nep-mkt New Economics Papers
on Marketing
Issue of 2011‒12‒19
seven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Direct and Intermediated Marketing of Local Foods in the United States By Low, Sarah A.; Vogel, Stephen J.
  2. Portfolio Considerations in Differentiated Product Purchases: An Application to the Japanese Automobile Market By Naoki Wakamori
  3. Non-Comparative versus Comparative Advertising of Quality By Winand Emons; Claude Fluet
  4. Good rankings are bad - Why reliable rankings can hurt consumers By Bouton, Laurent; Kirchsteiger, Georg
  5. Improving the quality of human resources by implementation of internal marketing By Ioan, Done; Ivana, Domazet
  6. Assessing Unilateral Merger Effects in a Two-Sided Market: An Application to the Dutch Daily Newspaper Market By Filistrucchi, L.; Klein, T.J.; Michielsen, T.O.
  7. Media market concentration, advertising levels, and ad prices. By Anderson, Simon P.; Foros, Øystein; Kind, Hans Jarle; Peitz, Martin

  1. By: Low, Sarah A.; Vogel, Stephen J.
    Abstract: This study uses nationally representative data on the marketing of local foods to assess the relative scale of local food marketing channels. This research documents that sales through intermediated marketing channels, such as farmersâ sales to local grocers and restaurants, account for a large portion of all local food sales. Small and medium-sized farms dominate local foods sales marketed exclusively through direct-to-consumer channels (foods sold at roadside stands or farmersâ markets, for example) while large farms dominate local food sales marketed exclusively through intermediated channels. Farmers marketing food locally are most prominent in the Northeast and the West Coast regions and areas close to densely populated urban markets. Climate and topography favoring the production of fruits and vegetables, proximity to and neighboring farm participation in farmersâ markets, and good transportation and information access are found to be associated with higher levels of direct-to-consumer sales.
    Keywords: Local foods, direct marketing channels, direct sales, intermediated sales Acknowledgments: The, Agricultural and Food Policy, Marketing,
    Date: 2011–11
  2. By: Naoki Wakamori
    Abstract: Consumers often purchase more than one differentiated product, assembling a portfolio, which might potentially affect substitution patterns of demand and, as a consequence, oligopolistic firms’ pricing strategies. This paper studies such consumers’ portfolio considerations by developing a structural model that allows for flexible complementarities/substitutabilities depending on consumer attributes and product characteristics. I estimate the model using Japanese household-level data on automobile purchasing decisions. My estimates suggest that complementarities arise when households purchase a combination of one small automobile and one minivan as their portfolio. Ignoring such effects leads to a overstated counterfactual analysis. Simulation results suggest that a policy proposal of repealing the current tax subsidies for small ecofriendly automobiles would decrease the demand for those automobiles by 9%; less than the 14% drop predicted by a standard single discrete choice model.
    Keywords: Economic models; Market structure and pricing
    JEL: D4 L5 Q5
    Date: 2011
  3. By: Winand Emons; Claude Fluet
    Abstract: Two firms produce a good with a horizontal and a vertical characteristic called quality. The difference in the unobservable quality levels determines how the firms share the market. We consider two scenarios: in the first one, firms disclose quality; in the second one, they send costly signals thereof. Under non-comparative advertising a firm advertises its own quality, under comparative advertising a firm advertises the quality differential. In either scenario, under comparative advertising the firms never advertise together which they may do under non-comparative advertising. Moreover, under comparative advertising firms do not advertise when the informational value to consumers is small.
    Keywords: Quality, Advertising, Disclosure, Signalling
    JEL: D82 L15 M37
    Date: 2011
  4. By: Bouton, Laurent; Kirchsteiger, Georg
    Abstract: Ranking have become increasingly popular on markets for study programs, restaurants, wines, cars, etc. This paper analyses the welfare implication of such rankings. Consumers have to make a choice between two goods of unknown quality with exogenous presence or absence of an informative ranking. We show that existence of the ranking might make all consumers worse off. The existence of a ranking changes the demand structure of consumers. With rigid prices and rationing, the change can be detrimental to consumers due to its effect on rationing. Furthermore, this change in demand can also be detrimental due to consumption externalities. Finally, with perfectly flexible prices the ranking might increase the market power of firms and hence lead to losses for all consumers.
    Keywords: Consumer Welfare; Externalities; Market Power; Rankings; Rationing
    JEL: D1 D4 D6 D8 L1
    Date: 2011–12
  5. By: Ioan, Done; Ivana, Domazet
    Abstract: Internal marketing includes programs intended for employees and their development. It is targeted on identifying, motivating and retaining customer oriented employees. For that reason, it is ov great importance for labour intensive, and especially service oriented compa¬nies, since knowledge, expertise, activity and behavior of employees create overall business portfolio that the consumers/clients are buying on external market. Regardless of its industry, adoption and implementation of internal marketing concept lead to long-term growth and success of the company. Internal marketing has important points of contact with human resources field of activity; therefore the analysis of internal marketing concept and its basic dimensions is a significant factor for creating competitive advantage in current business environment. The goal of internal marketing is to focus attention of employees on internal activities that need to be developed, maintained, and promoted for the purpose of business and strengthening competitiveness of the company on the external market. Human resources management through qualifying and motivation of employees to fulfill customer market needs as much as possible, namely to recruit appropriate personnel, and maintain and improve long-term relationship with them, is one of the key prerequisites for company’s business success.
    Keywords: Human Resources; Internal Marketing; Competitiveness Improvement
    JEL: M31 J24
    Date: 2011–10–17
  6. By: Filistrucchi, L.; Klein, T.J.; Michielsen, T.O. (Tilburg University, Center for Economic Research)
    Abstract: We compare different methods to assess unilateral merger effects in a two-sided market by applying them to a hypothetical merger in the Dutch newspaper industry. For this, we first specify and estimate a structural model of demand for differentiated products on both the readership and the advertising side of the market. This allows us to recover price elasticities and indirect network effects. Following Filistrucchi, Klein, and Michielsen (2010) marginal costs are then recovered from an oligopoly model of the supply side. We use these estimates of price elasticities, network effects and marginal costs to compare different methods that can be used to evaluate merger effects: We perform a concentration analysis based on the Herfindahl Hirschmann Index, a Small Significant Non-Transitory Increase in Price test, measure Upward Pricing Pressure, and conduct a full merger simulation.
    Keywords: Two-sided markets;newspapers;advertising;network effects;merger simulation;SSNIP;UPP;HHI.
    JEL: L13 L40 L82
    Date: 2011
  7. By: Anderson, Simon P. (University of Virginia); Foros, Øystein (Department of Finance and Management Science); Kind, Hans Jarle (Dept. of Economics, Norwegian School of Economics and Business Administration); Peitz, Martin (University of Mannheim)
    Abstract: Standard media economics models imply that increased platform competition decreases ad levels and that mergers reduce per-viewer ad prices. The empirical evidence, however, is mixed. We attribute the theoretical predictions to the combined assumptions that there is no advertising congestion and that viewers single-home. Allowing for crowding in viewer attention spans for ads may reverse standard results, as does allowing viewers to multi-home.
    Keywords: Media economics; pricing ads; advertising clutter; information congestion; mergers; entry.
    JEL: D11 D43 L13
    Date: 2011–12–15

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