nep-mkt New Economics Papers
on Marketing
Issue of 2010‒04‒17
thirteen papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Panel Data Analysis of Japanese Residential Water Demand Using a Discrete/Continuous Choice Approach By Koji Miyawaki; Yasuhiro Omori; Akira Hibiki
  2. Diffusion of Original and Counterfeit Products in a Developing Country By Franses, Ph.H.B.F.; Lede, M.
  3. Relaciones entre imagen de marca corporativa, satisfaccion y lealtad: estudio en una escuela de negocios de la Argentina By Domingo Sanna
  4. The 2008 Survey of Consumer Payment Choice By Kevin Foster; Erik Meijer; Scott Schuh; Michael A. Zabek
  5. A value chain and cluster perspective on competitiveness of European fresh vegetable production – Case studies from Germany, Italy, and Spain By Bettina Riedel
  6. Niche and Direct Marketing in the Rural-Urban Fringe: Study of the Agricultural Economy in the Shadow of a Large City By Tracy Stobbe; Alison Eagle; G. Cornelis van Kooten
  7. The Greenwashing Machine : is CSR more than Communication By Rémi Bazillier; Julien Vauday
  8. The effect of rating scale format on response styles: The number of response categories and response category labels By B. WEIJTERS; E. CABOOTER; N. SCHILLEWAERT;
  9. Markets with untraceable goods of unknown quality: a market failure exacerbated by globalization By McQuade, Timothy; Salant, Stephen W.; Winfree, Jason
  10. Discriminatory fees, coordination and investment in shared ATM networks By Stijn FERRARI
  11. Product Quality, Product Price, and Share Dynamics in the German Compact Car Market By Uwe Cantner; Jens J. Krüger; Rene Söllner
  12. Spatial competition and cross-border shopping By Brian Knight; Nathan Schiff
  13. Beer - the ties that bind By Waterson, Michael

  1. By: Koji Miyawaki; Yasuhiro Omori; Akira Hibiki
    Abstract: Block rate pricing is often applied to income taxation, telecommunication services, and brand marketing in addition to its best-known application in public utility services. Under block rate pricing, consumers face piecewise-linear budget constraints. A discrete/continuous choice approach is usually used to account for piecewise-linear budget constraints for demand and price endogeneity. A recent study proposed a methodology to incorporate a separability condition that previous studies ignore, by implementing a Markov chain Monte Carlo simulation based on a hierarchical Bayesian approach. To extend this approach to panel data, our study proposes a Bayesian hierarchical model incorporating the individual effect. The random coefficients model result shows that the price and income elasticities are estimated to be negative and positive, respectively, and the coefficients of the number of members and the number of rooms per household are estimated to be positive. Furthermore, the AR(1) error component model suggests that the Japanese residential water demand does not have serial correlation.
    Keywords: Block rate pricing, Bayesian analysis, Panel data, residential water demand
    JEL: C11 C23 C24 Q25
    Date: 2010–03
  2. By: Franses, Ph.H.B.F.; Lede, M. (Erasmus Econometric Institute)
    Abstract: We study the diffusion of original and counterfeit products in three distinct categories in a developing country. The focus is on when their diffusion processes peak, how sales of original and counterfeit products are related and how marketing efforts can influence this process. Using a unique data set for Suriname (South America) on televisions, mobile phones and DVDs, we can support various predictions from theory and give recommendations for marketing management.
