Search results

The purpose of this paper is to examine the relationship between primary product network size and the sales of complementary products, and to suggest customer characteristics moderating this relationship.

A panel dataset in the online video game industry was used to verify the proposed theoretical framework. Two‐level hierarchical linear modeling is used to test several hypotheses.

The authors' analysis results suggest there is a positive relationship between the primary product network size and the sales of complementary products. Also, two customer characteristics (previous transaction value and customer purchase frequency) were found to positively influence the complementary product sales. The primary product's network size has a stronger impact on complementary product sales for light buyers compared to heavy buyers.

This study only focused on online video industry, and the price differentiation of the products might not be adequately significant. Other relevant factors (such as word‐of‐mouth (WOM)) or other customer characteristics could also be relevant to complementary product sales. Therefore, future research could use data triangulation to collect data in different contexts, through a longer period of time, to test and verify the proposed relationships.

Product managers need to better understand the relationship between the primary product network size and the complementary product sales. They should adjust the marketing strategies toward different customer purchase frequency segments correspondingly. For example, to benefit further from the primary product network size, complementary product retailers can create online forums for all primary product users to influence light complementary product buyers.

This research is one of the first empirical investigations of establishing the relationship between primary product network size and complementary product sales, with customer characteristics as moderators.

This paper attempts to analyze the relationship between the complementarity degrees of imperfect complementary products and sales strategies and give appropriate sales strategies for a two-stage supply chain.

With respect to two-stage supply chain consisting of two manufacturers who produce imperfect complementary products and one retailer who sells the products, aiming at bundling sales strategy, the authors define complementarity elasticity of products and use it to measure the degree of complementary between two products. Based on Stackelberg game and cooperation, the authors analyze the relationship between the complementarity degrees of imperfect complementary products and appropriate sales strategies.

As the impact of complementarity degree on sales strategy decision-making is better, the authors can pinpoint out which sales decision-making is optimal and which bundling sales strategy is the best for a two-stage supply chain. Considering that the degree of complementarity has a significant impact on the product sales strategy, the authors can point out which sales decision-making is optimal, that is, which bundled sales strategy is the optimal in the secondary supply chain of selling complementary products.

An innovative bundling can expand the sales of existing products and new products. It helps a retailer transcend and defeat competitors by reducing marketing expenses while increasing profits. Proper use of bundling can improve consumers utility and create an overall positive effect for both the enterprises and consumer.

The research can help some retailers to make many appropriate bundling sales strategies.

Previous research in the context of feature fit has examined the effects of congruence (i.e. more specifically, the extent to which a new feature and the product are similar in the hedonic-utilitarian benefits they provide to consumers). The purpose of this paper is to examine a second dimension of feature fit: complementarity (i.e. the extent to which a new feature is related and contributing to the main functionality of the product).

The role of feature fit is examined in two experimental studies (n=593) in the context of feature additions, and also for feature deletions.

The results showed that complementarity adds value to a product as an additional dimension of feature fit beyond congruence, complementarity matters more for a hedonic than for a utilitarian product, and complementarity can compensate for lack of congruence.

For a product developer, adding new features to a product offers an array of choices in terms of what feature(s) to include. Although having a large pool of potential features to choose from is attractive it can also prove problematic, as products may become overly complex and features do not fit well together. The results demonstrate the importance of both congruence and complementarity as predictors of feature fit when features are added to or deleted from products.

The purpose of this paper is to articulate a customer-centric logic to explain the strategic behavior of multi-product corporations whose portfolio of complementary product offerings belong to diverse industries.

The paper develops a theoretical framework to explain the heterogeneity in multi-product corporations ' motivation and ability to leverage the demand-side strategic assets developed in their home-markets to enter new markets and thereby improve their long-run corporate performance.

The paper includes implications for strategic behavior of multi-product corporations in various industrial sectors such as telecommunications, financial services, consumer discretionary and staples, real estate, and so on.

The profitable applicability of demand-side strategic assets to new contexts should be explained both by the motivation of multi-product consumers (to purchase a portfolio of complementary products from a diversified seller) as well as the motivation of multi-product corporations (to leverage their demand-side strategic assets to enter new markets).

This paper aims to examine three important questions: What would be the effects of pricing at the lower end of a wide vs narrow latitude of price acceptance (LPA) on consumer choice of the bundle? How would the nature of a bundle frame (i.e. discount on bundle vs discount on components) and discount frame (i.e. discount as absolute off vs discount as percentage off) influence the preference given to a price level that is at the wide or narrow end of the LPA? Would the effect be significantly different if the bundle components were complementary vs if they were non-complementary?

