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on Marketing |
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Issue of 2013‒06‒24
23 papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Salois, Matthew; Reilly, Amber |
| Keywords: | generic advertising, orange juice, ordered choice, survey data, Agribusiness, Consumer/Household Economics, Marketing, C25, D12, M31, M37, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150019&r=mkt |
| By: | Carpio, Carlos E.; Isengildina-Massa, Olga |
| Abstract: | The main objective of this study was to analyze the effect of advertising on social welfare in a perfectly competitive market where the level of advertising is chosen by a social planner. The theoretical model revealed that social planner sponsored advertising that increases the equilibrium price of the advertised good can increase society’s welfare if the effect of advertising in consumers’ utility is higher than the consumer welfare reducing price effect (producer welfare is increased by the same amount as the reduction in consumer welfare). The empirical illustration focuses on the U.S. state of South Carolina “buy local” food products campaign. The findings suggest that this government sponsored advertising campaign increases total welfare. |
| Keywords: | Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Marketing, D11, D12, |
| Date: | 2013–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:149835&r=mkt |
| By: | Rosato, Antonio |
| Abstract: | Why are some sale items subject to limited availability while other substitute items are available in large quantities and are priced relatively high at the same point in time? Can such a retail strategy lure consumers into purchasing the more expensive item? This paper characterizes the profit-maximizing pricing and product-availability strategies for a retailer selling two substitute goods to loss-averse consumers and shows that limited-availability sales can manipulate consumers into an ex-ante unfavorable purchase. Consumers have unit demand, are interested in buying only one good, and their reference point is given by their recent rational expectations about what consumption value they would receive and what price they would pay. The seller maximizes profits by raising the consumers' reference point through a tempting discount on a good available only in limited supply (the bargain) and cashing in with a high price on the other good (the rip-off), which the consumers buy if the bargain is not available to minimize their disappointment. The seller might prefer to offer a deal on the more valuable product, using it as a bait, because consumers feel a larger loss, in terms of forgone consumption, if this item is not available. I also show that the bargain item can be a loss leader, that the seller's product line is not welfare-maximizing and that she might supply a socially wasteful product. The model suggests that the current FTC Guides Against Bait Advertising, by allowing retailers to employ limited-availability sales, could reduce consumer and social welfare. |
| Keywords: | Retail Pricing; Reference-Dependent Preferences; Loss Aversion; Limited Availability; Bait and Switch; Loss Leaders. |
| JEL: | D11 D42 L11 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47168&r=mkt |
| By: | Grebitus, Carola; Dumortier, Jerome |
| Abstract: | This paper analyzes the impact of human values and personality on the demand for organic tomatoes applying open-ended choice experiments to data from an online study that was performed in summer 2012. Results show that consumers make a distinction between conventional and organic produce, such that human values have a differential impact with regard to predicting demand for products associated with organic labels. Also, consumers distinguish between conventional and organic produce, such that personality has a differential impact with regard to predicting demand for products associated with organic labels. However, results are not as strong as for human values. Overall, results indicate that human values and personality are able to explain a portion of the variability of demand for organic tomatoes. |
| Keywords: | demand, human values, open ended choice experiments, organic, personality, tobit model, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, M31, Q13, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150193&r=mkt |
| By: | Willis, David B.; Carpio, Carlso E.; Boys, Kathryn; Young, Emily D. |
| Abstract: | This study investigates the possibility of using local food banks as a distributor in the local food supply chain. The specific research objective is to estimate the price premium consumers are willing to pay at retail outlets for locally grown products, if consumers have knowledge that a portion of the purchase price will be used as a donation to support local food banks. Preliminary estimates reveal that households are willing to pay (WTP) 22.90% more for locally grown produce relative to non-locally grown, and 14.64% more for locally produced animal products. In absolute terms, consumers are WTP a $0.15 per pound premium for locally grown produce and $0.43 per pound premium for local animal products. When it was noted that a food bank donation is incorporated into product price, consumers are willing to pay a price dedicated donation premium of 4.80% ($0.03 per pound) for locally grown produce and 5.80% ($0.15 per pound) for local animal products. Results were found to vary by respondent income and gender. |
