nep-mkt New Economics Papers
on Marketing
Issue of 2010‒09‒11
fourteen papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Value of Image in Service By Strandvik, Tore; Rindell, Anne
  2. Breaking the Mould on Copycats: When are Imitation Strategies Successful.. By Horen, F. van
  3. Time Dimension in Consumers’ Image Construction Processes: Introducing Image Heritage and Image-in-use By Rindell, Anne
  4. Customer Energy in Relationships By Heinonen, Kristina; Strandvik, Tore
  5. Exploring Customer Value Formation: A Customer Dominant Logic Perspective By Voima, Päivi; Heinonen, kristina; Strandvik, Tore
  6. An analysis of at-home demand for ice cream in the United States By Davis, Chris; Blayney, Don; Yen, Steven; Cooper, Joseph C.
  7. An Eye for an Eye: Impact of Sequelization and Comparison in Advertisements on Consumer’s Perception of Brands By Patrali Chakrabarty; Bibek Banerjee
  8. Can Information Costs Confuse Consumer Choice?---Nutritional Labels in a Supermarket Experiment By Kiesel, Kristin; Villas-Boas, Sofia B.
  9. Targeted Advertising in Magazine Markets By Ambarish Chandra; Ulrich Kaiser
  10. Every Viewer has a Price - On the Differentiation of TV Channels By Häckner, Jonas; Nyberg, Sten
  11. Examining the Nonlinear Effects in Satisfaction-Loyalty-Behavioral Intentions Model By Anand Kumar Jaiswal; Rakesh Niraj
  12. Proceedings“Regulation and Best Practices in Public and Nonprofit Marketing” By Matei, Lucica; Dinu, Teodora
  13. Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market By Hilger, James; Rafert, Greg; Villas-Boas, Sofia B
  14. Anticipating plug-in hybrid vehicle energy impacts in California: Constructing consumer-informed recharge profiles By Axsen, Jonn; Kurani, Kenneth S

  1. By: Strandvik, Tore (Hanken School of Economics); Rindell, Anne (Hanken School of Economics)
    Abstract: Purpose This paper takes a customer view on corporate image and value, and discusses the value of image in service. We propose a model depicting how the customer’s corporate brand image affects the customer’s value-in-use. Methodology/approach The paper represents conceptual development on customers’ value and image construction processes. By integrating ideas and elements from the current service and branding literature a model is proposed that extends current views on how value-in-use emerges. Findings From a current service perspective it is the customer who makes value assessments when experiencing service. Similarly, if branding is a concept used to denote the service provider’s intentions and attempts to create a corporate brand, image construction is the corresponding process where the customer constructs the corporate image. This image construction process is always present both in service interactions and in communication and has an effect on the customer’s value-in-use. We argue that two interrelated concepts are needed to capture corporate image construction and dynamics and value-in-use – the image-in-use and image heritage. Research implications The model integrates two different streams of research pointing to the need to consider traditional marketing communication and service interactions as inherently related to each other from the customer’s point of view. Additionally the model gives a platform for understanding how value-in-use emerges over time. New methodological approaches and techniques to capture image-in-use and image heritage and their interplay with value-in-use are needed. Practical implications The company may not be able to control the emergence of value-in-use but may influence it, not only in interactions with the customer but also with pure communication. Branding activities should therefore be considered related to service operations and service development. Additionally, practitioners would need to apply qualitative methods to understand the customer’s view on image and value-in-use. Originality/value The paper presents a novel approach for understanding and studying that the customer’s image of a company influences emergence of value-in-use. The model implies that the customer’s corporate image has a crucial role for experienced value-in-use.
    Keywords: service logic; service dominant logic; corporate brand image; image heritage; image-in-use; value-in-use;
    Date: 2010–09–06
  2. By: Horen, F. van (Tilburg University)
    Abstract: Consumer product companies and retailers often imitate the appearance (or “trade-dress”) of a leader brand to profit from the positive associations attached to the leader brand. Such a copycatting strategy is deliberate and frequently used, as evidenced by the plethora of copycats one can find in the supermarket. Despite the frequent use of such product imitation strategies, it is however less clear when they are successful and why. This dissertation sheds new light on this important question and demonstrates that the effectiveness of a copycat strategy is not only determined by package similarity, but is highly dependent on where the copycat is sold (e.g., in which store) and how it is positioned on the supermarket shelf (e.g., next to the leader brand or not). Furthermore and in contrast to the current opinion, this dissertation shows that high similarity copycats can backfire and reduce consumer’s liking of copycats, whilst subtler forms of copycatting can free-ride more effectively on the leader brand’s equity. Because this dissertation examines the mechanisms underlying copycat effectiveness beyond consumer confusion (where consumers accidentally purchase the copycat instead of the leader brand) are examined, the subsequent findings are an important supplement to the existing literature.
