Product Entry Timing in Dual Distribution Channels: The Case of the Movie Industry
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Ashutosh Prasad
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.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- Assessing Heterogeneity in Discrete Choice Models Using a Dirichlet Process Prior
- Durable Good, Extended Warranty and Channel Coordination
- The Relationship between Market Share and Information in a High-Tech Industry
- Product Entry Timing in Dual Distribution Channels: The Case of the Movie Industry
- Holding Company Cost Economies in the Global Advertising and Marketing Services Business
- Buyer Shopping Costs and Retail Pricing: An Indirect Empirical Test
- A New Approach for Capturing and Potraying the Competitive Structure of a Market: An Application To The Bush-Kerry-Nader Presidential Contest
- Long-term Profit Impact Of Integrated Marketing Communications Program
