Consumer-Driven Demand and Operations Management Models

This important book is by top scholars in supply chain management, revenue management, and e-commerce, all of which are grounded in information technologies and consumer demand research. The book looks at new selling techniques designed to reach the consumer.

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To compete in today's volatile market with rapidly changing consumer tastes and erce competition, companies in the manufacturing and service industries are - ploying new mechanisms to increase sales, market shares, and pro ts. As an - fective mechanism to segment a market comprising of consumers with different needs, preferences, and willingness-to-pay, many rms have used product (or s- vice) variety with different price points to serve different segments of the market, see Ho (1998). Ideally, the price of each of these products (or services) targets a particular segment of customers. For example, airlines often use different terms of sales (refundable/non-refundable, upgradable/non-upgradable, direct/connecting ight, etc. ) to sell economy class tickets at different prices. Likewise, retailers - ten sell the same product at different prices in different channels (company's own web site, dealers' web sites, or company's physical stores) or at different times (- fore, during, and after the selling season), see Talluri and van Ryzin (2005). Ample academic literature in Operations Management and other areas considered these strategies.
However, as consumers become more knowledgeable about the product, pricing, organizational and operational policies that the companies deploy for pr- ucts and services, their purchasing begins to change dramatically. In the academic Operations Management literature, consumer demand is often assumedtobe exogenous so that demand functions are usually modeled as well de- ned and exogenously speci ed functions of price and/or other product attributes such as quality.