nep-mkt New Economics Papers
on Marketing
Issue of 2007‒01‒14
sixteen papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Is City Marketing Opposed to Urban Planning? The Elaboration of a Pilot City Marketing Plan for the Case of Nea Ionia, Magnesia, Greece By Alex Deffner; Theodoros Metaxas
  3. Changing the Tide: the Campaign to Re-Brand Amsterdam. By Mihalis Kavaratzis; G.J. Ashworth
  4. Alternative Shopping Places: Periodic Markets in ¸stanbul By E. Umran (Mrs.) Topcu
  5. Market Innovations and Knowledge Transfer in the Agricultural Food Market By Marit Hoven
  6. PLS Path Modeling – A Software Review By Dirk Temme; Henning Kreis; Lutz Hildebrandt
  7. Does the Internet Kill the Distance? Evidence From Navigation, E-Commerce, and E-Banking. By Guido De Blasio
  8. Business Ethics in Transition Countries – Cluster Analysis of Behavior and Attitudes By Marina Dabić; Marina Pejić Bach; Najla Podrug
  9. An Experiment on Spatial Price Competition By Henrik Orzen; Martin Sefton
  10. How eBay Sellers set “Buy-it-now” prices - Bringing The Field Into the Lab By Tim Grebe; Radosveta Ivanova-Stenzel; Sabine Kröger
  11. Greek Port Cities in Transition: Regeneration Strategies, Waterfront Development and the Role of Cultural and Tourist Resources By Nicholas Karachalis; Evangelos Kyriazopoulos
  12. Value chain analysis and market power in the commodity processing with application to the cocoa and coffee sectores By Christopher L. Gilbert
  13. Economies of Scale and Spatial Scope in the European Airline Industry By Manuel Romero-Hernandez; Hugo Salgado
  14. The Role of Logistics' Information and Communication Technologies in Promoting Competitive Advantages of the Firm By Garrido Azevedo, Susana; Ferreira, João; Leitão, João
  15. Configuration of Logistics Activities across Life-Cycle of the Firms and Performance: Proposal of a Conceptual Model By Ferreira, João; Leitão, João; Garrido Azevedo, Susana
  16. Key Issues on Tourism Strategies By Carvalho, Pedro G.

  1. By: Alex Deffner; Theodoros Metaxas
    Abstract: The role of city marketing has been increasingly important in Europe. Today it has become a necessity with regard to the processes of global competition of cities, tourist attraction, urban management, city branding and urban governance. Many European cities support their competitiveness through cultural and tourism development. In addition, the majority of the implemented city marketing policies relate with culture and tourism. City marketing has faced many criticisms, the main one being that it substitutes for urban planning. However, the work done in cultural planning indicates that, in order for cities to be successful, marketing must be inter-connected with planning. There are even international examples of cities that have elaborated marketing plans in order to attract the potential target markets (new investments, tourists, new residents etc). One recent approach argues that marketing can contribute to the sense of place. The data for this paper are provided by the INTERREG IIIc CultMark project (Cultural Heritage, Local Identity and Place Marketing for Sustainable Development) that has been in operation in five European places since 2004: Nea Ionia/ Magnesia/ Greece (lead partner), Chester/ UK, Kainuu/ Finland, Rostock-TLM/ Germany and Pafos/ Cyprus. The CultMark project is applying a place marketing strategy with a cultural approach. This means that it emphasizes the cultural dimension of marketing and the promotion of the cultural resources of each place. The innovative characteristics of this project are reinforced by the use of the two concepts of ‘creativity’, and ‘branding destination’. The main objective of the CultMark project is the development and implementation of innovative place marketing strategies, based on the elements of local identity and the cultural assets of the partner areas in order to contribute to their sustainable economic and social development. As a case study the elaboration of the marketing plan of Nea Ionia/ Magnesia/ Greece is chosen, and the aim of the paper is to show the interconnection of marketing and planning by trying to answer, among others, the following questions: a) does marketing planning constitute strategic planning?, b) how can marketing contribute to sustainability?, c) can cultural heritage be marketed?
