There is strong evidence that consumers learn from their brand consumption experiences and continuously update their brand purchase probabilities. However, in explaining why established competitive brands continuously compete through periodic price promotions, most of the existing theories do...

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...

We analyze firms' decisions to invest in customer relationship management (CRM) initiatives such as acquisition and retention in a competitive context, a topic largely ignored in past CRM research. We characterize each customer by her intrinsic preference towards each firm, the contribution...

The existing marketing literature suggests that persuasive advertising elicits counteractions from competing manufacturers and consequently leads to wasteful cancellation of the advertising effects. Thus, persuasive advertising is widely perceived to be combative in nature. A series of...

Why is it that some products carry a minimal manufacturer base warranty even though all consumers are risk-averse? Conventional wisdom suggests that it is profitable for the manufacturer to offer a comprehensive warranty in this setting. We provide in this paper an explanation for the provision...

Consumers now purchase several offerings from direct sellers, including catalog and Internet marketers. These direct channels exist in parallel with the conventional retail stores. The availability of multiple channels has significant implications for the performance of consumer markets. The...

Past research reveals an extraordinary number and variety of transaction games, often with different rules. For example, buy and sell offers can be take-it-or-leave-it, irrevocable, of limited duration, negotiable, contingent on events, et cetera. The possible sets of rules seem endless. Past...

Two models of competition between high-end and low-end products benefiting the high-end firms are presented. One is a quantity competition model, and the other is a price competition model with product differentiation. The key factor is the existence of two heterogeneous consumer groups: those...

The act of trading in a used car as partial payment for a new car resonates with practically all consumers. Such transactions are prevalent in many other durable goods markets, ranging from golf clubs to CT scanners. What roles do trade-ins play in these markets? What motivates the seller to set...

Price promotions and bundling have been two of the most widely used marketing tools in industry practice. Past literature has assumed that firms respond to price promotions by promoting a product in the same category. In this paper, we extend this literature as well as the bundling literature by...