nep-mkt New Economics Papers
on Marketing
Issue of 2006‒02‒05
thirteen papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  2. City marketing - a significant planning tool for urban development in a globalised economy By Christos Liouris; Alex Deffner
  3. Shaping the vision, the identity and the cultural image of European places By Alex Deffner; Theodore Metaxas
  4. The b2c e-commerce landscape of the Dutch retail sector By Jesse Weltevreden; Karlijn De Kruijf; Oedzge Atzema; Koen Frenken; Frank Van Oort
  5. Shopping online and/or in-store? A structural equation model of the relationships between e-shopping and in-store shopping By Sendy Farag; Tim Schwanen; Martin Dijst
  6. Understanding urban networks through accessibility By Jianquan Cheng; Frank Le Clercq; Luca Bertolini
  9. Economy vs History - What Does Actually Determine the Distribution of Shops' Locations in Cities? By Helge Sanner
  10. CONSUMER’S SATISFACTION - EXPLANATORY MODELS By Margarita Tejera Gil; Santiago Rodriguez Feijoó; Alejandro Rodriguez Caro; Delia Davila Quintana
  12. The Randstad as a Network City By Jan Ritsema van Eck; Femke Daalhuizen; Lia Van den Broek; Frank Van Oort; Otto Raspe
  13. Convenient prices, currency, and nominal rigidity: theory with evidence from newspaper prices By Edward S. Knotek

  1. By: Ioana Chioveanu (Universidad de Alicante)
    Abstract: I construct a model in which an oligopoly first invests in persuasive advertising in order to induce brand loyalty to consumers who would otherwise buy the cheapest alternative on the market, and then competes in prices. Despite ex-ante symmetry, at equilibrium, there is one firm which chooses a lower advertising level, while the remaining ones choose the same higher advertising. For the endogenous profile of advertising expenditure, there are a family of pricing equilibria with at least two firms randomizing on prices. The setting offers a way of modelling homogenous product markets where persuasive advertising creates subjective product differentiation and changes the nature of subsequent price competition. The pricing stage of the model can be regarded as a variant of the Model of Sales by Varian (1980) and the two stage game as a way to endogenize consumers heterogeneity raising a robustness question to Varian¿s symmetric setting.
    Keywords: oligopoly, advertising, price dispersion, brand loyalty
    JEL: D21 D43 L11 L13 M37
    Date: 2005–11
  2. By: Christos Liouris; Alex Deffner
    Abstract: In our days it is a fact that what is projected as the ‘image’ of a city, can be more important than the reality of the city itself, in shaping visitors’, investors’, and even its own inhabitants’ opinion of it. Marketing techniques are often used to help a city’s transformation into a post-industrial centre of tourism, culture and redevelopment. In addition, urban tourism is playing an increasingly important role in deciding economic development strategies by the local governance authorities. In the current framework of the globalised economy, competition for attracting tourists is even greater. On this matter, the role of city marketing is crucial. This paper examines the importance of city marketing in urban governance decisions. It also investigates the relation of city marketing to urban tourism planning, given the relatively new trend for urban tourism quality management, and to sustainability. Finally, the paper looks at the relation of city marketing procedures to city time planning, participatory planning and urban regeneration, concluding with an acknowledgment of the significance of city marketing in urban planning in general.
