nep-mkt New Economics Papers
on Marketing
Issue of 2014‒11‒01
eight papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  2. Bundling and Tying By Nicholas Economides
  3. A Utility-Based Model of Sales with Informative Advertising By Sandro Shelegia; Chris M Wilson
  4. Changements de nom de marque : les différentes stratégies de mise en oeuvre et leur impact sur le consommateur By Isabelle Aimé; Michaël Korchia
  5. Optimal Pricing of Access and Secondary Goods with Repeat Purchases: Evidence from Online Grocery Shopping and Delivery Fees By Ricard Gil; Evsen Korkmaz; Ozge Sahin
  6. Comment substituer une marque connue par une nouvelle marque inconnue: les cas bio-Activia et Gemey- Maybelline By Isabelle Aimé; Chantal Lai
  8. Externality of Sales Activities and Policy Effectiveness By Masanori Takaoka

  1. By: Adhi Baskara Ekananda (University of Indonesia, Indonesia)
    Abstract: Cause-related marketing (CRM) has been applied by various brands, both in enhancing consumers’ perception of the brand social concern, and to generate more sales. There are two delivery patterns for CRM: conventional and social alliance (Liu and Ko, 2010). The conventional pattern is done by the company exclusively. Meanwhile, in the social alliance pattern, marketer creates a partnership with a non-profit organization. Although the main aim of CRM is to improve the corporate image, it was proven that company can increase its profit by applying CRM (Krishna and Rajan, 2009). CRM focuses on a distinct cause that can be related to the corporation or their product. The distinctiveness can be established by considering the cause-brand fit (Bigne-Alcaniz et al., 2012; Myers et al., 2012). The CRM program that tied to a particular brand is possible to strengthen the brand social image. The main purpose of this working paper is to examine consumer willingness to participate in the marketer’s CRM program based on the partner-fit and the cause-brand fit. The study will manipulate four conditions in applying CRM program, which employing experiment approach. The design of study will be 2 (partner: brand-partner fit vs. brand-partner not fit) X 2 (cause: product-related vs. non product-related) between subject. The expected practical contribution from this working paper is to offer alternative considerations for applying CRM program that will give a stronger preference from consumer.
    Date: 2013–09
  2. By: Nicholas Economides (Stern School of Business, New York University. 44 West 4th Street, New York, NY 10012)
    Abstract: We discuss strategic ways that sellers can use tying and bundling with requirement conditions to extract consumer surplus. We analyze different types of tying and bundling creating (i) intra-product price discrimination; (ii) intra-consumer price discrimination; and (iii) inter-product price discrimination, and assess the antitrust liability that these practices may entail. We also discuss the impact on consumers and competition, as well as potential antitrust liability of bundling “incontestable” and “contestable” demand for the same good.
    Keywords: tying, ties, bundling, bundled rebates, loyalty discounts, loyalty requirement rebates, single monopoly surplus, monopolization, market power, foreclosure, antitrust
    JEL: C72 D42 D43 K21 L12 L40 L41 L42
    Date: 2014–10
  3. By: Sandro Shelegia (University of Vienna, Austria); Chris M Wilson (School of Business and Economics, Loughborough University)
    Abstract: This paper presents a generalised framework to understand mixed-strategy sales behaviour with informative advertising. By introducing competition in the utility space into a clearinghouse sales model, we oer a highly tractable framework that can i) provide a novel welfare analysis of intra-personal price discrimination in sales markets, ii) characterise sales in a range of new contexts including complex market settings and situations where rms conduct sales with two-part taris or non-price variables such as package size, and iii) synthesise past research and highlight its key forces and assumptions.
    Keywords: Sales; Price Dispersion; Advertising; Clearinghouse; Utility Space; Intra-personal; Price Discrimination; Two-Part Taris; Bonus Packs; Package Size
    JEL: L13 D43 M37 D83
    Date: 2014–10
  4. By: Isabelle Aimé; Michaël Korchia
    Abstract: This work compares consumers’ attitude towards the brand names changes by analysing the brand representation evolution through three processes of changeovers: merging (co-branding between the initial and new brands), substitution (a new brand name with the initial brand identity kept) or rupture process (new brand name and identity). A before-after experimental design on two real brand changes shows that brand name substitution has a negative effect on brand evaluation and purchase intentions even with the same identity kept.
