Research NoteThe Benefits of Personalized Pricing in a Channel

Authors:
Yunchuan Liu;Z. John Zhang
Affiliations:
A. Gary Anderson Graduate School of Management, 900 University Avenue, University of California, Riverside, California 92521;The Wharton School, University of Pennsylvania, 700 Jon M. Huntsman Hall, 3730 Walnut Street, Philadelphia, Pennsylvania 19104-6340
Venue:
Marketing Science
Year:
2006

Citing 9
Cited 12

Distribution Channels: An Extension of Exclusive Retailership

Management Science
Coordinating Channels Under Price and Nonprice Competition

Marketing Science
When and How is the Internet Likely to Decrease Price Competition?

Marketing Science
Individual Marketing with Imperfect Targetability

Marketing Science
Competitive One-to-One Promotions

Management Science
Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design

Management Science
"Let Me Talk to My Manager": Haggling in a Competitive Environment

Marketing Science
Customized Advertising via a Common Media Distributor

Marketing Science
Channel Coordination in the Presence of a Dominant Retailer

Marketing Science

Note on Self-Restraint as an Online Entry-Deterrence Strategy

Management Science
Note on Self-Restraint as an Online Entry-Deterrence Strategy

Management Science
Editorial: Errors in the Variables, Unobserved Heterogeneity, and Other Ways of Hiding Statistical Error

Marketing Science
Research Note---Quantity Discounts in Differentiated Consumer Product Markets

Marketing Science
The Benefits of Downstream Information Acquisition

Marketing Science
Technical Note---Personalized Dynamic Pricing of Limited Inventories

Operations Research
Internet Channel Entry: A Strategic Analysis of Mixed Channel Structures

Marketing Science
Pooling, Access, and Countervailing Power in Channel Governance

Management Science
A design model for knowledge-based pricing services in the retail industry

International Journal of Web Engineering and Technology
A design model for knowledge-based pricing services in the retail industry

International Journal of Web Engineering and Technology
Service design of consumer data intermediary for competitive individual targeting

Decision Support Systems
Can Commonality Relieve Cannibalization in Product Line Design?

Marketing Science

Quantified Score

Hi-index	0.00

Visualization

Abstract

In this note, we explore channel interactions in an information-intensive environment where the retailer can implement personalized pricing and the manufacturer can leverage both personalized pricing and entry into a direct distribution channel. We study whether a retailer can benefit from personalized pricing and how upstream personalized pricing or entry into a direct distribution channel affects the allocation of channel profit. We find that the retailer is worse off because of its own or upstream personalized pricing, even when the retailer is a monopoly. However, it may still be optimal for the retailer to embrace personalized pricing in order to reap the strategic benefit of deterring the manufacturer from selling direct and targeting end consumers.