nep-mkt New Economics Papers
on Marketing
Issue of 2011‒05‒14
eleven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Consumer’s perceptions regarding Dacia cars prices, insights and lessons to be learned By Cruceru, Gheorghe; Micuda, Dan
  2. The Simple Economics of Hog Marketing Reforms in Quebec By Gervais, Jean-Philippe; Lambert, Remy
  3. How to Make a 29% Increase Look Bigger: Numerosity Effects in Option Comparisons By M. PANDELAERE; B. BRIERS
  4. Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees By Victor Stango; Jonathan Zinman
  5. Margins and Market Shares: Pharmacy Incentives for Generic Substitution. By Brekke, Kurt Richard; Holmås, Tor Helge; Straume, Odd Rune
  6. Customer Reactions in Out-of-Stock Situations – Do promotion-induced phantom positions alleviate the similarity substitution hypothesis? By Jana Luisa Diels; Nicole Wiebach
  7. The consumer empowerment index. A measure of skills, awareness and engagement of European consumers By Nardo, Michela; Loi, Massimo; Rosati, Rossana; Manca, Anna Rita
  8. Strategic Pricing and Health Price Policies By Bonnet, Céline; Réquillart, Vincent
  9. CSR firm profiles and innovation: An empirical exploration with survey data By Rachel Bocquet; Christian Le Bas; Caroline Mothe; Nicolas Poussing
  10. The attractiveness of a modern and contemporary art museum By JG. Brida; Marta Meleddu; Manuela Pulina
  11. The comeback of the Swiss watch industry on the world market: a business history of the Swatch Group (1983-2010) By Donzé, Pierre-Yves

  1. By: Cruceru, Gheorghe; Micuda, Dan
    Abstract: Price is one of the four classical elements of marketing mix and for long-term goods, as is the case of automobiles; price plays an important role in the purchasing decision. Therefore identifying consumer’s perceptions about the price of the cars is a key factor in establishing the marketing policy of any automobile producer. This paper analyzes Romanian customer’s perceptions of Dacia car prices and aims to determine whether the manufacturer succeeded in transmitting the Romanian customers the idea of affordability regarding his products.
    Keywords: prices, marketing mix, perceptions, financing.
    JEL: M31 D12
    Date: 2011–05
  2. By: Gervais, Jean-Philippe; Lambert, Remy
    Keywords: Hogs, marketing, vertical coordination, auctions, Industrial Organization, Livestock Production/Industries, Marketing,
    Date: 2010–11–01
    Abstract: Consumers prefer quantitative to qualitative information, yet the same quantitative information can appear as different numbers (e.g., 7-year warranty = 84-month warranty). The current paper demonstrates that consumers focus more on the number of units (7 versus 84) than on the type of units (year versus month), which implies a unit effect. The same attribute difference expressed as a higher number of units induces a perception of being larger (Study 1). When consumers receive the same information on different scales, the unit effect disappears (Study 2). Because differences in quality for the various options appear inflated due to the use of a scale with more units, consumers may switch away from a lower quality option when the quality ratings employ many units (Study 3). Finally, the unit effect implies that consumers are more sensitive to proportional differences and ratios of attribute levels when the attribute expression relies on many units rather than a few units (Study 4).
    Date: 2011–02
  4. By: Victor Stango; Jonathan Zinman
    Abstract: We explore dynamics of limited attention in the $35 billion market for checking overdrafts, using survey content as shocks to the salience of overdraft fees. Conditional on selection into surveys, individuals who face overdraft-related questions are less likely to incur a fee in the survey month. Taking multiple overdraft surveys builds a “stock” of attention that reduces overdrafts for up to two years. The effects are significant among consumers with lower education and financial literacy. Consumers avoid overdrafts not by increasing balances but by making fewer debit transactions and cancelling automatic recurring withdrawals. The results raise new questions about consumer financial protection policy.
