Contributions published at Marketing (Martin Natter)

In the marketing domain, models of grocery buying behavior consider purchase incidence as a key dimension. However, in recommender systems, timing is often subsumed under contextual information and has received little attention yet. For this reason, we analyze the relation between the timing of a recommendation and its acceptance across different product categories. Our study is based on a real-world deployment of an in-store recommendation system in the brick-and-mortar grocery industry. We base our analysis on transaction data of more than 100,000 unique users and more than four million product recommendations. Our findings suggest that the success of a recommendation significantly depends on the inter-purchase time within the respective category. Different sensitivities across product categories further stress the importance of timing and its interplay with category characteristics within the context of recommender systems. The insights gained in this study enable retailers to improve scheduling recommendations and target promotions more efficiently.

ecSys), Boston, USA, September 2016.

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Based on literature review on private labels (PL), co-branding and celebrity branding, a conceptual framework is developed in which a celebrity brand is used in a co-branding setting as a quality signal for a premium PL product. Similar to previous studies that are limited to PL and national brands (NB) as brand allies in a co-branding setting, we propose that the improved consumer evaluations of a celebrity co-branded, chain-labeled PL product will spill over to the first brand ally. That is the retailer and more specifically his brand image. Since previous research indicates a positive effect of retailer’s brand image on consumer evaluations of its PL, we also suggest that a celebrity co-branding strategy will indirectly (via retailer’s brand image as a mediator), improve consumer evaluations of an individual retailer’s PL product of any tier. The goal of the research is to contribute to the calls for more research on private label and branding as well as on retailer brand equity. This study provides the foundation for and should encourage further research in this area.

Online customer reviews (OCRs) have become a major source of information for customers in the Internet. Understanding the impact of OCRs on customers' decisions is an important challenge for academics and practitioners. We apply a choice-based conjoint experiment that combines all relevant levels of the OCR dimensions (valence, volume, and variance) and that estimates the effect of OCRs on choice. The experimental setting allows us to estimate the direct effects but also the interaction effects of the OCR dimensions, which have been largely neglected in previous research. The impact of the OCR dimensions is evaluated against the results from a control group that did not face OCRs when making their choices. Therefore, our experiment enables us to investigate the extent to which the presence of OCRs affects customers' consideration of brand, price, and technical product attributes. By contrast to previous findings, our results show that volume and variance do not affect customers' choices directly but that they moderate the impact of valence on customers' choices. Moreover, we find that OCRs decrease the importance of brand for customer purchase decisions, indicating that managing OCRs have become a challenge for brand management.

The authors provide an overview about research conducted in the area of four different voluntary market payment mechanisms, namely tipping, pay-what-you-want, donations, and gift giving. The authors identify three different research streams: the first stream of research investigates product and consumer characteristics that drive success measures of voluntary payment mechanisms, the second stream of research is more outcome oriented and studies economic and communicative success potentials of alternative mechanisms, whereas the third stream of research is more fundamentally oriented and discusses underlying motives of free market payments. The authors summarize and discuss important findings with respect to the three different research streams and point to open research questions and controversial findings in the field.

Market liberalization of the German household electricity market has led to an excessive number of competitors (1,150 electricity providers) and volatile price dynamics on price comparison sites. To date, providers that are struggling to achieve a top ranking on price comparison sites do not appear to implement a consistent or elaborate strategy for attracting customers. We developed a pricing tool, E lectricity C ontract O ptimization (ECO), that addresses this highly competitive market situation by integrating various available data sources, such as data from price comparison sites, demographic data, and regional sales or cost data. ECO sets regionally varying one-time bonuses to attract new customers on price comparison sites with the goal of optimizing sales and profit targets or optimally allocating sales budgets. Based on two field experiments, we demonstrate that ECO’s optimization procedure reduces ENTEGA yearly sales costs for new customer business, on average, by 35% relative to previously used pricing heuristics. ENTEGA uses ECO monthly to analyze different scenarios or to set prices and one-time bonuses on price comparison sites.

Pay-per-bid auctions are a popular new type of Internet auction that is unique because a fee is charged for each bid that is placed. This paper uses a theoretical model and three large empirical data sets with 44,614 ascending and 1,460 descending pay-per-bid auctions to compare the economic effects of different pay-per-bid auction formats, such as different price increments and ascending versus descending auctions. The theoretical model suggests revenue equivalence between different price increments and descending and ascending auctions. The empirical results, however, refute the theoretical predictions: ascending auctions with smaller price increments yield, on average, higher revenues per auction than ascending auctions with higher price increments, but their revenues vary much more strongly. On average, ascending auctions yield higher revenues per auction than descending auctions, but results differ strongly across product categories. Additionally, revenues per ascending auction also vary much more strongly.

Merchandise managers have long dreamt of automated dynamic systems to help them make well-informed pricing decisions. However, such systems have proved as elusive as the Holy Grail - until now, that is. The story of an Austrian DIY retailer shows often undetected opportunities to use valuable information, hidden in retailers' data warehouses, on consumer reactions to previous price changes in order to make automatic pricing and promotion decisions.

Pay-per-bid auctions require all bidders to pay for every bid. However, paying bidding fees without receiving the auction item in return often causes high dissatisfaction among losers, resulting in heated discussions and high churn rates. To reduce these negative reactions, pay-per-bid auctioneers created the Buy-Now feature, which allows losers to put all or part of the bidding fees that they paid during an auction toward buying the auction item. Using unique data, including individual customer bidding histories and cost data from more than 6,800 pay-per-bid auctions, we find that, overall, the Buy-Now feature leads to more aggressive bidding behavior, attracts more bidders, increases loyalty, and results in a higher profit per auction. However, for voucher auctions that represent common value auctions, the Buy-Now feature causes a decrease in the number of bidders and the profit per auction, although we find an increase in the average number of bids per bidder. We also show theoretically that a bidder can pursue a risk-free bidding strategy. However, we find empirically that bidders rarely use this strategy.

Pay what you want (PWYW) is a new participative pricing mechanism in which consumers have maximum control over the price they pay. Previous research has suggested that participative pricing increases consumers' intent to purchase. However, sellers using PWYW face the risk that consumers will exploit their control and pay nothing at all or a price below the seller's costs. In three field studies, the authors find that prices paid are significantly greater than zero. They analyze factors that influence prices paid and show that PWYW can even lead to an increase in seller revenues.

Pay-per-bid auctions are a popular new type of Internet auction that is unique because a fee is charged for each bid that is placed. This paper uses a theoretical model and three large empirical data sets with 44,614 ascending and 1,460 descending pay-per-bid auctions to compare the economic effects of different pay-per-bid auction formats, such as different price increments and ascending versus descending auctions. The theoretical model suggests revenue equivalence between different price increments and descending and ascending auctions. The empirical results, however, refute the theoretical predictions: ascending auctions with smaller price increments yield, on average, higher revenues per auction than ascending auctions with higher price increments, but their revenues vary much more strongly. On average, ascending auctions yield higher revenues per auction than descending auctions, but results differ strongly across product categories. Additionally, revenues per ascending auction also vary much more strongly.