nep-mkt New Economics Papers
on Marketing
Issue of 2008‒09‒13
seventeen papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Information Gathering and Marketing By Heski Bar-Isaac; Guillermo Caruana; Vicente Cunat
  2. Indagine esplorativa dell’atteggiamento dei consumatori europei verso riso e tapioca biologici importati dalla Tailandia [Explorative survey on the attitude of European consumers towards organic rice and tapioca imported from Thailand] By Maurizio Canavari; Pamela Lombardi; Bettina Riedel; Roberta Spadoni
  3. Commercio elettronico per la dinamica delle catene agro-alimentari internazionali: un’analisi del potenziale [E-commerce for the dynamics of international agri-food chains: an adoption potential analysis] By Melanie Fritz; Maurizio Canavari; Nicola Cantore; Jivka Deiters; Erika Pignatti
  4. Brand popularity, endogenous leadership, and product introduction in industries with word of mouth communication By Christian Dahl Winther
  5. Situation-Based Shifts in Consumer Web Site Benefit Salience: The Joint Role of Affect and Cognition By Wendel, S.; Dellaert, B.G.C.
  6. Sales and Sincerity: The Role of Relational Framing in Word-of-Mouth Marketing By Tuk, M.A.; Verlegh, P.W.J.; Smidts, A.; Wigboldus, D.H.J.
  7. Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format By Emek Basker; Shawn Klimek; Pham Hoang Van
  8. Nuove dinamiche nel commercio dei prodotti agroalimentari: resistenze all’adozione dell’e-commerce nelle relazioni B2B [New trends in agri-food products trade: resistance to adoption of e-commerce in B2B relationships] By Erika Pignatti; Maurizio Canavari; Roberta Spadoni
  9. Cross-National Logo Evaluation Analysis: An Individual Level Approach By Lans, R.J.A. van der; Cote, J.A.; Cole, C.A.; Leong, S.M.; Smidts, A.; Henderson, P.W.; Bluemelhuber, C.; Bottomley, P.A.; Doyle, J.R.; Fedorikhin, A.S.; Janakiraman, M.; Ramaseshan, B.; Schmitt, B.H.
  11. Interpersonal Relationships Moderate the Effect of Faces on Person Judgments By Tuk, M.A.; Verlegh, P.W.J.; Smidts, A.; Wigboldus, D.H.J.
  12. Implications of higher global food prices for poverty in low-income countries By Ivanic, Maros; Martin, Will
  13. Reconsidering the Economics of Demand Analysis with Kinked Budget Constraints By Aaron Strong; V. Kerry Smith
  14. Additive Hedonic Regression Models with Spatial Scaling Factors: An Application for Rents in Vienna By Wolfgang Brunauer; Stefan Lang; Peter Wechselberger; Sven Bienert
  15. A note on rising food prices By Mitchell, Donald
  16. Business Training for Microfinance Clients: How it Matters and for Whom? By Veronica Frisancho; Dean Karlan; Martin Valdivia
  17. Demanding to be served : holding governments to account for improved access By Shah, Anwar

  1. By: Heski Bar-Isaac; Guillermo Caruana; Vicente Cunat
    Date: 2008
  2. By: Maurizio Canavari (Alma Mater Studiorum University of Bologna); Pamela Lombardi (Alma Mater Studiorum University of Bologna); Bettina Riedel (Humboldt University to Berlin); Roberta Spadoni (Alma Mater Studiorum University of Bologna)
    Abstract: This paper deals with the introduction and promotion of innovative and differentiating products in distribution places geographically far and culturally different by the country of origin/production. In an international trade context, environmental elements (e.g. the introduction of organic agriculture) and the role of the country of origin/production could influence the consumers’ perception of the distribution places. This study is aimed at deepening the knowledge about European consumer attitudes towards Thai organic rice and tapioca imported from Thailand. In particular, the purpose was to explore relevant attributes for the quality product perception, motivations for purchasing, limiting factors, reasonable price brackets, trust elements. In this first phase of research, a qualitative approach was used. Four focus groups in different European countries (Germany, Greece, Italy and Scotland-UK) were administered by one or two investigators each. The participants were recruited using a convenience sampling method, gathering 6-8 persons per focus group). The discussions were recorded, transcribed and analysed through a qualitative approach. Finally, an exhaustive list of semantic categories was created, explained and supported by parts of the discussions. The results show that the participants still do not know much about these products, especially about tapioca. They tend to favour the product’s nutritional aspects, followed by its taste and smell, which in any case were not deemed satisfactory; however, they want also that a series of social and environmental benefits are satisfied. In general, Thai organic rice is perceived as a “different type” of rice and tapioca as a “new product”. The most important critical issues affecting participant’s opinions include: the lack of trust in the certification process by foreign countries and the low attitude towards trying food novelties seemed due to a sense of loyalty to (or affection for) local food traditions. One of the most important trust elements is represented by the brand of the distributor, the producer and the EU and national certification bodies; in particular, participants associate some parameters of guarantee and safety to brand’s name. The information obtained could be useful in further explorations of this topic and it needs to be tested with a quantitative approach in order to obtain an evaluation of the relative importance of the different semantic categories.