    JEL: D14 D18 G13 G21
    Date: 2011–05
  5. By: Brekke, Kurt Richard (Dept. of Economics, Norwegian School of Economics and Business Administration); Holmås, Tor Helge (Stein Rokkan Centre for Social Studies); Straume, Odd Rune (University of Minho)
    Abstract: We study the impact of product margins on pharmacies’ incentive to promote generics instead of brand-names. First, we construct a theoretical model where pharmacies can persuade patients with a brand-name prescription to purchase a generic version instead. We show that pharmacies’substitution incentives are determined by relative margins and relative patient copayments. Second, we exploit a unique product level panel data set, which contains information on sales and prices at both producer and retail level. In the empirical analysis, we find a strong relationship between the margins of brand-names and generics and their market shares. In terms of policy implications, our results suggest that pharmacy incentives are crucial for promoting generic sales.
    Keywords: Pharmaceuticals; Pharmacies; Generic Substitution.
    JEL: I11 I18 L13 L65
    Date: 2010–07–07
  6. By: Jana Luisa Diels; Nicole Wiebach
    Abstract: Out-of-Stock (OOS) is a prevalent problem customers face at the POS. In this paper, we demonstrate both theoretically and empirically how OOS-induced substitution patterns can be explained and predicted by means of context and phantom theory. We further analyze the relevance of promotions, for which OOS is most pronounced, as essential driver of differences in customers’ OOS reactions. The results of an online experiment demonstrate that customers substitute unavailable items in accordance to a negative similarity effect which is reduced, however, for OOS items on promotion. The empirical findings further suggest that customers’ OOS responses differ for promoted vs. non-promoted items. We find that customers being affected by a stock-out of promotional products significantly more often postpone purchases and tend to avoid substitution resulting in severe losses for the retailer. However, for non-promoted items, customers easily switch to alternative brands. That way, manufacturers lose profit and possibly loyal customers.
    Keywords: Out-of-Stock, Context Effects, Phantoms, Promotion, Consumer Decision Making
    JEL: M31 C12 C13 C81
    Date: 2011–05
  7. By: Nardo, Michela; Loi, Massimo; Rosati, Rossana; Manca, Anna Rita
    Abstract: The Consumer Empowerment Index is a pilot exercise, aimed at obtaining a first snapshot of the state of consumer empowerment as measured by the Eurobarometer survey (Special Eurobarometer n. 342). It is neither a final answer on empowerment nor a comprehensive study on all the different facets of consumer empowerment, but instead it is meant to foster the debate on the determinants of empowerment and their importance for protecting consumers. This report describes the steps followed in the construction of the Index of consumer Empowerment. In particular the definition of the theoretical framework, the quantification of categorical survey questions, the univariate and multivariate analysis of the dataset, and the set of weight used for calculating the scores and ranks of the Index. The report also discusses the robustness of the results and the relationship between the Index and the socio-economic characteristics of the respondents in order to identify the features of the most vulnerable consumers. The Consumer Empowerment Index identifies Norway as the leading country followed by Finland, the Netherlands and Germany and Denmark. The middle of the ranking is dominated by western countries such as Belgium, France, and UK, with an average score 13% lower than the top five. At the bottom of the Index are some Eastern and Baltic countries like Bulgaria, Lithuania, Poland, and Romania with a score 31% lower on average (this gap reaches 40% and 38% in Awareness of consumer legislation and Consumer skills). A group of southern countries, Italy, Portugal, and Spain score poorly in the Index, especially in the pillar Consumer skills where the gap with the top performers reaches 30%.
    Keywords: Consumer empowerment; composite indicators
    JEL: D18 D1
    Date: 2011–04
  8. By: Bonnet, Céline; Réquillart, Vincent
    Abstract: Healthier food diet is likely to prevent numerous non communicable diseases. Then there is a growing interest in evaluating the impact of food price taxation on food consumption. However, strategic reactions of both manufacturers and retailers are missing in empirical analysis. Rather, passive pricing is assumed. We develop a structural econometric model, to analyze vertical relationships between the food industry and the retail industry. We apply this model to the beverage industry and consider taxation of sugar. After selecting the ’best’ model of vertical relationships, we simulate different taxation scenarios. We consider excise tax as well as ad valorem tax. We find that firms behave differently when facing an ad valorem tax or an excise tax. Excise tax is overshifted to consumer prices while ad valorem tax is undershifted to consumer prices. We find that an excise tax based on sugar content is the most efficient at reducing soft drink consumption. Our results also indicate that ignoring strategic pricing by firms leads to misestimate the impact of taxation by 15% to 40% depending on the products and the tax implemented.
