nep-mkt New Economics Papers
on Marketing
Issue of 2015‒01‒31
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Does Local Label Bias Consumer Taste Bud and Preference: Evidence of a Strawberry Sensory Experiment By He, Chenyi ; Gao, Zhifeng ; Sims, Charles A. ; Zhao, Xin
  2. Information Disclosure and Consumer Awareness By Li, Sanxi ; Peitz, Martin ; Zhao, Xiaojian
  3. Willingness to Pay for Niche Fresh Produce across the States: Why Are Consumers Willing to Pay More for the Less Favorite? By Chen, Xuqi ; Gao, Zhifeng ; House, Lisa
  4. Variety and the cost of search in supermarket retailing By Richards, Timothy J. ; Yonezawa, Koichi ; Hamilton, Stephen F.
  5. Beliefs and Consumer Search By Maarten Janssen ; Sandro Shelegia
  6. Impacts from Region-of-Origin Labeling on Consumer Product Perception and Purchasing Intention – Causal Relationships in a TPB based Model By Lorenz, Bettina A. ; Hartmann, Monika ; Simons, Johannes
  7. Willingness to Pay for Tennessee Beef among Tennessee Consumers By Dobbs, Leah ; Jensen, Kimberly ; Leffew, Megan ; English, Burton ; Lambert, Dayton ; Clark, Christopher
  8. Red wine consumption in “the new world“ and “the old world” By Liang, Jiaji ; Wu, Wuyang
  9. Are Thai consumers willing to pay for food safety labels? Choice experiment on fresh produce By Wongprawmas, Rungsaran ; Canavari, Maurizio ; Waisarayutt, Chutima
  10. Price Transmission Analysis in the Fresh Vegetable Supply Chain of Saudi Arabia By Alhashim, Jawad ; Saghaian, Sayed
  11. The impact of brand use on innovation performance: Empirical results for Germany By Crass, Dirk
  12. Fresh-cut salad consumer and shelf life date extension: more or less information? By Stranieri, S. ; Baldi, Lucia ; Manzoni, V.
  13. Impacts on Food Safety Recalls and Consumer Information on Restaurant Performance By Pruitt, J. Ross ; Holcomb, Rodney B.
  14. The commitments of the Macedonian agri-food companies towards intellectual property rights By Nacka, Marina ; Simonovska, Ana ; Georgiev, Nenad ; Gjosevski, Dragan
  15. Consumers’ valuation of soft drinks labeled with calorie and sweetener information: the impact of taste By Lewis, Karen E. ; Grebitus, Carola ; Nayga, Rodolfo M.
  16. Factors influencing the decision of small-scale farmers on marketing channel choice: a Hungarian case study By Benedek, Zsófia ; Fertő, Imre ; Baráth, Lajos ; Tóth, József
  17. The Effects of FMMOs Pricing Regimes on Milk Price Behavior and Dairy Farm Profitability By Bolotova, Yuliya

  1. By: He, Chenyi ; Gao, Zhifeng ; Sims, Charles A. ; Zhao, Xin
    Abstract: Demand for local food, particularly for fresh vegetable and fruits, keeps increasing. Consumer claimed reasons of purchasing local food often include that local food are fresher, more environmental friendly and can support local community, which implies that the local information can affect consumer’ perception of food quality. Previous research mainly focused on the impact of local information/label on consumer preference as a credence attribute that is not observable even after purchasing the products. However, the local information of food may also influence consumer perception of the other two types of important attributes, search and credence attributes. In this study, we linked sensory test with consumer willingness to pay (WTP) to determine the impact of local information on consumer perception of strawberry search and experience attributes and how these three types of attributes affect consumer choice. Results show that providing local information positively affect some of the search and experience attributes such as color, freshness and flavor. Locality information is not a significant factor to determine consumers’ WTP. In addition, freshness and color have significant impact on consumer WTP before respondents taste the strawberries while flavor and texture became dominant to have most influential impact on consumer WTP after tasting.