    Keywords: marketing of quality food products, differentiating elements, international trade context, focus group, semantic categories
    JEL: Q13
    Date: 2008–08
  3. By: Melanie Fritz (University of Bonn); Maurizio Canavari (Alma Mater Studiorum University of Bologna); Nicola Cantore (Alma Mater Studiorum University of Bologna); Jivka Deiters (University of Bonn); Erika Pignatti (Alma Mater Studiorum University of Bologna)
    Abstract: Business-to-business (B2B) e-commerce is an innovative use of information and communication technologies and refers to the exchange of goods and related information between companies supported by Internet-based tools such as electronic marketplaces (also called electronic trade platforms) or online shops. It provides opportunities for cost-efficiency in supply chain management processes and access to new markets. With regard to the food sector with its chain levels input – agriculture – industry – retail – consumer, B2B e-commerce would take place in the exchange of food products between all levels except retail to consumer (business-to-consumer e-commerce). It is evident and widely known that B2B e-commerce brings key advantages and potentials for European consumers and the European food sector: - The affordability of high quality, traceable food for European consumers is supported as the innovation potentials from e-commerce technologies for cost-efficient processes along the food chain. The healthy choice of quality food will become the easy and affordable choice for European consumers. - The competitiveness of the European food sector with the majority of SMEs increases as B2B e-commerce technologies support cost-efficient transaction processes in food supply chains. In recent years, the availability of sophisticated B2B e-commerce technology has improved tremendously. The “European e-Business Market Watch” initiative from the Directorate-General Enterprise and Industry from the European Commission has shown that only large multinationals exploit the potentials of B2B e-commerce in the food sector for their supply chain management with their business partners. SMEs however, which create the majority of turn over in the European food sector and therefore create jobs and welfare in Europe, are reluctant to take up existing B2B e-commerce technologies into their food supply of selling. The crucial barrier to adoption is that trust between companies is not mediated appropriately by existing e-commerce technology. Currently, the barrier for food sector SMEs towards B2B e-commerce come from - the difficulty to examine the quality and safety of food products. This refers to all kinds of transactions in the food sector, whether supported by e-commerce or not. However, when it comes to e-commerce, the difficulty of physical product examination plays a much larger role as physical product inspection is not possible; - the (perceived) risk of performing a transaction via e-commerce. This includes concerns regarding secure transfer of data, or the possibly unknown transaction partner. Elements for the generation of trust between companies in the food chain and therefore of trustworthy B2B e-commerce environments for the food sector include guaranties regarding food quality, multimedia food product presentations to signal their quality, secure e-commerce technology infrastructures, third-party quality signs to be provided. As trust is highly subjective and depends on culture, food chains in different European countries with a different cultural background require different combinations of trust generating elements regarding the quality and safety of food. Different food chain scenarios with their transaction processes and risks regarding food quality and food safety and related trust elements need to be analysed and differences in trust in different European food chains need to be considered. It is the objective of this paper to identify food chains with trans-European cross-border exchange of food and international food chains in order to analyse the transaction processes and typical risks regarding food quality and food safety. The analysis focuses on trans-European cross-border and international food chains with their chain levels (e.g. production to wholesale trade, wholesale trade to industry, or wholesale trade to retail). In particular, it regards the food categories meat, grains, fresh vegetables, and fresh fruits and the particular risks regarding food quality and safety along the chains.
