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Companies often use sales contests to achieve short-term objectives to motivate salespeople and to boost sales. However, sales contests also may encourage salespeople to adopt less relational behaviors and limit their ability to manage customer relationships, as manifested in their customer listening practices. Therefore, this study, based on a natural field experiment, examines the effects of a sales contest on customer listening. In so doing, four dimensions of customer listening (passive, active, adaptive, and assertive listening), associated with a process of listening (Hearing,Processing, andResponding), were identified. The study helps clarify the effect of a sales contest on these four dimensions of customer listening by telesales agents. The results reveal that this sales contest exerts negative effects only on the active and passive customer listening, not on the adaptive and assertive customer listening. The study sheds light on how sales contests influence important behaviors such as customer listening, as well as on the nature of customer listening itself. [ABSTRACT FROM PUBLISHER]

Price transparency initiatives are typically undertaken by third parties to ensure that consumers can compare the prices of competing offers in markets in which obtaining such information is costly. Such practices have recently become widespread, yet it is unclear whether the increased price competition due to lower search costs overcomes the potential for collusion between competitors due to lower price coordination costs. Motivated by this question, the authors investigate the effect of mandatory price posting (on large electronic signs) on the pricing behavior of competing gas stations in the Italian highway system. The authors find that when prices are posted, the average price of gasoline decreases by 1 euro cent per liter, which represents about 20% of stations' margins. About half the price decrease can be attributed to the introduction of a sign posting a station's own price and those of its nearest neighbors, with the other half due to the introduction of other signs posting the prices of other stations on the same road. Despite the price reduction, however, the introduction of signs seems to have little impact on price dispersion, suggesting that price uncertainty persists even after the policy is implemented. Analysis of customer transaction data confirms this finding, showing that less than 10% of consumers use the posted price information effectively. [ABSTRACT FROM AUTHOR]

As consumers spend more time on their mobile devices, a focal retailer's natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor's location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use competitive locational targeting to generate incremental sales without cannibalizing profits. Although the experiment focuses on the effects of unilateral promotions, it represents an initial step in understanding the competitive implications of mobile marketing technologies. [ABSTRACT FROM AUTHOR]

This research assesses the effects of cooperative (coop) advertising in a channel with competing retailers considering both advertising and pricing as decision variables. We develop a game-theoretic model and provide equilibrium solutions for two games. In Game 1, the manufacturer and the retailers do not use cooperative advertising (status quo); and in Game 2, coop advertising is implemented. We also obtain optimal solutions for the case where the channel is coordinated. Contrary to the results provided for one-manufacturer, one-retailer channels, we find that coop advertising may not be profitable for the retailers or for the channel, especially when the market is characterised by low levels of price competition and high advertising competition between retailers. Although it benefits the manufacturer, the total effect of cooperative advertising on the channel profit might be negative under such conditions. The results also show that coop advertising stimulates retailers’ spending but may result in lower advertising expenditures than for a fully coordinated channel. Finally, when coop advertising benefits the entire channel, it does not fully achieve results from vertical integration. [ABSTRACT FROM PUBLISHER]

Private brands in grocery retailing have evolved from a way to compete on price by selling low quality products at a low price, into a brand category in their own right, with a wide range of positioning options open to retailers. The buying and selling of private brands means that retailers' add new activities and processes to those that are traditionally associated with retailing. This paper compares the buying processes for manufacturer brands and private brands across three European countries in an attempt to analyse how the extension of the buying process inherent in private brand ranges, and the organisational contexts within which these processes operate impact upon complexity in the retail buying process. [ABSTRACT FROM AUTHOR]

Discount retailers and 'category killers' are believed to be so detrimental to the existing retail environment that many communities have fought their entry through zoning and other regulations. However, the authors suggest that the patterns of competition among different types of retailers are more complex than previously believed. To understand this complexity better, they explore the cross-sectional relationship of competition and retail structure for different types of retailers. Contrary to popular opinion, the findings suggest a positive association between the number of larger stores and the number and size of smaller stores. This implies a mutually beneficial relationship among different types of retailers rather than an overwhelming competitive advantage for larger stores. [ABSTRACT FROM AUTHOR]

