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SELECTION OF PRODUCT ATTRIBUTES: A JOINT OPTIMIZATION OF CONSUMERS’ UTILITY AND MARKETERS’ PROFIT IN HIGHT TECH INDUSTRIES

Year 2007, Volume: 3 Issue: 5, 21 - 35, 01.06.2007

Abstract

This paper analyzes to find a general model of the decision to add an attribute to a product with the objective of maximizing consumers’ welfare utility while maximizing marketers’ profit at the same time. The optimal strategy, optimal combination of product attributes, is found in two steps. First, the optimal price is derived from the firm optimization problem as a function of product attributes. Second, the consumer problem is solved by substituting the price with the optimal price. As a result, an attribute should be in the product if its ratio of consumer welfare to firm’s cost exceeds the threshold. On the other hand, if this ratio doesn’t provide a higher value comparde to threshold, that attribute should not be in the product

References

  • Aaker, D. A. ve R. Jacobson (1994), “The Financial Information Content of Perceived Quality”, Journal of Marketing Research, Vol. 31 (May), Iss. 2, pp. 191- 201.
  • ANSI/ASQC (1978), “Quality Systems Terminology”, American Society for Quality Control, 1978-12, Milwaukee, WI.
  • Bettman, J.R., M.F. Luce ve J.W. Payne (1998), “Constructive Consumer Choice Process”, Journal of Consumer Research, Vol. 25, pp. 187-217.
  • Codell, V. (1997), “Consumer Knowledge Measures as Predictors in Product Evaluation”, Psychology & Marketing, Vol. 14, pp. 241-260.
  • Cropper, L. M., L. Deck, N. Kishor ve K. E. McConnell (1993), “Valuing Product Attributes Using Single Market Data: A Comparison of Hedonic and Discrete Choice Approaches”, The Review of Economics and Statistics, Vol. 25, pp. 225-232.
  • Deaton, A. ve J. Muellbauer (1981), Economics and Consumer Behavior, Cambridge University Press, New York.
  • Edwards, W. ve J. R. Newman (1983), Multiattribute Evaluation, Second Printing, Sage Publications, California.
  • Evans, J. R. ve W. M. Lindsay (1996), The Management and Control of Quality, Third Edition, West Publishing Company, New York.
  • Ferber, R. (1974), “Consumer Economics: A Survey”, Recent Advances in Economics; A Book of Readings, Irwin Inc., Illinois.
  • Garvin, D. A. (1984), “What Does Product Quality Really Mean?”, Sloan Management Review, Vol. 26 (Fall), pp. 25-48.
  • Gensch, D. H. ve W. W. Recker (1979), “The Multinomial, Multiattribute Logit Choice Model,” Journal of Marketing Research, Vol. 16 (February), pp. 124-132.
  • Greising, D. (1994), “Quality: How To Make It Pay”, Business Week, August 8, Iss. 3384, pp. 54-57.
  • Hamel, G. ve C.K. Prahalad (1991), “Corporate Imagination and Expeditionary Marketing,” Harvard Business Review, (July-August), pp. 81-92.
  • Hauser, J. R., and G. L. Urban (1979), “Assessment of Attribute Importances and Consumer Utility Functions: von Neumann-Morgenstern Theory Applied to Consumer Behavior”, Journal of Consumer Research, Vol. 5 (March),pp. 251-262.
  • Johansson, Per-Olov (1992), An Introduction to Welfare Economics, Cambridge University Press, New York.
  • Lancaster, K. (1966), “A New Approach to Consumer Theory”, Journal of Political Economy, Vol. 74 (April), pp. 132-157.
  • Lancaster, K. (1991), Modern Consumer Theory, Edward Elgar Publishing Company, Vermont.
  • Leech, D.J. (1982), Economics and Financial Studies for Engineers, John Wiley & Sons, New York.
  • MacMillan, I. C. ve R. G. McGrath (1996), “Discover Your Products’ Hidden Potential”, Harvard Business Review, Vol. 74 (May-June), pp. 58-73.
  • McFadden, D. (1970), “Conditional Logit Analysis of Qualitative Choice Behavior”, in Frontiers in Econometrics, New York: Academic Press, pp. 105-142.
  • Olshavsky, R. W. ve J. A. Miller (1972), “Consumer Expectations, Product Performance, and Perceived Quality”, Journal of Marketing Research, Vol. 9 (February), pp. 19-21.
  • Parasuraman, A., L. L. Berry, and A. Zeithhaml (1988), “Communication and Control Processes in Delivery of Service Quality”, Journal of Marketing, Vol. 52 (April), pp. 35-48.
  • Pekelman, D. ve S. K. Sen (1979), “Measurement and Estimation of Conjoint Utility Functions”, Journal of Consumer Research, Vol. 5 (March), pp. 263-271.
  • Phlips, L. (1974), Applied Consumption Analysis; Advanced Textbooks in Economics, American Elsevier Publishing Co., Inc., New York.
  • Power, C., K. Walecia, T. James, ve C. Alice (1991), “Value Marketing” Business Week,November 11,Iss. 3239, pp. 132.
  • Ratchford, B. T. (1979), “Operationalizing Economic Models of Demand for Product Characteristics”, Journal of Consumer Research, Vol. 6 (June), pp. 76- 86.
  • Reichheld, F. F. ve W. E. Sasser, Jr. (1990), “Zero Defections: Quality Comes to Services,” Harvard Business Review, Vol. 68 (September-October), pp. 105-111.
  • Rose, S. (1990), “The Coming Revolution in Credit Cards”, Journal of Retail Banking, Vol. 12 (Summer), pp. 17-19.
  • Rust, R. T., J. J. Inman, J. Jia, and A. Zahorik (1999), “What You Don’t Know About Consumer - Perceived Quality: The Role of Consumer Expectation Distributions”, Marketing Science, Vol. 18, pp. 77-92.
  • Rust, R. T., A. Zahorik, and T. L. Keiningham (1995), “Return on Quality (ROQ): Making Service Quality Financially Accountable,” Journal of Marketing, Vol. 59 (April), pp. 58-70.
  • Simon, H. A. (1966), “Theories of Decision-Making in Economics and Behavioral Science”, in Surveys of Economic Theory, Volume III, New York: St. Martin’s Press, pp. 1-29.
  • Srinivasan,V., W. S. Lovejoy, and D. Beach (1997), “Integrated Product Design for Marketability and Manufacturing”, Journal of Marketing Research, Vol. 34 (February), pp. 154-163.
  • Stigler, G. (1987), The Theory of Price, Macmillan Publishing Company, New York.
  • Turban, E. ve M. L. Metersky (1971), “Utility Theory Applied to Multi-Variable System Effectiveness Evaluation”, Management Science, Vol. 17 (August), pp. B817-B828.
  • Walstrom, K. A., B. C. Hardgrave, ve R. L. Wilson (1995), “Forums for Management Information Systems Scholars”, Association for Computing Machinery Communications of the ACM, Vol. 38, pp. 93-108.