    Keywords: e-commerce, B2B transactions, agri-food trade
    JEL: Q13
    Date: 2008–08
  4. By: Christian Dahl Winther (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: This paper considers the impact of popularity on duopolists’ entry strategies into an emerging industry, where each consumer holds a preference for one of two competing brands. Brand popularity is influenced by word of mouth communication, as early adopters recommend the brand they have bought to later buyers. Early introduction is, however, a costly strategy. The timing of product introduction is therefore of strategic importance to firms. I investigate the equilibria of the game when firms choose their time to market strategies sequentially, and observe how they relate to the popularity of the Stackelberg leader’s brand. This analysis reveals firms’ individual incentives for leader and follower roles, and the market structure that would result in this noncooperative game. As von Stackelberg showed a leader’s commitment to a strategy can preempt the follower. The present model shows that this situation, where both firms prefer the leader role, most likely occurs when brands hold equal levels of popularity. On the other hand it is interesting to observe that in certain markets, in particular where popularity is highly asymmetric, it is optimal for the dominant firm to become follower, and for the inferior firm to lead, because this facilitates soft competition. Still, the market structure may be insensitive to the order of moves. This warrants investigation of the connection between leadership and brand popularity, and the effect on market structure.
    Keywords: Endogenous leadership, product differentiation, product introduction, technological change, word of mouth communication
    JEL: D83 L11 O33
    Date: 2008–09–03
  5. By: Wendel, S.; Dellaert, B.G.C. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This study addresses the process by which differences in web site benefit salience arise in consumers’ minds for different anticipated usage situations. We investigate two routes by which situation may determine consumer benefit salience and find support for both route structures. The results indicate that individuals’ relative benefit importance ratings shift between different anticipated usage situations, both directly, and indirectly, through consumers’ anticipated affective states. Furthermore, the number of benefits that is rated as important by consumers is found to also differ depending on their anticipated affective states, providing further insight into why consumer benefit salience may vary across situations.
    Keywords: web site benefit salience;cognitive route;affective route;usage situation
    Date: 2008–08–20
  6. By: Tuk, M.A.; Verlegh, P.W.J.; Smidts, A.; Wigboldus, D.H.J. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: In the current research, we study relationship norms in a word-of-mouth marketing context. The presence of a financial incentive for a recommendation implies that the word-of-mouth behavior may be driven by ulterior motives. This setting triggers both friendship (Equality Matching; EM) and sales (Market Pricing; MP) relationship norms. However, the evaluation of the recommendation depends crucially on the relationship norm activated during the interaction. We show that, compared to MP relationship norms, activating EM norms leads to less sincere agent evaluations, but at the same time to higher intentions to comply with the target offer. We show that these norms can be activated outside awareness and influence our evaluations of interaction partners in a cognitively efficient manner. A second study shows that disclosing the financial motive has a positive effect on agent evaluations, but only when the recommendation target can devote full attention to the interaction.
    Keywords: word-of-mouth;rewarded recommendations;relationship norms;disclosure of ulterior motive
    Date: 2008–09–08
  7. By: Emek Basker (Department of Economics, University of Missouri-Columbia); Shawn Klimek; Pham Hoang Van
    Abstract: We offer a theory for the complementarity between the size of a retail chain and the scope of its business to explain the growth of general-merchandise firms and the expansion of the "superstore" format. The complementarity results from an interaction of the retailer's economies of scale and consumer gains from "one-stop shopping." We find support for our model in micro data from the Census of Retail Trade for 1977-2002. Retail chains with more stores carry more distinct product lines and as retail chains grow they add both stores and product lines. On average, we find that a chain adds one product line, such as shoes, computers, or jewelry, to an existing store with every new store it opens. For the average large chain, adding a new product line throughout the chain is correlated with adding 400 new stores, competing in over 8,000 new markets and increasing its competitive pressure in more than 10,000 additional markets.
