nep-mkt New Economics Papers
on Marketing
Issue of 2015‒01‒03
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  2. Product and Marketing Actions in a Competitive Scenario By Marco Giarratana; Alessandra Perri
  3. Grocery retail dynamics and store choice By van Lin, A.I.J.G.
  4. Consumer Attitudes and the Epidemiology of Inflation Expectations By Ehrmann, M.; Pfajfar, D.; Santoro, E.
  5. Socio-cultural sphere: governance in new economy and impact on city branding By Vadim Pashkus; Natalia Pashkus; Anna Bulina
  6. Price Dynamics with Customer Markets By Paciello, Luigi; Pozzi, Andrea; Trachter, Nicholas
  7. Quality Competition among Platforms: a Media Market Case By Serena Marianna Drufuca; Maria Rosa Battaggion
  8. Social Media Technology Deployment in B2B: A Case Study By Lashgari, Maryam
  9. Spatial Competition and Flexible Manufacturing with Spatially Discriminatory Pricing By Wen-Jung Liang; Kuang-Cheng Wang; Hong-Ren Din
  10. Quality Pricing-to-Market By Auer, Raphael; Chaney, Thomas; Sauré, Philip

  1. By: Beba Rakić, Mira Rakić (Megatrend University Belgrade, Faculty of Business Studies, Belgrade)
    Abstract: In the information century, the behavior of organizations in the business market is changing. Organizations as buyers have much more power at the business market. Organizations as sellers respond with the creation and free sharing of content that is important for potential and actual customers. Organizations apply digital marketing content to support the implementation of multiple business objectives, such as brand awareness, attraction of customers, creating the leads, maintaining of customer relationships/loyalty etc. The key forms of content are: articles, texts on social media (network, blogs, etc.), e-newsletter, case studies, events, videos etc. A particular challenge is the continuous creation and promotion of sufficient quality content for potential and current organizations as buyers.
    Keywords: Digital content, content marketing, business-to-business marketing (B2B), types of content, demand generation.
    JEL: M30
    Date: 2014–04
  2. By: Marco Giarratana (Dept. of Management and Technology, Bocconi University); Alessandra Perri (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: We analyze product and marketing actions and their consequences on firm competitive outcomes. These actions are investigates in relative terms compared to a firmÕs direct competitors. Our results shed new light on how a firmÕs choices regarding product portfolio and marketing postures affect its performance, while accounting for competitive conditions in the external environment. The theory is tested using data from the US apparel industry.
    Keywords: Product and Marketing Strategic actions, Competitive Interaction, Performance.
    JEL: M10 M31
    Date: 2014–12
  3. By: van Lin, A.I.J.G. (Tilburg University, School of Economics and Management)
    Abstract: In response to maturing markets and declining growth, retailers in Europe and the United States alike have been forced to rethink their business. In this dissertation, two recent phenomena are studied that are increasingly being used by retailers in response to this trend: store acquisitions and channel blurring. The first essay posits that, when patronizing stores, consumers may not only exhibit loyalty to a retail chain, but also to a specific outlet. It derives the extent to which consumers exhibit such outlet loyalty, and tests how the positioning of the acquiring chain alters consumers’ adherence to the acquired outlet. The second essay goes one step further and studies how the geo-temporal pattern of store conversion after a large-scale acquisition, affects consumers’ store choice process and, hence, the performance of the acquiring fi rm. In the third essay, the focus lies on across- rather than within-channel competition. It explores promotion-based competition between supermarkets and drug chains, for categories where their assortments overlap, and compares the effect of price promotions on category sales, both within and across channels. Overall, this dissertation sheds light on the dynamics in the retail marketplace and their impact on store choice – insights that retail managers can put to proper use.
    Date: 2014
  4. By: Ehrmann, M.; Pfajfar, D. (Tilburg University, Center For Economic Research); Santoro, E.
    Abstract: This paper studies the formation of consumers’ infl‡ation expectations using micro-level data from the Michigan Survey. It shows that beyond the well-established socio-economic determinants of infl‡ation expectations like gender, income or education also other characteristics like the household’s fi…nancial situation and its purchasing attitudes matter. Respondents with current or expected …financial difficulties, with pessimistic attitudes about major purchases, or who expect income to go down in the future have considerably higher forecast errors, are further away from professional forecasts and have a stronger updward bias in their expectations than other households. However, their bias shrinks by more than the one of the average household in response to increasing media reporting about in‡flation.
