IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v59y2013i5p1196-1212.html
   My bibliography  Save this article

Facilitating Fit Revelation in the Competitive Market

Author

Listed:
  • Zheyin (Jane) Gu

    (State University of New York, Albany, New York 12222)

  • Ying Xie

    (University of Texas at Dallas, Richardson, Texas 75080)

Abstract

This study examines firms' strategic decisions in the competitive market regarding whether to engage in marketing activities to assist consumers in finding the fit between their personal tastes and products' horizontal attributes. We find that competitive firms' strategies to facilitate fit revelation critically depend on the product qualities they offer. In particular, a firm offering a high-quality product is more likely to facilitate fit revelation in the competitive market than it would as a market monopolist, whereas a firm offering a low-quality product is less likely to do so. In addition, the firm offering the high-quality product implements fit-revealing activities in a greater intensity than its rival that offers the low-quality product, if the quality difference between the two products is small and both products' qualities are sufficiently high. This paper was accepted by J. Miguel Villas-Boas, marketing.

Suggested Citation

  • Zheyin (Jane) Gu & Ying Xie, 2013. "Facilitating Fit Revelation in the Competitive Market," Management Science, INFORMS, vol. 59(5), pages 1196-1212, May.
    • Handle: RePEc:inm:ormnsc:v:59:y:2013:i:5:p:1196-1212
    DOI: 10.1287/mnsc.1120.1594
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.1120.1594
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.1120.1594?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John R. Hauser & Steven M. Shugan, 2008. "Defensive Marketing Strategies," Marketing Science, INFORMS, vol. 27(1), pages 88-110, 01-02.
    2. Monic Sun, 2011. "Disclosing Multiple Product Attributes," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(1), pages 195-224, March.
    3. Dmitri Kuksov & Yuanfang Lin, 2010. "Information Provision in a Vertically Differentiated Competitive Marketplace," Marketing Science, INFORMS, vol. 29(1), pages 122-138, 01-02.
    4. Lynne M. Pepall, 2002. "The Simple Economics of Brand Stretching," The Journal of Business, University of Chicago Press, vol. 75(3), pages 535-552, July.
    5. Birger Wernerfelt, 1994. "On the Function of Sales Assistance," Marketing Science, INFORMS, vol. 13(1), pages 68-82.
    6. Ganesh Iyer & David Soberman & J. Miguel Villas-Boas, 2005. "The Targeting of Advertising," Marketing Science, INFORMS, vol. 24(3), pages 461-476, May.
    7. Lewis, Tracy R & Sappington, David E M, 1994. "Supplying Information to Facilitate Price Discrimination," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 309-327, May.
    8. Simon P. Anderson & Régis Renault, 2006. "Advertising Content," American Economic Review, American Economic Association, vol. 96(1), pages 93-113, March.
    9. Heski Bar‐Isaac & Guillermo Caruana & Vicente Cuñat, 2010. "Information Gathering and Marketing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 375-401, June.
    10. Frédéric Koessler & Régis Renault, 2012. "When does a firm disclose product information?," RAND Journal of Economics, RAND Corporation, vol. 43(4), pages 630-649, December.
    11. Dmitri Kuksov & J. Miguel Villas-Boas, 2010. "When More Alternatives Lead to Less Choice," Marketing Science, INFORMS, vol. 29(3), pages 507-524, 05-06.
    12. Bester, Helmut & Petrakis, Emmanuel, 1993. "The incentives for cost reduction in a differentiated industry," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 519-534.
    13. Simon P. Anderson & Regis Renault, 1999. "Pricing, Product Diversity, and Search Costs: A Bertrand-Chamberlin-Diamond Model," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 719-735, Winter.
    14. Kissan Joseph & Murali Mantrala, 2009. "A model of the role of free drug samples in physicians’ prescription decisions," Marketing Letters, Springer, vol. 20(1), pages 15-29, March.
    15. Gregory S. Crawford & Matthew Shum, 2005. "Uncertainty and Learning in Pharmaceutical Demand," Econometrica, Econometric Society, vol. 73(4), pages 1137-1173, July.
    16. K. Sridhar Moorthy, 1988. "Product and Price Competition in a Duopoly," Marketing Science, INFORMS, vol. 7(2), pages 141-168.
    17. Sridhar Moorthy & Kannan Srinivasan, 1995. "Signaling Quality with a Money-Back Guarantee: The Role of Transaction Costs," Marketing Science, INFORMS, vol. 14(4), pages 442-466.
    18. Dmitri Kuksov & Ying Xie, 2010. "Pricing, Frills, and Customer Ratings," Marketing Science, INFORMS, vol. 29(5), pages 925-943, 09-10.
    19. John R. Hauser, 1988. "Note—Competitive Price and Positioning Strategies," Marketing Science, INFORMS, vol. 7(1), pages 76-91.
    20. Robert, Jacques & Stahl, Dale O, II, 1993. "Informative Price Advertising in a Sequential Search Model," Econometrica, Econometric Society, vol. 61(3), pages 657-686, May.
    21. Scott Fay & Jinhong Xie, 2010. "The Economics of Buyer Uncertainty: Advance Selling vs. Probabilistic Selling," Marketing Science, INFORMS, vol. 29(6), pages 1040-1057, 11-12.
    22. Dina Mayzlin & Jiwoong Shin, 2011. "Uninformative Advertising as an Invitation to Search," Marketing Science, INFORMS, vol. 30(4), pages 666-685, July.