    Keywords: diffusion;counterfeits;developing countries
    Date: 2010–02–23
  3. By: Domingo Sanna
    Abstract: The objective of this paper is to present a comprehensive framework of relationships among corporate brand image (CBI), satisfaction, and loyalty. Three hypotheses are proposed and tested in this study: (1) Corporate brand image is antecedent to customer satisfaction, (2) The relationship between corporate brand image and customer loyalty is mediated by customer satisfaction, and (3) Customer satisfaction is a significant antecedent to customer loyalty. A brand personality scale is used for the measurement of the corporate brand image in the context of the Argentinean universities and Structural Equations Modeling (SEM) was employed to validate and re specify this brand personality scale as well as the full model including three main constructs: CBI, Satisfaction and Loyalty. El objetivo del presente trabajo es presentar las relaciones entre imagen de marca corporativa (CBI), satisfacción y lealtad en el contexto de una Escuela de Negocios de la Argentina. Se proponen y validan tres hipótesis en este estudio: (1) la imagen de marca es un antecedente de la satisfacción del cliente, (2) la relación entre la imagen de marca y la lealtad es a través de la satisfacción y (3) la satisfacción del cliente es un antecedente significativo de la lealtad. Se emplea una escala de personalidad de marca para la medición de la imagen de marca en el contexto de las Universidades argentinas y el Modelo de Ecuaciones Estructurales (SEM) para validar la misma y re-especificarla al igual que el modelo final propuesto el que incluye tres constructos principales: CBI, Satisfacción y Lealtad.
    Keywords: corporate branding; corporate brand image; off line corporate brand image; emotional branding; customer satisfaction; customer loyalty; behavioral intentions
    Date: 2010–03
  4. By: Kevin Foster; Erik Meijer; Scott Schuh; Michael A. Zabek
    Abstract: This paper presents the 2008 version of the Survey of Consumer Payment Choice (SCPC), a nationally representative survey developed by the Consumer Payments Research Center of the Federal Reserve Bank of Boston and implemented by the RAND Corporation with its American Life Panel. The survey fills a gap in knowledge about the role of consumers in the transformation of payments from paper to electronic by providing a broad-based assessment of U.S. consumers' adoption and use of nine payment instruments, including cash. The average consumer has 5.1 of the nine instruments, and uses 4.2 in a typical month. Consumers make 53 percent of their monthly payments with a payment card (credit, debit, and prepaid). More consumers now have debit cards than credit cards, and consumers use debit cards more often than cash, credit cards, or checks individually. Cash, checks, and other paper instruments are still popular and account for 37 percent of consumer payments. Most consumers have used newer electronic payments, such as online banking bill payment, but they only account for 10 percent of consumer payments. Security and ease of use are the characteristics of payment instruments that consumers rate as the most important.
    Keywords: Payment systems ; Electronic funds transfers ; Consumer behavior ; Consumers' preferences
    Date: 2010
  5. By: Bettina Riedel (Humboldt Universität zu Berlin)
    Abstract: In the present study we combine cluster theory with a value chain approach, with the aim of discovering elements of the European fresh vegetable business that could enable local producers to gain competitive advantages in a global market. European producers of fresh vegetables are under pressure to improve their performance and increase their competitiveness. Competitive advantage can be gained through innovation and by using unique resources stemming from cooperation between producers and complementary actors in local clusters. However, locally clustered producers do not sell to open markets but need access to value chains governed by lead firms, the large European retail chains, which set the rules and conditions of participation. The study presents first results from a multiple case-study analysis involving three different European regions in Germany, Italy and Spain specialized in fresh vegetable production. In-depth interviews with practitioners allowed us to confirm some main trends in business organization in the European fresh vegetable industry, but also to point out some interesting peculiarities of this industry. Local fresh vegetable producers become competitive due to their integration both in local production and wider marketing networks, where unique knowledge is created and interchanged by personal relationships. Further concentration on the local level is claimed to countervail power imbalances that usually favor buyers. The need for leading supermarket chains to build up direct relationships with key suppliers disturbs the functioning of existing relationship patterns in the local cluster. Creation of exclusive relationships with retail chains is pursued by entrepreneurs of innovative producing farms who treat their special knowledge and capacities as competitive advantages in the sharp competition in world markets and do not share it with other cluster actors.
