A Model of Promotion-Free Retail Pricing of Durable Products

Q4 Business, Management and Accounting

Review of Marketing Science Pub Date : 2007-09-19 DOI:10.2202/1546-5616.1053

S. Balachander

引用次数: 0

Abstract

An important decision facing retailers is the level of price promotions or "sales" to have in their retail prices. In this paper, we consider the use of promotion-free (PF) retail pricing by stores selling durable products, where PF pricing means that the retailer does not use or advertise price promotions. Interestingly, we find, contrary to the previous literature, that a store using a PF strategy does not advertise prices, and yet may charge below shoppers' reservation prices. Further, we show that a store can follow a PF pricing strategy in equilibrium, when competing with another store following a PF pricing or a promotional pricing strategy, and we characterize the conditions that support each type of equilibrium. The combination of PF pricing, the lack of advertisement of prices, and pricing below the reservation price may be similar to the pricing strategy followed by EDLP stores selling durable products. Our analysis yields insights on how a store may choose between a PF pricing strategy and a promotional pricing strategy in a competitive setting.

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耐用品无促销零售定价模型

零售商面临的一个重要决策是价格促销或“销售”在零售价格中的水平。在本文中，我们考虑使用无促销(PF)零售定价的商店销售耐用品，其中PF定价意味着零售商不使用或宣传价格促销。有趣的是，我们发现，与之前的文献相反，使用PF策略的商店不宣传价格，但可能会收取低于购物者预订价格的费用。此外，我们表明，当与遵循PF定价或促销定价策略的另一家商店竞争时，一家商店可以遵循均衡的PF定价策略，并且我们描述了支持每种均衡类型的条件。PF定价、价格不做广告、定价低于保留价的组合，可能与EDLP商店销售耐用品所遵循的定价策略类似。我们的分析提供了关于商店如何在竞争环境中选择PF定价策略和促销定价策略的见解。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Marketing Science Business, Management and Accounting-Marketing

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The Review of Marketing Science (ROMS) is a peer-reviewed electronic-only journal whose mission is twofold: wide and rapid dissemination of the latest research in marketing, and one-stop review of important marketing research across the field, past and present. Unlike most marketing journals, ROMS is able to publish peer-reviewed articles immediately thanks to its electronic format. Electronic publication is designed to ensure speedy publication. It works in a very novel and simple way. An issue of ROMS opens and then closes after a year. All papers accepted during the year are part of the issue, and appear as soon as they are accepted. Combined with the rapid peer review process, this makes for quick dissemination.