Coupon demand curve

The above method further comprises suggesting the discounting of a substitute of the product or item or service being auctioned. The obtaining of the demand data includes the ability to cover multiple market segments and suggest a promotion scheme targeted at different market segments.


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The above method further comprises suggesting discounting of a cross selling or an up selling product to the product being auctioned. The estimating of the demand curve uses the winning bid and the highest bids of all the bidders for the case of open-cry or ascending auctions while for the descending auctions namely, Dutch auctions only the winning bid is used.

How to sketch a demand curve from a demand function

The estimating of the market demand curve for an individual item uses demand data where multiple units of items are auctioned. The estimating of market demand curve uses the quantity demanded by an individual buyer at various price levels. The estimating of the market demand curve information from the online auctions is used to determine the decrement size in a descending or Dutch auction.

The above method further includes method for the user to configure the sources of online demand data as well as the parameters for conducting online auctions on a plurality of products on specified URLs. The storing and analyzing the demand data also receives the data from the electronic coupon issuing system as a feedback in order to dynamically learn, adapt and improve the promotional parameter estimation system. A computer program product comprising computer readable program code stored on computer readable storage medium embodied therein for causing a computer to generate promotional scheme parameters using electronic coupons comprising:.

The said computer readable program code configured for obtaining demand data from online auction includes ability to access different types of auctions such as sealed-bid auctions, open-cry auctions, Dutch auctions and reverse auctions. The said computer readable program code configured for obtaining the demand data from online auctions is through software to start capturing the demand data from the time the auction starts to the time it ends.

The said computer readable program code configured for storing and analyzing the demand data is a statistical computer readable program code that generates the promotion scheme parameters for different market segments. The said statistical computer readable program code includes:. The said computer readable program code configured for estimating the market demand curve is by considering the fractional demand at a particular price, the fraction of population that is willing to pay the price, computing the product of the fractional demand and the demand at zero price i.

The above computer program product further comprises computer readable program code configured for suggesting the discounting of a substitute of the product or item or service being auctioned. The computer readable program code configured for obtaining the demand data includes the ability to cover multiple market segments and suggest a promotion scheme targeted at different market segments. The above computer program product further includes computer readable program code configured for suggesting discounting of a cross selling or an up selling product to the product being auctioned.

The said computer readable program code configured for estimating the demand curve uses the winning bid and the highest bids of all the bidders for the case of open-cry or ascending auctions while for the descending auctions namely, Dutch auctions only the winning bid is used. The said computer readable program code configured for estimating the market demand curve for an individual item uses demand data where multiple units of items are auctioned.

The said computer readable program code configured for estimating market demand curve uses the quantity demanded by an individual buyer at various price levels.

Jamie Birch

The said computer readable program code configured for estimating the market demand curve information from the online auctions is used to determine the decrement size in a descending or Dutch auction. The above computer program product further includes computer readable program code configured for the user to configure the sources of online demand data as well as the parameters for conducting online auctions on a plurality of products on specified URLs.

The said computer readable program code configured for storing and analyzing the demand data also receives the data from the electronic coupon issuing system as a feedback in order to dynamically learn, adapt and improve the promotional parameter estimation system. The system is extended to learn about the state of online markets by mining information from current and past operations of similar online markets in order to devise differential strategies for various market segments.

The said system is also used to do optimal inventory management. The said system is integrated with an online electronic coupon generation system to provide a complete system for issuing of redeemable electronic coupons. The said generated market demand curve and promotion parameters are used to provide a data discovery service to a plurality of buyers in various market segments who use it for generating redeemable electronic coupons for their products or services. The invention will now be described with reference to the accompanying drawings.

As shown in FIG. The said feedback is the change in the product sales quantity during promotion or the number of new customers and the like. The demand data from the online auctions 1 comprises of the names of products or services being auctioned, the bids from a plurality of bidders participating in an auction, the reserve prices of the auction, the duration of the auction, the total number of bids received for each product or service, market segment of the bidders etc. The demand data also includes the information specific to particular auction types such as the opening p-rice and the successive decrements in case of descending 'Dutch' auctions.

The estimator 2 estimates the market demand curve and the price elasticity for an auctioned item, a product or a service, from each individual auction's data. The market demand curve is the response of a collective of potential buyers to changes in price. It determines if the item is amenable to price discrimination based on the demand curve and the price elasticity information from a plurality of auctions data.

