|
on Marketing |
|
Issue of 2011‒10‒15
24 papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Empen, Janine; Loy, Jens-Peter; Weiss, Christoph R. |
| Abstract: | Price promotions are important marketing activities for (food) retailers; brand loyalty is a major requisite to foster brands' assets. Several theoretical papers have analyzed the relationship between price promotions and brand loyalty resulting in mixed or perhaps contradictory outcomes; only a few empirical studies for (European) grocery markets are available to test which model(s) might be most relevant to reflect pricing strategies in food retailing. In this analysis, two detailed data sets for the German ready-to-eat breakfast cereals market are merged to investigate the relationship between price promotions and brand loyalty. We find significant empirical evidence that stronger brands tend to be promoted less frequently at lower discounts compared to weaker brands. The reason might be that price reductions are more costly for brands having loyal customers who are willing to accept higher mark-ups. Therefore stronger brands might need to come up with alternative measures to recruit new customers instead of offering attractive promotional sales. |
| Keywords: | Price Promotion, Brand Loyalty, Food Retailing, Ready-to-Eat Cereals, Germany, Instruments, Tobit, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114341&r=mkt |
| By: | Esteban Bravo, Mercedes; Lado, Nora |
| Abstract: | Rival firms often cooperate horizontally in order to share risks and achieve scale advantages in production or in their research and development projects. The output of these strategic alliances is usually sold by the individual ally company under its own brand and using its own marketing mix strategies. Marketing strategies create a cumulative effect that is reflected in brand value. Although horizontal alliances often have a significant overall impact on firm profitability, undesired brand value dilution is a worrisome possibility for the partners and therefore a relevant subject of study. In this paper, we consider brand value to be the economic added value of a brand, and propose two marketbased measures of brand value: (1) price premia (which are relevant for a unit sale) and (2) revenue premia (which also account for the premia in sales volume). We apply this analysis to the Spanish market for new automobiles, in which successful and long-lasting horizontal alliances have formed. Our findings suggest that, during the introduction stage of the product life cycle, horizontal allies did not charge different price premia, but that horizontal allies profit from differences in brand reputation obtained from demand side effects such as revenue premia (specifically, the impact on sales volume). Consequently, horizontal cooperation among brands does not dilute their value at the introduction stage. Furthermore, our results suggest that horizontal allies do charge different price premia during the growth stage of the product life cycle. Consequently, horizontal allies have recognized strategies that do not dilute brand value in intense competition mitigating the brand value diluting risk |
| Keywords: | Brand value; Revenue premia; Automobile market; Price premia; Marketing; |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/12259&r=mkt |
| By: | Klockner, Heike; Langen, Nina; Hartmann, Monika |
| Abstract: | Country of Origin (COO) labeling has been shown in several studies to be an important extrinsic cue for consumers in their quality evaluation of food products such as olive oil. COO has not been discussed in the context of pepper; a spice whichâs quality is highly dependant on its heritage. This is the first study that combines face-to-face interviews regarding attitudes, image and knowledge with a bind tasting of pepper and an investigation of consumer's WTP for pepper from different origins and processing characteristics. The study reveals that organic consumes are able to experience taste differences to due COO. They expect taste differences. But also concerned and involved consumers are not to that extent informed about COO that they rely in their purchase decision on COO information. As a result consumers are not willing to pay a significant higher price for COO labeled pepper. |
| Keywords: | Food Consumption/Nutrition/Food Safety, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:115963&r=mkt |
| By: | Bernabeu, Rodolfo; Olmeda, Miguel; Diaz, Monica |
