nep-mkt New Economics Papers
on Marketing
Issue of 2007‒05‒19
eleven papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Customer Poaching and Advertising By Rosa Branca Esteves
  2. Security Issues in Mobile Payment from the Customer Viewpoint By Linck, K.; Pousttchi, Key; Wiedemann, Dietmar Georg
  3. Media industry facing biggest upheaval since Gutenberg. Media consumers morphing into media makers By Heng, Stefan
  4. Audit Coordinates in Financial-Banking Marketing - Evidence from Romania By Dura, Codruta; Driga, Imola
  5. The determinants of pricing in pharmaceuticals : are U.S. prices really higher than those of Canada? By Sergi Jimenez-Martin; Antonio Cabrales
  6. Coordination with Supply Chain Contracts in the Presence of two Different Consumer Segments By Reddy Nalla, Vijayender; Veen, Jack van der; Venugopa, Venu
  7. The Taylor Effect on the Performances of the Red Devils’ Football Brand By Leitão, João
  8. Pricing Damaged Goods By McAfee, R. Preston
  9. E-commerce settles for established payment systems: Limited market potential for innovative payment systems By Heng, Stefan
  10. Equilibrium Market and Pricing Structures in Virtual Platform Duopoly By Behringer, Stefan
  11. Communication Networks in the N-Player Electronic Mail Game By Kris de Jaegher

  1. By: Rosa Branca Esteves (Universidade do Minho - NIPE)
    Abstract: This article is a first loock at the dynamic effects of customer poaching in homogeneous product markets, where firms need to invest in advertising to generate awareness. When a firm can recognize customers with different past purchasing histories, it may send them targeted advertisements with different prices. It is shown that only the firm that advertises the highest price in the first period will engage in price discrimination, and that poaching clearly benefits the discriminating firm. This gives rise to "the race for discrimination effect", through which price discrimination may act to soften price competition rather than to intensify it. As a result of that, all firms might become better off, even when only one of them can engage in price discrimination. This article offers a first attempt to evaluate the effects of price discrimination on the efficiency properties of advertising. In markets with low or no advertising costs, allowing frims to price discriminate leads them to provide too little advertising, which is not good for consumers and overall welfare. Only in markets with high advertising costs, may firms overadvertise. Regarding the welfare effects, price dsscrimination is generally bad for welfare and consumer surplus, though good for firms.
    Date: 2007
  2. By: Linck, K.; Pousttchi, Key; Wiedemann, Dietmar Georg
    Abstract: The perception of mobile payment procedures’ security by the customer is one major factor for the market breakthrough of the according systems. In this paper we examine security issues in mobile payment from the viewpoint of customers. Based on theoretical research we analyze empirical data from the MP2 mobile payment study with 8295 respondents in order to develop a set of dimensions, categories and aspects. The results do have a scientific as well as a practical impact: They provide a basis for the selection of appropriate indicators for further empirical studies. Furthermore they can serve as a guideline for mobile payment service providers in order to prevent security concerns through appropriate design and communication of payment procedures and to convince customers of the security of their mobile procedures by meeting concerns in informative advertising.
    JEL: M21
    Date: 2006
  3. By: Heng, Stefan
    Abstract: The advance of innovative information and communication technologies has triggered a fundamental upheaval in the media industry. The technology is reforming the conventional media model. The media mix will become more varied; interactive and personalised offers are taking root and finding their ideal milieu on the web. Newspapers, radio stations and TV broadcasters will have to reposition themselves if they want to remain attractive in the media industry with the arrival of the Web 2.0. This will include seeking new distribution channels and considering e.g. pay-per-view programming and innovative forms of advertising.
    Keywords: Information and communications technology; ICT; TV; Radio; Newspaper; media portal; Internet; Web 2.0; broadband; convergence; triple play
    JEL: O33 O34 O14 L82 L86 K23 L88 H41
    Date: 2006–10–16
  4. By: Dura, Codruta; Driga, Imola
    Abstract: The general term of internal audit was established in relation to the financial accounting activity; this notion was gradually replaced by a new approach which expands the sphere of the audit so that the preoccupation for the future is very important for any audit activity. If forming and consolidating a favorable image of the bank among service consumers represents a marketing problem, then solving it requires numerous instruments from the marketing policies; the most important role is attributed to the audit. The final goal of the marketing audit is drawing up a table regarding the performances and the efficiency of the bank, in relation to the risks involved by financial institutions and its operations. In this respect, specialists in banking management have come up with different models of calculations and rating systems in their trials to obtain the most accurate scan of the “state of health” of the banks, and moreover in their trials to identify the institutions which face financial and operational difficulties leading to bankruptcy. The uniform bank rating system is a specific instrument for the supervising activity and has its origins in the USA ; it has later been borrowed by German, Italian, Great Britain authorities, which use influential components in their banking system; later on, their system was adopted by most central banks within the European Union. In Romania, the uniform bank rating system has been implemented by N.B.R. (the National Bank of Romania) since 2000; the specific components that were analyzed are: the capital adequacy (C), the quality of assets (A), the management (M), profitability (P), liquidities (L) and sensitivity (S) starting from the year 2005. For short, this system is called CAMPL. The evaluation of these specific elements represents an important criterion for establishing a compound rating, which means assigning scores to each bank. The compound rating for the banking system is established based on economic – financial indicators and prudence indicators.
