nep-mkt New Economics Papers
on Marketing
Issue of 2011‒12‒13
eighteen papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. A study on the association between brand awareness and consumer/brand loyalty for the packaged milk industry in Pakistan By Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber
  2. Can we curb retail sales volatility through marketing mix actions? By Mercedes Esteban Bravo; Gökhan Yildirim; Jose Vidal-Sanz
  4. Leadership in Multi-sided Markets By Federico Etro
  5. Would you prefer a set menu or à la carte? An empirical study of multiple services and choices of consumer in the Swedish telecommunications market By Srinuan, Pratompong; Srinuan, Chalita; Bohlin, Erik
  6. National advertising and cooperation in a manufacturer-two-retailers channel By Ben Youssef, Slim; Dridi, Dhouha
  7. Preference for Variety By Karen Kaiser; Rainer Schwabe
  8. One-deal-fits-all?: On category sales promotion effectiveness in smaller versus larger supermarkets. By Haans, A.J.; Gijsbrechts, E.
  9. The Welfare Effects of Third-Degree PriceDiscrimination in a Differentiated Oligopoly By Takanori Adachi; Noriaki Matsushima
  10. High correlation between net promoter score and the development of consumers' willingness to pay (Empirical evidence from European mobile markets) By Jeanjean, François
  11. Product Bundling and Incentives for Merger and Strategic Alliance By Sue Mialon
  12. Informative Advertising, Consumer Search and Transparency Policy By Wang, Chengsi
  13. Téléprésence, nouvelles sociabilités et stratégies identitaires dans l’expérience de consommation en ligne. By Reineri-Brial, Bérangère
  14. Using social media data to understand mobile customer experience and behavior By Hsu, Wenling; Jacobsen, Guy; Jin, Yu; Skudlark, Ann
  15. Case study on the hybrid business model: KT's OTS By Song, Minzheong
  16. Markups and export pricing By Gullstrand, Joakim; Olofsdotter, Karin; Thede, Susanna
  17. An analysis of mobile internet service in Thailand: Implications for bridging digital divide By Srinuan, Chalita; Srinuan, Pratompong; Bohlin, Erik
  18. Willingness to pay for wholesome canteen takeaway By Nordström, Jonas

  1. By: Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber
    Abstract: Brand awareness remains fundamental to consumer life as the interaction initiation point to the brands. This paper put forwards the relationship of brand awareness on consumer/brand loyalty in the packaged milk brands in the urban Pakistan. There is evidence of brand awareness and consumer/brand loyalty on brand equity. The approach takes into account sources of brand equity-brand awareness, consumer/brand loyalty and image (perceptions / associations) on the sample of consumer households. This paper suggests that in Pakistan among the packaged milk brands there is no relationship between brand awareness and consumer/brand loyalty. In addition, testing relationship by setting perceptions as the mediating variable between brand awareness and consumer/brand loyalty results the same. For practicing managers and marketers it is important to note that there is a need to update their understanding of the nature and role of brand awareness on convenience products which has random switch purchase behavior and low-involvement. In the current era, marketers must develop branding strategies for commodity-products such as milk packaged brands by investing and strengthening its supply chain system, to create and increase brand awareness for the milk brands in-turn to build consumer/brand loyalty than trying to directly build consumer/brand loyalty by heavy spending on promotional tools.
    Keywords: brand awareness; consumer/brand loyalty; brand equity; brand perception
    JEL: M31 M39
    Date: 2011
  2. By: Mercedes Esteban Bravo; Gökhan Yildirim; Jose Vidal-Sanz
    Abstract: Sales uncertainty is a central problem for marketing management. Marketers tend to focus on expected sales, rather than short-term time-varying oscillations. With long supply-chain streams, the Bullwhip effect can turn retail sales volatility into a major problem for upstream companies. While it has been recognized that conditional expected sales change through time (for a review see Dekimpe and Hanssens, 2000), marketers have not yet started to modeling explicitly time variation of sales' conditional variances. In this paper we focus on this issue, modeling and forecasting time-varying retail sales and marketing mix volatility and their crossed effects within brand, and between competitive brands. We analyze up to 6 product categories sold by Dominick's Finer Foods, finding volatility and co-volatilities in all of them. We discuss managerial implications for brand management and competitive strategy.
