nep-mkt New Economics Papers
on Marketing
Issue of 2015‒11‒01
twenty-one papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Media see-saws: Winners and losers on media platforms By Anderson, Simon P.; Peitz, Martin
  2. Promotions in retailing By Guyt, Jonne
  3. Towards a Digital Attribution Model: Measuring the Impact of Display Advertising on Online Consumer Behavior By Anindya Ghose; Vilma Todri
  4. Stages of Transformation in Food Processing and Marketing: Results of an Initial Inventory of Processed Food Products in Dar es Salaam, Arusha, and Mwanza. By Ijumba, Claire; Snyder, Jason; Tschirley, David; Reardon, Thomas
  5. Deceptive Advertising with Rational Buyers By Salvatore Piccolo; Piero Tedeschi; Giovanni Ursino
  6. Price and match-value advertising with directed consumer search By Haan, Marten; Moraga Gonz
  7. Price Dispersion and Informational Frictions: Evidence from Supermarket Purchases By Dubois, Pierre; Perrone, Helena
  8. Private Contracts in Two-Sided Markets By Gaston Llanes; Francisco Ruiz-Aliseda
  9. Exploding Offers with Experimental Consumer Goods By Alexander L. Brown; Ajalavat Viriyavipart; Xiaoyuan Wang
  10. The influence of tactile stimulation in online product evaluation By Margot Racat; Sonia Capelli; Danilo C. Dantas
  11. John Dawson and Masao Mukoyama. Global Strategies in Retailing: Asian and European Experiences By Latchezar Hristov
  12. Kartellrecht und Wettbewerbspolitik für Online-Plattformen By Hamelmann, Lisa; Haucap, Justus
  14. Local Response to the Rapid Rise in Demand for Processed and Perishable Foods: Results of an Inventory of Processed Food Products in Dar es Salaam By Snyder, Jason; Ijumba, Claire; Tschirley, David; Reardon, Thomas
  15. Quality differences, third-degree price discrimination, and welfare By Franciso Galera; Pedro Mendi; Juan Carlos Molero
  17. Demand Determinants of Cruise Tourism in Competitive Markets: Motivation, Preference, and Intention By Jamie Chen
  18. Damages in a Consumer Sale Contract: Reviewing the Consumer Protection Bill, 2015 By Pathak, Akhileshwar
  19. An analysis of mobile banking customers for a bank strategy and policy planning By Behrooz Noori
  20. Emergence of Cooperative Long-term Market Loyalty in Double Auction Markets By Aleksandra Aloric; Peter Sollich; Peter McBurney; Tobias Galla
  21. Relations aux MDD, que nous disent les consommateurs ? By Jérôme Lacoeuilhe; Samy Belaid; Basma Taïeb

  1. By: Anderson, Simon P.; Peitz, Martin
    Abstract: We customize the aggregative game approach to oligopoly to study asymmetric media markets. Advertiser, platform, and consumer surplus are tied together by a simple summary statistic. When media are ad-financed and ads are a nuisance to consumers we establish see-saws between consumers and advertisers. Entry of a lower-quality platform increases consumer surplus, but decreases advertiser surplus if industry platform profits decrease with entry. Merger decreases consumer surplus, but advertiser surplus increases when the profits of the higher-quality platform within the merger increase. By contrast, when platforms use two-sided pricing or consumers like advertising,advertiser and consumer interests are often aligned.
