nep-mkt New Economics Papers
on Marketing
Issue of 2013‒07‒15
ten papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Spillover and Competitive Effects of Advertising in the Carbonated Soft Drink Market By Rigoberto A. Lopez; Yizao Liu; Chen Zhu
  2. Willingness to Pay for Private Labels, National Brands, and Local Designations at the Retail Level By Bosworth, Ryan C.; Bailey, DeeVon; Curtis, Kynda R.
  3. Canadian Food Dollar: Breakdown between Farm and Marketing Costs By Kelly, Jessica; Weersink, Alfons; Cranfield, John
  4. Competing for Consumer Inattention By Geoffroy de Clippel; Kfir Elias; Kareen Rozen
  5. Branding Stockholm By Paschou, Eleni; Metaxas, Theodore
  6. The hazard function of sales: An analysis of UK supermarket food prices By Lan, Hao; Lloyd, Tim A.; Morgan, C. Wyn
  7. How Effective is Public Policy in Decreasing Soda Consumption? An Assessment of Four Policy Options By Yizao Liu; Rigoberto A. Lopez; Chen Zhu
  8. Practical Aspects of Log File Analysis for E-Commerce By Chodak, Grzegorz; Suchacka, Grażyna
  9. An Analysis of Marketing Preferences of Sultana Producers in Turkey in Terms of Sustainable Market Power By Atis, Ela; Miran, Bulent; Bektas, Zerrin; Ciftci, Kenan; Karabat, Selcuk
  10. The anatomy of prices on the French fish market By Laurent Gobillon; François-Charles Wolff; Patrice Guillotreau

  1. By: Rigoberto A. Lopez (University of Connecticut); Yizao Liu (University of Connecticut); Chen Zhu (University of Connecticut)
    Abstract: This paper examines the spillover effects of television advertising on brand-level consumer demand for carbonated soft drinks (CSDs) and the competition consequences for manufacturers’ and private label CSDs. Using a random coefficients logit model (BLP) with household purchasing and advertising viewing data from five U.S. cities, we find that although brand advertising is important in increasing demand as previous work confirms, company advertising spillovers are nearly as important. Not surprisingly, advertising by competitors undermines demand for a particular manufacturer’s CSD brand but, surprisingly, there are positive spillover effects on the demand for private label brands. Further results show that eliminating all television advertising for CSDs would lower both brand and aggregate market shares (including private labels) as consumers migrate to other beverages. However, the dominant strategy is for leading companies to advertise to avoid losing revenues when competitors advertise or to increase revenues when they do not.
    Keywords: advertising, demand, competition, consumer behavior, sodas, carbonated soft drinks
    JEL: D12 L66 Q18 I18
    Date: 2013–02
  2. By: Bosworth, Ryan C.; Bailey, DeeVon; Curtis, Kynda R.
    Abstract: A shopper survey was conducted to determine willingness to pay for ice cream with different labels. A statistical analysis was conducted using stated choices by respondents. The randomized choices were 1) a local brand with or without an indication it had a Utah’s Own designation, 2) a local brand with and without a locally-produced designation, 3) a private label product , and 4) a national brand product. The results suggested that brands affect willingness to pay for ice cream. However, shoppers were willing to pay a significant positive amount more for ice cream with the local designations.
    Keywords: choice experiments, state-sponsored food designations, ice cream, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Public Economics, Q1, Q13,
    Date: 2013–02
  3. By: Kelly, Jessica; Weersink, Alfons; Cranfield, John
    Abstract: This poster assesses the breakdown of the Canadian food dollar between farm and marketing costs. It uses input-output methods, comparable to those used by the Economic Research Service (ERS), in order to allow for Canadian-American comparison. The farm share and marketing bill provide a valuable snapshot of the dynamics of the agri-food supply chain, changing consumer demands, and the resultant value distribution of the retail food dollar.
