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Article: Managing consumer deliberations in a decentralized distribution channel

TitleManaging consumer deliberations in a decentralized distribution channel
Authors
KeywordsConsumer deliberation
Product quality
Channel management
Consumer empowerment
Pricing
Issue Date2019
Citation
Marketing Science, 2019, v. 38, n. 1, p. 170-190 How to Cite?
AbstractConsumers may incur deliberation costs in learning about their valuations for new products. When the deliberation cost is not trivial, the retailer may set a low price to inhibit deliberation (regressive pricing) or choose a high price to induce deliberation (transgressive pricing). In a decentralized channel, we find that, first, the retailer is more likely to adopt the regressive pricing (versus transgressive pricing) when the wholesale price is lower. In response, the manufacturer sets a high (low) wholesale price to induce the transgressive (regressive) pricing when the deliberation cost is intermediate (high). Second, channel members can be misaligned in the incentive in investing in consumer empowerment. The ability to empower consumers and reduce their deliberation costs enhances the retailer’s channel power and its share of channel profit. Finally, the manufacturer may offer a socially suboptimal product quality because a high quality can lead to excessive deliberation. These nontrivial effects of the deliberation cost underscore the importance of considering consumer deliberations in channel management. The insights are robust under a positive production cost, heterogeneous deliberation costs, continuous deliberation efforts, and a channel structure with multiple layers.
Persistent Identifierhttp://hdl.handle.net/10722/302226
ISSN
2023 Impact Factor: 4.0
2023 SCImago Journal Rankings: 5.643
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorLi, Xi-
dc.contributor.authorLi, Yanzhi-
dc.contributor.authorShi, Mengze-
dc.date.accessioned2021-08-30T13:58:03Z-
dc.date.available2021-08-30T13:58:03Z-
dc.date.issued2019-
dc.identifier.citationMarketing Science, 2019, v. 38, n. 1, p. 170-190-
dc.identifier.issn0732-2399-
dc.identifier.urihttp://hdl.handle.net/10722/302226-
dc.description.abstractConsumers may incur deliberation costs in learning about their valuations for new products. When the deliberation cost is not trivial, the retailer may set a low price to inhibit deliberation (regressive pricing) or choose a high price to induce deliberation (transgressive pricing). In a decentralized channel, we find that, first, the retailer is more likely to adopt the regressive pricing (versus transgressive pricing) when the wholesale price is lower. In response, the manufacturer sets a high (low) wholesale price to induce the transgressive (regressive) pricing when the deliberation cost is intermediate (high). Second, channel members can be misaligned in the incentive in investing in consumer empowerment. The ability to empower consumers and reduce their deliberation costs enhances the retailer’s channel power and its share of channel profit. Finally, the manufacturer may offer a socially suboptimal product quality because a high quality can lead to excessive deliberation. These nontrivial effects of the deliberation cost underscore the importance of considering consumer deliberations in channel management. The insights are robust under a positive production cost, heterogeneous deliberation costs, continuous deliberation efforts, and a channel structure with multiple layers.-
dc.languageeng-
dc.relation.ispartofMarketing Science-
dc.subjectConsumer deliberation-
dc.subjectProduct quality-
dc.subjectChannel management-
dc.subjectConsumer empowerment-
dc.subjectPricing-
dc.titleManaging consumer deliberations in a decentralized distribution channel-
dc.typeArticle-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1287/mksc.2018.1120-
dc.identifier.scopuseid_2-s2.0-85063736781-
dc.identifier.volume38-
dc.identifier.issue1-
dc.identifier.spage170-
dc.identifier.epage190-
dc.identifier.eissn1526-548X-
dc.identifier.isiWOS:000459127200009-

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