nep-mkt New Economics Papers
on Marketing
Issue of 2014‒11‒28
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Credence Attributes’ Valuation and Price Dispersion: Quantile Regression vs. Stochastic Frontier – an Application to Health Claims in Yogurts By Bonanno, Alessandro; Costanigro, Marco; Bimbo, Francesco; Oude Lansink, Alfons; VIscecchia, Rosaria
  2. Opportunities for Local for Local Food Production: A case in the Dutch Fruit and Vegetables By Visser, Jurriaan; Trienekens, Jacques; van Beek, Paul
  3. Consumer complaint behavior in telecommunications: The case of mobile phone users in Spain By Garín-Muñoz, Teresa; Gijón, Covadonga; Pérez-Amaral, Teodosio; López, Rafael
  4. What Drives Wine Expenditure in the United States? A Four-State Wine Market Segmentation and Consumer Behaviors Study By Deng, Xueting; Woods, Timothy
  5. Platform pricing and consumer foresight: The case of airports By Flores-Fillol, Ricardo; Iozzi, Alberto; Valletti, Tommaso
  6. Publicité intrusive sur Internet : une étude exploratoire des profils de résistance By Chouk, Inès; Guiot, Denis
  7. Price disclosure rules and consumer price comparison By Stühmeier, Torben
  8. Dynamics of Advertising and Demand for Fluid Milk in the United States: An Incomplete Demand Approach By Gvillo, Rejeana; Capps, Oral; Dharmasena, Senarath
  9. Using a Randomized Choice Experiment to Test Willingness to Pay for Multiple Differentiated Products By Zaffou, Madiha; Campbell, Benjamin L.; Martin, Jennifer
  10. Price Discovery of World and China Vegetable Oil Markets and Causality with Non-Gaussian Innovations By Dharmasena, Senarath; Fang, Lu; Bessler, David A.; Jing, Wang
  11. Are Independent Retailers a Viable Distribution Channel for Local Foods? Evidence from Vermont By Kolodinsky, Jane; Roche, Erin; Desai, Sona; Campbell, Erica
  12. The Role of Sensory Profile in the Extra-Virgin Olive Oil Consumers Choice By Cicia, Gianni; Caracciolo, Francesco; Del Giudice, Teresa; Sannino, G.; Verneau, Fabio
  13. Chocolate price fluctuations may cause depression: an analysis of price pass-through in the cocoa chain By Jean-François BRUN; Catherine ARAUJO BONJEAN

  1. By: Bonanno, Alessandro; Costanigro, Marco; Bimbo, Francesco; Oude Lansink, Alfons; VIscecchia, Rosaria
    Abstract: Food manufacturers use health claims to signal higher product quality and attract health oriented consumers. However, consumers’ willingness to pay for health-related attributes may not be large enough to repay firms of the high costs associated with developing, certifying, and marketing such products. We investigate the impact of several health-related credence attributes on product’s price, and what may help manufacturers to reach consumers with the highest willingness to pay for yogurt. To achieve our goals we use a large database of yogurt sales in Italy and two empirical approaches recently introduced in the hedonic price literature: Quantile Regression (QR) and Stochastic Frontier Analysis (SFA). Results show that the implicit prices of health claims differ across price levels (i.e. quantiles), and that manufacturers differ in their ability to target consumers with high willingness to pay.
