Strategic pricing across the product’s sales cycle: a conceptualization

Target marketing is a key strategy used to increase the revenue. Among many methods that identify prospective customers, the recency, frequency, monetary value (RFM) model is considered the most accurate. However, no RFM study has focused on prospects for new product launches. This study addresses this gap by using website access data to identify prospects for new products, thereby extending RFM models to include website-specific weights. An RF model, built using frequency and recency information from website access data of customers, and an RwF model, built by adding website weights to frequency of access, were developed. A TextRank algorithm was used to analyze weights for each website based on the access frequency, thus defining the weights in the RwF model. South Korean mobile users’ website access data between May 1 and July 31, 2020 were used to validate the models. Through a significant lift curve, the results indicate that the models are highly effective in prioritizing customers for target marketing of new products. In particular, the RwF model, reflecting website-specific weights, showed a customer response rate of more than 30% among the top 10% customers. The findings extend the RFM literature beyond purchase history and enable practitioners to find target customers without a purchase history.

Consumer innovativeness is an important driver of economic progress and a country’s position in global competition. This study aims to examine the moderating effect of demographic factors of Indonesian consumers on the impact of consumer innovativeness on perceived risk and new product adoption. The type of research chosen is a causal comparative study by using online and offline survey methods. Data were obtained from a sample of 1,000 consumers from 31 provinces. The results showed that the demographic variable became a moderating variable for the impact of consumer innovativeness on new product adoption, but did not play a role in the influence of consumer innovativeness on credit-purchase risk perception. With regard to the influence of consumer innovativeness on credit-purchase risk perception, only social class has a significant effect as a moderating variable. As for the effect of consumer innovativeness on a new product adoption, the variables of marital status, occupation, income, and social class have significant effects. The social class variable consistently becomes a moderating one in both equations. The results of this study are useful for marketers to focus more specifically on their target markets, especially on the diffusion of new product innovations based on demographic characteristics.

Acknowledgment
PDUPT Research Grant by Ministry of Research and Technology of The Republic of Indonesia, 2019.

Firms use preannouncements to inform customers about the impending introduction of a new product or service. These preannouncements are significant events because they provide customers with product specific information while signaling the health, strategic intent, and future of a company. One important area of research in this field investigates the performance consequences of product preannouncements (PPA). However, a notable gap in our knowledge exists, because the focus of past research has been on studying wealth effects rather narrowly in certain industries, e.g., high-tech, or under certain contingencies. This restrictive approach is surprising, because PPA are observed in a broad range of product categories. Moreover, product life cycle and consumer switching cost theories predict performance effects of PPA irrespective of category or context. The author addresses this lack of generalizability by using switching cost and life cycle theories to hypothesize positive performance effects of PPA independent of context and contingencies. The event study method from finance is used to empirically test the relationship between PPA and stock prices in a broad sample of events comprising multiple product categories. Using events reported in the Wall Street Journal, evidence of a positive effect of PPA on stock prices irrespective of the type of product or context involved is found. Several managerial implications of the study are noted and avenues for further research are outlined.