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Product Entry Timing in Dual Distribution Channels: The Case of the Movie Industry

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Author Info
Ashutosh Prasad (The University of Texas at Dallas)
Bart Bronnenberg (The University of California, Los Angeles)
Vijay Mahajan (UT Austin)

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Abstract

In many durable goods industries, firms continuously offer new products to customers and market them in different versions through different channel of distribution. This paper examines the issue of when to introduce the product into the different channels. The determinants of entry time include the discounting of future profits, the foresight of the firm, customers' expectations, and the possibility of cannibalization. Of special interest is the effect of customers' expectations about the timing of sequential entries. Specifically, it is shown here that profits decline if firms ignore the role of customer expectations. We discuss how our results can be used to get insights into the workings of the US motion picture industry, which is characterized by sequential introduction of movies first into theaters followed by home video. Finally, a closed form solution for an optimal sequential timing policy is provided.

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File URL: http://www.bepress.com/cgi/viewcontent.cgi?article=1008&context=romsjournal
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Publisher Info
Article provided by Berkeley Electronic Press in its journal Review of Marketing Science.

Volume (Year): 2 (2004)
Issue (Month): 1 ()
Pages: 4
Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Handle: RePEc:bep:revmkt:2:2004:1:4

Note: oai:bepress:romsjournal-1008
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Related research
Keywords: New Product Introductions Durable Goods Motion Picture Industry

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Pesendorfer, Wolfgang, 1995. "Design Innovation and Fashion Cycles," American Economic Review, American Economic Association, vol. 85(4), pages 771-92, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lesley Chiou, 2005. "The Timing of Movie Releases: Evidence from the Home Video Industry," Occidental Economics Working Papers 4, Occidental College, Department of Economics, revised Jul 2006. [Downloadable!]
  2. Franses, Ph.H.B.F. & Hernández-Mireles, C., 2006. "When Should Nintendo Launch its Wii? Insights From a Bivariate Successive Generation Model," Research Paper ERS-2006-032-MKT Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
  3. Cleeren, K. & Dekimpe, M.G. & Verboven, F., 2005. "Intra- and Inter-Channel Competition in Local-Service Sectors," Research Paper ERS-2005-018-MKT Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
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This page was last updated on 2008-11-13.

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