Retail Price Of Products Research Articles

How Add-On Pricing Interacts with Distribution Contracts

With the rise of the Internet economy, an increasing number of firms are offering their core products through online platforms, but retail add-ons directly to consumers. Meanwhile, many online platforms have also started adopting the agency (model) contract, where the upstream firms decide the retail prices of products while the downstream platforms take a pre-determined cut from each sale. This study examines the interaction between an upstream firm’s add-on strategy and a downstream online platform’s distribution contract choice. We find that such a firm prefers bundling the add-on and the core product together under the wholesale contract, but prefers retailing the add-on separately under the agency contract. Our research thus is the first to suggest that the distribution contract can critically affect a firm’s choice between add-on pricing and bundling. On the platform side, we show that a higher commission rate does not always result in a higher profit for the platform under the agency contract. We further identify two conditions under which the platform prefers the agency contract over the wholesale contract: The commission rate for the platform cannot be too low, and the market potential of the add-on cannot be too large. For the overall channel, we show that the interaction between add-on pricing and distribution contracts leads to sub-optimal channel performance. That said, it is possible for both the firm and the platform to obtain higher profits under the agency contract than under the wholesale contract. Finally, we also demonstrate the robustness of our findings under several alternative model specifications.

Stochastic Pricing and Order Model with Transportation Mode Selection for Low-Carbon Retailers

More and more enterprises have begun to pay attention to their carbon footprint in the supply chain, of which transportation has become the second major source of carbon emissions. This paper aims to study both optimum pricing and order quantities, considering consumer demand and the selection of transportation modes by retailers, in terms of carbon emissions sensitivity and price sensitivity under the conditions of a cap-and-trade policy and uncertain market demand. Firstly, we analyze the effects of transportation mode (including transportation costs and transportation-induced carbon emissions), initial emissions allowances, carbon emissions trading price and consumer sensitivity to carbon emissions on the optimum decisions and profits of retailers. The results demonstrate that when consumers are less sensitive to price, the optimum retail price and the optimum order quantity of products are proportional to the transportation cost and transportation-induced carbon emissions of retailers per unit product, the carbon emissions trading price as well as consumer sensitivity to carbon emissions. However, when consumers are highly sensitive to price, the optimum order quantity of products is inversely proportional to the transportation costs and transportation-induced carbon emissions of retailers per unit product, the carbon emissions trading price and consumer sensitivity to carbon emissions. In addition, the optimum retail price of products is inversely proportional to consumer sensitivity to carbon emissions. We also find that retailers prefer a low-carbon transportation mode when the carbon emissions trading price is high. Meanwhile, the carbon emissions trading price influences the carbon emissions trading volume of retailers. These theoretical findings are further validated by some numerical analysis.

Prediction of retail prices of products using local competitors

Businesses and customers are interested in predicting the retail prices of products. In a competitive environment, the price of a product at a given target outlet is typically related to the price of the same or similar products at nearby competing outlets. This research predicts the start of day and current prices of a specific product at every outlet in a given city using four vector autoregression models that incorporate the historical retail prices of the product at a target outlet and at competing outlets. The models also include the estimated wholesale price of the product. Three ways of identifying local competitors are considered. The wholesale supplier is that with similar pricing patterns to a target outlet. The proposed models outperform a simple autoregression approach that does not include local competitors or wholesale prices in experiments carried out using data obtained from outlets in five North American cities.

Business Intelligence and the Web

Over the last decade, we have been witnessing an increasing use of Business Intelligence (BI) solutions that allow enterprise to query, understand, and analyze business data in order to make better decisions. Traditionally, BI applications allowed business people to acquire useful knowledge from the data of their organization by means of a variety of technologies, such as data warehousing, data mining, business performance management, OLAP, periodical business reports, and the like. Yet, in the very recent years, a new trend emerged: BI applications no longer limit their analysis to the data inside a company only. Increasingly, they also source their data from the outside, i.e., from the Web, and complement company-internal data with value-adding information from the Web (e.g., retail prices of products sold by competitors), in order to provide richer insights into the dynamics of today’s business. In parallel to the move of data from the Web into BI applications, BI applications are experiencing a trend from company-internal information systems to the cloud: BI as a service (e.g., hosted BI platforms for smalland medium-size companies) is the target of huge investments and the focus of large research efforts by industry and academia. This special issue of Information Systems Frontiers on Business Intelligence and the Web targets the above two moves:Web data feeding BI and engineeringWeb-enabled BI.

