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Nowadays, online retailers are offering a variety of delivery options consisting of varying combinations of delivery attributes. This study investigates how consumers value these delivery attributes (e.g., delivery speed, time slot, daytime/evening delivery, delivery date, and delivery fee) when selecting a delivery option for their online purchases. Mental accounting theory is used to frame the research and to suggest how mental accounts for money, time, and convenience influence consumer preferences for online delivery options. Specifically, the results of a conjoint analysis show that the most important attribute in shaping consumer preferences is the delivery fee, followed by nonprice delivery attributes. For individual attributes, significant differences are found in consumer preferences between gender and income groups. Cluster analysis reveals three consumer segments that show distinct preference structures: We identify a "price‐oriented," a "time‐ and convenience‐oriented," and a "value‐for‐money‐oriented" consumer segment. This study has practical implications for online retailers when implementing suitable delivery strategies and designing effective delivery options to maximize consumer satisfaction.

The proliferation of free trials for high-tech services calls for a careful study of their effectiveness, and the drivers thereof. On one hand, free trials can generate new paying subscribers by allowing consumers to become acquainted with the service free of charge. On the other hand, a disappointing trial experience might alienate potential customers, when they decide not to adopt the system and are lost for good. This dilemma is particularly worrisome in early periods, when service quality has not been “tried and tested” in the field, and breakdowns occur. We accommodate these phenomena in a model of consumers’ free-trial and regular adoption decisions. Among other effects, it incorporates usage- and word-of-mouth-based learning about quality in a setting where quality itself is evolving. Consumers are forward-looking in that they account for changes in quality and anticipate uncertainty reduction due to trial usage. We estimate our model and run simulations on the basis of a rich and unique data set that incorporates customers’ trial subscription, adoption, and usage behavior for an interactive digital television service. The results underscore that free trials constitute a double-edged sword, and that timing and consumers’ usage intensity during the trial are key to the effectiveness of these promotions. Implications for managers are also discussed. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0973 .

Existing research on price promotions typically investigates the effects of single-product promotions. However, brand managers often promote multiple items simultaneously to bolster the performance of a complete brand line. This paper investigates the brand performance implications of such multi-item promotions. We distinguish between two types of multi-item promotions: traditional, unconstrained multi-item promotions that grant a discount irrespective of the size or composition of the purchase set, and constrained multi-item promotions that require consumers to purchase specific quantities (self-bundling) or even predetermined combinations (fixed bundling) of promoted items. Using a normative consumer decision model, the authors analyze the relative effectiveness of these promotions in terms of unit sales and revenue impact and show that promotion performance is moderated by consumers’ preference for variety. The authors find that unconstrained multi-item promotions outperform single-item promotions, especially in markets without variety-seeking. In markets with variety seeking, unconstrained multi-item promotions are not as effective in stealing extra sales from competition because consumers prefer to spread their purchases across all items, including competitive ones. However, in those markets, self-bundling promotions are particularly effective because they force consumers to adopt larger amounts of the promoted items at the expense of competitors. Finally, in neither type of market does fixed bundling substantially improve promotion performance.

While the de-marketing of smoking among teenagers has received wide attention in the literature, few have examined the issue of whether messages should be uniform across cultures. Globally, the vast majority of anti-smoking messages are based on fear appeals to the negative effects on the (potential) smoker him/herself. This research suggests that such a global strategy may be suboptimal. Specifically, while ads portraying the negative consequences of smoking to oneself may work for teens from individualist cultures, they are less effective in collectivist cultures. In contrast, messages orientated towards the adverse effects on other people are more effective in collectivist environments. Given the astronomical amounts spent on anti-tobacco advertising, this finding offers significant advantages for creating effective anti-smoking messages.

Based on an experiment among more than 2000 students in nine culturally diverse countries, this article investigates how the cultural characteristic of uncertainty avoidance moderates the impact of valence and intensity on the effectiveness of antismoking messages. The results show that adolescents with high uncertainty avoidance respond more favorably to loss-framed advertisements than to benefit-framed advertisements, whereas the opposite holds for those with low uncertainty avoidance.