    Keywords: media economics , mergers , entry , advertising , aggregative games
    JEL: D43 L13
    Date: 2015
  2. By: Guyt, Jonne (Tilburg University, School of Economics and Management)
    Abstract: This doctoral thesis contains three empirical essays regarding the effect of promotions on consumer choices in a retailing context. The first essay studies the scheduling of featured price cuts for national brands, across retail chains. It shows that coordinating promotions across chains influences the performance outcomes for both manufacturers and retailers in several consumer packaged goods (CPG) categories. The second essay investigates the impact of consumers’ decision making processes on store-flyer and discount promotions. It shows that the effect of such promotions depends on whether a consumer follows a brand-focused structure (in which case s/he disproportionately substitutes between retailers) or a retailer-focused structure (in which case s/he primarily switches among brands within a given retail chain), and that a mixture of these structures is at work in CPG categories. The third essay examines large-scale promotional events (“Savings Weeks”). It provides insights into the mechanisms that set these events apart from ‘business-as-usual’ promotions, and sheds light on how they influence households’ retailer visit and spending decisions.<br/>
    Date: 2015
  3. By: Anindya Ghose (Department of Operations, Information, and Management Sciences, Leonard N. Stern School of Business, New York University, 44 West 4th Street, New York 10012, NY, USA); Vilma Todri (Department of Operations, Information, and Management Sciences, Leonard N. Stern School of Business, New York University, 44 West 4th Street, New York 10012, NY, USA)
    Abstract: The increasing availability of individual-level data has raised the standards for measurability and accountability in digital advertising. Using a massive individual-level data set, our paper captures the effectiveness of display advertising across a wide range of consumer behaviors. Two unique features of our data set that distinguish this paper from prior work are: (i) the information on the actual viewability of impressions and (ii) the duration of exposure to the display advertisements, both at the individual-user level. Employing a natural experiment enabled by our setting, we use difference-in-differences and corresponding matching methods as well as instrumental variable techniques to control for unobservable and observable confounders. We empirically demonstrate that mere exposure to display advertising can increase users’ propensity to search for the brand and the corresponding product; consumers engage both in active search exerting effort to gather information through search engines as well as through direct visits to the advertiser’s website, and in passive search using information sources that arrive exogenously, such as future display ads. We also find statistically and economically significant effect of display advertising on increasing consumers’ propensity to make a purchase. Furthermore, we find that the advertising performance is amplified up to four times when consumers are targeted earlier in the purchase funnel path and that the longer the duration of exposure to display advertising, the more likely the consumers are to engage in direct search behaviors (e.g., direct visits) rather than indirect ones (e.g., search engine inquiries). We also study the effects of various types of display advertising (e.g., prospecting, retargeting, affiliate targeting, video advertising, etc.) and the different goals they achieve. Our framework for evaluating display advertising effectiveness constitutes a stepping stone towards causally addressing the digital attribution problem.
    Keywords: Online Advertising; Big Data; Analytics; Display Advertising; Advertising Effectiveness; Digital Attribution; Natural Experiment
    JEL: L86 M37
    Date: 2015–10
  4. By: Ijumba, Claire; Snyder, Jason; Tschirley, David; Reardon, Thomas
    Abstract: Nearly 950 processed food products across five product categories (maize and other flour products, packaged rice, dairy, fruit juices, and poultry) were identified in Dar es Salaam, Arusha, and Mwanza retail outlets. 2. Tanzanian firms dominate maize, blended, and other flour product availability in all three cities – there has been a rapid proliferation of micro‐firms competing on price, and the rise of small to medium size firms investing in quality differentiation and marketing. Tanzanian firms have a respectable presence in the market for dairy, juice, and packaged rice products, but are generally overshadowed by imports. However regional firms (Tanzania, Kenya, Uganda, and Somalia) are competitive with international firms in the Tanzanian market.
    Keywords: Agricultural and Food Policy, Food Security and Poverty,
    Date: 2015–09–18
  5. By: Salvatore Piccolo (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Piero Tedeschi (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Giovanni Ursino (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: We study a game in which two competing sellers supplying experience goods of different quality can induce a perspective buyer into a bad purchase through (costly) deceptive advertising. We characterize the equilibrium set of the game and argue that an important class of these outcomes features pooling behavior at the pricing stage while requiring low quality sellers to air false claims about their product. These claims deceive the buyer and induce a bad purchase with positive probability. Although the low-quality product is purchased with positive probability in these equilibria, the buyer's (expected) utility can be higher than in a fully separating equilibrium. This result suggests that, surprisingly, deceptive practices may actually enhance competition. Finally, we characterize the optimal deterrence by a regulatory agency that seeks to punish deceptive practices. We show that consumer surplus maximization requires lower deterrence than social welfare maximization. The analysis is robust to various extensions.
    Keywords: Asymmetric Information, Bayesian Consumers, Deception, Misleading Advertising, Signaling
    JEL: L13 L15 L4
    Date: 2015–06
  6. By: Haan, Marten; Moraga Gonz (Groningen University)
    Date: 2015
  7. By: Dubois, Pierre; Perrone, Helena
    Abstract: Traditional demand models assume that consumers are perfectly informed about product characteristics, including price. However, this assumption may be too strong. Unannounced sales are a common supermarket practice. As we show, retailers frequently change position in the price rankings, thus making it unlikely that consumers are aware of all deals offered in each period. Further empirical evidence on consumer behavior is also consistent with a model with price information frictions. We develop such a model for horizontally differentiated products and structurally estimate the search cost distribution. The results show that in equilibrium, consumers observe a very limited number of prices before making a purchase decision, which implies that imperfect information is indeed important and that local market power is potentially high. We also show that a full information demand model yields severely biased price elasticities.