| Keywords: | Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150288&r=mkt |
| By: | Gondek, Christian; Heinemann, Stefan |
| Abstract: | -- |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fomarb:35&r=mkt |
| By: | Zheng, Hualu; Berning, Joshua |
| Abstract: | A coupon is a ticket or document that can be exchanged for a direct financial discount when purchasing a specific product, or a total amount of goods in a certain store. Coupons are usually issued by manufacturers of packaged goods or by retailers, to be used as a part of sales promotions. As coupons are extensively adopted to enhance consumer demand and to compete for market share, they draw considerable in the food marketing and industrial organization literature. The objective of this study is to examine how coupons impact retailers’ pricing decisions. Specifically, this study explores how retailer pricing and couponing change based on competitor’s coupon issuance; and whether different types of coupons (manufacturer verses retailer) have different impacts on retailer’s pricing. Breakfast cereals are heavily purchased. The substantial diversity of cereal products makes it easy to compare prices across stores, and lead to intense price competitions. Regional markets may adopt various mechanisms to attract consumers and maximize own profits; instead, they may also observe others’ behaviors and make decisions of achieving a joint profit. Hence, firms’ profit maximization procedures are analyzed under two scenarios: non-cooperative, and cooperative. The data employed in this study are taken from the 2006-2008 ACNielsen Homescan data. We focus on the market of New York because coupons are mostly redeemed in this market. Economic theory indicates that prices and coupon levels influence each other. To account for the bidirectional causality between coupon values and prices, the determinants of prices and coupon values are simultaneously identified by a two-equation, fixed-effects, and panel-data system. The problem of endogeneity arises due to data availability and exclusion variables are included. Estimation results indicate that a retailer will decrease the cereal price by 6.685 cents if its competitor increases the retailer coupon by 1 cent. This suggests that because both cereal prices and retailer coupon values are close across stores, consumers may be better off comparing prices between stores if there are retailer coupons available in the market. The positive relation between own and cross retailer coupon values suggests that retailers compete over cereals, and they may also cooperatively decide prices and coupon values. |
| Keywords: | Manufacturer and Retailer Coupon, Pricing, Cereal, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Industrial Organization, Marketing, L1, D4, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:149985&r=mkt |
| By: | Campbell, Benjamin L.; Behe, Bridget K.; Khachatryan, Hayk; Hall, Charles R.; Dennis, Jennifer H.; Huddleston, Patricia T.; Fernandez, R. Thomas |
| Abstract: | Plants are often merchandised with minimal packaging, thus, consumers have only the plant itself (intrinsic cue) or information signs (extrinsic cues) on which to assess product and on which to base their purchase decision. Our objective was to explore consumers’ preference for select plant display attributes and compare how consumers visually looked at the attributes. Using conjoint analysis we identified three distinct consumer segments: plant oriented (73%), production method oriented (11%), and price oriented (16%) consumers. Utilizing eye tracking technology we show that subjects spent more visual attention on cues in the retail displays that were relatively more important to them. For instance, plant oriented consumers were the fastest to fixate on the plants and looked at the plants for longer amounts of time compared to the other segments. Production method oriented consumers looked at the production labeling for a longer duration, while the price oriented consumer looked at the price sign the longest. Findings suggest that retailers should carefully consider the type of information included on signs and the relative importance those terms may have to a variety of consumers. |
| Keywords: | Consumer/Household Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150431&r=mkt |
| By: | Carrillo-Rodriguez, Lilian; Gallardo, Karina; Yue, Chengyan; McCracken, Vicki; Luby, James; McFerson, James R. |
| Abstract: | This study investigates the marginal values consumers place on apple quality traits as part of a larger SCRI project whose goal is to increase the long-term economic sustainability of Rosacea crops by increasing the U.S. per-capita consumption of fruits. Information on consumers’ preferences and the value they place on fruit quality is important and may help breeders better establish trait priorities and make the breeding process more efficient. We conducted sensory tasting tests and experimental auctions in order to study consumer preferences for apple quality traits. We find that consumers value more some quality traits depending on the information they have to make their decision. Size and color are important when consumers have information based on appearance, and sweetness and crispness are important when consumers have information based on sensory tasting tests. |
