nep-mkt New Economics Papers
on Marketing
Issue of 2015‒04‒02
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Platform pricing and consumer foresight: The case of airports By Ricardo Flores-Fillol; Alberto Iozzi; Tommaso Valletti
  3. Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals By Michael Sinkinson; Amanda Starc
  4. "Preference Reversal: Deriving Customer Lifetime Value from RFM Measures:Insights into Customer Retention and Acquisition" By Makoto Abe
  5. Price competition and reputation in markets for experience goods: An experimental study By Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert
  6. The reasons for the resignation of activity on social networking sites By Andrzej Szymkowiak
  7. Should non-genuine products be expelled from markets? By Keisuke Hattori; Keisaku Higashida
  8. Toward a Viable Integrated Marketing Communications in Egypt By Hisham Ibrahim; Alfredo Moscardini; Aiman Ragab
  9. Linking Value Co-creation and Organizational Absorptive Capacity: Theoretical study and Conceptual model By Monika Maciuliene
  10. The Main Factors for Strategic Building of the Brand Value and Methods for Brand Valuation at the Czech Republic Market By Monika Harantova; Petr Svoboda
  11. An exploratory study of collinearity effects between antecedents of post-complaint satisfaction By Pierre-Nicolas Schwab

  1. By: Ricardo Flores-Fillol (Universitat Rovira i Virgili); Alberto Iozzi (DEF and CEIS, Università di Roma "Tor Vergata"); Tommaso Valletti (Imperial College London, DEF and CEIS, Università di Roma "Tor Vergata" & CEPR)
    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 choosing 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, airport’s profits are maximal when consumers have perfect foresight.
    Keywords: two-sided markets, platform pricing, one-way demand complementarity, consumer foresight
    JEL: L1 L2 L93
    Date: 2015–03–24
    Abstract: With the globalization, the information age has revealed a new understanding of doing business in which the competition is more intense. This new understanding has changed the customers' buying behavior and the factors affecting them. The power in the change relationship established between the company and the customer shifted focus from the manufacturer or the dealer side to the customer side. Today, one of the most important marketing communication tools supporting us to reach information about customers is “relational marketingâ€. This study consists of three chapters formed the axis of relational marketing. In the first three chapters, marketing, modern marketing methods and relational marketing were discussed. In the third chapter, analyzes were conducted to measure the effects of relational marketing practices on business performance. In this section, the methodology and the findings of a research project covering the authorized auto sales agencies in the province of Konya were addressed, hypotheses were tested and some suggestions were presented.
    Keywords: Marketing, Relationship Marketing, Business Perfomance
    JEL: M31 M00 M30
    Date: 2014–10
  3. By: Michael Sinkinson; Amanda Starc
    Abstract: We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertising markets generated by idiosyncrasies of the political advertising cycle as well as a regulatory intervention affecting a single product. We find that a 10% increase in the number of a firm's ads leads to a 0.76% increase in revenue, while the same increase in rival advertising leads to a 0.55% decrease in firm revenue. Results also indicate that a 10% increase in category advertising produces a 0.2% revenue increase for non-advertised drugs. Both the business-stealing and spillover effects would not be detected through OLS. Decomposition using micro data confirms that the effect is due mostly to new customers as opposed to switching among current customers. Simulations show that an outright ban on DTCA would have modest effects on the sales of advertised drugs as well as on non-advertised drugs.
    JEL: I11 L1
    Date: 2015–03
  4. By: Makoto Abe (Faculty of Economics, The University of Tokyo)
    Abstract: The wide use of RFM analysis in CRM suggests that these measures contain rather rich information about customer purchase behavior. This research, using the RFM measures of a customer, develops an individual-level CLV model that identifies the underlying behavior traits of purchase rate, lifetime and spending, which are then linked to CLV. In the application to two datasets, frequent shoppers program data from a department store and a CD chain, the model produces customer-specific metrics that are useful for identifying preferred customers and taking marketing actions targeted at the individual level in CRM. The paper then presents a retention program for existing customers that is most effective in terms of Marketing ROI, such as what action needs to be taken to which customers at which timing. For prospective customers without RFM measures, by relating the demographic characteristics to behavioral traits, insight into acquisition strategy is obtained. --
    Date: 2015–03
  5. By: Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert
    Abstract: We experimentally examine the effects of price competition in markets for expe-rience goods where sellers can build up reputations for quality. We compare price competition to monopolistic markets and markets where prices are exogenously fixed (somewhere between the endogenous oligopoly and monopoly prices). While oligopolies benefit consumers regardless of whether prices are fixed or endoge-nously chosen, we find that price competition lowers efficiency as consumers pay too little attention to reputation for quality. This provides empirical support to recent models in behavioral industrial organization that assume that consumers may with increasing complexity of the market place focus on selected dimensions of products. We also find that consumers' attention to quality and, hence, provided quality drops when regulated prices are set at levels that are too low.
