nep-mkt New Economics Papers
on Marketing
Issue of 2011‒11‒21
thirteen papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Marketing is all about taking money from customers (an application of Tobit model) By Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber
  2. Effects of Deceptive Advertising on Consumer Loyalty in Telecommunication Industry of Pakistan By Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz
  3. Media Selection for Marketing Communication - an exploratory study among marketing managers - By Rademaker, Claudia A.
  4. Decomposing First Mover Advantages in the Mobile Telecommunications Industry By JP Eggers; Michal Grajek; Tobias Kretschmer
  5. Virality, Network Effects and Advertising Effectiveness By Catherine Tucker
  6. Economic models of consumer protection policies By Armstrong, Mark
  7. Generating global brand equity through corporate social responsibility to key stakeholders By Anna Torres; Tammo H. A. Bijmolt; Peter Verhoef; Josep A. Tribó
  8. La prise en compte de la durabilité dans les stratégies marketing des PME : apports et limites By Aurier, P.; Masson, J.; Siadou-Martin, B.; Sirieix, L.
  9. Measuring Customer Delight: A Model for Banking Industry By Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz; Raheem, Saquib
  10. How do your rivals' releasing dates affect your box office? By Fernanda Gutierrez-Navratil; Victor Fernandez-Blanco; Luis Orea; Juan Prieto-Rodriguez
  11. Stock Market Reactions due to Announcements of Consumer Price Index and the Investigation of Endogeneity By Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber
  12. "Can Vehicle-to-Grid Revenue Help Electric Vehicles on the Market?" By George R. Parsons; Michael K. Hidrue; Willett Kempton; Meryl P. Gardner
  13. How Happiness Impacts Choice By Mogilner, Cassie; Aaker, Jennifer; Kamvar, Sepandar

  1. By: Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber
    Abstract: One of the key dimensions of business is marketing and when we say marketing we talk about creating more revenue every second. Sales are an important key to success for revenue generation and for this purpose various marketing strategies have been developed. Sales are always driven by customers/consumers, and this thought is in practice since the inception of the concept of business. This paper is an appreciation on the comprehension of various marketing strategies (i.e. Single Segment Strategy, Differentiated Strategy, Un Differentiated Strategy, Product Development, Establishing The Brand, Innovation strategy, Market Growth Shares, Porter Cost Leadership, Market Expansion, Pricing, Diversification), which only aim at generating revenues while proposing the Tobit model to assess the relationships of outlined various marketing strategies with the revenue generation (sales of the products/ services). The comprehensive findings of this research reveals that all strategic means are important for generating revenues in relevance to the products/ services which are being offered and confirms that all outlined marketing strategies are designed and configured with the intent to grab the money from every pocket, but single segment strategy and market growth share strategy matter the most in this connections. Whereas, the Tobit model is revealed as an appropriate and robust model to predict the outlined relationship.
    Keywords: Marketing Strategies; Sales; Customer Relationship; Marketing; Revenue; Tobit Model
    JEL: C02 M30 C01
    Date: 2011
  2. By: Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz
    Abstract: This study is an attempt to interrogate the effects of deceptive advertising on consumer loyalty in telecommunication industry of Pakistan. Four variables, Call Charges (CC), Network Coverage (NC), Network Quality (NQ) and Customer Service (CS) were used to measure deception in Telecom Ads and then its effect on consumer loyalty while the consumer preference is used as the proxy of consumer loyalty. 10,000 random individuals from telecom industry were selected to conclude the results. Testing specification confirmed that the deception overwhelmingly exists in telecom ads and none of the telecom companies were providing exactly the same quality of service in terms of Call Charges, Network Coverage, Network Quality and Customer Service, as they promise in their advertisements, while, the consumers are inclined towards the services where the deceptions are seemingly meager.
