nep-mkt New Economics Papers
on Marketing
Issue of 2011‒02‒19
twelve papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Analysis of Value-Added Meat Product Choice Behaviour by Canadian Households By Zhang, Xu; Goddard, Ellen
  2. Advertising and R&D: Theory and evidence from France By Phillipe Askenazy; Thomas Breda; Delphine Irac
  4. Assembling the fractured European consumer By Marco Dani
  5. Goods versus characteristics: Revealed preference procedrues for nested models By Matthew Polisson
  6. Consumer Preferences for Country-of-Origin of U.S. Beef Products: A Meta Analysis By Xiaohua Yu; Zhifeng Gao
  7. Consumer Demand for Healthy Diet: New Evidence from the Healthy Eating Index By Zhifeng Gao; Xiaohua Yu; Jonq-Ying Lee
  8. Who Gained and Who Lost from Zambia's 2010 Maize Marketing Policies? By Nkonde, Chewe; Mason, Nicole M.; Sitko, Nicholas J.; Jayne, Thomas S.
  9. The Welfare Effects of Third-Degree Price Discrimination in a Differentiated Oligopoly By Takanori Adachi; Noriaki Matsushima
  10. Consumer Willingness to Pay for Preservative-Free Food: The Case of Beijing By Xiaohua Yu; Yinchu Zeng; Yuanyuan Liu
  11. Structuring the Smartphone Industry. Is the Mobile Internet OS Platform the Key? By Martin Kenney; Bryan Pon
  12. Virtual Socializing: Its Motives and Spread By Pillai, Rajasekharan; Rahul, Thoranath; Peringat, Beena Babu; Thilakarajan , Sindhya; Janardhanan, Neethu

  1. By: Zhang, Xu; Goddard, Ellen
    Abstract: The competitive landscape in retailing has changed over the past decade. Moreover, the degree of product differentiation has been increasing: households are able to choose between an increasing number of store brands and national brands of similar products. The value added meat market is no different than any other sector of the grocery market â both national brands and private label brands are being developed to appeal to the consumerâs desire for convenience, health, production and environmental attributes. Understanding the factors that are influencing consumersâ value added meat product preferences is important for meat manufacturers who wish to add value to their firmâs performance and increase market share. This knowledge is required in order to predict changes in demand and develop new products and marketing strategies that respond to changing consumer needs. The objective of the paper is to provide information on value added meat consumption patterns in Canada at the household level using household purchase information from a representative sample of the Canadian population collected through Nielsen Homescanâ¢. Specifically the focus is on how meat consumers make their decision to purchase value-added meat products â the impact of value added meat types, store choices and brands preference on meat demand. The study undertakes an empirical investigation of Canadian household value added meat demand for the period 2002 to 2007. A comparison of consumersâ preferences is performed with respect to store-switching, brand loyalty and meat expenditure. Multivariate regression analysis is employed to explain consumer preferences for the examined stores, products and brands. We find that meat price, advertising, the number of stores visited, household socio-demographic characteristics and regional segments are strongly related to meat expenditure levels. Value added meat product preferences vary widely across meat types - for example, consumer behaviour towards pork is not a good predictor of behaviour towards poultry, in terms of national brand/store brand choice. The data developed in this analysis can highlight6 marketing opportunities that exist for meat producers and processors to increase the value of total sales for their particular products. The results of this study highlight the impact of number of stores regularly shopped at on purchases of national brand versus private label meat products, the impact of expenditure on meat by product form on national brand versus private label and the impact of demographic and regional variables on all meat purchases, by animal species.
    Keywords: consumer behaviour, store loyalty, meat demand, value-added meat, national/store brand choice, Consumer/Household Economics, Demand and Price Analysis, D1, M3,
    Date: 2010–12
  2. By: Phillipe Askenazy (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, IZA - Institute for the Study of Labor - IZA, Banque de France - Banque de France); Thomas Breda (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Delphine Irac (Banque de France - Banque de France)
    Abstract: This paper exploits a unique panel of 59,000 French firms over 1990-2004 to investigate the interactions between R&D, advertising and the competitive environment.The empirical findings confirm the predictions of a dynamic model that complements results known in static frameworks. First, more competition pushes Neck and Neck firms to advertise more to attract a larger share of consumers on their products or services. Second, for a given competitive environment, quality leaders spend more in advertising in order to extract maximal rents; thus, lower costs of ads may favor R&D.
