Eunkyu Lee

Mastering the Mix: Do Advertising, Promotion, and Sales Force Activities Lead to Differentiation?

The authors consider the effects of three marketing communication activities on nonproduct based differentiation. Specifically, they examine whether advertising, sales force, and promotion activiti...

Internet Channel Entry: A Strategic Analysis of Mixed Channel Structures

By analyzing various alternative mixed channel structures composed of a monopoly manufacturer and online and offline outlets, we investigate how the specific channel structure and varying market conditions moderate the impact of Internet channel entry on the channel members and consumers. As an extension of Balasubramanians model [Balasubramanian, S. 1998. Mail versus mall: A strategic analysis of competition between direct marketers and conventional retailers. Marketing Sci.173 181--195], our game-theoretic model captures the fundamental difference between two different channel types and consumer heterogeneity in preference for the Internet channel use. The equilibrium solutions indicate that Internet channel entry does not always lead to lower retail prices and enhanced consumer welfare. We also find that an independent retailer might become worse off after adding its own Internet outlet under certain market conditions. We find that the impact of the Internet channel introduction substantially varies across channel structures and market environments. We explain these varied results by proposing a framework of five key strategic forces that shape the overall impact of the Internet channel introduction.

How Complex Do Movie Channel Contracts Need to Be

The motion picture industry is characterized by a dynamic market environment, limited shelf space and product category management, and consequently, complex channel contracts specifying the split of box office revenue between distributors and exhibitors. Although such a contracting practice creates a considerable administrative effort and channel conflict, it is not clear whether such complexity is necessary for superior channel performance. This study investigates this question by analyzing the impact of movie contract structure on movie scheduling and channel member profitability. We develop and analyze a game-theoretic model using the genetic algorithm approach and a decision support system, SilverScreener, to capture strategic behaviors of channel members in a complex market environment. We find that simpler two-part tariff or 50/50 split contracts perform as well as the current contracts. Thus, the complexity of the market environment need not be reflected in the complexity of the channel contracts. Channel contract structure has significant impact on channel member profitability and the exhibitors movie-scheduling behavior. In particular, our results indicate that the flat rate contract structure represents an attractive alternative to the current practice for distributors.

Survey Accuracy as a Function of Usage Rate

Using a large-scale AT&T database, we decompose usage levels into frequency and duration, and then investigate how they affect survey response accuracy. Results show that more accurate surveys are obtained from those in the high frequency group (possibly because of the increased use of the more accurate rate-based method of recall and higher degrees of regularity), and from those in the longer duration group (possibly because of increased involvement). We therefore suggest that the survey method is less suited for light users because of higher error, and that alternative methods such as diaries might be more appropriate. We also found similarly consistent results with respect to self-perception of usage rate and the accuracy of survey recall.

Impact of the level of aggregation on response accuracy in surveys of behavioral frequency

Through observations of AT&T data and the results of two of our own studies, we discovered interesting asymmetrical effects of the level of aggregation of the question on the response accuracy in surveys of behavioral frequency. We find that disaggregating a question to a lower, less comfortable level of aggregation creates greater uncertainty, leading to larger absolute errors in survey responses. However, if a question is asked at a higher less comfortable level, the majority of respondents escape by splitting questions down to the natural level, thereby avoiding greater uncertainty and thus responding more accurately. We argue that for greater accuracy in surveys, one should identify the natural level of aggregation at which a question should be posed. But when in doubt, it is better to ask a question at a higher level of aggregation because of possible escapability downward.

A “Meta-Analysis” of Multibrand, Multioutlet Channel Systems

In todays multibrand, multichannel marketplace, optimal channel design involves issues such as distribution intensity, channel exclusivity, vertical and horizontal coordination, and online–offline mixed structures. We investigate how a firms choice in these design issues affects its profitability under varying levels of brand and outlet differentiation. Our spatial model explicitly captures heterogeneous consumer preference for brand position, store location, and outlet type, under various consumer behavior assumptions. We apply this same underlying model to 10 different channel structures, deriving associated demand functions and equilibrium solutions. We perform a meta-analysis over the entire set of results to estimate a general model that summarizes the linkages among the factors shaping optimal channel structure decisions in a multibrand, multioutlet market. This general model efficiently describes the complex interactions of channel characteristics with industry structure and consumer characteristics, providing new findings as well as greater clarity to some results in the literature. A predictive analysis applied to additional channel structures exhibits strong generalizability in qualitative findings. This paper was accepted by by Pradeep Chintagunta, marketing.

Differentiation via the marketing mix

In this paper we investigate the conjecture that increasing marketing mix specialization enhances firm performance. We start by identifying two dimensions of specialization — absolute (concentration of expenditures) and relative to competition (distinctiveness). We then propose underlying mechanisms that lead to effects of marketing mix specialization on firm performance. Using these guidelines we specify an empirical model that relates marketing mix specialization to firm performance. We estimate this model using PIMS data and find support for our propositions.

False lateralization of scalp EEG seizure onset

Abstract We report a patient with lateralized right-sided ictal scalp EEG activity contralateral to left mesial temporal seizure onset as documented by depth electrodes. Subsequent left temporal lobectomy revealed mesial temporal sclerosis and resulted in a marked reduction (97%) in seizure frequency. This case illustrates the frequently discussed, but rarely documented, occurrence of false lateralization of scalp EEG seizure onset in a patient with temporal lobe epilepsy.

Asymmetric relationships with symmetric suppliers: Strategic choice of supply chain price leadership in a competitive market

This study investigates a supply chain members strategic choice between price leadership and price followership against each of its supply chain partners. In particular, our investigation focuses on whether a retailer ever has an incentive to have asymmetric price leadership types across multiple suppliers even in the absence of asymmetry across them in demand, cost, and competitive pricing behavior. By analyzing a game-theoretic model composed of two manufacturers and one common retailer, we show that the retailer does not always prefer price leadership over a manufacturer, and that the retailers strategic choice over price leadership with one manufacturer depends upon its price leadership type with the competing manufacturer and the degree of product substitutability. Surprisingly, although the competing manufacturers are completely symmetric in demand and cost characteristics, if the retailer does not have price leadership over one manufacturer, it prefers being a price leader over the other manufacturer when the product substitutability is sufficiently low, resulting in an asymmetric price leadership despite no asymmetry between the manufacturers. On the other hand, higher degrees of product substitutability lead the retailer to choose not to seek price leadership against either manufacturer. In contrast, each manufacturer always finds it profitable to be a price leader over the retailer, regardless of product substitutability and the price leadership situation between the retailer and the competing manufacturer. These strategic choices over vertical price leadership reflect interesting interplays of product positioning, the supply chain members’ pricing objectives, and their foresights of other supply chain members’ pricing behavior.

Does channel decentralization lead to low quality product lines

Purpose – The purpose of this study is to analyze the problem of optimal product line design in marketing channels. Design/methodology/approach – This paper develops a game theoretic model, in which a firm markets a line of a limited number of products at different quality levels to serve a market composed of multiple consumer segments. The consumer segments are modeled as clusters of somewhat heterogeneous consumers as typically observed in the real world. These model characteristics allow us to consider a broader set of targeting strategies such as sub-segmentation and partial cannibalization which have not been considered previously. By considering both a vertically integrated channel and a decentralized channel, we investigate how channel structure influences optimal product line design. We analyze the model mathematically with supplemental numerical analyses. Findings – Our analysis shows that “quality distortion” in product line design is not limited to the low-end product, as previously reported, b...