nep-mkt New Economics Papers
on Marketing
Issue of 2006‒10‒21
six papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Wheat Marketing and its Efficiency in India By Gandhi Vasant P.; Koshy Abraham
  2. GTAP-M: A GTAP Model and Data Base that Incorporates Domestic Margins By Peterson, Everett
  3. The Value-Congruity Relationship Model By Kaul Subhashini; Khokle Pradyumana; Koshy Abraham
  4. Intellectual Property and Marketing By Darius Lakdawalla; Tomas Philipson; Y. Richard Wang
  5. A Conceptual Note on Influencing Store Loyalty: Implications for Indian Retailers By Kaul Subhashini
  6. Is India Ready for Online Dispute Resolution? By Agarwal Anurag K.

  1. By: Gandhi Vasant P.; Koshy Abraham
    Abstract: The study examines the marketing of wheat in India, focusing on the private marketing system, the marketing efficiency and quality. Wheat is now a major food staple in India, crucial to India’s food economy and security. With production reaching 70 to 75 million tons and a large demand, India’s wheat economy is the second largest in the world. The efficiency of marketing is crucial to farmer incomes, consumer welfare, as well as government budgets and the economy. Substantial changes are taking place in the marketing of wheat. The study finds that the farmers now almost invariably sell in the nearby primary markets rather than to village traders. The farmer choice of varieties is now becoming market oriented with quality and market acceptance becoming as important as yield. The typically market intermediary provides hardly any special, value adding or developmental services in return for the commissions and margins. The farmers see considerable scope for improvement in the marketing system. The consumer demand for wheat varies considerably across the country. But wheat has made inroads into food consumption in the east and the south. The retailers are increasingly conscious of consumer demand and quality, and keep a varietiy of wheat and wheat products. Direct buying of wheat grain, storing, and own recourse to processing are common in the north and the west, whereas direct purchase of wheat products such as flour is the norm in the east and the south. The trend is towards direct purchase of processed wheat products, and within this from loose to packaged branded wheat products. The estimated average total marketing cost of wheat is found to be of the order of Rs. 266 per quintal, and in this transport has the largest share of 40 percent, commission and taxes make up 25 percent, and wastage another 15 percent. When compared to the consumer-farmer price spread, the marketing costs account for 74 percent of the spread, leaving 26 percent for margins – this is fairly efficient but there is significant scope for improvement. On an average, the farmers receive 66 percent of what the consumer pays. The government channel marketing cost is reported to be Rs. 309 per quintal, but this does not cover the whole chain and is not strictly comparable. Examination of the question of market integration for wheat is difficult due to data and quality difference problems. Co-integration analysis using monthly price data for eight markets for the period April 1997 to June 2004 indicates that nationally the markets are integrated but the LOP (Law of One Price) does not hold, and the presence of six common stochastic trends implies the absence of full pair-wise co-integration.
    Date: 2006–09–29
  2. By: Peterson, Everett
    Abstract: Transportation, wholesaling, and retailing activities are a significant segment of economic activity in many economies. The magnitude of these activities can vary greatly between products, users, and regions. However, in most applied general equilibrium (AGE) analyses, these marketing activities are not tied to specific commodities. This paper develops a model framework and database that incorporates domestic marketing margins on domestic and imported goods going to final demand or used as intermediate inputs, and margins on exports, into the standard GTAP Model. The effects of incorporating domestic marketing activities into an AGE model are illustrated by comparing the results of the standard GTAP Model to the new GTAP-M Model for several different technological change scenarios. The comparison yields two main results. First, tying the domestic marketing activities to specific commodities changes the degree of price transmission from producers to users, compared to a model that does not include margin activities explicitly. The second main result is that the magnitude of the elasticity of substitution between commodities and the composite marketing activity is very important. Allowing variable margins creates a new source of demand-responsiveness for commodities which can significantly alter the results of policy simulations.
    Date: 2006
  3. By: Kaul Subhashini; Khokle Pradyumana; Koshy Abraham
    Abstract: Marketers have always aimed at improving quality of relationship with consumers. Recent efforts exploring into brand-consumer relationships indicates that individuals use the interpersonal relationship elements to forge associations with brands and stores. This paper draws from interpersonal literature to develop a value-congruity model of relationship where four district 'circles' are identified. Each circle is associated with a set of values and relationship progression is conceived of as a movement inwards based on value-congruity.
    Date: 2006–10–13
  4. By: Darius Lakdawalla; Tomas Philipson; Y. Richard Wang
    Abstract: Patent protection spurs innovation by raising the rewards for research, but it usually results in less desirable allocations after the innovation has been discovered. In effect, patents reward inventors with inefficient monopoly power. However, previous analysis of intellectual property has focused only on the costs patents impose by restricting price-competition. We analyze the potentially important but overlooked role played by competition on dimensions other than price. Compared to a patent monopoly, competitive firms may engage in inefficient levels of non-price competition—such as marketing—when these activities confer benefits on competitors. Patent monopolies may thus price less efficiently, but market more efficiently than competitive firms. We measure the empirical importance of this issue, using patent-expiration data for the US pharmaceutical industry from 1990 to 2003. Contrary to what is predicted by price competition alone, we find that patent expirations actually have a negative effect on output for the first year after expiration. This results from the reduction in marketing effort, which offsets the reduction in price. The short-run decline in output costs consumers at least $400,000 per month, for each drug. In the long-run, however, expirations do raise output, but the value of expiration to consumers is about 15% lower than would be predicted by a model that considers price-competition alone, without marketing effort. The non-standard effects introduced by non-price competition alter the analysis of patents’ welfare effects.
    JEL: I11 L12 O34
    Date: 2006–10
  5. By: Kaul Subhashini
    Abstract: Store loyalty is the most initial variable of interest to retailers. This paper reviews existing retail literature to identify the dimensions of store loyalty; with specific focus on its antecedents such as store image. The paper also discusses methodological issues in measuring store loyalty and image in the current Indian context.
    Date: 2006–10–13
  6. By: Agarwal Anurag K.
    Abstract: The Indian judicial system is marred by delays. Businesses suffer because disputes are not resolved in a reasonable time. Even with the use of methods of alternative dispute resolution a fair number of high value disputes end up in a court. Thus, courts hardly have any time for taking up disputes of lower value. Also, in a country of continental dimensions, every disputant cannot afford to travel and contest in a court of law. Online Dispute Resolution (ODR) has emerged as a new method which may be beneficial in a geographically large country and also where a large number of B2B or B2C disputes are significantly of low value. ODR is the best available method for resolving such business disputes. But there are a number of hurdles like access, technology, cultural and language issues, and above all trust with a new un-tested system. Of late, ODR has been successfully used by the National Internet Exchange of India (NIXI) and the judiciary has also shown perceptible shift towards use of new technology and methods in resolution of disputes. The paper examines the hurdles faced by ODR in India, discusses its future and makes a few suggestions for its success.
    Keywords: Online Dispute Resolution, India, Arbitration, Business Disputes
    Date: 2006–10–11

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