Martin Natter

• Dr.
• Chair at University of Zurich

Digitalization allows retailers to target customers with personalized promotions when they enter the store. Although traditional promotional retailer objectives, such as store visit, become obsolete once the shopper is already in the store, retailers still tend to target customers based on indicators that drive store visit, such as recency, frequen...

Dynamic pricing is typically implemented via pricing algorithms that react to varying levels of supply and demand. Some companies, such as Uber, also vary prices for different offers, such as standard cars or limousines for a ride. However, companies usually do not proceed to the next logical step and delegate pricing authority to their employees....

Abundant evidence exists that expected utility theory does not adequately describe decision making under risk. Although prospect theory is a popular alternative, it is rarely applied in strategic situations in which risk arises through individual interactions. This study fills this research gap by incorporating prospect theory preferences into a dy...

Mystery shopping (MS) is a widely used tool to monitor the quality of service and personal selling. In consultative retail settings, assessments of mystery shoppers are supposed to capture the most relevant aspects of salespeople's service and sales behavior. Given the important conclusions drawn by managers from MS results, the standard assumption...

Purpose The purpose of this paper is to compare the impact of different multi-unit promotions (MUPs) and a single-unit promotion (SUP) on store-level sales and consumer-level purchase probability and quantity decision. Design/methodology/approach The paper combines two empirical studies. Study 1 applies a hierarchical multiplicative model to store...

Market liberalization of the German household electricity market has led to an excessive number of competitors (1,150 electricity providers) and volatile price dynamics on price comparison sites. To date, providers that are struggling to achieve a top ranking on price comparison sites do not appear to implement a consistent or elaborate strategy fo...

In the marketing domain, models of grocery buying behavior consider purchase incidence as a key dimension. However, in recommender systems, timing is often subsumed under contextual information and has received little attention yet. For this reason, we analyze the relation between the timing of a recommendation and its acceptance across different p...

Online customer reviews (OCRs) have become a major source of information for customers on the Internet. Understanding the impact of OCRs on customers’ decisions is an important challenge for academics and practitioners. We apply a choice-based conjoint experiment that combines all relevant levels of the OCR dimensions (valence, volume, and variance...

The authors provide an overview about research conducted in the area of four different voluntary market payment mechanisms, namely tipping, Pay-What-You-Want, donations, and gift giving. The authors identify three different research streams: the first stream of research investigates product and consumer characteristics that drive success measures o...

Free sampling and price discounts are important, popular promotional tools used to attract new customers by reducing their risk of trial. The authors investigate pay-what-you-want (PWYW) as an alternative promotional tool to free sampling and price discounts in two field experiments. The authors find significant differences in perceived promotional...

Pay-per-bid auctions are a popular new type of Internet auction that is unique because a fee is charged for each bid that is placed. This paper uses a theoretical model and three large empirical data sets with 44,614 ascending and 1,460 descending pay-per-bid auctions to compare the economic effects of different pay-per-bid auction formats, such as...

Pay-per-bid auctions require all bidders to pay for every bid. However, paying bidding fees without receiving the auction item in return often causes high dissatisfaction among losers, resulting in heated discussions and high churn rates. To reduce these negative reactions, pay-per-bid auctioneers created the Buy-Now feature, which allows losers to...

Pay what you want (PWYW) is a new participative pricing mechanism in which consumers have maximum control over the price they pay. Previous research has suggested that participative pricing increases consumers' intent to purchase. However, sellers using PWYW face the risk that consumers will exploit their control and pay nothing at all or a price b...

Merchandise managers have long dreamt of automated dynamic systems to help them make well-informed pricing decisions. However, such systems have proved as elusive as the Holy Grail - until now, that is. The story of an Austrian DIY retailer shows often undetected opportunities to use valuable information, hidden in retailers' data warehouses, on co...

In many firms, the marketing department plays a minor role in new product development (NPD). However, recent research demonstrates that marketing capabilities more strongly influence firm performance than other areas such as R&D. This finding underscores the importance of identifying relevant capabilities that can improve the position of marketing...