    Date: 2006–08
  2. By: Francisco J. Más (Universidad de Alicante); Juan Luis Nicolau (Universidad de Alicante)
    Abstract: In the advent of Customer Relationship Management, a more accurate profile of the consumer is needed. The objective of this paper is to show the usefulness of knowing consumer¿s complete utility function through his/her marginal utilities. This approach allows one to form groups of individuals with similar preferences (as traditional segmentation methods do) and to treat them individually (which represents an advance). The empirical application is carried out, on a sample of 2,127 individuals, in the context of tourism, where the customer relationship management philosophy is gaining more and more relevance. Con la llegada de la Gestión Relacional del Cliente, las organizaciones requieren un perfil del consumidor más preciso. En este contexto, el objetivo del presente trabajo consiste en proponer una segmentación apoyada en las utilidades marginales de las funciones de utilidad completas de cada individuo. Este enfoque permite formar grupos de individuos con preferencias similares (como los procedimientos habituales de segmentación) y también tratarlos de forma individual (lo que representa una novedad). La aplicación empírica se desarrolla en una muestra de 2.127 individuos en el contexto turístico, donde la filosifía de la gestión relacional del cliente está cobrando cada vez mayor importancia.
    Keywords: Gestión Relacional del Cliente, Utilidad Marginal Individual, Modelo Logit Mixto Customer Relationship Management, Marginal Individual Utility, Mixed Logit Model
    JEL: M41 G32
    Date: 2006–12
  3. By: Mihalis Kavaratzis; G.J. Ashworth
    Abstract: The re-branding of places whose existing brand image has become for various reasons inappropriate or ineffective poses particular challenges to the marketing of major multifunctional cities. The position of Amsterdam as the national cultural capital and major international cultural centre has for some time been threatened by a sharpening of competition from other cities both within and outside the Netherlands and by social and economic trends within the city that have seriously undermined the previously successfully promoted brand image. Furthermore, one of the main elements of the city’s international image associated with the liberal attitude towards soft drugs and prostitution is now seen as inappropriate for the city, as it overshadows other more desirable aspects of the city’s aspirations. This has focussed official thinking and led to a serious and fundamental attempt at strategic re-branding involving a far-reaching examination of stakeholders, goals and competitive positioning. The main tangible result so far, is the recent launching of the ‘I amsterdam’ brand. This paper will first elaborate on the context of the intensifying inter-urban competition expressed through the re-branding of cities. In this context, the process of developing the brand and the ‘I amsterdam’ campaign that has followed will be described and explained and its likely success will be assessed.
    Date: 2006–08
  4. By: E. Umran (Mrs.) Topcu
    Abstract: This paper investigates the spatial and temporal characteristics of periodic markets ( pazar ) in Ãstanbul, by means of analyzing the behavioral patterns of sellers and buyers. Periodic markets have their own products, their own ways of marketing, their own architecture and their own olfactory characteristics. All these factors together create a local culture. some periodic markets have been operating in the same place since the ottoman times. Others have sprung up both in squatter ( gecekondu ) neighborhoods and newly planned urban neighborhoods. So, they can be classified as traditional and modern. Neighborhood markets and the term "going to the market" is part of a traditional life style both in Turkey and Ãstanbul. Periodic markets range from farmers' markets that open up in a relatively more central empty location, on certain days of the week, to periodic markets that open up in central locations in the city, on certain days of the week. So, they happen to be representations of spatial cultural differences. besides providing basic needs for consumption ( food,clothing etc.), they also provide an environment of social interactions. Ãstanbul is a city that provides, anything and everything that can be bought, to her inhabitants. Like elsewhere in the world, new shopping trends are forcing the periodic markets for structural changes. Even in the most traditional neighborhoods, periodic markets are surviving the changes and no decline has been observed in the "going to the market" habits of Ãstanbul inhabitants.
    Date: 2006–08
  5. By: Marit Hoven
    Abstract: Food markets change with increasing wealth and the globalization of the economy. WTO and EU are challenging countries to enhance lower level of national protection and regulation of markets, including the markets for agricultural foods. Thus, the producers of food are continuously exposed for competition. As an answer to this food producers in Norway have looked for different possibilities to keep up the level of production and profitability. To some degree producers have adapted to new markets by either introducing new products for a new set of customers, or by making changes in existing products to satisfy the customers preferences. Export of high quality sheep meat from Norway to Japan can be mentioned as an example of market innovations, one of the five types of innovations described by Schumpeter (1934). In later years we have seen a tendency for groups of customers paying more for food products of certain origin, taste, design or other qualities. Although the cooperatives still are dominant in food processing and marketing in Norway, there are now an increasing number of farmers working with market innovations outside the traditional channels. Possibilities for success might depend on factors as culture, price, design and more. Specialised knowledge in different professions seems to be relevant when handling production, processing and marketing. Questions raised in this paper are: Is there a connection between market innovation success and the farmer’s ability to develop and transfer knowledge? How can we measure, understand and describe such processes?
