https://scholars.lib.ntu.edu.tw/handle/123456789/612147
Title: | Operations strategies with snobbish and strategic consumers | Authors: | Lee C.H. TSAN MING CHOI Edwin Cheng T.C. |
Keywords: | consumption externality; operations strategies; snobs; strategic consumers | Issue Date: | 2021 | Publisher: | John Wiley and Sons Inc | Journal Volume: | 68 | Journal Issue: | 3 | Start page/Pages: | 327-343 | Source: | Naval Research Logistics | Abstract: | Studying the optimal production and pricing strategies of a luxury brand manufacturer (in this paper, the ?anufacturer??is in fact also the ?etailer??, we consider the following situation. First, consumers exhibit a prestige-seeking (snobbish) behavior that values product exclusivity. Their utility decreases as more consumers possess the product. Second, consumers show a forward-looking (strategic) behavior. They make shop visit decisions based on predicted product availability. Third, the manufacturer's production policy is unobservable to consumers. Given these basic premises, we consider a traditional newsvendor inventory system and analytically derive the equilibrium production and pricing strategies within the rational expectation framework. We then propose two improvement strategies, each using a well-established channel policy, to steer the game participants to reach a better equilibrium than the one for the traditional system. First, under the limited edition strategy with consumer returns, the firm uses the consumer return policy as a proxy for the limited edition strategy that aims to increase product exclusivity. Second, under the product line extension strategy, the firm applies product line extension as a means to guide the game participants to simultaneously increase product availability and product exclusivity. Finally, we extend the study by incorporating a variety of modeling variations and examine robustness of the research findings. ? 2020 Wiley Periodicals LLC. |
URI: | https://www.scopus.com/inward/record.uri?eid=2-s2.0-85093849125&doi=10.1002%2fnav.21955&partnerID=40&md5=62d710bb3bda98126656a332620020bd https://scholars.lib.ntu.edu.tw/handle/123456789/612147 |
DOI: | 10.1002/nav.21955 | SDG/Keyword: | Costs; Manufacture; Consumer return policies; Improvement strategies; Operations strategies; Optimal production; Product availability; Product line extensions; Rational expectations; Traditional systems; Consumer behavior |
Appears in Collections: | 工商管理學系 |
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