The impact of digital channel distribution on the experience goods industry |
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Authors: | Moutaz Khouja Yulan Wang |
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Affiliation: | Belk College of Business, University of North Carolina at Charlotte, Charlotte, NC 28213, United States; Institute of Textiles and Clothing, Hong Kong Polytechnic University, Kowloon, Hong Kong |
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Abstract: | We explore the impact of a digital channel for experience goods on the profitability and behavior of players in the supply chain and on piracy. We consider a firm which can sell an experience good in physical form, in digitized form, or both. We analyze different pricing schemes – price for whole album on the retail channel and linear and nonlinear pricing for songs on the digital channel. Consumers are divided into a retail-captive segment whose consumers are limited to the retail channel and a hybrid segment whose consumers have access to both retail and digital channels. |
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Keywords: | Marketing E-commerce Channel selection Pricing |
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