Brand recognition, service quality and price competition

Authors:
Sulin Ba;Jan Stallaert;Zhongju Zhang
Affiliations:
University of Connecticut;University of Connecticut;University of Connecticut
Venue:
ICEC '05 Proceedings of the 7th international conference on Electronic commerce
Year:
2005

Citing 3
Cited 0

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Abstract

The Internet has significantly improved the bargaining power of consumers. Many online shopping search engines allow users to find most retailers that sell a specified product, compare product prices, and review detailed store ratings. With competition just a click away, online retailers do not have much leverage to prevent consumers from switching and changing where they would shop. Offering the lowest price alone does not guarantee that consumers will come and buy at your site. Other non-price attributes, such as the e-service quality and the brand recognition, also play important roles in helping online retailers to build competitive advantages. This paper develops a competitive model in which firms sequentially choose a level of brand recognition, service quality, and price to maximize their profits.