    Date: 2005–08
  3. By: Alex Deffner; Theodore Metaxas
    Abstract: European regions and cities have been, especially during the last twenty years, characterized by a plurality of efforts to define their vision, to construct their identity and to shape their images, in order to become more attractive and, consequently, competitive, and also to increase their market share in a globalized economy. Following this option, places have been elaborating and implementing particular competitive policies and strategic plans in order to attract the potential target markets (new investments, tourists, new residents etc). Shaping the vision concerns the identification of the sustainable development objectives that each place sets up in a long-term horizon. Furthermore, the vision is the first step of strategic planning implementation that a place has to follow in order to construct its identity and to produce its image as a ‘final provided good’. This paper investigates the relationship between vision, local identity and image, focusing on culture and tourism. The international bibliography shows several cases, mainly of European places, that support their competitiveness through cultural and tourism development. In addition, the majority of the implemented place marketing policies relate with culture and tourism. The primary aim of the paper is to present the ways with which the cultural image of a place as a ‘final provided good’, could be produced, supported and promoted effectively to the external environment. The secondary aim is to show under what conditions the promotion of this image could induce anticipated profits for a place in a long-term base. The data for this paper are provided by the INTERREG IIIc CultMark project (Cultural Heritage, Local Identity and Place Marketing for Sustainable Development, an project) that has been in operation in five European places during the last year: Nea Ionia/Magnesia/Greece, Paphos/Cyprus, Chester/UK, Rostock-Wismar/Germany and Kainuu/Finland – it has to be noted that the last four places relate directly with water. The main aim of the project is to create a final successful image for each place and for the study area as a whole. The paper presents a structural analysis of the project methodology and uses the available data in order to produce the ‘final provided good’ of each place.
    Date: 2005–08
  4. By: Jesse Weltevreden; Karlijn De Kruijf; Oedzge Atzema; Koen Frenken; Frank Van Oort
    Abstract: Business-to-consumer (b2c) e-commerce can be regarded as a disruptive process innovation that can make existing business models obsolete. B2c e-commerce provides retailers the possibility of a new service concept, new client interface and even delivery system. The history of retailing is replete of such innovations, like the introduction of department stores, mail order etcetera. It is only recently that researchers from various disciplines are examining the way retailers respond to b2c e-commerce as a major new innovation. Despite the growing attention from researchers to the adoption of b2c e-commerce by retailers, there is still little known about rate and extent of this innovation adoption process. Furthermore, studies concerning the diffusion of b2c e-commerce in retailing largely lack a geographical context. In this paper we examine the geographical pattern of b2c e-commerce adoption of shops in the Netherlands. A distinction is made between the two main stages in b2c e-commerce adoption that is the adoption of an active website and online sales. The main hypotheses hold that: (1) population density will positively affect the probability of adoption following the hierarchical diffusion theory and (2) the density of shops in the same sector will positively affect the probability of adoption due to inter-firm competition and imitation. In our analyses, we will control for size, sector and organisational form. For this paper we used a subset of the retail location database of Locatus that consists data of 23,312 shops in the Netherlands, which is 17 percent of all shops in the Netherlands. By a time-consuming procedure we searched for the Internet strategy of the individual shops in our dataset. To improve the accuracy, the data is currently re-examined by two trained coders. The subset contains location data of shops in nine retail categories: supermarkets; drug stores; perfume & cosmetic stores; ladies wear; family wear; menswear; book stores; CD stores; and computers stores that have adopted the Internet. Furthermore, the dataset distinguishes seven types of shopping centres: solitary urban locations; neighbourhood centres; city district centres; city centres; large-scale (peripheral) retail concentrations; business parks; and solitary peripheral locations. Other geographical classifications included in the dataset are: Zip code; municipality; and province. Given the variety of geographical levels in combination with the large number of cases, we will use multi-level analysis to investigate the relevance of geography for retail Internet adoption. We will include three geographical levels in the multi-level analysis: (1) shopping centres, (2) municipalities, and (3) COROP regions or provinces.
    Date: 2005–08
  5. By: Sendy Farag; Tim Schwanen; Martin Dijst
    Abstract: Searching product information or buying goods online is becoming increasingly popular and could affect shopping trips. However, the relationship between e-shopping and in-store shopping is currently unclear. The aim of this study is to investigate empirically how the frequencies of online searching, online buying, and non-daily shopping trips relate to each other, after controlling for sociodemographic, land use, behavioral, and attitudinal characteristics. Data were collected from 826 respondents residing in four municipalities (one urban, three suburban) in the center of the Netherlands, using a shopping survey. Structural Equation Modeling was used to give insight in the mutual dependencies of the endogenous variables, and in direct and indirect effects between variables. The findings suggest that complementarity or generation between e-shopping and in-store shopping seems to be more likely to occur than substitution. The more often people search online, the more shopping trips they tend to make. Frequent in-store shoppers also buy frequently online. Shop accessibility has a negative effect on the frequency of online searching; the more shops are nearby, the less often persons search online. However, shop accessibility influences the frequency of online buying positively; the more shops are nearby, the more often persons buy online. Urbanisation level affects e-shopping indirectly via Internet use: urban residents shop online more often than suburban residents do, because urban residents use the Internet more often.
