nep-mkt New Economics Papers
on Marketing
Issue of 2008‒04‒15
ten papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Effects of Customer Services Efficiency and Market Effectiveness on Dealer Performance By Rajagopal
  2. Targeted Advertising: The Role of Subscriber Characteristics in Media Markets By Chandra, Ambarish
  3. Portuguese quality wine and the region-of-origin effect: consumers' and retailers' perceptions By José Cadima Ribeiro; José de Freitas Santos
  4. Time Sharing at Leisure Facility Centres: Analysis of Sales Performance Indicators By Rajagopal
  5. Gain or Pain: Does Consumer Activity Reflect Utility Maximisation? By Yoonhee Tina Chang; Catherine Waddams Price
  6. Organizational Design and Control across Multiple Markets: The Case of Franchising in the Convenience Store Industry By Dennis Campbell; Srikant M. Datar; Tatiana Sandino
  7. Brand Names Before the Industrial Revolution By Gary Richardson
  8. Consumer Information in a Market for Expert Services By Kyle Hyndman; Saltuk Ozerturk
  9. Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry By Chandra, Ambarish; Collard-Wexler, Allan
  10. Price Discrimination with Partial Information: Does it pay off? By Rosa Branca Esteves

  1. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: Market orientation is positively associated with performance of dealers in terms of customer service quality, growth in sales and increase in market share. This paper aims at analyzing the impact of market orientation strategies and performance of customer services on customer acquisition, retention and sales of automobiles, which reveals overall performance of the automobile dealers in Mexico. Discussion in the paper also comprehends understanding on customer-dealer relationship in the automobile market segment referring to the key factors which establish services quality encompassing tangibility, responsiveness, trust, accuracy and empathy. The results of the study reveal that the customers perceive better quality of the relationship in a given frame of functions that are performed effectively by the dealer lowering the extent of conflicts thereof. High conformance quality services of dealers and value added customer relationship to offer high customer satisfaction develop life time customer value and strengthen the customer-dealer relationship.
    Keywords: Market orientation, customer services, services quality, dealer performance, customer value, competitive strategies
    JEL: D12 L10 L81 M31
    Date: 2008–03
  2. By: Chandra, Ambarish
    Abstract: This paper seeks to establish the importance of targeted advertising in media markets. Using zip-code level circulation for US daily newspapers, I show that newspapers facing more competition have lower circulation prices but higher advertising prices than similar newspapers facing little or no competition. I explain this by showing that newspapers in more competitive markets are better able to segment readers according to their location and demographics. This leads to greater homogeneity in the characteristics of subscribers and raises advertisers' willingness to pay for such readers. The results imply a substantial benefit to advertisers and media firms from targeted advertising.
    Keywords: Targeted Advertising; Media Markets; Newspapers; Media Segmentation
    JEL: D4 L1
    Date: 2008–03
  3. By: José Cadima Ribeiro (Universidade do Minho - NIPE); José de Freitas Santos (ISCAP - IPP and NIPE-UM)
    Abstract: This study investigates the relative importance of region of origin associated with extrinsic (price, brand, promotion) and intrinsic (grape, type of wine, colour, age, special references) cues in the decisions of final consumers and small retailers to buy Portuguese quality wine. In order to attain this goal we conducted a survey through face-to-face interviews in the Minho region. The results show that the dominant factor of influence in the acquisition of wine is the region of origin, both for final consumers and small retailers. Despite its importance, brand was not the principal variable to influence consumers’ wine choice, while price has been regarded as a less important extrinsic quality cue. One interesting result is the type of wine (“maduro” or “verde”) which seems to be the most preferred intrinsic cue for final consumers and small retailers. The findings also indicate that the regions of Alentejo, Douro and Verde are clearly the leaders in terms of customer acceptance.
    Date: 2008
  4. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: The changing cultural paradigms in Latin America have influenced variety of leisure activities and significant implications for development of leisure services. Leisure spending behaviour prompts sequential relationship among customers intending to perform family celebrations in a different environment and gaining higher satisfaction through the customized services, recreational attractions and brand value. This study focuses qualitative dimensions associated with the sales people and managerial efforts made to augment the outcome performance in sales in reference to the time sharing proposals at leisure facility centres in Mexico. The leisure facility centres are used by individual and institutional customers for organizing leisure events, parties and family gatherings. The study reveals that the leisure facility centre developer firms function with team sales strategy and the performance of sale teams is linked with their contributions to the profit of the firm.