    Keywords: Suvey inflation expectations; news on inflation; Information Stickiness; Consumer attitudes
    JEL: C53 D84 E31
    Date: 2014
  5. By: Vadim Pashkus; Natalia Pashkus; Anna Bulina
    Abstract: The article analyzes the problems of socio-cultural sphere in the new economy, as well as the impact of socio-cultural sphere on the brand of St.Petersburg, paper also discusses possibility of evaluation of changes in brand strength due to socio-cultural impact. The proposed method of estimation of the strength of the brand is universal enough, but due to a pronounced specificity of various segments of the public sector it requires specifying when evaluating consumer interest in services for various types of organizations. In this paper, brand evaluation can not be based on the financial performance of organizations; we are not interested on the characteristics of brand equity, but on indicators of consumer preferences and the associated strength of the brand on the market. The proposed method can be adapted to different segments of the public sector (and their impact on brand site) that require adaptation indicators of demand and availability of the services of these organizations. It requires considering not only the classical estimation of the brand, calculated using the method of BCG (including adaptation of its indicators for socio-cultural sphere), and together with the emotional evaluation of brand strength by Keller used to calculate the integral market power of the brand. Priority of emotional components is defined by specific traits of Russian market in general and the cultural market, in particular. The competitiveness of the regional institutions of socio-cultural sector and the strength of their brand directly affects the competitiveness of the region as such. The paper raises questions of so called "star" status and orientation on brands in risk conditions. Brand allows city to start the process of urban regeneration, become the basis of its development strategy, and to revive the use of vacant spaces as well. Branded cities attract not only tourists but also entrepreneurs in various industries, people who want to live interesting, in an unique location and have access to the benefits of modern goods, unique heritage, objects and experiences. Brand adds a certain 'flavour' to the city. It can be promoted; it can attract the most qualified workers not only with competitive salary and benefit packages, but with a good place for work and for pleasures as well.
    Keywords: Socio-cultural sphere; new economy; cultural institutions; brand of St. Petersburg; strength of the brand (by Keller)brand of the territory; Y & R method
    JEL: L3 R11 Z1
    Date: 2014–11
  6. By: Paciello, Luigi (Einaudi Institute for Economics and Finance); Pozzi, Andrea (Einaudi Institute for Economics and Finance); Trachter, Nicholas (Federal Reserve Bank of Richmond)
    Abstract: We study a tractable model of firm price setting with customer markets and empirically evaluate its predictions. Our framework captures the dynamics of customers in response to a change in the price, describes the behavior of optimal prices in the presence of customer acquisition and retention concerns, and delivers a general equilibrium model of price and customer dynamics. We exploit novel micro data on purchases from a panel of households from a large U.S. retailer to quantify the model and compare it to the counterfactual benchmark of the standard monopolistic competition setting. We show that a model with customer markets has markedly different implications in terms of the equilibrium price distribution, which better fit the available empirical evidence on retail prices. Moreover, the dynamic of the response of demand to shocks that affects price dispersion is also distinctive. Our results suggest that inertia in customer reallocation across firms increases the persistence in the response of demand to these shocks.
    JEL: E12 E30 L16
    Date: 2014–12–04
  7. By: Serena Marianna Drufuca; Maria Rosa Battaggion
    Abstract: We provide a two-sided model in a vertical di§erentiation context. We solve the model and we calculate the equilibrium in terms of advertising levels, subscription fees and qualities provision, both in duopoly - two platforms of different quality - and in monopoly case. We would like to investigate how competition among platforms and the entry deterrence behavior might a§ect the equilibrium, with particular focus on quality provision.