    Date: 2006–08
  6. By: Dirk Temme; Henning Kreis; Lutz Hildebrandt
    Abstract: After years of stagnancy, PLS path modeling has recently attracted renewed interest from applied researchers in marketing. At the same time, the availability of software alternatives to Lohmöller’s LVPLS package has considerably increased (PLS-Graph, PLS-GUI, SPAD-PLS, SmartPLS). To help the user to make an informed decision, the existing programs are reviewed; their strengths and weaknesses are identified. Furthermore, analyzing simulated data reveals that the signs of weights/factor loadings and path coefficients can vary considerably across the different programs. Thus, applied researchers should treat the interpretation of their results with caution. Compared to programs for analysis of covariance structure models (LISREL approach), PLS path modeling software is on equal footing regarding ease of use, but clearly lags behind in terms of methodological capabilities.
    Keywords: PLS Path Modeling, Marketing, Formative Indicators, Reflective Indicators
    JEL: C31 C87 M31
    Date: 2006–12
  7. By: Guido De Blasio
    Abstract: By diminishing the cost of performing isolated economic activities in isolated areas, information technology might serve as a substitute for urban agglomeration. This paper assesses this hypothesis by using Italian household level data on internet navigation, e-commerce, and e-banking. Empirically, I find no support for the argument that the internet reduces the role of distance. My results suggest that: (1) Internet navigation is more frequent for urban consumers than their non-urban counterparts. (2) The use of e-commerce is basically not affected by the size of the city where the household lives. Remote consumers are discouraged by the fact that they cannot see the goods before buying them. Leisure activities and cultural items are the only goods and services for which e-commerce is used more intensively in isolated areas. (3) E-banking bears no relationship with city size. In choosing a bank, non-urban customers evaluate personal acquaintances as an important factor more intensively than urban clients. This also depends on the fact that banking account holders in remote areas are more frequently supplied with a loan by their bank.
    Date: 2006–08
  8. By: Marina Dabić (Mechanical Engineering Faculty, University of Osijek); Marina Pejić Bach (Faculty of Economics and Business, University of Zagreb); Najla Podrug (Faculty of Economics and Business, University of Zagreb)
    Abstract: The aim of this article is to obtain a better understanding of people’s attitudes toward ethical issues. We explored four ethics issues: (1) attitude on ethical issues in general, (2) information manipulation, (3) environmental issues, and (4) law issues. This study examines variation in attitudes toward ethical issues based on data collected from questionnaire survey. The data set is composed of people who participated in the survey. Although firms were randomly selected to participate in the survey, it is not clear to what extent they apply to the population as a whole; this would be a useful further study. In order to study variation we used cluster analysis that revealed that people could be divided into three clusters, with distinctive demographic, economic and attitudinal traits for each cluster. Results could be useful both to policy makers at the government level, and to managers that are worried that low sensitivity toward ethical issues could influence firm’s performance.
    Keywords: ethics, information manipulation, cluster analysis
    JEL: C10 D23 L22
    Date: 2006–11–22
  9. By: Henrik Orzen (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham)
    Abstract: We conduct an experiment on price competition in a segmented market. Each segment contains one seller and one consumer, and consumers incur transportation costs when they buy from a seller located in another segment. We observe persistent price dispersion in our experimental markets with the implication that consumers frequently switch suppliers. We find that larger markets are more competitive, and that competitive pressures in large markets preclude sellers from exploiting higher consumers’ willingness to pay. We compare laboratory outcomes against several theoretical benchmarks. We find that mixed strategy equilibrium predictions from the analysis of a static model perform better than alternative benchmarks in organizing the data.
    Keywords: Spatial Price Competition; Price Dispersion; Experiments
    JEL: C72 C92
    Date: 2006–09
  10. By: Tim Grebe (Institut für Wirtschaftstheorie I, Humboldt.Universität zu Berlin, Spandauer Str. 1, D-10099 Berlin, Germany.; Radosveta Ivanova-Stenzel (Institut für Wirtschaftstheorie I, Humboldt.Universität zu Berlin, Spandauer Str. 1, D-10099 Berlin, Germany.; Sabine Kröger (Département d'économie, Université Laval, Pavillon J.A.DeSève, Québec City, Québec G1K 7P4, Canada.
