Reward programs, a promotional tool to develop customer loyalty, offer incentives to consumers on the basis of cumulative purchases of a given product or service from a firm. Reward programs have become increasingly common in many industries. The best-known examples include frequent-flier...

This paper examines the interaction of information provision, product quality, and pricing decisions by competitive firms to explore the following question: in a competitive market where consumers face uncertainty about product quality and/or their preference for quality, which firms—those...

We consider two broad categories of incentives by which a manufacturer can motivate its retailers to provide high customer satisfaction: (1) manufacturer assistance that reduces the retailer's cost of providing customer satisfaction (CS assistance); and (2) customer satisfaction index (CSI)...

When an improvable durable good (such as packaged software) saturates the market, the seller could be tempted to release new versions too frequently, hurting her profit. A novel contractual device, which I term as a Free New Version Rights warranty (free NVR warranty), can help the seller...

The paper provides a formal rationale for the common practice of using sales assistance. The argument is made in a model where a consumer's situation determines his needs. The products are differentiated and the map identifying the best match between a consumer's situation and a product is known...

There is strong evidence that consumers learn from their brand consumption experiences and continuously update their brand purchase probabilities. However, in explaining why established competitive brands continuously compete through periodic price promotions, most of the existing theories do...

Every Day Low Pricing (EDLP) strategy has proved to be a successful innovation resulting in higher profits to supermarkets adopting it in competition with Promotional Pricing (PROMO). Conventional wisdom attributes this success either to lower costs or to EDLP better serving time constrained...

We analyze firms' decisions to invest in customer relationship management (CRM) initiatives such as acquisition and retention in a competitive context, a topic largely ignored in past CRM research. We characterize each customer by her intrinsic preference towards each firm, the contribution...

Why is it that some products carry a minimal manufacturer base warranty even though all consumers are risk-averse? Conventional wisdom suggests that it is profitable for the manufacturer to offer a comprehensive warranty in this setting. We provide in this paper an explanation for the provision...