The offer of vacation packages is a marketing tool called bundling, selling at least two separate products at one single price (Guiltinan, 1987). Sellers adopt bundling strategies in order to sell more at lower costs, to contract consumer surplus, and to create value for consumers. Consumers purchase a package based on the trade-off between the perceived benefits and costs involved in purchasing the package compared to assembling different products/service. In other words, the perceived value of the package is the reason for consumers to purchase a package or not. The study serves two purposes. One is to examine the dimensionality of perceived value as a construct, in the pre-purchase stage. The other is to investigate the relationships between bundling strategies and perceived value, and perceived value and purchase intention of a vacation package. Bundling strategies taken by sellers include how many items to put in a package and what price discount for the package compared to the sum of all separate products. The findings of the study show that perceived value in service setting is composed of perceived acquisition value and perceived functional value, instead of perceived acquisition value and perceived transaction value proposed by scholars such as Thaler (1985) and Grewal et al. (1998). This is one of the theoretical contributions by the study. Another contribution of the study is the exploratory examination of the interaction effect between pricing strategies and product strategies for a bundle. The study provides evidence that bundles without a discount are perceived as having very low value and consumers expect a discount, large or small, from buying a bundle. And the larger the number of products in a package, the larger the discount size consumers expect to get. / Ph. D.

Peer-to-peer swarming, as used by BitTorrent, is one of the de facto solutions for content dissemination in today’s Internet. By leveraging resources provided by users, peer-to-peer swarming is a simple, scalable and efficient mechanism for content distribution. Although peer-to-peer swarming has been widely studied for a decade, prior work has focused on the dissemination of one commodity (a single file). This thesis focuses on the multi-commodity case. We have discovered through measurements that a vast number of publishers currently disseminate multiple files in a single swarm (bundle). The first contribution of this thesis is a model for content availability. We use the model to show that, when publishers are intermittent, bundling K files increases content availability exponentially as function of K. When there is a stable publisher, we consider content availability among peers (excluding the publisher). Our second contribution is the estimate of the dependency of peers on the stable publisher, which is useful for provisioning purposes as well as in deciding how to bundle. To this goal, we propose a new metric, swarm self-sustainability, and present a model that yields swarm self-sustainability as a function of the file size, popularity and service capacity of peers. Then, we investigate reciprocity and the use of barter that occurs among peers. As our third contribution, we prove that the loss of efficiency due to the download of unrequested content to enforce direct reciprocity, as opposed to indirect reciprocity, is at most two in a class of networks without relays. Finally, we study algorithmic and economic problems faced by enterprises who leverage swarming systems and who control prices and bundling strategies. As our fourth contribution, we present two formulations of the optimal bundling problem, and prove that one is NP hard whereas the other is solvable by a greedy strategy. From an economic standpoint, we present conditions for the existence and uniqueness of an equilibrium between publishers and peers.

QC 20110812

No description available.

This dissertation consists of two chapters. Chapter 1 focuses on the barriers that diversifying companies could face and explore how barriers to entry differ across different types of entry. Chapter 2 turns the attention to the market competition among insurance companies that are already in a market and examines how product bundling impact insurers' market power. Chapter 1 proposes and estimates a multi-agent model of entry. The prior literature often treats the number of companies in a market as an exogenous measure of market structure. However, the number of companies is endogenously decided by the market structure and other participants. Thus, I propose a structural model of entry to address the endogenous entry decision. In addition, the estimations are conducted at each market-year level, therefore, it provides an opportunity to delineate the relative importance of barriers to entry across three dimensions: geographic, product, and time. I find that barriers to entry exist in the financial services industry, and can be quite substantial to the \textit{de novo} entrants. Overall, I find \textit{de novo} entrants are the ones most subject to barriers to entry across all markets. Expanding within a state is as costly as expanding within a product line. Upon further examination, I discover that product-specific knowledge, such as underwriting expertise, pricing schemes, and coverage designs, plays a critical role in a successful expansion. This information is also relatively more important than state-specific connections, such as how well the company knows its customers and connections with distribution channels. Among all product lines, I find that expertise in mortgage guaranty insurance creates the most barriers, and these barriers are most subject to impacts of the financial crisis. In Chapter 2, I turn the focus to the market competition \emph{within} a market and explore the impact of product bundling on market power. Product bundling is a popular way for companies to retain their customers and keep up with fast-changing market demand. In this chapter, I will specifically examine the impact of bundling on price elasticity for personal lines of insurance. Insurance demand estimation is well-explored in the literature because it is difficult to obtain individual-level data. I overcome this hurdle by using a random coefficients logit model, which incorporates flexible consumer preferences over companies' characteristics. The second difficulty in insurance demand estimation is that it is hard to find a good instrument for the endogenous price. Therefore, I propose a novel instrument, which exploits an idiosyncrasy in insurance tax laws for identification. I find that bundling, on average, can reduce consumers' price sensitivity. Thus, companies that can offer bundle-able products experience a less elastic demand and achieve market power. However, product bundling has differential impacts on the auto insurance and homeowners' insurance markets. Auto insurers that offer bundled packages experience less elastic demand in response to price increases. However, we do not observe similar patterns in the homeowners' insurance market, where doing so intensifies price elasticity. With a closer examination, we discover that the different valuation in homeowners is not driven by the financial ratings of insurers. This indicates that homeowners tend to value other characteristics, such as claims management and the quality of service, more than just price of the contract. / Business Administration/Risk Management and Insurance

