BAIT AND SWITCH WOULD BENEFIT CONSUMERS, PROFS SAY
A form of bait and switch, considered taboo by consumers, would actually benefit them and should be legalized, according to a UC Davis professor and his co-researcher.
Eitan Gerstner of UC Davis' Graduate School of Management and James D. Hess of the University of Illinois, Champaign, argue in the journal Marketing Science for legalizing the deliberate use of shortages of a featured, low-price brand to persuade customers to purchase a more profitable substitute brand.
Their article is accompanied by others that call for a continuation of Federal Trade Commission and court oversight of all forms of bait and switch.
Gerstner and Hess maintain that the one form of bait and switch actually benefits consumers, specifically those who choose a superior product after discovering that a sale item is unavailable.
"Despite the monopoly power retailers have when customers visit their stores," the authors write, "the price of in-store-promoted brands cannot be raised too much or customers who face stock outages will buy the featured brand with a rain check."
The researchers add that the competitive process of bait and switch drives the price of featured brands to very low levels and stimulates in-store promotions of other brands.
"The FTC should investigate further its ban on bait and switch because this marketing practice can promote economic efficiency," Gerstner and Hess say.
They write that the competitive nature of retailing is often the only protection consumers need from the evils of bait and switch. Their arguments are based on operations research and management science models that they developed.
Media Resources
Andy Fell, Research news (emphasis: biological and physical sciences, and engineering), 530-752-4533, ahfell@ucdavis.edu