nep-mkt New Economics Papers
on Marketing
Issue of 2016‒08‒14
nine papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. ATTRIBUTES AFFECTING CONSUMERS' PURCHASING DECISION ON PORK SCRATCHING By Thanut Thumrongpirun; Apichart Daloonpate; Visit Limsombunchai Author-Email : -
  2. Retailer’s product line choice with manufacturer’s multichannel marketing By Cong Pan
  3. Effect of Store Atmosphere on Consumer Purchase Intention By Hussain, Riaz; Ali, Mazhar
  4. Demand Heterogeneity in Insurance Markets: Implications for Equity and Efficiency By Michael Geruso
  5. Evaluating Scale and Technical Efficiency among Farms and Ranches with a Local Market Orientation By Bauman, Allison; Jablonski, Becca B.R.; Thilmany McFadden, Dawn
  6. Consumption during the Great Recession in Italy By Martina Celidoni; Michele De Nadai; Guglielmo Weber
  7. Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market By Fan, Ying; Yang, Chenyu
  8. Price Determinants of California Wine in the U.S. Market: Does the Type Matter? By Asgari, Ali; Reed, Michael R.
  9. An Experimental Study of Bond Market Pricing By Matthias Weber; John Duffy; Arthur Schram

  1. By: Thanut Thumrongpirun; Apichart Daloonpate; Visit Limsombunchai Author-Email : - (Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand)
    Abstract: At present, pork rind is popular in the consumer industry. It is more competitive. This gives operators a lot Improves Product Development and pork rind. Without knowing exactly what features of products that affect the purchasing decisions of consumers. It is impossible to meet the preferences of consumers appropriately. This paper aimed to analyze attributes that affected consumers’ purchasing decision on pork scratching products, using conjoint analysis technique. Four hundred consumers in Bangkok were interviewed using questionnaire. Moreover, the cluster analysis technique was applied to segment consumers into groups that had satisfaction on similar attributes in order to formulate marketing strategies. The analytical results found that the consumers gave the most importance on the vacuum packaging. The important attributes of pork scratching products next below the top were price, labels, and spiral form. The cluster analysis showed that the consumers could be divided into 3 groups based on their similar preferences on attributes. The first group of consumers was mainly women with low income that gave importance on THB 50 per 100 grams prices. The second group of consumers was mainly men with high income who preferred the spiral shape of pork scratching. Finally, the third group of consumers was mainly women with high income that favored the zip lock packaging. This study results were beneficial to pork scratching seller to develop their marketing strategies.
    Keywords: Pork Scratching Product, Consumer Behavior, Cluster Analysis Technique, Conjoint Analysis Technique
    JEL: Q10 Q13
    Date: 2016–07
  2. By: Cong Pan
    Abstract: This paper studies how a retailer decides the length of product line in a vertically related industry. We study a market with two product varieties. Each retailer decides the number of varieties it procures from an upstream manufacturer. The manufacturer may open an online store and encroach on the resale market. In the case of a monopoly retailer, anticipating the online store’s encroachment, the retailer may be willing to shorten its product line, although it can choose a full-length one. In the case of duopoly retailers, on the other hand, retailers may make their product lines completely overlapped, partially overlapped, or non-overlapped. Moreover, the total surplus may decrease due to the efficiency loss in the online channel, although the competition in the resale market becomes more intense.
    Date: 2016–07
  3. By: Hussain, Riaz; Ali, Mazhar
    Abstract: This paper aimed at identifying the effects of atmosphere on the consumer purchase intention in international retail chain outlets of Karachi, Pakistan. This was the first study, which investigated the collective impact of atmospheric variables at one point in time on purchase intention. This research was causal in nature. A sample of 300 consumers was taken who usually visited these outlets. Data was collected through a well-structured questionnaire and analyzed through regression analysis. Research findings indicate that atmospheric variables such as cleanliness, scent, lighting, and display/layout have a positive influence on consumers’ purchase intention; whereas music and color have insignificant impact on consumers’ purchase intention. The temperature has almost no impact on the purchase intention of the consumers. This study has important implication for Practitioners and Academicians.
    Keywords: store atmosphere, shopping environment, cleanliness, scent, lighting, temperature, music,display/layout, purchase intention
    JEL: M31 M39
    Date: 2015–01–09
  4. By: Michael Geruso
    Abstract: In many markets insurers are barred from price discrimination on consumer characteristics like age, gender, and medical history. By themselves, such restrictions are known to exacerbate adverse selection problems. But the conventional wisdom—widely reflected in policy—is that with regulatory tools like premium subsidies, it is possible to address selection and induce efficient plan choices without price-discriminating. In this paper, I show why this conventional wisdom is wrong: As long as different sets of consumers (men and women, rich and poor, young and old) differ in their willingness-to-pay for insurance conditional on the losses they generate, then price discrimination across such groups is welfare-improving. The conventional wisdom is wrong because it implicitly assumes a one-to-one mapping from insurable risk to insurance valuation. I show that demand heterogeneity that breaks this one-to-one relationship is empirically relevant in a consumer health plan setting. Younger and older consumers and men and women reveal strikingly different demand for health insurance, conditional on their objective medical spending risk. This implies that these groups must face different prices in order to sort themselves efficiently across insurance contracts. The theoretical and empirical analysis highlights a previously unexplored, but fundamental, tradeoff between equity and efficiency that is unique to selection markets.