    Keywords: Fresh vegetables, value chains, clusters, competitiveness
    JEL: Q13
    Date: 2009–10
  6. By: Tracy Stobbe; Alison Eagle; G. Cornelis van Kooten
    Abstract: Farmers in the rural-urban fringe (RUF) face unique challenges. Spillovers from the urban region and competition for land increase the costs of farming relative to farming farther removed. Yet, there is greater potential for off-farm employment and niche marketing of farm products, providing more income options to RUF farmers. In this research, we employ a survey of direct- and niche-marketing farmers located in the RUF of Vancouver, Canada to examine how the rural-urban interface affects farms, particularly their long-term survivability and sustainability. From a list of 102 direct marketing and organic farmers, we managed to elicit twenty-nine completed surveys. Annual gross farm receipts averaged almost $500,000, similar to the census average for all farms in the region. Incomes varied significantly among respondents and farmers produced a wide range of products, and yet exhibiting a willingness to invest in their farms. Respondents had been farming for an average over twenty years and are highly educated. Compared with farmers near Victoria, on Vancouver Island, producers who use direct marketing or organic methods in the Vancouver RUF have higher gross farm incomes, rely less on off-farm income and are much more likely to carry farm debt. Direct marketing also contributes to total farm sales, with only 19.5% of product value marketed at the farm-gate, at farmers’ markets or through delivery programs, compared to 57.3% of farms near Victoria. Wholesalers, distributors and processors play a larger role on the mainland, likely because the amount of farm product available makes operation of such facilities economically feasible.
    Keywords: Direct marketing, organic farming, niche marketing, agritourism, local agriculture, farm survival
    JEL: Q13 Q15
    Date: 2009–11
  7. By: Rémi Bazillier (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Julien Vauday (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)
    Abstract: Corporate Social Responsibility (CSR) and advertising are strategic complements. Short of assuming firms are pure benevolent, firms will consider CSR as beneficial if it contributes to their sales and/or profits. However, it could be that communicating on CSR represents by itself a good strategy. If the claim about the environmental or social benefits of the product is unsubstantiated or misleading, this practice is known under the name of GreenWashing (GW). If consumers do not discover there is no CSR, they may be attracted by a so-called CSR product because of the advertising. This paper provides both a theoretical and an empirical frameworks to explore this question. The model clearly identifies some “usual suspects” that will prefer GW over CSR. We then conduct an empirical analysis using data on CSR, economic data of the 500 largest European firms to test the predictions. Several instruments are used in order to estimate the propensity to prefer GW, such as the number of pages of sustainable development reports. The results confirm that there exist some “usual suspects”.
    Keywords: Corporate Social Responsibility ; Greenwashing ; Communication
    Date: 2009–07–03
    Abstract: Questionnaires using Likert-type rating scales are an important source of data in marketing research. Researchers use different rating scale formats with varying number of response categories and varying label formats (e.g., seven point rating scales labeled at the endpoints, fully labeled five point scales…), but have few guidelines when selecting a specific format. Drawing from the response style literature, we formulate hypotheses on the effect of the labeling of response categories and the number of response categories on net acquiescence response style, extreme response style and misresponse to reversed items. We test the hypotheses in an online survey (N=1207) with eight experimental conditions and a follow-up study with two experimental conditions (N = 226). We find evidence of strong effects of scale format on response distributions and misresponse to reversed items and formulate recommendations on scale format choice
    Date: 2010–01
  9. By: McQuade, Timothy; Salant, Stephen W.; Winfree, Jason
    Abstract: In markets for many fruits, vegetables, and an increasing number of imported goods, consumers cannot discern the quality of a product prior to purchase and can never identify its producer. Producing high-quality, safe goods is costly for a firm and raises the collective reputation for quality shared with its rivals. Minimum quality standards improve welfare. If consumers observe the country of origin of a product, quality, profits, and welfare increase. Exports from countries with more exporting firms are of lower quality and sell for lower prices. If one country imposes a minimum quality standard on its exports while other countries do not, consumers benefit. As for sellers, the regulation raises the profits of firms in the country with regulation and lowers the profits of firms in countries without regulation.