    Keywords: Food dollar, farm share, marketing bill, marketing margin, Demand and Price Analysis, Q110,
    Date: 2013
  4. By: Geoffroy de Clippel (Dept. of Economics, Brown University); Kfir Elias (Tel Aviv University & University of Michigan, Ann Arbor); Kareen Rozen (Cowles Foundation, Yale University)
    Abstract: Consumers purchase multiple types of goods and services, but may be able to examine only a limited number of markets for the best price. We propose a simple model which captures these features, conveying some new insights. A firm's price can deflect or draw attention to its market, and consequently, limited attention introduces a new dimension of competition across markets. We fully characterize the resulting equilibrium, and show that the presence of partially attentive consumers improves consumer welfare as a whole. When consumers are less attentive, they are more likely to miss the best offer in each market; but the enhanced cross-market competition decreases average price paid, as leading firms try to stay under the consumers' radar.
    Keywords: Limited attention, Price competition, Multiple markets
    JEL: D03 D04
    Date: 2013–07
  5. By: Paschou, Eleni; Metaxas, Theodore
    Abstract: City branding is a relatively new topic gaining extreme interest and a promising and practical field of marketing. Due to global competition, even more regions and cities around the world, are seeking solutions in place branding’s methods and practices, which now consists a main urban development tool. Having a significant amount of information, the study will focus on the city of Stockholm. Being capital of Sweden and city with strong economic and political background, the case study will focus on the factors which contribute to an attractive external image. Studying its economic structure, business environment, educational system, how residents and foreigners see and respect the city, as well as the existing city branding methods, we will try to identify the way in which city will be attractive in tourists, investors and residents, as well as whether the city manages to fulfill its objectives about Vision 2030, targeting on a “World-Class city”.
    Keywords: City Branding, Place Marketing, Stockholm, Vision 2030, World-Class city, Brand Name
    JEL: R58 R59
    Date: 2013–06
  6. By: Lan, Hao; Lloyd, Tim A.; Morgan, C. Wyn
    Abstract: In this paper we examine the empirical pattern of sales behaviour among the UK’s seven largest retail chains using a scanner dataset of weekly food prices on over 500 products over a 2.5 year period. Motivating the analysis is the question ’are products more likely to go on sale that longer they remain unpromoted?’. Theory is not unanimous and empirical and recent empirical studies also offer conflicting evidence. To address the question we estimate the hazard rate of a sale - probability that a product goes on sale in the tth week since the last sale - over the market as a whole and then separately across different national retailers. We pay particular attention to the effects of sales in like-for-like products in rival retailers on the hazard of a sale. We also find that accounting for multiple sales has a pivotal role in determining the slope of the hazard function, which actually reverses sign when proper account is taken of this seemingly innocuous technicality. Correcting for this we find that food products are more likely to be discounted the longer they remain without a sale. This result helps square the circle between price setting and modern theories of sales behaviour. Furthermore, we find that the positive time-dependent pattern varies across product format and brand status. With sales in rivals, branded products in a representative retailer are more likely to be discounted if it has been on sale previously in the rival retailers, however the hazard of a sale in private labels is unrelated to its rival sales. In the individual retailer level, the hazard results show that while most supermarkets exhibit some form of a ’hi-lo’ pricing there is one retail chain does not (showing no time-dependence) preferring an every day low pricing strategy (EDLP).
    Keywords: sales, the hazard function, multiple sales, Demand and Price Analysis, Research Methods/ Statistical Methods, L16, L66, E30,
    Date: 2013–04
  7. By: Yizao Liu (University of Connecticut); Rigoberto A. Lopez (University of Connecticut); Chen Zhu (University of Connecticut)
    Abstract: This paper examines the effectiveness of four policy options to decrease the consumption of carbonated soft drinks (CSDs). They are: (1) a soda tax (1 cent per ounce), (2) a ban on television advertising, (3) limiting calories to 100 per 12 oz volume; and (4) banning large containers such as the 2 lt. bottle. We apply the Berry, Levinsohn and Pakes (1995) demand model to data for 12 CSD brands in 3 container sizes over seven cities and 36 months to estimate consumers’ preferences for CSD. Limiting the size of containers (e.g., banning the 2 lt. bottle) was found to be the most effective policy option and a tax on calories was found to be the weakest in terms of effectiveness in decreasing the consumption of CSDs. The declines in the national consumption of CSDs were found to be approximately -6.3%, -15.4%, -15.5% and -15.8 for a tax, advertising ban, limiting calories, and restricting container sizes, respectively.
