Table of Contents

Handbook of Service Marketing Research

Handbook of Service Marketing Research

Elgar original reference

Edited by Roland T. Rust and Ming-Hui Huang

The Handbook of Service Marketing Research brings together an all-star team of leading researchers in service marketing to explore many of the hottest topics in service marketing today.

Chapter 15: Marketing innovation: probabilistic goods and probabilistic selling

Jinhong Xie and Scott Fay

Subjects: business and management, marketing


"Probabilistic goods" and "probabilistic selling" are two terms defined recently in the marketing literature (Fay and Xie 2008) to refer to a newly observed marketing innovation. The term "probabilistic goods" (also called opaque products) represents a new product concept that is not a concrete product, but rather an offer involving the probability of obtaining any one of a set of multiple distinct products/services. "Probabilistic selling" is an emerging marketing strategy whereby a seller creates probabilistic goods using existing (component) products/services and adds probabilistic goods to its product line. is an early example of a seller offering probabilistic goods in the travel industry (for example, airlines, hotels, car rentals). Using this website, consumers can purchase travel services for which some specific attributes of the service (for example, the itinerary of the flight, the location of the hotel, or the identity of the car rental company) are not revealed until after payment. However, Priceline offers probabilistic goods via a unique pricing model: Rather than facing posted prices, buyers bid for prices (known as "Name Your Own Price" or NYOP). If the bid is accepted, the buyer's credit card is charged. Early research on opaque products was stimulated by Priceline's specific business model, but most studies focused on the NYOP pricing policy (for example, Fay 2004; Hann and Terwiesch 2003; Spann et al. 2004). Fay and Xie (2008) explore whether or not probabilistic selling can potentially benefit many firms in a wide range of industries.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information