    Keywords: Hedonic price, Price Dispersion, Incomplete Information, Quantile Regression, Stochastic Frontier, Agribusiness, Demand and Price Analysis, Marketing, Q11, Q13, I12,
    Date: 2014
  2. By: Visser, Jurriaan; Trienekens, Jacques; van Beek, Paul
    Abstract: This paper investigates the opportunities for farmers to produce for local consumers, based on a case study in the Dutch horticulture sector. Main requirements for the set-up of a local chain of supply chain actors are investigated. Producer requirements are added value, availability of time, infrastructure and training. Retailer requirements are quality of food, purchasing volumes, food safety, communication to consumers and traceability of products. For consumers taste/freshness, sustainability, health benefits and authenticity are important attributes of local foods. Based on literature review and interviews with stakeholders four possible strategies for local food chains are defined. The ‘keep it local’ strategy means that the local food supply chains will not make use of the current infrastructure of the marketing coop that acts as chain coordinator. Deliveries are directly between farmer and retail outlet. The local products - conventional supply chain strategy implies that current (non-local) supply chains are used to distribute local products. The supply chain planning will be more complex since products need to be separated per grower and distributed to several local supermarkets. In the ‘enabling producers’ strategy the marketing coop/chain coordinator is going to enable its member producers to sell their products locally. The marketing coop can support producers in for instance, billing and payments, marketing, logistics. The fourth strategy aims at strengthening current consumer communication strategies. It is argued that connecting producers and consumers, regardless of where they live is advantageous. Conclusion is that strategy 3; ‘Enabling producers’, in combination with strategy 4; ‘Strengthening current consumer communication strategies’ are the most promising options in setting up local food supply chains. Strategies 1 and 2, where the marketing coop/chain coordinator itself takes on the challenge of setting up local food supply chains meets too much resistance from the retail companies (head-office level) and offers too little opportunities for providing added value to both producers and retailers.
    Keywords: Food supply chain, local production, consumer preferences, producer requirements, retail requirements, chain coordination., Agribusiness, Food Consumption/Nutrition/Food Safety, Industrial Organization,
    Date: 2013–09
  3. By: Garín-Muñoz, Teresa; Gijón, Covadonga; Pérez-Amaral, Teodosio; López, Rafael
    Abstract: This work analyzes the post-purchase behavior of mobile phone users once they have experienced a service failure. Taking into account the existing literature on Consumer Complaint Behavior (CCB), a survey for 4249 individuals in Spain is used for specifying econometric equations explaining the determinants of the complaining decision and the impact of a proper management of complaints on overall satisfaction. The results suggest that dissatisfaction is not a necessary condition for complaining and that the propensity to complain is different depending on the type of problem experienced by the customer. Another relevant finding of this study is that a good handling of complaints by the company may constitute a source of improvement in the overall user satisfaction and profitabity of the firm. This result is of great interest for its implications when designing the marketing strategy of companies. Accordingly it seems reasonable to use the complaint management as a powerful tool to retain customers.
    Keywords: Consumer Complaint Behavior,Mobile phones,Consumer Retention,Consumer Satisfaction Consumer Loyalty,Voice,Exit,Service Failure,Complainers
    Date: 2014
  4. By: Deng, Xueting; Woods, Timothy
    Abstract: This study explores wine expenditure driven factors for consumers in the United States by employing a four-state consumer behaviors study. A market segmentation method is applied to investigate spending patterns of 1,609 wine consumers in Pennsylvania, Ohio, Kentucky, and Tennessee. Determinants including wine consumption frequency, preference of differently priced wines, wine knowledge, past wine experience, and “local” involvement are investigated and compared for their significance in driving expenditure on wine in general, as well as on locally produced wine specifically. This study also investigated the effect of the determinants on local wine to total wine expenditure ratio. Finally, this study recommends market strategic insights for wine business in general and local wine in specific.
    Keywords: local wine, market segmentation, wine expenditure, wine knowledge, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2014
  5. By: Flores-Fillol, Ricardo; Iozzi, Alberto; Valletti, Tommaso
    Abstract: Airports have become platforms that derive revenues from both aeronautical and commercial activities. The demand for these services is characterized by a one-way complementarity in that only air travelers can purchase retail goods at the airport terminals. We analyze a model of optimal airport behavior in which this one-way complementarity is subject to consumer foresight, i.e., consumers may not anticipate in full the ex post retail surplus when purchasing a flight ticket. An airport sets landing fees, and, in addition, also chooses the retail market structure by selecting the number of retail concessions to be awarded. We find that, with perfectly myopic consumers, the airport chooses to attract more passengers via low landing fees, and also sets the minimum possible number of retailers in order to increase the concessions’ revenues, from which it obtains the largest share of profits. However, even a very small amount of anticipation of the consumer surplus from retail activities changes significantly the airport’s choices: the optimal airport policy is dependent on the degree of differentiation in the retail market. When consumers instead have perfect foresight, the airport establishes a very competitive retail market, where consumers enjoy a large surplus. This attracts passengers and it is exploited by the airport by charging higher landing fees, which then constitute the largest share of its profits. Overall, the airport’s profits are maximal when consumers have perfect foresight. Keywords: two-sided markets, platform pricing, one-way demand complementarity, consumer foresight. JEL classification: L1, L2, L93.