    Keywords: consumer behavior; demand estimation; imperfect information; price dispersion; price elasticities; product differentiation; sales; search costs
    JEL: D4 D83 L11 L66
    Date: 2015–10
  8. By: Gaston Llanes (Escuela de Administracion, Pontificia Universidad Catolica de Chile); Francisco Ruiz-Aliseda (Escuela de Administracion, Pontificia Universidad Catolica de Chile)
    Abstract: We study a two-sided market in which a platform connects consumers and sellers, and signs private contracts with sellers. We compare this situation with a two-sided market with public contracts. We find that the platform provider sets positive (negative) royalties to sellers and earns a negative (positive) markup on consumers when contracts are private (public). Thus, private contracting has a significant effect on the price structure. Private contracting leads to lower platform profits, consumer surplus, and social welfare. We study the welfare effects of most-favored-nation clauses, price-forcing contracts, and integration with sellers; and relate our results with the agency model of sales. Our results indicate that enhancing the market power of a dominant platform over sellers may increase welfare because it acts as a commitment device for inducing lower seller prices, mitigating the hold-up problem borne by consumers when they cannot observe sellers' contracts.
    Keywords: Two-Sided Markets; Platforms; Vertical Relations; Most-Favored Nation; Price-Forcing Contracts; Resale Price Maintenance; Integration; Agency Model of Sales
    JEL: L12 L14 L42
    Date: 2015–09
  9. By: Alexander L. Brown (Texas A&M University, Department of Economics); Ajalavat Viriyavipart (Texas A&M University, Department of Economics); Xiaoyuan Wang (University of Electronic Science and Technology of China, School of Management and Economics)
    Abstract: Recent theoretical research indicates that search deterrence strategies are generally optimal for sellers in consumer goods markets. Yet search deterrence is not always employed in such markets. To understand this incongruity, we develop an experimental market where profit-maximizing strategy dictates sellers should exercise one form of search deterrence, exploding offers. We find that buyers over-reject exploding offers relative to optimal. Sellers underutilize exploding offers relative to optimal play, even conditional on buyer over-rejection. This tendency dissipates when sellers make offers to computerized buyers, suggesting their persistent behavior with human buyers may be due to a preference rather than a miscalculation.
    Keywords: exploding offer, search deterrence, experimental economics, quantal response equilibrium
    JEL: C91 D21 L10 M31
    Date: 2014–10–06
  10. By: Margot Racat (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon); Sonia Capelli (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon); Danilo C. Dantas (HEC Montréal - HEC MONTRÉAL)
    Abstract: The present research investigates tactile stimulation in online contexts. Our focus is to explore the influence of interface touch depending on the observed product tactile cues. We contribute to the literature in sensory marketing by empirically testing in an online environment, the effect of various tactile stimuli from the device and the product on attitude toward the product. Our results confirm past literature concerning the effect of touching a smooth interface when on line shopping: in this case, consumers prefer product with tactile cues. However, these results are not consistent across the type of tactile stimulation produced by the touch-based device.
    Keywords: tactile input, sensory marketing, online shopping, texture, need for touch
    Date: 2015–05–26
  11. By: Latchezar Hristov (Audencia Recherche - Audencia)
    Abstract: This book, comprising a collection of articles edited by John Dawson and Masao Mukoyama, will appeal to a wide audience of both academics and practitioners. With contributions from international scholars, the volume offers a comprehensive overview of history, contemporary practices, and future directions of retail internationalization with particular focus on Asian and European companies. Within its eleven chapters it blends conceptual, empirical, and case study-based papers linked through the application of the global portfolio strategy paradigm. The reader is steered from discussion of the broader industry-wide context and historical evolution of international retailing to more textured analyses of present day retailer strategies.
    Keywords: Retailing, Global strategy
    Date: 2015
  12. By: Hamelmann, Lisa; Haucap, Justus
    Abstract: Online-Plattformen wie Suchmaschinen und Marktplätze, die als Intermediäre zwischen verschiedenen Kundengruppen agieren, rücken zunehmend in den Fokus zahlreicher Wettbewerbsbehörden weltweit. Aufgrund ihrer mehrseitigen und dynamischen Strukturen kann sich die Marktposition einzelner Unternehmen schnell verschieben, sodass kartellrechtliche Eingriffe oftmals als strittig eingestuft werden. Der vorliegende Beitrag diskutiert die wesentlichen wettbewerbsrechtlichen Verfahren auf Online-Märkten. Vorab werden spezifische Eigenarten von Online-Märkten erörtert, um eine gemeinsame Basis für die anschließenden Fall-Analysen zu schaffen. Neben dem Kartellverfahren gegen Google wird dann eine Einordnung der kartellrechtlichen Behandlung von diversen Vertikalbeschränkungen vorgenommen. Grundsätzlich wird festgestellt, dass auf Online-Märkten und im stationären Handel ähnliche Wettbewerbsbedenken hervorgerufen werden, sodass bestehende Methoden angewendet werden können. Gleichzeitig muss jedoch berücksichtigt werden, dass aufgrund der speziellen Marktcharakteristika auf Online-Märkten einige Instrumente des Wettbewerbsrechts angepasst werden müssen. Nur so können mögliche Wettbewerbseffekte verlässlich festgestellt werden und Regulierungen vorgenommen werden, die weder zukünftige Innovationen noch den technischen Fortschritt hemmen.