    23. Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2009. "Optimal Restocking Fees and Information Provision in an Integrated Demand-Supply Model of Product Returns," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 577-594, December.
    24. Yubo Chen & Jinhong Xie, 2008. "Online Consumer Review: Word-of-Mouth as a New Element of Marketing Communication Mix," Management Science, INFORMS, vol. 54(3), pages 477-491, March.
    25. Kinshuk Jerath & Serguei Netessine & Senthil K. Veeraraghavan, 2010. "Revenue Management with Strategic Customers: Last-Minute Selling and Opaque Selling," Management Science, INFORMS, vol. 56(3), pages 430-448, March.
    26. Pradeep Bhardwaj & Yuxin Chen & David Godes, 2008. "Buyer-Initiated vs. Seller-Initiated Information Revelation," Management Science, INFORMS, vol. 54(6), pages 1104-1114, June.
    27. Scott Fay & Jinhong Xie, 2008. "Probabilistic Goods: A Creative Way of Selling Products and Services," Marketing Science, INFORMS, vol. 27(4), pages 674-690, 07-08.
    28. repec:dau:papers:123456789/12406 is not listed on IDEAS
    29. repec:hal:pseose:hal-00813051 is not listed on IDEAS
    30. Jinhong Xie & Steven M. Shugan, 2001. "Electronic Tickets, Smart Cards, and Online Prepayments: When and How to Advance Sell," Marketing Science, INFORMS, vol. 20(3), pages 219-243, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zheyin (Jane) Gu & Giri K. Tayi, 2015. "Consumer mending and online retailer fit-uncertainty mitigating strategies," Quantitative Marketing and Economics (QME), Springer, vol. 13(3), pages 251-282, September.
    2. Dmitri Kuksov & Yuanfang Lin, 2010. "Information Provision in a Vertically Differentiated Competitive Marketplace," Marketing Science, INFORMS, vol. 29(1), pages 122-138, 01-02.
    3. Zheyin (Jane) Gu & Yunchuan Liu, 2013. "Consumer Fit Search, Retailer Shelf Layout, and Channel Interaction," Marketing Science, INFORMS, vol. 32(4), pages 652-668, July.
    4. Onesun Steve Yoo & Rakesh Sarin, 2018. "Consumer Choice and Market Outcomes Under Ambiguity in Product Quality," Marketing Science, INFORMS, vol. 37(3), pages 445-468, May.
    5. Yuanfang Lin & Amit Pazgal, 2016. "Hide Supremacy or Admit Inferiority—Market Entry Strategies in Response to Consumer Informational Needs," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 3(2), pages 94-103, June.
    6. Bing Jing, 2016. "Lowering Customer Evaluation Costs, Product Differentiation, and Price Competition," Marketing Science, INFORMS, vol. 35(1), pages 113-127, January.
    7. Pedro M. Gardete & Liang Guo, 2021. "Prepurchase Information Acquisition and Credible Advertising," Management Science, INFORMS, vol. 67(3), pages 1696-1717, March.
    8. Monic Sun & Rajeev K. Tyagi, 2020. "Product Fit Uncertainty and Information Provision in a Distribution Channel," Production and Operations Management, Production and Operations Management Society, vol. 29(10), pages 2381-2402, October.
    9. Zhang, Tao & Li, Gang & Lai, Kin Keung & Leung, John W.K., 2018. "Information disclosure strategies for the intermediary and competitive sellers," European Journal of Operational Research, Elsevier, vol. 271(3), pages 1156-1173.
    10. Liang Guo, 2020. "Upstream Exploitation and Strategic Disclosure," Marketing Science, INFORMS, vol. 39(5), pages 923-938, September.
    11. Liang Guo, 2021. "Partial Unraveling and Strategic Contract Timing," Management Science, INFORMS, vol. 67(12), pages 7719-7736, December.
    12. Dmitri Kuksov & Chenxi Liao, 2019. "Opinion Leaders and Product Variety," Marketing Science, INFORMS, vol. 38(5), pages 812-834, September.
    13. Wu, Lingli & Deng, Shiming & Jiang, Xuan, 2018. "Sampling and pricing strategy under competition," Omega, Elsevier, vol. 80(C), pages 192-208.
    14. Dina Mayzlin & Jiwoong Shin, 2011. "Uninformative Advertising as an Invitation to Search," Marketing Science, INFORMS, vol. 30(4), pages 666-685, July.
    15. Petrikaitė, Vaiva, 2022. "Escaping search when buying," International Journal of Industrial Organization, Elsevier, vol. 82(C).
    16. Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2011. "Managing Consumer Returns in a Competitive Environment," Management Science, INFORMS, vol. 57(2), pages 347-362, February.
    17. Archishman Chakraborty & Rick Harbaugh, 2014. "Persuasive Puffery," Marketing Science, INFORMS, vol. 33(3), pages 382-400, May.
      • Archishman Chakraborty & Rick Harbaugh, 2012. "Persuasive Puffery," Working Papers 2012-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    18. Yogesh V. Joshi & Andres Musalem, 2021. "When Consumers Learn, Money Burns: Signaling Quality via Advertising with Observational Learning and Word of Mouth," Marketing Science, INFORMS, vol. 40(1), pages 168-188, January.
    19. Upender Subramanian & Ram C. Rao, 2016. "Leveraging Experienced Consumers to Attract New Consumers: An Equilibrium Analysis of Displaying Deal Sales by Daily Deal Websites," Management Science, INFORMS, vol. 62(12), pages 3555-3575, December.
    20. Mohsen Foroughifar & David Soberman, 2021. "Is More Precise Word of Mouth Better for a High Quality Firm? ... Not Always," Papers 2105.01040, arXiv.org, revised Apr 2022.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:59:y:2013:i:5:p:1196-1212. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.