    Keywords: Organització industrial, Aviació comercial, Aeroports, Comerç al detall, Consumidors, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus,
    Date: 2014
  6. By: Chouk, Inès; Guiot, Denis
    Abstract: This article focuses on the practices of resistance to intrusive advertising on the Internet. The analysis of 19 interviews reveals the existence of different resistance profiles when exposed to interstitial: functional resistance, ideological resistance, conative avoidance and non-resistance. From a managerial point of view, this typology is interesting for two main reasons. On the one hand, it is a decision tool when choosing an advertising format that takes into account oppositional responses to perceived intrusion. On the other hand, it provides a better understanding of the cyber-resistance movement due mainly to an increasingly perceived level of online advertising intrusion.
    Keywords: Résistance; Publicité intrusive; Interstitiels; Internet; Resistance; Intrusive advertising; Interstitial; Web marketing;
    JEL: D11 D12 M37
    Date: 2014–09
  7. By: Stühmeier, Torben
    Abstract: Search frictions are regarded as a major impediment to active competition in many markets. In some markets, such as financial and retail gasoline, governments and consumer protection agencies call for compulsory price reporting. Consumers could then more easily compare the firms' offers. We showthat for a given level of price comparison, mandatory price reporting indeed generally benefits consumers. Such regulation, however, feeds back into firms' strategies, resulting in lower levels of price comparison in equilibrium. This effect may dominate so that the regulation lead to higher expected market prices.
    Keywords: Mixed Strategies,Price Comparison,Regulation
    JEL: D83 L13 L51
    Date: 2014
  8. By: Gvillo, Rejeana; Capps, Oral; Dharmasena, Senarath
    Abstract: Fluid milk consumption has been on a decline in the United States for several years. The check off program funded by producers and processors of fluid milk provides generic advertising targeted at fluid milk consumption. Exploring how generic advertising affects fluid milk type consumption delineated by milk fat type is examined by incorporating a polynomial distributed lag advertising variable into an incomplete demand system. Seemingly unrelated regression results indicate that generic advertising indeed affects milk type consumption differently. The optimal advertising lag is five months. Whole milk has no significant advertising effects while low-fat and skim milks have positive, significant effects.
    Keywords: Fluid Milk, Generic Advertising, PDL, Incomplete Demand, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Marketing, D11, D12,
    Date: 2014
  9. By: Zaffou, Madiha; Campbell, Benjamin L.; Martin, Jennifer
    Abstract: The purpose of this paper is to evaluate the importance of different attributes of three major product categories: fruits, vegetables and ornamental plants, in order to understand the relative effect of these attributes on consumer’s choice. Using an online survey we implemented a choice based conjoint experiment. Respondents were asked to randomly evaluate two of the ten products being tested in the survey. A mixed logit model was used to analyze the data and determine willingness to pay for each product attribute. We further tested for the impact of purchase behavior and any randomization effect. Results for most of the products we analyzed demonstrate that consumers value locally grown products more than national products. Furthermore, results show that consumers tend to pay more money for farm and organic produce, but less for the latter one if consumers do not have prior experience buying organic. We also find a randomization effect that should be accounted for when evaluating multiple products in a survey.