Facing cutthroat price competition, manufacturers and retailers increasingly rely on non-price promotion techniques, such as premium promotions, where consumers receive a free gift with the purchase of a product. Despite the omnipresence of premium promotions, research to date has not fully answered the question whether and under which conditions premiums outperform plain price cuts. We use data from a large online shopping simulation with more than 2,000 consumers to model purchase behavior in response to premiums and price cuts. Our results indicate that the impact of premiums on consumers’ incidence, choice, and quantity decisions is systematically lower than that of equivalent price cuts. However, a premium’s relative underperformance in terms of purchase effects may well be offset by the premium’s cost advantage, especially in hedonic categories and for private label brands. We demonstrate that, as a result, manufacturers and retailers alike may be better off spending their promotion dollars on premiums than on price cuts.

We describe a new exact procedure for the discrete time/cost trade-off problem in deterministic activity-on-the-arc networks of the CPM type, where the duration of each activity is a discrete, nonincreasing function of the amount of a single resource (money) committed to it. The objective is to construct the complete and efficient time/cost profile over the set of feasible project durations. The procedure uses a horizon-varying approach based on the iterative optimal solution of the problem of minimising the sum of the resource use over all activities subject to the activity precedence constraints and a project deadline. This optimal solution is derived using a branch-and-bound procedure which computes lower bounds by making convex piecewise linear underestimations of the discrete time/cost trade-off curves of the activities to be used as input for an adapted version of the Fulkerson labelling algorithm for the linear time/cost trade-off problem. Branching involves the selection of an activity in order to partition its set of execution, modes into two subsets which are used to derive improved convex piecewise linear underestimations. The procedure has been programmed in Visual C++ under Windows NT and has been validated using a factorial experiment on a large set of randomly generated problem instances.

The rapid digitization of the entertainment industry urges managers to find new ways to improve marketing effectiveness and combat online piracy. Smart devices and innovative online services generate brand-related tracking data that reflect consumers’ brand engagement (e.g., digital usage rates, Facebook Likes), yet managers are unaware of how to use these big data to improve brand performance. We therefore propose a model to assess how digitally tracked engagement behaviors, namely consumer brand usage (CBU, measured by digital usage rates) and consumer brand endorsement (CBE, measured by Facebook Likes), drive the impact of promotion and new product releases and affect the role of piracy. We apply our framework to the U.S. music industry, and develop web scrapers and API mining scripts to collect data for 569 music artists over 66 weeks. Both CBU and CBE enhance marketing effectiveness and positively mediate the sales impact of piracy, thereby offsetting piracy’s cannibalization effect by 55%. However, CBU exerts a systematically stronger influence in these relationships than CBE. Using simulations, we show how our findings can help managers to improve the allocation of their marketing efforts across brands and reduce the detrimental sales impact of piracy.

Many service firms acquire customers by offering free-trial promotions. A crucial challenge is to retain customers acquired with these free trials. To address this challenge, firms need to understand how free-trial customers differ from regular customers in terms of their decision making to retain the service. This article conceptualizes how a customer’s retention decision is driven by marketing communication and usage behavior, and develops hypotheses about the impact of free-trial acquisition on this process. To test the hypotheses, the authors model a customer’s retention and usage decisions, distinguishing between usage of a flat-rate service and usage of a pay-per-use service. The model allows for unobserved heterogeneity and corrects for selection effects and endogeneity. Based on household panel data from a digital TV service, the authors find systematic behavioral differences which make the average customer lifetime value (CLV) of free-trial customers 59% lower than that of regular customers. However, free-trial customers are more responsive to marketing communication and usage rates, which offers opportunities to target marketing efforts and enhance retention rates, CLV, and customer equity.

Bundle promotions—the practice of granting consumers a discount when they buy a certain number of units from a designated range of stockkeeping units—have gained popularity among manufacturers and retailers. In this research, the authors investigate the purchase effects of bundle promotions for a category of packaged goods. Contrary to intuition, they find that promotional bundles are far more effective at inducing switching than at boosting category sales. The strong switching effects result from two mechanisms: (1) Stockkeeping units that are part of a bundle promotion appear to reinforce each other's choice probability, and (2) the bundle discount tends to attract consumers even if they do not buy enough to qualify for the price reduction. The weak category effects follow from the notion that the purchase quantity requirement is often too stringent to make consumers buy earlier and/or more in the category. The authors develop incidence, quantity, and choice models that incorporate the intricate bundle mechanisms, and they use simulations to contrast the sales impact of bundle and traditional per-unit promotions. On the basis of the model estimates, they present managerial implications and tentative guidelines for optimal bundle design.