nep-mkt New Economics Papers
on Marketing
Issue of 2011‒03‒26
four papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Nonmetric Unfolding of Marketing Data: Degeneracy and Stability By Velden, M. van de; Beuckelaer, De A.; Groenen, P.J.F.; Busing, F.M.T.A.
  2. The Effect of Customer Loyalty Programs on the Shopping Behavior in Retail : Loyalty Programs versus Loyalty Cards in the German Food Retail By Nikola Ziehe; Raina Stoll
  3. Is technology-enhanced credit counseling as effective as in-person delivery? By John M. Barron; Michael E. Staten
  4. Consumer Reactions To Unobserved Changes in Price Schedules By Peter Katuscak

  1. By: Velden, M. van de; Beuckelaer, De A.; Groenen, P.J.F.; Busing, F.M.T.A.
    Abstract: Nonmetric unfolding is a powerful (nonparametric) analytical tool generating a preference-based joint display of subjects (e.g., customers) and objects (e.g., brands or products). Systematic patterns in customers’ preferences can be directly inferred from this display, and may provide valuable input for making important marketing decisions such as deciding what new product to launch. Unfortunately, nonmetric unfolding frequently produces degenerate unfolding solutions (i.e., unfolding solutions showing close-to-perfect model fit irrespective of the data analyzed). As a degenerated display shows ill-positioned customers and brands/products, the chance of making an incorrect marketing decision (e.g., launching the wrong product) is very high. To solve this problem adequately, we combine bootstrapping with penalized nonmetric unfolding (Prefscal) to obtain an accurate, nondegenerate and stable unfolding solution.
    Keywords: perceptual mapping;customer preference modeling;nonmetric multidimensional unfolding;bootstrap analysis
    Date: 2011–03–11
  2. By: Nikola Ziehe (Department of Economics of the Duesseldorf University of Applied Sciences); Raina Stoll (Department of Economics of the Duesseldorf University of Applied Sciences)
    Abstract: This empirical study will show how bonus programs, particularly loyalty programs and loyalty cards, have an impact on the purchasing behavior of consumers in the german food retail trade. The study was carried out by students of the Bachelor degree program in Business Administration from the University of Applied Sciences Duesseldorf. The study results are based on two study parts: firstly, there has been an oral survey of consumers in the food retail business. To study the effect of loyalty programs and loyalty cards on the purchasing behavior and customer loyalty will be found in the food retail trade. In addition, several forces were conducted expert interviews with managers who are intensively engaged in their professional environment with customer loyalty programs. In this case was of interest to which customer loyalty measures are carried out with what success and how they affect the purchasing behavior of consumers. It should also found out what at the consumers better works: loyalty programs or customer cards. In conclusion, it is fair to say that bonus programs are suitable as a tool for customer loyalty and a high impact on the purchasing behavior and attitudes of consumers in the german food retail trade. It became clear that the success of a bonus program primarily depends on the design of programs by the retail trader. An interesting bonus program with attractive premiums is critical to the consumers.
    Keywords: customer loyalty, customer loyalty programs, loyalty programs, loyalty cards, Payback, Kundenbindung, Kundenbindungsmaßnahmen, Treueprogramme, Kundenkarten
    JEL: M30 M37
    Date: 2011–02
  3. By: John M. Barron; Michael E. Staten
    Abstract: This paper compares outcomes for borrowers who received face-to-face credit counseling with similarly situated consumers who opted for counseling via the telephone or Internet. Counseling outcomes are measured using consumer credit report attributes one or more years following the original counseling. The primary analysis uses data from a sample of 26,000 consumers who received credit counseling either in-person or via the telephone during 2003. A second sample of 12,000 clients counseled in 2005 and 2006 was provided by one of the agencies to examine Internet delivery. Technology-assisted delivery was found to generate outcomes no worse -- and at some margins better -- than face-to-face delivery of counseling services.
    Keywords: Consumer credit ; Financial literacy ; Finance, Personal
    Date: 2011
  4. By: Peter Katuscak
    Abstract: Economic theory presumes that individuals respond to true marginal prices when de- ciding on the amount of goods and services they buy and many other economic decisions. However, learning about these marginal prices is often costly in terms of search time, cog- nitive effort or monetary outlays. This is likely to be true of price changes in subscription plans. Consumers may therefore opt to be satisfied with only an approximate knowledge of the relevant marginal prices. This paper presents an experiment that studies repeated consumer purchase and price information updating and acquisition decisions when param- eters of the price schedule are serially correlated but unknown. Subjects have an option to acquire the pricing information at a cost, or otherwise just update their beliefs based on the observation of the total cost of purchase. We find the following: (1) conditional on information acquisition decisions, the model of Bayesian updating provides a good approx- imation for revealed mean beliefs about the per-unit price held by subjects who appear to understand the experiment and/or report their expected cost of purchase accurately; it is not a good approximation for other subjects; (2) the demand for information decreases with the cost of information, as expected; (3) controlling for Bayesian beliefs and cost of information, the demand for information does not vary with the length of the remaining time horizon in which the information can be used, contrary to the theoretical prediction; (4) large positive surprises in the cost of purchase in the most recent period increase infor- mation demand, whereas negative surprises decrease it, relative to the no-surprise baseline, which is contrary to the theoretical prediction.
    Keywords: price scheme; complexity; consumer decisions
    JEL: D12 D83
    Date: 2011–02

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