Competition strategies for location-based mobile coupon promotion

Pengcheng Xia, Gang Li, T. C.E. Cheng, Ao Shen

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

Location-based service heightens consumers’ shopping convenience. By utilizing spatial flexibility of consumers, retailers can target consumers via location-based mobile coupons (LBMCs) to enhance market performance. Considering the strategies for LBMC promotion for two competing retailers, we find that under different market intensities, only no adoption and symmetric adoption of LBMC promotion are the possible equilibria for the competing retailers at a low marginal targeting cost. Then, we extend our model to consider vertical (quality) differentiation and analyze the implications of adopting LBMC promotion for a superior-quality firm (with higher product valuation) and an inferior-quality firm (with lower product valuation). Mixed strategies for LBMC promotion emerge when firms’ products have different qualities. Our research findings provide useful guidance for managers and marketing practitioners to formulate strategies for targeted LBMC promotion.

Original languageEnglish
Pages (from-to)3248-3268
Number of pages21
JournalJournal of Theoretical and Applied Electronic Commerce Research
Volume16
Issue number7
DOIs
Publication statusPublished - Dec 2021

Keywords

  • E-commerce
  • Game theory
  • Location-based services
  • Mobile coupons

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Computer Science Applications

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