MARKET SEGMENTATION STRATEGIES OF MULTIPRODUCT FIRMS -super-*
Abstract
Abstract We analyze a multiproduct duopoly and ask whether firms should offer general purpose products or tailor their offerings to fit specific consumer needs. Offering a targeted product has two effects: utility increases for some consumers due to increased fit , whereas utility decreases for others due to increased misfit . Previous work has not considered these two effects jointly and has therefore not been able to capture the tradeoff inherent in market segmentation. We show that in addition to the degree of fit and misfit, the intensity of competition and the fixed cost of offering an additional product determine firms' market segmentation strategies. Copyright Blackwell Publishing Ltd. 2006.Download Info
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Bibliographic Info
Article provided by Wiley Blackwell in its journal The Journal of Industrial Economics.
Volume (Year): 54 (2006)
Issue (Month): 1 (03)
Pages: 125-149
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Herbert Dawid & Marc Reimann, 2011. "Diversification: a road to inefficiency in product innovations?," Journal of Evolutionary Economics, Springer, vol. 21(2), pages 191-229, May.
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