| Keywords: | Experimental auction, Willingness to pay, Quality traits, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150503&r=mkt |
| By: | Ahmad, Waseem; Anders, Sven; Marcoul, Philippe |
| Abstract: | This paper develops and tests different theoretical models of competition in a vertically linked market assuming different production arrangements for retailer private label brands (PL). We then empirical estimate retailer manufacturer competitive behavior based on best-fit games and determine the impact of PL production arrangements on pricing strategies for PLs and NBs. Retailers are using different production arrangements to produce PL products. In fact, a retailer may own a production facility, a national brand manufacturer (NB) produces the PL product exclusively for the retailer or the retailer outsources PL production to a non-NB manufacturer. These possible, different production arrangements can have significant implications for the competitive interactions and market outcomes between retailers and NB manufacturers. Existing economic literature has identified a significant degree of variation in the type of competitive interactions across grocery product categories. However, the majority empirical studies in IO have typically imposed assumptions about the nature of vertical production arrangement without formally and explicitly investigating the nature of PL-NB competitive interaction under different production arrangements. The analysis builds on the Non-Nested Model Comparison (NNMC) approach and employs weekly store-level retail scanner data, for a major North American retail chain. The findings from different theoretical models and their empirical application reveal that no consistent pattern of competitive interactions exists between PLs and NBs across different food product categories. Competitive patterns and outcomes vary depending on the nature of the PL production arrangement. Our study contributes to the IO literature by being the first to consistently derive and estimate the impact of PL production arrangement on brand-level competition. |
| Keywords: | Competition, Bertrand Nash, Stackelberg leader follower, Non-Nested Model Comparison, Canadian retail level, Private label, National brand, Production arrangements, Consumer/Household Economics, Marketing, Production Economics, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150749&r=mkt |
| By: | Kalogeras, Nikos; Pennings, Joost M.E. |
| Keywords: | Financial Economics, Marketing, Research Methods/ Statistical Methods, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150701&r=mkt |
| By: | Li, Ziran |
| Keywords: | Agribusiness, Demand and Price Analysis, Marketing, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150283&r=mkt |
| By: | Mattos, Fabio; Poirier, Jamie |
| Abstract: | This study examines formation and adaptation of reference prices by Manitoban grain producers. Research shows that preferences are reference-dependent and marketing decisions are affected by reference prices. Results suggest that Manitoban producers’ reference prices are formed primarily by an average of recent prices and the highest price to-date in the marketing window. Reference prices are found to adapt in the same direction as market prices, with adaptation to increasing prices being larger than adaptation to decreasing prices. When deciding to sell grain, producers are more likely to sell when they expect prices to decrease over the next month and when their reference price adjusts downwards towards the current price. |
| Keywords: | grain marketing, reference prices, Agribusiness, Institutional and Behavioral Economics, Marketing, C93, D03, D81, Q13, |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:149672&r=mkt |
| By: | Matin, Anahita Hosseini; Goddard, Ellen |
| Abstract: | Since novel food technologies (such as nanotechnology, cloning, genomics, etc.) are still in their infancy, communication will be very important in the development of these new technologies to address consumer perceptions and hence market acceptance of these innovations in the agri-food industry. Understanding consumer preferences is key to ensuring that the use of new technologies optimizes use of resources and societal welfare. Two national online surveys (in 2010 for nanotechnology and in 2012 for genomic information) were conducted across Canada to elicit Canadian consumers’ WTP for juice produced by nanotechnology or pork chops that are produced from pigs bred using genomic information. Canadian consumers’ WTP (i.e. whether or not they are willing to buy the products at a price over the price of goods produced without the use of the technologies), and the effects of demographic characteristics, Canadian consumers’ attitudes on their purchase intentions about products created using these novel technologies, were examined. The preliminary analysis shows that the majority of Canadians have little knowledge about use of genomic information or nanotechnology, and hence are not willing to pay a premium for these novel technologies applied to their food. |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150461&r=mkt |