    Keywords: Sales, Volatility, Bullwhip effect, Marketing mix
    Date: 2011–11
  3. By: Rosetta Lombardo (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: Business activity and consumption activities are recognised as impacting, often negatively, on the environment. The challenge of ‘satisfying the needs of the present generation without compromising the chance for future generations to satisfy theirs’ requires, however, contributions by all societal actors. A growing number of firms “overcomply” with environmental regulation for several reasons. Firms satisfy consumer demand and try to shape that demand. In doing so, they may create a taste for environment protection and sustainability. Corporate social responsibility has received considerable attention. The concept of ‘consumer social responsibility’ has received comparatively little attention probably because of the dominance of the notion of consumer sovereignty. If consumers’ perception of corporate social responsibility practices drives their purchase behaviour, firms are motivated to invest in socially responsible practices. However, there exists a wide gap between positive attitudes toward social responsibility and actual purchase behaviours. This paper tries to shed some light on what affects individuals’ perceptions about their responsibilities as citizens/consumers and their consumption behaviour.
    Keywords: Environment, Sustainability, Corporate Social Responsibility, Consumer Sovereignty, Consumer Social Responsibility, Preferences, Social norms
    JEL: D01 D21 D62 M14 Q28
    Date: 2011–11
  4. By: Federico Etro (Department of Economics, University Of Venice Cà Foscari)
    Abstract: I analyze the role of leadership in multi-sided markets as online advertising. Search and display advertising are better characterized by (respectively) quantity and price competition. A platform that reached dominance in search may have an incentive to limit services to consumers to be aggressive with the advertisers, to exploit its scale in search to build barriers to entry, or to adopt click-weighted auctions to manipulate the pricing of sponsored links. On the other side, a dominant platform in display advertising may increase the rewards of content providers to increase prices on advertisers, or may adopt exclusive clauses to predate on other platforms.
    Keywords: Multisided markets, Leadership, Dominance
    JEL: L1
    Date: 2011
  5. By: Srinuan, Pratompong; Srinuan, Chalita; Bohlin, Erik
    Abstract: Received analyses state that firms can use a bundling strategy to retain customers and capture new customers. Factors that determine the bundling strategy include product discount, service provider and customer characteristics. Consequently, this study addresses the fundamental question: What are the key determining factors that explain the probability that a consumer will buy multiple services? A Poisson regression model is employed to examine whether the product discount, service provider, socio-economic variables and geographical location impact on consumer decisions. Data from a national survey in 2009 commissioned by Post-och Telestyrelsen, the Swedish telecommunications regulator, are analysed. The results clearly show that the discount, service provider and income of the consumer affect the consumer's buying decision. For example, a consumer who receives a discount or has a high income is more likely to buy a bundle service (set menu) or select more services from the current service provider into his basket than a consumer who buys an individual service (à la carte). Service providers, cable TV operators and telecommunications carriers can also lock-in their consumer and expand their market position from one particular service to another using bundle services. Thus, this may be the time for the telecommunications regulator to consider the market definition. --
    Date: 2011
  6. By: Ben Youssef, Slim; Dridi, Dhouha
    Abstract: We consider a supply channel composed of one manufacturer and two retailers. Three cases are studied. The non-cooperative one is a leader-follower relationship. The manufacturer determines his spending in national advertising and the whole sale price. Then, the retailers determine non-cooperatively the price for consumers. The second case is a partial-cooperative one where retailers decide jointly for the price. In the third case, all members of the channel cooperate by maximizing a joint profit function. The spending in advertising and the quantity sold are the lowest in the partial-cooperative case, while retailers' price is the highest. Interestingly, when the degree of substituability between the two products proposed by retailers is low, these latter are worse off with partial-cooperation with respect to non-cooperation. Partial-cooperation is always the worst case for the manufacturer, the whole channel, consumers' surplus and social welfare, while cooperation is the best case. Cooperating members can share the extra-profit by a whole sale price.