    Keywords: Willingness to Pay, Choice Based Conjoint Analysis, Specialty Crops, Consumer/Household Economics, Demand and Price Analysis, Research Methods/ Statistical Methods, Q13,
    Date: 2014–07
  10. By: Dharmasena, Senarath; Fang, Lu; Bessler, David A.; Jing, Wang
    Keywords: Vegetable oil, causality, non-Gaussian Innovations, price discovery, International Relations/Trade, Marketing, Research Methods/ Statistical Methods, F1, C1, C3, C4, C5,
    Date: 2014–05
  11. By: Kolodinsky, Jane; Roche, Erin; Desai, Sona; Campbell, Erica
    Abstract: Building strong local and regional food systems has been suggested as a way to revitalize rural communities, preserve the rural landscape, and improve nutrition of citizens. The challenges of increasing local food consumption focus on key drivers of demand that include geographic proximity, relationships with farmers, and support for local economies. There are also complicated demographic, psychographic and behavioral attributes of local food consumers, and issues of consumer access and affordability. The purported benefits of increasing consumption of locally grown food include improved farm profitability and viability, farmland conservation, improved public health, and closer social ties between farmers and consumers. An online survey of independent grocers was conducted in 2013 to determine the viability of using this retail channel to sell more local food in Vermont. Results show potential for distributing local products through the independent retailer supply chain. The most potential exists for the newer spirits category and the historically profitable local grocery items. There is also potential for increases in sales of prepared foods and meats. And, while there is demand for other product categories, revenue streams are lower. Importantly, the location and size of independent retailers, and population density of these locations, must be considered along with knowledge of demand.
    Keywords: local food, independent retailers, demand, market opportunity, Agribusiness,
    Date: 2014
  12. By: Cicia, Gianni; Caracciolo, Francesco; Del Giudice, Teresa; Sannino, G.; Verneau, Fabio
    Abstract: sensory profiles promoted by the Extra-virgin olive oil (EVO) is an important element of the Mediterranean diet and a valuable agricultural crop for Southern Europe countries in terms of both farm income and cultivated area. Moreover, given the increased popularity of the Mediterranean diet among consumers in US, Canada, Australia and large parts Asia, EVO consumption has grown almost worldwide. In Italy olive-oil production has switched from low yields and low-input cultivation to a capital intensive farming system involving innovations of both agricultural practices and processing techniques: sensory characteristics of the product were significantly improved, changing the traditional taste from “neutral odour and flavour” and well known organoleptic features, to new complex sensory profiles. This evolution is due to the developments that have taken place in the sensory analysis of olive oil and the use of trained panel responses as a means of monitoring and guidance in the production of quality oils. Currently, agricultural research and sensory panels managed not only to identify what aspects of taste and smell are indicators of quality of the oil but also the correlation of these with the production techniques. The situation today is that consumers can find on the market EVOs characterized by well-differentiated sensory profiles. On the consumption side, however, buyers seem still to prefer neutral flavour oils with little or no personality. This aspect deserves a central position in present research on EVOs because consumer preferences risk undermining all efforts to improve the quality of the product made from the production side. In the following work, the role of sensory components in the consumers preferences of EVOs will be explicitly evaluated through an Hedonic Price model. During October 2012, a sample of 68 EVOs available on the shelf of a Supermarket belonging to one of the largest big retailers operating in Italy were bought. The 68 different EVOOs were also evaluated by a panel of expert tasters to get a precise sensory profile for each of them. The results estimation of a simultaneous two equations model well highlighted the idiosyncrasy of the consumers’ preferences towards the trained experts.
    Keywords: Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,
    Date: 2013–09
  13. By: Jean-François BRUN (Centre d'Etudes et de Recherches sur le Développement International); Catherine ARAUJO BONJEAN (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: The aim of this paper is to explore the channels of transmission of the fluctuations in the world price of cocoa to the consumer of chocolate bars in France. This case study can be considered as an illustration of a more general pattern of asymmetric vertical price transmission in the commodity-final product chain. Two types of asymmetry are suspected: asymmetry in the transmission of positive and negative shocks that may reflect non-competitive behavior in the chocolate industry and asymmetry in the transmission of small and large shocks that may be due to adjustment costs. These hypotheses are tested using a three-regime error correction model. Results show that adjustment costs in the processing, manufacturing and distribution of the chocolate tablet are important. Moreover, increases in the cocoa price are more fully and rapidly transmitted to consumers than decreases. These findings may be interpreted as the manifestation of the market power of chocolate companies.
    Keywords: chocolate chain, TAR model, asymmetric price transmission
    JEL: C32 Q13 F23
    Date: 2014–09

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