nep-mkt New Economics Papers
on Marketing
Issue of 2006‒09‒11
sixteen papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Kijken in het brein: Over de mogelijkheden van neuromarketing By Smidts, A.
  2. Marketing, Informatie en Besluitvorming: een inter-organisationeel Perspectief By Bruggen, G.H. van
  3. Competition:an inspirational marketing tool By Waarts, E.
  4. In search of an audience... By Stremersch, S.
  5. Of Rats and Brands: A Learning-and-Memory Perspective on Consumer Decisions By Osselaer, S.M.J. van
  6. Polysemy in Advertising By Puntoni, S.; Schroeder, J.E.; Ritson, M.
  7. Veranderende Datasets Binnen de Marketing: Puur Zegen of Ook een Bron van Frustratie? By Dekimpe, M.G.
  8. How Feedback Can Improve Managerial Evaluations of Model-based Marketing Decision Support Systems By Kayande, U.; Bruyn, A. de; Lilien, G.L.; Rangaswamy, A.; Bruggen, G.H. van
  9. Interaction Between Shelf Layout and Marketing Effectiveness and Its Impact On Optimizing Shelf Arrangements By Nierop, J.E.M. van; Fok, D.; Franses, Ph.H.B.F.
  10. Modeling Brand Extension as a Real Option: How Expectation, Competition and Financial Constraints Drive the Timing of Extensions By Pattikawa, L.H.
  11. Categorization by Groups By Hamilton, R.W.; Puntoni, S.; Tavassoli, N.T.
  12. Inkoop, Leveranciers en Innovatie: Van VOC tot Space Shuttle By Wynstra, J.Y.F.
  13. E-Fulfillment and Multi-Channel Distribution – A Review By Agatz, N.A.H.; Fleischmann, M.; Nunen, J.A.E.E. van
  14. E-Tailing and its Prospects: Great Expectations Reconsidered By Jeffrey Mayer
  15. Leveraging Offshore IT Outsourcing by SMEs through Online Marketplaces By Radkevitch, U.L.; Heck, E. van; Koppius, O.
  16. Mobile Payments in the Netherlands: Adoption Bottlenecks and Opportunities, or… Throw Out Your Wallets By Waris, F.S.; Mubarik, F.M.; Pau, L-F.

  1. By: Smidts, A. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Modern neuroimaging techniques enable one to measure where and when brain activity takes place when executing a task. With these techniques, one can assess in a continuous, objective and accurate manner, the brain response of customers to marketing stimuli such as TV-commercials and assortments, or when choosing between brands. In this inaugural address, a perspective is given on the potential of measuring brain responses in marketing research. The strengths and weaknesses of four neuroimaging techniques are given (i.e., EEG, MEG, PET and fMRI) and the suitability of each technique for marketing research is discussed. In two consumer research examples (advertising recall and brand choice processes), the value of measuring brain activity is illustrated. It is concluded that neuroimaging opens unique opportunities for marketing research. However, much basic research is still required before these techniques can be applied in practice. The ultimate goal of neuromarketing is to improve our understanding of customer???s reactions to mar-keting stimuli by directly measuring the customer???s brain activity, and by incorpo-rating this brain response in the development of more effective marketing stimuli.
    Keywords: neuroimaging;neuromarketing;neuroeconomics;brain activity;brain scan;marketing research;cognitive neuroscience;psychophysiology;EEG;MEG;PET;fMRI;research methodology;
    Date: 2002–10–25
  2. By: Bruggen, G.H. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: In this paper we describe three types of applications of information technology in marketing. These are (1) applications that focus on improving the efficiency of marketing processes; (2) applications that focus on improving the effectiveness of marketing management; and (3) applications that improve the strategic position of organizations within a marketing channel. The application of information technology has led to the availability of large amounts of marketing information. Through the use of marketing management support systems, this information can be used effectively. By sharing marketing information with channel partners through inter-organisational information systems, information can be used innovatively as well.
    Keywords: marketing;information technology;decision-Making;marketing;management support systems;information Sharing;marketing channels;
    Date: 2001–10–12
  3. By: Waarts, E. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Competition is the engine behind innovation and dynamics in the marketplace. Sectors like public transport,water,energy and telecom are liberalized and deregulated by nationalandinternationalgovernmentsinordertoincreasecompetitionamongcompanies. The ultimate goals are to create transparent markets with ample opportunities for new firms to enter, fair prices and a varied, innovative range of consumer products and services. Competition may indeed stimulate firms to run faster, and to create better products and services by using effectivemarketing practices.This can,for example,readily be observed in the high technology sector. In that sense, competition can be an inspirational and stimulating marketing tool. At the same time, competition can have destructive effectsaswell,whenfirms’primarygoalsbecometobeat orharmtheircompetitors.Thiswas, for example, recently the case in a taxi war in Amsterdam. Constructive and destructive behaviours are partly determined by both the characteristics and rules of the market, the manager and his company. Research is required to fully understand the effects of the various factors on competitive behaviour and subsequently on the performance of the market. This is essential, both for theory development, and for governments, companies and consumers as well.
