nep-mkt New Economics Papers
on Marketing
Issue of 2007‒04‒21
seven papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. STORE VS. NATIONAL BRANDS: A PRODUCT LINE MIX PUZZLE By José J. Sempere Monerris; Rafael Moner Colonques; Amparo Urbano
  2. Smallholder Household Maize Production and Marketing Behavior in Zambia and Its Implications for Policy. By Ballard Zulu; T.S. Jayne; Margaret Beaver
  3. Can minimum prices assure the quality of professional services? By Georg Meran; Reimund Schwarze
  4. Dimensionality of Responses to Customer Satisfaction with Low-Involvement Low-Risk Frequent Purchases: the Example of Grocery Retailing By Ivar Soone
  5. Tying and Freebies in Two-Sided Markets By AMELIO, Andrea; JULLIEN, Bruno
  6. Why are Americans Addicted to Baseball? An Empirical Analysis of Fandom in Korea and the U.S. By Trenton Smith; Young H. Lee
  7. "Bargaining and Fixed Price Offers: How Online Intermediaries are Changing New Car Transactions" By Michael A. Arnold; Thierry Pénard

  1. By: José J. Sempere Monerris (Universitat de València); Rafael Moner Colonques (Universitat de València); Amparo Urbano (Universitat de València)
    Abstract: This paper examines retailers' strategic decisions about store brand introduction when each retailer can stock a limited number of brands. The different product line mix equilibria depend on demand parameters that measure the cross-effect across national and store brands and the cross-effect within each brand type, thus leading to a simple testable implication. Store brand introduction is determined by the combination of the three effects that result from replacing a national brand by a store brand; the direct effect, the exclusivity effect and the in-store effect. Interestingly enough, we identify conditions under which similar retailers take different decisions concerning their product line mix.
    Keywords: store brands, retail duopoly, product line mix
    JEL: L13 L23
    Date: 2007–04
  2. By: Ballard Zulu; T.S. Jayne; Margaret Beaver
    Abstract: The ability of agricultural policy makers to promote national development objectives requires an accurate and reasonably current picture of what crops farmers grow, what they eat, the importance of various crops in their incomes, and how they spend their money. In Zambia’s case, there is reasonably accurate information on production levels and trends in a specific set of crops grown by smallholder farmers, but very little knowledge of how important these specific crops are in smallholders’ total crop incomes, the importance of crop production in total smallholder incomes (which include livestock and non-farm activities), and how changes in crop prices affect smallholders’ welfare. This paper presents a comprehensive picture of crop production and marketing patterns in Zambia’s small- and medium-scale farm sector, examines how these patterns vary regionally, and examines differences between poor and non-poor strata of the rural farm sector. The data presented comes from the 1999/00 and 2002/03 production years, corresponding to the 2000/01 and 2003/04 marketing years. Because so much policy attention in Zambia is focused on maize, the study provides a particular emphasis on small farmers’ maize production and marketing behavior, and discusses their implications for policy.
    Keywords: food security, food policy, maize, marketing, production, Zambia, Africa
    JEL: Q18
    Date: 2007
  3. By: Georg Meran; Reimund Schwarze
    Abstract: This papers studies the effects on service quality and consumer surplus of a minimum price which is fixed by a bureaucratic non-monopolistic professional association. It shows that the price set by a Niskanen-type professional assocation will maximize consumer surplus only if consumers demand the highest possible average quality. If consumers demand services of lesser quality, the association’s price will be too high if measured by consumer surplus. Moreover we show that a de-regulated market will always reproduce the favourable result of a uniformly high price in the case of top quality demand while delivering superior results in the case of a mixed demand for high and low quality services.