    Keywords: Team sales, customer satisfaction, sales performance, leisure property, brand image, returns on assets
    JEL: D12 L85 M31 R33
    Date: 2008–03
  5. By: Yoonhee Tina Chang (School of Management, University of Bath); Catherine Waddams Price (Centre for Competition Policy, University of East Anglia)
    Abstract: Competition Authorities are introducing new informational remedies to help consumers search and switch more actively. Using a specially commissioned data set, and unique direct estimates of the gains, search and switching time which consumers anticipate, we examine the determinants of consumer activity in eight markets. We find that expected costs (and to some extent gains) do influence consumers as a utility maximising model would predict; but that their role is small, and other factors, particularly experience of switching in other markets, are also influential. We conclude that consumers’ confidence in their own estimates is crucial in encouraging market activity.
    Keywords: consumer behaviour, search and switching, informational remedies
    JEL: D12 D83 L51 L88 L98
    Date: 2008–02
  6. By: Dennis Campbell (Harvard Business School, Accounting and Management Unit); Srikant M. Datar (Harvard Business School, Accounting and Management Unit); Tatiana Sandino (University of California, Marshall School of Business)
    Abstract: Many companies operate units which are dispersed across different types of markets, and thus serve significantly diverging customer bases. Such market-type dispersion is likely to compromise the headquarters' ability to control its local managers' behavior and satisfy the divergent needs of different types of customers. In this paper we find evidence that market-type dispersion is an important determinant of delegation and the provision of incentives. Using a sample of convenience store chains, we show that market-type dispersion is related to the degree of franchising at the chain level as well as the probability of franchising a given store within a chain. Our results are robust to alternative definitions of market-type dispersion and to other determinants of franchising such as the stores' geographic distance from headquarters and geographic dispersion. Additional analyses also suggest that chains that do not franchise at all, may cope with market-type dispersion by decentralizing operations from headquarters to their stores, and, to a weaker extent, by providing higher variable pay to their store managers.
    Keywords: Control, Market Dispersion, Decentralization, Incentives, Franchising, Retailing
    JEL: D82 D86 L22 M41
    Date: 2008–04
  7. By: Gary Richardson
    Abstract: In medieval Europe, manufacturers sold durable goods to anonymous consumers in distant markets, this essay argues, by making products with conspicuous characteristics. Examples of these unique, observable traits included cloth of distinctive colors, fabric with unmistakable weaves, and pewter that resonated at a particular pitch. These attributes identified merchandise because consumers could observe them readily, but counterfeiters could copy them only at great cost, if at all. Conspicuous characteristics fulfilled many of the functions that patents, trademarks, and brand names do today. The words that referred to products with conspicuous characteristics served as brand names in the Middle Ages. Data drawn from an array of industries corroborates this conjecture. The abundance of evidence suggests that conspicuous characteristics played a key role in the expansion of manufacturing before the Industrial Revolution.
    JEL: L15 L2 N13 N4 N6 O14 O34 O5
    Date: 2008–04
  8. By: Kyle Hyndman (SMU); Saltuk Ozerturk (SMU)
    Abstract: We analyze the implications of heterogeneously informed consumers in a market for expert services. Our main question is to investigate whether uninformed consumers are the most likely victims of expert cheating. We show that when consumers are heterogeneously informed on their true benefit from an expensive treatment, there is no equilibrium where the expert only cheats uninformed consumers. In fact, informed high-value consumers are the most frequent victims of cheating. Surprisingly, more information on the consumer side increases the inefficiency of the market outcome in terms of the foregone, but required, treatments. When some consumers receive noisy information signals on whether their problem is serious or minor, while others remain uninformed, in the unique equilibrium the expert is truthful to all types of consumers, regardless of their information status.
    Keywords: Credence Goods, Expert Cheating, Consumer Information
    Date: 2008–04
  9. By: Chandra, Ambarish; Collard-Wexler, Allan
    Abstract: In this paper we study mergers in two-sided industries. While mergers have been studied extensively in traditional industries, and there is a large and rapidly evolving literature on two-sided markets, there has been little work empirically examining mergers in these markets. We present a model that shows that mergers in two-sided markets may not necessarily lead to higher prices for either side of the market. We test our conclusions by examining a spate of mergers in the Canadian newspaper industry in the late 1990s. Specifically, we analyze prices for both circulation and advertising to try to understand the impact that these mergers had on consumer welfare. We find that greater concentration did not lead to higher prices for either newspaper subscribers or advertisers.
    Keywords: Mergers; Two-Sided Markets; Newspapers
    JEL: D43 L4
    Date: 2008–03
  10. By: Rosa Branca Esteves (Universidade do Minho - NIPE)
    Abstract: This paper investigates the profit effects of price discrimination when firms have partial information about consumer preferences. Using a two-dimensional model of product differentiation it shows that price discrimination can boost industriy profit if firms have acess to the right kind of information about consumer preferences while remaining ignorant of othet relevant information.
    Date: 2008

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