Data visualization aids have become popular tools to assist managerial decision making in marketing. For example, Geographical Information Systems (GIS) are often used to identify suitable retail locations, regional distributions for advertising campaigns, or targeting of direct marketing activities. GIS-based visualizations facilitate the assessme...

Pay-What-You-Want (PWYW) ist ein partizipativer Preismechanismus, der sich dadurch auszeichnet, dass dem Käufer die volle Kontrolle über den Preis gegeben wird. Anhand zahlreicher Praxisbeispiele wird deutlich, dass PWYW in verschiedenen Branchen anwendbar ist. Unter Verwendung einer Latent-Class-Regression werden zwei unterschiedliche Segmente ide...

When consumers decide where to shop, they take several criteria into account. It is not yet clear whether private label (PL) quality is one of these criteria. It is the intention of this study to shed light on this issue because many retailers have invested heavily into the quality of their PLs. They assume that PLs differentiate a store's assortme...

The degree of openness in innovation, ranging from closed to multiple levels of openness, is a key strategic decision for managers. Therefore, this study aims to carefully investigate the underlying drivers of openness. A major result of this study is that the degree of openness underlies separate mechanisms for being closed in innovation and highe...

Online price comparison sites (shopbots) like PriceGrabber.com are the most powerful tools for consumers to easily compare prices and find offers for desired products. Besides providing distributions of actual prices in price comparison tables, shopbots like NexTag.com have recently introduced price charts (line charts) displaying a product’s full...

This study of the influence of the marketing department (MD), as well as its relationship with firm performance, includes seven industrialized countries and aims to generalize the conceptual model presented by Verhoef and Leeflang (2009). This investigation considers the antecedents of perceived MD influence, top management respect for the MD, and...

Marketing planners often use geographical information systems (GISs) to help identify suitable retail locations, regionally distribute advertising campaigns, and target direct marketing activities. Geographical information systems thematic maps facilitate the visual assessment of map regions. A broad set of alternative symbolizations, such as circl...

Geographical Information Systems (GIS) are often used to identify suitable retail locations, regional distributions for advertising campaigns, or targeting of direct marketing activities. GIS facilitate assessments of store locations and help planners to select the most promising options. Such processes are multi-step, back-and-forth activities tha...

Issues of segmentation and positioning have always been at the heart of marketing management. In recent years, much methodological progress has been made in order to carry out these two tasks simultaneously, that is, to combine certain types of clustering algorithms with appropriate multidimensional scaling or unfolding procedures. When trying to p...

Brand-nonspecific retailer coupons that entitle customers to assortment-wide discounts appeal in similar ways to national brand (NB) and private label (PL) users. The latter may be considered an attractive target group because they express high levels of deal proneness. However, it is unclear how assortment-wide retailer coupons affect customers' p...

Preference maps provide a visual representation of market structure, usually depicting brand or product alternatives, product attributes, and customers in a single graphic. Using measures of consideration and attribute sets to establish criterion validity, we develop a set of metrics that can be interpreted by managers and that allow managers to ev...

New restaurants often do not manage to succeed within a reasonable amount of time. Exotic restaurants especially face the problem that price promotions may not attract new customers because prospective customers might associate very low prices for unfamiliar food with a high functional risk. This paper describes how Pay-What-You-Want (PWYW), a new...

Technology advances and competitive pressure have shortened the life cycles for many products and drastically increased the penalty of holding obsolete finished goods inventories. Standard planning methods lead to high forecasting errors and – as a consequence – to high safety inventories. Furthermore, these traditional inventory models typically a...

Pay what you want (PWYW) is a new participative pricing mechanism in which consumers have maximum control over the price they pay. Previous research has suggested that participative pricing increases consumers' intent to purchase. However, sellers using PWYW face the risk that consumers will exploit their control and pay nothing at all or a price b...

