Selling to Strategic Customers: Opaque Selling Strategies
نویسندگان
چکیده
Over the past few years, firms in the travel and entertainment industries have begun using novel sales strategies for revenue management. In this chapter, we study a selling strategy called opaque selling, in which firms guarantee one of several fully specified products, but hide the identity of the product that the consumer will actually obtain until after the purchase is completed. Several firms such as Hotwire, Priceline and Mystery Flights engage in opaque selling of travel products. The academic literature in this area is recent and evolving. We first survey the nascent literature on opaque selling strategies. After presenting the current state of theory and practice, we analyze in-depth a model of competing firms selling horizontally differentiated products through an opaque channel. Consumers strategically time their purchases by developing rational expectations about future availability in the opaque market, keeping in mind that demand is uncertain and product supply could be limited. This model helps illustrate the conditions under which opaque selling can increase firm profits. We conclude the chapter by discussing ongoing research and charting out future research directions.
منابع مشابه
Revenue Management with Strategic Customers: Last-Minute Selling and Opaque Selling
Companies in a variety of industries (e.g., airlines, hotels, theaters) often use last-minute sales to dispose of unsold capacity. Although this may generate incremental revenues in a short term, the long-term consequences of such a strategy are not immediately obvious: more discounted last-minute tickets may lead to more consumers anticipating the discount and delaying the purchase rather than...
متن کاملNew Approaches for Integrating Revenue and Supply Chain Management
In the first part of the thesis, we describe a general framework called online customer selection that describes natural settings where suppliers must actively select which customer requests to serve. Unlike traditional revenue management models that have sunk costs, we assume there are supply chain costs that depend on the demand being served. Specifically, customers arrive in an online manner...
متن کاملPricing and market segmentation using opaque selling mechanisms
In opaque pricing certain characteristics of the product or service are hidden from the consumer until after purchase, transforming a differentiated good into somewhat of a commodity. Opaque pricing has become popular in service pricing as it allows firms to sell their differentiated products at higher prices to regular brand loyal customers while simultaneously selling to non loyal customers a...
متن کاملOpaque Distribution Channels for Competing Service Providers: Posted Price vs. Name-Your-Own-Price Mechanisms
We consider a two stage model to study the impact of different selling mechanisms of an opaque reseller on competing travel service providers, who face both leisure and business customers. While leisure travelers learn of their need to travel in the first stage, business travelers learn of this need in the second stage. Business travelers have a higher willingness to pay than leisure travelers,...
متن کاملIntertemporal Pricing Under Minimax Regret
We consider the pricing problem faced by a monopolist who sells a product to a population of consumers over a finite time horizon. Customers are heterogeneous along two dimensions: (i) willingness-to-pay for the product and (ii) arrival time during the selling season. We assume that the seller knows only the support of the customers’ valuations and do not make any other distributional assumptio...
متن کامل