Promotions and product pricing: Parsimony versus Veblenesque demand

McClure, James E.; Kumcu, Erdo⌣gan

doi:10.1016/j.jebo.2004.01.007

Cited by 10 publications

(4 citation statements)

References 59 publications

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“…Our study is related to the work in social factors and conspicuous consumption [15,20,21]. Focusing on the conspicuous products, Krähmer [15] indicates that brands are consumed for image reasons and advertising creates a brand's image.…”

Section: Literature Reviewmentioning

confidence: 98%

“…Moreover, he finds that an incumbent might strategically overinvest in advertising to deter entry, and competition might be socially undesirable. McClure and Kumcu [20] formalize the relationship between the optimal price/quantity combination and the thoroughness of conspicuous product promotions. They reveal that iterating towards the profit maximizing thoroughness of product promotion will lead to a backward bending price/quantity locus.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Since * .2( ) > , we obtain item (iii) of Proposition 8. Lastly, by putting * .2( ) into (18), we obtain (20).…”

Section: Conclusion and Managerial Implicationmentioning

confidence: 99%

See 2 more Smart Citations

The Impact of the Strategic Advertising on Luxury Fashion Brands with Social Influences

Zheng

Shen

Chow

et al. 2013

Mathematical Problems in Engineering

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It is well known that purchase of luxury fashion brands is strongly influenced by social needs such as the need for uniqueness and the need of conformity. The existence of these two competing social needs separates customers into two groups who exhibit different buying behaviors. This paper concerns the impacts of such social influences between different consumer groups on pricing and advertising strategies of luxury fashion brands with penalty of insufficient advertising. We start by considering different advertising allocation strategies and derive the corresponding local optimal pricing and advertising allocation policies, through which the global optimal policy that maximizes the company's profit can be obtained. Important insights on strategic advertising for luxury fashion brands are discussed.

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Section: Literature Reviewmentioning

confidence: 98%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

The Impact of the Strategic Advertising on Luxury Fashion Brands with Social Influences

Zheng

Shen

Chow

et al. 2013

Mathematical Problems in Engineering

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show abstract

“…Marshall seemed to feel that this would make the diagrammatical treatment too complex. Recently, Reder and Samuelson noticed that external economies and diseconomies of consumption may vitiate (or, at best, greatly complicate) their “new” welfare analysis, and hence, in true academic fashion, they assume the problem away.’ See also McClure and Kumcu [] deriving an upward sloping demand‐like curve when consumers’ utility depends on the level of quality chosen by the firm. Similarly, see Rohlfs [] deriving an upward sloping demand curve for network effects.…”

mentioning

confidence: 99%

Sufficient Decisions in Multi‐Sided and Multiproduct Markets

Alexandrov¹,

Spulber

2017

The J Industrial Economics

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We show that in many models where firms make multiple decisions, analysis can be made more tractable by re‐formulating the model into one in which each firm makes a single choice, which we call a sufficient decision. The transformation allows application of standard techniques in these settings, including pass‐through for tax incidence and upward pricing pressure for merger analysis. The transformation works because the assumption of profit maximization links the firms’ decisions together. Examples include models of monopoly and oligopoly in two‐sided markets, where a natural sufficient decision may be the number of transactions that the firm facilitates, and multiproduct markets.

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