Pay what you want (PWYW) is a new participative pricing mechanism in which consumers have maximum control over the price they pay. Previous research has suggested that participative pricing increases consumers’ intent to purchase. However, sellers using PWYW face the risk that consumers will exploit their control and pay nothing at all or a price b...

Tele.ring is a mobile phone organization selling contracts and cell phones in the Austrian market. The market situation in 2005 was highly competitive and dynamic, resulting in relatively short tariff life cycles. Excessively long lead times made tele.ring's management feel dissatisfied with their new tariff development process. Furthermore, a new...

The image of retail stores offers an important means for differentiation in highly competitive retail markets. Storefront displays generally function to increase attention to the store or generate unplanned store visits, whereas their impact on store image remains unknown. This study therefore investigates perceived image differences between common...

The image of retail stores offers an important means for differentiation in highly competitive retail markets. Storefront displays generally function to increase attention to the store or generate unplanned store visits, whereas their impact on store image remains unknown. This study therefore investigates perceived image differences between common...

Tele.ring is a mobile phone organization selling contracts and cell phones in the Austrian market. The market situation in 2005 was highly competitive and dynamic, resulting in relatively short tariff life cycles. Excessively long lead times made tele.ring’s management feel dissatisfied with their new tariff development process. Furthermore, a new...

The main objective of this report is to describe a decision-support system for dynamic retail pricing and promotion planning. Our weekly demand model incorporates price, reference price effects, seasonality, article availability information, features, and discounts. Building on previous research, we quantify demand interdependencies and integrate t...

Fierce competition and rapid technological progress have considerably reduced the life cycle length for mobile phones in the last decade. Once a new mobile phone is launched, providers on the market under consideration practice a markdown strategy. Profits of the providers are generated mainly via the monthly (base plus variable) fees accruing duri...

An important aspect of customer relationship management is the targeting of customer segments with tailored promotional activities. While most contributions focus on the selection of promising customers for targeting, only few authors address the question of which specific differential offers to direct to the selected target groups.We focus on both...

This work surveys decision support systems that use sales and shopping basket data to suggest regular and promotional price changes in order to improve profit and turnover in retailing (so-called retail revenue management [RRM] systems). Starting with a demonstration of the impact of pricing on profit, we critically assess the pricing methods curre...

The aim of this paper is to develop a model predicting the collected amount of waste paper at the regional level of municipalities. Learning about the factors that influence the amount of collected paper is a prerequisite for the evaluation and reorganization of collection systems. We hypothesize that the amount of collected paper depends on both t...

In this paper, we describe DELI ('Development Interactive'), a method and software system that supports the product concept development phase by multi-functional product development teams using Marketing Engineering methods. After motivating our research, we present core concepts underlying DELI: a data model encompassing customer and product attri...

This paper presents DELI, a new interactive tool for supporting new product development decisions. DELI addresses the `chicken and egg` problem in new product development: a product's features shape the way that the market is segmented and targeted, but that very segmentation/targeting itself determines which features the product needs to incorpora...

In this contribution, we present, DELI, a new interactive tool for supporting new product development decisions. In contrast to existing market research methodologies such as conjoint analysis, our approach is able to cope with a large number of potential product features and levels. It's main advantages lie in the integration of segmentation, visu...

Conjoint analysis is one of the most important tools to support product development, pricing and positioning decisions in management practice. For this purpose various models have been developed. It is widely accepted that models that take consumer heterogeneity into account, outperform aggregate models in terms of hold-out tasks. The aim of our st...

The literature on recommendation systems indicates that the choice of the methodology significantly influences the quality of recommendations. The impact of the amount of available data on the performance of recommendation systems has not been systematically investigated. The authors study different approaches to recommendation systems using the pu...

In this paper, the authors develop a model to predict collected amounts of glass at the regional level of municipalities. Learning about the factors that influence the amount of collected glass is a prerequisite for the evaluation and reorganisation of collection systems. Furthermore, such a model provides essential input for decisions like restruc...