    Keywords: marketing research;marketing strategy;competition;innovation;competitive interaction;industry;drivers;company performance;
    Date: 2004–08–26
  4. By: Stremersch, S. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: For an academic, finding an audience is critical. However, finding an audience is not always easy for most marketing academics. This inaugural address explores what the challenges are in finding an audience, among fellow scholars, students, public policy, industry, or society in general. It finds that the academic audience for marketing research is: (1) often small; (2) constrained to the own discipline; and (3) mostly located in the United States. The student audience is also under pressure, due to: (1) the difficult translation of academic marketing research to marketing education; (2) shifting student preferences; and (3) lack of involvement of students. The audience in society is too small due to a lack of relevance of marketing research in three ways: (1) lack of a public policy perspective; (2) too incremental insights to be useful to practice; and (3) too much focus on rigor to be interesting for the press. This address cites three ways to grow towards a larger and more loyal audience by evolving towards: (1) a truly globalized community of marketing academics; (2) living together with our source disciplines; and (3) a stronger focus on the knowledge economy and the life sciences.
    Keywords: marketing;marketing research;philosophy of science;takeoff;globalization;pharmaceuticals;biotechnology;knowledge economy;
    Date: 2005–04–15
  5. By: Osselaer, S.M.J. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: When consumers evaluate or choose products, they rely on what they have learned and can remember about those products’ characteristics, such as brand names, ingredients, orfeatures. Severalexperimentssuggest that evenrathersophisticatedpatternsofproduct evaluation and choice can be explained by simple associative learning-and-memory processes,which show similarities to those found in rats,dogs,and other animals.Strategic implications for brand management and public policy, theoretical implications for the study of human learning and memory, and directions for future research are outlined.
    Keywords: brand management;brand equity;co-branding;ingredient branding;brand extension;consumer decision making;learning;memory;consumer behavior;consumer psychology;
    Date: 2004–10–29
  6. By: Puntoni, S.; Schroeder, J.E.; Ritson, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The article reviews the conceptual foundations of advertising polysemy – the occurrence of different interpretations for the same advertising message. We discuss how disciplines as diverse as psychology, semiotics and literary theory have dealt with the issue of polysemy, and provide translations and integration among these multiple perspectives. From such review we draw recurrent themes to foster future research in the area and to show how seemingly opposed methodological and theoretical perspectives complement and extend each other. Implications for advertising research and practice are discussed.
    Keywords: Polysemy;Semiotics;Advertising;
    Date: 2006–08–22
  7. By: Dekimpe, M.G. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Keywords: Marketing;econometric and time series analysis;mega-datasets;prijspromoties;merkentrouw;internationale diffusie;
    Date: 2003–03–07
  8. By: Kayande, U.; Bruyn, A. de; Lilien, G.L.; Rangaswamy, A.; Bruggen, G.H. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Marketing managers often provide much poorer evaluations of model-based marketing decision support systems (MDSSs) than are warranted by the objective performance of those systems. We show that a reason for this discrepant evaluation may be that MDSSs are often not designed to help users understand and internalize the underlying factors driving the MDSS results and related recommendations. Thus, there is likely to be a gap between a marketing manager’s mental model and the decision model embedded in the MDSS. We suggest that this gap is an important reason for the poor subjective evaluations of MDSSs, even when the MDSSs are of high objective quality, ultimately resulting in unreasonably low levels of MDSS adoption and use. We propose that to have impact, an MDSS should not only be of high objective quality, but should also help reduce any mental model-MDSS model gap. We evaluate two design characteristics that together lead model-users to update their mental models and reduce the mental model-MDSS gap, resulting in better MDSS evaluations: providing feedback on the upside potential for performance improvement and providing specific suggestions for corrective actions to better align the user's mental model with the MDSS. We hypothesize that, in tandem, these two types of MDSS feedback induce marketing managers to update their mental models, a process we call deep learning, whereas individually, these two types of feedback will have much smaller effects on deep learning. We validate our framework in an experimental setting, using a realistic MDSS in the context of a direct marketing decision problem. We then discuss how our findings can lead to design improvements and better returns on investments in MDSSs such as CRM systems, Revenue Management systems, pricing decision support systems, and the like.
