The Role of the Management Sciences in Research on Personalization
Management Science
Market-based recommendation: Agents that compete for consumer attention
ACM Transactions on Internet Technology (TOIT)
Marketing Science
Personalized Pricing and Quality Differentiation
Management Science
Research NoteThe Benefits of Personalized Pricing in a Channel
Marketing Science
Strategic Investment in Switching Cost: An Integrated Customer Acquisition and Retention Perspective
International Journal of Electronic Commerce
Economic incentives to adopt electronic payment schemes under competition
Decision Support Systems
Expert Systems with Applications: An International Journal
Technical Note---Personalized Dynamic Pricing of Limited Inventories
Operations Research
On the Optimal Product Line Selection Problem with Price Discrimination
Management Science
Group Buying: A New Mechanism for Selling Through Social Interactions
Management Science
Loyalty intelligence and price discrimination in a duopoly
Electronic Commerce Research and Applications
Modeling Customer Lifetimes with Multiple Causes of Churn
Marketing Science
Hide and Seek: Costly Consumer Privacy in a Market with Repeat Purchases
Marketing Science
Service design of consumer data intermediary for competitive individual targeting
Decision Support Systems
The Benefit of Uniform Price for Branded Variants
Marketing Science
Competitive Effects of Purchase-Based Targeted Advertising
Journal of Electronic Commerce in Organizations
Add-on Pricing by Asymmetric Firms
Management Science
Can Commonality Relieve Cannibalization in Product Line Design?
Marketing Science
Hi-index | 0.01 |
One-to-one promotions are possible when consumers are individually addressable and firms know something about each customer's preferences. We explore the competitive effects of one-to-one promotions in a model with two competing firms where the firms differ in size and consumers have heterogeneous brand loyalty. We find that one-to-one promotions always lead to an increase in price competition (average prices in the market decrease). However, we also find that one-to-one promotions affect market shares. This market-share effect may outweigh the effect of lower prices, benefiting the firm whose market share increases. Our results suggest that of two firms, the firm with the higher-quality product may gain from one-to-one promotions. Our model also has implications for the phenomenon of customer churn, where consumers switch to a less preferred brand due to targeted promotional incentives. We show that churning can arise optimally from firms pursuing a profit-maximizing strategy. Instead of trying to minimize it, the optimal way to manage customer churn is to engage in both offensive and defensive promotions with the relative mix depending on the marginal cost of targeting.