nep-mkt New Economics Papers
on Marketing
Issue of 2007‒04‒09
six papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Marketing Communication Drivers of Adoption Timing of a New E-Service among Existing Customers By Prins, R.; Verhoef, P.C.
  2. Longitudinal Study on the Performance of U.S. Pharmaceutical Firms: The Increasing Role of Marketing By Pattikawa, L.H.
  3. Brand Metrics: A Tool to Measure Performance By Rajagopal; Rajagopal, Amritanshu
  4. New Product Introduction and Seasonality Effect in Food Products Retailing By Rajagopal
  5. Determinants of UK box office success: the impact of quality signals By Caroline Elliott; Rob Simmons
  6. Rationing-Based Price Discrimination By Ruhai Wu; Xianjun Geng; Andrew B. Whinston

  1. By: Prins, R.; Verhoef, P.C. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The study investigates the effects of direct and mass marketing communications on the adoption timing of a new e-service among existing customers. The mass marketing communications concern both specific new service advertising and brand advertising from both the focal supplier and competitors. Using a split-hazard approach, the authors account for the fact that a significant part of the customer base will never adopt the new e-service. The empirical results show that service advertising shortens the time to adoption, even when it is initiated by competitors.
    Keywords: New product adoption;Competitive advertising;Hazard model;E-services;Telecommunications;
    Date: 2007–03–28
  2. By: Pattikawa, L.H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Nowadays, the U.S. pharmaceutical industry has been under thorough scrutiny. Popular press claims of intensive marketing activities that go beyond R&D, the strong increase of me-too drugs, and, at the same time, the high industry profitability have contributed to public skepticism. Despite this increasing role of marketing, studies on the profitability of pharmaceutical firms mainly focus on the role of R&D. In this paper, we investigate the impact of advertising and product differentiation on pharmaceutical firms? market value over the period 1971-2005. Especially, we examine whether there has been a change in the pattern of returns in these variables over this period. Our results show that, nowadays, pharmaceutical firms? performance is not only closely linked to their R&D activities but also to marketing activities such as advertising and product differentiation. Since the 1990s, the return of advertising has become three times larger than that of R&D. In addition, we found that the impact of product differentiation came largely from the introduction of the so called incrementally modified drugs (IMD). The vast increase of the number of IMDs since the 1990s is likely to contribute to this development. Our results emphasize the role of advertising and product differentiation in the virtuous rent-seeking behavior in the pharmaceutical industry.
    Keywords: Advertising;Product differentiation;Marketing;Market value;Panel data;Pharmaceutical industry;
    Date: 2007–03–28
  3. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México); Rajagopal, Amritanshu (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: An increasing interest in the continuous evaluation of brand performance has been observed in both managers and academics over recent past using metrics approach. This paper discusses the essential components of a brand metrics strategy and application of brand scorecard as an integrated approach to measure the overall performance of brands. The discussion delineates the process as how different constituents of metrics can be linked to business performance. It has also been argued in the paper that brand management is not just a marketing issue; it also directly affects corporate profitability. Effective brand portfolio management starts by creating a fact base about the equity in each brand and the brand's economic contribution.
    Keywords: Brand performance, brand measurement, brand scorecard, performance metrics, brand variability, risk management, brand experience
    JEL: M11 M31
    Date: 2007–03
  4. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: This study aims at measuring the effects of market demand and seasonality on new product introduction. Major factors contributing the variability of market demand and seasonality of new products have been discussed in reference to timing of introducing new products, variability of consumer preferences, retail sales and product promotion. The study is based on 243 new products in selected self-service stores in Mexico which belong to major food products sector for the reference period 2002-2006. Results of the study reveal that market demand and seasonality factors are most important for the timing of new product intro¬ductions as such conditions determine success of the new products in a given market.
    Keywords: New product development, market demand, aggregate demand, seasonality, consumer preference, retailing, time spread, product launch, shopping behavior, synchronization
    JEL: C51 D12 M11 M31
    Date: 2007–03
  5. By: Caroline Elliott; Rob Simmons
    Abstract: This paper analyses the roles of various potential quality signals in the demand for cinema in the United Kingdom using a breakdown of advertising totals by media category. Estimation of a two stage least squares model with data for 546 films released in the United Kingdom shows that the impacts of types of advertising on box office revenues vary both in channels and magnitudes of impact. We also offer a more sophisticated treatment of critical reviews than hitherto by examining the spread (entropy) rather than just the mean rating.
    Keywords: Advertising, Critical Reviews, Films
    Date: 2007
  6. By: Ruhai Wu (Department of Economics, College of Business, Florida Atlantic University); Xianjun Geng (Department of Information Systems and Operations Management, University of Washington Business School); Andrew B. Whinston (Department of Information, Risk, and Operations Management, McCombs School of Business, University of Texas, Austin)
    Abstract: This paper provides a theory of rationing where rationing functions as an effective mechanism for second degree price discrimination by a monopoly seller. When a seller charges multiple prices on homogenous products to all consumers, supply at the lowest price is limited and rationed among consumers. The supply shortage differentiates products sold at the lowest price and those sold at a higher price. When high-valuation consumers identify themselves at the higher price, the seller may extract more consumer surplus and increase his profit. In the paper, we address two common rationing-based price discrimination strategies, multiple-price menu and premium advance selling.. We also show that rationing-based price discrimination can be combined with other classical price discrimination strategies to further increase the seller’s profit.
    Keywords: rationing, price discrimination
    JEL: D42 L12
    Date: 2006–12

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