We provide a structural framework for retail cost pass-through based on a neoclassical inverse demand model and retail profit maximization conditions. Unlike previous literature where game-theoretic structures are imposed on cost pass-through, our framework allows for estimating cost pass-through and the degree of market competition simultaneously. Further, our model incorporates potential cross-brand effects representing demand substitution and strategic complementarity effects. Our model supplements the traditional reduced-form approach to pass-through and is applicable in environments, where the lack of brand-level cost data renders reduced-form analysis infeasible. The empirical value of our model is illustrated in an econometric analysis of retail pass-through for national and store brand yogurt. Our results indicate that: (1) market competition has a positive impact on own-brand cost pass-through, especially for national brands, and (2) overlooking cross-brand effects results in biased own-brand pass-through estimates. Finally, we provide a graphical illustration of the relationship between cost pass-through and market competition. [ABSTRACT FROM AUTHOR]

We quantify the effect of consumers' price uncertainty on gasoline prices and margins on an Italian highway. We observe the change in prices triggered by a longitudinal policy-based change in consumers' price information from one in which drivers on the highway have no information on the prices of stations they encounter to one that allows consumers to observe the prices of four upcoming stations on a single price sign by the side of the highway. Using these data, we estimate a model of consumer search and purchase behavior and a corresponding model of gas station pricing. We then measure the impact of varying degrees of price information on equilibrium prices, including (i) no price information, (ii) the current policy, and (iii) full price information. We also compare the current policy with an alternative policy in which stations' prices are advertised with individual price signs. We find that when consumers do not have price information, gas stations are able to charge 31% more, in terms of higher price-cost margins, than when prices are known. Our welfare analysis suggests that price information is worth €0.57 to consumers every time they take the highway. Relative to the current mandatory policy, advertising price on individual signs is worth €0.19 more to consumers. The e-companion is available at https://doi.org/10.1287/mksc.2018.1105. [ABSTRACT FROM AUTHOR]

Geographic price discrimination is generally considered beneficial to firm profitability. However, theoretical results point to conditions under which firms might prefer to price across markets uniformly in oligopolistic settings. This paper provides an empirical analysis of competitive price discrimination and quantitatively assesses the profitability of national pricing relative to store-level pricing policies under different market conditions. Specifically, we construct and estimate a model of retail competition using extensive data from the digital camera market. A series of counterfactuals show that, under reasonable commitment mechanisms, two leading chains would benefit from employing national pricing policies, whereas a discount retailer should target prices in each local market. Additional results explore the boundary conditions of these findings and evaluate hybrid pricing policies. The online appendices are available at https://doi.org/10.1287/mksc.2018.1100. [ABSTRACT FROM AUTHOR]

John Kwoka's Mergers, Merger Control, and Remedies is a meta-analysis of "retrospective" academic studies of consummated mergers and other horizontal arrangements. Based on this meta-analysis, Kwoka strongly criticizes federal enforcement policies, claiming that the agencies permit far too many anticompetitive mergers to go unchallenged, and are far too willing to accept remedies that fail to prevent a significant loss of competition. Kwoka claims further that this excessive leniency is the culmination of a trend reflecting deliberate policy choices made over the last several decades. In a forthcoming critique, Vita and Osinski challenge Kwoka's analysis and his conclusions, identifying serious flaws in the size, construction, and composition of his sample, and in the statistical analysis of the data drawn from that sample. In a published response to Vita and Osinski, Professor Kwoka offers a number of objections and counter-arguments. In this rejoinder, I respond to Professor Kwoka. [ABSTRACT FROM AUTHOR]

In a conventional wisdom, it was believed that in traditional consumer journey, consumer will engage in an extended consideration and evaluation before entering into the loyalty loop. But with the emergence of online and offline advocacy the modern consumers may skip various traditional phases and may directly enter into loyalty loop. Being well informed and empowered modern-day consumer would wait hardly few seconds before he shifts loyalty to the rival brands. Hence, the retailers and marketers need to deal with well informed and empowered consumers who are disloyal to the core. Therefore, this paper proposes the adoption of Omni-channel marketing as a strategy to deal with disloyal customers. This study is both analytical and theoretical in nature and is based on the secondary data as well as extensive review of literature on the subject. The findings of the study recommend that the adoption of Omni-channel marketing will reduce the loyalty depressing factors and increases the loyalty supporting factors amongst the consumers by creating seamless experience throughout their consumer journey. Therefore, this paper proposes the adoption of Omni channel marketing to retailers, brands and marketers to deal with well informed, empowered and disloyal consumers and to convert them into loyal consumers. [ABSTRACT FROM AUTHOR]

