nep-mkt New Economics Papers
on Marketing
Issue of 2014‒10‒22
seven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market By Ying Fan; Chenyu Yang
  2. Structural Analysis of Nonlinear Pricing By Yao Luo; Isabelle Perrigne; Quang Vuong
  3. Measuring Product Type with Dynamics of Online Product Review Variances: A Theoretical Model and the Empirical Applications By Yili Hong; Pei-yu Chen; Lorin Hitt
  4. Le Street marketing, forcément transgressif ? By Bernard Cova; Marcel Saucet
  7. CONSUMERS PERCEPTIONS ABOUT FAIRNESS AND UNFAIRNESS PRICES By Maria Elisabeta Ioanas; Daniela Valentina Constantin

  1. By: Ying Fan (Department of Economics, University of Michigan, 611 Tappan Street, Ann Arbor, MI 48109); Chenyu Yang (Department of Economics, University of Michigan, 611 Tappan Street, Ann Arbor, MI 48109)
    Abstract: We consider a structural model of demand and supply where firms endogenously offer vertically differentiated products and exercise second-degree price discrimination. We apply this model to the smartphone industry and quantify the welfare effects of price discrimination and competition. We use counterfactual simulations to assess how the welfare changes when each firm only offers its highest-quality product. We also study the market outcomes such as price, product variety and welfare if later entrants in the market entered earlier.
    Keywords: endogenous product choice, second-degree price discrimination, smartphone industry
    JEL: L11 L15 L13 L63
    Date: 2014–09
  2. By: Yao Luo; Isabelle Perrigne; Quang Vuong
    Abstract: This paper proposes a methodology for analyzing nonlinear pricing data with an illustration on cellular phone. The model incorporates consumer exclusion. Assuming a known tariff, we establish identification of the model primitives using the first-order conditions of both the firm and the consumer up to a cost parameterization. Next, we propose a new one-step quantile-based nonparametric method to estimate the consumers’ inverse demand and their type distribution. We show that our nonparametric estimator is root-N-consistent. We then introduce unobserved product heterogeneity with an unknown tariff. We show how our identification and estimation results extend. Our analysis of cellular phone consumption data assesses the performance of alternative pricing strategies relative to nonlinear pricing.
    Keywords: Nonlinear Pricing, Nonparametric Identification, Empirical Processes, Quantile, Transformation Model, Unobserved Heterogeneity, Telecommunication
    JEL: L8 C5
    Date: 2014–10–01
  3. By: Yili Hong (Department of Information Systems, Arizona State University); Pei-yu Chen (Department of Information Systems, Arizona State University); Lorin Hitt (Department of Operations and Information Management, University of Pennsylvania)
    Abstract: A significant body of literature in information systems, marketing, and economics has shown the important implication of the distinction between experience products and search products (“product typeâ€) on consumer information search, marketplace design, and firm strategy. However, how to empirically measure product types remains a challenge, and this challenge is further complicated by the growth of online commerce and the increasing availability of online reviews that have transformed the nature of many products and altered the traditional perception of these products. The objective of this research is to propose an online product review-based measure that could accurately reflect consumers’ perception of a product, as search or experience dominated product. Based on the definitions of search and experience products — whether information can be easily transferred or not — we propose a data-driven method that can be used to infer product type from statistical analyses of online product reviews. Our theoretical analyses indicate that the variance of the ratings should decrease as more consumers rate a pure search product; for experience products however, the variance of the ratings may remain constant or increase depending on the importance of the experience attributes in determining consumer utility. We demonstrate the empirical applications of this approach at the category, product, and attribute levels using product reviews data from,, and, respectively. In addition, a user study conducted on Amazon Mechanical Turk shows our review-based measure to outperform Nelson’s (1970) product classification, which historically has been the standard in determining product type. Overall, this new measure provides an easy to implement, less subjective and more accurate measure of product type. Therefore, researchers and practitioners can use this measure to better understand how consumers perceive products and to design strategies accordingly.
    Keywords: product type, online product reviews, user-generated content, data-driven approach
    JEL: C10 L15 M31
    Date: 2014–09
  4. By: Bernard Cova; Marcel Saucet
    Abstract: Le marketing non conventionnel représente un ensemble d’approches alternatives tendant à renouveler la communication des entreprises et des organisations. Dans cet ensemble, les actions dites de street marketing semblent particulièrement adaptées pour toucher une cible précise des consommateurs lors de déplacements urbains. Cependant ces actions de marketing de rue confrontent les agences et les annonceurs à un risque inédit, la mobilisation du bien commun à des fins de communication n’étant pas sans poser des problèmes réglementaires. Sur la base d’une recherche menée avec 8 annonceurs et 10 agences, cet article met en évidence les pratiques transgressives des entreprises face à la réglementation françaises, articule les trois grandes dimensions d’une décision de transgression pour agences et annonceurs et détaille les façons de contourner la règle et/ou de gérer la transgression de la règle.
