nep-mkt New Economics Papers
on Marketing
Issue of 2008‒08‒31
thirteen papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Information or Persuasion? An Empirical Investigation of the Effect of Advertising on Brand Awareness and Perceived Quality using Panel Data By Doraszelski, Ulrich; Draganska, Michaela; Clark, C. Robert
  2. Marketing vs Engineering: Who Should Decide ? By AMBEC Stefan; POITEVIN Michel
  3. Buying Online: Sequential Decision Making by Shopbot Visitors By Bernhard Weiss; Uwe Dulleck; Franz Hackl; Rudolf Winter-Ebmer
  4. Why Does Popcorn Cost So Much at the Movies? An Empirical Analysis of Metering Price Discrimination By Gil, Ricard; Hartmann, Wesley R.
  5. Crossing the Line: The Effect of Cross Border Cigarette Sales on State Excise Tax Revenues By Chiou, Lesley; Muehlegger, Erich
  6. Beyond Plain Vanilla: Modeling Joint Product Assortment and Pricing Decisions By Draganska, Michaela; Seim, Katja; Mazzeo, Michael
  7. Retail Competition and the Dynamics of Consumer Demand for Tied Goods By Hartmann, Wesley R.; Nair, Harikesh S.
  8. The Birth of Brand: 4000 Years of Branding History By Moore, Karl; Reid, Susan
  9. The importance of market size in the consumer service professional football: the Belgian case By Trudo Dejonghe
  10. Including Corporate Social Responsibility, Environmental Sustainaibility, and Ethics in Calibrating MBA Job Preferences By Montgomery, David B.; Ramus, Catherine
  11. Trade and Innovation Project: Case Study No. 3: The Ending of the Multi-Fibre Agreement and Innovation in Sri Lankan Textile and Clothing Industry By Janaka Wijayasiri; Jagath Dissanayake
  12. Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good By Chappell, Henry; Guimaraes, Paulo; Ozturk, Orgul
  13. Market potential as an indicator for the size of a new relocated football arena: The case KAA Gent a Belgian professional football team By Trudo Dejonghe

  1. By: Doraszelski, Ulrich (Harvard U); Draganska, Michaela (Stanford U); Clark, C. Robert (HEC Montreal)
    Abstract: We investigate the dominant role of advertising - whether it provides information or changes consumers' brand perceptions - for a wide range of product categories. For the empirical analysis, we assembled a panel data set that combines annual brand-level advertising expenditures for over three hundred brands with measures of brand awareness and perceived quality from a large-scale consumer survey. Advertising is modeled as a dynamic investment in a brand's stocks of awareness and perceived quality and we ask how such an investment changes brand awareness and quality perceptions. Our panel data allow us to control for unobserved heterogeneity across brands and to identify the effect of advertising from the time-series variation within brands. They also allow us to account for the endogeneity of advertising through recently developed dynamic panel data estimation techniques. We find that advertising has consistently a significant positive effect on brand awareness but no significant effect on perceived quality.
    Date: 2007–07
  2. By: AMBEC Stefan; POITEVIN Michel
    Date: 2008–08
  3. By: Bernhard Weiss (Department of Economics, Johannes Kepler University Linz, Austria); Uwe Dulleck (Department of Economics, Johannes Kepler University Linz, Austria); Franz Hackl (Department of Economics, Johannes Kepler University Linz, Austria); Rudolf Winter-Ebmer (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: In this article we propose a two stage procedure to model demand decisions by customers who are balancing several dimensions of a product. We then test our procedure by analyzing the behavior of buyers from an Austrian price comparison site. Although in such a market a consumer will typically search for the cheapest price for a given product, reliability and service of the supplier are other important characteristics of a retailer. In our data, consumers follow such a two stage procedure: they select a shortlist of suppliers by using the price variable only; finally, they trade off reliability and price among these shortlisted suppliers.
    Keywords: e-commerce, price comparison, decision theory, heuristics, seller reputation
    JEL: L81 D83
    Date: 2008–08
  4. By: Gil, Ricard (U of California, Santa Cruz); Hartmann, Wesley R. (Stanford U)
    Abstract: Prices for goods such as blades for razors, ink for printers and concessions at movies are often set well above cost. This paper empirically analyzes concession sales data from a chain of Spanish theaters to demonstrate that high prices on concessions reflect a profitable price discrimination strategy often referred to as “metering price discrimination.” Concessions are found to be purchased in greater amounts by customers that place greater value on attending the theater. In other words, the intensity of demand for admission is “metered” by concession sales. This implies that while some consumers’ surplus may be reduced by the high concession prices, surplus of other consumers on the margin of attending may increase from theaters’ decisions to shift their margins away from movies and toward concessions.
    Date: 2008–01
  5. By: Chiou, Lesley (Occidental College); Muehlegger, Erich (Harvard U)
    Abstract: Differences in excise tax rates across jurisdictions create incentives for consumers to cross the border and purchase in lower-tax jurisdictions. This paper introduces a discrete choice model to examine tax avoidance and state border-crossing in the market for cigarettes. We exploit a rich dataset of consumer location choices and demographics to estimate a consumer’s tradeoff between distance and price when choosing a location to maximize utility. Using the estimates from our location and demand models, we reconsider a recent public policy issue among states and simulate tax avoidance under alternative cigarette excise tax levels.
