Collective Buying Research Articles

Strength in numbers: collaborative procurement and competitiveness of craft breweries

PurposeThis article aims to investigate collaborative procurement as a sourcing strategy amongst competing small enterprises in an effort to reduce their material supply costs through increased efficiencies, bargaining power and economies of scale.Design/methodology/approachA case study approach is applied to a network of breweries that are regionally clustered. Interview data from producers, suppliers and industry experts is inductively interpreted to understand the viability, organisational impact and benefits/limitations of joint procurement activities.FindingsThe craft brewing industry follows a market place strategy of differentiation to achieve competitive advantage. This has supply chain implications that promote raw material diversity, which is in conflict with standardisation – a necessary factor for collective buying. Competition impacts information sharing and governance mechanism, while the structural factors of size asymmetry along and across the supply chain influence returns. These issues impact the potential economic benefits of collaborative procurement.Research limitations/implicationsThe research propositions have been developed in a specific industry but are generalisable to other companies with a differentiation strategy, especially in the consumer packaged goods sector.Practical implicationsEnabling conditions and constraints are captured in a framework and capability matrix, which can be used by practitioners to assess industry and product feasibility for collaborative procurement.Originality/valuePrevious studies of collaborative procurement have been in the public sector amongst large organisations. This work focusses on coopetition in the context of small businesses to identify the viability and cost-benefit of this strategy.

Triangular Stability Maximization by Influence Spread over Social Networks

In many real-world applications such as social network analysis and online advertising/marketing, one of the most important and popular problems is called influence maximization (IM), which finds a set of k seed users that maximize the expected number of influenced user nodes. In practice, however, maximizing the number of influenced nodes may be far from satisfactory for real applications such as opinion promotion and collective buying. In this paper, we explore the importance of stability and triangles in social networks, and formulate a novel problem in the influence spread scenario, named triangular stability maximization , over social networks, and generalize it to a general triangle influence maximization problem, which is proved to be NP-hard. We develop an efficient reverse influence sampling (RIS) based framework for the triangle IM with theoretical guarantees. To enable unbiased estimators, it demands probabilistic sampling of triangles, that is, sampling triangles according to their probabilities. We propose an edge-based triple sampling approach, which is exactly equivalent to probabilistic sampling and avoids costly triangle enumeration and materialization. We also design several pruning and reduction techniques, as well as a cost-model-guided heuristic algorithm. Extensive experiments and a case study over real-world graphs confirm the effectiveness of our proposed algorithms and the superiority of triangular stability maximization and triangle influence maximization.

Leveraging Social Interaction Among Customers: Referral Reward Versus Collective Buying

Over the past decade, the developed and emerging markets have witnessed an exponential growth in online selling strategies that leverage social interaction among customers and enable sellers to offer discounts or rewards on the basis of the size of the buyer pool. This article classifies these diverse strategies into two categories—referral reward (e.g., Uber) and collective buying (e.g., GroupGets)—with associated subtypes. The authors employ an analytical model in which the seller faces customers with heterogeneity in their knowledge and/or intrinsic valuation of a product. Informed customers may inform and increase their less-informed peers’ valuation of the product. The study's richer behavioral model and consideration of a broader strategy space, relative to the existing analytical models, provide new insights into when and how specific strategies are optimal. Referral reward and collective buying encourage information sharing with less-informed potential customers and are typically superior to the individual selling strategy (under which the seller does not incentivize information sharing among customers), except when information sharing is significantly difficult. The authors conduct model refinements and robustness checks and identify clear qualitative managerial implications that can aid strategic decisions under different product-market characteristics. The authors conclude by suggesting future research opportunities to build on this article and add new theoretical insights and managerial guidance.