    Keywords: advertising ; innovation ; competition ; Lerner
    Date: 2010–12
  3. By: Marco Marini; Alberto Zevi (University of Urbino "Carlo Bo", University of Roma "La Sapienza")
    Abstract: Consumer cooperatives constitute a highly successful example of democratic forms of enterprises operating in developed countries. They are usually organized as medium and large-scale ?rms competing with pro?t-maximizing ?rms in retail industries. This paper models such situation as a mixed oligopoly in which consumer cooperatives maximize the utility of consumer-members and distribute them a share of the pro?t equal to the ratio of their individual expenditure to the ?rm total sales. We show that when consumers possess quasilinear preferences over a bundle of symmetrically di¤erentiated goods and ?rms operate with a linear technology, the presence of consumer cooperatives a¤ects all industries output and social welfare positively. The e¤ect of cooperatives on welfare proves more signi?cant when goods are either complements or highly di¤erentiated and when competition is à la Cournot rather than à la Bertrand.
    Keywords: Consumer Cooperatives, Pro?t-maximizing Firms, Mixed Oligopoly
    Date: 2011
  4. By: Marco Dani
    Abstract: Recognised and shaped by regulatory strategies pulling in different directions, the European consumer may be portrayed as a fractured subject. By drawing from the Pasta and Hormones litigation, the article investigates its multiple and heterogeneous identities as resulting from the interaction between domestic, EU and WTO law. It argues that the fractured consumer could be viewed as a realistic legal projection of the human condition of actual individuals engaging in consumer activities, and sets out an adjudicative strategy for assembling its identities at an argumentative level so as to do the best by their promises and counter their biases. The article concludes by suggesting that the conceptual framework construed around the fractured consumer could improve the transparency and contestability of adjudication and policy-making.
    Date: 2011–01–01
  5. By: Matthew Polisson
    Abstract: This paper compares the goods and characteristics models of the consumer within a traditional demand framework. We examine the nonparametric revealed preference conditions for the goods and characteristics models, and we develop a methodology for testing nested models of this class using nonparametric revealed preference techniques. Of primary interest is to make a comparison on the basis of predictive success, which requires that we develop a method to relate set predictions across models. This allows us to nonparametrically identify the model which best fits the data, and in doing so, to identify the value added by the characteristics structure in explaining consumer behavior. We then explore the effects of hypothetical price variation as implied by our findings in order to nonparametrically bound any comparative statics of interest. We implement these procedures on household panel data from the UK milk market. The primary result is that the better fit of the characteristics model is entirely attributable to dimension reduction.
    Keywords: Characteristics, demand, dimension reduction, nested models, revealed preference
    JEL: D11 D12
    Date: 2011
  6. By: Xiaohua Yu (Georg-August-University Göttingen); Zhifeng Gao (University of Florida)
    Abstract: By conducting a meta-analysis with 50 observations collected from 15 primary studies, we systematically analyze heterogeneities in consumer preferences for the Country-of-Origin (COO) of U.S. beef products. The main findings include that consumers in Asian countries (Korea and Japan) are willing to pay least for the COO of U.S. beef products compared with North American countries, and that the BSE incidence in the U.S. substantially damaged consumer preferences for the COO of U.S. beef products outside the U.S. but not in the U.S. The results also indicate that choice experiments yield larger WTP values and that the sample size is negatively correlated with WTP values.
    Keywords: U.S. beef; COO; WTP; Meta analysis
    JEL: Q18 Q51
    Date: 2011–02–08
  7. By: Zhifeng Gao (University of Florida); Xiaohua Yu (Georg-August-University Göttingen); Jonq-Ying Lee (University of Florida)
    Abstract: A large volume of literature has been focusing on the measure of diet quality and consumer demand for food. However, little has estimated consumer demand for diet quality. In this article, we systematically estimate consumer demand for diet quality using the healthy eating index (HEI) developed by the U.S. Department of Agriculture. The Results show that consumers have insufficient consumption of the food containing dark green, orange vegetable, legumes and total grain. Age and education have significant impact on consumer demand for diet quality but income does not. The own price elasticities of demand for diet quality are inelastic and are larger than cross price elasticities. Asymmetric cross price elasticity exists between the diet quality of solid fats, alcoholic beverages and added sugars and the quality of other diet groups. This information is critical in policies and programs that are designed to improve consumer healthy food choice which can reduce social cost of public health.
    Keywords: Healthy Eating Index; Diet quality; Demand; Household production; Translog cost function