This paper explores the used intimate apparel collection (UIAC) programs in a supply chain system. Our game-theoretic analysis reveals that the collector type and the level of retail competition affect the UIAC program significantly. In particular, we show that the benefit-cost ratio of the collector’s investment plays a decisive role in determining whether an increased level of competition will improve the UIAC program’s levels of social, environmental, and economic sustainability. We further find that an increased level of competition will lead to a higher consumer surplus if the respective consumer goodwill of donation is sufficiently small. [ABSTRACT FROM AUTHOR]

To attain short-term performance, sales managers must motivate their salesforce to close deals (often through use of intra-firm competition). At the same time, to maintain long-term relationships, they must promote a highly ethical selling environment (which may be incongruent with use of intra-firm competition). The present study examines the interactive relationship between competitive psychological climate and ethical psychological climate in predicting salespeople's ethical intentions and behaviors toward customers. A unique dyadic data set is used to predict salesperson ethical intentions and actual salesperson ethical behaviors reported by customers. For ethical intentions, an 'executive control' perspective predicts improved ethical intentions toward customers. However, a 'depletion' perspective predicts reduced ethical behavior during actual customer interactions. This result is provocative as fostering an ethical climate in conjunction with a competitive climate is found to reduce ethical behaviors in the eyes of customers, a finding clearly counter to what managers intend. [ABSTRACT FROM AUTHOR]

I propose a framework in which asymmetric multiproduct retailers compete for one-stop shoppers who have biased beliefs about their future purchase probabilities (and so make unplanned purchases). One firm carries a full portfolio of products while the other carries an incomplete but endogenous one. Using this framework, I examine the phenomenon of loss leading, the optimal product portfolio of the smaller firm, and the effects of banning loss leading. Among other results, I show that there is a nonpredatory (and possibly procompetitive) justification for the observation that such larger firms may charge below cost on the core product lines of their smaller rivals. (JEL D11, D21, D83, L13, L25, L71, L81) [ABSTRACT FROM AUTHOR]

The article reports on the impact and response to competition between new shopping centers and older shopping centers in the same geographic area. An example of this competition is presented in the case of Cincinnati's Western Hills Plaza and Cheviot shopping center, which is an area marked by population growth. The differences in parking space availability is measured. The movement towards sales promotion at the Cheviot shopping center is reported. The formation of the Cheviot Merchants Association is reported. The group's publicity effort is described. It included new parking lots, increased walkways and lighting, a parade, bumper stickers and related activities to keep the Cheviot shopping center lively. The article reports a healthy movement by business owners to serve customers and improve business promotion at the Cheviot shopping center.

When a manufacturer advertises, what is the impact on retailer advertising? I analyze a contest model of advertising where total advertising by the manufacturer and by retailers determines market size, and the relative level of advertising by each retailer determines market share. If retailers are symmetric I show that there is a crowding-in effect so increased manufacturer advertising increases retail advertising. But if one retailer is stronger, then marginal increases in manufacturer advertising have a crowding-out effect on retailer advertising, while sufficiently large increases have a crowding-in effect by 'jump-starting' competition between retailers for the larger market. Furthermore, asymmetric abilities in such contests can lead the weaker player to effectively drop out of the contest, thereby undermining the ability of increased prizes to increase effort by intensifying competition. [ABSTRACT FROM AUTHOR]

