nep-mkt New Economics Papers
on Marketing
Issue of 2007‒09‒24
five papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. The long memory of newspapers' subscriptions: between the short-run and persistence response By Mercedes Esteban Bravo; Jose M. Vidal-Sanz
  2. The Evolving Food Chain: Competitive Effects of Wal-Mart's Entry Into The Supermarket Industry By Michael Noel; Emek Basker
  3. Which Reputations Does a Brand Owner Need? Evidence from Trade Mark Opposition By Georg von Graevenitz
  4. New Export Activities in Brazil: Comparative Advantage, Policy or self-Discovery? By Regis Bonelli; Armando Castelar Pinheiro
  5. Pricing and Signaling with Frictions By Alain Delacroix; Shouyong Shi

  1. By: Mercedes Esteban Bravo; Jose M. Vidal-Sanz
    Abstract: The mainstream of marketing time series analysis has shifted from classical short-range dependence (ARMA, transfer functions and VAR models). However, in cases where purchase decisions entail some commitment (e.g., a subscription selling periodic use of a product or service), sales response entails a long-term effect is not permanent. Long-memory assumes that shocks to a time series have neither a persistent nor a short-run transitory effect, but that they last for a long time and decay slowly with time. Many marketing policies face a short-memory response at the individual customer level but display a considerable degree of persistence at the aggregate level. The aggregation of short-run individual decisions made by heterogeneous customers can show a long-memory pattern. In today's highly competitive newspaper industry, loyal, ongoing customers are a key to obtain stable and long-term profits. Often newspapers obtain a loyal customer base through subscriptions. This paper proposes a long-memory model to study the long-term sales response dynamics in subscription markets. The model accounts for the heterogeneity of the individual responses and distinguishes between both trend and long-memory components pattern of subscriptions. This model permits more accurate predictions of subscription sales than those obtained using persistence models.
    Date: 2007–09
  2. By: Michael Noel (Department of Economics, University of California - San Diego); Emek Basker (University of Missouri)
    Abstract: We analyze the effect of Wal-Mart's entry into the grocery market using a unique stor-level price panel data set. We use OLS and two IV specifications to estimate the effect of Wal-Mart's entry on competitors' prices of 24 grocery items across several categories. Wal-Mart's price advantage over competitors for these products averages approximately 10%. On average, competitors' response to Wal-Mart's entry is a price reduction of 1-1.2%, mostly due to smaller-scale competitors: the response of the "big three" supermarket chains (Alberson's, Safeway, and Kroger) is less than half that size. We confirm our results using a falsification exercises, in which we test for Wal-Mart's effect on prices of services that it does not provide, such as movie tickets and dry cleaning services.
    Keywords: Wal-Mart, Retail Prices, Supermarkets, Price Competition,
    Date: 2007–06–01
  3. By: Georg von Graevenitz (Georg von Graevenitz,, INNO-tec, Munich School of Management, Kaulbachstraße 45, D 80539,Munich.)
    Abstract: At least two: the reputation of their brand and a reputation for being tough on imitators of this brand. Sustaining a brand requires both investment in its reputation amongst consumers and the defence of the brand against followers that infringe upon it. I study the defence of trade marks through opposition at a trade mark office. A structural model of opposition and adjudication of trade mark disputes is presented. This is applied to trade mark opposition in Europe. Results show that brand owners can benefit from a reputation for tough opposition to trade mark applications. Such a reputation induces applicants to settle trade mark opposition cases more readily.
    Keywords: trade marks, opposition, intellectual property rights, reputation
    JEL: K41 L00 O31 O34
    Date: 2007–07
  4. By: Regis Bonelli; Armando Castelar Pinheiro
    Abstract: The study aims at analyzing the emergence of export discoveries in Brazil following a framework proposed by Hausmann and Rodrik (2003, p. 603-633). Three activities were selected to illustrate the approach applied to Brazil: aircrafts, cell phones and swine meat. These activities not only recorded double-digit growth rates in the value of exports, but also accounted for a substantial share of the rise in Brazilian exports over the last ten years: in 1996 they answered for 1.0% of Brazil?s exports, a proportion that climbed to 7.8% in 2000, before receding to 5.7% in 2005. The three cases we examined in detail tend to confirm the importance of efficiency gains and sunk costs in discovery processes, as well as the good performance of the world economy, as driving forces behind the continued expansion of exports despite the recent appreciation of the real. They also point to the conclusion that both economic policy and comparative advantage played important roles in the emergence of new export activities in Brazil. More specifically, we found that the role of government was very important in aircraft, moderate in mobiles, and nearly nil in swine meat production and exports. Overall, our case studies reinforce the view that market failures are common in activities that go through export discoveries. In the three cases, economies of scale were a crucial determinant of competitiveness and a wellknown brand was an important instrument to overcome information asymmetry and facilitate entry into export markets (less so with swine meat). The three activities also shared the fact that exporters were increasingly concentrated on design, marketing, R&D, and assembling, turning coordination with suppliers a very important element in their strategies. Vertical diffusion was another noteworthy feature of the cases examined.
    Date: 2007–04
  5. By: Alain Delacroix; Shouyong Shi
    Abstract: In this paper, we introduce private information into a market with search frictions and evaluate the relative efficiency of two pricing mechanisms, price posting and bargaining. Each seller chooses investment that determines the quality of the good. This quality is the seller's private information before matching and it will be observed in a match. Sellers enter a search market competitively and can choose either to post prices or to bargain. In this environment, a pricing mechanism affects efficiency through the choice of quality and the number of trades. Bargaining induces the efficient choice of quality but an inefficient number of trades because the division of the match surplus is generically inefficient. By directing buyers' search, posted prices internalize search externalities and induce the constrained efficient outcome in the case of public information. However, when the quality is private information, this role of posted prices in directing search can conflict with their role in signaling quality. Focusing on this conflict, we find that bargaining could yield higher efficiency than price posting. We characterize the parameter regions in which each of the two mechanisms dominates in efficiency.
    Keywords: Directed search; Signaling; Bargaining; Efficiency
    JEL: D8 C78 E24
    Date: 2007–09–12

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