Competitive pricing and targeted advertising strategies in online and offline channels with webrooming
In recent years,customers'webrooming behavior(i.e.,gather information online and purchase offline)has become a common practice.With a focus on the effect of webrooming,we establish an analytical model in which online retailer and BM store sell the search-products and experience-products.By analyzing the equilibrium result,we firstly show that to search-products,whether customers engage webrooming is determined by the privacy cost,only when the privacy cost is in a high level,customers will engage webrooming;to experience-products,whether customers engage webrooming also concerned with the match probability between customer and BM store.Second,it is verified that the presence of webrooming strictly hurt online retailer's profit whatever the seller sells search-products and experience-products.In addition,the price of search-products will become higher with the higher unit travel costs,lower online search costs,and lower privacy costs;the price of experience-products will decline with the increasing match probability between customer and BM store.To counter the behavior of webrooming,we find that targeted advertising will relax the competition and reduces the impact of webrooming behavior on online retailer.Counterintuitive,BM store also prefers targeted advertising to some extent since when online retailer invests more on targeted advertising.Finally,we compare the performance of targeted advertising to search-products and experience-products when online retailer counter with webrooming,and find that when the privacy cost is in a low level,targeted advertising performs better in experience-products;on the contrary,when the privacy cost is in a high level,targeted advertising performs better in search-products.
NETL
NSTL
万方数据
维普
