Empirical investigation of customer perceived quality and product differentiation for multiproduct firms
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Authors
Tansitpong, Praowpan
Issue Date
2012-12
Type
Electronic thesis
Thesis
Thesis
Language
ENG
Keywords
Management
Alternative Title
Abstract
The first essay addresses the question of how operational decisions regarding a quality-differentiated product line determine the overall success of a multiproduct firm in the marketplace. Recently, the analytical literature has recognized the importance of the interplay among quality, resource consumption, and production volume. However, there is no empirical evidence that supports these findings. The lack of empirical testing might be due to the complicated relationships caused by multiple levels of competition, including intra-firm competition of products for demand (such as cannibalization), intra-firm competition of products for resources (when the resource consumptions of products are different), and an inevitable inter-firm competition for the market share, occurring simultaneously. This study analyzes two airline datasets; one dataset includes high-performing firms, and the other dataset includes firms that report financial losses. In the case of the high performers, the results show that the percentage of the product line that the premium product offered by the firm constitutes increases with quality differentiation but decreases when premium products consume more of the resources. Normally, an increase in premium seat size improves the quality perception of customers. However, this study suggests that constrained resources become the determining. When premium products consume more of the critical resources, successful firms reduce premium production volume.
Description
December 2012
School of Management
School of Management
Full Citation
Publisher
Rensselaer Polytechnic Institute, Troy, NY