nep-mkt New Economics Papers
on Marketing
Issue of 2008‒12‒07
eight papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Does it pay to read your junk mail? evidence of the effect of advertising on home equity credit choices By Sumit Agarwal; Brent W. Ambrose
  2. The Transmission of Price Trends from Consumers to Producers and Tests of Market Power By Lkassbi, Driss; West, Gale E.; Clark, J. Stephen
  3. Third party labeling and the consumer decision process By Larceneux, Fabrice; Carpenter, Marie
  5. An Investigation of the Marketing of Butterfat by the Canadian Dairy Industry By Clark, J. Stephen Bettina Brown; Brown, Bettina; Dunlop, Diane; Yang, Jinbin; Prochazka, Petr
  6. Downstream labeling and upstream competition By Bonroy, O.; Lemarie, S.
  7. California and the creation of a modern wine industry: 1860-1919 By James Simpson
  8. Strategic Planning - Niche Marketing in the Agriculture Industry By Cuthbert, Ronald

  1. By: Sumit Agarwal; Brent W. Ambrose
    Abstract: We examine the effect of direct mail (commonly referred to as junk mail) advertising on individual financial decisions by studying consumer choice of home equity debt contracts. Consistent with the theoretical predictions, we find that financial variables underlying the relative pricing of debt contracts are the leading factors explaining consumers home equity debt choice. Furthermore, we also find that the intended use of debt proceeds significantly impacts consumer choice. However, when we study a subset of consumers who received a direct mail solicitation for a particular debt contract (fixed versus adjustable-rate), we find evidence that the relative pricing variables are less revelent in explaining consumer contract choice, even though they were presented with a full menu of debt contracts. Thus, our results are consistent with the persuasive view of advertising.
    Date: 2008
  2. By: Lkassbi, Driss; West, Gale E.; Clark, J. Stephen
    Abstract: This study examines the competitiveness of four Canadian agricultural industries (eggs, milk, chicken and turkey) using a general equilibrium farm to retail pricing model developed by Wohlgenant (1989). The model generates retail and farm pricing equations that are estimated using maximum likelihood developed by Johansen (1992). The results indicate that in all cases, long-run constant returns is rejected, indicating market power within the Canadian retail to farm marketing sector. The model also finds more cointegrating vectors than predicted by theory, also inconsistent with competitive markets. Results are based on commercial disappearance as a proxy for consumer demand and therefore confounding between uncompetitive markets and quality differences may be indicated. Less ambiguous results would be obtained if consumer expenditures rather than commercial disappearance data were available. Still, results are rather emphatic in rejection of competitive markets in food markets in Canada. More competitive markets are indicated in the United States using similar methods.
    Keywords: Market power, food processing, cointegration, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, D41, L66, Q13,
    Date: 2008–01
  3. By: Larceneux, Fabrice; Carpenter, Marie
    Abstract: The objective of this research is to explore the decision-making process of consumers when faced with food products that have values-based labels.
    Keywords: Food labels; Protected Geograhic Indication (PGI) labels; label equity; consumer decision process
    JEL: D11 D12
    Date: 2008–09–01
  4. By: Russo, Carlo; Green, Richard; Howitt, Richard
    Abstract: The primary purpose of this paper is to provide updated estimates of domestic own-price, cross-price and income elasticities of demand and estimated price elasticities of supply for various California commodities. Flexible functional forms including the Box-Cox specification and the nonlinear almost ideal demand system are estimated and bootstrap standard errors obtained. Partial adjustment models are used to model the supply side. These models provide good approximations in which to obtain elasticity estimates. The six commodities selected represent some of the highest valued crops in California. The commodities are: almonds, walnuts, alfalfa, cotton, rice, and tomatoes (fresh and processed). All of the estimated own-price demand elasticities are inelastic and, in general, the income elasticities are all less than one. On the supply side, all the short-run price elasticities are inelastic. The long-run price elasticities are all greater than their short-run counterparts. The long-run price supply elasticities for cotton, almonds, and alfalfa are elastic, i.e., greater than one. Policy makers can use these estimates to measure the changes in welfare of consumers and producers with respect to changes in policies and economic variables.