Adam Smith, the Competitive Process, and the Flawed Consumer Welfare Standard

Abstract Scottish economist Adam Smith wrote in 1776 that the collective buying and selling of individuals would result in the preferred allocation of society’s resources. That insight has endured and is the basis for the competition law goal of fostering and protecting the competitive process. That goal, with venerable roots on both sides of the Atlantic, has been sidetracked by emergence of the consumer welfare standard, which is now preeminent in competition law analysis. The narrow focus of the consumer welfare standard has led to confusion and misdirected decisions that do not adequately protect the competitive process. I point to confusion about who is the buyer and who is the seller in many transactions, and describe why that classification should, in any event, be irrelevant in applying competition law. When competition is distorted, the central goal of protecting the process and ensuring a preferred allocation of resources is undermined, regardless of the impact on the consumer. The proper welfare standard is unconcerned with where the harm occurs. The standard focuses on anticompetitive conduct at any level of the distribution chain and regardless of whether the anticompetitive effects are directed upstream at sellers or downstream at buyers. The symmetric standard is rooted in competition law decisions on both sides of the Atlantic; it is sound in theory and, compared to the consumer welfare standard, is easier to explain and apply. It more comfortably honors the broader goals of competition, including promoting entry, innovation, and choices for both entrepreneurs and consumers. I assess how this symmetric welfare standard would apply to mergers and classic predatory or exclusionary conduct. The standard offers hope of simplifying analysis and better serving ancillary goals of competition. Fostering and preserving efficiency, enhancing output, and maintaining low consumer prices are among the highly valued benefits of the competitive process, but they are not determinative. The focus must remain on the central goal of preserving the competitive process.

Adam Smith, the Competitive Process, and the Flawed Consumer Welfare Standard

Scottish economist Adam Smith wrote in 1776 that the collective buying and selling of individuals would result in the preferred allocation of society’s resources. That insight has endured and is the basis for the competition law goal of fostering and protecting the competitive process. That goal, with venerable roots on both sides of the Atlantic, has been sidetracked by emergence of the consumer welfare standard, which is now preeminent in competition law analysis. The narrow focus of the consumer welfare standard has led to confusion and misdirected decisions that do not adequately protect the competitive process. I point to confusion about who is the buyer and who is the seller in many transactions, and describe why that classification should, in any event, be irrelevant in applying competition law. When competition is distorted, the central goal of protecting the process and ensuring a preferred allocation of resources is undermined, regardless of the impact on the consumer. The proper welfare standard is unconcerned with where the harm occurs. The standard focuses on anticompetitive conduct at any level of the distribution chain and regardless of whether the anticompetitive effects are directed upstream at sellers or downstream at buyers. The symmetric standard is rooted in competition law decisions on both sides of the Atlantic; it is sound in theory and, compared to the consumer welfare standard, is easier to explain and apply. It more comfortably honors the broader goals of competition, including promoting entry, innovation, and choices for both entrepreneurs and consumers. I assess how this symmetric welfare standard would apply to mergers and classic predatory or exclusionary conduct. The standard offers hope of simplifying analysis and better serving ancillary goals of competition. Fostering and preserving efficiency, enhancing output, and maintaining low consumer prices are among the highly valued benefits of the competitive process, but they are not determinative. The focus must remain on the central goal of preserving the competitive process.

Social Commerce as a Driver of Sustainable Development of the Information Economy of the City

The purpose of this article is to determine notion of social commerce, find out state of social commerce in Russia and to define its place in the city economy. Social commerce implies use of Web 2.0 technologies and in some way is similar to e-commerce. This article compares these two types of activity, shows the importance of social commerce for information economy and elicits special features of this phenomenon in Russia. The authors research competitive structure of some segments of markets in the Russian Far East and determine some features of distribution logistics of collective buying in Russian Far East.

THE ANALYSIS OF PURCHASING CONSORTIUM FOR SMALL AND MEDIUM ENTERPRISES

Lack of the buying power of small and medium enterprises (SMEs) in purchasing their raw material could hinder their competitiveness. The low buying power generally caused by the fact that SMEs purchase their raw material in small lot. Purchasing consortium offers SMEs to increase their buying power and obtain better pricing through the collective buying mechanism amongst SMEs. This paper proposes purchasing consortium mechanism using joint replenishment and vendor managed inventory. The analysis shows that SMEs gain potential cost savings in sourcing their raw material through the proposed mechanism.

Thumbs Up, Sales Up? The Contingent Effect of Facebook Likes on Sales Performance in Social Commerce

In this study we investigate whether social reference systems, such as Facebook “likes” (FBLs), promote sales in social commerce, wherein adverse selection and quality uncertainty often severely damage consumer trust and impede efforts to achieve sustainable growth. We also examine the extent to which product characteristics (product uncertainty and product franchising) and deal characteristics (tipping points, discount rates, and deal durations) moderate the social selling stimulated by FBLs. On the basis of 1,327 samples collected from a major social commerce platform provider, we identify several interesting empirical regularities regarding the relationship between FBLs and social commerce sales. The findings suggest that FBLs drive traffic and increase sales. Information technology artifacts and social technologies, such as FBLs, can endow a consumer’s shopping experience with a socialization component and induce social selling in collective buying platforms. Nevertheless, significant variations occur across products and deals. For example, consumers who purchase experience goods more frequently depend on FBLs than do those who buy search goods. FBLs exert a far greater influence on the sales of goods from independent stores than those from franchise chains. Social commerce consumers are unaffected by heavy discount rates as they make purchase decisions, but they extensively rely on FBLs, particularly when purchasing products that have low tipping points. Our results suggest that social commerce can be a powerful marketplace when the economic utility that is driven by price incentives is further strengthened and protected by the social utility that originates from trust and sharing.