    Keywords: Markets,Price competition,Behavioral IO,Price regulation,Reputation,Trust,Moral hazard,Experience goods
    JEL: C72 C90 D40 D80 L10
    Date: 2015
  6. By: Andrzej Szymkowiak (Poznań University of Economics)
    Abstract: More than 628.8 million people aged 18-34 years have a Facebook account. After more than a decade of functioning of the social networking site, its further development is dependent, inter alia, of user loyalty and willingness to continue actively use this tool of communication. Popularity portal may, however, adversely affect the attitude of the consumers, who can decide not to use this communication tool or change the social networking site they use most actively. It areas represent two distinct groups of reasons. In the first case, the decision is based on uprising lead hazards and weaknesses of the opportunities and strengths of this tool. The second group is related to comparative assessments with respect to newer ICTs. In this article the author made about the reasons for the resignation of activity on social networks of the indicated age group. The hypothesis put in the work is that consumers cease activity on the social network because of privacy protection. The initial study was carried out in 2 stages. First, qualitative research was conducted in the form of 27 partially structured in-depth interviews. The study allowed the identification of different possible causes and deepening problems. In the survey, the author quantitatively verified the preliminary findings and hypotheses. For this purpose, a survey was conducted among 209 consumers who have or had an account on Facebook. The study used a 5-step Likert scale and the allocation pool of points. The results obtained with the current activity of the respondents, both in terms of time spent on the site, the characteristics of the user (passive and active), the length of an account and gender.
    Keywords: social networking sites, consumer behavior, Internet marketing,
    JEL: D12 M31
    Date: 2014–10
  7. By: Keisuke Hattori (Faculty of Economics, Osaka University of Economics); Keisaku Higashida (School of Economics, Kwansei Gakuin University)
    Abstract: We develop a model in which a `genuine' producer supplying genuine products competes with many `non-genuine' producers supplying the compatible third-party or generic products. We examine whether non-genuine products should be expelled from markets. In particular, we focus on the genuine producer's strategies for driving out non-genuine products: running comparative advertising, building technical barriers, and improving the quality of genuine products. Although the small amount of spending on advertising or building technical barriers improves social welfare, their equilibrium amounts are socially excessive. The quality improvement may raise or reduce welfare, depending on the degree of patent protection. We also find that prohibition of entry of non-genuine producers may improve welfare by discouraging the genuine producer from implementing the drive-out strategies.
    Keywords: Genuine products, advertising, technical barriers, anti-trust law
    JEL: L13 L15
    Date: 2015–03
  8. By: Hisham Ibrahim (Arab Academy for Science, Technology and Maritime Transport (AAST)); Alfredo Moscardini (Cardiff Metropolitan University); Aiman Ragab (Arab Academy for Science, Technology and Maritime Transport (AAST))
    Abstract: The concept of Integrated Marketing Communications (IMC) has received significant coverage in literature. However, there is a problem in translating this concept into reality due to the difficulties of coordinating all communication tools in one program. The advances in communication technology threatens advertising agencies working in the Egyptian market, as the future of communications tends to be specialized and the need for coordination between communication agencies became essential. Thus there is a need for a new organisational structure for agencies that reflects these changes, This paper proposes the viable system model (VSM) developed by Stafford Beer as such a structure. The VSM will help organisations discover and solve their problems to remain viable and successful in the future, It also provides a framework for better coordination between communication agencies to maintain successful IMC campaigns.
    Keywords: Integrated Marketing Communications, Viable System Model, Egyptian Communication Market.
    Date: 2014–12
  9. By: Monika Maciuliene (Mykolas Romeris University)
    Abstract: Scientific literature on marketing and innovation management has a long-standing tradition of involving customers into organizational processes. In the traditional value creation process, organizations tried to manage the knowledge gap on consumer needs by engaging market research tools. However, SD-logic and co-creation put the organization in control of value co-creation, and the external stakeholders (customers, suppliers, partners, etc.) are invited to join this process as co-creators. Hardly any organization can ignore external input into development of new and existing products and the need of constant ideas flow while competing through added-value factors like fast product development, fascinating design, experiences, and new never-seen technologies. Even though empowerment of customers is often highlighted, but high volume of research shows lack of understanding of how to manage this process. Insights and data can come from different external sources but it is important to have qualified people and appropriate organizational structure ability to recognize the value of external knowledge sources, digest it, and apply it to commercial ends. Such organizational capability of organization is defined as absorptive capacity. There is an apparent need for broader theoretical research as well as the necessity for interdisciplinary discussions between scholars of related fields of ‘value co-creation’ and ‘absorptive capacity’ in order to get a better understanding of the subject and development of unified model. Such research could provide insights on how value creation on the external interaction level can be systemized and to come to a better understanding of management tools aiming on the development of absorptive capacity.