    Keywords: Game theory; Manufacturer-two-retailers; National advertising; Cooperation
    JEL: C70 M30
    Date: 2011–11
  7. By: Karen Kaiser; Rainer Schwabe
    Abstract: We consider a decision maker who enjoys choosing from a varied set of alternatives. Building on behavioral evidence, we propose testable axioms which characterize preference for variety, and provide a representation theorem. We go on to illustrate the potential effects of preference for variety in a model of retailing. Consumer welfare may be decreasing in the competitiveness of the retailing sector as competition eliminates the scope for retailers to offer variety. Mainstream consumers with a preference for variety and consumers with eccentric tastes enjoy a symbiotic relationship. Competition over mainstream consumers makes retailers offer more exotic goods, while eccentric consumers subsidize their carrying costs.
    Keywords: Preferences, variety, representation theorem, retail, competition.
    JEL: D0 D03 D4
    Date: 2011–12
  8. By: Haans, A.J. (Universiteit van Tilburg); Gijsbrechts, E. (Universiteit van Tilburg)
    Date: 2011
  9. By: Takanori Adachi (School of Economics, Nagoya University); Noriaki Matsushima (Institute of Social and Economic Research, Osaka University)
    Abstract: This paper studies the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently greater in the "strong" market (where the discriminatory price is higher than the uniform price) than in the "weak" market (where it is lower). It is verified, however, that consumer surplus is never improved; social welfare improves solely due to an increase in the firms' profits.
    Keywords: Third-degree price discrimination, Oligopoly, Social welfare, Horizontal product differentiation, Substitutability, Complementarity
    JEL: D43 L11 L13
    Date: 2011–12
  10. By: Jeanjean, François
    Abstract: This paper shows that the correlation between the Net Promoter Score and consumers' Willingness To Pay in five European mobile markets is very strong. The Net Promoter Score is provided by a survey and the Willingness To Pay is calculated using the Spokes Model which is an economic model based on horizontal differentiation among firms. The model input data (firms' revenues, number of subscribers and profits) are provided by Merill Lynch, Bank of America. The well-known correlation between Net Promoter Score and Revenues is weaker and arises from the previous correlation. The same is true of the correlation between Net Promoter Score and Profits. --
    Keywords: Net Promoter Score,recommend intention,customer satisfaction,consumer's Willingness to Pay
    JEL: D11 D43 L13 L96 M31
    Date: 2011
  11. By: Sue Mialon
    Abstract: This paper analyzes firms' choice between a merger and a strategic alliance in bundling their product with other complementary product. We consider a framework in which firms can improve profits only from product bundling. While mixed bundling is not profitable, pure bundling is because pure bundling reduces consumers' choices, and thus, softens competition among firms. Firms benefit the most from this reduced competition if they form an alliance. Firms do not gain as much from a merger because, internalizing the complementarity between the two products, a merged firm is inclined to pursue aggressive pricing to gain market share. Yet, firms may be motivated to choose a merger over an alliance because of foreclosure possibility as foreclosure is not possible under strategic alliance. However, in response, unmerged rivals can use a strategic alliance to avert foreclosure. Hence, the possibility of counter-bundling via strategic alliance by rivals reduces the incentives for merger. In equilibrium, bundling is offered only through strategic alliances.
    Date: 2011–07
  12. By: Wang, Chengsi
    Abstract: Information about a new or non-frequently purchased product is often produced by both sides of the market. We construct a monopoly pricing model consisting of both seller's information disclosure and consumer's information acquisition. The presence of consumer search, which lowers the probability of making sales, creates incentive for the monopolist to deter search. In contrast with most previous literature, we show that, partial information disclosure arises in equilibrium when the search cost is low. As the search cost increases to medium level, the monopolist hides information but lowers the price to prevent consumers from searching. When the search cost is very high, the monopolist charges high price and hides all information. The equilibrium price is thus non-monotonic in search cost. Information disclosure and consumer search co-exist only when the search cost is low, and thus complement each other. We show that transparency policies on advertising cannot improve social welfare. Nevertheless, they benefit consumers in a wide range of values of the search costs by improving matching quality and reducing the expense of searching. But for some medium levels of search costs, transparency policies hurt consumers due to the induced high price in equilibrium.
