nep-mkt New Economics Papers
on Marketing
Issue of 2011‒11‒28
eleven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. How Do Experience and Shopping Frequency Affect Consumers Brand Choice? By Farina, Tatiana
  2. Measuring Consumers' Attachment to Geographical Indications: Implications for Competition Policy By Hassan, Daniel; Monier-Dilhan, Sylvette; Orozco, Valérie
  3. Home Bias in U.S. Beer Consumption By Rigoberto A. Lopez; Xenia Matschke
  4. Strategic Pricing and Health Price Policies By Bonnet, Céline; Réquillart, Vincent
  5. Marketing Response Models for Shrinking Beer Sales in Germany By Wolfgang Polasek
  6. Entry of Wal-Mart Supercenters and Supermarkets' Profit Margins By Rigoberto A. Lopez; Xiaoou Liu
  7. On the importance of prior relationships in bank loans to retail customers By Manju Puri; Jörg Rocholl; Sascha Steffen
  8. An evaluation of government proposed restrictions on television advertising of food products to children By Joshua P. Berning; Rui Huang; Adam Rabinowitz
  9. THE RELATIONSHIP BETWEEN ONLINE ENVIRONMENTS AND CUSTOMER SATISFACTION (IRAN COMPUTER HARDWARE INDUSTRY) By Reza Gheshmi; Ali Haj Aghapour; Mehrdad salehi; Mojtaba Saeidinia; Bahdor Ganjeh Khosravi; Hadi Rasoulzadeh; Mahmoud Manafi
  10. Market Share Indicates Quality By Amir Ban; Nati Linial
  11. Refundability and Price: Empirical Analysis on the Airline Industry By Seongman Moon; Makoto Watanabe

  1. By: Farina, Tatiana
    Date: 2011–10
  2. By: Hassan, Daniel; Monier-Dilhan, Sylvette; Orozco, Valérie
    Abstract: Geographical Indications (GIs) are considered as upmarket products because they are based on tradition and convey information about their geographical origin. Otherwise, the limitation of the geographical areas devoted to GIs and the exclusivity they benefit on the product lead to suspicions of monopoly power. Quality and market power should however reflect a stronger attachment, making consumers less price sensitive than for standard goods. This research aims to compare theses conjectures to empirical measures concerning the French cheese market. Price elasticities are computed from a demand model on 21 products, 11 Protected Designation of Origin (PDO) products and 10 non PDOs. The results are counterintuitive, PDOs being as price elastic as or more price elastic than standard products. This finding thus challenges the widespread idea that PDOs systematically correspond to high quality. It also has important implications in terms of competition policy, showing that PDO cheeses suppliers cannot decide on price increases without suffering large reductions in demand.
    Keywords: Geographical indications, demand model, price elasticities, competition policy
    JEL: C51 D12 Q18
    Date: 2011–03
  3. By: Rigoberto A. Lopez (Department of Agriculture and Resource Economics, University of Connecticut); Xenia Matschke
    Abstract: We apply the Berry, Levinsohn, and Pakes (1995) market equilibrium model to data from 30 brands of beers sold in 12 U.S. cities over 20 quarters (1988-92) to estimate the consumers’ taste for beer characteristics (price, alcohol content, and calories) and cultural regions of origin (USA, Anglo- European, Germanic, and U.S. border countries). Consumer heterogeneity is allowed with respect to age and income. Overall, we end up with 7,200 beer brand and 13,920 consumer observations. Empirical results indicate that there is home bias with respect to foreign beers, which is less accentuated among older and more affluent individuals.
    Keywords: Home bias, beer, country of origin, demand, differentiated products.
    JEL: D12 F14 L66
    Date: 2011–08
  4. 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 I18
    Date: 2011–04
  5. By: Wolfgang Polasek (Institute for Advanced Studies, Vienna, Austria; University of Porto, Porto, Portugal)
    Abstract: Beer sales in Germany are confronted for several years with a shrinking market share in the market of alcoholic beverages. I use the approach of sales response function (SRF) models as in Polasek and Baier (2010) and adapt it to time series observation of beer sales for simultaneous estimation. I propose a new class of growth sales (gSRF) models having endogenous and exogenous variables as in Polasek (2011) together with marketing efforts that follow a sustained growth allocation principle. This approach allows to model growth rates in markets that are exposed to fierce competition and where marketing efforts cannot be evaluated directly. The class of gSRF models has the property that it models supply (i.e. marketing efforts) and demand factors jointly in a log-linear regression model that are correlated over time. The estimated model can explain the relative success of marketing expenditures for the shrinking beer market in the period 1999-2010.
