Drawing on the literature on buyers' uncertainty in preference and product knowledge, the authors make, and empirically test, the proposition that an individual consumer's reservation price for a product is more meaningfully and accurately represented as a range than as a single point. Given this conceptualization, they propose an approach for incentive compatible elicitation of an individual's reservation price range (ICERANGE) that builds on the Becker, DeGroot, and Marschak (BDM, 1964) point-of-purchase method. Two empirical applications of the approach provide an assessment of its practicality and its predictive performance relative to current methodologies for reservation price elicitation. Results demonstrate that the proposed method significantly outperforms the benchmark approaches in terms of predictive validity, while yielding valuable incremental information about uncertainty in product valuation.

This paper investigates the relationship between investments in marketing innovation, that is, the way in which technologically unchanged products are designed, priced, distributed, and/or promoted, and a firm's new product performance. Marketing innovation, such as calorie‐based packaging or unusual distribution channels, may lead to new products. However, it is unclear whether they pay off, particularly when the firm follows a dual strategy, that is, investing in both innovative marketing and R&D at the same time. We draw from theory on competence development as well as diffusion of innovation and argue that pursuing a dual strategy lowers performance, an effect that we attribute to the role of complexity in innovation. Based on a mixed methods study that integrates a data set of 866 firms from a representative set of industries in Germany and extensive interview evidence, we find empirical support for our hypotheses. Our research contributes to the emerging stream of literature that seeks to better understand the role of marketing in firms' innovation processes.

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The marketing and sales functions in many firms are often at odds despite their common goal of increasing revenue and profit. The finger pointing goes both ways: Marketing complains of poor lead follow-up by sales, and in turn, sales grumbles about the quality of leads generated by marketing. This disconnect can be damaging; high lead volumes generated through effective marketing campaigns could actually hurt downstream sales because of wasted effort on poorly qualified leads and/or delays in sales follow-up resulting from limited sales force capacity. To examine the revenue and profit implications of coordinated communications efforts at the marketing-sales interface, the authors develop a three-stage model that captures the effects of sequential marketing/sales communications on lead generation, appointment conversion, and sales closure. The results, which are based on a collaborative effort with a large home improvement retailer, suggest a complex interplay among marketing efforts (multiple media that generate leads), delays in follow-up (time lag between inquiry and sales force contact), and sales efficiencies (appointment and sales conversion). The findings underscore the impact of multimedia spending on the timing and effectiveness of subsequent communications, implying that improved internal collaboration between marketing and sales can offer significant upside potential for the firm. Finally, the authors develop a managerial decision support tool to simulate the impact of varying communications budgets, timing, and allocation on the marketing and sales planning system.

We examine pricing policy for a monopolist facing uncertain demand in a market characterized by dynamics on the demand side (such as diffusion or saturation effects) and/or on the cost side (experience curve effects). Our model explicitly incorporates the impact of demand uncertainty, and thus allows us to analyze the implications of uncertainty on the optimal price path, by contrasting the stochastic policy with the corresponding deterministic policy. We begin with an analysis of the general model and then focus on several special cases based on well known demand specifications to gain more specific insights and to suggest directional guidelines for dynamic pricing decisions in an uncertain environment. In general, the interaction among uncertainty, demand and/or cost dynamics, and firm's discount rate. Thus, farsighted firms operating under dynamic market conditions with high demand uncertainty, such as high tech companies with innovative products for consumer or industrial markets, should attach particular importance to the formal consideration of uncertainty in their long term pricing decisions.dynamic pricing, optimal control, stochastic models, marketing