Investigating a long tail in retail vehicle sales
The concept of the long tail in demand distributions has generated significant research interest because of its potential importance for producers, distributors and retailers. Studies to date have focused on information goods sold through internet channels. Here we study long tail effects in vehicle sales sold through conventional car dealerships. The willingness of customers to compromise on, and/or wait for their requested vehicle specifications are identified as critical factors in vehicle purchases. An extensive empirically based simulation study is conducted to investigate these demand-side factors. The results show how the characteristics of the customer population affect the observed pattern in vehicle sales. The interaction effects of supply-side factors are also highlighted, in particular the effect of the replenishment policy used in the fulfillment system. The study also analyzes the distortion of the underlying demand signal in the sales distribution and the lead time and degree of compromise experienced by different customer populations. Significant managerial implications are highlighted, including the dangers of using the sales distribution as a definitive indicator of demand, the need for the order fulfillment process to align with the characteristics of the market, and the negative effects of focusing replenishment on a small subset of the most popular variants.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 40 (2012)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
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.:
- Bentley, R. Alexander & Madsen, Mark E. & Ormerod, Paul, 2009. "Physical space and long-tail markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(5), pages 691-696.
- Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
- Paul E. Green & Abba M. Krieger, 1985. "Models and Heuristics for Product Line Selection," Marketing Science, INFORMS, vol. 4(1), pages 1-19.
- Vijay Mahajan & Eitan Muller & Frank M. Bass, 1995. "Diffusion of New Products: Empirical Generalizations and Managerial Uses," Marketing Science, INFORMS, vol. 14(3_supplem), pages 79-88.
- Erik Brynjolfsson & Yu (Jeffrey) Hu & Michael D. Smith, 2003.
"Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers,"
INFORMS, vol. 49(11), pages 1580-1596, November.
- Brynjolfsson, Erik & Smith, Michael D. & Yu, (Jeffrey) Hu, 2003. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers," Working papers 4305-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Fenner, Trevor & Levene, Mark & Loizou, George, 2010. "Predicting the long tail of book sales: Unearthing the power-law exponent," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(12), pages 2416-2421.
- Meyr, H., 2004. "Supply chain planning in the German automotive industry," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 36062, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL). Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:40:y:2012:i:3:p:302-313. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.