【Speaker】XIEJinhong, Etheridge Professor, University of Florida

【Topic】A New Mechanism for Expanding Market and Managing Demand Uncertainty: Probabilistic Goods and Probabilistic Selling

【Time】10:30-12:00am, 2010-07-05, Monday

【Venue】Weilun 453, Tsinghua SEM

【Language】English

【Organizer】Research Center of Contemporary Management, Tsinghua University

Department of Management Science and Engineering

Department of Marketing

Abstract

We define a “probabilistic good” as an offer involving a probability of getting any one of a set of multiple distinct items. Under the “probabilistic selling” strategy, a multi-item seller creates probabilistic goods using the existing distinct products or services and offers such probabilistic goods as additional purchase choices. For example, a theatre that offers two different shows on a given weekend can sell an additional probabilistic ticket, “Saturday or Sunday Performance.” A retailer selling two different colors of sweaters, red and green, may offer an additional “probabilistic sweater,” which can be either the red or green sweater. We develop a formal theory of probabilistic selling. Our analysis shows that probabilistic selling is a general marketing tool that can improve profit and enhance efficiency for manufactures, retailers, and service providers, especially in the presence of demand uncertainty and capacity constraints.

Bio

Prof. XIE Jinhong is Etheridge Professor of University of Florida and the Special-term Professor at Tsinghua University. Her expertise includes innovation management and strategies, network effects, service pricing, independent product information and marketing strategy, national culture effect on new product management.

She got her PHD and MS in Engineering & Public Policy from Carnegie Mellon University in 1992. She also got MS in Optimal Control from The Second Academy of the Ministry of Astronautics in 1984 and BS in Electrical Engineering from Tsinghua University in 1982.