Strategic Pricing and Detailing Behavior in International Markets

Chintagunta, Pradeep C.; Desiraju, Ramarao
January 2005
Marketing Science;Winter2005, Vol. 24 Issue 1, p67
Academic Journal
We study three determinants of the levels of price and detailing effort across geographic markets: the within-market response to each variable, the nature of interfirm strategic interactions both within that market and across markets. We empirically examine the interactions of Prozac, Zoloft, and Paxil across the United States, the United Kingdom, Germany, France, and Italy. Our results indicate that all three factors driving marketing mix interactions are a play in this product category. The U.S. market is less price-sensitive than the European markets. Detailing elasticities are comparable across the United States, Germany, and Italy, while the United Kingdom and France show greater elasticity. For the U.S. market, we find that almost all deviations from Nash pricing and detailing levels are due to within-market interactions. In the U.K. market, deviations from Nash prices come about due mostly to across-market interactions--both with the United States as well as the rest of Europe, whereas deviations from Nash detailing levels are mainly due to across-market interactions with the United States. For Italy, we observe that both within and across-market interactions affect price and detailing levels. Overall, the pattern of interactions makes observed prices more similar across countries than prices implied by the estimated elasticities. This underscores the importance of considering within-and across-market interactions in developing multimarket strategy.


Related Articles

  • Segment focus strong in b-to-b. Golia, Nathan // DM News;3/15/2010, p16 

    The article focuses on the reliance of business marketers on testing and segmentation to reach niche audiences.

  • AMA cites `filtered pricing' move toward individualization.  // Marketing News;2/1/88, Vol. 22 Issue 3, p8 

    The article discusses about filtered pricing. According to the American Marketing Association (AMA), filtered pricing is an inclination toward greater pricing individualization. A filtered pricing method enhances the total revenues of marketers by taking into account individual differences in...

  • Violating the Law of Once Price. Engel, Charles; Rogers, John H. // Working Papers -- U.S. Federal Reserve Board's International Fin;1999, p1 

    This paper utilizes disaggregated data on consumer prices to observe why there is variability in prices of similar goods across cities in the United States. The authors consider whether this variability is purely a result of market segmentation or if sticky nominal prices play a role. They...

  • Balancing Act. Coupe, Kevin // Chain Store Age;Mar2004, Vol. 80 Issue 3, p40 

    Discusses the pricing strategy used by the New York-based firm Price Chopper in an attempt to secure its market niche. Approaches to creating a differential advantage for consumers; Effectiveness of the promotional efforts of the firm; Stock performance of Price in 2003.

  • When Is Price Discrimination Profitable? Anderson, Eric T.; Dana, Jr., James D. // Management Science;Jun2009, Vol. 55 Issue 6, p980 

    We consider a general model of monopoly price discrimination and characterize the conditions under which price discrimination is and is not profitable. We show that an important condition for profitable price discrimination is that the percentage change in surplus (i.e., consumers' total...

  • AFTER-SALES SUCCESS.  // B&T Weekly;Feb2004 Supplement, p6 

    Focuses on issues related to business plans for after-sales services. Importance of service plans on the development of strategic business planning; Forfeiture on the profit potential of after-sales service by some companies; Recommendation for businesses to segment customers according to their...

  • SCIENTIFIC APPROACH IN LEATHER PRODUCTION ORGANIZATION. Zinovievich, Dubinovskiy Mark; Andreevna, Sycheva Anastasia // Theory & Practice of Social Development;2013, Issue 3, p50 

    The article considers lateral marketing and its constituents, as well as such a form of market incentives as an upfront payment, problems of the market segmentation and out-reaches to target group. It is emphasized that for ensuring the competitive strength the companies use a cost index, and...

  • Short Term Price and Dealing Effects in Selected Market Segments. Massy, William F.; Frank, Ronald E. // Journal of Marketing Research (JMR);May65, Vol. 2 Issue 2, p171 

    Changes in relative price and dealing activity are likely to affect different segments of the market in different ways. A distributed lag model is developed for predicting a firm's market share over a period of weeks from knowledge of the changes in these variables. It is tested on aggregate...

  • Broad market segmentation tricky when appealing to older consumer. Herzbrun, David J. // Advertising Age;8/5/1991, Vol. 62 Issue 32, p15 

    Explains the difficulty of appealing to older consumer in a broad market segmentation. Discussion on target marketing; Market segments in the U.S.; Needs of different market segments;.


Read the Article


Sign out of this library

Other Topics