nep-mkt New Economics Papers
on Marketing
Issue of 2011‒08‒22
five papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. The impact of context and promotion on consumer responses and preferences in out-of-stock situations By Nicole Wiebach; Jana L. Diels
  2. The Software Value Chain as an Analytical Framework for the Software Industry and Its Exemplary Application for Vertical Integration Measurement By Pussep, Anton; Schief, Markus; Widjaja, Thomas; Buxmann, Peter; Wolf, Christian Michael
  3. Sales and Collusion in a Market with Storage By Francesco Nava; Pasquale Schiraldi
  4. Conference summary: federal regulation of the prepaid card industry: costs, benefits, and changing industry dynamics By Philip Keitel
  5. Do supermarkets reduce the number of traditional bookshops? An empirical application to the textbook market in Spain By Aday Hernandez; Juan Luis Jimenez

  1. By: Nicole Wiebach; Jana L. Diels
    Abstract: In general, consumer preferences depend on the context of a decision situation. This paper highlights the context-dependence of substitution behavior in out-of-stock (OOS) situations and provides evidence for the relevance of promotion as essential driver of customers' OOS reactions. We demonstrate both theoretically and empirically how OOS-induced preference shifts can be explained and predicted using context and phantom theory. In a series of experiments, we show that consumers substitute in accordance to a negative similarity effect, which is reduced for stock-outs of promoted low-involvement FCMGs. If a similar substitute is offered at a reduced price, the effect is enforced. For dissimilar substitutes, we show the contrary. The empirical findings further suggest an augmented probability of purchase postponement and a significant smaller chance of brand switching for stock-outs of promotional products. Furthermore, our study emphasizes outlet switching as a so far uninvestigated OOS reaction and discusses implications for retailers and manufacturers.
    Keywords: Out-of-Stock, Context Effects, Phantoms, Promotion, Preference Shifts
    JEL: M31 C12 C13 C81
    Date: 2011–08
  2. By: Pussep, Anton; Schief, Markus; Widjaja, Thomas; Buxmann, Peter; Wolf, Christian Michael
    Abstract: The value chain concept disaggregates a firm into the various activities it performs. Abstracting from the firm-level this concept has also been applied to industries as a whole. In this paper we conceptualize a software specific value chain and provide a first proof of concept. Our approach aggregates and unifies findings from a literature review on industry-level value chains, software value chains, and related concepts. The resulting unified software value chain comprises eleven activities: product research, component procurement, product development, user documentation, production and packaging, marketing, implementation, training and certification, maintenance and support, operations, and replacement. A first proof of concept is provided through expert interviews with software firms. Furthermore, we present an example that shows how the software value chain can be applied to measure the degree of vertical integration in the software industry.
    Keywords: software industry, value chain, software value chain, vertical integration, degree of vertical integration, vertical integration measurement
    Date: 2011
  3. By: Francesco Nava; Pasquale Schiraldi
    Abstract: Sales are a widespread and well-known phenomenon that has been documented in several product markets. Regularities in such periodic price reductions appear to suggest that the phenomenon cannot be entirely attributed to random variations in supply, demand, or the aggregate price level. Certain sales are traditional and so well publicized that it is difficult to justify them as devices to separate informed from uninformed consumers. This paper presents a model in which sellers want to reduce prices periodically in order to improve their ability to collude over time. In particular, the study shows that if buyers have heterogeneous storage technologies, periodic sales may facilitate collusion by magnifying intertemporal linking in consumers' decisions. The stability and the profitability of different sale strategies is then explored. The optimal sales discount and timing of sales are characterized. A trade-off between cartel size and aggregate profits arises.
    Keywords: Storage, sales, collusion, cartel size, repeated games
    JEL: L11 L12 L13 L41
    Date: 2011–07
  4. By: Philip Keitel
    Abstract: On April 8-9, 2010, the Payment Cards Center of the Federal Reserve Bank of Philadelphia hosted a conference that brought together leaders in the prepaid card industry, regulators, consumer groups, law enforcement agents, and industry researchers to discuss the economics of prepaid cards and the benefits and costs of their regulation from the standpoint of several different product categories. In particular, the conference examined ways in which prepaid card products can differ, how the industry has developed over time, ongoing industry dynamics, ways in which the usefulness of prepaid products to criminals might be limited, whether consumers who use prepaid cards are adequately protected, and the challenges facing regulators. This paper summarizes the highlights from the presentations given at the conference and the discussions that ensued.
    Keywords: Point-of-sale-systems ; Consumer credit
    Date: 2011
  5. By: Aday Hernandez; Juan Luis Jimenez (University of Las Palmas de Gran Canaria. Facultad de Economía, Empresa y Turismo)
    Abstract: Some countries, especially in Europe, regulate the textbook market due to its special characteristics. In 2000, the Spanish Government passed a law that relaxes resale price maintenance and lets retailers give discounts of up to 25% off the gross price. Traditional bookshops do not favour this policy. We construct a database for the Canary Islands (a Spanish Autonomous Community) on schools, bookshops, population and other control factors. Our empirical objectives are twofold: first, we explore whether malls force the exit (or encourage entry) of bookshops; second, we test whether these larger retailers decrease consumer welfare by increasing distance from schools to points of sale. The results show that malls are not as bad as bookshops claim
    Keywords: Textbooks, Competition, Regional economic activity
    JEL: Z11 R11
    Date: 2011–07

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