| Abstract: | The commercialisation of wine in Spain is problematic due to two concrete circumstances: the decrease in wine consumption because of a consumer shift toward substitute drinks and the greater presence of national and foreign wine in the interior market, which involves an increase in business competitiveness. The increase in competitiveness of quality Spanish wine depends on producing enterprisesâ knowledge of wine consumer preferences so they can offer consumers what they demand. In order to respond to this matter and better adapt supply, 421 wine consumers were surveyed using the Best-Worst Scaling methodology. Various segmentations were also made by consumer income and age groups. The results indicate that the two main attributes which condition consumers in choosing wine are the region of origin and having tasted it previously. The region of origin attribute is valued in general by consumers over 34 years old who have a monthly family income above 1,500 â¬. The attribute of having tasted it before, which on many occasions is associated with the price attribute, is valued particularly by younger consumers and those with lower incomes. |
| Keywords: | Consumer behaviour, Wine attributes, Food Marketing, Consumer/Household Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114250&r=mkt |
| By: | Fauquet-Alekhine, Philippe; Fauquet-Alekhine-Pavlovskaia, Elena |
| Abstract: | Many researches have been done concerning the study of parameters which make people choose or not such product on the market. Concerning food industry, scientists have been involved in the analysis of technical parameters (nutrition, health characteristics) and their perception by the consumer, and in the analysis of psycho-sociological parameters linked with the perception of the product, or emotion associated with food or its environment. Other parameters investigated are suspicion of novelties, adherence to technology or to natural food, enjoyment, necessity. But what about the effect of words from the socio-psycholinguistic standpoint? It seems to be poorly investigated. Some claims: âIt doesnât matter how important the brand name is to the company, itâs what it means to the public that countsâ. Concerning the foreign migration of brands (the use of a brand from one country to another), some psychological functions associated with language are weakened in the communication process. If an undesirable link is built between the concept of the brand and another one in the target foreign market, this can come from some communication channels detailed in this study. The weakened psychological functions can be some of the causes, and the undesirable link built through the communication channels is the consequence. It is shown why unexpected links between the brand (or the product name) and an undesirable concept must be looked for in six dimensions (academic, common, popular, rude language, slang, and âno meaningâ language), and how an adapted advertisement campaign can enforced the psychological functions associated with language. |
| Keywords: | agronomy, product, marke, t marketing, food industry perception, psycholinguistic linguistic communication, language, foreign migration, brands, homonym, paronym, neograph, Consumer/Household Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114361&r=mkt |
| By: | Janssen, Meike; Hamm, Ulrich |
| Abstract: | Organic food is often labelled with an organic certification logo to gain consumer trust in the product integrity. The number of different organic certification logos in the European market raises the question whether consumers prefer specific logos over others. The aim of this paper is to analyse consumersâ willingness-to-pay (WTP) for different organic logos to give recommendations for actors in the organic sector. Choice experiments and structured interviews were conducted with 2,441 consumers of organic food in six European countries. The data was analysed with random parameter logit models. We found great differences between the tested logos regarding the price premium that consumers were willing to pay. The highest WTP was recorded for well-known logos that consumers perceived as credible with high production standards and a strict control system. It is thus recommended for suppliers of organic food to label products with an organic logo preferred by consumers. Organisations owning an organic logo should put effort into measures for increasing consumer awareness of the logo and forming consumer perceptions of the certification scheme behind it. |
| Keywords: | Organic logos, willingness-to-pay, credence goods, random parameter logit models, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114454&r=mkt |
| By: | Alfnes, Frode; Rickertsen, Kyrre; Shogren, Jason F. |
| Abstract: | We explore preference stability at the individual and market level. We examine individual bidding behavior among 116 French consumers who participated in experimental auctions conducted seven months apart for five types of fish. We reject preference stability at the individual level, but not at the aggregate market level. |
