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Open Access
Article
Publication date: 21 March 2024

Xiaogang Cao, Cuiwei Zhang, Jie Liu, Hui Wen and Bowei Cao

The purpose of this article is based on the unit patent license fee model in the closed-loop supply chain.

Abstract

Purpose

The purpose of this article is based on the unit patent license fee model in the closed-loop supply chain.

Design/methodology/approach

This paper analyzes the impact of the bundling strategy of the retailer selling new products and remanufactured products on the closed-loop supply chain under the condition that the original manufacturer produces new products and the remanufacturer produces remanufacturing products.

Findings

The results show that alternative products can be bundled, and in many cases, the bundling of remanufactured products and new products is better than selling alone.

Originality/value

If the retailer chooses bundling, for the remanufacturer, when certain conditions are met, the benefits of bundling are greater than the separate sales at that time; for the original manufacturer, when the recycling price sensitivity coefficient is high, the bundling is better than separate sales.

Details

Modern Supply Chain Research and Applications, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2631-3871

Keywords

Article
Publication date: 15 December 2023

Wanting Hu and Guangwei Deng

The purpose of this study is to provide an optimal joint strategy of multi-period pricing and sales effort for a retailer with a logit choice demand in an integrated channel.

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Abstract

Purpose

The purpose of this study is to provide an optimal joint strategy of multi-period pricing and sales effort for a retailer with a logit choice demand in an integrated channel.

Design/methodology/approach

Customer demand is characterized by a logit choice model, it varies over time and is influenced by price and sales effort. The multi-period decision model for the retailer is constructed using a discrete-time dynamic programming method to determine the optimal price and sales effort in each period.

Findings

When the inventory level does not exceed a certain threshold, decreasing price and increasing sales effort over time or as inventory level increases are the optimal strategies. However, once the inventory level exceeds the threshold, the optimal strategy is to maintain both price and sales effort constant as the inventory level changes or to increase price and decrease sales effort over time. Additionally, the greater the influence of sales effort on demand or the higher the arrival rate of customers, the higher the optimal price and the greater the optimal sales effort level.

Originality/value

This study contributes to the existing research on dynamic pricing and sales effort in integrated channels by incorporating a logit choice model. Furthermore, it provides valuable management insights for retailers operating in an integrated channel to make pricing and sales effort decisions based on inventory level and time period.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Abstract

Details

Economics of Art and Culture Invited Papers at the 12th International Conference of the Association of Cultural Economics International
Type: Book
ISBN: 978-0-44450-995-6

Article
Publication date: 8 November 2023

Yongfu He, Harmen Oppewal, Yuho Chung and Ling Peng

This paper aims to study how price and sales level information influence consumer product perceptions and choices in online settings. It, in particular, tests whether displaying…

Abstract

Purpose

This paper aims to study how price and sales level information influence consumer product perceptions and choices in online settings. It, in particular, tests whether displaying sales level information increases consumer price sensitivity, which is a potential strategic risk to retailers.

Design/methodology/approach

Study 1 uses eBay data to investigate whether the interaction effects between price and sales level can be observed in an existing market. Study 2 involves online experiments across three product categories. Participants choose from product pairs that are shown with either the same or different prices and with no, the same or different sales levels.

Findings

Study 1 shows strong effects of a product’s displayed sales and price level on its daily sales but finds no interaction effect. Study 2 shows strong effects of price and sales levels on product choice but similarly finds no evidence that sales level information influences consumer price sensitivity, although it reveals an effect on quality perceptions. The results show how perceptions of quality, sacrifice and popularity mediate the effects of price and sales level information on product choice.

Research limitations/implications

Study 1 has limited control over prices and sales levels. Study 2 involves only hypothetical choices.

Practical implications

These findings indicate that businesses can use sales level information to manage consumer product quality perceptions and choices without having to be concerned that this will make consumers more price-sensitive.

Originality/value

To the best of the authors’ knowledge, this paper is the first to investigate how sales level information affects consumer responses to price differences in online contexts.

Details

European Journal of Marketing, vol. 57 no. 12
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 31 July 2007

Tom Nagle and John Hogan

The article seeks to discuss how and why it is possible to motivate a sales force to follow the guidelines of a consistent pricing policy that promotes profitability and increases…

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Abstract

Purpose

The article seeks to discuss how and why it is possible to motivate a sales force to follow the guidelines of a consistent pricing policy that promotes profitability and increases margin, and which is beneficial to both providers and consumers of products and services.