    Date: 2005–08
  6. By: Jianquan Cheng; Frank Le Clercq; Luca Bertolini
    Abstract: The question to be investigated in the paper is how to characterize urban networks, taking both place-bound activities and (quality of) transport networks into account. The description should help formulate planning questions about the development of urban networks. Urban networks can morphologically be characterized as concentrations of land uses in a geographical area. Beyond this morphological description, places in the area can also be characterized by the amount and diversity of activities to be accessed by means of a physical transport network. So, each place can be valued in terms of opportunities within reach, depending on its links to the transport network, the attractiveness of activities within given travel time or costs, and spatial interaction with other places. The changes of activities at one place (e.g. amount of workers or jobs) can thus, in combination with changes in the transport network (e.g. travel speeds), influence the position of places elsewhere because of competition between places. The process of influence will be spatially diffused further. It indicates that spatial competition is a hidden determinant of an urban network. The paper will illustrate these different components of the urban network for the northern part of the Randstad Holland conurbation (the greater Amsterdam area) by means of different accessibility measures. The comparisons between the patterns of two urban networks (morphological and opportunity based, or ‘virtual’) can help explore the changing urban network, giving rise to planning questions such as: -what should be the planning aim for urban networks: making places more homogenous, more diverse or rather make them subject to (controlled) competitive developments? -improvements in the transport system may have more or less exogenous impacts on the competitive position of urban places. How should these impacts be acknowledged in transport planning? -are comprehensive planned (and controlled) interventions thinkable in urban networks, or are urban networks rather the outcome of adaptively evolving, and necessarily partial planning interventions, as those responding to traffic congestion, the need for urban expansion, changes in location preferences, etc.? Answers to these questions will be tentatively addressed to formulate a planning research agenda for urban networks.
    Date: 2005–08
  7. By: Carlo Tesauro
    Abstract: The diffusion of ICT technologies that generated the Internet phenomenon, is responsible of the world-wide incredible expectation level related to its high potential contribution to problem solution in many socio-economic sectors. In facts, the contribution of ICT in some sectors, as organizations management (public or private, profit or no-profit), was undoubtedly highly effective. The interaction between citizens and institutions is also considered extremely interesting, as the specific funds appropriation since the end of 90es of European Union on these topics can demonstrate. This wide interest caused the expectation of a remarkable services improvement, but the obtained results doesn’t seem as much satisfactory. This international and European scenario had a meaningful reflex also in Italian case, because the lack of information flows between Institutions and citizens in our country is always strongly perceived as critical point. In a former study of 1998 (Tesauro, Campisi), some institutional web sites was included in a wider study sample about the usage of internet communications, reaching unflattering results. Nevertheless, some recent “accidents” in citizen-institution relationships, widely reported by mass media and strictly related to computer technologies, suggest remarkable doubts about the usage of these technologies. This happen in spite of the creation of a specific Ministry in Italy and five years later the cited study, an incredible amount of time in terms of evolutionary dynamic of virtual environment). So, the main objective of this contribution is to show a scenario of citizen-institution relation via Internet in Italy at different scales (national, regional and local), identifying strength or weak points not only from users viewpoint and trying to underline the difficulties inherited from a poor usage of actual computer knowledge.