    Keywords: Monopoly Pricing; Information Disclosure; Information Acquisition; Search Cost; Transparency Policy
    JEL: M37 D83 D42
    Date: 2011–10–03
  13. By: Reineri-Brial, Bérangère
    Abstract: Partant du constat que la consommation sur Internet n’est pas seulement utilitaire, et qu’elle peut être non seulement expérientielle, mais aussi culturelle, cette thèse décrit en profondeur et explique ce que les internautes vivent dans leurs expériences de consommation en ligne. Cette description se fait au spectre des trois grandes modifications sociales et individuelles engendrées par l’avènement de la cyberculture : la question de la matérialité du corps pendant l’immersion, au travers du concept de téléprésence ; les stratégies identitaires et les nouvelles formes de sociabilité qui apparaissent dans la consommation en ligne. La recherche est interprétative, et mobilise plusieurs méthodes dont une principale, les récits de vie (les entretiens semi-directifs et les collages projectifs sont aussi utilisés). Ils sont analysés par une analyse structurale puis une analyse comparative. En outre, la thèse mobilise une littérature pluridiciplinaire, principalement issue des sciences de la communication et de l’information, de la psychologie sociale et du marketing. Enfin, des recommandations sont formulées pour les chercheurs et les praticiens.
    Abstract: Noting that the use of Internet is not only utilitarian but experiential indeed cultural, this dissertation describes in depth and explains what people lives in their online consumer experiences. This description is done through the three great social and personal changes brought by the advent of cyberculture: the question of materiality of the body during immersion, through the concept of telepresence, the identity strategies and new forms of sociability appearing in the online consumption. The research is interpretive and involves a number of methods including the life stories as the main one (the semi-structured interviews and projective collages are also used). They are analyzed by a structural analysis and comparative analysis. In addition, the dissertation engages multidisciplinary literature, mainly based on media research, social psychology and marketing. Finally, recommendations are made for researchers and managers.
    Keywords: experiential marketing; identity strategy; identity construction; mediated communications; marketing expérientiel; stratégies identitaires; construction identitaire; sociabilité médiatisée; téléprésence; cyberculture; Internet;
    JEL: C93 D12 M31
    Date: 2011–10
  14. By: Hsu, Wenling; Jacobsen, Guy; Jin, Yu; Skudlark, Ann
    Abstract: Understanding mobile customer experience and behavior is an important task for cellular service providers to improve the satisfaction of their customers. To that end, cellular service providers regularly measure the properties of their mobile network, such as signal strength, dropped calls, call blockage, and radio interface failures (RIFs). In addition to these passive measurements collected within the network, understanding customer sentiment from direct customer feedback is also an important means of evaluating user experience. Customers have varied perceptions of mobile network quality, and also react differently to advertising, news articles, and the introduction of new equipment and services. Traditional methods used to assess customer sentiment include direct surveys and mining the transcripts of calls made to customer care centers. Along with this feedback provided directly to the service providers, the rise in social media potentially presents new opportunities to gain further insight into customers by mining public social media data as well. According to a note from one of the largest online social network (OSN) sites in the US [7], as of September 2010 there are 175 million registered users, and 95 million text messages communicated among users per day. Additionally, many OSNs provide APIs to retrieve publically available message data, which can be used to collect this data for analysis and interpretation. Our plan is to correlate different sources of measurements and user feedback to understand the social media usage patterns from mobile data users in a large nationwide cellular network. In particular, we are interested in quantifying the traffic volume, the growing trend of social media usage and how it interacts with traditional communication channels, such as voice calls, text messaging, etc. In addition, we are interested in detecting interesting network events from users' communication on OSN sites and studying the temporal aspects - how the various types of user feedback behave with respect to timing. We develop a novel approach which combines burst detection and text mining to detect emerging issues from online messages on a large OSN network. Through a case study, our method shows promising results in identifying a burst of activities using the OSN feedback, whereas customer care notes exhibit noticeable delays in detecting such an event which may lead to unnecessary operational expenses. --
    Keywords: Mobile customer experience,social media,text data mining,customer feedback
    JEL: C89 L11
    Date: 2011
  15. By: Song, Minzheong