    Keywords: autorisation, justification, règlementation, relation agence-annonceur, transgression.
    Date: 2014–09–25
  5. By: Pablo Gutiérrez Rodríguez (Universidad de León, Facultad de Ciencias Económicas y Empresariales, Spain); José Luis Vázquez Burguete (Universidad de León, Facultad de Ciencias Económicas y Empresariales, Spain); Ana Lanero Carrizo (Universidad de León, Facultad de Ciencias Económicas y Empresariales, Spain); Pedro Cuesta Valiño (Universidad de León, Facultad de Ciencias Económicas y Empresariales, Spain)
    Abstract: The evolution of hypermarket retailers in recent years has been quite dynamic and they are trying to adjust their store formats in response to changing demographics and stronger competition. This means that hypermarkets are increasingly valued by consumers, compared to other commercial formats, which triggers the gradual disappearance of traditional markets but this doesn’t look like enough. In this context Corporate social responsibility (CSR) appears to be a subject of increasing interest amongst academics and practitioners because this policy benefits the economy, society and environment based on the idea that companies have wider responsibilities beyond commerce. This is not a new concept but when other strategies aren’t getting hoped results perhaps it’s possible to build loyalty with clients through this way for creating and sustain long-lasting relationships and repeat business. The purpose of this study was to disaggregate CSR into four dimensions based on hypermarket customer perception: (1) legal, (2) philanthropic, (3) economic, (4) environmental dimensions, and examine how each dimension would affect satisfaction and loyalty in hypermarkets. The findings can provide managers with insights into which dimensions of CSR activities would improve to increase loyalty and the important of CSR in hypermarket customer.
    Date: 2013–09
  6. By: Petya Koleva (University of Bedfordhsire, Business School, UK); Giuseppe Emanuele Adamo (University of Bedfordhsire, Business School, UK)
    Abstract: The aim of this paper is to revise the existing literature on corporate social responsibility (CSR) practices in the Middle Eastern countries due to their increasing importance in global business and growing flows of foreign investments. Despite that many Western theoreticians have attempted to provide universal moral and ethical grounding for CSR initiatives, they proved to be inconsistent with the Middle Eastern contextual domain. The analysis shows clear necessity of detailed understanding of local business practices in the context of the examined countries due to their heterogeneity and unique links with Islamic culture. The paper reveals that local businessman remain attached to ethical postulates originating from Islamic perspectives for social responsibility that contrasts with the conventional form of CSR. The reviewed literature demonstrates that the features of social responsibility and justice from an Islamic perspective are deeply rooted in the framework of Islam – the Qur’an and the Sunnah that present clear codification of ethical standards as well as a set of explicit postulates that practitioners and companies are considered to follow. Shari’ah (Islamic law), as a legal and moral framework with a high importance in the Islamic paradigm, provides a religious bond for business activities. The findings show that ethical codifications and standards originating from these sources offer foundation for further development and implementation of CSR practices in accordance with the needs of local customers and companies. From a methodological perspective, the paper systematically revises academic contributions belonging to the areas of Management, International Business and Marketing in accordance with the ABS classification. Finally, the paper identifies a need for further investigation and development of CSR practices which will be in consistency with the Middle Eastern domain
    Date: 2013–09
  7. By: Maria Elisabeta Ioanas (Bucharest University of Economic Studies, Romania); Daniela Valentina Constantin (Bucharest University of Economic Studies, Romania)
    Abstract: Buyers, when taking purchasing decisions are influenced by the perception they have on a product, offers, motivation (what urges them to buy a product) quality, price or impulse to buy items that they find attractive. There are many situations when the consumer doesn’t know the real price because the companies set them arbitrarily or with the purpose of increasing their profits. So price fairness perception is a comparative process. It has an individual component because people might evaluate a price, by comparing it with: a price paid by them in another buying occasion, a price set by another store, or with the costs estimated by them for the product. It also has a social component, in that the price might be compared with a price paid by another person (Xia, Monroe, and Cox, 2004). The article aims to study the perception of price fairness and unfairness in some given situations. The goal of the present research is to observe various factors that influence the consumer perceptions of price fairness.
    Date: 2013–09

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