    Keywords: advertising, demand, policy, taxes, obesity, consumer behavior, sodas, carbonated soft drinks
    JEL: D12 L66 Q18 I18
    Date: 2013–04
  8. By: Chodak, Grzegorz; Suchacka, Grażyna
    Abstract: The paper concerns Web server log file analysis to discover knowledge useful for online retailers. Data for one month of the online bookstore operation was analyzed with respect to the probability of making a purchase by e-customers. Key states and characteristics of user sessions were distinguished and their relations to the session state connected with purchase confirmation were analyzed. Results allow identification of factors increasing the probability of making a purchase in a given Web store and thus, determination of user sessions which are more valuable in terms of e-business profitability. Such results may be then applied in practice, e.g. in a method for personalized or prioritized service in the Web server system.
    Keywords: Web server, log file analysis, statistical inference, e-commerce, B2C, Business-to-Consumer, Web store
    JEL: C8
    Date: 2013–06
  9. By: Atis, Ela; Miran, Bulent; Bektas, Zerrin; Ciftci, Kenan; Karabat, Selcuk
    Abstract: Sultana is among the most important products in Turkish economy in terms of being a principal export crop and many producers’ occupations. Although sultana’s share in export is high, Turkey aims having a sustainable place in the international competition. In this framework; common attitude of all the actors and institutions in the sector towards attaining competitive advantages are required both in national and international markets. A sustainable competition power calls for paying a special attention to producer preferences. It is of importance to reveal and analyze that sultana producers’ preferred market and particularly the reasons for those preferences. This study deals with analyzing tendencies of the conventional and organic sultana producers to supply their products to domestic and international markets with respect to some alternatives such as high price, guaranteed payment and marketing easily by means of Analytical Hierarchy Process. Data of the study was gathered from randomly chosen 300 sultana producers in Manisa where sultana production is very widespread. Scores from Analytical Hierarchy Process are analyzed by Tobit for doing a deeper analysis of the producer preferences.
    Keywords: Analytical Hierarchy Process, Conventional Sultana, Market Preference, Organic Sultana, Tobit, International Relations/Trade, Marketing, Production Economics,
    Date: 2013–02
  10. By: Laurent Gobillon (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, INED - Institut National d'Etudes Démographiques Paris - INED); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Patrice Guillotreau (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, IUML - Institut universitaire Mer et Littoral - CNRS : FRE3473 - Institut Français de Recherche pour l'Exploitation de la Mer (IFREMER) - Université de Nantes)
    Abstract: Hedonic price regressions have become a standard tool to study how prices of commodity goods are related to quality attributes. In this paper, we extend the traditional price specification by incorporating three sources of unobserved heterogeneity related to sellers, buyers, and matches between buyers and sellers. The extended price specification is estimated on a unique exhaustive dataset of nearly 15 million transactions occurring in French wholesale fish markets from 2002 to 2007. Results show that unobserved heterogeneity plays a significant role in price formation. For some species, its inclusion in price regressions changes the coefficients of quality-related fish characteristics. Last, using data analysis techniques, we classify fish and crustacean species by the extent to which price variations are related to fish characteristics, time effects and the three sources of unobserved heterogeneity.
    Keywords: Fish ; Commodity price ; Unobserved heterogeneity ; Variance analysis ; Panel data
    Date: 2013–06

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