Should Designers Worry About Market Systems?

2008 ◽  
Vol 131 (1) ◽  
Author(s):  
Ching-Shin Norman Shiau ◽  
Jeremy J. Michalek
Keyword(s):  
Consumer Choice ◽  
Price Competition ◽  
Consumer Preference ◽  
Channel Structure ◽  
Retail Prices ◽  
Planning Decision ◽  
Profit Maximizing ◽  
Design Tradeoffs ◽  
Design Case Study ◽  
Channel Structures

We examine how profit-maximizing designs are influenced by two structural aspects of market systems: (1) the structure of manufacturer-retailer interactions and (2) the structure of heterogeneity in consumer preference modeling. We first model firms as players in a profit-seeking game that compete on product attributes and prices offered. We then model the interactions of manufacturers and retailers in Nash competition under alternative channel structures and compare the equilibrium conditions for each case. We find that under linear logit consumer choice, optimal design can be decoupled from the game, and design decisions can be made without regard to price, competition, or channel structure. However, when consumer preference coefficients are heterogeneous over the population, channel structure is key to determining which designs are most profitable. We examine the extent of this influence in a vehicle design case study from the literature and find that the presence of heterogeneity leads different channel structures to imply different profit-maximizing designs. These findings imply that the common assumption that manufacturers set retail prices may produce suboptimal designs with respect to alternative channel structures. The results highlight the need for coordination between engineering design and product planning decision-makers and the importance that the structure of market systems plays in making design tradeoffs optimally.

Should Designers Worry About Market Systems?

2008 ◽  
Author(s):  
Ching-Shin Shiau ◽  
Jeremy J. Michalek
Keyword(s):  
Consumer Choice ◽  
Price Competition ◽  
Consumer Preferences ◽  
Distribution Channels ◽  
Channel Structure ◽  
Design Decisions ◽  
Market Structures ◽  
Product Pricing ◽  
Optimal Product Design ◽  
Design Case Study

Engineering approaches for optimizing designs within a market context generally take the perspective of a single producer, asking what design and price point will maximize producer profit predicted by consumer choice simulations. These approaches treat competitors and retailers as fixed or nonexistent, and they take business-oriented details, such as the structure of distribution channels, as separate issues that can be addressed post hoc by other disciplines. It is well established that the structure of market systems influences optimal product pricing. In this paper, we investigate whether two types of these structures also influence optimal product design decisions; specifically, 1) consumer heterogeneity and 2) distribution channels. We first model firms as players in a profit-seeking game that compete on product attributes and prices. We then model the interactions of manufacturers and retailers in Nash competition under alternative market structures and compare the equilibrium conditions for each case. We find that when consumers are modeled as homogeneous in their preferences, optimal design can be decoupled from the game, and design decisions can be made without regard to price, competition, or channel structure. However, when consumer preferences are heterogeneous, the behavior of competitors and retailers is key to determining which designs are profitable. We examine the extent of this effect in a vehicle design case study from the literature and find that the presence of heterogeneity leads different market structures to imply significantly different profit-maximizing designs.

scholarly journals Maqasid-based consumer preference index for Islamic home financing

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hanudin Amin
Keyword(s):  
Consumer Choice ◽  
General Setting ◽  
Consumer Preference ◽  
Future Research ◽  
Building Society ◽  
Content Type ◽  
Customer Preference ◽  
Preference Index ◽  
A New Technique ◽  
Debt Policy

Purpose Using the maqasid-based consumer preference index (MCPi), this study aims to investigate customer preference for Islamic home financing. Design/methodology/approach The current study, based on valid 1,034 usable questionnaires and the MCPi, evaluates consumer choice for the supplied Islamic home finance products by 16 Islamic banks in Malaysia. Findings According to the findings, all banks have a moderate value of MCPi. Bank Islam Malaysia Berhad is at the top of the list, followed by Maybank Islamic, Commerce International Merchant Bankers Islamic and Malaysia Building Society Berhad. Research limitations/implications The MCPi is used in this study to test a new technique to measuring consumer preference. The contributions are confined to these particular variables – Educating Customer, Establishing Justice, Promoting Welfare and Fulfiling Islamic Debt Policy. The research also has limitations in terms of the facility’s general setting. Future research may shed light on these issues from new angles. Practical implications This research offers banks a new way to manage their products based on maqasid al-Sharīʿah. Originality/value In the context of Malaysia, this study introduces the MCPi, a new measure of consumer preference for home financing.

scholarly journals Design of multilayer microfluidic paper chip and its visual detection of pesticide residues