    Keywords: Marketing Decision Support Systems;Marketing Decision Models;Marketing Information Systems;Feedback;Learning;
    Date: 2006–08–14
  9. By: Nierop, J.E.M. van; Fok, D.; Franses, Ph.H.B.F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Allocating the proper amount of shelf space to stock keeping units [SKUs] is an increasingly relevant and difficult topic for managers. Shelf space is a scarce resource and it has to be distributed across a larger and larger number of items. It is in particular important because the amount of space allocated to a specific item has a substantial impact on the sales level of that item. This relation between shelf space and sales has been widely documented in the literature. However, besides the amount of space, the exact location of the SKU on the shelf is also an important moderator of sales. At the same time, the effectiveness of marketing instruments of an SKU may also depend on the shelf layout. In practice, retailers recognize that these dependencies exist. However, they often revert to rules of thumb to actually arrange their shelf layout. We propose a new model to optimize shelf arrangements in which we use a complete set of shelf descriptors. The goal of the paper is twofold. First of all, we aim to gain insight into the dependencies of SKU sales and SKU marketing effectiveness on the shelf layout. Second, we use these insights to improve the shelf layout in a practical setting. The basis of our model is a standard sales equation that explains sales from item-specific marketing-effect parameters and intercepts. In a Hierarchical Bayes fashion, we augment this model with a second equation that relates the effect parameters to shelf and SKU descriptors. We estimate the parameters of the two-level model using Bayesian methodology, in particular Gibbs sampling. Next, we optimize the total profit over the shelf arrangement. Using the posterior draws from our Gibbs sampling algorithm, we can generate the probability distribution of sales and profit in the optimization period for any feasible shelf arrangement. To find the optimal shelf arrangement, we use simulated annealing. This heuristic approach has proven to be able to effectively search an enormous solution space. Our results indicate that our model is able to fit and forecast the sales levels quite accurately. Next, when applying the simulated annealing algorithm to the shelf layout, we appear to be able to increase profits for all the stores analyzed. We compare our approach to commonly used shelf optimization rules of thumb. Most sensible rules of thumb also increase expected profits (although not as much as our optimization algorithm). In particular, it is beneficial to put high-margin items close to the beginning of the aisle (or the “racetrack"). Finally, we provide managerial implications and directions for further research.
    Keywords: Shelf Management;Sales Models;Hierarchical Bayes;Markov Chain Monte Carlo;Simulated Annealing;
    Date: 2006–03–27
  10. By: Pattikawa, L.H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Despite their strategic importance firm’s motivations to extend brands have received only modest attentions by marketing scholars. We use multiple events duration models to examine the timing of launching brand extensions. We provide a theoretical framework of brand extensions based on the real option framework. Using a real option framework allows us to make a parallel comparison between firms launching brand extensions with an agent exercising a call option in a financial market. Specifically, we consider the timing of extensions as an opportunistic behaviour to cope with uncertainty, competition, and lack of financial resources. By using 428 pharmaceutical brands that were extended in the period 1973-2005, we demonstrate the use of several different variant of Cox models to deal with multiple extensions within the same brand (Andersen-Gill model, Marginal model, and two Conditional models). Our results show that firms launch brand extensions in response to increase in competition pressure, uncertainty concerning their expectation on firms’ stock prices, and lack of financial resources.
    Keywords: Brand Extension;Real Options;Hazard Models;
    Date: 2006–06–30
  11. By: Hamilton, R.W.; Puntoni, S.; Tavassoli, N.T. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Categorization is a core psychological process central to consumer and managerial decision-making. While a substantial amount of research has been conducted to examine individual categorization behaviors, relatively little is known about the group categorization process. In two experiments, we demonstrate that group categorization differs systematically from that of individuals: groups created a larger number of categories with fewer items in each category. This effect is mediated by groups’ larger knowledge base and moderated by groups’ ease in achieving consensus. While neither broader nor narrower categories are normatively superior, more integration or distinction among concepts may be desirable for a given objective. Thus, it is important for those relying on the outputs of categorization tasks, such as web site designers, store managers, product development teams, and product marketing managers, to understand and consider the systematic differences between group and individual categorization.