The aim of this paper is to develop a model predicting the collected amount of waste paper at the regional level of municipalities. Learning about the factors that influence the amount of collected paper is a prerequisite for the evaluation and reorganization of collection systems. We hypothesize that the amount of collected paper depends on both,...

Choice-Based Conjoint (CBC) models are often used for pricing decisions, especially when scanner data models cannot be applied. Up to date, it is unclear how Choice-Based Conjoint (CBC) models perform in terms of forecasting real-world shop data. In this contribution, we measure the performance of a Latent Class CBC model not by means of an experim...

This paper proposes a new model for studying the new product development process in an artificial environment. We show how connectionist models can be used to simulate the adaptive nature of agents' learning exhibiting similar behavior as practically experienced learning curves. We study the impact of incentive schemes (local, hybrid and global) on...

This paper proposes a new model for studying the new product development process in an artificial environment. We show how connectionist models can be used to simulate the adaptive nature of agents' learning exhibiting similar behavior as practically experienced learning curves. We study the impact of incentive schemes (local, hybrid and global) on...

This paper analyzes acquisitions resulting in a product line expansion of a firm. When the firm faces a non-stationary and stochastic demand in both the current and the new product line, switching between the production facilities may give diversification advantages. Switching between production facilities is similar to holding an inventory for bot...

The knowledge required for decision making in a firm is distributed across various departments. In practice, cross-functional teams are used to integrate this distributed knowledge. Incentive schemes are of crucial importance to encourage departments to share knowledge. The authors study different incentive schemes by means of a two stage model. In...

Two neural network approaches, Kohonen’s Self-Organizing (feature) Map (SOM) and the topology representing network (TRN) of Martinetz and Schulten are employed in the context of competitive market structuring and segmentation analysis. In an empirical study using brands preferences derived from household panel data, we compare the SOM and TRN appro...

The paper discusses the formation of organizational knowledge of boundedly rational economic agents and studies the necessity of hierarchical coordination of economic agents. We consider a firm that consists of a management and N subordinated shops. The problem of the firm is to observe a signal from the environment, forecast future demands and dis...

We study the effects of various incentive schemes on the learning behavior of teams in an artificial factory. Modeling the new product development process, we demonstrate, how production and marketing agents learn to coordinate their actions in order to produce the optimal product with respect to their incentive schemes. As a coordinating mechanism...

The valuation of Flexible Manufacturing Systems is one of the most frequently undertaken productivity improvement activities. In practice, the introduction of an FMS into industry must be done on the basis of cost justification. Recently developed techniques for the evaluation of the value of flexibility typically include the computation of stochas...

Benefits of incremental investments in R&D and new business initiatives are strongly future oriented and, therefore, coincide with large uncertainty. Market launch after the embryonic stages only takes place when conditions are favorable and is blown off when circumstances are poor. Such conditional investments lead to the problem of a complex econ...

We compare the use of stochastic dynamic programming (SDP), Neural Networks and a simple approximation rule for calculating the real option value of a flexible production system. While SDP yields the best solution to the problem, it is computationally prohibitive for larger settings. We test two approximations of the value function and show that th...

Two neural network approaches, Kohonen's Self-Organizing (Feature) Map (SOM) and the Topology Representing Network (TRN) of Martinetz and Schulten are employed in the context of competitive market structuring and segmentation analysis. In an empirical study using brands preferences derived from household panel data, we compare the SOM and TRN appro...

We compare the performance of a specifically designed feedforward artificial neural network with one layer of hidden units to the K-means clustering technique in solving the problem of cluster-based market segmentation. The data set analyzed consists of usages of brands (product category: household cleaners) in different usage situations. The propo...

We study the effects of various incentive schemes on the learning behavior of teams in an artificial factory. Modeling the new product development process, we demonstrate how production and marketing agents learn to coordinate their actions in order to produce optimal products with respect to their incentive schemes. As a coordinating mechanism bet...

In this paper, the "Self-Organising (Feature) Map" (SOM) methodology as originally proposed by Kohonen [1] is employed in the context of competitive market structure and segmentation analysis. In an empirical study using brands preferences derived from household panel data, the adaptive algorithm results in a mapping of topologically ordered protot...

