nep-mkt New Economics Papers
on Marketing
Issue of 2006‒02‒12
eight papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Modeling Commercial Processes and Customer Behaviors to Estimate By Daniel Krob; Alain Bloch; Ada F.S. Ng
  2. A Combined Approach for Segment-Specific Analysis of Market Basket Data By Yasemin Boztug; Thomas Reutterer
  3. How do consumers overcome ambivalence toward hedonic purchases ? a typology of consumer strategies By Dubois, Bernard; Laurent, Gilles; Czellar, Sandor
  4. Switch on the competition; causes, consequences and policy implications of consumer switching costs. By Marc Pomp; Victoria Shestalova; L. Rangel
  5. An evolutionary perspective on Internet adoption by retailers in the Netherlands By Ron A. Boschma; Jesse W.J. Weltevreden
  6. The Impact of Internet on the Market for Daily Newspapers in Italy By Lapo Filistrucchi
  7. Middle managers in a medium-sized firm: Their involvement in the internationalization strategy process By Mair, Johanna; Thurner, Claudia
  8. Price formation in a sequential selling mechanism By Radosveta Ivanova-Stenzel; Sabine Kröger

  1. By: Daniel Krob (LIX - Laboratoire d'informatique de l'école polytechnique - - CNRS : UMR7161 - Polytechnique - X); Alain Bloch (LIX - Laboratoire d'informatique de l'école polytechnique - - CNRS : UMR7161 - Polytechnique - X); Ada F.S. Ng (LIX - Laboratoire d'informatique de l'école polytechnique - - CNRS : UMR7161 - Polytechnique - X)
    Abstract: We propose a formal model for estimating the diffusion rate of a new product on a coherent market. Our approach is based on a discrete probabilistic modeling of customer behaviors and of commercial processes.
    Keywords: Diffusion of innovation, diffusion rate, marketing, customer behavior, product diffusion
    Date: 2006–02–05
  2. By: Yasemin Boztug; Thomas Reutterer
    Abstract: There are two main research traditions for analyzing market basket data that exist more or less independently from each other, namely exploratory and explanatory model types. Exploratory approaches are restricted to the task of discovering cross-category interrelationships and provide marketing managers with only very limited recommendations regarding decision making. The latter type of models mainly focus on estimating the effects of category-level marketing mix variables on purchase incidences assuming cross-category dependencies. We propose a procedure that combines these two modeling approaches in a novel two-stage procedure for analyzing cross-category effects based on shopping basket data: In a data compression step we first derive a set of market basket prototypes and generate segments of households with internally more distinctive (complementary) cross-category interdependencies. Utilizing the information on categories that are most responsible for prototype construction, segment-specific multivariate logistic models are estimated in a second step. Based on the data-driven way of basket construction, we can show significant differences in cross- effects and related price elasticities both across segments and compared to the global (segment-unspecific) model.
    Keywords: Marketing, Choice Models, Market Basket Analysis, Cross-Category Effects, Segmentation
    JEL: C31 C33 C35 C63 M31
    Date: 2006–01
  3. By: Dubois, Bernard; Laurent, Gilles; Czellar, Sandor
    Abstract: Purchase decisions for hedonic products and services are often characterized by ambivalence -sensory benefits make them attractive, but consumers may feel guilty about bying them. To overcome this ambivalence, consumers frequently adopt strategies that allow them to enloy hedonic benefits while limiting their negative feelings. Combining an extensive literature review with an interpretive study, the authors identify 23 consumer strategies and propose a typology in four groups on the basis of strategy antecedents: two groups of objective strategies (obtaining consumption benefits without purchasing, objectively contining purchasing costs) and two groups of subjective strategies (manipulating the mental accounting of costs and benefits, relinquishing responsability).
    Keywords: consumer behavior; hedonic purchase; consumer strategies
    JEL: D12
    Date: 2006–02–06
  4. By: Marc Pomp; Victoria Shestalova; L. Rangel
    Abstract: The success or failure of reforms aimed at liberalising markets depends to an important degree on consumer behaviour. If consumers do not base their choices on differences in prices and quality, competition between firms may be weak and the benefits of liberalisation to consumers may be small. One possible reason why consumers may respond only weakly to differences in price and quality is high costs of switching to another firm. This report presents a framework for analysing markets with switching costs and applies the framework in two empirical case studies. The first case study analyses the residential energy market, the second focuses on the market for social health insurance. In both markets, there are indications that switching costs are substantial. The report discusses policy options for reducing switching costs and for alleviating the consequences of switching costs.