    Abstract: Online platforms such as search engines and market places, which act as intermediaries between customer groups, are increasingly at the focus of numerous competition authorities worldwide. Because of their multi-sided and dynamic nature, market positions can change quickly, thus the application of competition law may prove challenging. After discussing the key characteristics and possible approaches towards market definition, this paper analysis the most prominent proceedings such as the antitrust case against google as well as different cases on vertical restraints in e-commerce. The paper posits that in principle, online markets are prone to similar competition concerns as offline markets and existing competition concepts can adequately be applied. However, some of the tools need to be adjusted to account for the special characteristics of online markets, to reliably assess potential competition issues in order not to retard innovation and technological advances.
    Keywords: Digitale Märkte,Vertikalbeschränkungen,Zweiseitige Plattformen,Digital Markets,E-Commerce,Two-Sided Platforms,Google,Vertical Restraints
    Date: 2015
  13. By: Mehmet Akif Çini (Selçuk University); Mehmet Emin Demir (SELÇUK UNIVERSITY)
    Abstract: The gradual increase of competition and the effects of globalization make yeting the customer satisfaction increasingly more diffecult in the field of transportation as well as in other sectors. Meeting the customer satisfaction is one of the biggest obstackles to ensure the customer loyalty. As a result, to differenciate from their competitors and to ensure customer loyalty, the enterprices have had to increase their quality of service as well as their product. In this study a research has been made to find out what kind of effects the service quality has on customer satisfaction and loyalty in the enterprises operating in the transport sector in the province of Konya. This study has been carried out with the participation of the studets of Konya Selçuk University.
    Keywords: The Dimentions of Service Quality, Customer Satisfaction, Loyalty.
    JEL: M31
  14. By: Snyder, Jason; Ijumba, Claire; Tschirley, David; Reardon, Thomas
    Abstract: Nearly 500 processed food products across five product categories (milled grains, packaged rice, dairy, fruit juices, and poultry) were identified in Dar es Salaam retail outlets; Contrary to common views, local and regional processing – not imports from outside the continent - dominate this market; Branding has expanded dramatically in the city in recent years. Branded maize meal now dominates in all retail outlet types; over 50 branded blended flour products can be found; even 20 brands of packaged rice can now be found, though currently limited to supermarket chains;
    Keywords: Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,
    Date: 2015–05–08
  15. By: Franciso Galera (University of Navarra); Pedro Mendi (University of Navarra); Juan Carlos Molero (University of Navarra)
    Abstract: We propose a theoretical model to analyze the welfare implications of price discrimination in the presence of differences in quality. The model considers two markets where in each market competition takes place between a local firm that operates in that market only and a global firm that operates in both markets. All firms are assumed to be producing with zero marginal costs. Local firms produce a good that is perceived by consumers to have superior quality than that produced by the global firm. We find that there are parameter values such that welfare increases while total output decreases if the global firm engages in price discrimination. This is due to a positive allocation effect brought about precisely by the global firm engaging in price discrimination.
    Keywords: Vertical diff erentiation, third-degree price discrimination, welfare
    JEL: D43 D60
    Date: 2015–10–27
  16. By: Zuhrem Ergun (Selcuk University)
    Abstract: As the competition between the organizations increases, the organizations are no longer able to create differentiation in product and service that they are trying to find new ways to create difference. Abstract values become more important than material sources, in this context intangible values are much more important than anything, and the most important of these are ‘Corporate Reputation’ and ‘Service Quality’.In particular, corporate reputation is important to be addressed in health service sector. As the main point in this service is human health, how the customers perceive reputation and service quality becomes important. The frequency and content demanded from health sector is affected by the management and staff quality of organization, whether the service is reliable or not, the effectiveness of the communication in the environment and social responsibility consciousness towards society.In the light of this information, our aim is to determine whether there is a difference between the effects of corporate reputation in perceived service quality at hospitals and the perceived service quality by the customers through comparing public and private hospitals.
