The DOI matches its Crossref record; 11 of the 11 references it cites were found in a registry or an index.
Market Segmentation, Cannibalization, and the Timing of Product Introductions
Abstract
Consider a seller who faces two customer segments with differing valuations of quality of a durable product. Demand is stationary and known, the technology exists to release two products simultaneously, and the seller can commit in advance to subsequent prices and qualities. Should he introduce two differentiated products at once or one at a time? Under the simultaneous strategy, the lower quality would cannibalize demand for the higher quality. To reduce cannibalization, the seller could lower the quality of the low-end model and reduce the price of the high-end. Alternatively, he could increase the quality of the low-end model, but delay its release. Sequential introduction, however, would mean that the profits from the low-end model arrive later. We show that sequential introduction is better than simultaneous introduction when cannibalization is a problem and customers are relatively more impatient than the seller. However, when the seller cannot pre-commit, sequential selling is much less attractive because then he cannot use his product designs to alleviate cannibalization.
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Cites
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Market Segmentation, Self-Selection, and Product Line Design
Moorthy, K. S. (1984) · Marketing Science · doi:10.1287/mksc.3.4.288 · Cited by 703
Self-citationIntertemporal Price Discrimination
Stokey, N. L. (1979) · The Quarterly Journal of Economics · doi:10.2307/1883163 · Cited by 589
Optimal Price Skimming by a Monopolist Facing Rational Consumers
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Durable Goods and Product Obsolescence
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Intertemporal Price Discrimination and Sales Strategy under Incomplete Information
Landsberger, M., & Meilijson, I. (1985) · The RAND Journal of Economics · doi:10.2307/2555568 · Cited by 97
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On the monetization of mobile apps
Appel, G., Libai, B., Muller, E., & Shachar, R. (2020) · International Journal of Research in Marketing · doi:10.1016/j.ijresmar.2019.07.007 · Cited by 90
“Our work is also relevant to the literature on product line design (Moorthy 1984; Moorthy and Png 1992; Kannan 2013; Biyalogorsky and Koenigsberg 2014; Gu, Kannan, and Ma 2018).”
Freemium as an Optimal Strategy for Market Dominant Firms
Shi, Z. (., Zhang, K., & Srinivasan, K. (2019) · Marketing Science · doi:10.1287/mksc.2018.1109 · Cited by 86
The design and introduction of product lines when consumer valuations are uncertain
Biyalogorsky, E., & Koenigsberg, O. (2014) · Production and Operations Management · doi:10.1111/poms.12167 · Cited by 49
Metadata
- Authors
- Moorthy, K. S., & Png, I. P. L.
- Venue
- Management Science
- Published
- 1992-03
- Volume
- 38
- Issue
- 3
- Pages
- 345-359
- ISSN
- 0025-1909 (ISSN-L)
- 1526-5501
- OpenAlex
- W2143559000
- Cited by
- 503
- References
- 11
- FWCI
- 15.37
- Type
- journal article
- Language
- en
- Open access
- closed
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Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.