    Keywords: Strawberry, Local produced, Sensory test, Willingness to pay, Multivariate Tobit model, Agribusiness, Institutional and Behavioral Economics, Marketing,
    Date: 2015
  2. By: Li, Sanxi ; Peitz, Martin ; Zhao, Xiaojian
    Abstract: Whether consumers are aware of potentially adverse product effects is key to private and social incentives to disclose information about undesirable product characteristics. In a monopoly model with a mix of aware and unaware consumers, a larger share of unaware consumers makes information disclosure less likely to occur. Since the firm is not interested in releasing information to unaware consumers, a more precise targeting technology that allows the firm to better keep unaware consumers in the dark leads to more disclosure. A regulator may want to intervene in this market and impose mandatory disclosure rules.
    Keywords: Information disclosure , informative advertising , targeted advertising , consumer awareness , behavioral bias , non-common prior , consumer protection , behavioral industrial organization
    JEL: L51 M38
    Date: 2014
  3. By: Chen, Xuqi ; Gao, Zhifeng ; House, Lisa
    Abstract: In the past decades, demand for niche products (including organic, natural, and locally produce) has grown dramatically. Previous literature has shown that people bought organic and natural fresh produce because they perceived the products to be healthier and more nutritious. For locally produced products, supporting the local economy was also suggested as one of major reasons for purchasing besides the health benefits and freshness. When comparing the preferences of organic locally produced, and naturally grown, it has been exhibited that states (regions) have an influential impact. In this study, we used online surveys to determine the consumers’ knowledge and perception for niche fresh produce, as well as used open-ended contingent valuation to elicit consumer willingness to pay (WTP). From preliminary results of the national survey, it is indicated that although consumers stated that they favored locally produced and naturally grown products over organic ones, their WTP for organic products was still the highest in general. However, when delving into the case of each state, we were convinced that the preference was not homogeneous. This research is going to demonstrate such disparity in different regions and analyze the reasons behind it.
    Keywords: WTP, preference, disparity, locally produce, organic, region., Agribusiness, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2015–01–15
  4. By: Richards, Timothy J. ; Yonezawa, Koichi ; Hamilton, Stephen F.
    Abstract: It is generally not optimal for consumers to become perfectly informed about all prices and all available products in a multi-product retail environment when search is costly. We examine the link between the cost of search and product variety o¤ered by multi-product retailers. Using a hierarchical model in which consumers search among stores and then among brands, we …nd statistically signi…cant costs both for search among stores and for brands within a store. We also …nd that the costs of search rise with variety, suggesting that retailers may improve their market power by increasing assortment depth.
    Keywords: consumer search, variety, retail prices, attribute search, market power, Consumer/Household Economics,
    Date: 2014–08
  5. By: Maarten Janssen ; Sandro Shelegia
    Abstract: When consumers search sequentially for prices and product matches, their beliefs of what they will encounter at the next rm are important in deciding whether or not to continue to search. In search environments where retailers have a common cost that is not known to consumers and is either the outcome of a random process or strategically set by an upstream rm, it is natural for consumers to have symmetric beliefs. We show that market outcomes under symmetric beliefs are quantitatively and qualitatively dierent from outcomes when consumers hold passive beliefs. Market prices are higher with symmetric beliefs (and can be as high as the joint prot maximizing prices), and are non-monotonic in the search cost. Moreover, price rigidities arise endogenously as retailers are not willing to charge prices above consumers' reservation utility. These phenomena become exacerbated in a vertical relations environment.
    JEL: D40 D83 L13
    Date: 2015–01
  6. By: Lorenz, Bettina A. ; Hartmann, Monika ; Simons, Johannes
    Abstract: In this study, an extended TPB model is set up for purchasing behaviour of regional pork. It refers to research on organic food purchasing and on influences from region-of-origin labelling on product evaluation. Besides cognitive attitudes, subjective norms and perceived behavioural control, the model includes an element of personal norms and affective attitudes. Furthermore, identification with and perceived authenticity of a labelled region are considered. Empirical findings for 485 citizens of the German Federal State NRW imply that normative and affective determinants are most relevant for consumers’ purchasing intention. With respect to the impact of a stated region-of-origin, the identification with a region is a significant determinant of positive product evaluation by personal norms and affective attitudes. Respectively, the product-specific authenticity of a region determines cognitive attitudes towards the regional product.
    Keywords: RoO labelling, Theory of Planned Behavior, Consumer preferences, Consumer/Household Economics,
    Date: 2014–08
  7. By: Dobbs, Leah ; Jensen, Kimberly ; Leffew, Megan ; English, Burton ; Lambert, Dayton ; Clark, Christopher
    Abstract: This study examines willingness to pay among consumers in five metropolitan areas in Tennessee for steaks and ground beef produced in Tennessee. Consumers are willing to pay a positive premium for Tennessee beef. The choice of shopping outlets for Tennessee beef is also examined. Demographics, prior shopping patterns, and product preferences influence shopping outlet choices.