    Keywords: corporate reputation, service quality, perceived service quality.
    JEL: M00 I11 D41
  17. By: Jamie Chen
    Abstract: The purpose of this study is to develop and estimate an integrated structural path model of the determinants of cruise demand, based on the nexus of motivation, preference, and intention of cruise tourists. The paper aims to identify the drivers of this demand in a growing competitive world market. Our model results show that different cruise motives have significant positive or negative effect on specific customer preferences and intentions, while some significant relationships between specific cruise preferences and intentions are also found. Based on our structural path model, a T-test is applied to compare the differences of cruise motivations and cruise preferences between the growing Asian market and the global cruise market, in order to trace the instrumental determinants of cruise passengers, leading to a new understanding of cruise competitiveness in different regional markets.
    Keywords: cruise; competitiveness; motivation; preference; intention
    Date: 2015–10
  18. By: Pathak, Akhileshwar
    Abstract: Consumer protection law rests on the foundations of contract law and the law of sale of goods. A consumer law has to conceptually express this foundation and the modifications it is bringing about in these laws. Without this, the law would become unclear, conflicting and confusing. In this respect, the Consumer Protection Bill, 2015 is not secured in its foundation and needs revision. The paper reviews the rights of the consumer (buyer) to receive damages for breach by the seller. The bill recognises only repair and replacement as damages for the consumer. For claiming other damages, the consumer must establish negligence by the seller. The principle of contract law, to the contrary, is that for every breach, irrespective of the intention or diligence, the seller has to pay damages to the buyer. The bill has mixed up contractual damages with damages under the law of torts. In sale contracts, consequential damages arising from defective goods are readily recognised. The bill should recognise this. The paper, reviewing the law, develops draft provisions on the theme. The draft provisions are in the annexure to the paper.
  19. By: Behrooz Noori (Department of Industrial Engineering, West Tehran Branch, Islamic Azad University)
    Abstract: Online banking is increasingly common. Financial institutions deliver online services via various electronic channels, subsequently diminishing the importance of conventional branch networks. This study proposed an integrated data mining and customer behavior scoring model to manage existing mobile banking users in an Iranian bank. This segmentation model was developed to identify groups of customers based on transaction history, recency, frequency, monetary background. It classified mobile banking users into six groups. This study demonstrated that identifying customers by a behavioral scoring facilitates marketing strategy assignment. Then the bank can develop its marketing actions. Thus, the bank can attract more customers, maintain its customers, and keep high customers' satisfaction.
    Keywords: Data mining; mobile data, mobile banking; customer segmentation
    JEL: C54 C52 C88
  20. By: Aleksandra Aloric; Peter Sollich; Peter McBurney; Tobias Galla
    Abstract: Loyal buyer-seller relationships can arise by design, e.g. when a seller tailors a product to a specific market niche to accomplish the best possible returns, and buyers respond to the dedicated efforts the seller makes to meet their needs. We ask whether it is possible, instead, for loyalty to arise spontaneously, and in particular as a consequence of repeated interaction and co-adaptation among the agents in a market. We devise a stylized model of double auction markets and adaptive traders that incorporates these features. Traders choose where to trade (which market) and how to trade (to buy or to sell) based on their previous experience. We find that when the typical scale of market returns (or, at fixed scale of returns, the intensity of choice) become higher than some threshold, the preferred state of the system is segregated: both buyers and sellers are segmented into subgroups that are persistently loyal to one market over another. We characterize the segregated state analytically in the limit of large markets: it is stabilized by some agents acting cooperatively to enable trade, and provides higher rewards than its unsegregated counterpart both for individual traders and the population as a whole.
    Date: 2015–10
  21. By: Jérôme Lacoeuilhe (IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée); Samy Belaid (Ecole de Management de Normandie); Basma Taïeb (ESG Research Lab - ESG Management School)
    Abstract: Cet article explore les points de vue des consommateurs à l’égard des marques de distributeurs (MDD). A cet effet, 2 focus group et 11 entretiens individuels semi-directifs ont été réalisés. L’analyse de contenu identifie les différentes facettes des MDD telles qu’elles ont été perçues par les consommateurs : performance économique, sécurité/réassurance, symbolique liée à l’achat des MDD et valorisation. Ces résultats permettent de mieux comprendre les rapports qu’entretiennent les consommateurs avec les marques de distributeurs et renseignent également sur la manière de valoriser les MDD.
    Keywords: comportement du consommateur, étude qualitative,marque, marques de distributeur
    Date: 2015–10

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