    Keywords: co-creation, absorption capacity, collectively created knowledge
    JEL: M00 M31
    Date: 2014–12
  10. By: Monika Harantova (Faculty of Management, University of Economics, Prague); Petr Svoboda (Faculty of Management, University of Economics, Prague)
    Abstract: Currently there is a variety of approaches dealing with a brand or trademark valuation. The International Valuation Standards (IVS) and the Valuation under Act No. 151/1997 Coll. on property valuation in relation to trademarks in the territory of Czech Republic can be classified among them. The main goal of this paper is to determine the factors which participate most in strategic building of brand value. These factors could be used as a basis for the proposal of a new method for the valuation trademarks in the Czech Republic. So far, these methods have taken into account only the financial aspects (economic profit, return of investment). The other factors which create a brand value (brand awareness, brand loyalty, emotional association) have not been implemented yet. For this reason, the methodology of International Valuation Rankings, which takes into account valuation based on other previously mentioned components, is also analysed in the article.
    Keywords: Brand, Brand management, Brand value, Brand equity, Brand attitude, Methods for brand valuation, International valuation standards
    JEL: M31
    Date: 2014–12
  11. By: Pierre-Nicolas Schwab
    Abstract: The issue of the conceptual independence of attributes of perceived justice has received scant direct empirical attention in the complaint-handling literature. The present study aimed to investigate the strength of associations between attributes of perceived justice and, in doing so, contribute to the literature on conceptualisations of apology, politeness, and empathy. A naturally occurring dataset of 524 responses to customers’ complaints posted on France’s largest public forum ( between September 2003 and September 2013 were analysed. Cramer’s V coefficients demonstrated strong collinearity effects in relation to some of the associations tested and, as such, suggest that existing problems in implementing effective complaint-handling strategies might be due to a lack of clarity concerning how apology, politeness, and empathy should best be defined. Recommendations are provided as to what should be measured, and how, in further research; implications for industry practitioners are also discussed.
    Keywords: complaint-handling; justice; empathy; politeness; apologies
    JEL: M31
    Date: 2015–03–16
  12. By: Tuba Ünlükara ((ITU) Istanbul Technical University); Lale Berkoz ((ITU) Istanbul Technical University)
    Abstract: Shopping Centers offer certain advantages to customers such as social activities, lack of car parking problems, security, product variety, and hygiene; these advantages enable them to hold a considerable market share in the retail sector. Shopping centers are also superior in providing their customers with ease and comfort as well as keeping the retail stores alive. Shopping centers, due to the proximity of stores to each other, create a synergy inside, despite the competition among these stores. Despite a considerable number of shopping center oriented studies both at home and abroad, in the literature, a study on determining the level of importance of the factors influencing costumer satisfaction and expectation selection could not be detected.This study looks into the factors that are influential on the preferences for shopping center’s costumers satisfaction and expectation selection and explains these factors through a conceptual model. By means of a comprehensive literature search, the theoretical framework of the factors affecting the causes of preference is established and relevant research questions are chosen. Thus, the theoretical foundations of the model have been created. The field research includes the 7 different types of shopping centers that operate in Istanbul. In this study, among the qualitative research methods, in-depth interview technique and interview form approach are preferred. Interviews have been held with people from shopping center’s costumers pursuing different characteristics. In 7 different shopping center, 420 questionnaires in total have been given by using face-to-face interview technique. The results of the study have been evaluated by applying One-way Analysis of Varience, Factor Analysis and Regressional Analysis. These methods can be defined as the decision-making and estimating method, which gives the percentage distribution of decision points in terms of factors affecting decisions; it is used in the identification of decision hierarchy.The occurrence of a competitive environment with the increase in the number of shopping centers in our country, there is not enough research to provide guidance to investors as well as to enliven the retail industry.This study aims at becoming a source for shopping centre investors, developers, architects and other related disciplines; additionally, expects all these sides to act with the knowledge of what is expected from them.
    Keywords: Shopping centers, real estate development, costumer satisfaction, factor analysis, regression analysis.
    JEL: R00
    Date: 2014–05

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