    Keywords: Advertising; Deceptive Advertising; Consumer Loyalty; Telecommunication
    JEL: L96 M3
    Date: 2011
  3. By: Rademaker, Claudia A. (Department of Marketing and Strategy)
    Abstract: For marketing managers, decisions in media planning and consequently the media selection are becoming increasingly complex and challenging as more media options are available. This exploratory study examines the factors that guide and influence marketing managers when selecting media for their ad campaigns. The extent to which green environmental issues, advertiser-agency cooperation and the economic recession influence media selection is focused on. The sample was chosen on the basis of a cluster analysis on annual media investments among the largest advertisers in Sweden. The results of the cluster analysis showed some correspondence with type of industry and revealed eight clusters with different portfolios of media expenditures. <P>The results of the interviews indicated that despite companies’ environmental policies, green environmental issues do not seem to be considered by the marketing managers in this study when selecting advertising media. Among the marketing managers it is perceived that considering the green environment when selecting advertising media is not part of their responsibility. <P>The results also indicated that the marketing managers spend a great amount of time on selecting and building relationships with new agencies. Rather than primarily agency performance evaluations, the marketing managers indicate personal chemistry to be a key element for good collaboration between advertisers and agencies. Compared to earlier studies on developing advertiser-agency relationships, the marketing managers in this study seem to be more similar to American than to Dutch marketing managers in the sense that they put social bonding before agency performance evaluations. The lack of personal chemistry was found to be one of the main reasons for companies to switch agencies. The interviews revealed that it is primarily the marketing manager that is involved in the media selection and that the role of agencies is to give additional secondary input on the matter. <P>The marketing managers in this study indicate that in times of an economic recession there is a stronger need to be flexible and to adjust marketing (communication) plans which is in line with prior research. In addition, the marketing managers perceive an economic recession to provide better negotiation opportunities with agencies and media suppliers. This study may add to previous findings by indicating that during an economic recession receiving special offers from media suppliers is popular among the marketing managers which may lead to adjustments of the marketing communication plan and thus to more ad hoc media decisions. <P>Furthermore, this study concludes with a discussion on the factors that may hinder marketing managers from performing more effective media selection, e.g. basing media selection on mostly previous experience, main agency appointment, short term agency collaboration and the non-use of models.
    Keywords: Marketing Managers; Media Selection; Advertising; Marketing Communication; Green Environment; Advertiser-agency Cooperation; Economic Recession
    Date: 2011–11–11
  4. By: JP Eggers; Michal Grajek; Tobias Kretschmer
    Abstract: We study first-mover advantages and organizational pre-entry experience in a market with highly heterogeneous consumers – the global mobile telecoms industry. Specifically, we consider the fact that early consumers will be different from later ones. We suggest that early entrants will attract higher-value consumers, which results in first-mover advantages. This effect will be enhanced if these firms have acquired prior technical experience. Conversely, later, mass-market adopters are attracted by established (domestic) brand names. Our empirical results from the global telecommunications industry support our assertions and provide importation insight for the study of first-mover advantages in high-technology industries.
    Keywords: First-mover advantage; Mobile telecommunications; Consumer-centric; Pre-entry experience; Firm pre-entry experience
    Date: 2011
  5. By: Catherine Tucker (MIT Marketing)
    Abstract: Many video ads are designed to go viral, so that the total number of views they receive depends on customers sharing the ads with their friends. This paper explores the relationship between achieving this endogenous reach and the effectiveness of the ad at persuading a consumer to purchase or adopt a favorable attitude towards a product. The analysis combines data on the real-life virality of 400 video ads, and crowd-sourced measurement of advertising effectiveness among 24,000 consumers. We measure effectiveness by randomly exposing half of these consumers to a video ad and half to a similar placebo video ad, and then surveying their attitudes towards the focal product. Relative ad persuasiveness drops on average by 10\% for every one million views the ad had received. Taking into account the advantages of increased reach, this means that there was a decline in overall advertising effectiveness at 3-4 million views. Importantly, ads that generated both views \emph{and} online engagement in the form of comments did not suffer from the same negative relationship. We show that such ads retained their efficacy because they achieved virality due to humor or visual appeal rather than because they were provocative or outrageous.