    Keywords: Switching costs; consumer behaviour; competition; energy markets; health insurance
    JEL: L13 D12
    Date: 2005–09
  5. By: Ron A. Boschma; Jesse W.J. Weltevreden
    Abstract: The paper analyses from an evolutionary perspective how retailers respond and adapt to b2c e-commerce. As such, the paper explores the diversity of behavior of retailers with respect to the adoption of e-commerce. More in particular, it examines empirically the extent to which the adoption of Internet strategies is affected by firm-specific features (e.g., habits of the entrepreneur, routines of firms), network relationships, and geographical proximity. Logistic regression analyses of 643 independent retailers in the Netherlands suggest that geography matters, controlling for other factors. That is, the probability of having an Internet strategy increases significantly when (a) the more knowledge spillovers are locally available; (b) the more demanding local customers are; and (c), the less rivalry is present locally.
    Keywords: evolutionary economics, Internet strategies, retailers, city centres, the Netherlands
    JEL: A12 D21 L81 R00
    Date: 2006–01
  6. By: Lapo Filistrucchi
    Abstract: Recent years have seen a surge in websites that provide news for free and, up to the end of 2001, daily newspapers in Italy have shown a growing trend towards making available online for free; the exact articles published on paper. To assess whether on-line news and traditional daily newspapers are substitute, complement or independent goods, I model the choice between different daily newspapers as a discrete choice among differentiated products. Considering the availability of a website as a newspaper characteristic and controlling for other observable and unobservable characteristics of newspapers and of the outside good, I estimate a logit model of demand on market level data from 1976 to 2001 for the main national daily newspapers in Italy. Results suggest that opening a website had a negative impact both on the sales of the newspaper who opened it and on those of its rivals. I calculate the implied short-run and approximated long-run losses in both sales and profits and provide some evidence of the additional negative effect stemming from the general availability of Internet and on-line news. Results also contribute to explaining why, starting from the end of 2001, many publishers introduced a fee to read on-line the paper edition of the newspaper.
    Keywords: daily newspapers, Internet, websites, substitution, discrete choice models, product differentiation, dynamics, market level data
    JEL: C2 D12 L12 O3
    Date: 2005
  7. By: Mair, Johanna (IESE Business School); Thurner, Claudia (IESE Business School)
    Abstract: While prior research has emphasized middle managers' important role in the strategy process and the benefits of their involvement, little is known about their role in the strategy process in medium-sized firms and, specifically, their participation in the internationalization strategy process (ISP). Our analysis of interviews conducted with the complete layer of middle managers at a medium-sized firm is intended to shed light on these issues by examining the extent and effect of middle managers' involvement in the formulation phase of the ISP. The medium-sized Italian firm chosen for our sample was going through a period of radical change as it expanded its international activities beyond its cultural boundaries. We found that not all the firm's middle managers perceived themselves to be involved in formulating the internationalization strategy. The perception of involvement was dependent on ownership of the outcome of internationalization. Middle managers with revenue accountability perceived themselves to be involved in strategy formulation. Furthermore, this perception of increased involvement was tightly linked to a more opportunity-oriented attitude toward internationalization. We suggest that medium-sized firms can actively manage middle managers' attitudes and behavior toward internationalization by managing perceptions.
    Keywords: Middle managers; internationalization strategy; small and medium-sized companies;
    Date: 2005–11–21
  8. By: Radosveta Ivanova-Stenzel (Department of Economics, Spandauer Str. 1, D-10178 Berlin, Germany.; Sabine Kröger (Université Laval, Département d’économique, Pavillon J.A.DeSève, Québec city, Québec, G1K 7P4 Canada.
    Abstract: This paper analyzes the trade of an indivisible good within a two-stage mechanism, where a seller first negotiates with one potential buyer about the price of the good. If the negotiation fails to produce a sale, a second–price sealed–bid auction with an additional buyer is conducted. The theoretical model predicts that with risk neutral agents all sales take place in the auction rendering the negotiation prior to the auction obsolete. An experimental test of the model provides evidence that average prices and profits are quite precisely predicted by the theoretical benchmark. However, a significant large amount of sales occurs already during the negotiation stage. We show that risk preferences can theoretically account for the existence of sales during the negotiation stage, improve the fit for buyers’ behavior, but is not sufficient to explain sellers’ decisions. We discuss other behavioral explanations that could account for the observed deviations.
    Keywords: auction, negotiation, combined mechanism, sequential mechanism, risk preferences, experiment
    JEL: C72 C91 D44 D82
    Date: 2005–10

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