nep-mkt New Economics Papers
on Marketing
Issue of 2012‒02‒01
seven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Advertising Media and the Green Environmental Aspect By Rademaker, Claudia A.
  2. Hinders for Eco-friendly Media Selection By Rademaker, Claudia A.
  3. Advertiser Pressure on Newspaper Journalists: A Survey By De Smet, Dries; Vanormelingen, Stijn
  4. Does self-regulation of advertisement length improve consumer welfare? By Taisuke Matsubae; Noriaki Matsushima
  5. Emission Taxes and the Adoption of Cleaner Technologies: The Case of Environmentally Conscious Consumers By Maria José Gil-Moltó; Dimitrios Varvarigos
  6. Corporate social responsibility and management control By Mersereau, Alexander; Mottis, Nicolas
  7. What If Marketers Put Their Customers ahead of Profits? By Shriver, Scott K.; Srinivasan, V. Seenu

  1. By: Rademaker, Claudia A. (Department of Marketing and Strategy, Center for Media and Economic Psychology)
    Abstract: <p>Previous research has shown that consumer trust in advertising is low and continues to diminish. Researchers have also found that a big share of advertising investments is placed in less favorable media which can contribute to consumers’ increasing disbelief towards advertising. The results of the present study add to these previous findings by showing that the consumers’ trust levels in advertising vary among the 11 different media studied and that the marketing managers’ beliefs about consumers are not consistent with the consumers’ attitudes toward and usage of advertising media. Ignoring this phenomenon may have consequences for companies investing in less favorable media and thereby adding to consumers’ increasing disbelief towards advertising.<P> The greatest discrepancy was found for ads on TV. The marketing managers seem to believe incorrectly that ads on TV are not only more trusted but also more used by consumers than the consumers claim. The consumers were found to have more negative attitudes toward TV advertising than what the marketing managers believe about consumers. TV is also perceived by the consumers as more harmful for the green environment than the marketing managers believe about consumers.<P> The results show that the consumers have more positive attitudes toward direct marketing than the marketing managers believe about them. The consumers perceive direct marketing as better, less irritating and less harmful for the environment compared to the marketing managers’ beliefs about them. In addition, the consumers claim to make more use of ads in many of the paper-based media than TV advertising when they want to buy different products. This was found to be not consistent with the marketing managers’ beliefs about consumers. The consumers were found to have more negative attitudes toward advertising through the mobile phone than the marketing managers believe about consumers. Advertising through the mobile phone is considered by the consumers as one of the worst, most irritating and least trusted medium among the 11 advertising media studied. Moreover, the consumers consider the mobile phone to be more harmful for the green environment compared to the marketing managers’ beliefs about consumers.<P> The results also show that the marketing managers feel more personal responsible towards caring for the green environment than the consumers. In addition, both the marketing managers and the consumers were found to have equally high demands and expectations of organizations to act responsibly toward the green environment. This contradicts previous findings that showed that the green environmental aspect is among the factors that are the least considered when marketing managers work with marketing communication in general and advertising media selection in particular. Furthermore, this study found that green environmental responsibility attitude (GERA) is weakly related to the perception on the green environmental aspect of advertising media. Thus, the discrepancies found in this study between the consumers and marketing managers regarding their green environmental perceptions on the 11 different advertising media should be explained by other factors.<P>
    Keywords: Advertising Media; Attitudes; Consumers; Marketing Managers; Green Environment; Green Environmental Responsibility Attitude (GERA);
    Date: 2011–12–07
  2. By: Rademaker, Claudia A. (Department of Marketing and Strategy, Center for Media and Economic Psychology)
    Abstract: <p>This study shows that, despite organizations claiming to care for the green environment through documented environmental policies, marketing communication such as advertising media selection does not seem to be much guided by green environmental concerns. Problems with consistency and control thus seem to exist between companies’ ideas/decisions (documented environmental policies) and their actions (advertising media selection), causing the need for justification and/or hypocrisy.<P> This study adds to prior research on the non-use of models in practice by showing that the non-use of models also exists among marketing managers when selecting advertising media for marketing communication purposes. It was found that 64 percent of the marketing managers do not make use of media selection models. In the attempt to investigate differences in the factors guiding media selection between marketing managers who use media selection models (users) and those who do not use any model (non-users), it was found that the users take a medium’s eco-friendly characteristics less into consideration than the non-users.<P> The paper discusses that the use of models can be viewed as attempts for making more rational decisions. The findings thus suggest that rational decision-making (users) may hinder eco-friendly media selection while non-rationality (non-users) may develop more powerful organizational ideologies such as acting responsibly towards the green environment. However, this study points out a link between the use of media selection models, previous experience and rules of thumb, i.e. the users tend to make more use of previous experience and rules of thumb than the non-users. Thus, the author argues that a new approach to model use may be needed and that the media selection should not be too much influenced by the marketing managers’ previous experience and rules of thumb. Otherwise, new factors may be overlooked such as consumers’ increasing concern for the green environment in relation to consumer advertising media attitudes.<P> Previous studies have found that current approaches to marketing planning pay too little attention to the impact of technological advances on changes in consumer media habits. Thereby the risk may exist for focusing on mainly conventional media and not selecting “new media”. The present study seems to contradict these previous findings by showing that the selection of “new media” such as media using the Internet was found among the most selected advertising media by both the users and non-users for the two communication objectives studied, i.e. brand-building and to increase sales. Thus, the results indicate that while the marketing managers adapt their media selection to changes in technological media advances they tend to overlook consumers’ increasing concern for the green environment and the environmental aspect of advertising media.<P> The results also show differences among the marketing managers in their selection of advertising media. At the same time as the non-users tend to be more precise with the recycling of paper, they are more inclined to select paper-based media such as catalogues and brochures than the users. The users on the other hand, tend to select more electronic media such as TV, radio and cinema than the non-users. In the attempt to explain the factors guiding media selection and in particular to what extent the environmental aspect of advertising media is considered, green environmental responsibility attitudes (GERA) of the users and non-users are assessed.<P>
    Keywords: Media Selection; Advertising; Green Environment; Marketing Managers; Models; Green Environmental Responsibility Attitude (GERA); Rationality; Non-rationality
    Date: 2011–12–02
  3. By: De Smet, Dries (Center of Economic Studies and Licos Centre for Institutions and Economic Performance, K.U.Leuven and Centre for European Economic Research (ZEW), Mannheim); Vanormelingen, Stijn (Hogeschool-Universiteit Brussel (HUB), Belgium)
    Abstract: We conduct a survey among Belgian newspaper journalists to check whether advertisers are putting pressure to steer newspaper content, either directly or indirectly and whether they succeed in doing so. The results indicate that 35 per cent of Belgian journalists are experiencing some pressure of advertisers. However, journalists can to a large extent withstand this pressure, especially if coming directly from advertisers.