    Date: 2010
  3. By: Rindell, Anne (Hanken School of Economics)
    Abstract: This paper focuses on the time dimension in consumers’ image construction processes. Two new concepts are introduced to cover past consumer experiences about the company – image heritage, and the present image construction process - image-in-use. Image heritage and image-in-use captures the dynamic, relational, social, and contextual features of corporate image construction processes. Qualitative data from a retailing context were collected and analysed following a grounded theory approach. The study demonstrates that consumers’ corporate images have long roots in past experiences. Understanding consumers’ image heritage provides opportunities for understanding how consumers might interpret management initiatives and branding activities in the present.
    Keywords: image heritage; image-in-use; consumer; branding; time dimension
    Date: 2010–09–06
  4. By: Heinonen, Kristina (Hanken School of Economics); Strandvik, Tore (Hanken School of Economics)
    Abstract: All companies have a portfolio of customer relationships. From a managerial standpoint the value of these customer relationships is a key issue. The aim of the paper is to introduce a conceptual framework for customers’ energy towards a service provider. Customer energy is defined as the cognitive, affective and behavioural effort a customer puts into the purchase of an offering. It is based on two dimensions: life theme involvement and relationship commitment. Data from a survey study of 425 customers of an online gambling site was combined with data about their individual purchases and activity. Analysis showed that involvement and commitment influence both customer behaviour and attitudes. Customer involvement was found to be strongly related to overall spending within a consumption area, whereas relationship commitment is a better predictor of the amount of money spent at a particular company. Dividing the customers into four different involvement / commitment segments revealed differences in churn rates, word-of-mouth, brand attitude, switching propensity and the use of the service for socializing. The framework provides a tool for customer management by revealing differences in fundamental drivers of customer behaviour resulting in completely new customer portfolios. Knowledge of customer energy allows companies to manage their communication and offering development better and provides insight into the risk of losing a customer.
    Keywords: involvement; commitment; customer energy; segmentation; customer portfolio; customer dominant logic;
    Date: 2010–09–06
  5. By: Voima, Päivi (Hanken School of Economics); Heinonen, kristina (Hanken School of Economics); Strandvik, Tore (Hanken School of Economics)
    Abstract: This paper extends current discussions about value creation and proposes a customer dominant value perspective. A customer-dominant marketing logic positions the customer in the center, rather than the service provider/producer or the interaction or the system. The focus is shifted from the company´s service processes involving the customer, to the customer´s multi-contextual value formation, involving the company. It is argued that value is not always an active process of creation; instead value is embedded and formed in the highly dynamic and multi-contextual reality and life of the customer. This leads to a need to look beyond the current line of visibility where visible customer-company interactions are focused to the invisible and mental life of the customer. From this follows a need to extend the temporal scope, from exchange and use even further to accumulated experiences in the customer´s life. The aim of this paper is to explore value formation from a customer dominant logic perspective. This is done in three steps: first, value formation is contrasted to earlier views on the company’s role in value creation by using a broad ontologically driven framework discussing what, how, when, where and who. Next, implications of the proposed characteristics of value formation compared to earlier approaches are put forward. Finally, some tentative suggestions of how this perspective would affect marketing in service companies are presented. As value formation in a CDL perspective has a different focus and scope than earlier views on value it leads to posing questions about the customer that reveals earlier hidden aspects of the role of a service for the customer. This insight might be used in service development and innovation.
