Hruschka, Harald (2007) Clusterwise pricing in stores of a retail chain. OR SPECTRUM, 29 (4). pp. 579-595. ISSN 0171-6468,
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Clusterwise pricing is characterized by prices of each brand of a category being equal in stores belonging to the same cluster. Expected sales necessary to compute profits are estimated using coefficients of a multilayer perceptron which performs better than several parametric models. Store-specific coefficients of sales response models are estimated by a MCMC method. Both assignment of stores to clusters and prices of each cluster are determined by means of improving hit-and-run, a stochastic optimization method. The objective function to be optimized includes both profits and adherence to the usual price level at individual stores. Based on empirical data on sales, prices and marginal costs of a retail chain it is demonstrated that for a moderate level of risk aversion clusterwise pricing leads to higher expected utility than micromarketing pricing with different prices of each brand across individual stores. Clusterwise pricing attains a high percentage of the profits generated by micromarketing pricing and entails lower menu costs than micromarketing pricing.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | MONTE-CARLO; CONSTRAINED PARAMETER; MODEL; pricing; retailing; optimization |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Betriebswirtschaftslehre > Lehrstuhl für Marketing (Prof. Dr. Harald Hruschka) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 01 Dec 2020 10:44 |
| Last Modified: | 01 Dec 2020 10:44 |
| URI: | https://pred.uni-regensburg.de/id/eprint/32172 |
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