    Keywords: Willingness to pay, Local, Beef, Shopping outlets, Survey, Agribusiness, Consumer/Household Economics, Farm Management, Q130, D120,
    Date: 2015–01–15
  8. By: Liang, Jiaji ; Wu, Wuyang
    Keywords: red wine, consumption, Agribusiness, Marketing,
    Date: 2015
  9. By: Wongprawmas, Rungsaran ; Canavari, Maurizio ; Waisarayutt, Chutima
    Abstract: Thai government introduced a food safety label (Q mark) to help consumers recognizing produce with higher level of safety assurance. Producers and retailers are sceptical on whether Thai consumers place value on it, thus they are reluctant to apply to obtain certification and label. This study aims to estimate the value Thai consumers place on food safety labels for fresh produce using a discrete choice experiment approach and a mixed logit (RPL) model. A sample of 350 Thai consumers was surveyed in Bangkok in 2013. Thai consumers are willing- to-pay a premium price for food safety labelled produce over unlabelled ones.
    Keywords: food safety label, stated choice experiment, mixed logit, fresh produce, Thailand, Consumer/Household Economics,
    Date: 2014–08
  10. By: Alhashim, Jawad ; Saghaian, Sayed
    Abstract: Price transmission studies focus on how price variation at one marketing level affects the prices at other levels, either vertically or horizontally. Price movement among farms, wholesale, and retail levels is indicative of vertical price transmission. Any change in the farmer’s price is reflected in the final consumer’s price. Asymmetric price transmission (APT) can occur anywhere along the supply chain. The objective of this study is to explore the existence of APT for selected fresh vegetable products in Saudi Arabia. This study focused on six perishable products: tomatoes, potatoes, cucumbers, squash, onions, and garlic. The Wolffram-Houck and an error-correction model were used to analyze monthly average wholesale and retail price data from January 1999 to December 2012. Granger causality tests provided the causality relationship between market levels of cucumbers and squash, which were independent. The results indicate price transmission is symmetric for tomatoes, potatoes, and garlic, while onion prices are transmitted asymmetrically.
    Keywords: Market and Prices, Agribusiness, Marketing, Q130 Agricultural Markets and Marketing, Cooperatives, Agribusiness,
    Date: 2015
  11. By: Crass, Dirk
    Abstract: The market launch of product innovations is the most visible output of a firm's investment in innovation activities. To achieve this objective most efficiently, firms strengthen their technological capabilities, acquire external knowledge in a number of different ways, and optimize their innovation process. The success of a firm's innovation strategy has two dimensions: First, the ability of a firm to master the research and development process, leading to the market introduction of a product innovation. Second, the ability to turn the market introduction of a product innovation into commercial success. While a firms technological abilities make a product innovation possible, this product might face a lack of interest among potential customers after its market introduction. The introduction of a product innovation under a brand name might generate interest, adds credibility and reputation and has the potential for the firm to better appropriate the returns from its innovations. This paper investigates the role of brand use for the commercial success of product innovations, using a representative sample of German firms. The results show that firms can improve the odds of commercial success by pursuing a branding strategy. The market introduction of a product innovation is shown to be associated with 35% larger sales if the firm uses an established brand to introduce the product innovation into the market.
    Keywords: innovation performance,brands,trademarks,innovation,Germany
    JEL: O32 O34
    Date: 2014
  12. By: Stranieri, S. ; Baldi, Lucia ; Manzoni, V.
    Abstract: Shelf-life estimation has become increasingly important due to the growing consumer interest in fresh and safe food products and the European policy indications to consider it as a key issue for the sustainable management of food waste within the supply chains. To date, no legislation on the shelf life date of the most of food products exists (Boxstael et al., 2014). Several studies demonstrate that the technology available in the fresh-cut sector would allow to extend the shelf life date of products without compromising their intrinsic quality attributes and to achieve a more sustainable production by a strong reduction of unsold stock. The aim of the study was to segment consumers on the basis of their attitude towards the extension of the shelf life date in the fresh-cut salad sector. On the basis of the clusters found, the paper discusses if the information concerning such technology is a useful tool to inform consumers on product characteristics or if it entails a risk of information overload.
