Service Design, Competition and Market Segmentation in Business Information Services with Data Updates

39 Pages Posted: 17 Jul 2006

See all articles by Bashyam Anant

Bashyam Anant

Macrovision Corporation

Uday S. Karmarkar

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: March 22, 2005

Abstract

Business information services are intermediaries that collect, collate, package and distribute information of value to professional users. We consider two technologies that such intermediaries may use for delivering information. First, a packaged design that uses physical media like CD-ROMs to distribute information. Second, an online service that delivers such information via the Internet or other online networks. We model a market where subscribers may choose between "self-service", where they collect and collate information directly from sources, and a third party service provider who provides either a packaged design or an online service.

Subscribers are indexed by their volume of usage for the service. In a duopoly, we show that providers with online or package technologies will serve different market segments. The package provider's limited ability to provide current information, combined with decreasing search costs in an online service will make a package provider increasingly vulnerable to being driven out of the market by the online provider.

Keywords: Industrial marketing, pricing, segmentation, competitive strategy, computers, databases, Internet, Non-cooperative games, competition, information goods

Suggested Citation

Anant, Bashyam and Karmarkar, Uday S., Service Design, Competition and Market Segmentation in Business Information Services with Data Updates (March 22, 2005). Available at SSRN: https://ssrn.com/abstract=916557 or http://dx.doi.org/10.2139/ssrn.916557

Bashyam Anant (Contact Author)

Macrovision Corporation ( email )

4301 Norwalk Drive
San Jose, CA 95129
United States

Uday S. Karmarkar

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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