Cross-sectional study of availability and pharmaceutical quality of antibiotics requested with or without prescription (Over The Counter) in Surabaya, Indonesia.

BackgroundAntimicrobial resistance is an increasing problem in developing countries and antibiotic use is widespread. Our previous surveys in Java, Indonesia, revealed that most antibiotic use was probably unnecessary or ineffective. The aim of this study was to explore a potential connection between resistance and substandard antibiotics sold in the area.MethodsA cross-sectional field study using the simulated client method was conducted in Surabaya. Five first-line antibiotics were requested with or without prescription (OTC). A certified laboratory analysed the drug content using validated methods. Possible determinants of substandard quality were explored.ResultsIn total, 104 samples from 75 pharmacies, ten drug stores and 39 roadside stalls (kiosks) were obtained. Pharmacy employees filled all OTC requests. Three quarters of kiosks sold antibiotics. Antibiotics were dispensed as single blister strips or repackaged (16%) without label. Ninety five percent of samples carried the label of 14 Indonesian manufacturers. The pharmaceutical quality did not meet BP standards for 18% of samples. Deviations (less active ingredient) were small. There was no association between low content and type of outlet, sold with or without prescription, registration type, price or packaging. Median retail prices of products carrying the same label varied up to 20 fold.ConclusionsAntibiotics were available OTC in all visited pharmacies and sold in the streets of an Indonesian city. Most samples contained an active ingredient. We urge to increase enforcement of existing regulations, including legislation that categorizes antibiotics as prescription-only drugs for all types of medicine outlets, to limit further selection of antimicrobial resistance.

Integrated vendor-buyer inventory model with fuzzy retail price-elasticity coefficient

We want to find the optimal strategy for the integrated vendor-buyer inventory system by setting the model to analysis the profit function be the win-win strategy between vendor and buyer. In the real world, the market is much uncertain because of many dynamic factors. We can’t determine the real relation using crisp value between market demand and retail price of product in complex business. The retail price of product will affect the demand of customers. Furthermore, in order to solve this problem, we will use the fuzzy theory to develop the model and wish to simulate the value of approximate relation between market demand and retail price of product in reality. We employ the signed distance, method for fuzzy numbers, in the retail price to estimate of total profit per unit time in the fuzzy model. Numerical examples are included to illustrate the procedures of the algorithms in order to see if corresponding to the optimal number of profit.

Two-period pricing and ordering policy for the dominant retailer in a two-echelon supply chain with demand uncertainty

Retailing channels are increasingly being dominated by ‘power’ retailers who are in a position to dictate prices and ordering schedules to manufacturers and suppliers. A dominant retailer, such as Wal-Mart, has the ‘power’ to decide retail prices of products because there are so many manufacturers who are keen to sell their products through or to such a large and powerful retailer. Several products, such as electronic products, can be sold in the market for some periods during their lifecycles before they retreat, except when they are not popular with consumers after been introduced. Therefore, in case of such products, the retailer should not just consider a single-period pricing and ordering policy. It should make dynamic pricing and ordering decisions based on market demand forecast, in order to obtain maximum cumulative profit from the product during its lifecycle. In this study, we consider this scenario and construct a two-period model to discuss pricing and ordering problems for a dominant retailer with demand uncertainty in a declining price environment. We show that the maximum expected profit function is continuous concave, so the optimal solution to pricing and ordering policy exists and it is the one and only. We also analyze sensitivity of retailer's expected profit to the effects of parameters of price-discount sharing scheme and market demand.

Impact of Administration Angle on the Cost of Artificial Tear Solutions: Does Bottle Positioning Minimize Wastage?

The aim of this study was to describe the cost considerations of multidose artificial tear products according to drop volume and the number of usable drops per bottle, based on a 45- versus 90-degree administration angle. Densitometric assessment of the drop volume of five multidose artificial tear products of a 15-mL labeled bottle size in conjunction with predictive cost analysis. The correlation between drop volume and density was not significant (Spearman correlation, P = 0.4500; alpha < 0.05). Overall, drop size ranged from 65.9 microL to a nadir of 30.8 microL, with a statistically significant difference (Student t test, P < 0.05) between 45- and 90-degree volumes for all but one product. Cost analysis demonstrated up to a $1.93 per bottle cost savings by the administration of drops at a 45- rather than a 90-degree bottle angle. Products that provide a higher number of drops per dollar of product offer economic advantages that may not be otherwise discernible by the examination of the product retail price alone. Furthermore, it is shown that altering the angle of administration may, in general, result in significant economic ramifications in the use of multidose artificial tear products longitudinally.

