New product development under channel acceptance

New product development under channel acceptance

0.00 Avg rating0 Votes
Article ID: iaor20082230
Country: United States
Volume: 26
Issue: 2
Start Page Number: 149
End Page Number: 163
Publication Date: Mar 2007
Journal: Marketing Science
Authors: , ,
Keywords: innovation
Abstract:

In channel structures characterized by a powerful retailer (e.g., Wal-Mart, Home Depot), the dominant retailer’s acceptance of a manufacturer’s new product often determines the success of the new offering. Focusing on a manufacturer in such a market, we develop an approach to positioning and pricing a new product that directly incorporates the retailer’s acceptance criteria into the development process. Our method also accounts for the retailer’s product assortment and the competing manufacturers’ potential reactions in wholesale prices. Our method merges individual-level conjoint models of preference with game-theoretic models of retailer and manufacturer behavior that are specific to the institutional setting of the focal manufacturer. The application of our approach in the context of a new power tool development project undertaken by this manufacturer also highlights the potential of our approach to other analogous institutional settings.

Reviews

Required fields are marked *. Your email address will not be published.