| Keywords: | aggregation, consumer preferences, demand, experimental auctions, food choice, Marketing, C91, D12, Q13, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114219&r=mkt |
| By: | Richards, Timothy J.; Allender, William J.; Fang, Di |
| Keywords: | Marketing, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114814&r=mkt |
| By: | Anders, Sven; Ahmad, Waseem |
| Keywords: | Health Economics and Policy, Marketing, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114223&r=mkt |
| By: | Drescher, Larissa S.; Marette, Stephan; Roosen, Jutta |
| Abstract: | For products with risky characteristics, there are many debates about the best way to inform consumers. Traffic-lights have been already implemented in the UK on food products to guide consumers in making healthier food choices. In response to the recent financial crisis, a discussion about the compulsory usage of traffic-light labels on financial products has started by politicians and media in the UK and Germany. Similarly to foods, a green label on financial products would highlight a positive product attribute level (such as an above average rate of return); yellow that special attention is needed, whereas red would identify an adverse attribute level. This paper presents results of a choice experiment conducted in Germany to evaluate the impact of traffic-light labelling on food purchases in comparison to financial product purchases. Special attention is given to consumersâ involvement level in food and financial product purchases. In general, results indicate that traffic-lights affect consumersâ purchases of both product groups. While the low-fat attribute has no significant impact on food choices without traffic-lights, it has a positive impact on choices once signalled with a traffic-light label. We find that traffic-lights on financial products result in a halo-effect for the variance of returns: without traffic-lights, a product with a high variance of returns is chosen less often but more often if the product is labelled with a traffic-light. |
| Keywords: | traffic-light labelling, consumer acceptance, food, financial products, Germany, Food Consumption/Nutrition/Food Safety, D03, D12, D14, D81, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114431&r=mkt |
| By: | Chiodo, Emilio; Casolani, Nicola; Fantini, Andrea |
| Keywords: | Consumer/Household Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114297&r=mkt |
| By: | Moeser, Anke |
| Abstract: | Im deutschen Lebensmitteleinzelhandel finden sich neben dem bekannten Sonderangebot vermehrt neue Aktionsformen wie âBOGOFâ, âRabattâ, âLinksaveâ oder âCouponsâ. Der vorliegende Beitrag diskutiert die Akzeptanz dieser unterschiedlichen Verkaufsförderungs-aktionen. Dabei ist davon auszugehen, dass Verbraucher zwischen dem Nutzen einer Aktion und dem Aufwand bei der Wahrnehmung der Aktion abwägen. Im Rahmen einer Verbraucherbefragung zeigt sich eine deutliche Verbraucherpräferenz für das bekannte Sonderangebot, während aufwändigere Aktionsformen wie der Coupon eher abgelehnt werden. Daneben sind Opportunitätskosten der Zeit und Einkaufsfähigkeiten der Verbraucher wichtige Einflussfaktoren auf die Nutzung einer Aktion. Sales promotions like price actions, but also new forms as âBOGOFâ, ârebatesâ, âlinksavesâ or âcouponsâ are widely used in the German retailing sector. This study discusses the consumer acceptance of these diverse promotion offers. It can be argued that consumers evaluate a promotion in dependence of the perceived utility and the costs using the promotion. Based on results of a consumer survey, consumers still favour the traditional price action, whereas promotions which involve more effort (e.g., coupons) are not accepted. Opportunity costs of time and consumer knowledge regarding buying decisions are identified as determinants of consumersâ choices. |
| Keywords: | Verkaufsförderungsaktionen, Lebensmitteleinzelhandel, multinomiale Logitanalyse, Cluster-analyse, Sales promotions, retailing sector, multinomial logit analysis, cluster analysis, Marketing, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi11:114499&r=mkt |
| By: | Bosbach, Moritz; Maietta, Ornella Wanda |
