T here exist capital constraints in many distribution channels. We examine a channel consisting of one manufacturer and one retailer, where the retailer is capital constrained. The retailer may fund its business by borrowing credit either from a competitive bank market or from the manufacturer, provided the latter is willing to lend. When only one credit type (either bank or trade credit) is viable, we show that trade credit financing generally charges a higher wholesale price and thus becomes less attractive than bank credit financing for the retailer. When both bank and trade credits are viable, the unique equilibrium is trade credit financing if production cost is relatively low but is bank credit financing otherwise. We also study the case where both the retailer and the manufacturer are capital constrained and demonstrate that, to improve the overall supply chain efficiency, the bank should finance the manufacturer if production cost is low but finance the retailer otherwise. Our analysis further suggests that the equilibrium region of trade credit financing shrinks as demand variability or the retailer's internal capital level increases.

The tailoring of a firm's marketing mix to the individual customer is the essence of one-to-one marketing. In this paper, we distinguish between two forms of one-to-one marketing: personalization and customization. Personalization occurs when the firm decides what marketing mix is suitable for the individual. It is usually based on previously collected customer data. Customization occurs when the customer proactively specifies one or more elements of his or her marketing mix. We summarize key challenges and knowledge gaps in understanding both firm and customer choices in one-to-one markets. We conclude with a summary of research opportunities.

In a product market where consumers are open to uninformed purchases, we study competition between a traditional and an online retailer in the presence of showrooming. Several results are obtained. First, showrooming intensifies competition and lowers both firms’ profits, thus supporting traditional and online retailers’ recent strategy of carrying more exclusive varieties. Second, lowering consumer search costs may aggravate showrooming and decrease the traditional retailer’s profits for intermediate search costs. Third, opening an online store expands the demand of the traditional retailer but intensifies competition, thus lowering its profits under certain conditions. Fourth, a return policy by the online retailer alleviates showrooming and relaxes competition but weakly reduces its demand, increasing its profits only for intermediate search costs. The return policy (weakly) increases the traditional retailer’s profits. Fifth, when search cost is not high enough, price matching by the traditional retailer may also intensify competition and hurt its profits. We then examine how webrooming interacts with showrooming. When webrooming resolves partial match uncertainty, it may increase both firms’ profits by inducing more consumers to participate. The online appendix is available at https://doi.org/10.1287/mksc.2018.1084 .

The Internet provides an unprecedented capability for sellers to learn about their customers and offer custom products at special prices. In addition, customization is more feasible today because of advances in manufacturing technologies that have improved sellers' manufacturing flexibility. We first develop a model of product customization and flexible pricing to incorporate the salient roles of the Internet and flexible manufacturing technologies in reducing the costs of designing and producing tailored consumer goods. We show how a monopoly seller may earn the highest profits by producing both standard and custom products and can raise prices for both types of products as customization and information collection technologies improve. Simultaneous adoption of customization in a duopoly reduces the differentiation between their standard products but does not intensify price competition. Compared with a two-facility monopolist, the duopoly may underinvest in customization. Consumer surplus improves after sellers adopt customization but does not monotonically increase as customization technologies advance. When firms face a fixed entry cost and adopt customization sequentially, the first entrant always achieves an advantage and may be able to deter subsequent entry by choosing its customization scope strategically.Mass Customization, Price Discrimination, Product Differentiation, Internet Economics

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