We compare the performance of a specifically designed feedforward artificial neural network with one layer of hidden units to the K-means clustering technique using marketing resarch data. This proposed multilayer perceptron results in a two cluster solution that is confirmed by appropriate tests. On the other hand, the K-means algorithm fails in d...

The main contribution of this paper is a method that allows one to study the effects of different degrees of competition. We find that optimal prices and profits are more sensitive to cooperative than to aggressive behavior on the part of competitors. With more aggressive policies, the average pricing level decreases and the average difference betw...

Artificial neural networks can be seen as nonlinear generalizations of conventional Statistical or econometric models. This paper studies goodness-of-fit and forecasting Performance of neural networks with one hidden layer. The central dependent variables regarded are purchase incidence and brand choice within the context of consumer non-durables....

We compare the use of stochastic dynamic programming (SDP), Neural Networks and a simple approximation rule for calculating the real option value of a flexible production system. While SDP yields the best solution to the problem, it is computationally prohibitive for larger settings. We test two approximations of the value function and show that th...

We propose to use neural networks to value options when analytical solutions do not exist. The basic idea of this approach is to approximate the value function of a dynamic program by a neural net, where the selection of the network weights is done via simulated annealing. The main benefits of this method as compared to traditional approximation te...

Reference price theories provide behavioral explanations of certain dynamic price effects. These theories postulate that consumers compare internal prices (reference prices) to observed actual prices. Together with other factors this comparison determines purchase decisions (Winer 1988). Consumers consider reference prices that lie above actual pri...

Adaptive methods are used to forecast three main Austrian economic indicators. We use a weighted recursive model as well as a neural network approach both with and without adaptive characteristics and compare our results to the forecasts of two Austrian research institutes. It appears that even models which use very limited information can outperfo...

An artificial neural network (ANN) algorithm is proposed that incorporates both cluster and discriminant (or regression) analysis of the segments. The method simultaneously estimates the models relating consumer characteristics to market segments, i.e., subjects are assigned to (unique) segments so that subjects within a class show similar purchase...

We study profit impacts of aggressive/cooperative pricing strategies in a dynamic oligopolistic environment. A logistic model with asymmetric reference prices is used to forecast market shares. Pricing strategies – optimized by simulated annealing – are evaluated by simulating the empirical price distribution of competitors. It is shown that there...

We specify reference prices as nonlinear dynamic latent variables represented as hidden units of an artificial neural net. Model parameters are estimated by an extended version of backpropagation. For a scanner data base containing prices and sales of seven brands of a consumer non-durable these models lead to better fits as compared to models that...

We forecast US Industrial Production growth rates as available through the IFSdatabase. We compare the predictions of Elman-Networks to those of Kalman Filters, Weighted Recursive LS, and OLS. The forecasts are then evaluated using both conventional statistical criteria (MSE, R 2 , Theil's U) as well as business cycle theory, i.e. how well the fore...

Recently, the application of statistical error measures such as MSE or Theil's U has been criticized by Leitch and Tanner (1991) who argue that these criteria fail to capture a forecast's economic value. In this paper we compute stylized facts for US data in the spirit of real-business cycle theory where stylized facts are observed phenomena to be...

UEberarbeitete Version Februar 1995 1 Prof. Dr. Harald Hruschka i s t Inhaber des Lehrstuhls fuer Betriebswirtschaftslehre, insbesondere Marketing, an der Universitaet Regensburg. 2 Dr. Martin Natter ist Wissenschaftlicher Mitarbeiter an der Abteilung f ur Industrielle Informationsverarbeitung der Wirtschaftsuniversitaet Wien. Der folgende Beitrag...

This paper presents a connectionist model for forcasting and controlling of nitrate (NO3-N) which is a typical pollutant of a waste water treatment. In an empirical study we use the operating database of a purification plant for estimating the model. We pay special attention to the process of problem representation and model selection. Backpropagat...