    Abstract: In this paper we introduce a new type of experiment that combines the advantages of lab and field experiments. The experiment is conducted in the lab but using an unchanged market environment from the real world. Moreover, a subset of the standard subject pool is used, containing those subjects who have experience in conducting transactions in that market environment. This guarantees the test of the theoretical predictions in a highly controlled environment and at the same time enables not to miss the specific features of economic behavior exhibited in the field. We apply the proposed type of experiment to study seller behavior in online auctions with a Buy-It-Now feature, where early potential bidders have the opportunity to accept a posted price offer from the seller before the start of the auction. Bringing the field into the lab, we invited eBay buyers and sellers into the lab to participate in a series of auctions on the eBay platform. We investigate how traders' experience in a real market environment influences their behavior in the lab and whether abstract lab experiments bias subjects' behavior.
    Keywords: online auctions, experiments, buyout prices
    JEL: C72 C91 D44 D82
    Date: 2006–11
  11. By: Nicholas Karachalis; Evangelos Kyriazopoulos
    Abstract: Greek port cities find themselves in a profound and encompassing change as they try to improve their image and confront the competition for advanced port services and facilities and the need for urban revitalization. As port functions are increasingly relocated towards the outskirts of port cities, disadvantaged neighbourhoods and docks are turned into modern housing and commercial areas or cultural quarters that reinforce the identity, the appeal and the competitiveness of the city. Policies and practices that consider the regeneration of derelict areas and seafronts are at the top of local agendas with culture and leisure resources (cultural infrastructure, mega-events, tourist facilities, etc.) holding the key role. The main goal is the creation of new city images and environments that are attractive for residents, investors and visitors. Hence, these new policies have various spatial and economic effects, leading to prestigious waterfront developments, cultural clustering (e.g., Wit de Wittestraat in Rotterdam, Ladadika in Thessaloniki), increase of tourism, etc. On the other hand, regeneration projects affect the traditional spatial urban hierarchies and often lead to the displacement of activities and residents. So the main issue is how port cities can avoid the negative effects and in which way these strategies affect the economic and portal services. The paper intends to present the most important policy changes of the major Greek port cities and to evaluate the role of culture and leisure within these policies. Characteristic examples of European port cities redevelopments based on culture, such as the ones of Bilbao, Rotterdam and Hamburg, will be compared to the efforts of Greek port cities. Special emphasis will be given to the Cultural Capital of Europe event that has had a great impact on Thessaloniki (1997) and is expected to have a long term effect on Patras (2006). The main research questions that are being addressed are the following: Which are the spatial, economic, social and environmental effects of the new port city strategies and which role do the cultural resources hold? Is an effective cultural and leisure policy a panacea for port cities in order to adjust to the contemporary competition? How are Greek port cities responding to these new circumstances?
    Date: 2006–08
  12. By: Christopher L. Gilbert
    Abstract: Value chain analysis extends traditional supply chain analysis by locating values to each stage of the chain. This can result in a “cake division” fallacy in which value at one stage is seen as being at the expense of value at another. Over the past three decades, the coffee and cocoa industries have witnessed dramatic falls in the producer (i.e. farmer) share in rental price. Both industries are highly concentrated at the processing stage. Nevertheless, developments in the producer and retail markets are largely unconnected and there is no evidence the falls in the producer share are the result of exercise of monopoly-monopsony power. The explanation of declining producer shares is more straightforward – processing, marketing and distribution costs, incurred in consuming countries have tended to increase over time while production costs at the origin have declined.
    Date: 2006
  13. By: Manuel Romero-Hernandez; Hugo Salgado
    Abstract: In this article we use four different indices to measure cost performance of the European Airline Industry. By using the number of routes as an indicator of Network Size, we are able to estimate indicators of Economies of Scale and Spatial Scope. By estimating total and variable cost functions we are also able to calculate an index of the excess capacity of the firms. For this purpose, we use data from the years 1984 to 1998, a period during which several deregulation measures were imposed on the European airline industry. Some of the implications of this deregulation process for the cost performance of the industry are presented and discussed. Our results suggest that in the year 1998, almost all the firms had Economics of Density in their existing networks, while several of the firms also had Economies of Scale and Economies of Spatial Scope. All of the firms had excess capacity of fixed inputs. These results support our hypothesis that fusion, alliance, and merger strategies followed by the principal European airlines after 1998 are not just explained by marketing strategies, but also by the cost structure of the industry.
