nep-mkt New Economics Papers
on Marketing
Issue of 2006‒04‒22
thirteen papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. The Collective-Quality Promotion in the Agribusiness Sector: An Overview By Stephan Marette
  2. Business Organization and Coordination in Marketing Specialty Hogs: A Comparative Analysis of Two Firms from Iowa By Brent Hueth; Maro Ibarburu; James Kliebenstein
  3. Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart By Jerry Hausman; Ephraim Leibtag
  4. Advertising: "The Good, the Bad and the Ugly" By Lynne Pepall; Dan Richards; Liang Tan
  5. Emerging Issues for Geographical Indication Branding Strategies By Sanjeev Agarwal; Michael J. Barone
  6. A New Multivariate Product Growth Model By H.P. Boswijk; D. Fok; P.-H. Franses
  7. What Can the United States Learn from Spain's Pork Sector? Implications from a Comparative Economic Analysis By Sergio H. Lence
  8. Case Study of China's Commercial Pork Value Chain, A By Jacinto F. Fabiosa; Dinghuan Hu; Cheng Fang
  9. Radio Frequency Identification Tagging as a Mechanism of Creating a Viable Producer’s Brand in the Cattle Industry By Brian Mennecke; Anthony Townsend
  10. (R)E-tail satisfaction: retail customer satisfaction in online and offline By Weijters, B.; Schillewaert, N.;
  11. Benetton: identifying an image, imagining an identity By Giovanni Favero
  12. Consumer Demand under Price Uncertainty: Empirical Evidence from the Market for Cigarettes By Mark Coppejans; Donna Gilleskie; Holger Sieg; Koleman Strumpf
  13. Common Labels and Market Mechanisms By Christine Boizot-Szantai; Sebastien Lecocq; Stephan Marette

  1. By: Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: This paper reviews the economic effects of collective-quality promotion through a survey of the recent literature devoted to common labeling and professional groups. Benefits and costs of common labeling and professional groups for improving quality are detailed. Some empirical facts are presented, mainly focusing on some European examples, since many European countries have a long history of producer-owned marketing programs. This paper shows that in some cases the collective-quality promotion can be a successful strategy for firms/farmers.
    Keywords: collective-quality promotion, labeling, marketing organization, quality signals.
    Date: 2005–10
  2. By: Brent Hueth; Maro Ibarburu; James Kliebenstein
    Abstract: We study business organization and coordination of specialty-market hog production using a comparative analysis of two Iowa pork niche-marketing firms. We describe and analyze each firm's management of five key organizational challenges: planning and logistics, quality assurance, process verification and management of "credence attributes," business structure, and profit sharing. Although each firm is engaged in essentially the same activity, there are substantial differences across the two firms in the way production and marketing are coordinated. These differences are partly explained by the relative size and age of each firm, thus highlighting the importance of organizational evolution in agricultural markets, but are also partly the result of a formal organizational separation between marketing and production activities in one of the firms.
    Keywords: Specialty hogs; coordination; contracting; organizational design; niche markets.
    Date: 2005–11
  3. By: Jerry Hausman (Institute for Fiscal Studies and Massachussets Institute of Technology); Ephraim Leibtag
    Abstract: Consumers often benefit from increased competition in differentiated product settings. In previous research Hausman (1997a, 1997b, 1999, 2002) has estimated the increased consumer welfare from the introduction of new brand, e.g. Apple Cinnamon Cheerios, and new products, e.g. mobile telephones. In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of nontraditional retail outlets. Non-traditional outlets, including supercenters, warehouse club stores, and mass merchandisers have grown in popularity and nearly doubled their share of consumer food-at-home expenditures from 1998 to 20033. Within this non-traditional retail group, supercenters have experienced the largest increase over this time period, but warehouse club stores and dollar stores have also experienced significant increases in their share of the consumer food dollar as U.S. consumers attempt to find the best combination of prices and services at their retailer of choice.