    Keywords: Consumer Economics: Empirical Analysis, Agricultural Markets and Marketing, Agriculture: Aggregate Supply and Demand Analysis, Prices, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Marketing, D120, Q130, Q110,
    Date: 2008–06–26
  5. By: Clark, J. Stephen Bettina Brown; Brown, Bettina; Dunlop, Diane; Yang, Jinbin; Prochazka, Petr
    Abstract: This study examines the Canadian Dairy Commission€ٳ marketing of butterfat. Previous studies have concentrated on the evaluation of butterfat by using total kilograms of milk. Measuring milk as kilograms is based the assumption of fixed proportions between kilograms of milk and kilograms of butterfat. However, measuring dairy using kilograms may not be a good proxy for the underlying butterfat. In this study we argue that dairy fat maybe an inferior factor of production, whereas kilograms is a normal factor of production. This means that following kilograms within the marketing system may not track butterfat. In fact, butterfat may respond in an opposite direction to kilograms when prices and incomes change. Assuming that butterfat is an inferior factor may explain some of the marketing practices of the provincial marketing boards that on the surface seems to be neither in the interest of consumers or dairy farmers. If the objective of the supply management is to make dairy producers better off, then basing dairy quota on kilograms of butterfat seems logical since the demand for butterfat has been rising over time. In addition, controlling supply at the retail level using minimum milk price supports also benefits producers, although it may not be in the best interest of consumers due to higher dairy prices and increased butterfat consumption.
    Keywords: Inferior factors, dairy fat, health policy, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, I18, Q18,
    Date: 2008–07
  6. By: Bonroy, O.; Lemarie, S.
    Abstract: This paper analyses the impact of labeling in a context where the products come from a supply chain. We consider a case where there is an information problem about product quality in the downstream part of the chain, but not in the upstream part. We show that the implementation of a label to solve this information problem affects competition in the upstream part of the chain. In particular, competition may be softened up to a point where both the high- and the low-quality upstream suppliers benefit from labeling while all the intermediary producers or final consumers lose from labeling. This result is established on the basis of a simple model with two vertically related markets (a competitive downstream market which is supplied by an upstream duopoly) where the quality of the downstream output is determined by the quality of the upstream input.
    JEL: L15 L50
    Date: 2008
  7. By: James Simpson
    Abstract: The very different factor endowments of the New World to those found in Europe implied that the wine industry developed its own style and characteristics. In California production was located at a considerable distance from the main markets on the East Coast, and trade was initially controlled by the East Coast merchants, who imported wines from Europe and purchased California wine in bulk, selling it under their own brands. The problems of marketing and the fight against fraud and adulteration, produced a struggle between the wine-makers and San Francisco’s merchants for the control of the industry, and the creation of the world’s largest, vertically integrated wine company, the California Wine Association.
    Keywords: Wine history, Agricultural commodity chains, Farm organization, California agriculture
    JEL: L14 N51 Q13
    Date: 2008–11
  8. By: Cuthbert, Ronald
    Abstract: The purpose of the research is to improve our understanding of the adaptation process in agriculture at the farm level and the influence through the value chain. The research identified critical managerial decision areas in the strategic planning process of blackcurrant growers in Alberta and the South Island of New Zealand. The work was a comparative study of growers that attempted to determine the correspondence between the results of case study observations and a set of theoretical propositions that were developed from a review of the relevant literature. Results indicate that growers understand their own firm€ٳ core competencies, plan strategically and contingently to maintain flexibility and retain niche advantages. Data gathered on the blackcurrant sectors in Canada and New Zealand provided the contextual basis for the selection and analysis of the grower case studies. The sector analysis reached across the value chain. Among the findings reported was the interesting observation that although niche marketing is an accepted strategy in the marketing literature as a means to adaptive change, and although the flexibility inherent in this approach is critical to the success of traditionally resource-starved small firms, it is not clear that the firms reported on in this study engaged in niche marketing as a planned strategy but rather came upon the opportunity through serendipity. In terms of country comparison, results indicate that there may be some specific factors that contribute to the success of the blackcurrant industry in New Zealand. Closer examination of these factors may be beneficial to assisting the Canadian sector. Keywords: Niche marketing, strategic planning, adaptation flexibility JEL Codes: D81, L1, M31, O13, Q13
    Keywords: Niche marketing, strategic planning, adaptation flexibility, Farm Management, Marketing, D81, L1, M31, O13, Q13,
    Date: 2008

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