    Date: 2008
  6. By: Draganska, Michaela (Stanford U); Seim, Katja (Northwestern U); Mazzeo, Michael (U of Pennsylvania)
    Abstract: In this paper, we take a first step toward exploring empirically the product assortment strategies of oligopolistic firms. Our starting point is a discrete- choice demand model for differentiated products. We incorporate the demand model into an equilibrium supply model, in which firms compete by first choosing which products to offer and then by setting prices. We show how modeling joint product assortment and pricing decisions enriches standard product choice models by allowing insights into how demand characteristics affect firms' product offerings in a competitive environment. We furthermore demonstrate that incorporating endogenous product choice into demand models is essential for policy simulations (e.g., mergers) as it entails at times dramatically different welfare assessments than the common assumption that product assortments are exogenous.
    Date: 2007–10
  7. By: Hartmann, Wesley R. (Stanford U); Nair, Harikesh S.
    Abstract: We empirically investigate the demand for tied goods sold through competing retail channels. Tied good pricing strategies commonly involve a low price on the initial purchase (i.e. the primary good) to drive adoption, and a substantial markup on aftermarket goods to capture value. However, if the goods are sold through downstream channels, retail market power and a misalignment of incentives could distort the relative prices of primary and aftermarket goods. To evaluate whether retail competition is strong enough to prevent such distortions, we explore the commonly noted example of razors and blades, which are sold through drug, grocery, mass merchandising, and club stores. We specify a forward-looking demand model that incorporates dynamics arising from the tied good nature of the products and the stockpiling and durability aspects of razors and blades. Furthermore, we allow intertemporal substitution in the purchase of both razors and blades to occur across channels as well as time. This modeling feature enables a novel approach to measuring retail competition in single category demand analyses. Our estimates indicate that there is substantial cross-channel substitution in razors, but some retail market power in blades. However, the channel with the most market power in blades, club stores, specializes in high volume customers that would adopt a razor even if blade prices are higher. This suggests that the manufacturer can achieve its desired level of razor adoption without vertical restraints, though blade sales may be slightly reduced by double marginalization.
    Date: 2007–12
  8. By: Moore, Karl; Reid, Susan
    Abstract: This paper seeks to show that brands are as old as civilization. It derives evidence of branding, in various forms, from important historical periods beginning 2250 BCE in the Indus Valley through to 300 BCE Greece. This evidence is compared with modern research directed toward developing a meaning of “brand”. We observe a gradual transition from a more utilitarian provision of information regarding origins and quality to the addition of more complex brand image characteristics over time. Including status/power, added value and finally, the development of brand personality.
    Keywords: brand; proto-brand; ancient world; brand personality
    JEL: L2 A1 D1
    Date: 2008
  9. By: Trudo Dejonghe (Lessius Hogeschool (KULeuven), Belgium)
    Abstract: The problem with Belgian football competition is that in the long run, and as reality shows us in the short term, the contemporary situation will lead to market failures and the elimination of some of the clubs. The solution proposed in this paper is the creation of a new professional competition with fewer teams combined with territorial exclusivity in a centre with a potential number of consumers that reach a certain absolute or relative threshold.
    Keywords: sports economics, soccer
    JEL: L83
    Date: 2008–08
  10. By: Montgomery, David B. (Stanford U and Singapore Management U); Ramus, Catherine (U of California, Santa Barbara)
    Abstract: Our research studies 759 MBA’s graduating from eleven business schools to gain insight into what MBA’s in the 21st Century care about during their job searches. We update the MBA job preference literature by using adaptive conjoint analysis to calibrate the relative importance of a wide variety of job factors combining factors found in previous research in disparate fields (general management, applied psychology, corporate social performance, ethics, and marketing). Our results show the relative importance of organizational reputation related to caring for employees, ethical products and practices, and social and environmental responsibility, compared to factors like financial package, job challenge, etc. to 759 MBA’s graduating from eleven business schools – eight in North America and three in Europe. Study limitations and some mitigations of these are discussed.
    Date: 2007–12
  11. By: Janaka Wijayasiri; Jagath Dissanayake
    Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of the ending of the Multi-Fibre Agreement (MFA) on innovation in the Sri Lankan textile and clothing sector. The ending of the quota system under the MFA led to an increase in the US and EU markets which has motivated a large number of innovations in the Sri Lankan textile and clothing sector. Some large companies have become a total services provider while some are trying to establish their own brands. Product innovations with foreign partners, process innovations such as introduction of CAD/CAM and various marketing and organisational innovations have been implemented.
    Keywords: competition, innovation, FDI, Multi-Fibre Arrangement (MFA), outsourcing, corporate social responsibility, CSR, textile and clothing industry, brands, fair-trade, garment, joint-ventures, marketing, MFA, Sri Lanka
    Date: 2008–08–06
  12. By: Chappell, Henry; Guimaraes, Paulo; Ozturk, Orgul
    Abstract: We investigate profit-maximizing versioning plans for an information goods monopolist. The analysis employs data obtained from a web-based field experiment in which potential buyers were offered information goods in varied price-quality configurations. Maximum simulated likelihood (MSL) methods are used to estimate parameters describing the distribution of utility function parameters across potential buyers of the good. The resulting estimates are used to examine the impact of versioning on seller profits and market efficiency.
    Keywords: Versioning; price discrimination; field experiment; maximum simulated likelihood
    JEL: D12 C81 D83 D42 C93
    Date: 2006
  13. By: Trudo Dejonghe (Lessius Hogeschool (KULeuven), Belgium)
    Abstract: The place of Gent in the urban system is that of a regional city with high centrality. This means that consumer-oriented services with a high threshold, such as a professional football team, reach their threshold in the city. In the case of professional football a functional substitution has taken place and the top team is located in Brugge The service area of Bruges reaches almost up to Gent and the E40 highway reduces the time-distance. The new location of the stadium is near the main highway.. The question is of the market potential of the clubs is large enough to attract more attendances.
    Keywords: local identity, relocation, functional substitution, service area, market potential, consumer oriented service, spatial competition
    JEL: L83
    Date: 2008–08

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