ÜRÜN ÖZELLİKLERİNİN SEÇİMİ: YÜKSEK TEKNOLOJİ ÜRÜN PAZARINDA TÜKETİCİ İHTİYAÇLARI VE ÜRETİCİ KALİTE GELİŞTİRME HARCAMALARININ EŞZAMANLI OPTİMİZASYONU

Year 2007, Volume: 3 Issue: 5, 21 - 35, 01.06.2007

Abstract

Bu çalışmanın amacı tüketici faydasını ve üretici karını aynı anda maksimum seviyede tutmak kaydı ile bir ürüne ilave özellik katma kararının verilmesinde genel bir karar alma modelinin bulunmasıdır. Optimal strateji, yani optimal ürün özellik kombinasyonu iki aşamada bulunmaktadır. Birinci aşamada, optimal fiyat, firma optimizasyon problemindeki ürün özelliklerinin bir fonksiyonu olarak türetilmektedir. İkinci aşamada, birinci aşamada bulunan optimal fiyat’ın tüketici probleminde yer alan fiyatın yerine konulması ile problem çözülmektedir. Sonuç olarak bir özellik tüketici faydasının üretici maliyetine olan oranı bulunan eşik değerini aşmakta ise ürüne eklenmelidir. Ancak bu oran eşik değerinin altında kalmakta ise özellik ürüne eklenmemelidir.