| Abstract: | Consumers in developed countries are increasingly interested in the consumption of food products incorporating ethical aspects, particularly fair trade products. These products are usually distributed in a network of World Shops and, more recently, in supermarkets and shopping centres. The fair trade product with the highest market share is coffee. This study aims to ascertain the implicit price paid by Italian consumers for the fair trade content of coffee and how this implicit price is influenced by the level of social capital of the territory where consumers live. The data utilised are scanner data, based on the purchase at supermarkets and shopping centres observed from 2005 to 2007, referred to a territorial unit that is the province. Since scanner data are used, the analysis can allow for the coffee attributes described by the labels: branded, organic, decaffeinated, fair trade, espresso, and so on. The approach followed is the application of an hedonic regression where the dependant variable is the coffee price while the regressors are coffee characteristics (fair trade content and coffee other attributes) and several indicators of provincial social capital, alternatively included. |
| Keywords: | hedonic price, coffee, fair trade, scaner data, Italian consumers, Consumer/Household Economics, Demand and Price Analysis, C50, D12, L66, Z13, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114371&r=mkt |
| By: | Russo, Carlo; Perito, Maria Angela; Di Fonzo, Antonella |
| Abstract: | Large retail chains have spent considerable resources to promote production protocols and traceability across the supply chain, aiming at increasing food safety. Yet, the majority of consumers are unaware of these private food safety standards (PFSS) and retailers are not informing them. This behavior denotes a pooling paradox: supermarkets spend a large amount of money for food safety and yet they forget to inform consumers. The result is a pooling equilibrium where consumers cannot discriminate among high quality and low quality products and supermarkets give up the potential price premium. This paper provides an economic explanation for the paradox using a contract-theory model. We found that PFSS implementation may be rational even if consumers have no willingness to pay for safety, because the standard can be used as a tool to solve asymmetric information along the supply chain. Using the PFSS, supermarkets can achieve a separating equilibrium where opportunistic suppliers have no incentive to accept the contract. Even if consumers exhibit a limited (but strictly positive) willingness to pay for safety, advertising may be profit-reducing. If the expected price margin is high enough, supermarkets have incentive to supply both certified and uncertified products. In this case, we show that, if consumers perceive undifferentiated products as âreasonably safeâ, supermarkets may maximize profits by pooling the goods and selling them as undifferentiated. This result is not driven by advertising costs, as we derive it assuming free advertising. |
| Keywords: | Agribusiness, Food Consumption/Nutrition/Food Safety, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:115987&r=mkt |
| By: | Luciano Fanti; Luca Gori |
| Abstract: | We analyse the dynamics of a Cournot duopoly game with heterogeneous players to investigate the effects of micro-founded differentiated products demand. The present analysis, which modifies and extends Zhang et al. (2007) Zhang, J., Da, Q., Wang, Y., 2007. Analysis of nonlinear duopoly game with heterogeneous players. Economic Modelling 24, 138–148) and Tramontana, F., (2010) (Tramontana, F., 2010. Heterogeneous duopoly with isoelastic demand function. Economic Modelling 27, 350–357), reveals that a higher degree of product differentiation may destabilise the market equilibrium. Moreover, we show that a cascade of flip bifurcations may lead to periodic cycles and ultimately chaotic motions. Since a higher degree of product differentiation implies weaker competition, then a theoretical implication of our findings, that also constitute a policy warning for firms, is that a fiercer (weaker) competition tends to stabilise (destabilise) the unique positive Cournot-Nash equilibrium of the economy. |
| Keywords: | Bifurcation; Chaos; Cournot; Oligopoly; Product differentiation. |
| JEL: | C62 D43 L13 |
| Date: | 2011–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2011/121&r=mkt |
| By: | Gracia, Azucena; de Magistris, Tiziana; Nayga, Rodolfo M., Jr. |
| Abstract: | The aim of the paper is to assess consumersâ willingness to pay (WTP) for a local food produced in a less-favoured area in the Aragon region (Spain). In particular, we examine whether consumers value lamb meat products (lamb and suckling lamb) labelled as âOjinegra from Teruelâ, traditionally produced in these area. We use a nonhypothetical experimental auction to elicit Spanish consumersâ WTP for âOjinegra from Teruelâ labelled lamb products. Results show that consumers are willing to pay a positive premium for a lamb and suckling lamb labelled as âOjinegra from Teruelâ. |
| Keywords: | Aragon, auction, label, preferences, willingness to pay, Demand and Price Analysis, Livestock Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114607&r=mkt |
