Learning from customer interaction: How merchants create price-level propositions for experience goods in hybrid market environments

MÀRQUETING – Article available at Computers in Human Behaviour


Learning from customer interaction: How merchants create price-level propositions for experience goods in hybrid market environments


For hybrid merchants, who sell goods simultaneously through digital media and conventional channels, creating a price proposition is a major and controversial decision. We model the interaction between hybrid merchants and their customers within the context of an experience goods market; and we study how merchants and customers both learn from this interaction to make optimum decisions. The equilibrium solution of the proposed game shows that experience goods’ loyal customers tend to switch channels, make repeat purchases online, and avoid learning alternative value propositions. And the optimum strategy for hybrid merchants involves higher prices that rely on solid branding and knowledge of the clientele. The findings also yield important managerial implications.


ANTONI MESEGUER-ARTOLA, INMA RODRÍGUEZ-ARDURA

Internet Interdisciplinary Institute, Universitat Oberta de Catalunya (UOC)


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Estudis d'Economia i Empresa de la Universitat Oberta de Catalunya (UOC) / Estudios de Economía y Empresa de la Universitat Oberta de Catalunya (UOC)
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