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In this paper, we analyze the optimal introduction timing of a seller's products targeted at segments that differ in their willingness to pay for quality. Past studies suggest that an introduction sequence of a high-quality product followed by a lower-quality version of the product may mitigate the cannibalization effects of the low-quality product on profits from the high-quality product. We show that if customers who value quality more possess an outside option such as a substitute product, as may be the case with replacement buyers, a seller may find it optimal to follow a low-quality product with a higher-quality one, the latter being targeted at replacement buyers. Furthermore, the ability of the seller to commit to future qualities accentuates the sequential increase in quality in the presence of such buyers. Thus, we show that conditions other than uncertainty or technological improvements occurring over time may justify a seller adopting a strategy of sequentially increasing quality. Keywords: new product introduction; game theory; marketing strategy; market segmentation; product differentiation; durable products; pricing History: Received April 16, 2012; accepted May 15, 2014, by J. Miguel Villas-Boas, marketing. Published online in Articles in Advance October 31, 2014., 1. Introduction How should a seller introduce products that vary in their quality or functionality? Should the seller introduce these products simultaneously or sequentially, and if the latter, in what [...]

This paper studies the extent and variation in production cost pass-through for U.S. outsourcing imports. Data from 4,676 products imported through the U.S. overseas assembly program show that outsourcing imports were characterized by incomplete pass-through of production and trade costs to import prices. Notably, pass-through was higher for products assembled in high education countries while the response of outsourcing import prices to competing suppliers' prices was largest for products sold by firms in capital-intense industries. The reasons for these cross-country and cross-industry differences, as they relate to theories of outsourcing and trade, are explored. (JEL F1, F2), I. INTRODUCTION The dramatic growth in international outsourcing has fueled the expansion of international trade and deepened international integration. (1) Developments in outsourcing attract public attention due to concern that [...]

To identify ways in which resistance can be overcome and technology's potential realized, we study acceptance and use of a specific technology, the Internet, by a specific resistant group, older [...]

The growing disparity in income between the rich and middle/lower income groups has resulted in significant skewness in the distribution of wealth in the U.S. The short and tall of [...]

The paper examines the significance of enforceability and adaptability in governing vertical alliances and their performance ramifications for suppliers. Literature on supplier relations suggests that suppliers are skeptical of close [...]

We have developed a unique procedure for analyzing innovation dynamism that uses a logistic equation. This paper is a trial to clarify the complexity of innovation systems using this procedure. [...]

Many recommendation and decision processes depend on eliciting evaluations of opportunities, products, and vendors. A scoring system is devised that induces honest reporting of feedback. Each rater merely reports a signal, and the system applies proper scoring rules to the implied posterior beliefs about another rater's report. Honest reporting proves to be a Nash equilibrium. The scoring schemes can be scaled to induce appropriate effort by raters and can be extended to handle sequential interaction and continuous signals. We also address a number of practical implementation issues that arise in settings such as academic reviewing and online recommender and reputation systems. Key words: proper scoring rules; electronic markets; honest feedback, 1. Introduction Decision makers frequently draw on the experiences of multiple other individuals when making decisions. The process of eliciting others' information is sometimes informal, as when an executive consults [...]

Many complicated, proprietary systems attract a dynamic community of underground innovators who explore and alter them--and not always in ways that manufacturers appreciate. These individuals have little regard for the [...]

Billions of poor people aspire to join the world's economy. Disruptive innovation can pave the way, helping companies combine sustainable corporate growth with social responsibility. Global companies today are struggling [...]

Several studies have demonstrated an order-of-entry effect on market share, suggesting that pioneers outperform later entrants. However, other research has pointed out the limitations of these studies and found evidence that many pioneers fail or have low market share. Given this background, the purpose of this research is to understand the conditions under which pioneers are more likely and also less likely to have an advantage. We propose a game-theoretic model that includes important sources of pioneer advantages as well as disadvantages. Specifically, we incorporate a pioneer advantage due to preemption in markets with heterogeneous tastes. In addition, we incorporate a potential pioneer disadvantage due to technology vintage effects, where later entrants utilizing improved technology can have lower costs and higher quality. The model allows us to evaluate the extent of vintage effects necessary to overcome a pioneer's advantage. Key relationships are found between the magnitude of the pioneer advantage o r disadvantage and consumer valuations of product attributes (e.g., variety and quality). We empirically validate the model with vintage effect data in 36 product categories, and measures of consumer valuations of product variety and quality for 12 of these 36 categories. The results show that pioneers do better in product categories where variety is more important and worse in categories where product quality is more important. Pioneers in categories with high vintage effects are shown to have lower market shares and higher failure rates. Similar results appear when analyzing persistence of market leadership over time, further validating our model's major implications. We also present two case studies that illustrate key elements of the model. (Pioneering; Order of Entry), Introduction The strategy of pioneering new markets is widely considered to be a cause of long-term success. Several studies have demonstrated an order-of-entry effect on market share, indicating that pioneers [...]

