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- Title
- Three essays on the marketing strategies of a durable goods manufacturer.
- Creator
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Chau, Ngan, Desiraju, Ramarao, Krishnamoorthy, Anand, Joshi, Amit, Chintagunta, Pradeep, University of Central Florida
- Abstract / Description
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When purchasing durable goods, consumers not only pay for current but also future consumption; consequently, forward looking behavior is an important consideration in durable goods markets. For example, anticipating that prices will go down in the future, consumers may delay the purchase today; such behavior has a significant impact on the firm's marketing strategies. This dissertation investigates the impact of durability on two marketing strategies: new product introductions and supply...
Show moreWhen purchasing durable goods, consumers not only pay for current but also future consumption; consequently, forward looking behavior is an important consideration in durable goods markets. For example, anticipating that prices will go down in the future, consumers may delay the purchase today; such behavior has a significant impact on the firm's marketing strategies. This dissertation investigates the impact of durability on two marketing strategies: new product introductions and supply chain design. The first part of this dissertation (Chapter 3) examines a durable goods manufacturer's new product introduction strategy under different market environments where network effects and product compatibility are important. More specifically, this part explores the incentives of a firm to use either a replacement strategy or a skipping strategy---in the former, the firm commercializes the existing technology, while in the latter, it does not; in either case, an improved technology will be available in the future and the firm will introduce a new product at that time. Using a two-period analytical model with network effects, the analysis shows how the level of improvement in the new product, along with the type of compatibility between the products, interacts with network strength to determine the manufacturer's optimal strategy. Under gradual new product improvement, there is a strict preference for replacement. In contrast, under rapid new product improvement, that preference only holds in markets with relatively high levels of the network strength; at lower levels of the network strength, skipping is preferred; interestingly, for moderate values of the network strength, the level of product improvement affects the manufacturer's optimal choice differently under varying types of compatibility.The second part of this dissertation (Chapters 4 and 5) focuses on the supply chain design decisions of a durable goods manufacturer who is a sole supplier of an essential proprietary component for making the end product. Three different supply chain structures are considered. In the first, the manufacturer operates as a ``component supplier'' and sells the component to a downstream firm who then makes the end product. In the second structure, the manufacturer produces the end product using its component but does not make that component available to any other firms; here, the manufacturer operates as a ``sole entrant''. Finally, the manufacturer can operate as a ``dual distributor'' who not only makes the end product using its own component, but sells the component to a downstream firm who then competes against the manufacturer in the end product market.The extant literature on the optimal choice among the above supply chain structures has focused mainly on static settings in a framework of price competition. By contrast, researchers predominantly use quantity competition to examine durable goods markets in dynamic (i.e., multiple time period) settings. Moreover, the literature notes diversity in optimal firm behavior under the two types of (i.e., price and quantity) competition. Therefore, to transition from supply chain design in a static setting to a more dynamic one where consumers are forward-looking, this part utilizes Chapter 4 to analyze the manufacturer's choice using quantity competition in a static setting. This analysis (in Chapter 4) identifies precisely the shift in the manufacturer's choice of supply chain structure when moving from price competition to a quantity competition framework. With that analysis as a benchmark, the next chapter focuses on the manufacturer's choice in a dynamic setting. More specifically, Chapter 5 investigates the impact of durability on the optimality of the supply chain structures identified above. Using a two period setting, the analysis explores how the manufacturer's preference for different supply chain structures is modified. The findings reveal that, e.g., when durability is taken into account, the manufacturer's preference for the sole entrant role goes up, while the preference for the component supplier role goes down. Further, under certain conditions, the manufacturer may opt to be a dual distributor in the first period and then choose to become only a component supplier in the second period. The underlying rationale for such shifts in preference is directly linked to durability, which creates future competition and substantially reduces the manufacturer's profitability in the long run. Interestingly, this negative impact varies across different supply chain structures.Overall, this dissertation contributes to the current literature on durable goods and enhances our understanding of the impact of durability on the optimality of distinct marketing strategies, and provides insights that are valuable to both academics and managers.
Show less - Date Issued
- 2012
- Identifier
- CFE0004364, ucf:49428
- Format
- Document (PDF)
- PURL
- http://purl.flvc.org/ucf/fd/CFE0004364
- Title
- Social Media Effectiveness.