Price leadership within a marketing channel: A cointegration study

Building upon a multiple-product channel structure, this paper develops a model to test channel price leadership on the basis of time series observations on retail and wholesale prices and using absence of double marginalisation as a criterion for channel price leadership. The model studies strategic pricing decisions in a two-stage (suppliers–retailers) channel, dealing with several products. Possible long-run relationships between wholesale and retail prices are investigated in relation to three cases. Case 1: suppliers have sufficient power vis-à-vis retailers to enforce double marginalisation; Case 2: retailers do not allow suppliers to enforce double marginalisation; and Case 3: one retailer not only keeps its suppliers from double marginalisation, but is also the horizontal price leader vis-à-vis competing retailers. We explicitly take the time series properties into account to derive the testable implications of strategic price interactions in marketing channels. An attractive feature of our methodology is that price leadership can be tested on the basis of time series on retail prices and wholesale prices only. The procedure for testing the long-run causality implications of the model uses the definition of long-run causality as formulated by Bruneau and Jondeau [Oxf. Bull. Econ. Stat. 61 (4) (1999) 545], but does not use their Wald statistic, which suffers from the undesirable properties of the Wald test when there are nonlinear parameter restrictions. To interpret restrictions on the common stochastic trends of retail and wholesale prices, we show that the common stochastic trends and the deviations from the long-run equilibriums must explicitly be assigned to variables in the channel model. If a common stochastic trend consists of both the retail price and the wholesale price of a product, then the suppliers are able to enforce double marginalisation vis-à-vis the retailers (Case 1). If a common stochastic trend consists solely of a product's wholesale price, then the retailers do not allow suppliers to enforce double marginalisation (Case 2). The opposite situation is a common stochastic trend consisting solely of a product's retail price. In this situation, one of the retailers not only keeps its suppliers from double marginalisation, but is also the horizontal price leader in the retail market for the product (Case 3). The model is applied to a typical multiple product channel allowing various vertical and horizontal interactions between the channel members to co-occur.

National and International Differences in the Prices of Branded and Unbranded Medicines

This study examined retail prices of products containing 22 off-patent active substances, in branded (both original product and branded generics) and unbranded forms, in nine countries. Defined daily doses (DDDs) were used to calculate unit prices (price/DDD) in order to ensure standardised comparisons. Median unit prices for each substance in each country were computed. Brand premiums (price of branded/price of unbranded product) were calculated. Sensitivity analysis was undertaken on key variables to test the robustness of the conclusions reached. Median prices and brand premiums varied considerably across the countries surveyed. Few general trends could be identified, but Germany was the country with the highest prices, both for branded and unbranded products. Branded products are generally more expensive than their unbranded equivalents. Brand premiums were found to be much higher in Eastern European than in Western European countries. The availability of cheaper unbranded products is the most frequent reason for greater brand premiums. A number of local factors — related health policy, market structure and tax policy — contribute to the determination of the prices of medicines. Comparison of retail prices within each country, and national and international price variations between branded and unbranded forms of comparable products, led to the conclusion that medicine pricing at the national level may benefit from the improved availability of price information from other countries. The originality of this study lies in the comparison of retail prices between branded and unbranded products, which, for consumers, is the most visible difference between pharmaceutical products. The methodology used in this study may be a useful tool for consumer organisations and policy makers when addressing pricing and reimbursement issues.

Manufacture of dairy products on the farm

Historical causes have resulted in the majority of milk produced on farms in Britain being sold by wholesale. The self‐sufficiency fashion and other factors have increased interest in making products on the farm. Costs of making are considerable so that the retail prices for products are not necessarily sufficient to ensure high profits. Sustained repeatability in quality of the product is essential. Manufacture requires expertise; some instruction is required if continuing successes are to be assured. Packaging is important for both eye appeal and suitability, for each product. The interest in making is not only by cow herd owners. Goat and sheep milk is being made into cheese and yogurt; these, too, must be of high quality or the reputation of all farmhouse dairy products could be endangered.