    Keywords: customer value; value creation; value formation; service dominant logic; customer dominant logic;
    Date: 2010–09–06
  6. By: Davis, Chris; Blayney, Don; Yen, Steven; Cooper, Joseph C.
    Abstract: Ice cream has been manufactured commercially in the United States since the middle of the 19th century. Ice cream and frozen dessert products comprise an important and relatively stable component of the United States dairy industry. As with many other dairy products, ice cream is differentiated in several dimensions. A censored translog demand system model was employed to analyze purchases of 3 ice cream product categories. The objective of this study was to determine the effect that changes in retail prices and consumer income have on at-home ice cream consumption. The analysis was based on Nielsen 2005 home scan retail data and used marital status, age, race, education, female employment status, and location in the estimations of aggregate demand elasticities. Results revealed that price and consumer income were the main determinants of demand for ice cream products. Calculated own-price elasticities indicated relatively elastic responses by consumers for all categories except for compensated bulk ice cream. All expenditure elasticities were inelastic except for bulk ice cream, and most of the ice cream categories were substitutes. Ongoing efforts to examine consumer demand for these products will assist milk producers, dairy processors and manufacturers, and dairy marketers as they face changing consumer responses to food and diet issues.
    Keywords: Nielsen home scan retail data; dairy demand; elasticity; ice cream
    JEL: Q1
    Date: 2009–12
  7. By: Patrali Chakrabarty; Bibek Banerjee
    Abstract: In this paper we demonstrate that the positive effects of comparative advertising are significantly diluted when a compared-to brand retaliates. Retaliation introduces sequencing in advertisements. We therefore evaluate sequelized advertisements (both comparative and noncomparative) alongside comparative advertisements and ordinary advertisements. We show that, given no threat of comparative advertising from competitors, sequelizing a popular advertisement may be as potent as comparative advertising, in terms of improving consumers’ recall as well as preference for the sponsored brand. Furthermore, an advertisement message may be directed at core benefits (and/or attributes) that a brand promises, or at a stylized theme or storyline that use peripheral cues to indirectly convey the brand’s deliverables. We incorporate this dimension of communication focus and conclude that while comparative advertisements are more effective with objective messages, noncomparative sequelized advertisements work better with thematic or story based messages. [W.P. No. 2010-08-01]
    Keywords: positive effects, comparative advertising, brand, communication focus, advertisements
    Date: 2010
  8. By: Kiesel, Kristin; Villas-Boas, Sofia B.
    Abstract: This paper investigates whether information costs prevent consumers from making healthier food choices under currently regulated nutritional labels in a market-level experiment. Implemented nutritional shelf labels reduce information costs by either repeating information available on the Nutritional Facts Panel, or providing information in a new format. We analyze microwave popcorn purchases using weekly store-level scanner data from both treatment and control stores in a difference-in-differences and synthetic control method approach. Our results suggest that information costs affect consumer purchase decisions. In particular, no trans fat labels significantly increase sales, even though this information is already available on the package. Low calorie labels significantly increase sales, while correlated low fat labels significantly decrease sales, suggesting that labeling response may also be influenced by consumers' taste perceptions. Finally, combining multiple claims in a single label reduces the effectiveness of the implemented labels. Our results provide direct implications for changes to the format and content of nutritional labeling currently considered by the Food and Drug Administration.
    Date: 2009–12–16
  9. By: Ambarish Chandra (University of British Columbia); Ulrich Kaiser (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: We examine the scope and value of targeted advertising in the magazine industry. We use data on reader characteristics at individual media, in contrast to previous work that has needed to infer this information from aggregate data. Our results show a strong relationship between subscriber characteristics and advertising prices. Advertisers clearly value more homogenous groups of readers, measured according to income, gender and age. Our results explain recent trends of declining advertising expenditures in print media, in favor of increasing online advertising.
    Keywords: targeted advertising; reader homogeneity; quantile regression; magazines; advertising rates
    Date: 2010–08
  10. By: Häckner, Jonas (Dept. of Economics, Stockholm University); Nyberg, Sten (Dept. of Economics, Stockholm University)
    Abstract: This study has three main objectives. First, we develop a realistic framework for studying the incentives to differentiate broadcasting in free-to-air TV markets. Consumers are allowed to vary the amount of time spent in front of the television set depending on preferences over program types (e.g., entertainment versus news), differences in the alternative cost of time and an Hotelling type dimension reflecting i.e., political positioning. Second, since empirical evidence suggest that different consumer segments are priced differently in the market for advertising, we analyze the implications of targeted advertising on the equilibrium level of differentiation. Third, we compare the equilibrium outcome with the socially optimal configuration. When consumers have no preferences over program types, standard Hotelling type results apply. Market forces minimize differentiation while the optimal degree is at an intermediate level. As preferences over program types get stronger the difference between optimal and market outcomes is initially reduced. However, when a large enough number of consumers start flipping between channels in order to avoid the least preferred program type, minimal differentiation suddenly becomes optimal while market forces leads to excessive differentiation. Hence, policies aimed at increasing diversity is beneficial only when viewers care little about program content.