| By: | Maples, Josh; Harri, Ardian; Riley, John Michael; Tack, Jesse B. |
| Keywords: | Demand and Price Analysis, Marketing, Risk and Uncertainty, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150604&r=mkt |
| By: | Katare, Bhagyashree; Yue, Chengyan; Hurley, Terrance |
| Abstract: | Using eye-tracking technology and experimental auctions, this paper evaluates the impact of information from various sources on consumers’ real willingness to pay (WTP) for nano-packaged food products with varying shelf-lives. Information about the risks and benefits of nanotechnology in food processing from various sources was presented to consumers and consumers’ eyes were tracked and the time they spent on viewing the information was recorded. Double hurdle models estimation results show that the specific information about nanotechnology from various sources has a negative effect on the probability of consumer submitting positive bids for the nano-packaged products. Conditional on participants’ willingness to submit positive bids, general and specific information about nanotechnology had a positive effect on participants’ WTP for nano-packaged salads and apple sauce which are products with a relatively shorter shelf-life. The eye-tracking data in the analysis showed the proportion of the normalized time viewing the information from private industry significantly increased the WTP conditional on participants submitting a positive bid for apple sauce as compared with the proportion of normalized time viewing the information from environmental protection groups. |
| Keywords: | nanotechnology, willingness to pay, shelf-life, experimental auction, eye-tracking, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, Q13, Q16, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:149676&r=mkt |
| By: | Hueth, Brent |
| Keywords: | Consumer/Household Economics, Demand and Price Analysis, Political Economy, |
| Date: | 2013–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150182&r=mkt |
| By: | Khachatryan, Hayk; Joireman, Jeff; Casavant, Ken |
| Abstract: | The relationship between the consideration of future and immediate consequences (CFC) and consumer preference for gasoline, cellulose-based and corn-based ethanol fuels was investigated using data from a representative panel of U.S. consumers. A panel of U.S. consumers completed the consideration of future consequences-14 scale, and made a series of choices in fueling scenarios. Results showed that the CFC score was positively associated with the choice for alternative transportation fuels. As the CFC score increases from its minimum to maximum, the predicted probability of choosing cellulose- and corn-based ethanol fuels increases from 14% to 61%, and 22% to 30%, respectively, and the probability of choosing gasoline drops from 64% to below 10%. Additional analyses showed that the CFC-Future and CFC-Immediate subscales were unique predictors of preference for biofuels. Implications for marketing of biofuels are discussed. |
| Keywords: | consideration of future and immediate consequences, choice of biofuels, environmental behavior, discrete choice model, Consumer/Household Economics, Institutional and Behavioral Economics, Resource /Energy Economics and Policy, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150334&r=mkt |
| By: | Lin, Chung-Tung Jordan; Lee, Jonq-Ying |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150580&r=mkt |
| By: | Isengildina-Massa, Olga; Zapata, Samuel D.; Carpio, Carlos E.; Lamie, R. Dave |
| Keywords: | E-commerce, direct marketing, supply chain, effectiveness, economic impact, interval-censored analysis., Agribusiness, Demand and Price Analysis, Marketing, |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:149831&r=mkt |
| By: | Gao, Zhifeng; House, Lisa; Jing, Xie |
| Keywords: | Consumer/Household Economics, Demand and Price Analysis, Research Methods/ Statistical Methods, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150777&r=mkt |
| By: | Chen, Xuqi; Gao, Zhifeng; House, Lisa |
| Abstract: | The rapid income per capita of Chinese consumers and increasing demand for nearly all agricultural products have attracted western food industries to focus on this booming and huge market. This research investigated the perspectives of western food products in China's market, with focus on one representative western food-orange juice, by studying the Chinese consumer knowledge, perceptions, and willingness to pay (WTP) for different types of orange juice products. Though the Chinese consumers' willingness to pay for 100 % juice exceeded the 10% juice as expected, it would not have been persuasive to conclude meaningful to develop the 100 % juice market in China unless the WTP is around the actual market price. |
| Keywords: | Western food products, orange juice, demand, attitude, willingness to pay, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, International Development, International Relations/Trade, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150771&r=mkt |
| By: | Kelly, Jessica; Weersink, Alfons; Cranfield, John |
| Keywords: | Agribusiness, International Relations/Trade, Marketing, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150388&r=mkt |