    Keywords: Liberal professions, price regulation, quality, professional association, self-regulation, EU competition policy, intrinsic motivation
    JEL: L15 J44 K21
    Date: 2007–01
  4. By: Ivar Soone (Faculty of Economics and Business Administration, Tallinn University of Technology)
    Abstract: This working paper explores affective, cognitive, conative and action consequences of customer satisfaction focusing on the dimensionality of responses to satisfaction and their interrelations. For the purpose of the present working paper, affective, cognitive, conative and action consequences of customer satisfaction are operationalised as loyalty dimensions following the recommendations by Oliver (1997). Yet, before applying the analysis to the interrelations of satisfaction and loyalty, the research presented in this working paper tests this commonly recognized factor structure of loyalty and its applicability to retail settings. As a result of the test, a different factor structure emerges that suits the research context better than the commonly recognized loyalty dimensions proposed by Oliver (1997).The working paper looks further into the type of responses to customer satisfaction, revealing affective/emotional rather than cognitive/rational nature of satisfaction consistently with findings by Cadotte, Woodruff and Jenkins (1987), Fornell and Wernerfelt (1987), Halstead, Hartman, and Schmidt (1994), Mano and Oliver (1993), Neal (1999), Oliver (1981, 1989, 1992, 1993, 1997), Spreng, MacKenzie and Olshavsky (1996), Westbrook (1987), Westbrook and Oliver (1991), Westbrook and Reilly (1983) and many other researchers. The research findings presented in this working paper suggest that neither cognitive nor action measures describe satisfaction judgments adequately and additional affective or conative measures are needed for that purpose. The research also finds that “relative” mixed cognitive-affective or cognitive-conative measures might also be suited to describe satisfaction judgments as compared to the purely cognitive measures. The affective nature of satisfaction itself is also hypothesized to be the main reason behind the satisfaction influence mainly on affective and to the lesser extent also to cognitive-affective and cognitive-conative dimensions of loyalty, which is revealed in the course of the present research. The empirical part of the working paper is based on a pan-national ad hoc survey of grocery retail customers (999 respondents) carried out in Estonia regarding their grocery and convenience goods retail purchases.
    Keywords: customer satisfaction, customer loyalty, consumer behaviour, consumer psychology, retailing
    JEL: M
    Date: 2006
  5. By: AMELIO, Andrea; JULLIEN, Bruno
    Date: 2007–03
  6. By: Trenton Smith; Young H. Lee (School of Economic Sciences, Washington State University)
    Abstract: Theories of rational addiction posit that certain habit -forming goods "characterized by an increasing marginal utility of consumption "generate predictable dynamic patterns of consumer behavior. It has been suggested that attendance at sporting events represents an example of such a good, as evidenced by the pricing strategies of commercial sports interests. In this essay, we provide new evidence in support of rational addiction for the case of Major League Baseball, but fail to find such support in data from the Korean Professional Baseball League. We then review the scientific literature on sports fans from the perspective of human behavioral ecology and propose a theory of endogenous habit formation among sports fans that could explain our findings.
    Keywords: Attendance Demand, Habit Formation, Baseball Addiction, Fan Psychology, Testosterone
    JEL: C32 D83 L83
    Date: 2006–05
  7. By: Michael A. Arnold (Department of Economics,University of Delaware); Thierry Pénard (Department of Economics,University of Rennes)
    Abstract: The Internet has introduced a variety of online buying services that expand the reach of sellers and reduce search costs for buyers. In markets in which traditional outlets establish prices through bargaining, these online intermediaries have also altered the price setting process. Perhaps the most well known example is which provides referral services in the automobile market. By using Autobytel, a buyer can obtain a non-negotiable price offer as an alternative to bargaining with a car dealership. To understand the effect of online referral systems on the price setting process, we construct a theoretical model of oligopolistic price competition in which one dealership has an exclusive contract with a referral intermediary. We derive market conditions under which the fixed price offered through the referral system will or will not be lower than offline (bargained) prices. Our model provides theoretical insights relevant to results in the empirical literature addressing the role that Autobytel and other infomediaries play in online markets.
    Keywords: online markets, E-commerce, intermediary, autobytel, pricing
    JEL: D4 D83 L19 L89

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