Curating the quest for ‘good food’: The practices, spatial dynamics and influence of food-related curation in Sweden

What is ‘good food’? Is it fair trade, local, organic or ethically produced? With an ever-expanding array of products and ‘qualities’ to consider, consumers in the global North may find it increasingly difficult and time-consuming to make the ‘right’ choices. As a result, a range of intermediaries, including food apps and collective buying groups, are emerging to support and influence people with their food choices. While intermediation refers to all activities linking producers and consumers, this paper narrows the focus and considers one important, yet poorly understood, intermediary function within the food marketplace: ‘curation’. Although the concept of curation has long been associated with museums and art worlds, curatorial practices are evolving in the contemporary marketplace and are performed by a growing range of actors operating in physical, temporary and virtual spaces. Rather than acting as brokers or gatekeepers, curators interpret, translate and shape the marketplace by sorting, organising, evaluating and ascribing value(s) to specific products. They also offer general and personalised recommendations to consumers. Although the literature on local food privileges the direct relations between producers and consumers, this paper considers the important role of intermediaries. Drawing on interviews and participant observation in Sweden it contributes to the existing literature on curation by examining the spatial dynamics and nature of curatorial practices, the motivations behind them and the values they create for consumers. The findings demonstrate that a range of activities can be understood as curation and that in order to nuance and extend existing conceptualisations of curation a wider and more dynamic range of actors (food apps), spaces (blogs) and values such as inspiration, convenience and sense of community need to be considered.

Conceptualising Consumers' Purchase Intention towards Online Group Buying

Objective - Group-buying is a business model based on the power of collective buying. Consumers with similar product interest come together and obtain a significant volume discount from retailers. Online Group Buying (OGB) is growing rapidly and it has become popular and successful in many countries. However, this area still lacks of research and it is in the early stages of development especially in developing and emerging market. This paper aims to conceptual consumers' purchase intention in online group buying. Methodology/Technique - Through intensive literature review on consumers' purchase intention and online group buying, a set of factors proposed as leading influencers. Findings - Findings of this paper reveal that perceived usefulness, perceived ease of use, price, electronic word of mouth, trust and perceived risk are the main determinants of online group buying. Novelty - This paper propose a framework for conceptualising factors that influence consumer's purchase intention in online group buying. Type of Paper - Conceptual Keywords: Electronic Word of Mouth; Online Group-Buying; Perceived Usefulness; Perceived Ease-of-Use; Price; Trust; Perceived Risk.

United We Shop! Chinese Consumers’ Online Group Buying

ABSTRACTThis study aims to understand the underlying psychology that drives Chinese consumers’ online group buying intention. The relationship-oriented factors of perceived homophily, consumer susceptibility to interpersonal influence, and consumer need for uniqueness were tested as key antecedents of online group buying intention. Based on a nonstudent sample of Chinese Internet users, findings indicate that consumer need for uniqueness and perceived homophily significantly and directly influenced online group buying intention, while the effect of susceptibility to normative influence on online group buying intention was mediated by consumer need for uniqueness. Theoretical and practical implications of collective online buying are provided.

Efeitos das Estratégias de Marketing de Compras Coletivas Sobre o Comportamento Impulsivo

Brazil has the second largest e-commerce market in the world. One model used in this sector is "collective buying", a feature of which is impulse sales. Consumer behavior can be influenced by several factors, two of which are addressed in this article: the individual impulsivity of consumers and strategies of mix marketing. Impulsive buying is characterized by an unplanned purchase, i.e. the need to acquire the product arises just before the purchase. Consumers respond differently to mixed strategies depending on their degree of impulsivity. Thus, this article aims to analyze the efficacy of different marketing mix strategies for impulsive and non-impulsive consumer purchasing behavior. 137 participants were given a questionnaire containing the Buying Impulsiveness scale from Rook and Fisher (1995), and statements about the marketing strategies used by collective buying sites. Through a regression analysis, three strategies were found to relate more to impulsivity: search for products from well-known brands, search for deals with big discounts and confidence in receiving the product. For e-commerce and researchers, this study elucidates which strategies, from the consumer's perspective, effectively persuade purchasing behavior.DOI: 10.5585/remark.v13i3.2646