    Keywords: two-sided market, media; quality
    JEL: D42 D43 L15 L82
    Date: 2014
  8. By: Lashgari, Maryam (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm)
    Abstract: The advent of social media as a modern communication tool has been extensively studied in the B2C domain; however its use as a communication platform in the B2B sector has thus far been under researched. This paper will examine two cases of global corporations headquartered in Stockholm including Ericsson and Scania that will demonstrate different approaches to the social media communication paradigm. The inclusion of these techniques in the classical communication theory will be necessary as online communication’s role is inevitable in B2B and B2C context nowadays. The study reveals that just as social media has proved to be advantageous in the B2C market, the same advantages exist within the B2B realm. The study emphasizes on different possible social media strategies adopted by the B2B firms, the individual’s role reached by social media in the B2B sector, and the benefit achieved by integrating social media into events and tradeshows. With the proper application of the correct communication strategy it is hypothesized that an increase in business and benefits will follow, this will be examined from the perspective of the two case studies.
    Keywords: Social media; marketing communication; B2B; communication strategy; case studies
    JEL: D83 M15 M31
    Date: 2014–11–18
  9. By: Wen-Jung Liang; Kuang-Cheng Wang; Hong-Ren Din
    Abstract: Spatial Competition and Flexible Manufacturing with Spatially Discriminatory Pricing Abstract This paper develops a two-dimensional spatial framework to explore the firms¡¦ optimal locations and optimal attributes of basic products under linear transportation costs, in which firms have the technique of flexible manufacturing and engage in spatially discriminatory pricing. We can observe in the real world that the technique of flexible manufacturing has been widely adopted by most major manufacturing industries. As indicated by Eaton and Schmitt (1994), the key feature of flexible manufacturing is economies of scope, which can be represented by the production of an array of differentiated products extended by a basic product using the same manufacturing process. The production of the basic product incurs a sunk cost of product development, whose feature can be described by a point on Hotelling¡¦s attribute line. This basic product can be modified to produce extended variant products by incurring additional costs. The additional cost of producing an extended variant product is denoted by a per-unit modification cost that is proportional to the distance of the attribute line between the attribute addresses of the basic product and the extended variant product. The game in question is a three-stage game. Firms simultaneously select their equilibrium locations in the first stage. Then, they simultaneously choose the optimal attributes of the basic products in the second stage. Finally, firms engage in spatially discriminatory pricing in the third stage. The main findings of the paper are as follows. First of all, we show that the two firms will agglomerate at the center of the location line and the optimal attributes of the two basic products will be located at the first and third quartiles of the attribute line, respectively, when the ratio of the marginal modification rate to the transport rate is high. Secondly, the two firms will locate separately on the location line and the optimal attributes of the two basic products will remain at the first and third quartiles when this ratio is moderate. Moreover, the two firms will locate at the first and third quartiles of the location line, respectively, and the optimal attributes of the basic products will agglomerate at the center of the attribute line when this ratio is low. JEL Classification: R32, L22 Keywords: Spatial Agglomeration; Flexible Manufacturing; Spatially Discriminatory Pricing
    Keywords: Spatial Agglomeration; Flexible Manufacturing; Spatially Discriminatory Pricing;
    JEL: R32 L22
    Date: 2014–11
  10. By: Auer, Raphael; Chaney, Thomas; Sauré, Philip
    Abstract: We examine firm's pricing-to-market decisions in vertically differentiated industries featuring a large number of firms that compete monopolistically in the quality space. Firms sell goods of heterogeneous quality to consumers with non-homothetic preferences that differ in their income and thus their marginal willingness to pay for quality increments. We derive closed-form solutions for the pricing game under costly international trade, thus establishing existence and uniqueness. We then examine how the interaction of good quality and market demand for quality affects firms' pricing-to-market decisions. The relative price of high quality goods compared to that of low quality goods is an increasing function of the income in the destination market. When relative costs change, the rate of exchange rate pass-through is decreasing in quality in high income countries, yet increasing in quality in low-income countries. We then document that these predictions receive empirical support in a dataset of prices and quality in the European car industry.
    Keywords: exchange rate pass-through; intra-industry trade; monopolistic competition; pricing-to-market; vertical differentiation
    JEL: E3 E41 F12 F4 L13
    Date: 2014–07

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