Riding successive product diffusion waves. Building a tsunami via upgrade-rebate programs

Avagyan, Vardan; Esteban-Bravo, Mercedes; Vidal-Sanz, Jose M.

doi:10.1016/j.ijresmar.2016.01.007

Cited by 4 publications

(2 citation statements)

References 28 publications

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“…However, the competition of two generations of products in the market and the threat of the previous generation products to the market share of the next generation products will be alleviated and even disappeared as the time interval extension. First, over time a previous product increases the risk of obsolescence, reducing its competitiveness and impelling new consumers to give up buying the previous product (Avagyan et al, 2016). Newer products usually have the core functionality of previous generations plus some new features (Gunther & Stummer, 2018).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

Do positive reviews of a previous‐generation product benefit a next‐generation product?

Yan

Zou²,

Yao

et al. 2021

J of Consumer Behaviour

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Drawing on consumer inferences theory, our research examines the spillover effects of positive reviews from a multi‐generation product perspective and mainly explores the moderating role of time interval and price growth rate. The results show the spillover effects of positive reviews would be affected or even changed by entering timing and prices of new products. We find that the number of a previous‐generation product's positive reviews has an inverted U‐shaped relation with sales performance of a next‐generation product when the time interval between the two generational products is short. Further, we reveal that this relation is positive when the time interval between the two generations is long. Moreover, the positive influence of the number of a previous‐generation product's positive reviews on the sales performance of a next‐generation product will be weaker as the price growth rate of a next‐generation product rises. We test our hypotheses using online sales data of the Chinese mobile market. Our empirical analysis contributes to the research of multi‐generational products and online reviews, and enriches the consumer inferences theory.

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Section: Theory and Hypothesesmentioning

confidence: 99%

Do positive reviews of a previous‐generation product benefit a next‐generation product?

Yan

Zou²,

Yao

et al. 2021

J of Consumer Behaviour

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show abstract

“…For example, Cheng and Cryder (2018) found that consumers may benefit twice from a rebate (double mental discounting): once when they purchase the item and deduct the amount of the rebate from the retail price, and a second time when they actually receive the rebate. Future research may also consider alternative strategies to increase profits through rebates that are applied to bundle purchases (Popkowski Leszczyc & Häubl, 2010;Jeitschko, Jung, & Kim, 2017), or upgrade-rebate strategies used to stimulate sales for new generations of products, such as a new iPhone (Avagyan, Esteban-Bravo, & Vidal-Sanz, 2016).…”

Section: Summary and Implicationsmentioning

confidence: 99%

A Joint Optimal Model of Pricing, Rebate Value, and Redemption Hassle

Zhang

Leszczyc

et al. 2019

Decision Sciences

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Although rebates are widely employed, redemption is not effort free, and the hassle of redemption is an important decision variable for buyers. The current research examines the impact of hassle cost on optimal rebate strategy. An analytical model is developed that simultaneously determines the supply chain's optimal price, level of rebate value, and rebate‐redemption hassle, while allowing for slippage (as consumers may forget to redeem a rebate), in both a centralized and decentralized supply chain. Results show that the level of rebate‐redemption hassle plays a key role in segmenting the market into rebate and nonrebate purchasers. Although in a centralized supply chain redemption hassle should increase in a convex manner with valuations, no such restrictions exist in a decentralized supply chain. This difference is due to double marginalization, which results in higher retail prices in the decentralized supply chain. Rebates can be used to reduce this double marginalization. Furthermore, a manufacturer in a decentralized supply should offer a more attractive rebate than in a centralized supply chain. We also find that changes in the supply chain's optimal price and rebate strategy are nonlinear and nonmonotonic in both production cost and elasticity for consumers’ disutility for hassle. Finally, findings are all supported by results from numerical analyses. Overall, our work contributes theoretically and managerially to the study of rebates by jointly considering price, rebate value, and redemption hassle.

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Consumer rebate strategy for a manufacturer selling price‐quality differentiated products

Majumder,

Nielsen,

Maity

et al. 2023

Int Trans Operational Res

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In this study, we consider a scenario where a manufacturer offers two price‐quality differentiated products, which we label “regular” and “upgraded,” through a retailer and uses direct rebates to customers to stimulate sales. Therefore, the critical question posed is: If a customer rebate is provided, should it be on the regular, upgraded, or both products? Consequently, we compare the outcomes of eight options from a manufacturer's perspective. The analysis reveals that the manufacturer's choice is not straightforward. Rebates on both products can lead to higher profit for the manufacturer if the proportion of rebate‐sensitive consumers is moderate. However, product quality becomes critical as the proportion of rebate‐sensitive consumers increases. If the quality of the regular product is too high or too low, then the manufacturer may use a rebate only on the regular product; otherwise, it should be on only an upgraded product. The rebate value on an upgraded product continuously decreases with regular product quality if a rebate is introduced only on an upgraded product, but its nature changes in other contexts. Quality improvement investment is also a critical factor that affects the manufacturer's decision. Because an analytical assessment of the effectiveness of rebate promotion under the price‐quality consideration is still missing in the literature, the decision to initiate a rebate promotion might be considered on an ad hoc basis. Therefore, the explicit thresholds identified in this study can help managers to make rebate decisions comprehensively.

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Riding successive product diffusion waves. Building a tsunami via upgrade-rebate programs

Cited by 4 publications

References 28 publications

Do positive reviews of a previous‐generation product benefit a next‐generation product?

Do positive reviews of a previous‐generation product benefit a next‐generation product?

A Joint Optimal Model of Pricing, Rebate Value, and Redemption Hassle

Consumer rebate strategy for a manufacturer selling price‐quality differentiated products

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