In practice, many manufacturers offer trade promotion to retailers to induce demand. It is also common for a retailer to sell products of competing manufacturers. This paper considers a two-echelon supply chain where two manufacturers provide a trade promotion to a retailer, and the retailer faces uncertain and price-dependent demand. In the model, the manufacturers determine wholesale prices and the retailer determines retail price and order quantity to maximize their own profits. An algorithm based on non-linear optimization is provided to solve the problem. We compare three trade promotions under brand competition: off-invoice, scan-back, and buy-back policies, and discuss the effects of trade promotions on decisions and profits. The results indicate that the manufacturers and retailer prefer the buy-back policy over the off-invoice and scan-back policies. The retailer's profit will increase and the manufacturers' profits will decrease as the brand substitution effect increases. Also, the manufacturers will raise their wholesale prices, but the retailer will reduce the retail price and order quantity when the brand substitution rate increases. [ABSTRACT FROM AUTHOR]

This article addresses an optimization problem using Game Theory in an advertising environment, where decisions regarding the advertising expenditure of a supply chain members must be determined. We study a cooperative (Co-op) advertising problem in a channel comprised of one manufacturer and two competing/cooperating retailers. The manufacturer leads the channel and Stackelberg game is played between the echelons. Moreover, the retailers in the downstream echelon can adopt either Collusion or Stackelberg behavior. The possibility of coordination via a two-way subsidy strategy is discussed under two scenarios in which either the participation rates are exogenously specified or the members endogenously decide on these rates. It is shown that the perfect coordination of the channel is obtained via a two-way subsidy strategy in the exogenous scenario. Furthermore, under the endogenous scenario, with the whole system point of view, the two-way subsidy strategy is superior to the traditional one-way strategy. [ABSTRACT FROM AUTHOR]

Retailers around the globe survive and prosper when they satisfy customers' needs more effectively compared to their competitors. Thus, retailers offer unique benefits using different retail formats to satisfy the ever-changing customers' needs and to create loyal customers who patronize their stores. Though retailers have been experimenting with new and innovative retail formats, spending millions of dollars in designing them, very little academic research is available which investigates the most sought after retail format in the consumer durable market in South Africa. This research paper attempts to explore the effect of retail formats on the customer buying behaviour in the consumer durable market by examining a random sample of 96 respondents from Johannesburg, South Africa. The empirical research findings suggest that there is a significant effect of Discount Stores, Super Stores, Hypermarkets and Warehouse Stores on the customer buying behaviour in the consumer durables market in South Africa. [ABSTRACT FROM AUTHOR]

This study considers a two-echelon competitive supply chain consisting of two rivaling retailers and one common supplier with trade credit policy. The retailers hope that they can enhance their market demand by offering a credit period to the customers and the supplier also offers a credit period to the retailers. We assume that the market demand of the products of one retailer depends not only on their own market price and offering a credit period to the customers, but also on the market price and offering a credit period of the other retailer. The supplier supplies the product with a common wholesale price and offers the same credit period to the retailers. We study the model under a centralised (integrated) case and a decentralised (Vertical Nash) case and compare them numerically. Finally, we investigate the model by the collected numerical data. [ABSTRACT FROM PUBLISHER]

With e-commerce having accelerated over recent years, retailing has changed significantly. Manufacturers and retailers have established multichannel (offline/online) strategies within which pricing restraints often constitute a central element. Behind these strategies sits the firms' ambition to find a solution to free-riding. Free-riding results in non-optimal service levels and price setting and thus offers a business justification for pricing restrains which, in many instances, are viewed as infringements under Article 101 or 102 Treaty on the Functioning of the European Union (TFEU). In this article we map out the alignment of characteristics of products targeted by recent antitrust enforcement in Europe with the likelihood of free-rider effects taking place. Specifically in the case of products with search and experience characteristics, we find intensive enforcement activity despite prevalent free-rider effects. [ABSTRACT FROM AUTHOR]

Regulations curbing the entry of large retail stores have been introduced in many countries to protect independent retailers. Analyzing a planning reform launched in the United Kingdom in the 1990s, I show that independent retailers were actually harmed by the creation of entry barriers against large stores. This is because the entry barriers created the incentive for large retail chains to invest in smaller and more centrally located formats, which competed more directly with independents and accelerated their decline. Overall, these findings suggest that restricting the entry of large stores may exert negative competitive effects on independent retailers. [ABSTRACT FROM AUTHOR]