In automobile and household appliances, the manufacturer’s decision to offer retailer rebates to retailers or delayed incentives directly to end customers is very important. Under game theoretic environment, we show that delayed incentive is an important tool not only for price discrimination but it also provides more flexibility to the manufacturer. We differentiate the impact of delayed incentives and retailer rebates. We draw implications for optimal rebate strategies for both retailer rebates and delayed incentives. We also discuss delayed incentives in the form coupons that give more control to the manufacturer, whereas retailer rebates require retailer’s participation. Analysis and numerical insights show that the manufacturer prefers better observance of retail price. We provide a decision rule to the manufacturer on how to select the rebate type based on customer heterogeneity.
Keywords: Marketing-operations interface, delayed incentives, pricing and rebate strategies, heterogeneous customers and Stackelberg game
@article{RO_2021__55_3_1695_0,
author = {Muzaffar, Asif and Nasir Malik, Muhammad and Deng, Shiming},
title = {Efficacy of retailer rebates and delayed incentives under customer heterogeneity},
journal = {RAIRO. Operations Research},
pages = {1695--1713},
year = {2021},
publisher = {EDP-Sciences},
volume = {55},
number = {3},
doi = {10.1051/ro/2021070},
mrnumber = {4273677},
zbl = {1470.91119},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2021070/}
}
TY - JOUR AU - Muzaffar, Asif AU - Nasir Malik, Muhammad AU - Deng, Shiming TI - Efficacy of retailer rebates and delayed incentives under customer heterogeneity JO - RAIRO. Operations Research PY - 2021 SP - 1695 EP - 1713 VL - 55 IS - 3 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2021070/ DO - 10.1051/ro/2021070 LA - en ID - RO_2021__55_3_1695_0 ER -
%0 Journal Article %A Muzaffar, Asif %A Nasir Malik, Muhammad %A Deng, Shiming %T Efficacy of retailer rebates and delayed incentives under customer heterogeneity %J RAIRO. Operations Research %D 2021 %P 1695-1713 %V 55 %N 3 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2021070/ %R 10.1051/ro/2021070 %G en %F RO_2021__55_3_1695_0
Muzaffar, Asif; Nasir Malik, Muhammad; Deng, Shiming. Efficacy of retailer rebates and delayed incentives under customer heterogeneity. RAIRO. Operations Research, Tome 55 (2021) no. 3, pp. 1695-1713. doi: 10.1051/ro/2021070
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