    Keywords: consumer behaviour, information, shelf life date, cluster analysis, fresh-cut salad, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,
    Date: 2014–08
  13. By: Pruitt, J. Ross ; Holcomb, Rodney B.
    Abstract: Consumer expenditures on purchases of food away from home have risen in recent years to nearly half of consumer food budgets. Using the monthly National Restaurant Association Restaurant Performance Index, we seek to determine the factors that influence this index. Macroeconomic factors and health concerns influence restaurant performance.
    Keywords: Restaurant performance, food away from home, health, nutrition, food safety, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, D12, Q11, Q13,
    Date: 2015
  14. By: Nacka, Marina ; Simonovska, Ana ; Georgiev, Nenad ; Gjosevski, Dragan
    Abstract: We aim to give an overview of the different levels of commitment towards Intellectual Property Rights (IPR) among agri-food companies in the Republic of Macedonia so to emphasize its basic role in creating competitive market position. The low-level IPR committed companies were analyzed by specifying a fixed-effects model, and for the high-level IPR committed companies we used a single case study with a distinctive IP experience in permanently implementing innovation and marketing strategies. The results emphasize the importance of the companies’ IPR strategies for strengthening their market position. In fact, brand equity is created only through constant marketing investments.
    Keywords: IPR, competitive market position, IP assets, brand equity, marketing investments, Agribusiness, Institutional and Behavioral Economics,
    Date: 2014–08
  15. By: Lewis, Karen E. ; Grebitus, Carola ; Nayga, Rodolfo M.
    Abstract: In the U.S., soft drink consumption has been considered one culprit for the obesity epidemic. Improved product labeling is considered a policy tool that can help consumers choose healthier products. This research uses an auction to determine consumers’ willingness to pay (WTP) for soft drinks labeled with sweetener and calorie information after consumers tasted the soft drinks. Soft drink taste is the primary driver of consumers’ WTP for soft drinks, while sweetener labeling also influences WTP. Calorie labeling has little impact on WTP. Consumers’ least preferred soft drink label was “sweetened with HFCS”; sugar was consumers’ most preferred sweetener ingredient.
    Keywords: calorie labeling, sweetener, soft drinks, taste, auction, Consumer/Household Economics,
    Date: 2014–08
  16. By: Benedek, Zsófia ; Fertő, Imre ; Baráth, Lajos ; Tóth, József
    Abstract: The local food movement is rapidly evolving in Hungary. Three market types can be identified: traditional, farmers’ and organic markets. Results show that farmer- and farmspecific characteristics as well as attitudes greatly and variously influence the decision of small-scale farmers on finding the proper market type. A relatively young, educated and innovative farmer group is interested mostly in selling at farmers’ markets. The outcomes are important in the light of the coming EU funding schemes as small-scale farmers using different marketing channels may require targeted supporting frameworks and solutions.
    Keywords: short food supply chain, local food system, farmers’ market, organic farming, Farm Management,
    Date: 2014–08
  17. By: Bolotova, Yuliya
    Abstract: This research evaluates the effects of the key changes that took place in the design of Class III milk pricing within Federal Milk Marketing Orders (FMMOs) on milk price behavior and dairy farm profitability over three milk pricing regimes: Minnesota-Wisconsin price series (1960s – 1995), Basic Formula Price (1995-1999) and Multiple Component Pricing (2000-present). An autoregressive conditional heteroscedasticity (ARCH) model is estimated to evaluate the effects of changes in the dairy industry institutional environment on the Class III milk price level and volatility over the analyzed period of time. The empirical evidence presented in the paper indicates that changes in the level of Class III milk price were rather minor in magnitude. However, changes in the milk price volatility were dramatic. There is empirical evidence indicating that the private Exchange spot cheese price is the main determinant of the Class III milk price, which is consistent with the design of Class III milk pricing during the analyzed FMMOs milk pricing regimes.
    Keywords: dairy farm profitability, Federal Milk Marketing Orders, milk price volatility, regulated pricing., Agribusiness, Agricultural and Food Policy, Agricultural Finance, Demand and Price Analysis, Farm Management, Industrial Organization, Marketing, L1, K2, Q1,
    Date: 2015–01–14

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