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on Marketing |
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Issue of 2009‒05‒16
nineteen papers chosen by Joao Carlos Correia Leitao Technical University of Lisbon |
| By: | Allender, William J.; Richards, Timothy J. |
| Abstract: | Though brand loyalty has been studied extensively in the marketing literature, the relationship between brand loyalty and equilibrium pricing strategies is not well understood. Designing sales pricing strategies involves two key decisions: the percentage reduction in price from the existing price point, and the number or frequency of promotions within a category or for a specific product. These decisions, in turn, are critically dependent upon how many consumers can be convinced to switch to a brand by temporarily reducing its price, and how many are instead brand loyal. Theoretical models of how the size and strength of brand loyalty influence optimal promotion strategies have been developed, but there are no rigorous tests of their hypotheses. We test how brand loyalty impacts promotion strategies for a frequently purchased consumer package good category. Our results largely confirm that retailers often promote many brands simultaneously and that depth and breadth can be complementary. |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49536&r=mkt |
| By: | Suh, Daeseok; Chung, Chanjin |
| Abstract: | The purpose of this study is to investigate whether the generic advertising helps or hurts the brand advertising within the differentiated product environments. We develop an analytical model that includes both generic and brand advertising expenditures considering vertical product differentiation. Then the analysis is devoted to examine how marginal effects of expenditure affect each other under product differentiation. To help examine the relationship, we also include a new variable, the degree of product differentiation. Analytical results show that when the generic advertising increases the product differentiation, the high quality brand tends to take benefits while the low quality brand loses. When generic advertising includes messages that do not differentiate quality attributes, the high quality brand loses while the low quality brand takes benefits. |
| Keywords: | check off, generic advertising, brand advertising, vertical product differentiation, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49557&r=mkt |
| By: | House, Lisa A.; Gao, Zhifeng |
| Keywords: | citrus, tangerines, consumer preference, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49476&r=mkt |
| By: | Zhuang, Yan; Dimitri, Carolyn; Jaenicke, Edward C. |
| Abstract: | We use a two-stage, sample selection model to investigate organic milk purchases using Neilsenâs Homescan data. In the first stage, households decide on a weekly basis to buy mainly organic milk or non-organic milk. Results from this stage show that higher income, better education, having children at home, and several other demographic and marketing variables have a positive effect on organic choice. In the second stage, consumers then choose to buy mainly private label milk or national brand milk conditional on their first-stage choice. Most demographic and marketing variables are found to affect the organic and non-organic private label decision in the same way. However, our results show that a few factors, such as marriage status and children, affect the private label decision differently for organic and non-organic milk customers. |
| Keywords: | organic milk, private label, sample selection, Agribusiness, Consumer/Household Economics, Demand and Price Analysis, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49207&r=mkt |
| By: | Da Pra, Michelle; Arnade, Carlos |
| Abstract: | This paper presents a model of estimated demand for four tobacco products: cigarettes, cigars, chewing tobacco, and smoking tobacco products. Own elasticities and cross-price elasticites are used to obtain insights into the effectiveness and implications of new policy measures. Of particular interest is whether substitution of various tobacco products varies by market outlet. Several variations of the tobacco product outlet-choice model were estimated using iterative SUR. Four separate product-specific models where also estimated and represent consumersâ choice of a retail market outlet to purchase a particular tobacco product. In contrast to the joint product-outlet choice model, the two stage budgeting model rests on the assumption that consumers first choose a tobacco product, and then choose where to purchase it. In addition to estimating overall demand for the four tobacco products, models are estimated for tobacco products from three specific outlets: grocery stores, drug stores, and convenience stores. The paper investigates whether the various outlets substitute or complement each other and briefly deals with the issue of the premium consumers pay when purchasing tobacco products at convenience stores. |
| Keywords: | Tobacco, Demand estimation, Market outlet, Price premiums, Two-stage budgeting, Cigarette tax, Demand and Price Analysis, Health Economics and Policy, Marketing, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49210&r=mkt |
| By: | Mark, Tyler; Adhikari, Arun; Detre, Joshua; Mishra, Ashok |
| Keywords: | Farm Management, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49528&r=mkt |
