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When is the best ship a leaky one? Segmentation, competition and gray markets

Author: Coughlan, A. T ; Soberman, David A.INSEAD Area: Marketing Series: Working Paper ; 98/60/MKT Publisher: Fontainebleau : INSEAD, 1998.Language: EnglishDescription: 58 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: A quick scan of today's business press reveals that one of the most presing issues for global marketers is the existence and persistence of gray markets. While the incentive to counterfeit is as old as he Dutch masters, it has been and remains illegal; in contrast, the gray-marketed products we find in the bargain/discount outlets of high-margin markets are authentic and frequently come from the same factory that supplies authorized channels.... The model also provides a compelling explanation for the growth of gray markets based on the natural evolution fo an aging population. An aging population desires more instore assistance and personalized service and our analysis shows this endogenously leads to an increase in the prevalence of gray marketing. In addition the model offers a prspective on most likely timing for gray marketing. In addition, the model offers a perspective on most likely timing for gray markets within a category, based on the category's maturity
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A quick scan of today's business press reveals that one of the most presing issues for global marketers is the existence and persistence of gray markets. While the incentive to counterfeit is as old as he Dutch masters, it has been and remains illegal; in contrast, the gray-marketed products we find in the bargain/discount outlets of high-margin markets are authentic and frequently come from the same factory that supplies authorized channels.... The model also provides a compelling explanation for the growth of gray markets based on the natural evolution fo an aging population. An aging population desires more instore assistance and personalized service and our analysis shows this endogenously leads to an increase in the prevalence of gray marketing. In addition the model offers a prspective on most likely timing for gray marketing. In addition, the model offers a perspective on most likely timing for gray markets within a category, based on the category's maturity

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