| By: | de Magistris, Tiziana; Groot, Etienne; Gracia, Azucena; Albisu, Luis Miguel |
| Keywords: | Consumer/Household Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114449&r=mkt |
| By: | Demont, Matty; Zossou, Esperance; Rutsaert, Pieter; Ndour, Maimouna; Mele, Paul Van; Verbeke, Wim |
| Abstract: | In Benin, traditional parboiling is still widely practiced among rice processors, resulting in inferior grain quality. A new parboiler was introduced to improve the milling yield and quality of local rice. We conducted Vickrey second price auctions followed by a consensus session to elicit rural Beninese consumersâ willingness to pay for rice obtained through the new parboiler and two locally innovated parboilers. Relative to traditionally parboiled rice, consumers were willing to pay price premiums of 9â13% for rice obtained through a local parboiler using a container of which the bottom is a perforated metal, 27% for rice obtained through a local parboiler using wooden sticks at the bottom of the pot, and 25â34% for rice parboiled through the improved parboiler. Bids were influenced by the presentation order of the products according to perceived quality. Bids were also higher when participants had been informed on the benefits of improved parboiling techniques, a crucial insight for developing marketing and communication strategies for this improved quality product. |
| Keywords: | sub-Saharan Africa, food processing, experimental auction, food quality, Food Consumption/Nutrition/Food Safety, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114443&r=mkt |
| By: | Bolliger, Conradin |
| Keywords: | Consumer/Household Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114259&r=mkt |
| By: | Olearius, Gotz; Roosen, Jutta; Drescher, Larissa S. |
| Abstract: | German food retailing is characterized by fierce competition among retail chains for consumer shopping. This paper considers the switching behaviour using data of white dairy product purchases. The empirical investigation uses survival analysis approach, in particular hazard analysis. The results extend the knowledge of shopping behaviour by providing a new set of explaining variables and the importance of the first store, defined as store with the major share of household budget, becomes apparent. On average, households buy dairy products 42 times per year. Thereof only 21 % are retail chain switches. Generally a high customer loyalty is visible in this investigation. It is shown that switching behaviour is widely influenced - amongst others - by percentage of private label products, percentage of special offers and price consciousness. |
| Keywords: | switching behaviour, store choice, store loyalty, hazard analysis, food retailing, Geschäftsstättenwahl, Geschäftsstättenwechsel, Einkaufsverhalten, Hazard Analyse, Lebensmitteleinzelhandel, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Industrial Organization, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi11:114516&r=mkt |
| By: | Empen, Janine |
| Abstract: | Die Produktkategorie Joghurt gilt als hoch differenziert. In Deutschland sind über 2000 verschiedene Joghurts in mehr als 250 Produktlinien (z.B. âAlmighurtâ von Ehrmann) auf dem Markt erhältlich. Während fast alle Hersteller über ein breites Geschmackssortiment verfügen, ist die Produktion speziellerer Varianten, wie z.B. probiotische oder laktosefreie Joghurts auf wenige, internationale Konzerne oder Nischenmolkereien konzentriert. In diesem Beitrag wird analysiert, inwieweit die Preisgestaltung bei Joghurt anhand der Produkteigenschaften erklärt werden kann und welche Produktattribute von den Marktteilnehmern mit besonders hohen Preisaufschlägen bewertet werden. Dazu wird ein hedonisches Preismodell auf der Basis von Einzelhandelsscannerdaten, welche von 2005 bis 2008 in über 500 Geschäften aus ganz Deutschland wöchentlich erhoben wurden, geschätzt. Als Produktcharakteristika werden sowohl Eigenschaften berücksichtigt, die innerhalb einer Produktlinie variieren (Geschmacksrichtungen), als auch solche, die Produktlinien untereinander abgrenzen (Fettstufen, Verpackungsarten, Markenzugehörigkeit, spezielle Eigenschaften). Insgesamt kann 74 % der Preisvariation durch diese Produktattribute erklärt werden. Der Trend zu einer gesundheitsbewussteren Ernährung spiegelt sich in den Ergebnissen sehr deutlich wider. Probiotische (laktosefreie) Joghurts sind auf Einzelhandelsebene im Durchschnitt rund 15 % (67 %) teurer als naturbelassene Vollfettvarianten. Magerjoghurts (0,1 â 1,4 % Fett) können gegenüber den fettarmen Joghurts (1,5 â 3,4 % Fett) trotz niedrigerer Rohstoffkosten denselben impliziten Preis erzielen. Zudem spielt die Markenzugehörigkeit in der Preissetzung eine wichtige Rolle. Aus den Ergebnissen werden auch Implikationen für