Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict

Digital intermediaries and Internet search technologies have commoditized many products, resulting in intense price competition and channel conflict. Firms use decommoditization strategies to regain control over distribution channels, as well as to implement resonance marketing and hyperdifferentiat...

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Main Authors: GRANADOS, N. F., Kauffman, Robert J., Lai, H. C., Lin, H. C.
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Language:English
Published: Institutional Knowledge at Singapore Management University 2011
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Online Access:https://ink.library.smu.edu.sg/sis_research/2187
http://dx.doi.org/10.2753/MIS0742-1222280203
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spelling sg-smu-ink.sis_research-31872014-04-02T10:22:16Z Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict GRANADOS, N. F. Kauffman, Robert J. Lai, H. C. Lin, H. C. Digital intermediaries and Internet search technologies have commoditized many products, resulting in intense price competition and channel conflict. Firms use decommoditization strategies to regain control over distribution channels, as well as to implement resonance marketing and hyperdifferentiation, which allows them to improve margins through differentiation. We test two hypotheses: the decommoditization hypothesis and the resonance marketing hypothesis. We use data from an airline with a new í﾿ la carte pricing mechanism, which allows consumers to tailor airline ticket bundles to suit their individual preferences. We compare í﾿ la carte ticket pricing, whose features can be modified by the purchaser, and fixed (bundled offer) sales, which cannot be modified. We found that a significant number of travelers do use í﾿ la carte pricing, which allows the airlines to regain some control over distribution. We find that travelers customized standard bundles when it was possible for them to make í﾿ la carte ticket bookings, but mainly for low-feature standard bundles. Frequent-flyer members purchased higher-feature bundles more often when they had the opportunity. The findings support the proposed hypotheses. We discuss the implications for distribution strategy and channel conflict management. 2011-01-01T08:00:00Z text https://ink.library.smu.edu.sg/sis_research/2187 info:doi/10.2753/MIS0742-1222280203 http://dx.doi.org/10.2753/MIS0742-1222280203 Research Collection School Of Computing and Information Systems eng Institutional Knowledge at Singapore Management University air travel services à la carte pricing channel conflict commoditization decommoditization disintermediation information transparency intermediaries reintermediation resonance marketing Computer Sciences Technology and Innovation
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic air travel services
à la carte pricing
channel conflict
commoditization
decommoditization
disintermediation
information transparency
intermediaries
reintermediation
resonance marketing
Computer Sciences
Technology and Innovation
spellingShingle air travel services
à la carte pricing
channel conflict
commoditization
decommoditization
disintermediation
information transparency
intermediaries
reintermediation
resonance marketing
Computer Sciences
Technology and Innovation
GRANADOS, N. F.
Kauffman, Robert J.
Lai, H. C.
Lin, H. C.
Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict
description Digital intermediaries and Internet search technologies have commoditized many products, resulting in intense price competition and channel conflict. Firms use decommoditization strategies to regain control over distribution channels, as well as to implement resonance marketing and hyperdifferentiation, which allows them to improve margins through differentiation. We test two hypotheses: the decommoditization hypothesis and the resonance marketing hypothesis. We use data from an airline with a new í﾿ la carte pricing mechanism, which allows consumers to tailor airline ticket bundles to suit their individual preferences. We compare í﾿ la carte ticket pricing, whose features can be modified by the purchaser, and fixed (bundled offer) sales, which cannot be modified. We found that a significant number of travelers do use í﾿ la carte pricing, which allows the airlines to regain some control over distribution. We find that travelers customized standard bundles when it was possible for them to make í﾿ la carte ticket bookings, but mainly for low-feature standard bundles. Frequent-flyer members purchased higher-feature bundles more often when they had the opportunity. The findings support the proposed hypotheses. We discuss the implications for distribution strategy and channel conflict management.
format text
author GRANADOS, N. F.
Kauffman, Robert J.
Lai, H. C.
Lin, H. C.
author_facet GRANADOS, N. F.
Kauffman, Robert J.
Lai, H. C.
Lin, H. C.
author_sort GRANADOS, N. F.
title Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict
title_short Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict
title_full Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict
title_fullStr Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict
title_full_unstemmed Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict
title_sort decommoditization, resonance marketing, and information technology: an empirical study of air travel services amid channel conflict
publisher Institutional Knowledge at Singapore Management University
publishDate 2011
url https://ink.library.smu.edu.sg/sis_research/2187
http://dx.doi.org/10.2753/MIS0742-1222280203
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