The Role of Discount Vouchers in Market with Customer Valuation Uncertainty
Production and Operations Management · 2015 · Volume 24 · Issue 4
Abstract
Online discount voucher market In the discount voucher market, customers usually face two types of valuation uncertainty, namely,preference uncertaintyandconsumption state uncertainty. Preference uncertainty is related to the customer's lack of relevant experience with the merchant, whereas consumption state uncertainty is related to the advance selling nature of the discount voucher mechanism. By taking a comprehensive perspective (i.e., considering revenue management and promotion effect at the same time), we find (i) no show of voucher buyers may not be a good thing for the merchant, especially for those large or start-up ones; (ii) offering refund may always hurt the merchant's profit and the PayPal model may not be optimal in terms of maximizing social welfare; and (iii) market segmentation is not necessary for the profitability of promotion.
Keywords
customer valuation uncertainty, discount vouchers, revenue management, marketing-operations interface
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