Consumer Cynicism toward Collective Buying: The Interplay of Others’ Outcomes, Social Value Orientation, and Mood

ABSTRACTThis research examines whether consumer cynicism about collective buying depends on consumers’ observations of fellow buyers being treated unfairly in a cobuying context. Prosocial consumers should differ from proself consumers in their level of cynicism, because they value equality in outcomes. Study 1 reveals that prosocials become cynical if others receive an unfair outcome and therefore do not repatronize the provider. This effect does not occur for proselfs. Study 2 shows that mood mediates this effect. Specifically, when prosocial consumers are in a positive mood, the others’ outcomes no longer influence their cynicism. © 2012 Wiley Periodicals, Inc.

Usability and the emotional relationships in collective buying sites: a case study

Several people buy products that they will never use or even know what for. Feelings associated with pleasure, spontaneity and possession of something are reasons why people buy products without considering if they really need it or not if it will be useful or not, etc.. The collective buying sites are going up and offer products and services with great discounts. This study aims to relate the emotional design and usability concerning to collective buying sites and identify the reasons that influence people when it comes to buy something online.

Diagnosis and prediction of rebounds in financial markets

We introduce the concept of “negative bubbles” as the mirror (but not necessarily exactly symmetric) image of standard financial bubbles, in which positive feedback mechanisms may lead to transient accelerating price falls. To model these negative bubbles, we adapt the Johansen–Ledoit–Sornette (JLS) model of rational expectation bubbles with a hazard rate describing the collective buying pressure of noise traders. The price fall occurring during a transient negative bubble can be interpreted as an effective random down payment that rational agents accept to pay in the hope of profiting from the expected occurrence of a possible rally. We validate the model by showing that it has significant predictive power in identifying the times of major market rebounds. This result is obtained by using a general pattern recognition method that combines the information obtained at multiple times from a dynamical calibration of the JLS model. Error diagrams, Bayesian inference and trading strategies suggest that one can extract genuine information and obtain real skill from the calibration of negative bubbles with the JLS model. We conclude that negative bubbles are in general predictably associated with large rebounds or rallies, which are the mirror images of the crashes terminating standard bubbles.

Consumer Behavior Analysis with Fruit Group-Buying

This paper proposes the consumer group-buying the domestic fruit. ”Group-buying” is collective buying that buyers offered products and services at reducing prices with a minimum number of buyers to make the purchase. This research was established the conduction of survey upon the nation divided into four different geographical districts. The decisions making for consumer-association are based greatly upon ”convenience,” ”inexpensive price ranges,” ”trust in quality standards,” and ”consumption habits.” Other important purchase variables are ”reliability” and ”kindness and compassion” of sellers. This extensive research thoroughly analyzes the reasons behind the decision making of a consumer upon purchasing the emerging circuit's expense patterns and the demands made regarding the group. It also provides the group with reason for purchase of businesses that develop entrustment upon marketing strategies, especially towards the emerging circuit.

Diagnosis and Prediction of Market Rebounds in Financial Markets

We introduce the concept of “negative bubbles” as the mirror image of standard financial bubbles, in which positive feedback mechanisms may lead to transient accelerating price falls. To model these negative bubbles, we adapt the Johansen-Ledoit-Sornette (JLS) model of rational expectation bubbles with a hazard rate describing the collective buying pressure of noise traders. The price fall occurring during a transient negative bubble can be interpreted as an effective random downpayment that rational agents accept to pay in the hope of profiting from the expected occurrence of a possible rally. We validate the model by showing that it has significant predictive power in identifying the times of major market rebounds. This result is obtained by using a general pattern recognition method which combines the information obtained at multiple times from a dynamical calibration of the JLS model. Error diagrams, Bayesian inference and trading strategies suggest that one can extract genuine information and obtain real skill from the calibration of negative bubbles with the JLS model. We conclude that negative bubbles are in general predictably associated with large rebounds or rallies, which are the mirror images of the crashes terminating standard bubbles.