    Keywords: globalization; quality; collective reputation; minimum quality standards
    JEL: L13 D43 L15
    Date: 2009–12–14
  10. By: Stijn FERRARI
    Abstract: This paper empirically examines the effects of discriminatory fees on ATM investment and welfare, and considers the role of coordination in ATM investment between banks. Our main findings are that foreign fees tend to reduce ATM availability and (consumer) welfare, whereas surcharges positively affect ATM availability and the different welfare components when the consumers’ price elasticity is not too large. Second, an organization of the ATM market that contains some degree of coordination between the banks may be desirable from a welfare perspective. Finally, ATM availability is always higher when a social planner decides on discriminatory fees and ATM investment to maximize total welfare. This implies that there is underinvestment in ATMs, even in the presence of discriminatory fees.
    Date: 2009–12
  11. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Jens J. Krüger (Technical University Darmstadt, Fachbereich Rechts- und Wirtschaftswissenschaften); Rene Söllner (Friedrich Schiller University Jena, DFG-RTG "The Economics of Innovative Change")
    Abstract: The present paper examines one of the central elements of evolutionary thinking - competition formalized by the replicator dynamics mechanism. Using data on product characteristics of automobiles sold on the German domestic market over the period 2001-2006, we construct a competitiveness or fitness variable for each car model applying non-parametric efficiency measurement techniques. The basic question we intend to answer is whether cars providing a higher quality-price ratio for consumers tend to increase their market share compared to variants with lower quality-price ratios. The relationship between a car models' fitness and its market performance is empirically tested in a regression framework. The results show that the principle of `growth of the fitter' is working as suggested by evolutionary theory. In particular, we find that car models with considerably lower fitness than the market average lose, whereas models with above-average fitness gain additional market shares.
    Keywords: Replicator Dynamics, Product Characteristics, Data Envelopment Analysis
    JEL: O33 D12 L15
    Date: 2010–04–07
  12. By: Brian Knight; Nathan Schiff
    Abstract: This paper investigates competition between jurisdictions in the context of cross-border shopping for state lottery tickets. We first develop a simple theoretical model in which consumers choose between state lotteries and face a trade-off between travel costs and the price of a fair gamble, which is declining in the size of the jackpot and the odds of winning. Given this trade-off, the model predicts that per-resident sales should be more responsive to prices in small states with densely populated borders, relative to large states with sparsely populated borders. Our empirical analysis focuses on the multi-state games of Powerball and Mega Millions, and the identification strategy is based upon high-frequency variation in prices due to the rollover feature of lottery jackpots. The empirical results support the predictions of the model. The magnitude of these effects is large, suggesting that states do face competitive pressures from neighboring lotteries, but the effects vary significantly across states.
    Keywords: Gambling industry ; Consumer behavior
    Date: 2010
  13. By: Waterson, Michael (Department of Economics, University of Warwick)
    Abstract: It started with the Beer Orders (1989). A watershed decision was made by the Law Lords in July 2006. For one man, Bernie Crehan, this was the culmination of a 15 year episode in the pub trade, in which he has made legal history as the first UK case of damages for breach of competition law being awarded by a court. Possibly hundreds of other cases hung on their Lordships’ decision and Nomura, the Japanese bank that took over the chain called Inntrepreneur, had a total potential liability of £100m. And it all concerns Article 81, vertical agreements, and the price of a pint of beer. In 1989, the UK Monopolies and Mergers Commission published its lengthy and longawaited report on Beer. The Commission “…recommended measures that eventually led brewers to divest themselves of 14000 public houses. The MMC claimed that their recommendations would lower retail prices and increase consumer choice. There is considerable doubt, however, that their objectives were achieved.” (Slade, 1998, p565). In their report, the MMC noted rising real prices of beer and seized upon the power of the then big six brewers exercised through their considerable tied estates as being a prime motor. Consequently, they recommended that the ties be substantially cut. At that stage, the MMC (unlike the present day Competition Commission) did not determine remedies and it was left to the Department of Trade and Industry (DTI) to formulate the remedies (the Beer Orders) and the Office of Fair Trading (OFT) to supervise their implementation. Thus the OFT found itself implementing the Beer Orders in the face of a brewing industry determined to fight back.
    Date: 2010

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