| By: | Cristina Marreiros (Universidade de Evora, Departamento de Gestão, CEFAGE-UE); Mitchell Ness (Faculty of Science, Agriculture and Engineering, University of Newcastle) |
| Abstract: | The aim of this paper is to develop a conceptual framework for the analysis of consumer behaviour concerning the evaluation and choice of food products. The paper presents a review of theory on the processes of consumers' decision making and quality perception. Following this review, a theoretical framework is proposed that integrates the models of Engel, Blackwell and Miniard (1995), the main constructs of the Total Food Quality model of Grunert (1997), together with additional constructs and relationships between them, proposed by Zeithaml (1988) and by the authors of the present paper. |
| Keywords: | Consumer behaviour; Food; Decision-making; Perception; Quality. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2009_06&r=mkt |
| By: | Dhoubhadel, Sunil P.; Castillo, Sergio C.; Capps, Oral |
| Abstract: | It is generally observed that whenever there are cases of disease outbreaks or food recalls, there is a concomitant decline in commodity prices. However, it is still not clear what happens to price spreads among affected agents in the marketing chain. To shed light on this issue, we estimate the collective impact of Bovine Spongiform Encephalopathy (BSE) and food recalls on marketing margins associated with the U.S. beef industry over time. In previous research, the effects of these variables on the market demand of meat were estimated separately. By including these variables together in the same model specification we avoid the possibility of confounding their effects, and we are in position to obtain more precise estimates of elasticities of price transmission along the marketing chain. |
| Keywords: | marketing margins, elasticities of price transmission, BSE, food recalls, U.S. beef industry, Agribusiness, Demand and Price Analysis, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49386&r=mkt |
| By: | An, Henry |
| Abstract: | The focus of the microeconomic technology adoption literature has been on the adoption and diffusion of new innovations: who adopts, and when they adopt. Implicit in the literature is that consumers will embrace the product that results from the use of the new technology. If producers have reason to believe that adopting a new technology may lead consumers to perceive differentiated products, then the decision of whether or not to adopt needs to consider not only the effectiveness of the new technology but also the consumer response to it. That is, producers have to incorporate the impact of consumer-driven market-level effects into their technology choice decisions. In these situations, producers considering the adoption of a new agricultural biotechnology have a more complex learning problem than the technology adoption literature generally addresses, because producers need to consider the interaction of demand and supply effects from the adoption of any new technology. We motivate our analysis with the case of recombinant bovine somatotropin (rbST). In order to address some of these issues, we construct an analytical model of technology adoption that considers a market with differentiated goods. We develop a multi-period economic model of a representative farmerâs technology choice decision and integrate it into a market-level analysis that links the industryâs use of the technology to the structure of consumer demand.The focus of the microeconomic technology adoption literature has been on the adoption and diffusion of new innovations: who adopts, and when they adopt. Implicit in the literature is that consumers will embrace the product that results from the use of the new technology. If producers have reason to believe that adopting a new technology may lead consumers to perceive differentiated products, then the decision of whether or not to adopt needs to consider not only the effectiveness of the new technology but also the consumer response to it. That is, producers have to incorporate the impact of consumer-driven market-level effects into their technology choice decisions. In these situations, producers considering the adoption of a new agricultural biotechnology have a more complex learning problem than the technology adoption literature generally addresses, because producers need to consider the interaction of demand and supply effects from the adoption of any new technology. We motivate our analysis with the case of recombinant bovine somatotropin (rbST). In order to address some of these issues, we construct an analytical model of technology adoption that considers a market with differentiated goods. We develop a multi-period economic model of a representative farmerâs technology choice decision and integrate it into a market-level analysis that links the industryâs use of the technology to the structure of consumer demand. |
| Keywords: | Marketing, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49590&r=mkt |
| By: | Sáiz, J. Patricio (Universidad Autónoma de Madrid); Fernández, Paloma (Universidad de Barcelona) |