    Keywords: Retail, Chain, Big Box, Superstore, Economies of Scale, General Merchandise, One Stop Shopping
    JEL: L11 L25
    Date: 2008–08–20
  8. By: Erika Pignatti (Alma Mater Studiorum University of Bologna); Maurizio Canavari (Alma Mater Studiorum University of Bologna); Roberta Spadoni (Alma Mater Studiorum University of Bologna)
    Abstract: Since some decades, agri-food products exchanges can be carried on using Information and Communication Technology (ICT) tools. Anyway, their adoption in the agri-food sector appears to be hindered, both because of consolidated dynamics in developing B2B transactions, and of the peculiarities of the agri-food products themselves. The lack of direct relationships between partner heighten problems connected with food safety assessments, and with the definition of standardized production practices able to match business partner’ needs. Standardization is the key point in the relationship between e-commerce and agri-food sector. As for some products it is possible to define standardized requirements, it is hard to find a collocation for the wide range of agri-food differentiated and quality products in e-commerce B2B relationships. Moreover, existing e-marketplaces are not always able to convey properly the degree of differentiation and the peculiarities of agri-food products. The study aims at analyzing the barriers connected with the adoption of e-commerce in B2B relationships in agri-food sector, defining the factors which affect the interaction between the two areas. The attitude towards e-commerce showed by potential ICT tools users, chosen between Italian agri-food operators, has been analyzed; moreover, an overview on the evolution of agri-food e-marketplaces in the last 5 years has been carried on. The results describe the main problems concerning the adoption of e-commerce in agri-food sector, deeply connected with the agri-food products specifics. In spite of positive outcomes about efficiency and transactions for standardized products, the interaction between ICT tools and agri-food sector’s needs becomes problematic in case of high quality levels and differentiation, which can’t be properly conveyed by e-marketplaces. Results also highlight the role of trust and reputation in e-environments.
    Keywords: e-commerce, B2B transactions, agri-food products, standardization, quality requirements
    JEL: Q13
    Date: 2008–08
  9. By: Lans, R.J.A. van der; Cote, J.A.; Cole, C.A.; Leong, S.M.; Smidts, A.; Henderson, P.W.; Bluemelhuber, C.; Bottomley, P.A.; Doyle, J.R.; Fedorikhin, A.S.; Janakiraman, M.; Ramaseshan, B.; Schmitt, B.H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The universality of design perception and response is tested using data collected from ten countries: Argentina, Australia, China, Germany, Great Britain, India, the Netherlands, Russia, Singapore, and the United States. A Bayesian, finite-mixture, structural-equation model is developed that identifies latent logo clusters while accounting for heterogeneity in evaluations. The concomitant variable approach allows cluster probabilities to be country specific. Rather than a priori defined clusters, our procedure provides a posteriori cross-national logo clusters based on consumer response similarity. To compare the a posteriori cross-national logo clusters, our approach is integrated with Steenkamp and Baumgartner’s (1998) measurement invariance methodology. Our model reduces the ten countries to three cross-national clusters that respond differently to logo design dimensions: the West, Asia, and Russia. The dimensions underlying design are found to be similar across countries, suggesting that elaborateness, naturalness, and harmony are universal design dimensions. Responses (affect, shared meaning, subjective familiarity, and true and false recognition) to logo design dimensions (elaborateness, naturalness, and harmony) and elements (repetition, proportion, and parallelism) are also relatively consistent, although we find minor differences across clusters. Our results suggest that managers can implement a global logo strategy, but they also can optimize logos for specific countries if desired.
