ABSTRACT
In this chapter, we review the economic foundations of marketing strategy. We begin with an overview of the economic perspective, which emphasizes clear characterizations of the players in the marketplace, their objectives, payoffs, sequence of actions, and information, as well as how different players engage with each other. We discuss the applications of the economic perspective in various market settings. We organize these applications around pricing, online customization, competition, product line strategy, product quality communication, distribution channel coordination, sales force management, advertising, and sales promotions.
