nep-mkt New Economics Papers
on Marketing
Issue of 2011‒01‒30
six papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Consumer preferences and demand for livestock products in urban Bangladesh By Islam, S.M. Fakhrul; Jabbar, Mohammad A.
  2. Concentration and self-censorship in commercial media By Fabrizio Germano; Martin Meier
  3. Should they stay or should they go? Reactivation and Termination of Low-Tier Customers: Effects on Satisfaction, Word-of-Mouth, and Purchases By Bijmolt, Tammo H.A.; Blömeke, Eva; Clement, Michel
  4. Reports of Water Quality Violations induce Consumers to buy Bottled Water By Seo, Misuk; Pape, Andreas Duus
  5. Generating Global Brand Equity through Corporate Social Responsibility to Key Stakeholders By Bijmolt, Tammo H.A.; Atribo, Jo; Torres Lacomba, Anna
  6. Strategic Advertising for Entry Deterrence Purposes By COCCORESE, Paolo

  1. By: Islam, S.M. Fakhrul; Jabbar, Mohammad A.
    Abstract: Demand for animal products has been increasing rapidly in Bangladesh due to urbanization and increases in per capita income. There are rudimentary indications that demand for improved food quality and safety has also been increasing and that consumers were willing to pay higher prices for such attributes of products. However, there is little empirical evidence on the criteria and indicators of quality and safety that consumers use in their buying decisions, or that suppliers use in differentiating products to promote sales, or the extent to which consumers are willing to pay for such attributes. This study is the first attempt to comprehensively characterize and quantify Bangladeshi urban demand for animal products with a focus on quality and safety. Based on a multi-stage sample survey of 900 households from Dhaka and Mymensingh cities, successive analyses present statements of preference based on ratings, identified quality criteria, stated sources of supply and recent purchasing behaviour both at home and away from home, and econometric analysis of relationships between price ratings and quality ratings across attributes, so as to generate willingness to pay for those attributes. The findings show that officially defined grades and quality standards of livestock products are either absent or poorly defined and enforced. On the other hand, producers and consumers in the market use specific attributes or criteria and indicators to differentiate quality and safety of livestock products and they also charge and pay different prices based on those attributes. Although targeted at urban populations, considerable variation between locations in terms of the product preferences and attributes used to differentiate quality was identified. Establishment of standards and grades will become necessary to meet consumer demand on the one hand and facilitate producers and market agents to respond to consumer demand on the other. Whether smallholders will have any comparative advantage in supplying an expanding market requiring more homogenous and better quality and safer products need to be studied regularly along with studies on consumer demand because of the dynamic nature of the emerging and evolving market, the industry and the sector.
    Keywords: demand, quality, safety, livestock products, Bangladesh, Consumer/Household Economics, Livestock Production/Industries,
    Date: 2010
  2. By: Fabrizio Germano; Martin Meier
    Abstract: Within a simple model of non-localized, Hotelling-type competition among arbitrary numbers of media outlets we characterize quality and content of media under different ownership structures. Assuming advertising-sponsored, profit-maximizing outlets, we show that (i) topics sensitive to advertisers can be underreported (self-censored) by all outlets in the market, (ii) self-censorship increases with the concentration of ownership, (iii) adding outlets, while keeping the number of owners fixed, may even increase self-censorship; the latter result relies on consumers' most preferred outlets being potentially owned by the same media companies. We argue that externalities resulting from self-censorship could be empirically large.
    Keywords: Media economics; media consolidation; media markets; advertising and commercial media bias JEL Classification Numbers: L13; L82
    Date: 2010–12
  3. By: Bijmolt, Tammo H.A.; Blömeke, Eva; Clement, Michel (Groningen University)
    Abstract: Many companies face the problem of having a substantial number of low-tier customers ? clients at the bottom of the customer pyramid. For this segment, it is necessary to either reactivate or terminate the customer relationships to increase profitability. Managers seek to learn more about marketing actions targeted towards low-tier customers and their response towards these actions. Therefore, we conducted a large field experiment in which we implemented a ?last call? marketing action for a large sample of low-tier customers of a catalogue retailer (N = 12,000). The action aims at sales reactivation, but in case a customer should not react, the relationship will be terminated. We measure customer response in terms of satisfaction, (positive and negative) word-of-mouth, and purchase behavior. We find no harmful effects from relationship termination, such as dissatisfaction or negative word-of-mouth. The results indicate that the ?last call? marketing action reactivates a small fraction of the low-tier customers. These customers remain active in the months following the action period. We discuss managerial implications of our findings and future research on low-tier customer segments.
    Date: 2010
  4. By: Seo, Misuk; Pape, Andreas Duus
    Abstract: The 1996 Safe Drinking Water Act Amendments require that water utilities mail drinking water quality reports to their customers annually. The public uses this information; the news of a water quality violation makes a household 21% more likely to purchase bottled water in the following year. We estimate that about 768,000 additional Americans purchase bottled water because of reported violations. We measure reports of violations with Environmental Protection Agency (EPA) data about violation reports from 1,300 water utilities, with a service population of approximately 10 million people total. We measure the consumer response using the Consumer Expenditure (CEX) survey from 2006-2008 with 10,874 households, and we match consumers to utilities geographically.
    Keywords: Water Quality Reports; Environmental Information; Consumer Response to Information; Bottled Water Expenditure; Consumer Expenditure Survey
    JEL: D12 Q53 Q25
    Date: 2011–01
  5. By: Bijmolt, Tammo H.A.; Atribo, Jo; Torres Lacomba, Anna (Groningen University)
    Abstract: In this paper we argue that socially responsible policies have positive short-term and long-term impact on equity of global brands. We find that corporate social responsibility towards all stakeholders, whether primary (customers, shareholders, employees and suppliers) or secondary (community), have positive effects on brand equity value, where the secondary stakeholders are even more important than primary stakeholders. In addition, policies aimed at satisfying community interests act as a mechanism to reinforce trust that gives further credibility to social responsible polices with other stakeholders. The result is a decrease in conflicts among stakeholders and greater stakeholder willingness to provide intangible resources that enhance brand equity. We provide support of our theoretical contentions using a panel data composed of 57 global brands, originating from 10 countries (USA, Japan, South Korea, France, the UK, Italy, Germany, Finland, Switzerland and the Netherlands) for the period 2002 to 2007. We use detailed information on brand equity obtained from Interbrand and on corporate social responsibility provided by the Sustainalytics Global Profile (SGB) database, as compiled by Sustainalytics.
    Date: 2010
  6. By: COCCORESE, Paolo (CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy)
    Abstract: This paper evaluates the possible effects of advertising on conditions of entry in a market with one incumbent and one potential entrant. Through a game-theoretic framework, it is shown that the use of pre-entry advertising expenditures (which are supposed to exhibit diminishing returns) may discourage entry even when firms behave rationally and face the same conditions of cost and demand.
    Keywords: market structure; advertising
    JEL: L10
    Date: 2011–01–18

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