"Call for prices": Strategic implications of raising consumers' costs

Many consumer durable retailers often do not advertise their prices and instead ask consumers to call them for prices. It is easy to see that this practice increases the consumers' cost of learning the prices of products they are considering, yet firms commonly use such practices. Not advertising prices may reduce the firm's advertising costs, but the strategic effects of doing so are not clear. Our objective is to examine the strategic effects of this practice. In particular, how does making price discovery more difficult for consumers affect competing retailers' price, service decisions, and profits? We develop a model in which a manufacturer sells its product through a high-service retailer and a low-service retailer. Consumers can purchase the retail service at the high-end retailer and purchase the product at the competing low-end retailer. Therefore, the high-end retailer faces a free-riding problem. A retailer first chooses its optimal service levels. Then, it chooses its optimal price levels. Finally, a retailer decides whether to advertise its prices. The model results in four structures: (1) both retailers advertise prices, (2) only the low-service retailer advertises price, (3) only the high-service retailer advertises price, and (4) neither retailer advertises price. We find that when a retailer does not advertise its price and makes price discovery more difficult for consumers, the competition between the retailers is less intense. However, the retailer is forced to charge a lower price. In addition, if the competing retailer does advertise its prices, then the competing retailer enjoys higher profit margins. We identify conditions under which each of the above four structures is an equilibrium and show that a low-service retailer not advertising its price is a more likely outcome than a high-service retailer doing so. We then solve the manufacturer's problem and find that there are several instances when a retailer's advertising decisions are different from what the manufacturer would want. We describe the nature of this channel coordination problem and identify some solutions. © 2010 INFORMS.

The increasing impact of human immunodeficiency virus infections, sexually transmitted diseases, and viral hepatitis in Durham County, North Carolina: a call for coordinated and integrated services.

BACKGROUND: Durham County, North Carolina, faces high rates of human immunodeficiency virus (HIV) infection (with or without progression to AIDS) and sexually transmitted diseases (STDs). We explored the use of health care services and the prevalence of coinfections, among HIV-infected residents, and we recorded community perspectives on HIV-related issues. METHODS: We evaluated data on diagnostic codes, outpatient visits, and hospitalizations for individuals with HIV infection, STDs, and/or hepatitis B or C who visited Duke University Hospital System (DUHS). Viral loads for HIV-infected patients receiving care were estimated for 2009. We conducted geospatial mapping to determine disease trends and used focus groups and key informant interviews to identify barriers and solutions to improving testing and care. RESULTS: We identified substantial increases in HIV/STDs in the southern regions of the county. During the 5-year period, 1,291 adults with HIV infection, 4,245 with STDs, and 2,182 with hepatitis B or C were evaluated at DUHS. Among HIV-infected persons, 13.9% and 21.8% were coinfected with an STD or hepatitis B or C, respectively. In 2009, 65.7% of HIV-infected persons receiving care had undetectable viral loads. Barriers to testing included stigma, fear, and denial of risk, while treatment barriers included costs, transportation, and low medical literacy. LIMITATIONS: Data for health care utilization and HIV load were available from different periods. Focus groups were conducted among a convenience sample, but they represented a diverse population. CONCLUSIONS: Durham County has experienced an increase in the number of HIV-infected persons in the county, and coinfections with STDs and hepatitis B or C are common. Multiple barriers to testing/treatment exist in the community. Coordinated care models are needed to improve access to HIV care and to reduce testing and treatment barriers.