    Abstract: This paper aims to analyze hybrid consumer behavior and develop a hybrid business model, which serves as a guideline to better understanding hybrid consumer behavior and their needs. The case is the telecommunication operator's new hybrid set-top-box business model which combines IPTV with DTH satellite reception and business. This paper shows KT's OTS (Olleh TV Skylife) which has a successful market performance so far with the hybrid Set Top Box (STB). Before this regional study, it shows the current status of Korean pay TV market in overview. After this, it analyzes the service offerings of cable TV, satellite TV and IPTV. Then, it shows that the mixed service portfolio of satellite TV and IPTV is the perfect service combination to beat the cable TV in terms of hybrid consumer needs. This paper also verifies that this hybrid business model generates good market performance and operating synergy with KT's other legacy business. In conclusion, this paper expects KT's vision about the future growth potential of OTS in home shopping, advertising sales based on the total subscriber base, and also KT's plan to make TV much smarter with innovative open business models such as TV application store of parent KT. --
    Keywords: Hybrid business model,IPTV,Satellite TV
    Date: 2011
  16. By: Gullstrand, Joakim (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University); Thede, Susanna (Department of Economics, Lund University)
    Abstract: We analyze empirically product-price variation across export destinations using detailed firm-product data. Most recent studies using highly disaggregated data emphasize variations in product quality as an explanation as to why firms charge different prices for the same product on different export markets. In this paper, we take an alternative approach and assume that variations in firms' export prices reflect market segmentation and investigate the relationship between price variation and average firm markup. We study an entire supply chain in order to see how price discrimination varies across sectors with different distribution networks. Specifically, we make use of firm-level data for exporting firms in the Swedish food supply chain. The results offer new information about the behavior of exporting firms. Hence, for the food-processing industry, firms with greater ability to discriminate between markets are associated with a higher markup. However, the results also reveal that markups are a complex function of firm characteristics and that the price-setting behavior of firms in the manufacturing sector is not necessarily observed in other sectors of the supply chain.
    Keywords: Markups; Export prices; Price discrimination; Firm-level data
    JEL: D40 F12 F14
    Date: 2011–11–24
  17. By: Srinuan, Chalita; Srinuan, Pratompong; Bohlin, Erik
    Abstract: Mobile Internet is growing around the world without exception for developing countries like Thailand by passing the poor legacy wired infrastructure. This study attempts to provide guidance to a national regulatory agency (NRA) by addressing the following question: What are the key determining factors to explain the probability that individual consumer will use mobile Internet? The discrete choice model is employed to empirically examine whether the service and application attributes, socio-economic variables and service provider has systematic link with the decision of consumer. The data from a national survey in 2010 commissioned by the National Telecommunications Commission (NTC) of Thailand is used for the analysis. Based on the findings, fixed telephony, e-mail, age, area of living and mobile operator are recognized as the strongest determinants for mobile Internet adoption. The findings suggest that the mobile Internet becomes an alternative technology to bridge the digital divide since a group of people who have no fixed Internet connection at home they can connect the Internet via mobile Internet. As such, telecom regulator and policy makers need to consider the policies regarding to infrastructure investment frequency allocation, content and application development and competition in order to stimulate the growth of mobile Internet adoption and close the digital divide within country. --
    Keywords: Mobile Internet,digital divide,developing country
    Date: 2011
  18. By: Nordström, Jonas (Department of Economics, Lund University)
    Abstract: The primary objective of this study was to estimate the willingness to pay (WTP) for a new intervention at the workplace: wholesome canteen takeaways (CTA), i.e. a low fat meal with a large amount of vegetables prepared at the workplace canteen that only requires re-heating. The contingent valuation method was used to elicit the WTP. Two surveys were carried out in Denmark; one large-scale Internet based survey and one survey at a workplace that introduced CTA. The results from the large-scale survey suggest that this concept attracts relevant target groups; groups of individuals with a less healthy diet, low physical activity and a high body mass index. For males and individuals with low education, who also constitute relevant target groups, the results suggest no significant difference in WTP between males and females, whereas low educated individuals have a significantly lower WTP than highly educated individuals. However, the workplace study, carried out at a hospital, found that females have a significantly higher WTP for CTA compared with males. In conclusion, the concept appears to attract relevant target groups, although for a given price a smaller fraction of low educated individuals compared to high educated individuals would be willing to buy CTA.
    Keywords: Workplace intervention; healthy; contingent valuation; diet; willingness to pay; fast food; takeaway meal; demand
    JEL: D12 I10
    Date: 2011–11–07

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