    Keywords: Sales response functions (SRF), marketing budget models, MCMC estimation, beer consumption, optimal budget allocation
    Date: 2011–11
  6. By: Rigoberto A. Lopez (Department of Agriculture and Resource Economics, University of Connecticut); Xiaoou Liu
    Abstract: This article quantifies the impact of Wal-Mart Supercenters on supermarkets’ profitability via a two-stage dynamic entry game, using method of simulated moments and milk scanner data from Dallas/Fort Worth supermarkets. The empirical findings show that the entry of Wal-Mart Supercenters accounts for about an average 50% decrease in milk profit margins for incumbent supermarkets. Effects of scale are found to be more significant for Wal-Mart Supercenters than for incumbent supermarkets, granting Wal-Mart a competitive edge.
    Keywords: Wal-Mart, entry, profit margins, milk, dynamic games
    Date: 2011–06
  7. By: Manju Puri (Duke University, Durham, NC 27708, USA, and NBER); Jörg Rocholl (European School of Management and Technology, Schloßplatz 1, 10178 Berlin, Germany.); Sascha Steffen (University of Mannheim, L5.2, 68131 Mannheim, Germany.)
    Abstract: This paper analyzes the importance of retail consumers’ banking relationships for loan defaults using a unique, comprehensive dataset of over one million loans by savings banks in Germany. We find that loans of retail customers, who have a relationship with their savings bank prior to applying for a loan, default significantly less than customers with no prior relationship. We find relationships matter in different forms, scope, and depth. Importantly, though, even the simplest forms of relationships such as transaction accounts are economically meaningful in reducing defaults, even after controlling for other borrower characteristics as well as internal and external credit scores. Our results suggest that relationships of all kinds have inherent private information and are valuable in screening, in monitoring, and in reducing consumers’ incentives to default. JEL Classification: G20, G21.
    Keywords: Retail banking, relationships, default rates, monitoring, screening.
    Date: 2011–11
  8. By: Joshua P. Berning (Department of Agriculture and Resource Economics, University of Connecticut); Rui Huang (Department of Agriculture and Resource Economics, University of Connecticut); Adam Rabinowitz (Department of Agriculture and Resource Economics, University of Connecticut)
    Abstract: Several US agencies have collectively worked to establish voluntary principles to guide how firms market food to children and to establish a threshold for the nutritional quality of foods marketed to children. Based on the proposed standards, the authors evaluate television advertising for breakfast cereals, which is both heavily advertised and a common meal item for children. They find that the majority of cereals advertised from 2006-2008 do not meet the nutritional guidelines for sugar content. Cereals that do not meet the nutritional guidelines generate more overall advertising exposure than cereals that do. Further, children and adolescents are exposed to more advertising for products that do not meet the nutritional guidelines. Exposure to advertising is greatest for children 2-11, particularly for cereals that are high in sugar content. Based on prior history of cereal reformulations and the large share of products that fail to meet the guidelines for sugar indicates there might be potential for further reformulation of these products to meet the proposed principles.
    Keywords: nutrition guidelines, television advertising, voluntary restrictions
    Date: 2011–11
  9. By: Reza Gheshmi (Islamic Azad University, Marvdasht Branch, Marvdasht, Iran); Ali Haj Aghapour (Multimedia Universiti ,Cyberjaya); Mehrdad salehi (MSU); Mojtaba Saeidinia (MSU); Bahdor Ganjeh Khosravi (Multimedia Universiti ,Cyberjaya); Hadi Rasoulzadeh (Islamic Azad University, Boukan Branch, Boukan, Iran); Mahmoud Manafi (Islamic Azad University, Marvdasht Branch, Marvdasht, Iran)
    Abstract: In this quantitative article research first, the main factors in customer satisfaction in online environment of Iran in hardware industry with process based-view are identified. Secondly relationships between identified factors in online environment of Iran and customer satisfaction are investigated
    Keywords: Online Environment, Customer satisfaction, and Process Based-View
    JEL: M0
    Date: 2011–10
  10. By: Amir Ban; Nati Linial
    Abstract: Market share and quality, or customer satisfaction, go hand in hand. Yet the inference that higher market share indicates higher quality is seldom made. The skepticism is in part fueled by elitism, the association of mass popularity with lower quality, and by cynicism, ascribing market leadership to an entrenched position. We find that though such skepticism is often justified, it is correct to make a Bayesian inference that the product with the higher market share has the better quality under rather tame assumptions.
    Date: 2011–10
  11. By: Seongman Moon (Universidad Carlos III de Madrid); Makoto Watanabe (Universidad Carlos III de Madrid)
    Abstract: This paper provides new evidence on price dispersion in the US airline industry. Using the observed fare differences between refundable and non-refundable tickets, we first document evidence on the prices passengers pay for a refund option. We find that the factors related to the value of refund option and customers¡¯ individual demand uncertainty have a significant effect on the relative refund fares. This finding is robust for various market structures. Further, taking into account the variations of the relative refund fares, we investigate the effects of market structure on price dispersion.
    Keywords: Price discrimination, Refundability, Competition, Airline industry
    JEL: D43 L13 L93
    Date: 2011

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