    JEL: D12
    Date: 2011–02–08
  8. By: Nkonde, Chewe; Mason, Nicole M.; Sitko, Nicholas J.; Jayne, Thomas S.
    Abstract: Zambiaâs record-breaking maize harvest of nearly 2.8 million metric tons (MT) in 2010 is a major achievement and a testimony to what input subsidies, output price incentives, and favorable weather can do to elicit a major supply response. Maize-growing smallholders harvested more than in previous years and so have more to eat. Public markets are currently well stocked with maize grain, to the benefit of urban consumers and maize-buying rural households. Farmers who were able to sell their crop to the Food Reserve Agency (FRA) at K65,000 per 50-kg bag, a price well above market levels, have clearly benefited from the bumper crop and FRAâs involvement in maize marketing. The FRAâs high buy price and purchase of nearly 900,000 MT of maize are also likely to have put upward pressure on market prices for maize. As a result, farmers who sold maize to private sector buyers may have benefited indirectly from the FRAâs activities. However, the policies adopted by the Zambian government (GRZ) to handle the 2010 maize bumper crop have produced both winners and losers. This paper examines the key features of the 2010/11 GRZ maize marketing policies and their likely income distributional effects on various stakeholder groups: large-scale farmers, three categories of smallholder households (net sellers of maize, net buyers of maize, and those that neither buy nor sell maize), urban consumers, millers, traders, and government. We then propose a set of alternative policies GRZ could use to manage future maize bumper crops and explore the likely distributional effects of these policies on the various stakeholder groups.
    Keywords: food security, marketing, agricultural policy, zambia, Agricultural and Food Policy, Food Security and Poverty, International Development, Marketing,
    Date: 2011–01
  9. By: Takanori Adachi; Noriaki Matsushima
    Abstract: This paper studies the relationship between horizontal product differentiation and the welfare effects of third-degree price discrimination in oligopoly. By deriving linear demand from a representative consumer's utility and focusing on the symmetric equilibrium of a pricing game, we characterize the conditions relating to such demand properties as substitutability and complementarity for price discrimination to improve social welfare. In particular, we show that price discrimination can improve social welfare if firms' brands are substitutes in a market where the discriminatory price is higher and complements in one where it is lower, but welfare never improves in the reverse situation. We verify, however, that consumer surplus is never improved by price discrimination; welfare improvement by price discrimination is solely due to an increase in the firms' profits. This means that there is no chance that firms suffer from a "prisoners' dilemma," that is, firms are better off by switching from uniform pricing to price discrimination.
    Date: 2011–01
  10. By: Xiaohua Yu (Georg-August-University Göttingen); Yinchu Zeng (Renmin University of China); Yuanyuan Liu (Renmin University of China)
    Abstract: Consumers are facing a trade-off between the benefits of an increase in the length of the shelf life of food, such as low food costs, and the potential health damages caused by food preservatives. However, few studies in the current literature place emphasis on food preservatives, neither from a scientific perspective nor from an economic perspective. This causes a lot of controversies about government regulations. By constructing a theoretical framework and using a survey of 293 customers from 25 supermarkets in Beijing, this paper studies the consumer attitude towards food preservatives and attempts to fill the gap in the current literature. The main findings include that food price, and consumers’ age and income are important for the willingness to pay (WTP) for “preservative-free food” in Beijing. In particular, food price and consumer incomes are positively correlated with the WTP and there might be an inverted U-shaped relationship between age and WTP. This study indicates that consumers in Beijing are willing to pay a very high premium for preservative-free food —62% for preservative-free Mooncakes compared to conventional ones.
    Keywords: Preservative-Free Food; Willingness to Pay; Double-Bounded Dichotomous Choice; Mooncakes; Beijing
    JEL: I12 Q18
    Date: 2011–02–08
  11. By: Martin Kenney; Bryan Pon
    Abstract: Until the introduction of the iPhone, cellular telephony and the Internet were essentially separate. The Internet was a PC-based service, while mobile telephony was conducted on a telephone. Though there were mobile products that provided communication services such as email, web access and other Internet services were either unavailable or inferior to those available on a PC. The “smartphone” cate-gory redefined by Apple meant the convergence of traditional mobile telephony, Internet services, and personal computing. As these sectors merge into a single device, formerly separate industry architec-tures and their constituent firms are being forced into direct competition. We test theories of industry architecture and technological platforms regarding their ability to explain the strategies of key entrants in navigating the transition. We analyze in detail the actions and strategies of four major competitors, including Apple, Google, Microsoft, Nokia, and, more briefly, Research in Motion and HP/Palm, from the framework of technological platform theory. Our analysis suggests that currently some competitors are following traditional platform strategies, but that Google and Apple appear to have adopted strate-gies at odds with platform literature. We examine how the dynamics of this convergence may lead to a reconsideration of certain tenets of platform theory.
    Keywords: platforms, industry structure, smart phones, Android, iPhone
    Date: 2011–02–10
  12. By: Pillai, Rajasekharan; Rahul, Thoranath; Peringat, Beena Babu; Thilakarajan , Sindhya; Janardhanan, Neethu
    Abstract: Virtual communities constitute an important attribute through which social dialogues are mediated. The emergence of online communities is the outcome of the prevalence of web based technologies. In the world of inter and intra connectedness individuals have the prerogative to get connected to the community of their choice. The present study examines the magnitude and motivations of online social networking through field survey method.
    Keywords: virtual socializing; online communities; social networking; virtual platforms; virtual communities
    JEL: P36 D71
    Date: 2011–02

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