nep-mkt New Economics Papers
on Marketing
Issue of 2009‒11‒14
five papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Social Networking: Changing the way we communicate and do business. By Jones, Kevin
  2. Strategies to fight ad-sponsored rivals By Casadesus-Masanell, Ramon; Zhu, Feng
  3. A Forecasting Model Incorporating Replacement Purchase: Mobile Handsets in South Korea¡¯s Market By Jongsu Lee; Chul-Yong
  4. Demand Forecasting in the Early Stage of the Technology's Life Cycle Using Bayesian update By Chul-Yong Lee; Jongsu LEE
  5. Inertia, Interaction and Clustering in Demand By Babutsidze, Zakaria; Cowan, Robin

  1. By: Jones, Kevin
    Abstract: This paper reviews the value of social networking and the impact it can have on small and large businesses. The paper also reviews the Social Networking Business Plan and the power of recommender networks. Examples are given of inbound and outbound marketing techniques. Social Networking is an integral part of inbound marketing. A synopsis of the evolving demographic of social networkers is presented to add clarity and show potential for social networking websites and tools.
    Keywords: social networking; business; Facebook; The Social Network Business Plan; Social Networking Strategy; social networking demographics; inbound marketing; outbound marketing; advertising in the 21st century
    JEL: D71 D83 Z13 M13
    Date: 2009–10–15
  2. By: Casadesus-Masanell, Ramon (Harvard Business School); Zhu, Feng (Marshall School of Business)
    Abstract: We analyze the optimal strategy of a high-quality incumbent that faces a low-quality ad-sponsored competitor. In addition to competing through adjustments of tactical variables such as price or advertising intensity, we allow the incumbent to consider changes in its business model. We consider four alternative business models, two pure models (subscription-based and ad-sponsored) and two mixed models that are hybrids of the two pure models. We show that the optimal response to an ad-sponsored rival often entails business model reconfigurations, a phenomenon that we dub "competing through business models." We also find that when there is an ad-sponsored entrant, the incumbent is more likely to prefer to compete through a pure, rather than a mixed,business model because of cannibalization and endogenous vertical differentiation concerns. We discuss how our study helps improve our understanding of notions of strategy,business model, and tactics in the field of strategy.
    Keywords: Ad-sponsored; economy; products; services; business;
    Date: 2009–06–19
  3. By: Jongsu Lee; Chul-Yong (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: The paper introduces a replacement forecasting model that operates at the brand level and overcomes limitations of existing models. The model (1) consists of a diffusion model and a time series model; (2) separately identifies the diffusion of first-time purchases and that of replacement purchases; (3) reflects brands¡¯ competitive factors affecting product diffusion; and (4) characterizes consumers¡¯ different replacement cycles.The model is applied to South Korea¡¯s mobile handset market. The model performs well in terms of its fit and forecasting when compared with other forecasting models incorporating replacement and repeat purchases. The usefulness of the model stems from its ability to describe complicated environments and its flexibility in including multiple factors that drive diffusion in the regression analysis.
    Keywords: Replacement, Diffusion model, Mobile handset market
    Date: 2009–04
  4. By: Chul-Yong Lee; Jongsu LEE (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Forecasting demand for new technology for which few historical data observations are available is difficult but essential to successful marketing. The current study suggests an alternative forecasting methodology based on a hazard rate model using stated and revealed preferences. In estimating the hazard rate, information is derived initially through conjoint analysis based on a consumer survey and then updated using Bayes¡¯ theorem with available market data. Based on the results of the empirical analysis, the model described here can significantly improve demand forecasting for newly introduced technologies.
    Keywords: demand forecasting, conjoint analysis, Bayesian update, telematics service
    Date: 2009–04
  5. By: Babutsidze, Zakaria (UNU-MERIT); Cowan, Robin (UNU-MERIT, Maastricht University, and BETA - Universite Louis Pasteur)
    Abstract: We present a discrete choice model of consumption that incorporates two empirically validated aspects of consumer behaviour: inertia in consumption and interaction among consumers. We specify the interaction structure as a regular lattice with consumers interacting only with immediate neighbours. We investigate the equilibrium behaviour of the resulting system and show analytically that for a large range of initial conditions clustering in economic behaviour emerges and persists indefinitely. Short-run behaviour of the model is investigated numerically. This exercise indicates that equilibrium properties of the system can predict a short-run behaviour of the model quite accurately.
    Keywords: Clustering, Interaction, Habits, Consumer choice
    JEL: D11 D83 C65
    Date: 2009

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