    Keywords: excise tax, ad valorem tax, vertical contracts, strategic pricing, differentiated products, soft drinks
    JEL: H32 L13 Q18 I18
    Date: 2011–04
  9. By: Rachel Bocquet (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Christian Le Bas (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Nicolas Poussing (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen)
    Abstract: This paper explores the relationship between different Corporate Social Responsibility (CSR) strategies and innovation. Using a survey carried out on CSR behavior of Luxembourg firms, we found two types of firms as far as CSR practices are concerned. Cluster 1 firms adopted CSR practices to achieve economic goals without resorting to the formalization of these practices. In contrast, cluster 2 firms "learn CSR by doing" and by establishing CSR procedures and tools. Then  we match Community Innovation Survey (CIS) data and specific data collected on CSR clusters. We estimate Logit models to explain the different types of innovation (product, process, organizational). In comparison with the firms which don't adopt CSR, firms in Cluster 1 are more innovative in  terms of product and process once we control for firm characteristics and innovation drivers while firms in cluster 2 tend to reject innovation in process and adopt organizational innovation. These results, which show the link between the various CSR practices and innovation types, have important consequences in terms of managerial recommendations and public policy support for innovation.
    Keywords: Corporate Social Responsibility; Innovation; Organizational; Practices; Product; Process
    Date: 2011
  10. By: JG. Brida; Marta Meleddu; Manuela Pulina
    Abstract: This paper analyses the different factors influencing the intention to revisit a cultural attraction with an application to the Museum for Modern and Contemporary Art (MART) of Rovereto (Italy). The empirical data were obtained from a survey undertaken from September to November 2009 and a zero-truncated count data model is estimated. The findings reveal that, on the one hand, socio-demographic characteristics positively influence the probability to return. Also, as reported in other studies, the temporary exhibitions offered by the museum have a significant impact with a incidence rate ratio of almost two times. On the other hand, no matter how much the visitors spend on accommodation, are less likely to revisit if they travel in groups, by train or foot, are farer from their town of origin and spent longer visiting the museum.
    Keywords: museum; cultural economics; repeat visitation; zero-truncated Poisson; Rovereto (Italy)
    JEL: D12 L83 C19
    Date: 2011
  11. By: Donzé, Pierre-Yves
    Abstract: The objective of this paper is to contribute to a better understanding of the comeback of the Swiss watch industry on the world market since the end of the 1980s. It focuses on the Swatch Group (SG), currently the world’s biggest watch company. In 1983, the merger of the largest watch group (SSIH) and of the trust controlling the production of parts and movements of watches (ASUAG) into SG was the main measure taken to overcome the Japanese competition. Managed since 1986 by Nicolas G. Hayek (1928-2010), SG experienced a high growth and recovered its competitiveness on the world market, becoming a driving force for the entire Swiss watch industry. This success is traditionally explained by the firm itself and by scholars as the result of the launch of a new product (Swatch, a cheap plastic quartz watch first marketed in 1983) and the persistence of an old technical culture in Switzerland which enabled this rebirth. This paper, based on SG annual reports, focuses on the strategy adopted by SG since 1983. It shows that, rather than product innovation (Swatch), it was the rationalization and globalization of the production system (concentration of strategic parts’ production in Switzerland; transfer of production facilities in Asia), together with a new marketing strategy (brand segmentation, distribution and retailing facilities, communication, etc.) which were the two main sources of the comeback of the Swiss watch industry on the world market. While Japanese still attach great attention to product innovation, SG largely established its competitiveness on non-technological innovation.
    Keywords: Watch Industry; Switzerland; Swatch Group; Luxury Goods; Marketing Strategy
    JEL: M31 N80
    Date: 2011–04

This nep-mkt issue is ©2011 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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