| Abstract: | This paper studies the origins of trademark registration in Spain and offers, for the first time, data across sectors and regions with a long-term perspective. In apparent contradiction to the slow path of industrialization and the economic backwardness of Spain between 1850 and the 1940s, empirical evidence on trademark registration suggests that, in this field, Spanish policies and Spanish firms seemed to be well ahead of other countries. Spain was among the pioneering countries in the Western world in having a state legislation protecting brand registration since 1850. Also, some Spanish regions and industrialized sectors adopted similar strategies to those of its European counterparts in terms of using consistently branding and registered trademarks. Our evidence suggests that firms seem to have used brands and marks, first to fight against fraud and imitation and second to add intangible assets to its products in order to endow them with persistent identity trends regarding origins or quality of the product that were difficult to replicate, as often happened with patents. This created and accumulated, over that period of time, a marketing knowledge among consumers, which may have been useful to maintain the competitiveness of some industrial districts and regions. |
| Keywords: | Intangible assets; Trade Marks; Brands; Catalonia, Spain. |
| JEL: | N80 N83 N84 M31 M37 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpapeh:200901&r=mkt |
| By: | Lai, Pei-Chun; Bessler, David |
| Abstract: | We consider the performance of distance-metrics method applied in demand estimation of carbonated soft drink products. Based on preliminary OLS outcome, the estimated coefficients are satisfied our prior expectations and results are consistent with previous research. Brand loyalty and strong substitution between products of the same group is found in our study, as also found in Rojas and others. Our tentative conclusion is that distance metrics method is worthy of further consideration in demand estimation and offers the potential for study of merger simulations. |
| Keywords: | distance metrics, demand, merger simulation, Agribusiness, Industrial Organization, Marketing, L13, C14, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49352&r=mkt |
| By: | Luo, Jie; Mainville, Denise; You, Wen; Nayga, Rodolfo M. |
| Abstract: | Experimental Economics methods are used to determine Hispanic consumersâ sensory acceptance of pasture-fed beef and evaluate visual and taste influences on their overall preferences and willingness-to-pay (WTP). Two hundred and thirty-one Hispanic consumers in four experimental sites in Virginia participated in a laboratory experimental procedure where they visually examined and tasted pasture-fed and conventionally produced grain-fed beef, and then participated in a non-hypothetical Multiple Price Lists (MPL) experiment to determine their WTP. Hispanic consumers perceived significant differences between pasture-fed and grain-fed beefâs appearance and taste. Visual and taste acceptances are closely correlated to and significantly influence overall preferences. More than fifty percent of Hispanic consumers prefer pasture-fed beef and the majority of them consistently are willing to pay a price premium. Approximately, half consumers who generally prefer pasture-fed beef consistently consider the appearance and taste of pasture-fed beef more favorable but another half of them indicated discrepant visual and taste acceptances. Nevertheless, this inconsistency doesnât lead to a lower WTP for pasture-fed beef. |
| Keywords: | Pasture-Fed Beef, Experimental Economics, Multiple Price Lists, Preference, Willingness-to-pay, Agribusiness, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Livestock Production/Industries, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49457&r=mkt |
| By: | Giuseppe Tattara (Department of Economics, University Of Venice Cà Foscari); Paolo Crestanello (CEG, Treviso. University Of Venice Cà Foscari) |
| Abstract: | The paper investigates the change in strategy of the Benetton Group, since the mid nineties, in face of the severe intensive competition in the international fashion market. New competitors, in particular the European brands Zara, Mango and H&M, have challenged the Benetton position in the Italian and the European clothing market and have pushed the Group towards cost reduction through globalization of his suppliers. Benetton is a vertically integrated producer that controls (in different ways) the whole value chain from textile raw materials to the sales to the consumers. Till 2000 Benetton made part of its production in its own factories and through a wide network of domestic sub-contractors, mainly specialized in sewing. Now Benetton has drastically moved to a new strategy, abandoning Italy and organizing production around a dual supply chain: close locations (East Europe and North Africa) for quick production and far away locations (Asia) for more standardised products. The paper discusses also the redefinition of competences for the Treviso clothing district, where Benetton traditional sub-contractors have been in few years, drastically curtailed. Benetton restructuring marks the transition to a new network of competences between agents in the district. |
| Keywords: | Global value chains, Internationalization, Benetton, Apparel |
| JEL: | L22 L23 L67 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2009_11&r=mkt |
| By: | Chang, Jae Bong; Moon, Wanki; Balasubramanian, Siva K. |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49591&r=mkt |
| By: | Funtanilla, Margil; Lyford, Conrad; Wang, Chenggang |