    JEL: I11 I13
    Date: 2016–07
  5. By: Bauman, Allison; Jablonski, Becca B.R.; Thilmany McFadden, Dawn
    Abstract: In recent years, the growth in local food marketing channels has been significant. Most of the research in this field examining the economic implication of these trends has focused post-farmgate including supply chain analysis (e.g. Hardesty et al., 2014; King et al., 2010), regional economic impacts (e.g. Brown et al., 2014; Hughes et al., 2008; Jablonski et al., 2016), and consumer values and motivations that have driven demand (e.g. Costanigro, 2014; Lusk and Briggeman, 2009). To date, with the exception of a few case studies examining expenses and sales by channel assessment (LeRoux et al., 2010; Hardesty and Leff, 2010; Jablonski and Schmit 2016) there has been little research that examines the impact on financial viability among farms selling through these markets. The goal of this paper is twofold: first, to identify the factors that have the greatest influence on the efficiency of farmers and ranchers that participate in local food systems, and second, to estimate the relationship between marketing strategy and farm financial efficiency, with a particular focus on variations across farm size. Our estimation of the stochastic production frontier suggests that scale, production enterprise specialty, market outlet choices, land ownership, and management of expenses have the greatest influence on producer financial efficiency. Our model suggests that scale has the largest impact on financial efficiency, providing evidence that, all else constant, the most important factor in the efficiency of direct market producers is scale. When profit is defined as operating profit, results indicate that marketing channel is not an important indicator of efficiency. But when profit is defined as return on assets, marketing channel is an important indicator of efficiency, albeit less than is scale. Results from this analysis indicate there are economies of scale associated with farms and ranches that sell through local and regional markets, and that scale rather than marketing channel has the largest influence on efficiency.
    Keywords: Local foods, technical efficiency, farm profitability, Agribusiness, Farm Management, Productivity Analysis,
    Date: 2016
  6. By: Martina Celidoni (Institute for Fiscal Studies); Michele De Nadai (Institute for Fiscal Studies); Guglielmo Weber (Institute for Fiscal Studies and University of Padua)
    Abstract: We use Italian micro data to investigate how consumers reacted to the Great Recession. In particular, we study the age profiles of non-durable consumption, durable purchases and wealth over the 2008-2012 period for different year-of-birth cohorts, and how they departed from the way they would have been had consumer behavior been the same as it was over the 1995-2006 period. We find that consumption dropped most for younger households - only part of these drops can be explained by the increase in unemployment. We also investigate whether the crisis had an impact on the way consumers allocate their spending among broad consumption bundles. We find that the budget elasticity of the demand for food changed during the recession period, particularly among the young.
    Keywords: Great Recession, consumption
    Date: 2016–07–20
  7. By: Fan, Ying; Yang, Chenyu
    Abstract: This paper studies (1) whether, from a welfare point of view, oligopolistic competition leads to too few or too many products in a market, and (2) how a change in competition affects the number and the composition of product offerings. We address these two questions in the context of the U.S. smartphone market. Our findings show the market contains too few products and that a reduction in competition decreases both product number and product variety. These results suggest that merger policies should be stricter when we take into account the effects of a merger on product choice in addition to those on pricing.
    Keywords: endogenous product choice; merger; product proliferation; smartphone industry
    JEL: L13 L15 L41 L63
    Date: 2016–08
  8. By: Asgari, Ali; Reed, Michael R.
    Abstract: The price of wine reflects the various features that differentiate each bottle. This study is aimed at analyzing the determinants of California wine prices. A hedonic price model is estimated using data collected between 2004 and 2015 from the Wine Spectator, with a total of 4,693 individual wines, focusing on type, age, critical points, and variables related to the origin. The impact of geographic production of origin from Bay Area/Central Coast, Carneros, Napa, Mendocino/Lake, and South Coast is analyzed. An important aspect of this analysis is to investigate whether the type of wine is important, and if any price premium regarding to the type (still and sparkling) is changing, holding quality and quantity constant. The main findings suggest California wine prices are determined by time related variables such as age. The expert points given by the Wine Spectator also have a significant impact on prices.
    Keywords: Hedonic price model, Sparkling, California Wine prices, U.S. wine market, Demand and Price Analysis, Marketing,
    Date: 2016–07
  9. By: Matthias Weber (Bank of Lithuania and Faculty of Economics, Vilnius University); John Duffy (Department of Economics, University of California-Irvine); Arthur Schram (University of Amsterdam and European University Institute)
    Abstract: An important feature of bond markets is the relationship between initial public offering prices and the probability of the issuer defaulting. First, this probability affects the bond prices. Second, IPO prices determine the default probability. Though market equilibrium has been shown to predict well for other assets, it is a priori unclear whether markets will yield competitive prices when such interaction with the default probability occurs. We develop a flexible bond market model that is easily implemented in the laboratory and examine how subjects price bonds. We find that subjects learn to price bonds well after only a few repetitions.
    Keywords: Bond markets; Experimental finance; Experimental markets; Asset pricing; Learning
    JEL: C92 C90 D47 G12
    Date: 2016–08

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