- Creator
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You, Ya, Joshi, Amit, Bhardwaj, Pradeep, Vadakkepatt, Gautham, Trusov, Michael, University of Central Florida
- Abstract / Description
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Over the last decade, the advent of social media such as online product reviews (e.g., Amazon.com),blogs and other social networking sites (e.g., Facebook.com) has dramatically changed the way consumers obtain and exchange information about products. This dissertation investigates the impact of various types of social media on product performance and compares the effectiveness of social and traditional media under various conditions. Specifically, the first chapter performs a meta-analysis of...
Show moreOver the last decade, the advent of social media such as online product reviews (e.g., Amazon.com),blogs and other social networking sites (e.g., Facebook.com) has dramatically changed the way consumers obtain and exchange information about products. This dissertation investigates the impact of various types of social media on product performance and compares the effectiveness of social and traditional media under various conditions. Specifically, the first chapter performs a meta-analysis of consumer-generated WOM elasticity in social media to identify the factors that influence the impact of WOM on product sales and to assess the generalizability of the relationship. The second chapter examines how social media may influence product performance in different product contexts as compared with traditional media, which assists managers in making better media decisions. Taken together, this dissertation evaluates the progress in this field, and then takes a step further by applying past findings to understand how social media may perform at various stages in the product lifecycle.
Show less - Date Issued
- 2013
- Identifier
- CFE0005077, ucf:50759
- Format
- Document (PDF)
- PURL
- http://purl.flvc.org/ucf/fd/CFE0005077
- Title
- Essays on Sales Force Career Incentives.
- Creator
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Banerjee, Somnath, Stock, Axel, Krishnamoorthy, Anand, Joshi, Amit, Amaldoss, Wilfred, University of Central Florida
- Abstract / Description
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This dissertation uses game theoretic models in a principal-agent framework to study how firms optimally manage long term career related incentives for their sales people. When sales people put sales effort they face incentives not only from short term incentives like commissions and bonuses but also from long term rewards associated with progression in their career. In particular, sales people are often motivated to get promoted and avoid being laid off, to get selected to managerial...
Show moreThis dissertation uses game theoretic models in a principal-agent framework to study how firms optimally manage long term career related incentives for their sales people. When sales people put sales effort they face incentives not only from short term incentives like commissions and bonuses but also from long term rewards associated with progression in their career. In particular, sales people are often motivated to get promoted and avoid being laid off, to get selected to managerial positions and to form stronger relationships with customers so that they can bargain for higher wages in the future, respectively. Three different essays examine each of these three career related incentives and how firms can optimally manage them.Essay 1 (Chapter 2) studies why and how firms use a type of promotion and layoff policy, called the Forced Ranking policy, to provide optimal long term career incentives to sales people. Findings from the essay suggests that when sales people are ambiguity averse and there is economic uncertainty regarding promotions and layoffs, firms are likely to commit to a promotion policy but may or may not commit to a layoff policy as part of Forced Ranking. Interestingly, it is shown that firms enjoying higher margins are more likely to commit to both promotion and layoffs, consistent with observations from industry practice. Results also suggest that in absence of costs from promoting and laying off employees, firms should use an up-or-out contract to motivate the sales force. Essay 2 (Chapter 3) investigates how career incentives associated with promotion of sales employees to sales management roles may interfere with selection of the right sales managers. The essay was motivated by the common observation that organizations often promote their best sales people to sales managerial roles but after promotion find that the sales people are not as good as they were expected to be in their new roles, a phenomenon called Peter Principle. An alternative explanation for this phenomenon of adverse selection is provided and possible solutions are analyzed as part of the essay. In essay 3 (Chapter 4) long term career incentives that sales reps face when they can form relationships with their customers are considered. Loyalty generated from customer-salesperson relationships is often (")owned(") by the sales person and it can be lost if the sales person moves to another firm. Therefore, firms compete for both customers as well as sales reps with the objective of poaching customers that are loyal to the sales reps. The essay analyzes how firms can deal with such a competition. Findings suggest that contrary to general beliefs, the presence of anti-employee poaching regulations like Non-Compete clauses, or tacit collusion to not poach each other's employees may hurt firm profits under some conditions. Overall, the dissertation answers how firms can manage sales force career incentives to maximize profits.
Show less - Date Issued
- 2015
- Identifier
- CFE0005762, ucf:50102
- Format
- Document (PDF)
- PURL
- http://purl.flvc.org/ucf/fd/CFE0005762