    Keywords: Social Networks, Video, Online Advertising
    JEL: M37
    Date: 2011–10
  6. By: Armstrong, Mark
    Abstract: This paper summarizes some of my recent work on consumer protection. I present three theoretical models which illustrate the merits and drawbacks of a number of common consumer protection policies, namely: policies which prevent firms from setting unduly high prices; policies which prevent firms requiring on-the-spot decision making by prospective customers, and policies which prevent suppliers from paying commission payments to sales intermediaries.
    Keywords: Consumer protection; consumer search; marketing; commission sales
    JEL: D18 M31 D83
    Date: 2011–11
  7. By: Anna Torres; Tammo H. A. Bijmolt; Peter Verhoef; Josep A. Tribó
    Abstract: In this paper we argue that corporate social responsibility (CSR) to various stakeholders (customers, shareholders, employees, suppliers, and community) has a positive effect on global brand equity (BE). In addition, policies aimed at satisfying community interests help reinforce credibility to social responsible polices with other stakeholders. We test these theoretical contentions using panel data comprised of 57 global brands originating from 10 countries (USA, Japan, South Korea, France, UK, Italy, Germany, Finland, Switzerland and the Netherlands) for the period 2002 to 2008. Our findings show that CSR to each of the stakeholder groups has a positive impact on global BE. In addition, global brands that follow local social responsibility policies over communities obtain strong positive benefits in terms of the generation of BE, as it enhances the positive effects of CSR to other stakeholders, particularly to customers. Therefore, for managers of global brands it is particularly productive for generating brand value to combine global strategies with the satisfaction of the interests of local communities
    Keywords: Global Brands, Brand Equity, Corporate Social Responsibility, Stakeholders
    Date: 2011
  8. By: Aurier, P.; Masson, J.; Siadou-Martin, B.; Sirieix, L.
    Abstract: This paper examines how SME managers in the agro-food sector include sustainable development into their marketing strategy. We focus on the link between sustainable development and performance, the impact of environmental factors on their practices and the limits that they perceive when trying to include sustainability into their marketing strategy. More than a marketing strength, sustainability appears as important for the people who work in the SME. However, there are some limits. ...French Abstract : Nous examinons dans cet article comment des directeurs de PME agroalimentaires à fort ancrage territorial s’approprient la notion de développement durable et l’expriment dans leurs stratégies marketing. Nous examinons successivement leur vision du lien entre développement durable et performance, l’impact des caractéristiques environnementales sur leurs pratiques et les limites qu’ils perçoivent à cette volonté d’intégrer la durabilité dans leur stratégie au moment de sa mise en œuvre. Au-delà de l’argument commercial, la durabilité apparaît comme un levier intéressant du projet d’entreprise et de la mobilisation des salariés. Néanmoins, la démarche comporte aussi des limites.
    JEL: M31 Q01
    Date: 2011
  9. By: Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz; Raheem, Saquib
    Abstract: Customer Satisfaction has been generally researched and is being used to attain competitive advantage. Since everyone in the market is trying to satisfy its customers, it becomes imperative for the organization to delight its customers. Customer delight in the banking sector study has found that how the account holder of banks can be delighted not just by their services but by reaching beyond the expectations of the customers. Research was initiated with exploratory investigation through 300 personal interviews to identify the elements that create delight in the mind of customers. This enabled the generation of a customer delight model with eight variables. These eight variables are the fundamentals of a customer delight model. Delight model was tested on 3000 Bank account holders confirming the successful validation of the research using t-test technique. The findings revealed that all eight variables are very necessary in delighting the customers.
