IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

—Pricing Digital Content Product Lines: A Model and Application for the National Academies Press

  • P. K. Kannan

    ()

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

  • Barbara Kline Pope

    ()

    (The National Academies, Washington, DC 20001)

  • Sanjay Jain

    ()

    (Mays School of Business, Texas A&M University, College Station, Texas 77843)

Registered author(s):

    We examine the problem of how a content provider, specifically the National Academies Press (NAP), can optimally price the different forms of its product—print and PDF—that it sells online. Whereas products in the traditional product line generally tend to be substitutes, the different content product forms could range from being substitutes to being complements across customers. Thus the content provider can possibly sell bundles of the product forms, leading to additional revenue. We first discuss NAP's decision context and describe the model we proposed for developing NAP's optimal pricing policies for its different forms. We describe the choice experiment we conducted on the publisher's website that maximally uses the online interface to collect relevant data needed to estimate our model. We show how NAP embraced the results from the model for developing a new business model and how it used the insights derived from the study to set pricing policies and monitor sales performance as a function of pricing. Finally, we perform validation of the model and the implemented policies using dynamic modeling of sales data from NAP's website. The paper illustrates how e-commerce technologies can lead to the development of optimal policies using marketing models.

    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.

    File URL: http://dx.doi.org/10.1287/mksc.1080.0481
    Download Restriction: no

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 28 (2009)
    Issue (Month): 4 (07-08)
    Pages: 620-636

    as
    in new window

    Handle: RePEc:inm:ormksc:v:28:y:2009:i:4:p:620-636
    Contact details of provider: Postal:
    7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA

    Phone: +1-443-757-3500
    Fax: 443-757-3515
    Web page: http://www.informs.org/
    Email:


    More information through EDIRC

    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.:

    as in new window
    1. McConnell, K. E., 1990. "Models for referendum data: The structure of discrete choice models for contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 19-34, January.
    2. William James Adams & Janet L. Yellen, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 90(3), pages 475-498.
    3. R. Venkatesh & Wagner Kamakura, 2003. "Optimal Bundling and Pricing under a Monopoly: Contrasting Complements and Substitutes from Independently Valued Products," The Journal of Business, University of Chicago Press, vol. 76(2), pages 211-232, April.
    4. Wendy W. Moe & Peter S. Fader, 2004. "Dynamic Conversion Behavior at E-Commerce Sites," Management Science, INFORMS, vol. 50(3), pages 326-335, March.
    5. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    6. Peter H. Farquhar & Vithala R. Rao, 1976. "A Balance Model for Evaluating Subsets of Multiattributed Items," Management Science, INFORMS, vol. 22(5), pages 528-539, January.
    7. K. Sridhar Moorthy & I. P. L. Png, 1992. "Market Segmentation, Cannibalization, and the Timing of Product Introductions," Management Science, INFORMS, vol. 38(3), pages 345-359, March.
    8. Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
    9. Sanjay Jain, 2008. "Digital Piracy: A Competitive Analysis," Marketing Science, INFORMS, vol. 27(4), pages 610-626, 07-08.
    10. Gregory Dobson & Shlomo Kalish, 1993. "Heuristics for Pricing and Positioning a Product-Line Using Conjoint and Cost Data," Management Science, INFORMS, vol. 39(2), pages 160-175, February.
    11. Rajeev Kohli & R. Sukumar, 1990. "Heuristics for Product-Line Design Using Conjoint Analysis," Management Science, INFORMS, vol. 36(12), pages 1464-1478, December.
    12. Manski, Charles F & Lerman, Steven R, 1977. "The Estimation of Choice Probabilities from Choice Based Samples," Econometrica, Econometric Society, vol. 45(8), pages 1977-88, November.
    13. Paul E. Green & Abba M. Krieger, 1985. "Models and Heuristics for Product Line Selection," Marketing Science, INFORMS, vol. 4(1), pages 1-19.
    14. Jie Zhang & Lakshman Krishnamurthi, 2004. "Customizing Promotions in Online Stores," Marketing Science, INFORMS, vol. 23(4), pages 561-578, June.
    15. Alberini Anna, 1995. "Optimal Designs for Discrete Choice Contingent Valuation Surveys: Single-Bound, Double-Bound, and Bivariate Models," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 287-306, May.
    16. Gregory Dobson & Shlomo Kalish, 1988. "Positioning and Pricing a Product Line," Marketing Science, INFORMS, vol. 7(2), pages 107-125.
    17. V. Srinivasan & Amiya K. Basu, 1989. "The Metric Quality of Ordered Categorical Data," Marketing Science, INFORMS, vol. 8(3), pages 205-230.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:28:y:2009:i:4:p:620-636. 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: (Mirko Janc)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.