    Keywords: marketing audit; uniform bank rating system; the capital adequacy; the quality of assets ; sensitivity to market risk
    JEL: M31 E58 A10
    Date: 2007–04–17
  5. By: Sergi Jimenez-Martin; Antonio Cabrales
    Abstract: This paper studies price determination in pharmaceutical markets using data for 25 countries, six years and a comprehensive list of products from the MIDAS IMS database. We show that market power and the quality of the product has a significantly positive impact of prices. The nationality of the producer appears to have a small and often insignificant impact on prices, which suggests that countries which regulates prices have relatively little power to do it in a way that advances narrow national interest. We produce a theoretical explanation for this phenomenon based on the fact that low negotiated prices in a country would have a knock-on effect in other markets, and is thus strongly resisted by producers. Another key finding is that the U.S. has prices that are not significantly higher than those of countries with similar income levels. This, together with the former observation on the effect of the nationality of producers casts doubt on the ability of countries to pursue “free-riding" regulation.
    Date: 2007–04
  6. By: Reddy Nalla, Vijayender; Veen, Jack van der; Venugopa, Venu (Nyenrode Business Universiteit)
    Abstract: This paper models a supply chain of a manufacturer, a retailer and two different consumer segments. One segment has a high willingness-to-pay and the other a low willingness-to-pay. The manufacturer decides on the wholesale price and the selling price is determined by the retailer. It is well known that a straightforward wholesale price contract does not coordinate the channel. In this paper we show that two other types of contracts, namely the revenue sharing and the profit sharing mechanisms do coordinate the supply chain and, furthermore, provide win-win for the entire range of parameter values. Our analysis has also established an equivalence relationship between the revenue and the profit sharing mechanisms. It is also shown that the pull discount mechanism (that is: the manufacturer provides a discount directly to the end consumers) coordinates for a greater range of parameter values compared to the wholesale price discount but not for the entire possible range. Moreover, for the situation where the manufacturer designs the targeted push-pull discount (Manufacturer provides a wholesale price discount to the retailer and a pull discounts which can be availed only by the low willingness to pay consumers) it is shown that it is possible for the channel to make a greater profit by extracting surplus from the high willingness-to-pay customers. However, “targeted push-pull” is feasible only with certain restrictions. Interestingly, we found that the revenue sharing or the profit sharing mechanisms with the targeted pull discount is feasible when the “targeted push-pull” fails to coordinate. Even, in this case the performance of the targeted pull discount in combination with the revenue or profit sharing mechanisms is equivalent.
    Keywords: Pull discounts, Push discounts, Contract mechanisms, Channel coordination & winwin.
    Date: 2007
  7. By: Leitão, João
    Abstract: In this paper we present an impact analysis of the regulation associated to the adoption of the Taylor Report, both on business strategy and sportive and financial performances of the Manchester United Football Club. An econometric approach is presented, by using a Cointegrated Vector Autoregressive (CVAR) model. This aims to analyse the impact of the regulation in terms of the national sportive performance, the value added, and the sales of the club, from 1967 to 1997. The importance of the Taylor Report on better national sportive performances of the football club in study is ratified. The growing importance of generating value added as a precedent mechanism that explains the best national sportive performance is confirmed.
    JEL: C32 M31 L51
    Date: 2007–05–15
  8. By: McAfee, R. Preston
    Abstract: Companies with market power occasionally engage in intentional quality reduction of a portion of their output as a means of offering two qualities of goods for the purpose of price discrimination, even absent a cost saving. This paper provides an exact characterization in terms of marginal revenues of when such a strategy is profitable, which, remarkably, does not depend on the distribution of customer valuations, but only on the value of the damaged product relative to the undamaged product. In particular, when the damaged product provides a constant proportion of the value of the full product, selling a damaged good is unprofitable. One quality reduction produces higher profits than another if the former has higher marginal revenue than the latter.
    JEL: D43 L15
    Date: 2007
  9. By: Heng, Stefan
    Abstract: Established payment systems play a dominant role also in B2C e-commerce. Innovative payment systems can only be a success here if they pay attention to the particular features of e-commerce, convey the worth of their value-adding unique selling proposition and enjoy the support of established e-shops or financial service providers. However, apart from rare cases the conventional payment systems leave little room for the innovative systems. This holds all the more since the conventional payment systems are responding to the new demands of B2C e-commerce.
    Keywords: Information- and communication technology; ICT; E-Business; E-Commerce; B2C-E-Commerce; Internet; e-payments
    JEL: O33 O14 E42 G29 E51
    Date: 2007–05–14
  10. By: Behringer, Stefan
    Abstract: We investigate the equilibrium market sturcture in virtual platform duopoly (auctions or other market forms) that are prevalent in internet settings. We take full account of the complexity of network effects in such markets and determine optimal pricing strategies. We invstigate the welfare implications of such strategies, look at the impact of non-exclusive services and at what happens in large markets.
    Keywords: Two-sided Markets; Duopoly Pricing;
    JEL: D44 L14
    Date: 2005–12–21
  11. By: Kris de Jaegher
    Abstract: This paper shows that Rubinstein’s results on the two-player electronic mail game do not extend to the N-player electronic mail game.
    Keywords: Communication Networks, N-Player Electronic Mail Game
    JEL: D85 C72
    Date: 2007–03

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