    Keywords: Categorization;Decision-making;Group and Individual Categorization;
    Date: 2006–08–22
  12. By: Wynstra, J.Y.F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Purchasing and supply management studies the initiation, design, control and evaluation of activities within and between organisations aimed at obtaining goods and services from suppliers. Already during the times of the "Verenigde Oost-Indische Compagnie", purchasing turned out to be an important function that could provide a substantial contribution to business success. More recently, the significance of purchasing and supply management has only grown, due to the trend towards increased specialisation and vertical disintegration. At the same time, incidents such as the Challenger and Columbia Space Shuttle disasters have demonstrated that effective purchasing and supply management is far from simple. Education and research in this area is thus of great importance.As a management research discipline, purchasing and supply management is fairly young and can be dated back to the mid-1960s. The last 15-20 years, however, a more specialist, distinct field has been developing. In doing research in this field, theories and concepts developed in other areas such as Operations Management and Marketing are highly relevant. The risk, however, of becoming a more distinct research area, is that these neighboring disciplines tend to be disregarded. A multi-disciplinary approach in studying purchasing and supply management could limit such a risk.
    Keywords: Purchasing and supply management;supplier relations;innovation;new product;development;outsourcing;
    Date: 2006–02–17
  13. By: Agatz, N.A.H.; Fleischmann, M.; Nunen, J.A.E.E. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This review addresses the specific supply chain management issues of Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and reviews corresponding quantitative models. In this way, we aim to enhance the understanding of multi-channel e-fulfillment and to identify gaps between relevant managerial issues and academic literature, thereby indicating directions for future research. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’, the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies need to master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operations decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering.
    Keywords: Distribution;E-fulfillment;Online Retailing;Literature Review;
    Date: 2006–08–22
  14. By: Jeffrey Mayer
    Abstract: This paper attributes slower than predicted growth in e-commerce retailing to four factors: consumer resistance; the ability of traditional retailers to become multi-channel sellers; prudent official survey and classification practices; and perhaps the limited range of “pure-play” business models (i.e., retail models that rely mainly on electronic sales). Based on responses to the Census Bureau’s Monthly Retail Trade Survey (MRTS) in the five fourth quarter periods from 2001 to 2005, the paper finds that e-commerce has claimed a small but rapidly growing share of U.S. retailing markets; and that pure play companies are still important drivers of this process. However, it also finds that the capacity of pure-play companies to continue in this role may be nearing its limits, and that the rate of continued growth in e-commerce retailing may depend on the business decisions of large, multi-channel sellers. Qualified researchers can access MRTS-based quarterly e-commerce data for 2001-2005 at the Census Bureau’s Regional Data Centers.
    Keywords: e-commerce, retailing, pure-play retailing, Monthly Retail Trade Survey
    Date: 2006–07
  15. By: Radkevitch, U.L.; Heck, E. van; Koppius, O. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Following their larger counterparts, an increasing number of small firms outsource their IT tasks to lower cost offshore destinations. For small firms, however, offshore outsourcing is a difficult undertaking as it involves high transaction costs. Online marketplaces for IT services, which have recently become available to small firms, make offshore IT outsourcing more accessible and manageable, although differences in the marketplace design result in varying outcomes across the marketplaces. This has consequences for SME’s decision as to which online marketplace to use, because different markets may have different types of benefits and costs. This paper sets to analyze some of the similarities and differences between online marketplaces for IT services and their effects for small firms. First, we analyze if and how online marketplaces reduce small firms’ transaction costs in offshore IT outsourcing. Second, we examine the effects of market entry barriers on outcomes of online marketplaces and their implications for small firms. The results indicate that online marketplaces for IT services do reduce transaction costs for small firms in offshore outsourcing across ten specific market processes. More surprising, however, is the finding that the lower market entry barriers for suppliers result in lower prices for buyers without compromising other aspects of market performance.
    Keywords: Offshore IT Outsourcing;Online Market;Reverse Auction;Process-Stakeholder Analysis;
    Date: 2006–08–22
  16. By: Waris, F.S.; Mubarik, F.M.; Pau, L-F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The purpose of this research report is to analyse the mobile payment market size and its revenue basis, as well as adoption bottlenecks, in view of establishing the adoption and deployment of mobile banking services in The Netherlands. The research report describes various aspects with regard to mobile payments/mobile banking in The Netherlands. Issues like implementation, regulatory framework, estimated business case, deployment scenario’s, recommended business model, a SWOT analysis of the technical solutions, organisational bottlenecks, an analysis of the reasons for success and failures, and open issues and challenges are addressed. The main aim is to try to answer the question whether there is a market in The Netherlands for mobile banking services, and providing an analysis of why M-banking services have not been so successful in The Netherlands. Furthermore, it needs to be mentioned that the focus of this paper was on micro-payments, which are generally considered to be payments of up to €10.
    Keywords: Mobile payments;Mobile banking;The Netherlands;Business Models;Mobiel betalen;Mobiel bankieren;Nederland;Business modellen;
    Date: 2006–03–17

This nep-mkt issue is ©2006 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.