nep-mkt New Economics Papers
on Marketing
Issue of 2012‒02‒27
four papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. The effects of cause and donation size of cause-related marketing program on consumers' intention to buy By Dubravka Sinčić Ćorić; Nataša Kurnoga Živadinović; Marija Dropuljić
  2. Brand Management and Strategies Against Counterfeits By Yi Qian
  3. Differentiation and the relationship between product market competition and price discrimination By MANUEL BECERRA; JUAN SANTALO
  4. Market Leadership Through Technology - Backward Compatibility in the U.S. Handheld Video Game Industry By Jörg Claussen; Tobias Kretschmer; Thomas Spengler

  1. By: Dubravka Sinčić Ćorić; Nataša Kurnoga Živadinović; Marija Dropuljić
    Abstract: There were different understandings of cause-related marketing in the past. It has been described as a form of horizontal cooperative sales promotion, a tie-in between corporate philanthropy and sales promotion, synonymous with corporate sponsorship of charitable causes, the initiation and funding of deserving causes, or as marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives. Nowadays, cause-related marketing is considered a specific type of relationship between profit- and nonprofit- organizations, where both partners receive potential benefit.
    Keywords: cause-related marketing, cause of the CRM campaign, donation size in the CRM campaign, consumers’ intention to buy
    JEL: M1 M3
    Date: 2011–11–24
  2. By: Yi Qian
    Abstract: In this paper, I provide a theory for the brand-protection strategies to counterfeiting under weak intellectual property rights. My theoretical framework has general implications for endogenous sunk cost investments as a means of deterring counterfeiters. My model incorporates two layers of asymmetric information that counterfeits can incur: counterfeiters fooling consumers, and buyers of counterfeits fooling other consumers. Brands have a number of different tools at their disposal to maintain a separating equilibrium in the face of counterfeits. One of the theoretical predictions of this study is that counterfeit entry would induce incumbent brand to introduce new products. This helps to explain the innovation strategies that authentic firms employ in response to entry by their counterfeiters in the real world. Authentic prices rise if and only if the counterfeit quality is lower than a threshold level. In addition, the model demonstrates how authentic producers could invest in self-enforcement to increase counterfeiters' incentives to separate themselves. Better channel management through company stores and other costly devices are forms of non-price signals and complement a company's own enforcements against counterfeits. These predictions are validated using a unique panel data collected from Chinese shoe companies covering the years 1993-2004. Data further reveal that companies with worse relationships with the government invest more in various self-enforcement strategies, which are effective in reducing counterfeit sales, and that the set of strategies are complements rather than substitutes.
    JEL: D21 D22 D4 K42 L26
    Date: 2012–02
  3. By: MANUEL BECERRA (Instituto de Empresa); JUAN SANTALO (Instituto de Empresa)
    Abstract: We investigate how the effect of competition on price discrimination varies depending on the level of quality provided by companies in the hospitality industry. Our findings reconcile conflicting results of previous literature on this topic. Namely, we provide strong empirical evidence that competition affects differently the price of single and double rooms of hotels with greater quality versus those with lower quality. In the presence (absence) of differentiation, competition increases (decreases) price discrimination. Our findings are robust to the use of econometric techniques that alleviate endogeneity concerns.
    Date: 2011–12
  4. By: Jörg Claussen; Tobias Kretschmer; Thomas Spengler
    Abstract: The introduction of a new product generation forces incumbents in network industries to rebuild their installed base to maintain an advantage over potential entrants. We study if backward compatibility moderates this process of rebuilding an installed base. Using a structural model of the U.S. market for handheld game consoles, we show that backward compatibility lets incumbents transfer network effects from the old generation to the new to some extent but that it also reduces supply of new software. We examine the tradeoff between technological progress and backward compatibility and find that backward compatibility matters less if there is a large technological leap between two generations. We subsequently use our results to assess the role of backward compatibility as a strategy to sustain market leadership.
    Keywords: backward compatibility, market leadership, network effects, video games, two-sided markets
    JEL: L15 L82 O33
    Date: 2012–02

This nep-mkt issue is ©2012 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.