9th International Conference on Business Servitization

Vendrell‐Herrero, Ferran; Bustinza, Óscar F.; Opazo‐Basáez, Marco

doi:10.3926/serv2022

Cited by 1 publication

(1 citation statement)

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“…Recent investigations on the degree of price discrimination have revealed remarkable variations, due mainly to the entry of technologies enabling connections between individual or segmented markets at global level, such as social media, digital shopping channels, and digital banking (Cortiñas et al, 2019;Jenkinson, 2009;Stole, 2007;Vendrell-Herrero et al, 2018). In addition, traditional production models are increasingly exposed to these technologies, giving rise to mixed models that challenge theoretical concepts and encourage the development of new strategies yet to be defined and appropriated.…”

Section: Operations and Price Strategiesmentioning

confidence: 99%

Consumer goods: from mass consumption to servitization

Monroy-Osorio¹,

Opazo‐Basáez²,

Vendrell‐Herrero³

2023

Handbook of Industrial Development

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This chapter draws on price discrimination and historical production models to build price and operations strategy typologies in manufacturing. Historically, manufacturing firms have been unable to find production models that achieve optimal price and operations strategies.For instance, craft production could possibly achieve optimal price discrimination (firstdegree discrimination) but lower operational performance. In contrast, mass production dramatically improved operational performance simply by offering volume discounts to attract demand (second-degree discrimination) or segmentation (mass customization), which could only achieve third-degree price discrimination. However, this research presents a relatively new production model that can offer price and operational optimality jointly, i.e., the servitization of manufacturing. In servitization, manufacturing firms add services to foster closer and richer relationships with customers (front-end), and digital technologies to improve logistics and inventory management (back-end). Here it is argued that, by doing so, servitization enables first-degree price discrimination to be established via product customization, and production efficiency via built-in digital production facility and product capabilities.

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Section: Operations and Price Strategiesmentioning

confidence: 99%