Competition and price-format adoption in the U.S. airline industry : a study of EDLP implementation on the Internet - Sin, Raymond G.; Chellappa, R. K.; Siddarth, S.
Research in marketing suggests that creating and maintaining a certain price image among consumers is a strategic choice made by many retailers. While “Dollar Stores”, 99 cent price-endings, etc., fall in this category, one key method of execution of these price-image strategies is through the employment of particular price-formats (Ortmeyer et al. 1991). The two end-points of such a price-format strategy are the “everyday low price” (EDLP) format and a price-promotion (HILO) format. While the former is generally associated with a strategy of charging consistent and low average prices, the latter is associated with deals, discounts and promotions. The success...
(119364 bytes; application/pdf) - 09-feb-2011
An empirical investigation of multimarket contact and asymmetric pricing strategies in the US domestic airline industry - Sin, Raymond G.; Chellappa, R. K.; Sambamurthy, V.
Multimarket contact (MMC) is a unique form of competition where the same set of firms face each other in more than one market resulting in a focal-market strategy that needs to account for competition in other markets. Extant research in this area suggests that rational firms will not undercut multimarket competitors in a given market as they will foresee a response from their competitors in other markets leading to a form of tacit collusion and higher prices. Such behavior is purportedly observed in a number of industry contexts including the US domestic airline sector. Our research presents a significant departure...
(32816 bytes; application/pdf) - 09-feb-2011