Design/methodology/approach

Theories and examples stemming from the authors' research and experience with the subject matter are stated. The sales incentive theory in particular is supported by a specific formula that determines the sales credit someone would earn for making a sale based on profit contribution rather than price.

Findings

While employing flexible pricing policies in competitive markets is enticing for suppliers, it can ultimately lead to price erosion and falling margins. A sound pricing policy lets customers know that the price they are paying is related to the value they receive, and keeps salespeople from dealing with long, complicated negotiation processes. While many managers worry that their sales force won't accept such a change, most salespeople will adopt it if the new policy is implemented well. The key is to recompense salespeople for driving profitability instead of just revenue and sales volume.

Originality/value

This article addresses an ongoing problem that many companies face as they try to win and maintain business using flexible pricing policies to cut customer‐specific deals. It discusses how and why it is possible to change this behavior using sales incentives that reward profitable sales rather than just sales volume.

Details

Business Strategy Series, vol. 8 no. 5
Type: Research Article
ISSN: 1751-5637

Keywords

Article
Publication date: 10 May 2019

Sof Thrane, Martin Jarmatz, Michael Fetahi Laursen and Katrine Kornmaaler

The purpose of this paper is to analyze price decision-making through a practice-based approach. The paper investigates the micro-level practices used to arrive at sales price

Abstract

Purpose

The purpose of this paper is to analyze price decision-making through a practice-based approach. The paper investigates the micro-level practices used to arrive at sales price decisions.

Design/methodology/approach

In this study, a qualitative study approach is used to develop findings abductively. The data are gathered through an in-depth case study at two firms: semi-structured interviews, meeting observations, shadowing and pricing documents.

Findings

This paper finds that pricing is a collective decision-making process involving multiple actors across the organization. The case firms work on solving information, coordination and control problems to arrive at sales prices by enacting interlinked practices. Pricing is therefore neither a structure nor a single decision but a process consisting of multiple micro-level practices that enable firms to make pricing decisions.

Originality/value

This paper develops a practice-based approach to pricing that conceptualize the micro-level practices used to to make pricing decisions in the face of information, coordination and control problems. The paper is interdisciplinary and adds to the accounting literature and the market literature, which have tended to study pricing as a decision made by one decision maker, and not as an organizational process where multiple actors share, evaluate, interpret and coordinate information and decisions.

Details

Qualitative Research in Accounting & Management, vol. 16 no. 1
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 8 August 2016

Rafay Ishfaq, Uzma Raja and Shashank Rao

The purpose of this paper is to evaluate the interaction between inventory availability (scarcity) and pricing levels (price-leadership (PL)), and its effect on product returns in…

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Abstract

Purpose

The purpose of this paper is to evaluate the interaction between inventory availability (scarcity) and pricing levels (price-leadership (PL)), and its effect on product returns in the internet retail supply chain. Specifically, this paper investigates how supply chain managers can use inventory (seller-induced scarcity) and pricing (PL) levers to control product returns.

Design/methodology/approach

Empirical data of sales and product returns from an internet retailer is analyzed to identify the scale of the effect that product scarcity and PL has on product returns. These factors are considered in developing a sales-return process model which is used with empirical data in a simulation study. The study evaluates changes in product returns for different policy settings related to PL and inventory levels. Findings of the simulation study are validated using statistical analysis of empirical data.

Findings

PL and seller-induced product scarcity affect the rate of product returns; however, the scale of this effect depends on inventory and pricing decisions. The results identify an inflection boundary based on scarcity and PL levels which reverses this effect. This reversal is explained by underlying principles at play regarding buyers’ valuation of the sale and corresponding product attributes.

Practical implications

Supply chain managers in internet retail can leverage lower inventory under the seller-induced scarcity approach to improve revenues. However, reducing inventory levels beyond a threshold is counterproductive, due to an associated increase in product returns. Similarly, setting market competitive prices (PL) can help reduce product returns. Under the seller-induced scarcity condition, this effect is reversed for inventory levels below a threshold. Retailers can implement the methodology developed in this paper to identify the inventory-price threshold that can help increase revenues while keeping the rate of product returns at a manageable level.

Originality/value

This research extends prior work regarding the role of product scarcity and pricing on product returns and develops a deeper understanding of how these factors can be managed to control product returns in the internet retail setting.