2020 ◽  
Vol 11 ◽  
pp. 170-182
Author(s):  
Li zhi Li ◽  
Han Ping Mao
Keyword(s):  
Pesticide Residues ◽  
Visual Detection ◽  
Channel Structure ◽  
Test Results ◽  
Mixed Effect ◽  
Detection Range ◽  
Long Time ◽  
Paper Chip ◽  
Channel Structures ◽  
High Repeatability

With the increase of China's grain production, the use of pesticides is gradually increasing. Traditional pesticide detection takes a long time and requires expensive experimental instruments, which is not conducive to the rapid and accurate detection of pesticide residues in the field. To solve this problem, this paper proposes a visual detection method of pesticide residues based on multi-layer microfluidic paper chips. The internal channel structure of paper chip is designed from the perspective of efficient mixing. Through the simulation of the mixed effect of three kinds of staggered channel structures, which are arc type, triangle type, and ladder type, the "ladder-type h-0.3, s-2.6" is selected as the best-staggered structure, and the mixing strength is 0.91534. The best simulation structure was tested by a colored reagent, and the image processing of 15 test results was carried out with MATLAB. The average mixing strength was 0.84, and the and the standard deviation was 0.022. The visual detection experiment of acetamiprid and profenofos in cabbage samples was carried out by using the device，The detection range of acetamiprid was 4~72 μg/kg, and the detection range of profenofos was 3~54 μg/kg . The recovery of acetamiprid was 75%~85%, and the recovery of profenofos was 80%~90%. The detection range and recovery rate indicate that the device has high repeatability and accuracy in the actual sample detection

A Simulation Model for Managing Marketing Multi-Channel Conflict

2012 ◽  
Vol 1 (4) ◽  
pp. 59-76 ◽  
Author(s):  
Hisham M. Abdelsalam ◽  
Ahmed O. El-Tagy
Keyword(s):  
Real Data ◽  
Consumer Electronics ◽  
Channel Structure ◽  
Global Competition ◽  
System Dynamic Model ◽  
Multiple Channels ◽  
Channel Conflict ◽  
Multiple Channel ◽  
Promotion Rates ◽  
Channel Structures

In today’s global competition, companies are obliged to go to market using multiple channels of strategy for various reasons. However, channel conflict is inevitable in multi-channel structures causing sharp decreases in the demand of one or more channels. A system dynamic model was developed to simulate the complex multiple channel structure and factors that affect the demand and channel conflict; aiming to simulate the situation of the supplier decision maker who takes fast decisions in one of the various variables that he controls to achieve maximum profits and minimum channel conflict. The model was validated using real data of a major consumer electronics supplier in Egypt that has traditional distributors and Hypermarkets as two different channels. Various policies of inventory allocations in each channel and different promotion rates were tested in order to achieve the objective of maximizing supplier profit and minimizing channel conflict.

Channel structure and differential pricing strategies in dual-channel e-retail considering e-platform business models

2020 ◽  
Vol 32 (1) ◽  
pp. 91-114
Author(s):  
Yufang Fu ◽  
Bojun Gu ◽  
Yuying Xie ◽  
Jun Ye ◽  
Bin Cao
Keyword(s):  
Service Quality ◽  
Business Models ◽  
Dynamic Game ◽  
The Self ◽  
Channel Structure ◽  
Third Party ◽  
Pricing Strategies ◽  
Dual Channel ◽  
Channel Preference ◽  
Retail Prices

Abstract Although online business has been growing for some time, third-party e-platforms and their impact on e-channels are an under-explored area in the literature on dual-channel supply chains. Considering different combinations of open and self-support e-platform, this paper develops dynamic game models in four dual-channel e-retail structures to study pricing strategies and channel preference for manufacturers. The results provide interesting insights. First, a manufacturer’s optimal prices vary in different e-channels. Second, e-retail prices on the self-support e-platform and open e-platform are both affected by the e-platform’s service quality and commission fee. Regardless of the channel structure, a better service quality by one e-platform leads to an increase in its own e-retail prices and forces the competing e-platform to either improve its service quality or take a lower price. Lastly and more importantly, we compare the manufacturer’s pricing strategies and performances in different dual-channel e-retail structures and identify its preferences. Specifically, if the commission fee is dynamic, we find that the manufacturer always prefers to use two e-channels provided by different e-platforms, and at least one of the e-channels is the self-support model, although it is a sub-optimal strategy.

