Essays on Price, Demand and Choice in Fashion and Car Industries PDF Download

Author: Aidin Tajzadeh Namin
Publisher:
ISBN:
Category : Automobile industry and trade
Languages : en
Pages : 266

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Book Description
With three essays, this dissertation focuses on investigating demand and pricing policies for short life cycle goods, and studies consumer search behavior and choice for automobiles. The former comprises the first two dissertation essays (Chapters 2 and 3) in which I specifically focus on fashion products by using a unique dataset from a well-known U.S. fashion retailer. The final essay (Chapter 4) concentrates on the automobile industry in the US where efficiency of search outcome through various search sources for cars is studied. In the first essay (Chapter 2), using data on women's coats, I combine revenue management and durable goods literature to develop a demand model which estimates sales at every price markdown level at each time period of the fashion season. The demand model is estimated using the General Method of Moments (GMM). Next, I run simulations to study the demand variations based on different pricing policies. I find price markdowns which are not deep and are implemented early in the season to maximize the retailer's revenue levels. In the second essay (Chapter 3), I use a Finite Mixture Model (FMM) to find latent classes based on fashion product characteristics for women's and men's coats in the US. I develop a dynamic programming model and solve it with the class-specific coefficients of the FMM model. Results provide the retailer with the optimal (1) timing and (2) depth of markdowns given fashion product characteristics at each time period. The optimal markdown policy offers over 3% increases in retailer¿s revenue. In the third essay (Chapter 4) I investigate customer search efficiency for automobiles. Having data on car specifications, I use Data Envelopment Analysis (DEA) technique to measure the efficiency of cars based on the value of their attributes per dollar spent (price). Next using survey data on consumer search time and final choice, I use the estimated efficiency parameters to investigate the contribution of each search source in making a car choice. I find customers who search using online and offline third party sources purchase more efficient cars, while males and those who knew the manufacturer prior to purchase buy less efficient cars.