    Date: 2005–08
  8. By: Juan Luis Nicolau (Universidad de Alicante)
    Abstract: The aim of this study consists of proposing a sequential and hierarchical decision-making process of tourists divided into four stages: 1) going on holiday (or not); 2) choosing a national of international trip; 3) choosing a specific geographical area; and 4) choosing a type of trip –multidestination vs. single-destination- on this area. This analysis allows us to examine the sundry stages that a tourist follows until s/he chooses a type of trip on a destination, as well as to observe the determining factor in each stage. The empirical application is carried out on a sample of 3,781 individuals, by estimating a Random Parameter Logit Model by applying Bayesian procedures. The results obtained reveal a nested non-independent character of the aforementioned decisions, which confirms the proposed four-stage sequential and hierarchical decisionmaking process. El objetivo de este trabajo consiste en proponer un proceso de decisión secuencial y jerárquico que siguen los turistas vacacionales en cuatro etapas: 1) salir (o no) de vacaciones; 2) elección de un viaje nacional vs. internacional; 3) elección de determinadas áreas geográficas; y 4) elección de la modalidad del viaje -multidestino o de destino fijo- en estas áreas. Este análisis permite examinar las distintas fases que sigue un turista hasta seleccionar una determinada modalidad de viaje en un zona geográfica concreta, así como observar los factores que influyen en cada etapa. La aplicación empírica se realiza sobre una muestra de 3.781 individuos, y estima, mediante procedimientos bayesianos, un Modelo Logit de Coeficientes Aleatorios. Los resultados obtenidos revelan el carácter anidado y no independiente de las decisiones anteriores, lo que confirma el proceso secuencial y jerárquico propuesto.
    Keywords: Decisiones anidadas, modelización estocástica, marketing turístico Nested decisions, stochastic modelling, tourism marketing
    Date: 2005–09
  9. By: Helge Sanner
    Abstract: This study examines in which cases economic forces or historical singularities prevail in the determination of the spatial distribution of retail shops. We develop a relatively general model of location choice in discrete space. The main force towards an agglomerated structure is the reduction of transaction costs for consumers if retailers are located closely, whilst competition and transport costs work towards a disperse structure. We assess the importance of the initial conditions by simulating the resulting distribution of shops for identical economic parameters but varying initial settings. If the equilibrium distributions are similar we conclude that economic forces have prevailed, while dissimilarity indicates that 'history' is more important. The (dis)similarity of distributions of shops is calculated by means of a metric measure.
    Date: 2005–08
  10. By: Margarita Tejera Gil; Santiago Rodriguez Feijoó; Alejandro Rodriguez Caro; Delia Davila Quintana
    Abstract: When the first studies related to consumer satisfaction began to appear in the sixties, nobody could imagine protagonism that it would reach with the course of the time. Nowadays not only private sector companies dedicate part from their resources to the study of the degree of satisfaction of their clients, but satisfaction studies are more and more increasing preoccupation in the state sector, therefore works related to the satisfaction of the patients, the contributors or with the tourist destiny can be found. Firstly, a revision of the different models that have been used to explain customer satisfaction level is presented, using the cognitive and the affective-cognitive models. In the first case, human being is looking as a rational being that can process information about the different attributes of the services to form his personal satisfaction. The most useful model within this category is the expectation disconfirmation model. These kind of models explain satisfaction as a function of the degree and direction of the discrepancy between expectation and perceptions. It has evolved all over time resulting in a lot of different approaches. We have also studied the equity model, in which consumer does a benefit-cost analysis not only its owns but from the rest of people who take part in the transaction. Finally, in the affective-cognitive models, human being is seeing like a complex being that is not solely an information processor but experiences feelings and emotions that also influence in their judgments of satisfaction. Secondly, it has been realized an empirical application in which we have used the main variables in the expectation disconfirmation model: perceptions, expectations and discrepancies to estimate some logit models. The tourists who visit Tenerife are classified as satisfied or unsatisfied. Then, we model the probability of each characteristic using tourist’s scores on some destination attributes. Two samples have been used. The first one was obtained at the time of arriving; the second one has been made when leaving the island. Since tourists are not necessary the same in both samples, a statistic inference process has been made to use all the information available. The best model is obtained when expectations and perceptions are used at the same time, so we obtain a 75% of right classification. To sum up, we have found that perceptions are the main subject for the tourist’s satisfaction, although we can’t forget the importance of expectations to complete the model.
