nep-mkt New Economics Papers
on Marketing
Issue of 2010‒01‒10
eight papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Consumer reactions to self-expressive brand display By Czellar, Sandor; Sprott, David E.; Spangenberg, Eric R.; Raska, David
  3. A Marketing Scheme for Making Money off Innocent People: A User’s Manual By Kaushik Basu
  4. Online communities of payments and consumer behaviour By Olivier Hueber
  5. Model for Studying Commodity Bundling with a Focus on Consumer Preference By Jungwoo Shin; Chang Seob Kimi; Jongsu Lee
  6. The price of gasoline and the demand for fuel economy: evidence from monthly new vehicles sales data By Thomas H. Klier; Joshua Linn
  7. A forecast simulation analysis of the next-generation DVD market based on consumer preference data By Jongsu Lee; Jae Young Choi; Youngsang Cho
  8. Optimal risk in marketing resource allocation By Alejandro Balbas; Mercedes Esteban Bravo; Jose M. Vidal-Sanz

  1. By: Czellar, Sandor; Sprott, David E.; Spangenberg, Eric R.; Raska, David
    Abstract: Brand names and other brand elements are often displayed on one’s body or clothes for the purpose of personal value expression. Despite the frequency of such brand displays in the marketplace, we know little about how consumers respond to seeing brands in this fashion. A recent view of consumer brand identification—the concept of brand engagement in self-concept (BESC)—provides a unique perspective from which to explore how consumers react when see-ing brands displayed by others. Across three experiments, we demonstrate a consistent pattern of findings indicating that consumers’ reactions to others ostentatiously displaying brands as means of value expression are strongest for those with high BESC levels and with a high value focus during brand exposure. The research highlights important variations in consumers’ responses to self-expressive brand stimuli associated with others; implications for branding practice and re-search are provided.
    Keywords: Brand engagement; self-concept; advertising; brand management
    JEL: D11 D12 D91
    Date: 2009–12–08
  2. By: Fulgence J. Mishili (Anna A. Temu; Joan Fulton; J. Lowenberg-DeBoer)
    Abstract: The objective of this study was to determine the impact of bean grain quality characteristics on market price. The data was collected from retail markets in Tanzania. Hedonic pricing provides a statistical estimate of premiums and discounts. Implications for development of bean markets include: i) extension agents should identify cost-effective ways to educate producers on targeting urban market niches based on consumer preferences for varieties, ii) breeding for bruchid resistant beans and use of appropriate storage technologies would alleviate the problems of storage damage, and iii) requiring a portfolio of grain quality characteristics to fit consumer preferences in local markets.
    Keywords: Beans, markets, consumer preferences, hedonic, storage, Tanzania
    JEL: D12 Q13
    Date: 2009
  3. By: Kaushik Basu
    Abstract: Firms often give away free goods with the product that they sell. Firms often give stock options to their top management and other employees. Mixing these two practices—giving stock options to consumers who buy the firm’s product—, creates a deadly brew. Large numbers of consumers can be lured into buying this product, giving the entrepreneur huge profits and the consumers a growing profit share. But this is a camouflaged Ponzi that will ultimately crash. By analogy it is argued that the common practice of giving stock options to employees can be a factor behind financial crashes. The aim of the paper is to help create a better regulatory structure.
    Keywords: employees, money, marketing, financial, entrepreneur, stock options, financial scams, product bundling, firms, consumers, employees, product, profit share, strategy, law, loans,
    Date: 2009
  4. By: Olivier Hueber (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: This paper asserts that the online communities of electronic money (e-money) users affect the traditional mechanisms of price determination by introducing anonymity in money payments. By studying the Second Life case it is possible to show the main characteristics of such a communities and raise new questions linked to the online behaviours of the consumers. In the aim of shedding light on the online consumer behaviour we turn to Thorstein Veblen works and to network externalities concepts.
    Date: 2008–09–01
  5. By: Jungwoo Shin; Chang Seob Kimi; Jongsu Lee (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: This research complements demand side analysis of previous commodity bundling studies in which oligopoly models and game theory were used. According to demand side analysis, this study proposes the use of discrete-continuous consumption behavior applied to a commodity bundling model that incorporates consumer heterogeneity to analyze the effect of bundling strategies. Previous researchers have assumed a simple consumer utility model such that the heterogeneity of consumer preference is not reflected. Most analyzed effects of commodity bundling by focusing on firm behavior. However, to measure the results of the competition of bundling strategy, analysis of commodity bundling that is based on consumer preference is useful. Unlike previous research, this study proposes a model that directly analyzes consumer behavior for commodity bundling. This study conducted empirical analysis, obtained from data on information communication technology (hereafter, ICT) service subscription and usage in Korea, to validate the proposed model. The empirical results show that the proposed model is useful to analyze the effects of bundling for various services and products.
    Keywords: Bayesian estimation, Commodity bundling, Consumer heterogeneity, Game theory, Mixed multiple discrete-continuous extreme value model, Oligopoly model
    JEL: C11 C35 D11 D12 L40
    Date: 2009–11
  6. By: Thomas H. Klier; Joshua Linn
    Abstract: This paper uses a unique data set of monthly new vehicle sales by detailed model from 1978- 2007, and implements a new identification strategy to estimate the effect of the price of gasoline on consumer demand for fuel economy. We control for unobserved vehicle and consumer characteristics by using within model-year changes in the price of gasoline and vehicle sales. We find a significant demand response, as nearly half of the decline in market share of U.S. manufacturers from 2002-2007 was due to the increase in the price of gasoline. On the other hand, an increase in the gasoline tax would only modestly affect average fuel economy.
    Date: 2009
  7. By: Jongsu Lee; Jae Young Choi; Youngsang Cho (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Just as standards wars over formats had characterized VCRs upon introduction to the market, the next-generation DVD standards war between Blu-Ray and HD-DVD lasted six years before Blu-Ray won the contest. Beginning with stated preference data drawn from a structured conjoint survey conducted before Blu-Ray became the de facto standard of the next-generation DVD format, we estimated consumer preferences on digital video players. A Bayesian mixed-logit model was used and market share simulations were conducted under various scenarios based on estimated parameters to surmise the future South Korean digital video-player market. Results indicate that consumers feel that network size and title availability are more important than hardware-related facets of the product, such as definition and storage capacity. The level of title availability and price of the Blu-Ray player for Blu-Ray¡¯s dominance over DVD will vary by the penetration rate of DVD players.
    Keywords: next-generation DVD, de facto standard, mixed logit, market share simulation, standard competitiongrade, willingness to pay, relative importance
    JEL: C11 C25 C63 L15 L82
    Date: 2009–11
  8. By: Alejandro Balbas; Mercedes Esteban Bravo; Jose M. Vidal-Sanz
    Abstract: Marketing resource allocation is increasingly based on the optimization of expected returns on investment. If the investment is implemented in a large number of repetitive and relatively independent simple decisions, it is an acceptable method, but risk must be considered otherwise. The Markowitz classical mean-deviation approach to value marketing activities is of limited use when the probability distributions of the returns are asymmetric (a common case in marketing). In this paper we consider a unifying treatment for optimal marketing resource allocation and valuation of marketing investments in risky markets where returns can be asymmetric, using coherent risk measures recently developed in finance. We propose a set of first order conditions for the solution, and present a numerical algorithm for the computation of the optimal plan. We use this approach to design optimal advertisement investments in sales response management
    Keywords: Resource allocation, Coherent risk measures, Optimization, Sales response models
    Date: 2009–10

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