    Keywords: Product Differentiation; TV Channels; Advertising
    JEL: L32 L82
    Date: 2010–09–03
  11. By: Anand Kumar Jaiswal; Rakesh Niraj
    Abstract: Extant research has widely investigated linear functional forms in satisfaction and loyalty models. In this study with the use of nonlinear form, the relationship between satisfaction, attitudinal loyalty, purchase loyalty and customer behavioral intentions, such as willingness to pay more and external and internal complaining responses in the context of business-to-consumer e-commerce, has been discussed. It has found modest empirical support for nonlinear effects in the relationship. Results support nonlinearity only in the case of attitudinal loyalty to internal complaining response link. Results also present evidence about the mediating role of attitudinal loyalty in the relationship between satisfaction, purchase loyalty, willingness to pay more and internal complaining responses. [W.P. No.2007-11-01]
    Keywords: Nonlinearity, satisfaction, attitudinal loyalty, purchase loyalty, behavioral intentions
    Date: 2010
  12. By: Matei, Lucica; Dinu, Teodora
    Abstract: The volume contains the papers presented during the 9th International Congress of the International Association on Public and Nonprofit Marketing (IAPNM) entitled "Regulation and Best Practices in Public and Nonprofit Marketing", organised by the Faculty of Public Administratiom of National School of Political Studies and Public Administration (NSPSPA), Bucharest, Romania, June 10-11, 2010. Structured in accordance with the sessions of the mentioned Congress, the volume includes papers and relevant contributions on marketing research development in the public administration, healthcare and social assistance, higher education, local development and, more generally, nonprofit organizations. The social marketing specific issues take an important part of the volume giving the diversity of the approached topics as well as the large number of researchers concerned with this matter. Though of small dimensions, the contents of the sessions dedicated the revival and reinvention of public marketing must be underlined, as well as of the transfer of public marketing best practices to the South-Eastern European states. Publishing this volume represents a term of the interest expressed by over 40 academic and research groups in Europe and other continents with interests in the public and nonprofit marketing field, as well as in other European states’ bodies that develop specific empirical studies.
    Keywords: Social Marketing;Public Administration;Reviving and Reinventing Public Marketing;Corporate Social Responsability;Nonprofit Organizations;Local Development
    JEL: M14 M31 L31
    Date: 2010–06–11
  13. By: Hilger, James; Rafert, Greg; Villas-Boas, Sofia B
    Abstract: The effect of expert opinion on demand for experience goods is difficult to quantify, as the relationship between purchases and reviews may be driven by product quality. Further, it is unclear whether a review-based demand effect is due to providing quality or existence information. Utilizing a retail �field experiment to overcome these obstacles, we �find a significant� positive average consumer response to expert opinion labels for wine. Demand decreases for low scoring wines and demand increases for wines scoring average or higher. Results indicate that expert opinion labels transmit quality information as opposed to solely shelf visibility.
    Date: 2010–08–05
  14. By: Axsen, Jonn; Kurani, Kenneth S
    Abstract: Plug-in hybrid electric vehicles (PHEVs) can be powered by gasoline, grid electricity, or both. To explore potential PHEV energy impacts, a three-part survey instrument collected data from new vehicle buyers in California. We combine the available information to estimate the electricity and gasoline use under three recharging scenarios. Results suggest that the use of PHEV vehicles could halve gasoline use relative to conventional vehicles. Using three scenarios to represent plausible conditions on PHEV drivers’ recharge patterns (immediate and unconstrained, universal workplace access, and off-peak only), tradeoffs are described between the magnitude and timing of PHEV electricity use. PHEV electricity use could be increased through policies supporting non-home recharge opportunities, but this increase occurs during daytime hours and could contribute to peak electricity demand. Deferring all recharging to off-peak hours could eliminate all additions to daytime electricity demand from PHEVs, although less electricity is used and less gasoline displaced.
    Keywords: UCD-ITS-RP-10-12
    Date: 2010–04–01

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