    Keywords: design;logos;international marketing;standardization;adaptation;structural equation models;Gibbs sampling;concomitant variable;Bayesian;mixture models
    Date: 2008–09–02
  10. By: Yigezu A. Yigezu; John H. Sanders (Department of Agricultural Economics, College of Agriculture, Purdue University)
    Abstract: Many developing regions have excellent potential agricultural resources. However, historically population has become so concentrated on such small holdings that acute poverty and malnutrition now predominate. The food scientists’ response to the chronic nutritional problem has often been subsidized bio-fortification with nutritional supplements or more recently cultivars with higher nutrient levels. Where much of the population is in this inadequate nutrition category as in highland Ethiopia, the supplements are neither financially feasible nor sustainable. The cultivars can provide a few critical nutrients but are not a comprehensive solution. To improve nutrition, it is necessary to increase income so that an increased quality and quantitative diet can be obtained. Here we evaluate a strategy to introduce new agricultural technologies where a central aspect of evaluation is combining the nutritional and income goals. This analysis is undertaken in the Qobo valley, Amhara state, Ethiopia. Using behavioralist criteria for decision making defined by the farmers, the effects of different potential combinations of technologies and supporting agricultural policies on the household nutritional gaps and farmers’ incomes are analyzed. An integrated approach involving the combined technologies of water harvesting, fertilization and Striga resistance combined with improved credit programs has the potential to increase income by 31% and to eliminate malnutrition except in the most adverse state of nature (10% probability). Both the treatment of the nutritional deficits and the decision making criteria defined by farmers are expected to be useful techniques in other developing country technology and policy analysis as well.
    Keywords: Adoption, agricultural technologies, Striga resistance, inorganic fertilizers, tied-ridges, marketing strategies, inventory credit, nutrition, income, capped-lexicographic utility.
    JEL: O13 O33 Q16 Q18
    Date: 2008
  11. By: Tuk, M.A.; Verlegh, P.W.J.; Smidts, A.; Wigboldus, D.H.J. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Previous research suggests that people form impressions of others based on their facial appearance in a very fast and automatic manner, and this especially holds for trustworthiness. However, as yet, this process has been investigated mostly in a social vacuum without taking interpersonal factors into account. In the current research, we demonstrate that both the relationship context that is salient at the moment of an interaction and the performed behavior, are important moderators of the impact of facial cues on impression formation. It is shown that, when the behavior of a person we encounter is ambiguous in terms of trustworthiness, the relationship most salient at that moment is of crucial impact on whether and how we incorporate facial cues communicating (un)trustworthiness in our final evaluations. Ironically, this can result in less positive evaluations of interaction partners with a trustworthy face compared to interaction partners with an untrustworthy face. Implications for research on facial characteristics, trust, and relationship theories are discussed.
    Keywords: trust;facial characteristics;person perception;word-of-mouth;relationship norms
    Date: 2008–09–08
  12. By: Ivanic, Maros; Martin, Will
    Abstract: In many poor countries, the recent increases in prices of staple foods raise the real incomes of those selling food, many of whom are relatively poor, while hurting net food consumers, many of whom are also relatively poor. The impacts on poverty will certainly be very diverse, but the average impact on poverty depends upon the balance between these two effects, and can only be determined by looking at real-world data. Results using household data for ten observations on nine low-income countries show that the short-run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but, that poverty increases are much more frequent, and larger, than poverty reductions. The recent large increases in food prices appear likely to raise overall poverty in low income countries substantially.
    Keywords: Rural Poverty Reduction,Markets and Market Access,Population Policies,Achieving Shared Growth
    Date: 2008–04–01
  13. By: Aaron Strong; V. Kerry Smith
    Abstract: This paper has two objectives. First, we identify a problem with the ability of the discrete-continuous choice (DCC) framework and conditional demand functions to fully describe consumer preferences in the presence of kinked budget constraints. Second, we propose and illustrate an alternative, preference based, method for estimating consumer responses to price changes under these conditions. Our preference based approach yields price elasticities on the order of 0.4 and a "utilities expenditure" elasticity of near unity. This research highlights the possibility that households may be more sensitive to price schedules than previously thought. It is recognizes commitments to commodities such as pools or outdoor landscaping influence how water consumption responds to price changes as part of the long run adjustments.