    Date: 2005–08
  11. By: Rossana Galdini
    Abstract: This paper analyzes the process of Urban Regeneration in Europe and examines the factors influencing this process as well as its implementation. Foundamental changes in the economy, technology, demography and politics are reshaping the environment for cities in Europe. These changes have induced a logic of competion in a dynamic and complex context. In the attempt to become and remain an attractive place for inhabitants, city users, businessmen and visitors, cities invent their own strategies, discovering that the policies of local governments need to be more marked-oriented with an eye to the city’s weaknesses and strenghts. Many historic cities in recent decades experienced redevelopment for new “postindustrial uses” often related to culture, tourism, technology. Such uses may offer the potential for creating more sustainable and liveable cities. Especially in old industrial areas, new politics, strategies and funds have been used for re-utilization of old industrial sites. Clear examples for this is Italian case studies like Genoa. In Genoa a programme for restructuring the old harbour areas, the waterfront and the historic centre has been set up. Genoa approaches functional specialisation as a more general element in its strategy for increasing economic competitiveness. The development of transport systems, services, infrastructures, promises considerable renovation of the urban functions with a significant growth in the economy linked to cultural activities and tourism. Regeneration programmes for de-industrialised areas have promoted the location and relocation of business investments as well as actions to improve a productive diversification. At present Genoa after a deep crisis, has regained a new identity and its role in the Italian economic and social system. This paper integrates three issues. First it describes some of the main features of pattern of urban development and the increase of competition, setting the scene for a more strategic action. Second analyzes the case study Genoa, an example of integrated urban development approach. Third attention is drawn on the way in which cities “create” their own image management, using actions that shown and reveal hidden resources.
    Date: 2005–08
  12. By: Jan Ritsema van Eck; Femke Daalhuizen; Lia Van den Broek; Frank Van Oort; Otto Raspe
    Abstract: Randstad Holland, the most urbanised area in the western part of the Netherlands, is one of the seven World Cities that were described in Peter Halls famous study of that name. World cities are those cities which have the highest level (in terms of both quantity and quality) of internationally oriented activities. In this ranking of world cities, the Randstad is often mentioned as an example of a polycentric metropolis. But does the Randstad function as one world city, rather than a conglomerate of medium-sized urban regions in close proximity to each other? The network city is supposed to be more than the sum of the constituent urban regions. This implies not only specialisation between these urban regions, but also complementarity and, as a result of this, a high quality (metropolitan) environment for residents, visitors and business. Clearly, the four main urban regions of the Randstad show some degree of functional specialisation. In this paper, the main focus will be on the complementarity. We propose to measure complementarity by analysing flows of people, goods and/or information, specifically focussing on the asymmetric flows, against the background of functional specialisation. Some results are presented for the Randstad Holland as well as some other polycentric urban networks, which are discussed in the context of the debate about the Randstad as a Network City.
    Date: 2005–08
  13. By: Edward S. Knotek
    Abstract: Newspapers, movie tickets, and concession stand items typically charge prices that facilitate rapid, simple transactions: their prices often coincide with available monetary units, require few pieces of money, or require little change. In this sense, these prices are more convenient than other proximate prices. I model a firm that explicitly incorporates convenience into its pricing decisions, where convenience is quantified by the number of currency units in a transaction. The model illustrates how alternating periods of price rigidity and flexibility can arise in such a setting, along with rapid switching between convenient prices. I compile time series data on newspaper cover prices and use simulations to show that convenience is an essential component of these prices. In the empirical data, firms set prices that were more convenient than adjacent prices 61% of the time. Standard menu costs cannot replicate this behavior. Because convenience appears to affect many of the consumer goods and services with the stickiest prices in the U.S. economy, studies focusing on very sticky prices must be cognizant of convenience’s role in effecting above-average price rigidity.
    Date: 2005

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