The Discipline of Marketing seminar organiser is Marylouise Caldwell.
To RSVP for any of these seminars contact Bettina Leate.
29th May 2015 - 12:00 pm
Venue: Room 321, Level 3, Economics & Business Building
Speaker: Professor Yong Liu, Eller College of Management, University of Arizona
Title: Modelling Quality and Price Decisions of Nonprofit Organizations and the Nonprofit/For-profit Competition
Abstract: In recent years nonprofit organizations have increasingly relied on marketing actions to cope with heightened competition and the reduction in public funding. Yet, very limited research has examined the nature and outcomes of marketing strategies under unique nonprofit objectives and constraints. This paper models nonprofit quality and pricing to provide both theoretical and managerial guidance on when and why they may choose higher (or lower) quality and price than their for-profit counterparts. Our model goes beyond the traditional Arrow-Hansmann paradigm, which argues that the information asymmetry between buyers and sellers drives nonprofits to provide higher quality than for-profits. We show that, without pursuing a quality objective per se and in the absence of information asymmetry, nonprofits may still choose higher quality. This implies that quality can essentially function as a strategic tool when nonprofits pursue non-financial objectives. Furthermore, the information asymmetry has reduced as communication technologies and public policy both empower the consumers in many markets where nonprofits are active. Nevertheless, in the case when consumers are identifiable and nonprofits target the needy population, they could still choose a lower quality than for-profits. We also find that the pricing outcomes are not always similar to quality, and identify situations where nonprofits could charge a higher or a lower price than for-profits. While contributing to economic theories on the nonprofit sector, which has grown increasingly critical in many important industries, this study demonstrates how marketing decisions could be fruitfully utilized by nonprofit organizations.
Bio: Yong Liu is Associate Professor of Marketing and Gary M. Munsinger Chair in Entrepreneurship & Innovation at the Eller College of Management, University of Arizona. He received his Ph.D. in Marketing from the University of British Columbia, Vancouver, Canada. His research focuses on quantitative models of social interactions and influence, media and entertainment markets, especially the motion picture industry, competitive strategies for business and nonprofit organizations, and managing product-harm crisis. His research has been published in journals such as Journal of Marketing, Marketing Science, Quantitative Marketing and Economics, Marketing Letters, and Journal of Public Policy and Marketing. He was named a Marketing Science Institute (MSI) Young Scholar, and currently serves on the Editorial Review Board of Marketing Science and as an Associate Editor for Journal of Retailing.