The Impacts of Channel Structure and Information on an OEM’s Procurement Strategy

2020 ◽  
Vol 37 (03) ◽  
pp. 2050010
Author(s):  
Fei Lv
Keyword(s):  
Information Asymmetry ◽  
Private Information ◽  
Single Channel ◽  
Channel Structure ◽  
Market Size ◽  
Purchasing Cost ◽  
Sourcing Strategies ◽  
Production Activity ◽  
Procurement Strategy ◽  
Channel Structures

This paper investigates the optimal procurement strategy for an original equipment manufacturer (OEM) under different information and channel structures. We consider two possible sourcing strategies, Consignment and Turnkey, in which Consignment represents the situation when an OEM procures components itself and only assigns the production activity to a contract manufacturer (CM) and Turnkey is defined as when an OEM delegates both the procurement and production activities to the CM. We specifically consider two channel structures, a single channel with one OEM and one CM and two competing channels in which each consists of an OEM and a CM. Under each channel structure, the CM’s purchasing cost may be public or private information. We find that under both channel structures, in the absence of information asymmetry, the OEM will always choose Turnkey if its cost is higher than the CM’s average cost. However, in the presence of information asymmetry, the OEM is more likely to adopt Consignment with the increase in market size. We also find that when the two CMs’ cost correlation is small (large), the structure of the competing channels increases the possibility that the OEM adopts Turnkey (Consignment) in equilibrium.

Search Advertising

2016 ◽  
Vol 8 (3) ◽  
pp. 156-188 ◽  
Author(s):  
Alexandre de Cornière
Keyword(s):  
Search Engine ◽  
Search Engines ◽  
Price Competition ◽  
Search Costs ◽  
Search Advertising ◽  
Sponsored Links ◽  
Profit Maximizing

Search engines enable advertisers to target consumers based on the query they have entered. In a framework in which consumers search sequentially after having entered a query, I show that such targeting reduces search costs, improves matches and intensifies price competition. However, a profit-maximizing monopolistic search engine imposes a distortion by charging too high an advertising fee, which may negate the benefits of targeting. The search engine also has incentives to provide a suboptimal quality of sponsored links. Competition among search engines can increase or decrease welfare, depending on the extent of multi-homing by advertisers. (JEL D43, D83, L13, L86, M37)

Extracting Consumer Preference From User-Generated Content Sources Using Classification

2013 ◽  
Author(s):  
Thomas Stone ◽  
Seung-Kyum Choi
Keyword(s):  
Consumer Preference ◽  
Data Interpretation ◽  
User Generated Content ◽  
Support Vector ◽  
Product Reviews ◽  
Preference Modeling ◽  
Opinion Extraction ◽  
Design Case Study

The use of online, user-generated content for consumer preference modeling has been a recent topic of interest among the engineering and marketing communities. With the rapid growth of many different types of user-generate content sources, the tasks of reliable opinion extraction and data interpretation are critical challenges. This research investigates one of the largest and most-active content sources, Twitter, and its viability as a content source for preference modeling. Support Vector Machine (SVM) is used for sentiment classification of the messages, and a Twitter query strategy is developed to categorize messages according to product attributes and attribute levels. Over 7,000 messages are collected for a smartphone design case study. The preference modeling results are compared with those from a typical product review study, including over 2,500 product reviews. Overall, the results demonstrate that consumers do express their product opinions through Twitter; thus, this content source could potentially facilitate product design and decision-making via preference modeling.

A Trade Value Perspective on Ecommerce Research

2011 ◽  
pp. 59-78
Author(s):  
Ruth C. King ◽  
Ravi Sen ◽  
Fergle D’Aubeterre ◽  
Vikram Sethi
Keyword(s):  
Transaction Cost ◽  
Cost Minimization ◽  
Value Theory ◽  
Channel Structure ◽  
Web Based ◽  
Inhibiting Factors ◽  
The Impact ◽  
Economic Measure ◽  
Channel Structures ◽  
Structure Research

The impact of web-based electronic commerce on the process of disintermediation and re-intermediation has been extensively studied. Two major limitations of the existing work are the focus on a single economic measure (i.e., transaction cost minimization) and the examination of channel-structure decisions from only a single perspective (the seller’s). This paper introduces transactional value theory in the context of channel-structure research and integrates it with transaction cost theory to generate a trade value framework. The trade value framework considers channel-structure decisions from the perspectives of both buyers and sellers and is used to analyze the impact of web-based e-commerce on intermediated channel-structures. The proposed framework suggests that intermediaries function best in a channel-structure if they can reduce trade-inhibiting factors and improve trade-enhancing factors. Intermediaries may also prosper if they deliver extraordinary value on one side of the trade value framework to the point that inhibiting factors on the other end of the trade can be overlooked. Intermediaries maximize the value of the trade for both the buyers and the sellers by trading through an intermediated channel-structure as opposed to trading directly.

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