    Date: 2006–03
  4. By: Lynne Pepall; Dan Richards; Liang Tan
    Abstract: We model the choice of firms competing in prices in a differentiated products market to bundle advertising messages with their goods in return for payment from advertisers. From the firms’ perspective, the potential to earn revenue from advertisers, makes advertising a “good”. However, because consumers in the product market dislike such advertising, the bundling dampens demand and in this sense is a “bad”. There is also a third role played by advertising, however. Since a firm that bundles advertisements with its good sells a less attractive good, it has to price more aggressively than one that does not do such bundling. Thus, bundling advertisements with the good can lead to more aggressive product pricing and thereby intensify product market competition. In this sense, advertising can make things “ugly”.
    Date: 2006
  5. By: Sanjeev Agarwal; Michael J. Barone
    Abstract: Branding strategies centering on the geographical origins of a product can provide a basis for differentiating commodity products. The use of such "geographical indications" (or GIs) can involve unique quality characteristics associated with a particular location or quality images that are based on the history, tradition, and folklore in a region. In this paper we describe the benefits and pitfalls (such as the threat of new entrants, oversupply, the broadening of boundaries to include more producers, and limiting generic use of such names) of using GI branding strategies. We also focus on trademark issues germane to a company's ability to (1) adopt GI-based trademarks as a means of gaining a competitive advantage and (2) protect the rights associated with such marks in order to sustain this source of competitive advantage.
    Keywords: brand, branding, commodity marketing, generic brand, geographic identity.
    Date: 2005–01
  6. By: H.P. Boswijk (Department of Quantitative Economics, Universiteit van Amsterdam); D. Fok (Department of Econometrics, Erasmus Universiteit Rotterdam); P.-H. Franses (Department of Econometrics, Erasmus Universiteit Rotterdam)
    Abstract: To examine cross-country diffusion of new products, marketing researchers have to rely on a multivariate product growth model. We put forward such a model, and show that it is a natural extension of the original Bass (1969) model. We contrast our model with currently in use multivariate models and we show that inference is much easier and interpretation is straightforward. In fact, parameter estimation can be done using standard commercially available software. We illustrate the benefits of our model relative to other models in simulation experiments. An application to a three-country CD sales series shows the merits of our model in practice.
    Keywords: Diffusion; International marketing; econometric models
    JEL: C39 M31
    Date: 2006–03–16
  7. By: Sergio H. Lence
    Abstract: This study provides a comparative economic analysis of the primary production of pork and its marketing channel in Spain and the United States. The focus on Spain is due to the profound growth and transformation of its pork sector over the last 20 years, compared with other major players in the world market for pig meat. The analysis reveals a number of similar characteristics but also important differences between the two countries. The significant expansion of Spain's pork production sector stemmed from a number of factors that apply, to a relatively large extent, to some U.S. states (in particular, North Carolina) but do not apply to the U.S. pork production sector as a whole. This implies that it is unlikely that the U.S. pork production sector as a whole will mimic an expansion driven by the same type of factors in the future. Likewise, it seems highly unlikely that the U.S. consumption of pig meat will expand in the future based on the same driving forces behind the sharp increase in Spain's domestic demand for pig meat over the last 20 years. The analysis also indicates that Spanish pig producers are currently being subjected to more stringent environmental and animal welfare regulations than their U.S. counterparts and that these regulations are becoming increasingly more restrictive. It would not be surprising to see similar trends emerging in the United States, leading to a substantially more restrictive regulatory environment for U.S. hog producers.
    Keywords: comparative analysis, hog marketing channel, Spain pork industry, U.S. pork industry.
    Date: 2005–09
  8. By: Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Dinghuan Hu; Cheng Fang
    Abstract: In China, with the cost of improved technology rising, surplus labor shrinking, and demand for food quality and safety increasing, it will be just a matter of time before the country's hog production sector will be commercialized like that of developed countries. However, even if China's cost of production converges to international levels, as shown in this case study, China may continue to retain some competitive advantage because of the labor-intensive nature of the marketing services involved in hog processing and meat distribution. The supply of variety meats offers the most promising market opportunity for foreign suppliers in China. The market may open further if the tariff rate for variety meats is reduced from 20% and harmonized with the pork muscle meat rate of 12%, and if the value-added tax of 13% is applied equally to both imported and domestic products. The fast-growing Western-style family restaurant and higher-end dining sector is another market opportunity for high-quality imported pork.