    JEL: H42 Q21
    Date: 2008–09
  14. By: Wolfgang Brunauer; Stefan Lang; Peter Wechselberger; Sven Bienert
    Abstract: We apply additive mixed regression models (AMM) to estimate hedonic price equations. Non-linear effects of continuous covariates as well as a smooth time trend are modeled non-parametrically through P-splines. Unobserved district-specific heterogeneity is modeled in two ways: First, by location specific intercepts with the postal code serving as a location variable. Second, in order to permit spatial variation in the nonlinear price gradients, we introduce multiplicative scaling factors for nonlinear covariates. This allows highly nonlinear implicit price functions to vary within a regularized framework, accounting for district-specific spatial heterogeneity. Using this model extension, we find substantial spatial variation in house price gradients, leading to a considerable improvement of model quality and predictive power.
    Keywords: Hedonic regression, submarkets, multiplicative spatial scaling factors, semiparametric models, P-splines
    Date: 2008–08
  15. By: Mitchell, Donald
    Abstract: The rapid rise in food prices has been a burden on the poor in developing countries, who spend roughly half of their household incomes on food. This paper examines the factors behind the rapid increase in internationally traded food prices since 2002 and estimates the contribution of various factors such as the increased production of biofuels from food grains and oilseeds, the weak dollar, and the increase in food production costs due to higher energy prices. It concludes that the most important factor was the large increase in biofuels production in the U.S. and the EU. Without these increases, global wheat and maize stocks would not have declined appreciably, oilseed prices would not have tripled, and price increases due to other factors, such as droughts, would have been more moderate. Recent export bans and speculative activities would probably not have occurred because they were largely responses to rising prices. While it is difficult to compare the results of this study with those of other studies due to differences in methodologies, time periods and prices considered, many other studies have also recognized biofuels production as a major driver of food prices. The contribution of biofuels to the rise in food prices raises an important policy issue, since much of the increase was due to EU and U.S. government policies that provided incentives to biofuels production, and biofuels policies which subsidize production need to be reconsidered in light of their impact on food prices.
    Keywords: Food&Beverage Industry,Markets and Market Access,Crops&Crop Management Systems,Economic Theory&Research,Renewable Energy
    Date: 2008–07–01
  16. By: Veronica Frisancho; Dean Karlan; Martin Valdivia
    Abstract: We measure the impact of a business training program for female microentrepreneur clients of a group banking program in Peru. Using the credit with education model, we assigned clients randomly to either treatment or control groups. Treatment groups received thirty to sixty minute entrepreneurship training sessions during their normal weekly group banking meeting. These lasted between one to two years. Control groups remained as they were before, meeting weekly with the group banking program solely for making loan and savings payments. We find that intention to treat (ITT) led to higher repayment and client retention rates for the microfinance institution, improved business knowledge, and practices. More importantly, average business sales revenues also increase while revenues fluctuations were reduced. In addition, we find significant heterogeneity in the exposure of clients within the treatment group. Treatment on the treated (TOT) estimates, obtained using ITT as instrumental variable, show substantially larger effects.
    Keywords: Microfinance, business training, adult education
    JEL: C93 D12 D13 D21 I21 J24 O12
    Date: 2008
  17. By: Shah, Anwar
    Abstract: This paper presents an overview of the constitutional-legal provisions on access to services in developing countries and shows that rights to public services are not justice-able. It further documents the performance record to show that governments'response to such a weak accountability framework has been predictable - poor performance in service delivery with little accountability. The paper also shows that while there has not been a shortage of ideas on how to deal with this problem, most approaches have failed because they could not diagnose and deal with the underlying causes of government dysfunction. The paper presents an analytical perspective on understanding the causes of dysfunctional governance and the incentives and accountability regimes that have the potential to overcome this dysfunction. The paper also documents practices that have shown some promise in improving access. The paper then integrates ideas from successful practices with conceptual underpinnings for good governance and presents a citizen-centric (rights based) governance approach to access. It further explores how such a citizen empowerment and government accountability framework can be implemented in practice, especially in the context of developing countries, where most governments still operate in a command and control environment with little or no orientation to serve their people. It also presents ideas on how to overcome resistance to such reforms.
    Keywords: National Governance,Public Sector Corruption&Anticorruption Measures,Governance Indicators,Public Sector Expenditure Analysis&Management,Banks&Banking Reform
    Date: 2008–06–01

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