approach has been useful in reproducing consumers' response to sales promotions but...