nep-mkt New Economics Papers
on Marketing
Issue of 2014‒12‒08
eight papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The Use of Social Media within the Austrian Supply Chain for Food and Beverages By Meixner, Oliver; Haas, Rainer; Moosbrugger, Helmut; Magdits, Philipp
  2. An Analysis of Pricing in the United States Dairy Industry By Bolotova, Yuliya; Novakovic, Andrew
  3. Which Livestock Production Methods Matter Most to Consumers? By Brooks, Kathleen; Ellison, Brenna
  4. Are Food Exchange Websites the Next Big Thing in Food Marketing? A Latent Class Analysis. By Vassalos, Michael; Lim, Kar Ho
  5. Information Cost and Consumer Choices of Healthy Foods By Liu, Xiaoou; Lopez, Rigoberto; Zhu, Chen
  6. Consumer Price Search and Platform Design in Internet Commerce By Michael Dinerstein; Liran Einav; Jonathan Levin; Neel Sundaresan
  7. Consumers’ perceptions and tradeoffs between the safety and quality of artisan cheese By Waldman, Kurt
  8. Consumer Acceptance and Willingness to Pay for Genetically Modified Rice in China By Jin, Jing; Wailes, Eric; Dixon, Bruce; Nayga, Rodolfo M. Jr.; Zheng, Zhihao

  1. By: Meixner, Oliver; Haas, Rainer; Moosbrugger, Helmut; Magdits, Philipp
    Abstract: In addition to traditional marketing communication instruments, social media marketing has become a powerful tool of interaction with participants within supply chains. An increasing number of com-panies, especially in the US, are using social media platforms not only to market their products and manage their customer relationships, but also to initiate active interaction and communication with current and prospective customers. One core objective of this study was to evaluate certain content and contact features, as well as social media activities of companies of the Austrian food and bever-age industry. The evaluation of the content and interactivity possibilities on corporate websites was carried out with a set of criteria that had been elaborated according to research literature. Another objective was to gain insights into threats, risks, and opportunities for companies when interacting with customers by means of social media. This was done by a qualitative survey amongst Austrian business leaders. The research study clearly shows that a minority of the Austrian food and beverage industry actively uses social media platforms for marketing purposes and interaction with present and potential cus-tomers. Usually the platforms are not applied for active customer relationship management but for distributing exactly the same advertising messages already broadcasted via traditional mass media. The basics of a successful customer relationship management by use of social media are frankness, willingness to engage in dialogue, truthfulness and a short reaction time. In this case, potentials can be activated, while risks are minimized. The results imply that social media applications are innova-tive alternatives for implementing effective customer relationship management initiating a true dia-logue with customers. However, more knowledge on how to properly use social media marketing seems to be necessary within the food sector.
    Keywords: Web 2.0, food industry, communication, social media, Agribusiness, Agricultural and Food Policy, Farm Management, Institutional and Behavioral Economics, Resource /Energy Economics and Policy,
    Date: 2013–09
  2. By: Bolotova, Yuliya; Novakovic, Andrew
    Abstract: The objective of this research is to evaluate increasing interaction between the private Exchange spot cheese market and Federal Milk Marketing Orders pricing system during three milk pricing regimes: Minnesota-Wisconsin price series (1960s-1995), Basic Formula Price (1995-1999) and Multiple Component Pricing (2000 – present).
    Keywords: cheese pricing, dairy industry, Federal Milk Marketing Orders, milk pricing, regulated pricing, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Industrial Organization, Marketing,
    Date: 2014–05–23
  3. By: Brooks, Kathleen; Ellison, Brenna
    Abstract: Consumers are becoming increasingly interested in how their food is produced. Many studies have focused on consumers’ preferences and willingness-to-pay for specific production method claims; however, few studies have asked consumers to prioritize (rank) the importance of different production method claims. In this study, we use a best-worst scaling approach to have consumers rank the importance of seven common production method claims across four product types: beef, milk, chicken, and eggs. Results of the study show that consumers often prefer specific individual claims (e.g., animals were not treated with growth hormones, no GMOs used in production) as opposed to broader, more encompassing claims (such as product is certified organic). Additionally, the majority of preference shares were captured by the top three claims, so livestock producers could utilize this information to optimize their current labeling schemes.
    Keywords: production method claims, best-worst scaling, Agribusiness, Agricultural and Food Policy, Marketing, Q13, Q18,
    Date: 2014
  4. By: Vassalos, Michael; Lim, Kar Ho
    Abstract: A Latent Class model is utilized to examine vegetable and livestock producers’ preferences for a number of different features offered by food exchange websites. The results indicate that growers are willing to pay on average $55.69 per month if an online marketplace is offered. Additionally, the WTP for advertising on FacebookSocial media is on average $20.43 per month. Lastly, the producers are willing to pay $31.37 per month more for the service if it is provided by a private for profit company.