    Keywords: advertising; advertising pressure; media bias; survey; newspapers
    JEL: L2 L82 M37
    Date: 2011–12
  4. By: Taisuke Matsubae; Noriaki Matsushima
    Abstract: In Japan, TV platforms regulate themselves as to the length of the advertisements they air. Using modified Hotelling models, we investigate whether such self-regulation improves consumer and social welfare or not. When all consumers choose a single TV program (the utility functions of consumers satisfy the standard "full-coverage" condition), self-regulation always reduces consumer welfare. It improves social welfare only if the advertisement revenue of each platform is not small and the cost parameter of investments in improving the quality of TV programs is small. When some consumers have outside options (the standard "full-coverage" condition is not satisfied), self-regulation can benefit consumers because it increases the number of consumers who watch TV programs.
    Date: 2012–01
  5. By: Maria José Gil-Moltó; Dimitrios Varvarigos
    Abstract: We model a market with environmentally conscious consumers and a duopoly in which firms consider the adoption of a clean technology. We show that as pollution increases, consumers shift more resources to the environmental activities, thereby affecting negatively the demand faced by the duopoly. This effect generates incentives for firms to adopt the clean technology even in the absence of emissions taxes. When such taxes are considered, our results indicate that the benefit of adopting the clean technology is initially increasing and then decreasing in the emission tax. The range of values for which the emission tax increases this benefit becomes narrower when the consumers’ environmental awareness is stronger.
    Keywords: Environmentally Conscious Consumers; Technology Choice; Environmental Taxation
    JEL: L13 Q55 Q58
    Date: 2011–11
  6. By: Mersereau, Alexander (HEC Montreal); Mottis, Nicolas (ESSEC Business School)
    Abstract: This paper focuses on the management control processes associated with Corporate Social Responsibility (CSR) issues management in organisations. Following a review of the literature related to management control and CSR, we use a case example of a leading European insurance company to explore the extent and nature of management control for CSR.
    Keywords: Management; control
    JEL: M14
    Date: 2012–01–20
  7. By: Shriver, Scott K. (Stanford University); Srinivasan, V. Seenu (Stanford University)
    Abstract: We examine a duopoly where one of the firms does not maximize profit, but instead maximizes customer surplus subject to a profit constraint. (Customer surplus for a firm is the sum of its customers' individual consumer surpluses, i.e., the dollar value the customer attaches to the product minus its price.) For the surplus-maximizing firm, profit is constrained to be at least X percent (where X% might be, say 80-90%) of the profit it would have obtained under a profit maximization objective. The model assumes customer willingness to pay for quality is uniformly distributed and that customers follow a simple decision rule: when presented with two products of known quality and price, purchase one unit of the product which maximizes surplus, or if surplus is negative for both products, elect not to purchase any product. We further assume that firms' marginal cost of production is convex (quadratic) in quality. Competition between firms is modeled as a two-stage game, which is solvable by backward induction. In the first stage, one of the firms, whose identity is exogenously specified, moves first and decides its quality level, fully anticipating the quality response of the second firm and the subsequent price competition. The second firm observes the first firm's quality level and then decides its own quality level, anticipating the subsequent price competition. In the second stage, firms take qualities as given and choose prices simultaneously in accordance with a Nash equilibrium. Two possibilities are considered: (a) the first mover is the profit-maximizing firm, and (b) the first mover is the customer surplus-maximizing firm. We compare the results to the corresponding base case of Moorthy (1988) where both firms are profit-maximizing. We find that firms can deliver significant additional value to their customers by forgoing small amounts of profit. However, the effectiveness of this strategy depends upon which firm is the first mover. When the surplus-maximizing firm moves first, a 1% increase in its customers' surplus "costs" the firm approximately 2% of its potential profits. By contrast, when the profit-maximizing firm chooses quality first, we find that sacrificing 20% of profits is sufficient for the surplus-maximizing firm to more than quadruple the customer surplus it would have provided under a profit-maximizing objective. This outcome results from the surplus-maximizing firm leap-frogging its competitor to become the high quality producer.
    Date: 2011–12

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