    Date: 2006–08
  14. By: Garrido Azevedo, Susana; Ferreira, João; Leitão, João
    Abstract: With the rapid growth of technologies, our economic society and life are changing significantly in the 21th century. The way to capture their competitive advantage has become the most important issue for enterprises in the rapidly changing and uncertain business environments. Many researches have pointed out that the adoption of technology is the most important tool for enterprises to keep their competitive advantage. The survival of an enterprise in the age of knowledge-based economy depends on how to improve their technological capability. In this sense, firms should develop adequate methodologies, in order to adopt, in a successful way, new technologies in the logistics field, and also to integrate logistics into the corporate strategy for becoming even more competitive. Growing number of firms are under pressure from their partners to change their traditional management style, both operationally and organizationally, replacing them with integrated systems that help increase the speed and fluidity of physical and information flows. In order to reach this kind of integration they are investing on new Information and Communication Technologies (ICT). In this paper we consider that the ICT are the devices or infrastructures to make more efficient the communications of business information among organizations (Dawe, 1994). Being so, the present paper aims: (i) to highlight the importance of ICT on logistics; and (ii) to understand the impact of ICT on the firms’ competitiveness. In this paper a conceptual model for the adoption of Logistics’ ICT is presented, by taking into consideration four determinant factors: individual, organizational, technological or innovation, and environmental. The interaction established between the referred determinant factors may be identified through the computation of the predominant factor, by using a selected set of adequate indicators and a simple geometry methodology. These procedures may provide the identification of the sources of firms’ competitive advantages that adopt Logistics’ ICT. The Logistics’ ICT analysed in this paper are grouped into four types, such as, the identification, the data communications and the data acquisition technologies. With regard to the identification technologies, firms may appeal to barcoding, Radio Frequency Identification (RFID). The barcoding (Chapman et al., 2003; Ellram et al., 1999), and RFID (Kumar et al., 2006; Twist, 2005; Choy et al., 2007), are identification technologies that facilitate logistics information collection and exchange. Nowadays, as regards the data acquisition technologies, the firms usually deal with a large amount of goods and data which means that data collection and exchange are critical for logistics information management and control. Good quality in data acquisition can help firms deliver customers' goods more accurately and efficiently. To attain this goal firms could appeal to some data acquisition technologies in logistics field, such as the optical scanning, the electronic pen notepads, (Lin, 2006), the voice recognition and the robotics (Dawe, 1994).
    Keywords: ICT; Logistics; Competitive Advantages; Strategy.
    JEL: M0 M11
    Date: 2007–01–06
  15. By: Ferreira, João; Leitão, João; Garrido Azevedo, Susana
    Abstract: In the last years, broad changes have contributed to the enhancement of the importance of the logistics as a source of competitive advantage, not just for increasing the satisfaction of the clients, but also for improving the performance of the firms. Nevertheless, the response functions of the firms to the referred changes are different according to the life-cycle stage that they face. The present paper aims to present a conceptual model that explores the connection between the life-cycle firm’s stages, and the standard profile of logistics activities, and the correspondent impact on performance.
    Keywords: Life Cycle; Logistics; Performance.
    JEL: M1 M10 M0 M11
    Date: 2007–01–07
  16. By: Carvalho, Pedro G.
    Abstract: After an institutional request, strategic planning is usually promoted by teams coordinated by one expert in the field, by a firm or by a University. The day it is delivered there is a general feeling of frustration with the outcome. This feeling is most likely due to an incomplete diffusion process or/and to some difficulties to measure long term and intangible outcomes. In this paper we intend to overcome some of these misinterpretations, reflecting on the mostly theoretical questions popping up from recent study cases; it is essentially centred upon the lived experiences and the methodological issues that only future will assess. This paper is also an academic exercise to share with the regional science peers the life experiment we had during PETUR (Strategic Plan for Tourism in Serra Estrela - Portugal), the acronym of the work team I coordinated, which rose a number of practical questions that one should reflect upon under recent theoretical developments in social sciences involving decision and collective action. The paper is structured as follows: (1) a context introduction; (2) an international and national literature review considering then in more detail (3) some recent developments on innovation diffusion theories. The (4) section illustrates some of the initiatives we took in the case study for a the specific region in Serra da Estrela, an internal small region located in between the Portuguese Atlantic coast and the Spanish border; the (5) section is devoted to the main focus of the paper - key issues in tourism Strategies. The paper will close with the concluding remarks where private-public partnership is mostly considered a complex learning process in order to excel in innovative diffusion processes. JEL Classification: R58; L83; O22; L26; C61; H77
    Keywords: Keywords: tourism economics; planning methodology; organizational complexity; cluster strategy; Portugal
    JEL: L83 O22 R58
    Date: 2006–11–16

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