| Abstract: | The organic cotton market has been growing internationally and presents a potential opportunity for producers. This article evaluates prices and returns for organic cotton production in Texas using a stochastic frontier approach. Organic producers were found to be more profitable relative to conventional production, but the analysis showed that organic producers were relatively less technically efficient. |
| Keywords: | organic cotton, production frontier, technical efficiency, Production Economics, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49359&r=mkt |
| By: | Li, Chenguang; Sexton, Richard J. |
| Abstract: | The typical model of retail pricing for produce products assumes retailers set price equal to the farm price plus a certain markup. However, observations from scanner data indicate a large degree of price dispersion in the grocery retailing market. In addition to markup pricing behavior, we document three alternative leading pricing patterns: fixed (constant) pricing, periodic sale, and high-low pricing. Retail price variations under these alternative pricing regimes in general have little correlation with the farm price. How do retailersâ alternative pricing behaviors affect farmersâ welfare? Using markup pricing as the baseline case, we parameterize the model to reflect a prototypical fresh produce market and carry out a series of simulations under different pricing regimes. Our study shows that if harvest cost is sufficiently low, retail prices adjusting only partially, or not at all, to supply shocks tends to diminish farm income and exacerbate farm price volatility relative to the baseline case. However, we also find that if harvest cost is sufficiently large and the harvest-cost constraint places a lower bound on the farm price, increased farm price volatility induced by retailersâ alternative pricing strategies may result in higher farm income, compared to markup pricing. Our study is the first to evaluate the welfare implications for producers of the diversified pricing strategies that retailers utilize in practice and the resulting attenuation of the relationship between prices at retail and at the farm gate. |
| Keywords: | Agribusiness, Demand and Price Analysis, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49600&r=mkt |
| By: | Volpe, Richard James III |
| Abstract: | This study takes an important first step at quantifying the nature of competition between major supermarket chains through price promotions. Using data that covers virtually the entire product menus of supermarkets representing two major chains in 18 cities, I examine both the effect of direct competition on promotional intensity and the nature of promotional competition itself. In a counterintuitive finding, there appears to slightly less promotional activity in cities in which both chains compete directly, as compared to cities in which only one chain operates. Moreover, most promotional activity tends to be retaliatory, rather than accommodating, in nature.This study takes an important first step at quantifying the nature of competition between major supermarket chains through price promotions. Using data that covers virtually the entire product menus of supermarkets representing two major chains in 18 cities, I examine both the effect of direct competition on promotional intensity and the nature of promotional competition itself. In a counterintuitive finding, there appears to slightly less promotional activity in cities in which both chains compete directly, as compared to cities in which only one chain operates. Moreover, most promotional activity tends to be retaliatory, rather than accommodating, in nature. |
| Keywords: | Agribusiness, Demand and Price Analysis, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49582&r=mkt |
| By: | Kwon, Dae-Heum; Koo, Won W. |
| Abstract: | The recent concurrent surges of food and commodity prices renew the debate on the causal directions between producer and consumer prices. To address this issue, we utilize the stage of processing system incorporating retail stage beyond crude, intermediate, and finished processing stages of food and employ the method proposed by Toda and Yamamoto (1995) and Dolado and Lütkepohl (1996) of Granger causality tests. The overall results show that consistent with theory of derived demand, the demand-pull mechanisms coexist with the cost-push processes in 1985-2001. However, the upward cost-push pressures dominate the demand-pull mechanism through various transmission channels in 2002-2008. |
| Keywords: | Demand and Price Analysis, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49332&r=mkt |
| By: | Gao, Zhifeng; Yu, Xiaohua; House, Lisa O. |
| Abstract: | With fixed dimensionality of choice experiments, previous simulation results shows that D-optimal design with correct priori information generates more accurate valuation. In the absence of prior information, random designs and designs incorporate attribute interactions result in more precise valuation estimates. In this paper, the Monte Carlo results demonstrate that the performances of different design strategy are affected by attribute information loads in choice experiments. Consumer valuation estimates in simulation settings varies with the number of attributes. |
| Keywords: | Marketing, Research Methods/ Statistical Methods, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49406&r=mkt |