nep-mkt New Economics Papers
on Marketing
Issue of 2009‒11‒07
four papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Cost Quality Management By Vitanova Gordana; Tatjana Spaseska
  2. Nonlinear and chaotic patterns in Japanese video game console sales and consequences for management control By Bonache, Adrien; Moris, Karen
  3. Conformity based behavior and the dynamics of price competition: a new rational for fashion shifts By Filomena Garcia; Joana Resende
  4. Das Goodwill-Modell des Wettbewerbsmarktes: Vertrauen ermöglichen und Arbeitsplätze schaffen By Rapold, Ingo

  1. By: Vitanova Gordana; Tatjana Spaseska (Faculty of Economics – Prilep, Macedonia)
    Abstract: Within the contemporary economic conditions, enterprises might achieve a competitive advantage if only they sell goods and services with high quality and lower prices. Customers, usually, prefer quality goods with acceptable prices, while such goods create reputation with the particular brand. The perfect control system is necessary to achieve a high quality product, which the cost quality management is considered to be an indispensable part in. The cost quality is nevertheless created to ensure that customers’ requirements are being appropriately attained. The most important objective of quality costs controlling is to assist the management in enhancing the product’s value permanently. The superior cost quality control system helps the management to achieve other strategic objectives, such as: producing goods with acceptable costs and deliver the products to their customers in time.
    Keywords: enterprise, goods, clients, prices, brands, quality, cost quality control, management
    JEL: M11 M31 M37
    Date: 2009–05
  2. By: Bonache, Adrien; Moris, Karen
    Abstract: This paper investigates the behaviour of weekly hardware sales in the Japanese video game sector. It is found that weekly hardware sales exhibit significant linear and non-linear behaviours during the product cycle. We are going to analyse the implications of our findings for management control in the video game sector.
    Keywords: forecasting; marketing; time series; systems dynamics; chaos theory
    JEL: C02 M30 M40
    Date: 2009–09–30
  3. By: Filomena Garcia (ISEG - Technical University of Lisbon and UECE); Joana Resende (CEF.UP and Faculdade de Economia, Universidade do Porto and CORE, Université catholique de Louvain)
    Abstract: This paper deals with dynamic price competition in markets in which the perception of consumers regarding the value of goods depends on the choices of other consumers in the market. In particular, we consider the case in which consumers tend to imitate their peers, generating a conformity effect. In the context of a finite horizon model, we show that conformity based behavior creates new channels of dynamic interaction between firms, changing the nature of price competition. As time evolves, both price strategic complementarity and substitutability may arise along the equilibrium trajectory. This leads to V-shaped equilibrium price paths and oscillating trajectories of market shares. We provide also a new rational for the inversion of fashion trends.
    Keywords: dynamic price competition, consumer behavior, conformity, fashion shift
    JEL: D11 L13 C61
    Date: 2009–10
  4. By: Rapold, Ingo
    Abstract: The Goodwill Model of the Competitive Market Allowing for Trust and Creating Jobs Consumers often cannot judge the quality of goods and services at the time of the purchase decision. The goodwill model explains how the market participants deal with this problem. It makes a distinction between markets for search goods, experience goods and credence goods. In markets for experience goods the goodwill mechanism can ensure completely by itself that suppliers behave with integrity. The goodwill mechanism causes irreversible costs of the market entrance in the form of goodwill investments for new suppliers. These irreversible costs of the market entrance lead to the fact that established suppliers can permanently achieve prize and volume premiums if they behave with integrity. Established suppliers, therefore, abstain from a hidden reduction of the quality of their products. The strength of the goodwill mechanism lies in the fact that it adapts itself in markets for experience goods to changed circumstances of the market by changes in the communications behavior of the market participants and thereby it stabilizes the market development and optimizes the market result. Markets for credence goods, however, are, in spite of the social institution Goodwill, characterized by market failure. The root causes for this result are selected sporadic bad quality deliveries which cannot be recognized by the consumers as those. Suitable regulations to stabilize markets for credence goods artificially generate irreversible costs of the market entrance for new suppliers. These created irreversible costs enable the established suppliers of credence goods to permanently earn positive economic profits by behaving with integrity. Numerous regulations which exist today in functioning markets for credence goods establish such irreversible costs of the market entrance. The abolition of such regulations can lead to market failure. An example having a lasting effect even today is the transformation which occurred between 1980 and 1999 of the US banking system which developed from a system of separated commercial and investment banks to a system of fully integrated banks.
    Keywords: Goodwill; reputation; price premiums; mouth-to-mouth-information; sunk costs; quality uncertainty; search goods; experience goods; credence goods; minimum quality; behavior with integrity; established suppliers; selected sporadic bad quality deliveries; hidden reduction of the quality of goods; market failure
    JEL: D11 G18 D02 D82 D83
    Date: 2009–10–31

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