    Keywords: commercial, cost structure, imports, pork value chain.
    Date: 2005–08
  9. By: Brian Mennecke; Anthony Townsend
    Abstract: This manuscript reports on a project to examine the feasibility of extensive radio frequency identification (RFID) tagging to determine product provenance in the meat production industry. The investigators examined existing technologies and meat production processes as well as emerging technologies in RFID tagging to assess the potential of RFID technologies for provenance assurance. While RFID technologies hold tremendous promise for traceability, the current state of the technology and production process creates challenges for effectively creating full traceability. However, RFID holds tremendous potential for improving processing throughput, which will help make RFID-based traceability more attractive for adoption by meat processors.
    Keywords: brand marketing, provenance assurance, radio frequency identification (RFID), traceability.
    Date: 2005–05
  10. By: Weijters, B.; Schillewaert, N.;
    Abstract: Building on the e-Satisfaction model proposed by Szymanski and Hise (2000) and further validated by Evanschitzky, Iyer, Hesse, and Ahlert (2004), we develop an instrument to measure shopper satisfaction in online and offline retail contexts: the (R)E-Tail Satisfaction scale. Using data from an online (N=202) and an offline (N=441) grocery shopper sample, the instrument is shown to be fit for cross-channel evaluation of levels of satisfaction and its antecedents. We find full metric invariance (identical factor loadings), sufficient partial scalar invariance (identical item intercepts for at least two items per construct), as well as some interesting structural differences. Most notably, online shoppers evaluate the facets of retail satisfaction generally lower than do offline shoppers.
    Date: 2006–04–07
  11. By: Giovanni Favero (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper deals with the Benetton’s approach to advertising and with the changes in the image of the company since its foundation in 1965 up to the 2000s. Links among the evolution in promotional, distributional and productive strategy are discussed.
    Keywords: business strategy, image policy, franchising
    JEL: N84 M37
    Date: 2006
  12. By: Mark Coppejans; Donna Gilleskie; Holger Sieg; Koleman Strumpf
    Abstract: The goal of this paper is to analyze consumer demand in markets with large price uncertainty. We develop a demand model for goods that are subject to habit formation. We show that consumption plans of forward looking individuals depend not only on preferences and current period prices, but also on individual beliefs about the evolution of future prices. Moreover, a mean preserving spread in the price distribution and, hence, an increase in price uncertainty reduces consumption along the optimal path. With smoking as our application, we test the predictions of our model. We use a unique data set of prices for cigarettes collected by the Bureau of Labor Statistics to characterize price uncertainty and price expectations of individuals. We have also obtained access to the restricted use version of the National Education Longitudinal Study, which provides detailed information on smoking behavior of teenagers in the U.S. Our estimation results suggest that teenagers who live in metropolitan areas with a large amount of cigarette price volatility have, on average, significantly lower levels of cigarette consumption. Moreover, these individuals are less likely to start consuming cigarettes. Our results also provide evidence that young individuals are forward looking. Myopic individuals would not respond to an increase in uncertainty about future prices by reducing consumption.
    JEL: C8 D8 I1
    Date: 2006–04
  13. By: Christine Boizot-Szantai; Sebastien Lecocq; Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: In this article, the impact of common labels is investigated with both theoretical and empirical approaches. Recent statistics regarding the egg market in France suggest that retailer brands largely adopt common labels. A simple theoretical framework enables us to determine the conditions under which producers and/or retailers with different product qualities decide to post a common label on their products. In particular, a situation of multiple equilibria (one where the label is used by the high-quality seller only and one where it is used by the low-quality seller only) is exhibited when the cost of the label is relatively large. The demand is then estimated for different segments of the French egg market, including producer/retailer brands with/without common labels. The estimates are used to derive expenditure and price elasticities and allow us to calculate welfare measures revealing a relatively large willingness-to-pay for labels.
    Keywords: competition, demand estimation, labels, product differentiation.
    Date: 2005–09

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