For instance, it is well recognized that price discrimination is successful in markets that are segmented with each segment having distinct price elasticity. So if the demand data is from a plurality of market segments and different segments have distinct price elasticities, it outputs the promotion scheme parameters for each market segment.

Even if the data were from the same market segment, if the demand curve suggested a large increase in item sales for a small price drop, promotion scheme parameters are suggested accordingly. Promotion scheme parameters 3 comprise the item or collective of items to be discounted, the amount of discount, the nature of the discount e.

Market segment is defined by a plurality of multi-valued attributes such as the demographic parameters like age group, sex, marital status, household income and hobbies or the geographic like city, state and country. Some of these attributes may be non-quantitative and hence fuzzy e. An Electronic Coupon System that takes as input the promotion scheme parameters and generates electronic coupons that are redeemable online according to the received promotion scheme parameters. In one embodiment of this invention, demand data is the bid values from various bidders participating in a sealed bid auction.

These point estimates for different price values can be smoothed to a continuous demand curve using statistical smoothing techniques as discussed by J. The price elasticity can now be obtained by determining the slope of the demand curve. If the price elasticity suggests that a small decrease in product price results in a large increase in product demand, then the system decides that the product is amenable to price discrimination.

The economics of advertising using Groupon or other coupon selling agencies as examples.

It suggests that the product be discounted by an automatically determined amount. The system may also suggest that the electronic coupon should be offered only to the customer who shows hesitant interest in the product. The demand data from the online auctions 5 is used to estimate a demand curve 6 and estimate price elasticity 7 for the auctioned products. If the price elasticity obtained suggests price discrimination 8 then a competitive substitute is identified 9 for which promotion parameters for the e-coupon scheme are generated If the price elasticity does not suggest any price discrimination, the promotion scheme is not generated Usually the increase in demand is due to brand switching rather than more buying as discussed by S.

Thus a manufacturer can use this system to obtain the demand curve of a competitor's product and then discount its own substitute product accordingly. In FIG. If the price elasticities do not suggest any price discrimination, no action is taken So a promotion scheme targeted to different market segments is suggested.

The demand data from different market segments can be obtained by conducting auctions at appropriate web-site e. In another embodiment of this invention, the system suggests that a cross selling or an up-selling product of the product being auctioned should be discounted. A cross-selling product is different from the product being sold but is associated with it.

Coupon sites becoming increasingly important - #3 in series - JEBCommerce

For example, a table to keep a computer is a cross-selling product of the computer. An up-selling product on the other hand is closer to being an accessory of the product being sold or related to the product being sold. For example, a printer is an up-selling product to a computer.

Thus a manufacturer can use this system to obtain the demand curve of a product and then discount items that are cross-selling or up-selling. The idea is to offer a combination of products at the price where the demand is high by discounting the cross-selling product rather than the original product. Yet in another embodiment of this invention, demand data can be from different types of auctions like sealed-bid auctions, open-cry auctions, Dutch auctions and reverse auctions.

In case of open-cry or ascending auctions, demand curves can be estimated using the winning bid and the highest bids of all the bidders.

Data from a plurality of ascending auctions, for same market segment, can be combined for better demand curve estimation. In case of descending auctions, only the winning bid is available.

The Complete Glossary of Marketing Terms

A demand curve can be estimated using data from a plurality of descending auctions along with some model for the price distribution. In a further embodiment of this invention, the demand data is used to do optimal inventory management. Using the demand curve, the price that maximizes the revenue is calculated as being the point maximizing the product of price and product quantity. The product is first sold at this revenue maximizing price. The remaining inventory is then sold at the price corresponding to the remaining product quantity in the demand curve. Thus electronic coupons are issued for clearing inventory to discount the product.

In another embodiment of this invention, an individual demand curve is estimated. The individual demand curve is the quantity demanded by an individual at a particular price such demand curve can be estimated from auction data where multiple units of items are auctioned. Such demand curve can be estimated from demand data where multiple units of items are auctioned.

As before, data from a plurality of auctions can be combined to Yield better estimation. In another embodiment of this invention, the demand curve information from the auctions can be used for determine the decrement size in a descending or Dutch auction. In a Dutch auction the price is dropped constantly in some steps until an on-line bidder accepts a price or the reserve price is reached. This can be visualized as an electronic coupon whose value increases with time.


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The demand curve estimated from some demand data can be used to determine the prices at which the demand is high. The price can then be dropped accordingly in a Dutch auction rather than in constant steps.