References

  • Aaker, D. A. ve R. Jacobson (1994), “The Financial Information Content of Perceived Quality”, Journal of Marketing Research, Vol. 31 (May), Iss. 2, pp. 191- 201.
  • ANSI/ASQC (1978), “Quality Systems Terminology”, American Society for Quality Control, 1978-12, Milwaukee, WI.
  • Bettman, J.R., M.F. Luce ve J.W. Payne (1998), “Constructive Consumer Choice Process”, Journal of Consumer Research, Vol. 25, pp. 187-217.
  • Codell, V. (1997), “Consumer Knowledge Measures as Predictors in Product Evaluation”, Psychology & Marketing, Vol. 14, pp. 241-260.
  • Cropper, L. M., L. Deck, N. Kishor ve K. E. McConnell (1993), “Valuing Product Attributes Using Single Market Data: A Comparison of Hedonic and Discrete Choice Approaches”, The Review of Economics and Statistics, Vol. 25, pp. 225-232.
  • Deaton, A. ve J. Muellbauer (1981), Economics and Consumer Behavior, Cambridge University Press, New York.
  • Edwards, W. ve J. R. Newman (1983), Multiattribute Evaluation, Second Printing, Sage Publications, California.
  • Evans, J. R. ve W. M. Lindsay (1996), The Management and Control of Quality, Third Edition, West Publishing Company, New York.
  • Ferber, R. (1974), “Consumer Economics: A Survey”, Recent Advances in Economics; A Book of Readings, Irwin Inc., Illinois.
  • Garvin, D. A. (1984), “What Does Product Quality Really Mean?”, Sloan Management Review, Vol. 26 (Fall), pp. 25-48.
  • Gensch, D. H. ve W. W. Recker (1979), “The Multinomial, Multiattribute Logit Choice Model,” Journal of Marketing Research, Vol. 16 (February), pp. 124-132.
  • Greising, D. (1994), “Quality: How To Make It Pay”, Business Week, August 8, Iss. 3384, pp. 54-57.
  • Hamel, G. ve C.K. Prahalad (1991), “Corporate Imagination and Expeditionary Marketing,” Harvard Business Review, (July-August), pp. 81-92.
  • Hauser, J. R., and G. L. Urban (1979), “Assessment of Attribute Importances and Consumer Utility Functions: von Neumann-Morgenstern Theory Applied to Consumer Behavior”, Journal of Consumer Research, Vol. 5 (March),pp. 251-262.
  • Johansson, Per-Olov (1992), An Introduction to Welfare Economics, Cambridge University Press, New York.
  • Lancaster, K. (1966), “A New Approach to Consumer Theory”, Journal of Political Economy, Vol. 74 (April), pp. 132-157.
  • Lancaster, K. (1991), Modern Consumer Theory, Edward Elgar Publishing Company, Vermont.
  • Leech, D.J. (1982), Economics and Financial Studies for Engineers, John Wiley & Sons, New York.
  • MacMillan, I. C. ve R. G. McGrath (1996), “Discover Your Products’ Hidden Potential”, Harvard Business Review, Vol. 74 (May-June), pp. 58-73.
  • McFadden, D. (1970), “Conditional Logit Analysis of Qualitative Choice Behavior”, in Frontiers in Econometrics, New York: Academic Press, pp. 105-142.
  • Olshavsky, R. W. ve J. A. Miller (1972), “Consumer Expectations, Product Performance, and Perceived Quality”, Journal of Marketing Research, Vol. 9 (February), pp. 19-21.
  • Parasuraman, A., L. L. Berry, and A. Zeithhaml (1988), “Communication and Control Processes in Delivery of Service Quality”, Journal of Marketing, Vol. 52 (April), pp. 35-48.
  • Pekelman, D. ve S. K. Sen (1979), “Measurement and Estimation of Conjoint Utility Functions”, Journal of Consumer Research, Vol. 5 (March), pp. 263-271.
  • Phlips, L. (1974), Applied Consumption Analysis; Advanced Textbooks in Economics, American Elsevier Publishing Co., Inc., New York.
  • Power, C., K. Walecia, T. James, ve C. Alice (1991), “Value Marketing” Business Week,November 11,Iss. 3239, pp. 132.
  • Ratchford, B. T. (1979), “Operationalizing Economic Models of Demand for Product Characteristics”, Journal of Consumer Research, Vol. 6 (June), pp. 76- 86.
  • Reichheld, F. F. ve W. E. Sasser, Jr. (1990), “Zero Defections: Quality Comes to Services,” Harvard Business Review, Vol. 68 (September-October), pp. 105-111.
  • Rose, S. (1990), “The Coming Revolution in Credit Cards”, Journal of Retail Banking, Vol. 12 (Summer), pp. 17-19.
  • Rust, R. T., J. J. Inman, J. Jia, and A. Zahorik (1999), “What You Don’t Know About Consumer - Perceived Quality: The Role of Consumer Expectation Distributions”, Marketing Science, Vol. 18, pp. 77-92.
  • Rust, R. T., A. Zahorik, and T. L. Keiningham (1995), “Return on Quality (ROQ): Making Service Quality Financially Accountable,” Journal of Marketing, Vol. 59 (April), pp. 58-70.
  • Simon, H. A. (1966), “Theories of Decision-Making in Economics and Behavioral Science”, in Surveys of Economic Theory, Volume III, New York: St. Martin’s Press, pp. 1-29.
  • Srinivasan,V., W. S. Lovejoy, and D. Beach (1997), “Integrated Product Design for Marketability and Manufacturing”, Journal of Marketing Research, Vol. 34 (February), pp. 154-163.
  • Stigler, G. (1987), The Theory of Price, Macmillan Publishing Company, New York.
  • Turban, E. ve M. L. Metersky (1971), “Utility Theory Applied to Multi-Variable System Effectiveness Evaluation”, Management Science, Vol. 17 (August), pp. B817-B828.
  • Walstrom, K. A., B. C. Hardgrave, ve R. L. Wilson (1995), “Forums for Management Information Systems Scholars”, Association for Computing Machinery Communications of the ACM, Vol. 38, pp. 93-108.
There are 35 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Oya Erdil This is me

Mevlüt Baydar This is me

Publication Date June 1, 2007
Published in Issue Year 2007 Volume: 3 Issue: 5

Cite

APA Erdil, O., & Baydar, M. (2007). ÜRÜN ÖZELLİKLERİNİN SEÇİMİ: YÜKSEK TEKNOLOJİ ÜRÜN PAZARINDA TÜKETİCİ İHTİYAÇLARI VE ÜRETİCİ KALİTE GELİŞTİRME HARCAMALARININ EŞZAMANLI OPTİMİZASYONU. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 3(5), 21-35.