Online retailers frequently implement aggressive price promotion wars, but increased demand puts a strain on the fulfillment process. “You don’t want to spend all your promotion budget getting customers in the door but fail to serve them well and end up with a lot of unhappy customers, which defeats the purpose of the promotion,” says Li Chen. In his research, he builds a theoretical model showing the importance of integrated planning between marketing and operations, to drive the strategy that preserves service capacity.
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