Details

The International Journal of Logistics Management, vol. 27 no. 2
Type: Research Article
ISSN: 0957-4093

Keywords

Article
Publication date: 12 September 2016

Anup Kumar, Amit Adlakha and Kampan Mukherjee

The purpose of this paper is to capture the dynamic variations in sales of a product based upon the dynamic estimation of the time series data and propose a model that imitates…

2105

Abstract

Purpose

The purpose of this paper is to capture the dynamic variations in sales of a product based upon the dynamic estimation of the time series data and propose a model that imitates the price discounting and promotion strategy for a product category in a retail organization.

Design/methodology/approach

Time series data relating to sales has been used to model the sales estimates using moving average and proportional and derivative control; thereafter a sales forecast is generated to estimate the sales of a particular product category. This provides valuable inputs for taking lot sizing decisions regarding procurement of the products and selection of suppliers. A hybrid model has been proposed and explained with a hypothetical case, which considerably impacts the sales promotion and intelligent pricing decisions.

Findings

A conceptual framework is developed for modeling the dynamic price discounting strategy in retail using fuzzy logic. The model imitates sales promotion and price discounting strategy. This has helped minimize the inventory cost thereby keeping the profitability of the retail organization intact.

Research limitations/implications

There is no appropriate empirical data to verify the models. In light of the research approach (modeling based upon historical time series data of a particular product category) that was undertaken, there is a possibility that the research results may be valid for the product category that was selected. Therefore, the researchers are advised to test the proposed propositions further for other product categories.

Originality/value

The study provides valuable insight on how to use the real-time sales data for designing a dynamic automated model for product sales promotion and price discounting strategy using fuzzy logic for a retail organization.

Details

Industrial Management & Data Systems, vol. 116 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 1 January 2005

Ron D'Andrea

To identify the keys to executing profitable sales negotiations based on analysis of the negotiation approaches of high‐performing salespeople.

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Abstract

Purpose

To identify the keys to executing profitable sales negotiations based on analysis of the negotiation approaches of high‐performing salespeople.

Design/methodology/approach

BayGroup International (a leading global sales consultancy) conducted a research study involving 2,000 salespeople at all levels from Fortune 500 companies across a wide range of industries. Respondents participated in an actual buy‐sell negotiation. BayGroup collected and analyzed data on the negotiation approaches taken by study participants, and determined how the approaches taken by the sales professionals who negotiated the best agreements differed from others in the study.

Findings

BayGroup concluded that high performers raise their customers’ perception of value by using six fundamental strategies, summarized in the form of principles of sales negotiation. The paper not only describes the principles, but also reveals the unique, counterintuitive manner in which high‐performing salespeople plan and execute profitable sales strategy.

Practical implications

Owing to increasing pressure to improve earnings (and share prices), value‐based sales negotiation has become more critical than ever to corporate success. Use of the research conclusions and analysis from this article can provide useful guidance to sales professionals and their managers on how to execute more profitable customer agreements throughout the sales process.

Originality/value

The importance of “selling value, not price” has been fully embraced by the world's leading sales organizations, but effective approaches to implementing behavioral change in this area have been rare. This paper presents provocative findings that suggest new ways to approach this critical strategic challenge.

Details

Industrial and Commercial Training, vol. 37 no. 1
Type: Research Article
ISSN: 0019-7858

Keywords

Article
Publication date: 1 June 2004

Erkki K. Laitinen

The study develops a mathematical model of the firm to derive theoretical foundations for the balanced scorecard concept (BSC). The model is based on several parts which are…

1504

Abstract

The study develops a mathematical model of the firm to derive theoretical foundations for the balanced scorecard concept (BSC). The model is based on several parts which are integrated into a company model. This model includes the demand function, the production function and the objective function of the firm which are depicted by traditional microeconomic concepts. Demand is presented as a function of price and customer relationship management (CRM) costs. Production is assumed to depend on labor, capital, and development and learning (D&L) costs. Simple dynamics is included both in the demand and production function. The strategy of the firm is depicted by the objective function based on profit and net sales. The output variables of the model are classified as the four perspectives of BSC. The effects of the objectives (strategies) on the importance (shadow prices) of the constraints are analysed. It is shown that a change in the objectives may alter the order of their importance. Thus, a change in the strategy should be accompanied with a change in the focus of BSC. Furthermore, non‐financial and financial performance ratios may change in opposite directions, when the strategy is shifted towards revenue maximization. Thus, inconsistencies with the interpretation of cause and effects may emerge, when the strategy is shifted. Numerical examples are presented to demonstrate the results.

Details

Managerial Finance, vol. 30 no. 6
Type: Research Article
ISSN: 0307-4358

Keywords

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