The authors carried out two studies using between-subject experimental design. In Study 1, the authors used 2 (LPA: wide/narrow) × 2 (complementarity: yes/no) × 2 (bundle frame: together/separate) design, and in Study 2, the authors replaced bundle frame with discount frame (i.e. absolute off/percentage off).

The authors find that the LPA effect is likely to outweigh the complementarity effect; however, a combined effect of complementarity and bundle frame is stronger than the LPA effect. Also, for a wide (narrow) LPA product bundle, absolute off (percentage off) discount frame is more attractive.

Managers should use bundling strategy with complementary products having wider LPA. In case of wide LPA and complementary products, both together and separate frame could be the best bundling strategy while in case of narrow LPA and complementary products, together frame could be the best bundling strategy.

The main contribution relates to the role LPA plays in consumer evaluation of a bundle offer and its interaction with complementarity and discount frame. The authors apply the range hypothesis principles (i.e. price-attractiveness judgments are based on a comparison of market prices to the endpoints of a range of evoked prices) in the bundling context and extend the earlier work in the area of complementarity and discount frame.

This paper aims to address the following problems: What are the firms’ optimal pricing and quality policies under three scenarios (no bundling, pure bundling and mixed bundling)? In what condition will one bundling strategy dominate the others? How does the degree of complementarity affect the firms’ decision?

Using the game theory, this study first establishes three models of bundling strategies: no bundling, pure bundling and mixed bundling and then obtains the optimal prices and quality decisions. This study uses numerical analysis to explore the relationships between the prices (demands and profits) and some key parameters and to obtain some valuable management complications.

Some interesting and valuable management implications are established: regardless of the degree of complementarity, adopting a pure bundling or mixed bundling strategy is better than separately selling an individual product; a high degree of complementarity leads to reduced profit in the no bundling and mixed bundling scenarios, whereas the condition in the pure bundling strategy is the opposite; and when the degree of complementarity is adequately large, choosing pure bundling strategy is more profitable.

On the one hand, this study does not calculate the profit sharing ratio, and hence, the equilibrium profit sharing ratio can be explored in future work. On the other hand, marketing efforts (e.g. advertising and promotion) can be included in the study.

This study derives the necessary conditions for the most effective bundling strategy that maximizes firm’s profits, and these conclusions can provide a decision reference to the bundling decisions of firms.

First, the optimal bundling strategies in a horizontal supply chain consisting of two firms is considered. Under the pure and mixed bundling strategies, the two firms sell the bundled product by building a cooperative program. Second, both the pricing policies and quality decisions of supply chain members under the different bundling strategies are studied.

This paper aims to examine the equilibrium limit price charged by a producer trying to deter the entry of a firm that can choose one of the two markets of complementary goods.

The authors model a dynamic game of incomplete information solved using a “perfect Bayesian equilibrium” approach.

It is shown that an incumbent will be willing to spend more resources – i.e. charge a lower limit price – to deter entry into its market as products become more complementary. This is because additional benefits are gained from entry deterrence by facing a more competitive market in the complementary product. The additional benefits of entry deterrence are shown to be a function of the degree of complementarity between goods.

A managerial implication of this article is that firms are willing to compete more fiercely to send an entrant to the other's incumbent market as the degree of complementarity between goods increases. An interesting conclusion that is derived from the above analysis is that managers should invest to understand the interdependences (e.g. complementarities) of the goods they sell, since the strategic variables chosen to compete may be affected by them, in some cases in a non‐trivial way.

From a public policy perspective, the main contribution of this paper is to point out that regulators who analyze predatory pricing, or other (probably) illegal “low‐price strategies”, should consider the degree of complementarity between goods and its effect on pricing.

As far as the authors' knowledge goes, there are no other papers that analyze entry decisions involving multiple markets of complementary goods.

As an increasingly popular tool for product exploration, online communities have an important impact on consumers’ purchasing decisions. The purpose of this study is to gain a deeper understanding of how visiting behaviors in online communities affect consumers’ offline purchasing behavior. The moderating role of two dimensions of consumer visiting behaviors (visiting depth and visiting breadth) also receives attention. Moreover, the impact of consumer visiting behaviors on offline sales for different types of online communities is also the focus of this paper.

To test the empirical model, the authors collected data on consumers’ visits to an online real estate platform with local housing sales data. In addition to the baseline regression analysis of the data with the help of Stata 17.0, the study also analyzes the robustness of the results through several methods.