In contrast to the prevailing supply-side explanation that price decreases are the key driver of a sales takeoff, we argue that outward shifting supply and demand curves lead to market takeoff. Our fundamental idea is that sales in new markets are initially low because the first commercialized forms of new innovations are primitive. Then, as new firms enter, actual and perceived product quality improves (and prices possibly drop), which leads to a takeoff in sales. To provide empirical evidence for this explanation, we explore the relationship between takeoff times, price decreases, and firm entry for a sample of consumer and industrial product innovations commercialized in the United States over the past 150 years. Based on a proportional hazards analysis of takeoff times, we find that new firm entry dominates other factors in explaining observed sales takeoff times. We interpret these results as supporting the idea that demand shifts during the early evolution of a new market due to nonprice factors is the key driver of a sales takeoff. (New Product Development; Firm Entry; Entrepreneurship), 1. Introduction The early market evolution of successful consumer and industrial product innovations is generally characterized by an initial period of slow growth immediately after commercialization that is eventually followed [...]

By answering six questions, managers can reduce the gamble in this high-stakes game. One of the most challenging decisions a company can confront is whether to diversify: the rewards and [...]

States that since the mid-1980s, substantial deregulation and competitive liberalization of the South-East Asian economies in their trade and investment regimes has resulted in greater integration of their economies with [...]

Introduction Ten years ago, pessimistic reports appeared in Western newspapers about the Olympic Games to be held in Seoul, the capital of South Korea in 1988. Such reports questioned the [...]

A warranty is a promise by a manufacturer or a seller to stand behind its products. The purpose of the Magnuson-Moss Warranty Federal Trade Commission Improvement Act (MMWA)--passed by Congress [...]

In recent years, social theory has become increasingly concerned with consumption and the changing nature of consumer society. By contrast, students of organizations have given only limited attention to the implications of consumption and consumerism for the analysis of their subject matter. In the light of this, the paper considers the contribution that the sociology of organizations can and should make to discussions of consumption and associated debates concerning contemporary consumer society. Our argument is that since in contemporary societies, consumption is achieved through the mediation of organizations it follows that an adequate study of consumption can only be developed in conjunction with the sociology of organizations. However, it is also the case that the analysis of organizations must change if it is to take the issue of consumption seriously. By placing consumption more centrally in our analysis, the study of organizations is, in our view, forced to address current theoretical and empirical questions about the nature of modern (or is is post-modern?) society, a task that is sometimes ignored by organizational analysts but is implicit in the tradition of study deriving from Weber. The paper seeks to show how these changes open up fruitful new areas for the study of organizations and consumption and, in particular, questions concerning the nature of power and identity in modern societies. (Reprinted by permission of the publisher.), Clegg, S. R. 1990 Modern organizations. London: Sage. Clegg, S. R., and D. Dunkerley 1980 Organizations, class and control. London: Routledge, Kegan and Paul. Collinson, D. L., D. Knights, and [...]

Extended warranties are becoming increasingly popular, both among consumers and manufacturers. In this study, consumer and manufacturer perceptions of why extended warranties are bought and sold are evaluated and compared. The results indicate that consumers seem to view extended warranties as a way of reducing perceived risk. Manufacturers reveal that they market extended warranties both to generate revenue and to provide service to consumers. Marketing management and public policy implications are examined and research directions identified. (Reprinted by permission of the publisher.), Researchers for years have been interested in the differing perceptions consumers and manufacturers hold toward express warranties (Kelley 1986). Consumers view express warranty coverage as a legal means of seeking [...]

The United States has a long history of opposing large, standing armies. After every previous war, including Vietnam, we expeditiously dispatched troops, shuttered bases, mothballed or scrapped equipment, and canceled [...]