    Keywords: E-Commerce, Online Food Exchange, Marketing, Local Food, Choice Experiment, Agribusiness, Marketing, Research and Development/Tech Change/Emerging Technologies, Q13, Q18,
    Date: 2014–05–28
  5. By: Liu, Xiaoou; Lopez, Rigoberto; Zhu, Chen
    Abstract: This paper explores how lowering consumer search costs based on labeling formats affects the probability of choosing healthy foods. We propose a theoretical model of the links between information costs and consumer choices of healthy foods and empirically test the ensuing propositions with scanner data from ready-to-eat breakfast cereals (RTEC). Based on a natural experiment with changes in labeling for otherwise identical products, we apply an alternative-specific conditional logit model to approximately 1.13 million observations derived from Nielsen Homescan weekly purchases data matched to advertising and product nutritional and labeling data. Empirical results confirm the theoretical propositions that more convenient labeling significantly increases the probability of a healthier product being chosen. We also find that consumers with a higher volume of RTEC purchases are more sensitive to information cost reductions. Overall, the use of front-of-package labels is effective in inducing consumers to select healthier RTEC products.
    Keywords: information cost, consumer choices, healthy, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Marketing,
    Date: 2014
  6. By: Michael Dinerstein; Liran Einav; Jonathan Levin; Neel Sundaresan
    Abstract: Search frictions can explain why the "law of one price" fails in retail markets and why even firms selling commodity products have pricing power. In online commerce, physical search costs are low, yet price dispersion is common. We use browsing data from eBay to estimate a model of consumer search and price competition when retailers offer homogeneous goods. We find that retail margins are on the order of 10%, and use the model to analyze the design of search rankings. Our model explains most of the effects of a major re-design of eBay's product search, and allows us to identify conditions where narrowing consumer choice sets can be pro-competitive. Finally, we examine a subsequent A/B experiment run by eBay that illustrates the greater difficulties in designing search algorithms for differentiated products, where price is only one of the relevant product attributes.
    JEL: D12 D22 D83 L13 L86
    Date: 2014–08
  7. By: Waldman, Kurt
    Abstract: This paper combines hedonic analysis of retail prices of artisan cheese with analysis of experimental auction data to answer two key research questions: how do artisan cheese consumers perceive tradeoffs between safety and quality? To what extent do they perceive pasteurization and aging to be food safety attributes? Experimental auctions using a Becker-DeGroot-Marschak (BDM) auction mechanism were conducted on computer tablets with consumers at farmers markets in Michigan, New York, and Vermont. Along with the auctions, participants were asked to evaluate the sensory characteristics of multiple varieties of cheese and respond to pre-auction questions about demographics and post-auction questions about risk preferences and food safety attitudes. Retail data was also used to examine the marginal value of pasteurization and age as it is currently distinguished in the marketplace. We find that pasteurization is a food safety attribute to only a small portion of consumers and age is not a safety attribute. There does appear to be a tradeoff between safety and quality and this tradeoff is driven largely by ideological differences among consumers. There is also evidence that artisan cheese consumers appear to engage in selective exposure to information about pasteurization.
    Keywords: Artisan cheese, food safety, consumer demand, hedonic price analysis, experimental auctions, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics,
    Date: 2014
  8. By: Jin, Jing; Wailes, Eric; Dixon, Bruce; Nayga, Rodolfo M. Jr.; Zheng, Zhihao
    Abstract: Over the past decade public perception of GM food in China has become increasingly contentious. Concerns have emerged with regard to public health, environmental safety, and economic impacts. This paper utilizes a survey conducted in 2013 to evaluate China’s urban consumers’ acceptance and willingness to pay (WTP) for genetically modified rice. The survey was conducted in thirteen of the main rice consuming provinces of China. Responses from 994 consumers are used to estimate WTP for GM rice relative to non-GM rice. A double bounded dichotomous choice contingent valuation method is used to estimate consumers’ WTP for GM rice products. The effect of socio-demographic characteristics of consumers on acceptance and WTP is also reported. The survey design includes different information treatments for GM rice: no specific rice trait information, environmental/producer trait information (Bt rice), consumer health trait information (Golden rice) and stacked environmental/producer plus consumer health traits information. For the three specific rice trait information treatments, the risks and benefits information were reordered for the half of the respondents. The main result of the study is that a majority of Chinese urban consumers require a large discount to be willing to pay for GM rice regardless of rice trait and information treatment. Compared to previous studies, Chinese consumers’ WTP and attitudes on GM rice have become more negative.
    Keywords: GM rice, China urban consumers, willingness to pay, double bounded dichotomous choice model, Food Consumption/Nutrition/Food Safety, Marketing, D12,
    Date: 2014

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