    Keywords: Brand image, brand name changes, substitutions, representations, strategies, central core, attitude
    Date: 2014–09–29
  5. By: Ricard Gil (Johns Hopkins Carey Business School, 100 International Drive, Baltimore, MD 21202, USA); Evsen Korkmaz (University of Amsterdam, Amsterdam Business School, M2-07, Amsterdam 1018TV, The Netherlands); Ozge Sahin (Johns Hopkins Carey Business School, 100 International Drive, Baltimore, MD 21202, USA)
    Abstract: In this paper we investigate optimal pricing strategies for an online grocery retailer who derives its profits from delivery fees and grocery sales. We base our theoretical framework upon the well-established work of Schmalensee (1981) in two-part pricing, while allowing for repeat purchase occasions as in Phillips and Battalio (1983). We derive testable implications that we take to data using a unique dataset detailing transaction information from an online grocery retailer in a Western European country. We find that the number of transactions and the average size of grocery baskets purchased are positively correlated. We also observe two customer groups in our data that differ in their willingness to pay. This observation together with robust evidence that price-sensitive customers buy larger baskets are consistent with an optimal pricing strategy that offers discounts for B2B customers and charges higher prices to households for grocery delivery. We conclude that firms may increase profits by implementing alternative and simpler pricing strategies that combine second and third degree price discrimination schemes.
    Keywords: Metering, price discrimination, online grocery sales
    JEL: L11 L86 M20
    Date: 2014–09
  6. By: Isabelle Aimé; Chantal Lai
    Abstract: To substitute a well-known initial brand by a totally unknown target brand is risky. Whereas some general recommendations in terms of implementation have already been described in the literature, it is not taken into account that brand substitutions could cover two completely distinct situations according to the substitution’s stake : either the substitution could be a customer transfer when the positioning of the initial brand remains identical (Bio-Activia) or it could aim to a customer modification when it evolves (Gemey- Maybelline). The study of the Bio-Activia and Gemey-Maybelline recent cases reveals two different stakes and helps to formulate adapted and more relevant recommendations for implementation to these two situations in order to maximise their success probability : distinct timing of process, different evolution of the identification system and of the product range, specific communication stages. Main contributions of this study, and its limits, are presented in conclusion.
    Keywords: Brand - Substitution - Implementation - Positioning - Name - Change.
    Date: 2014–09–30
  7. By: Caroline Burr (Bournemouth University, UK)
    Abstract: Customers, through their purchases, play a central role in sustainable development. As public concern for the environment increases, opportunities emerge for marketers to produce the green products that consumers desire. However, there is growing skepticism about green claims, and despite many consumers being pro-environmental, most do not translate this into purchases. These factors pose problems for organisations, therefore in order to take advantage of the available opportunities, companies need to understand green consumer behavior in more depth. This paper will critically analyse the conventional literature on green consumption, but will also synthesise the recent research which covers exclusion, conspicuous consumption and cheating. Green purchasing might be different from other types of consumer behaviour due to the underlying motivations, and as such we are beginning to discover more about the experiential and symbolic benefits of green products. Buying green products can be considered as a new form of conspicuous consumption, which denotes the consumer as caring, informed and well- off . In addition, certain green consumption patterns may be used to reinforce symbolic boundaries. For instance, simultaneously including the consumer as green, but also excluding the consumer from the non-green consumption patterns which are said to have contributed to global warming etc. These findings appear to contradict the previous literature which has consistently indicated that values such as universalism and benevolence are positively related to environmentally friendly behaviours, and others such as power, achievement and hedonism are negatively related. It also seems that the ‘greener’ people are, counter-intuitively, the more likely they are to lie and cheat. The “halo of green consumerism” appears to be a licensing effect which allows people to behave less well in other areas of life. This literature review will consider the implications for green marketing, particularly focusing on exclusion, conspicuous consumption and cheating.
    Date: 2013–09
  8. By: Masanori Takaoka (Graduate School of Economics, Osaka University)
    Abstract: Externalities exist when companies perform sales activities (e.g., advertising and sales promotions). However, welfare analysis of policy effectiveness, such as taxation/regulation on sales activities, has not been sufficiently conducted. Existing studies have mainly focused on specifying the deviation factors of sales activities from the socially optimum level, so the influences of tax policies on corporate activities have not been analyzed. Moreover, changes of extrinsic factors should be studied to determine the effectiveness of restrictive regulatory policies. This study extends the conventional methods of analysis at these points and analyzes the interactive effects of six types of policies composed of taxation and regulations: (1) selling expense taxes, (2) ad-valorem duties, (3) specific duties, (4) sales restrictions, (5) price controls, and (6) quantity restrictions. As a result, I propose as effective policies two types of policy mixes: (a) taxation (selling expense, ad valorem, and specific duties) and price cap regulation and (b) taxation (ad valorem and specific duties) and sales activity regulation.
    Keywords: Sales activity, Advertising, Sales promotion, Taxation, Regulation
    JEL: H21 H23 H25
    Date: 2014–08

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