    Keywords: Customer Delight; Customer Satisfaction; Customer Retention
    JEL: M31 A11
    Date: 2011
  10. By: Fernanda Gutierrez-Navratil (Departamento de Economia, Facultad de Economia y Empresa, Universidad de Oviedo); Victor Fernandez-Blanco (Departamento de Economia, Facultad de Economia y Empresa, Universidad de Oviedo); Luis Orea (Departamento de Economia, Facultad de Economia y Empresa, Universidad de Oviedo); Juan Prieto-Rodriguez (Departamento de Economia, Facultad de Economia y Empresa, Universidad de Oviedo)
    Abstract: In this paper, we study to what extent a movie's box office receipts are affected by the temporal distribution of rival films. We propose a theoretical model that analyses the effects of past, present and future releases on a film's results. Using this model we can analyse how rivals' release dates impact on others' box office revenues. This theoretical model also allows us to carry out some comparative statics by changing some relevant parameters such as time depreciation, film quality or the timeline of exhibition. We have tested the empirical implications of this model using information on the films released in five countries: the USA, the United Kingdom, Germany, France and Spain. In order to maintain a degree of homogeneity, we have constructed an unbalanced panel consisting of films that were released in at least three of these countries. The geographical dimension of our data set allows us to use panel data techniques to control for unobserved heterogeneity among the films released. This allows us to control for one of the most relevant features of the movie market, namely the presence of highly differentiated products.
    Keywords: temporal competition, movie exhibition, film industry, panel data, unobserved heterogeneity, differentiated product
    JEL: Z10
    Date: 2011–11
  11. By: Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber
    Abstract: In the financial market the very peculiar and key focus is about the trading volume response to Consumer price index (CPI). Therefore, taking CPI as one of the important economic variables, the Karachi Stock Exchange-100 index trading volume was investigated in connection with the CPI. The outcomes of this study suggested that CPI has a major association with the KSE-100 index trading volume. The statistical test further elaborated this significance and has revealed a negative relationship between CPI “Consumer price index” and “KSE-100 index trading volume”. Another interesting key feature to this research was the presence of endogeneity in the data used for the research.
    Keywords: Consumer price index (CPI) announcements; Trading Volume; Endogeneity
    JEL: O16
    Date: 2011
  12. By: George R. Parsons (Department of Environmental and Natural Resource Economics, University of Delaware); Michael K. Hidrue (Department of Economics, University of Delaware); Willett Kempton (Department of Electrical & Computer Engineering, University of Delaware); Meryl P. Gardner (Department of Business Administration, University of Delaware)
    Abstract: Vehicle-to-grid (V2G) electric vehicles can return power stored in their batteries back to the power grid and be programmed to do so at times when power prices are high. Since providing this service can lead to payments to owners of vehicles, it effectively reduces the cost of electric vehicles. Using data from a national stated preference survey (n = 3029), this paper presents the first study of the potential consumer demand for V2G electric vehicles. In our choice experiment, 3029 respondents compared their preferred gasoline vehicle with two V2G electric vehicles. The V2G vehicles were described by a set of electric vehicle attributes and V2G contract requirements such as “required plug-in time” and “guaranteed minimum driving range”. The contract requirements specify a contract between drivers and a power aggregator for providing reserve power to the grid. Our findings suggest the V2G concept is mostly likely to help EVs on the market if power aggregators operate on pay-as-you-go-basis or provide consumers with advanced cash payment (upfront discounts on the price of EVs) in exchange for V2G restrictions.
    Keywords: electric vehicles, vehicle-to-grid, stated preference, latent-class model
    JEL: Q42 Q51
    Date: 2011
  13. By: Mogilner, Cassie (University of PA); Aaker, Jennifer (Stanford University); Kamvar, Sepandar (MIT)
    Abstract: Consumers want to be happy, and marketers are increasingly trying to appeal to consumers' pursuit of happiness. However, the results of six studies reveal that what happiness means varies, and consumers' choices reflect those differences. In some cases happiness is defined as feeling excited, and in other cases happiness is defined as feeling calm. The type of happiness pursued is determined by one's temporal focus, such that individuals tend to choose more exciting options when focused on the future, and more calming options when focused on the present moment. These results suggest that the definition of happiness, and consumers' resulting choices, are dynamic and malleable.
    Date: 2011–10

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