The thesis presents two essays on OM-marketing interface....[ Read more ]

The thesis presents two essays on OM-marketing interface.

In the first essay, we consider a supply chain with a retailer and a manufacturer introducing a new product into the market. Customers are initially uncertain about product fit. The retailer needs to determine whether to share market information with the manufacturer and whether to offer product demonstration to customers. We show that the retailer prefers to share information with the manufacturer when there is a high chance that the product will fit all the customers, or the marginal production cost is large. She prefers to offer product demonstration when the product may fit a small proportion of customers, or the marginal production cost is large. The retailer would be in general more likely to provide product demonstration when she does not share information with the manufacturer. We also demonstrate that the retailer may apply markups or markdowns under different situations. Finally, we find that the manufacturer always prefers the retailer to demonstrate the product and sometimes he can induce the retailer to do so with a side payment.

In the second essay, we investigate firms’ design postponement strategies in a duopoly. The firms face two distinct customer segments and they need to balance the first-mover advantage with the benefits of design postponement. We study two cases where the drivers of postponement are respectively design enhancement (an increase in product value) and information on customers’ preference. In both cases, there are two possible equilibria. Both firms postpone design, or only one firm postpones design. In the first case, the asymmetric equilibrium where only one firm postpones design exists only when the asymmetry of segment size is intermediate. However, in the second case, the asymmetric equilibrium may also exist when the asymmetry of segment size is high. We also conduct sensitivity analysis and find some counterintuitive results.