The authors focus on an online community for newly-built housing and find that consumer visits to the focal online community have a positive impact on offline sales. Visiting breadth has a negative moderating effect on this relationship, and no statistically significant moderating effect is found for visiting depth. Further, our empirical exploration finds that consumer visits to competitive online communities have a positive impact on offline focal product sales, but visits to complementary online communities have no statistically significant effect on offline sales.

Our findings contribute to the understanding of consumers’ cross-channel purchasing behavior and provide new insights into how visiting behaviors in online communities affect consumers’ purchasing decisions.

Companies face the critical reliability problem of products due to the development of outsourcing. This study intends to provide some feasible solutions for a company to improve the reliability level of products.

The paper considers the reward and reliability decisions regarding a product made with two complementary components from two different suppliers: high-capable and low-capable. Two kinds of reliability improvement incentives (normal incentive and cost-sharing incentive) through which a manufacturer provides a reward and shares the reliability improvement cost with a supplier are discussed. As the Stackelberg leader, the manufacturer determines the strategy, while the suppliers are responsible for determining its reliability. Using a game-theoretic framework, four different contract scenarios are addressed. We develop analytical methods to better understand how the manufacturer decides the incentive mechanism to be used for the suppliers.

The results show that cost-sharing contracts do not always lead to a higher reliability level and more enormous profits. Setting a target reliability level is better for the manufacturer. The cost-sharing contract is beneficial for a high-capable supplier even though it does not directly participate in that kind of mechanism. A low-capable supplier gains more profit when the manufacturer provides incentive mechanisms that do not specify a target reliability level.

This paper investigates the reliability improvement mechanism used for complementary products and focuses on identifying the optimal decisions when demand is influenced by the gap between the product's failure rate and the standard failure rate.

This research aims to analyze whether the self-regulatory focus, a consumer variable, moderates the impact of incongruity on consumer evaluations. A congruity or typicality arises when a product (e.g. champagne) is consistently consumed in certain occasions or is used in conjunction with other specific products. This typicality may remind people of the product with regard to specific contexts but may limit the product’s overall versatility. In line with the moderate incongruity effect, there may be an opportunity to extend a product usage to situations associated with moderate incongruity or atypicality.

Study 1 is a 2 (self-regulatory focus: promotion/prevention) × 3 (atypicality of product usage context: typical/moderately atypical/highly atypical) between-subject experimental design. Study 2 replicated Study 1 with a sample of different age, three different champagne usage contexts and a manipulation of self-regulatory focus. Study 3 is a 2 (self-regulatory focus: promotion/prevention) × 3 (atypicality of product usage context: typical/moderately atypical/highly atypical) × 2 (product replicates: red wine/pearl jewelry) mixed design with self-regulatory focus and atypicality as between-subjects factors and product replicates as a within-subject variable.

Promotion-focus consumers’ product evaluations for the moderate incongruity or atypicality are higher than those for congruity and extreme incongruity. The relationship takes an inverted-U shape. Prevention-focus consumers’ product evaluations decrease monotonically as congruity decreases. Moreover, compared with prevention-focus individuals, promotion-focus ones evaluate moderate incongruity more favorably.

There are some limitations to this research. First, it only investigates the moderate incongruity effect with regard to product use occasions and complementary products. To increase the external validity of self-regulatory focus as a moderator of incongruity-evaluation relationships, it remains to future research to extend the research setting to products which have been tightly bonded to specific users, locations, seasons or times. Second, although the experimental designs are similar to previous ones, the scenarios are nevertheless imaginary. Therefore, participants’ involvement levels in all manipulated situations, as well as the quality of their answers, remain unknown.

First, brand managers should target only promotion-focus customers to obtain the moderate incongruity effect, but should maintain a consistent marketing strategy for prevention-focus customers. Second, because both promotion- and prevention-focus individuals have unfavorable evaluations of extreme incongruity, drastic changes in marketing strategies should be avoided. Third, people from a Western (Eastern) culture exhibit more promotion (prevention) focus orientation. Therefore, the type of culture can serve as an indicator of regulatory orientation. Fourth, a gain-framed appeal is recommended for realizing the moderate incongruity effect from promotion-focus consumers. Finally, promotion-focus (vs prevention-focus) consumers will welcome a moderately nonalignable than alignable product upgrade.

Most prior research on goal orientation has found that promotion-focus (vs. prevention-focus) individuals are more inclined to adopt new products, but both types of people are unlikely to purchase new products when the associated risks become salient, while the research related to schema incongruity has suggested that the moderate incongruity effect may not exist when consumers perceive high risks. By combining both schema congruity and self-regulatory focus theories, this research provides a more precise picture of how and why a person’s goal orientation influences the relative salience of risks and benefits with an increase in incongruity.