die milchverarbeitende Industrie abgeleitet. The yoghurt market shows a high degree of differentiation, innovations are launched on a frequent basis. In Germany, consumers can choose between more than 2000 different varieties. Whereas most manufacturers offer a wide assortment of different flavors, the production of specialties as e.g. probiotic or lactose-free yoghurts is concentrated on multinational food corporations or niche manufacturers. In this study, the question is addressed whether variations in yoghurt prices can be attributed to product characteristics. Furthermore, product attributes leading to particularly high price premiums are identified. We adopt a hedonic price model und use retail scanner data, which was collected from 2005 to 2008 in over 500 retail stores throughout Germany. Employing flavor, fat content, package type, brand name and special variations (probiotic, lactose-free and organic) as product characteristics, up to 74 % of the observed price variation can be explained. Yoghurts being lactose-free realize price premiums up to 67 % at the retail level and also yoghurts being perceived as healthy (low-fat and probiotic) are more expensive than pure full-fat yoghurts. Implications for the milk processing industry are also being discussed. |
| Keywords: | Hedonische Preisanalyse, Joghurt, Einzelhandelsscannerdaten, Hedonic Price Analysis, Yoghurt, Retail Scanner Data, Agribusiness, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi11:115362&r=mkt |
| By: | Nocella, Giuseppe; Stefani, Gianluca; Romano, Donato |
| Abstract: | Lack of consumer trust and communication strategies are probably the main determinants of information failure in modern food markets. This study attempts to tackle these aspects affecting the quality of food information by investigating questions related to what topics are more relevant to consumers, who should disseminate trustful food information, and how communication should be conveyed. Primary data were collected both through qualitative (in depth interviews and focus groups) and quantitative research. Quantitative research was conducted by means of a questionnaire administered in 2006-2007 to a sample of Italian respondents using both a web and a traditional mail survey. Reading preferences, willingness to pay and trust towards public and private sources conveying information through a hypothetical food magazine were assessed combining factor analysis, choice modelling and a criterion-based market segmentation. The study shows that reading preferences of Italian consumers can be summarized along three dimensions: agro-food system, enjoyment and wellness. Furthermore, willingness to pay for receiving food-related information is influenced by trust towards the type of publisher, which plays also a key role in market segmentation together with socio-demographic and economic variables such as gender, age, presence of children and income. Policy implications of these findings are discussed. |
| Keywords: | food information, trust, preference heterogeneity, segmentation, Italy, Food Consumption/Nutrition/Food Safety, D12, D18, D89, Q18, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114606&r=mkt |
| By: | Merel, Pierre R.; Sexton, Richard J. |
| Keywords: | Consumer/Household Economics, Marketing, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114651&r=mkt |
| By: | Pennings, Joost M.E.; Wansink, Brian; Hoffmann, Arvid O.I. |
| Abstract: | A conceptual marketing-finance framework is proposed which links channel contracting in agriculture and the use of financial facilitating services (e.g., financial derivatives) to (shareholder) value creation. The framework complements existing literature by explicitly including channel contract relationships as market-based assets that can be managed to reduce cash flow volatility and hence increase shareholder value. We show how financial facilitating services (e.g., derivatives) can be used to complement the cash flows components of channel contract relationships thereby further reducing the risk adjusted cost of capital and improving shareholder value. In a field study of producers, wholesalers, and processors, in the potato and meat industry the framework shows how shareholder value can be enhanced by using financial facilitating services, such as derivatives, to complement marketing channel relationships. Moreover, this study shows how producers and managers from agribusiness companies can use such financial services as conflict-solving tools in case of incongruent contract preferences between channel members. |
| Keywords: | marketing-finance, agricultural marketing strategy, decision-making, channels, Agribusiness, Agricultural Finance, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114785&r=mkt |