This dissertation is concerned with decision making in retail operations management. Specifically, we focus on pricing, variety, and inventory decisions, which are at the interface of the marketing and operations functions of a retail firm. We consider two problems that relate to two major types of retail goods. First, we study joint pricing, variety, and inventory decisions for a set of substitutable" items that serve the same need for the consumer (commonly referred to as a "retailer's product line"). Second, we present a novel model of a selling strategy for "complementary" items that we refer to as ``convenience tying," and focus on analyzing the effect of this selling strategy on pricing and profitability. We also study inventory decisions under convenience tying and exogenous pricing. For a product line of substitutable items, the retailer's objective is to jointly determine the set of variants to include in her product line ("assortment"), together with their prices and inventory levels, so as to maximize her expected profit. We model the consumer choice process using a multinomial logit choice model and consider a newsvendor type inventory setting. We derive the structure of the optimal assortment for a special case where the non-ascending order of items in mean consumer valuation and the non-descending order of items in unit cost agree. For this special case, we find that an optimal assortment has a limited number of items with the largest values of the mean consumer valuation (equivalently, the items with the smallest values of the unit cost). For the general case, we propose a dominance rule that significantly reduces the number of different subsets to be considered when searching for an optimal assortment. We also present bounds on the optimal prices that can be obtained by solving single variable equations. Finally, we combine several observations from our analytical and numerical study to develop an efficient heuristic procedure, which is shown to perform well on many numerical tests. With the objective of gaining further insights into the structure of the retailer's optimal decisions, we study a special case of the product line problem with "similar items" having equal unit costs and identical reservation price distributions. We also assume that all items in a product line are sold at the same price. We focus on two situations: (i) the assortment size is exogenously fixed, while the retailer jointly determines the pricing and inventory levels of items in her product line; and (ii) the pricing is exogenously set, while the retailer jointly determines the assortment size and inventory levels. We also briefly discuss the joint pricing/variety/inventory problem where the pricing, assortment size, and inventory levels are all decision variables. In the first setting, we characterize the structure of the retailer's optimal pricing and inventory decisions. We then study the effect of limited inventory on the optimal pricing by comparing our results (in the ``risky case" with limited inventory) with the ``riskless case," which assumes infinite inventory levels. In addition, we gain insights on how the optimal price changes with product line variety as well as demand and cost parameters, and show that the behavior of the optimal price in the risky case can be quite different from that in the riskless case. In the second setting, we characterize the retailer's optimal assortment size considering the trade-off between sales revenue and inventory costs. Our stylized model allows us to obtain strong structural and monotonicity results. In particular, we find that the expected profit at optimal inventory levels is unimodal in the assortment size, which implies that the optimal assortment size is finite. By comparison to the riskless case, we find that this finite variety level is due to inventory costs. Finally, for the joint pricing/variety/inventory problem, we find that even when the retailer has control over the price, finite inventories still restrict the variety level. We also propose several bounds that can be useful in solving the joint problem. We then study a convenience tying strategy for two complementary items that we denote by "primary" and "secondary." The retailer sells the primary item in an appropriate department of her store. In addition, to stimulate demand, the secondary item is offered in two locations: its appropriate department and the primary item's department where it is displayed in very close proximity to the primary item. We analyze the profitability of this selling practice by comparing it to the traditional independent components strategy, where the two items are sold independently (each in its own department). We focus on understanding the effect of convenience tying on pricing. We also briefly discuss inventory considerations. First, assuming infinite inventory levels, we show that convenience tying decreases the price of the primary item and adjusts the price of the secondary item up or down depending on its popularity in the primary item's department. We also derive several structural and monotonicity properties of the optimal prices, and provide sufficient conditions for the profitability of convenience tying. Then, under exogenous pricing, we find that convenience tying is profitable only if it generates enough demand to cover the increase in inventory costs due to decentralizing the sales of the secondary item. / Ph. D.

As the digital convergence trend comes and the deregulation of telecom industry, it becomes more competitive in telecom market in Taiwan. The telecom industry now is not limited to voice service but mobile internet, broadband internet and even video contents. The business expansion and marketing resource allocation somehow become a conflict under the strong competition. This business plan is to a new bundling Product model in Taiwan telecom market to overcome the conflict. To make it more specific and practical, all assumptions are under the current business condition of Chunghwa telecom.

Abstract not available

Thesis (M.S.)--Naval Postgraduate School, 2004. / Mode of access: Internet via the World Wide Web. Title from title screen (viewed May 10, 2005). "December 2004." Includes bibliographical references (p. 69-73). Also issued in paper format.

This study sought to understand factors driving repurchase intentions for consumer electronics (CE) hardware and in particular mobile phones. The outcome of the study was expected to be of interest in academia and practice because it develops upon existing literature and identifies actionable variables that could be used to optimise market offerings. Based on a literature review it was hypothesised that the intent was driven by hedonic and utilitarian factors. These included conspicuousness and visibility; product bundling; reliability; technological features, usability of the product and the buyers’ age. The study tested these hypotheses using primary data. The method was employed to confirm the postulated drivers as well as to determine the direction of the effects. Data collection was conducted through a cross sectional internet survey enumerated in August 2010. The survey reached a broad sample of 144 responders. The analysis supported two of the six hypothesised drivers. The supported drivers were conspicuousness and usability. The recommendation was therefore to encourage the CE industry to focus on creating aesthetically appealing, fashionable devices that were intuitively easy to use requiring minimal assistance or product manuals. It also recommends that less emphasis be placed on durability, advanced features, on bundling additional extras and on targeting particular age groups. Copyright / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted