nep-mkt New Economics Papers
on Marketing
Issue of 2016‒09‒18
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Price Setting in Online Grocery Markets: The Case of Chocolate By Grein, Theresa; Herrmann, Roland
  2. The Theory of Planned Behaviour and Food Choices: The Case of Sustainable pre-packed Salad By Stranieri, S.; Ricci, E.; Banterle, A.
  3. Quality Seals in the Food Sector: Consumers Information Needs and Sources By Meixner, Oliver; Haas, Rainer
  4. Consumers’ Preference for Sweet Peppers with Different Process Attributes: A Discrete Choice Experiment in Taiwan By Yeh, Ching-Hua; Hartmann, Monika
  5. Price Competition in Product Variety Networks By Ushchev, Philip; Zenou, Yves
  6. Convexity of Network Restricted Games Induced by Minimum Partitions By Alexandre Skoda
  7. Buying Reputation as a Signal of Quality: Evidence from an Online Marketplace By Lingfang (Ivy) Li; Steven Tadelis; Xiaolan Zhou
  8. Key Success Factors in the Brazilian Coffee Agrichain: Present and Future Challenges By de Almeida, Luciana Florêncio; Zylbersztajn, Decio
  9. Preferences for School Milk - How Juveniles Differ By Christoph-Schulz, Inken; Weible, Daniela; Salamon, Petra
  10. Does having a Choice make a Difference? Market Potential of the Animal Welfare Label in Germany By Schulze-Ehlers, Birgit; Purwins, Nina
  11. Acceptance of Animal Husbandry Practices: The Consumer Perspective By Roosen, Jutta; Dahlhausen, Johanna Lena; Petershammer, Silke
  12. Using Big Data to Estimate Consumer Surplus: The Case of Uber By Peter Cohen; Robert Hahn; Jonathan Hall; Steven Levitt; Robert Metcalfe
  13. Consumers’ Acceptance and Attitude towards Bioactive Enriched Foods By Hegyi, Adrienn; Kertész, Zsófia; Kuti, Tünde; Sebők, András
  14. Family Connections in Motorsports: The Case of Formula One By Craig A. Depken II; Peter A. Groothuis; Kurt W. Rotthoff
  15. Product Differentiation with Multiple Qualities By F. Barigozzi; C. A. Ma
  16. Price Margins in the Finnish Food Chain By Peltoniemi, Ari; Niemi, Jyrki

  1. By: Grein, Theresa; Herrmann, Roland
    Abstract: Online markets are developing rapidly in many industrialized countries and have already reached a rather mature status for some product categories. This, however, is not the case in the food sector. In Germany, the online food market captured still less than 1 % of total food sales in 2014. Despite this small share of the online market, the segment is clearly increasing and major players on the offline grocery market engage themselves on the online market, too, or they plan to do so. It is intended in this paper to contribute to our knowledge on competitive strategies of multichannel suppliers and pure online traders which are active on this growing market segment. A major element of competitive strategies on the online market for foods is pricing. We concentrate on pricing strategies of multichannel firms and pure online traders on the German online market and present evidence for the product group chocolate. More and quicker price information for consumers will become available with the development of online markets. Theory suggests that buyers’ search costs will be lowered and market efficiency will be improved. With lower search costs, it is expected that price dispersion will be reduced, i.e. markets will tend towards the law of one price for identical goods, and that the price level will decline and adjust rapidly. It may, however, happen that online markets induce new search costs for consumers as the variety of products offered will also increase substantially. It is an empirical question whether the level and the dispersion of prices will actually fall as the online supply of foods grows. The increasing empirical evidence on non-food markets indicates that remarkable differences between various suppliers persist with the growing importance of online markets and prices remain relatively rigid over time. Different explanations for these patterns are offered in the literature including a growing importance of product differentiation and non-price strategies on online and offline markets.
    Keywords: Agribusiness, Demand and Price Analysis,
    Date: 2016–05
  2. By: Stranieri, S.; Ricci, E.; Banterle, A.
    Abstract: The demand for sustainable food products is in continuous growth. There are many different instruments that can be used in order to signal to consumers environmentally-friendly characteristics of food products, among which product labelling. Organic certification is probably the most well-known. Many studies have investigated consumer preferences towards organic products (Andersen, 2011; Bravo et al., 2013; Breustedt et al., 2011; Falguera et al., 2012; Gil et al., 2000; Gracia and De Magistris, 2008; Meike and Ulrich, 2014; Krystallis et al., 2006; Lee Wan-Chen et al., 2013). Despite the relevance of this aspect, other crucial labelled product attributes related to the sustainability have not yet been widely investigated (Bazoche et al., 2014; Govindasamy and Italia, 1998; Magnusson and Cranfiled, 2005; Yigezu et al., 2013). The paper aims at understanding the main factors affecting consumer purchase of products that report environmentally-friendly labelled features. The analysis refers to minimally processed pre-packed salad with environmental-friendly labelled characteristics related to integrated pest management. The Theory of Planned Behaviour (TPB) (Ajzen, 1985) represents the conceptual framework of this analysis. Purchases of such products show a steady upward trend in Italy (Freshfel, 2015). Most of the research about the food category of minimally processed vegetables focuses on microbiological quality, safety, processing and packaging issues (Fusi et al., 2016) . The analysis on the determinants affecting consumers preferences towards environmental characteristics of such products are still underdeveloped (Sillani and Nassivera, 2015). The paper is organized as follow. The next section will introduce the conceptual framework. Afterword, the methodology is presented. Results and some preliminary final remarks are placed at the end.
    Keywords: Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2016–05
  3. By: Meixner, Oliver; Haas, Rainer
    Abstract: This study analyzes consumers’ information needs concerning quality seals in the food sector. A survey was conducted taking one of the most well-known quality labels for food products in Austria (the AMA Quality Seal). Apparently, there is a lack of consumer-oriented information. Up to now, the type of information con-sumers of AMA sealed products demand is more or less unknown. Therefore, the objectives of this study were (1) to identify consumers actual use of information and (2) their information needs about the AMA Quality Seal in order to provide needs-based consumer information.
    Keywords: quality seal, information needs, consumer survey, cluster analysis, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2016–05
  4. By: Yeh, Ching-Hua; Hartmann, Monika
    Abstract: Based on an online discrete choice experiment (DCE) this study investigates the relative importance of food label information (country of origin, production methods, chemical residue testing (CRT)) and price for Taiwanese consumers’ in their purchase of sweet peppers. Results show that respondents focus mostly on the COO labeling during their sweet-pepper shopping, followed by price. Information concerning CRT results and production methods are of less importance. Our findings also indicate that interaction between attributes matter and that preference for attribute levels differs depending on socioeconomic characteristics.
    Keywords: choice experiment, food safety information, production methods, country of origin, logit models, Agribusiness, Food Consumption/Nutrition/Food Safety, Production Economics,
    Date: 2016–05
  5. By: Ushchev, Philip; Zenou, Yves
    Abstract: We develop a product-differentiated model where the product space is a network defined as a set of varieties (nodes) linked by their degrees of substitutability (edges). We also locate consumers into this network, so that the location of each consumer (node) corresponds to her “ideal” variety. We show that, even though prices need not to be strategic complements, there exists a unique Nash equilibrium in the price game among firms. Equilibrium prices are determined by both firms’ sign-alternating Bonacich centralities and the average willingness to pay across consumers. They both hinge on the network structure of the firm-product space. We also investigate how local product differentiation and the spatial discount factor affect the equilibrium prices. We show that these effects non-trivially depend on the network structure. In particular, we find that, in a star-shaped network, the firm located in the star node does not always enjoy higher monopoly power than the peripheral firms.
    Keywords: Networks, Product Variety, Monopolistic Competition, Spatial Competition, Research Methods/ Statistical Methods, D43, L11, L13,
    Date: 2016–09–07
  6. By: Alexandre Skoda (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We consider restricted games on weighted communication graphs associated with minimum partitions. We replace in the classical definition of Myerson's graph-restricted game the connected components of any subgraph by the sub-components corresponding to a minimum partition. This minimum partition P min is induced by the deletion of the minimum weight edges. We provide necessary conditions on the graph edge-weights to have inheritance of convexity from the underlying game to the restricted game associated with P min. Then we establish that these conditions are also sufficient for a weaker condition, called F-convexity, obtained by restriction of convexity to connected subsets. Moreover we show that Myerson's game associated to a given graph G can be obtained as a particular case of the P min-restricted game for a specific weighted graph G ′. Then we prove that G is cycle-complete if and only if a specific condition on adjacent cycles is satisfied on G ′ .
    Keywords: restricted game,partitions,communication networks,cooperative game
    Date: 2016–03
  7. By: Lingfang (Ivy) Li; Steven Tadelis; Xiaolan Zhou
    Abstract: Reputation is critical to foster trust in online marketplaces, yet leaving feedback is a public good that can be under-provided unless buyers are rewarded for it. Signaling theory implies that only high quality sellers would reward buyers for truthful feedback. We explore this scope for signaling using Taobao's "reward-for-feedback" mechanism and find that items with rewards generate sales that are nearly 30% higher and are sold by higher quality sellers. The market design implication is that marketplaces can benefit from allowing sellers to use rewards to build reputations and signal their high quality in the process.
    JEL: D47 D82 L15 L86
    Date: 2016–09
  8. By: de Almeida, Luciana Florêncio; Zylbersztajn, Decio
    Abstract: Coffee production has grown 100% in volume over the past 30 years, with 30 million bags of coffee consumed every year in the world. Brazil is responsible for 35% of this production, followed by Vietnam (16%), Indonesia (7%), Colombia (5%), and Ethiopia (5%). At this pace, consumption has expanded not only in traditional markets such as the United States of America (4.2 kg/year), Germany (6.9 kg/year) and France (5.7 kg/year), but also in tea‐driven markets such as Japan, Korea, Russia and China (CECAFE 2013). In 2013, Brazil harvested 49.15 million 60 kg bags of processed coffee, 38.29 million of which were of Arabica coffee and 10.86 million of Conilon species (CONAB 2014). The planted area in Brazil is 2.3 million hectares and there are about 287,000 producers, predominantly mini and small farmers. Having continental dimensions, the country presents a variety of climates, reliefs, altitudes and latitudes that allow the production of a wide range of types and qualities of coffee (MAPA 2014). This research aimed to clarify present and future challenges for the Brazilian coffee agrichain, considering the growing demand and also competitiveness between the coffee countries’ producers. To capture the vivid perception of the actors in the coffee chain, a qualitative approach was employed. The research was conducted in three phases. In the first phase, 10 coffee specialists were interviewed using the snowball technique with the saturation premise, to identify the coffee sector’s main milestones for Brazil over the next 30 years. In the second phase, desk research was conducted to collect data and bibliographical information. This culminated in eight key success factors for coffee farming management. Finally, in the third phase, the results of phase two were submitted for analysis by 39 coffee farmers through three discussion panels held in the major producing regions: Sul de Minas (corresponding to 60% of the national production), Cerrado Mineiro (with 20%), and Matas de Minas (with 15%) (CECAFE 2012). The first outcome was a comparative analysis of the three regions using the lens of the key success factors and, secondly, the main future challenges faced by each region. Added to those results, the panels provided insights for public policies and private strategies. The study consolidated new drivers of change that directly impact corporate strategies and public policies, namely: a) increasing complexity in coffee farming, b) farm succession, c) mechanization, d) increased use of pesticides, d) climate change, e) consumer behavior, and e) risk management in the coffee agrichain. Given these drivers of change, companies in the Brazilian coffee agrichain may move forward with relevant strategic focus on important issues, leading to: i) loyalty from the farmer to guarantee high quality coffee supply, ii) increase in entry barriers to ensure the maintenance of leadership in world coffee production and exportation, iii) operational risk minimization for companies as well as coffee farmers, iv) encourage and participate in the farmers´ actions to make coffee activity more environmental friendly, and finally, v) designing marketing plans connected with the coffee consumers’ habits and desires, current and future.
    Keywords: coffee, agribusiness, key success factors, Agribusiness,
    Date: 2016–05
  9. By: Christoph-Schulz, Inken; Weible, Daniela; Salamon, Petra
    Abstract: Snacks and lunches offered at school can decisively influence children’s dietary habits. In the light of discussions to establish prevention and intervention programs to abate current trends of rising childhood obesity, children’s preferences for food items with lower calorie content gain on importance. But youths preferences concerning different school milk products are not well-known. Therefore, the objective is to investigate if the milk products offered at school still meet older children’s preferences or if modifications could prove to be useful. Based on outcomes of an online survey covering a choice experiment and conducted among juveniles in Germany the probability that youths benefit from different products as well as varying prices, sugar and fat contents is estimated. Socio-demographics, psycho-metrics and perceived weight status are employed to explain youths choices preferring novel school milk products yet unavailable in German schools. Results of the choice experiment show that youths aged 15-18 are a heterogeneous group. They prefer a wider range of different products including drinking yoghurt as an option as well. Results indicate that nutritional aspects (low sugar/fat content, artificial sweetener) and body image are important for some of them.
    Keywords: school milk, youths, preferences, choice experiment, body image, Agribusiness,
    Date: 2016–05
  10. By: Schulze-Ehlers, Birgit; Purwins, Nina
    Abstract: This paper investigates the effects of the introduction of a specific animal welfare label on consumer decision making when shopping for pork. Based on two empirical studies, we analyze whether substitution effects between organic, regional, and animal welfare products have to be expected under current market conditions. Our results show that persons with preference for animal welfare decide significantly more often for the animal welfare or the organic product, not for local, and that organic heavy buyers do not differ from rest of sample with respect to animal welfare or local choice. The animal welfare label as stand-alone selling proposition may be too weak to create value added. Based on the examination of interaction terms, we find that organic does not gain by combination with an animal welfare label, whereas regional labels are not associated yet with animal welfare and would profit more by including an additional informational cue. We tentatively conclude that animal welfare programs should be embedded in regional marketing programs.
    Keywords: organic, regional, choice experiment, interaction terms, mixed logit, Agribusiness,
    Date: 2016–05
  11. By: Roosen, Jutta; Dahlhausen, Johanna Lena; Petershammer, Silke
    Abstract: Everything consumers do involves making a choice. Looking at these choices, an increasing consumer interest in food products bearing labels identifying non-tangible attributes has been observed over the last years. Consumer concern relates not only to the issue as to what is produced and which product attributes are present in final products, but the growing sentiment relates also to the question of how food is produced in general. Consumers question fairness and justness of production processes with regard to producers (e.g., fair trade labelling) or animals (e.g., animal welfare labelling) and demand support for local supply chains. As a result, certain food production technologies are stigmatized in certain parts of the society. Thereby stigma is defined as “[…] a mark placed on a person, place, technology, or product, associated with a particular attribute that identifies it as different and deviant, flawed, or undesirable.” (Kasperson, Jhaveri & Kasperson, 2001:19). Human values are thought to be at the root of the stigmatization of certain food production technologies. A systematic analysis of human values was introduced in the seminal book by Milton Rokeach in 1973. He defines values “an enduring belief that a specific mode of conduct or end-state of existence is personally and socially preferable to alternative modes of conduct or end-states of existence.” Values hence transgress situations and time. Later work by Schwartz (1994) has refined the definition of values and developed a value survey instrument that links values to ten different value domains. He arranges these along a two-folded dichotomy of self-enhancement versus self-transgression and openness to change versus conservation. In consequence, some of these values relate to egoistic versus altruistic versus biospheric values. Thereby egoistic values refer to an egocentric orientation, altruistic values refer to a homocentric orientation and biospheric values refer to an ecocentric orientation (De Groot & Steg, 2008).
    Keywords: Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2016–05
  12. By: Peter Cohen; Robert Hahn; Jonathan Hall; Steven Levitt; Robert Metcalfe
    Abstract: Estimating consumer surplus is challenging because it requires identification of the entire demand curve. We rely on Uber’s “surge” pricing algorithm and the richness of its individual level data to first estimate demand elasticities at several points along the demand curve. We then use these elasticity estimates to estimate consumer surplus. Using almost 50 million individual-level observations and a regression discontinuity design, we estimate that in 2015 the UberX service generated about $2.9 billion in consumer surplus in the four U.S. cities included in our analysis. For each dollar spent by consumers, about $1.60 of consumer surplus is generated. Back-of-the-envelope calculations suggest that the overall consumer surplus generated by the UberX service in the United States in 2015 was $6.8 billion.
    JEL: H0 J0 L0
    Date: 2016–09
  13. By: Hegyi, Adrienn; Kertész, Zsófia; Kuti, Tünde; Sebők, András
    Abstract: The aim of our research was to explore the consumers’ attitude towards healthy diet and food consumption and measure the acceptance of these types of products on the product portfolio developed in PATHWAY-27 projects. The benefit of the experiment was to have a better understanding on HTAS based questionnaire with using real prototypes of bioactive enriched foods with potential health claims. The results showed clearly, that unusual appearance and flavour have negative effect on the opinion of the product and the positive health effect also increases the acceptance of the products.
    Keywords: HTAS, functional foods, sensory test, bioactive enriched foods, Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2016–05
  14. By: Craig A. Depken II; Peter A. Groothuis; Kurt W. Rotthoff
    Abstract: Many careers find within-family career following common including law, politics, business, agriculture, medicine, entertainment, and professional sports. As children enter the same career as their parents, there are potential benefits: physical-capital transfer, human-capital transfer, brandname- loyalty transfer, and/or nepotism. In Formula One (auto racing) career following is also common where many sons follow their father into racing and many brothers race at the same time. Using a panel describing the annual statistics for drivers from 1953-2011, we find that the brothers of Formula One drivers appear to benefit from human capital transfer and nepotism but that sons gain little from human capital transfer and do not enjoy nepotism. We do find, however, that only the best drivers have sons who follow them into racing suggesting that sons can extend the brand name-loyalty their famous fathers have created. Key Words: Motorsports, Nepotism, Human Capital, Brand Loyalty.
    JEL: L83 Z20
    Date: 2016
  15. By: F. Barigozzi; C. A. Ma
    Abstract: We study subgame-perfect equilibria of the classical quality-price, multistage game of vertical product differentiation. Each firm can choose the levels of an arbitrary number of qualities. Consumers’ valuations are drawn from independent and general distributions. The unit cost of production is increasing and convex in qualities. We characterize equilibrium prices, and the equilibrium effects of qualities on the rival’s price in the general model. We present necessary and sufficient conditions for equilibrium differentiation in any of the qualities.
    JEL: D43 L13
    Date: 2016–09
  16. By: Peltoniemi, Ari; Niemi, Jyrki
    Abstract: There is a growing interest – among consumers, the media, political decision-makers and the food system at large – in more detailed information on the formation of consumer prices for foodstuffs. This paper, based on Finnish case evidence, is an opportunity to increase the transparency of the food chain as well as consumers’ knowledge of its functioning. The aim of this study is to present an analysis of the price margin data for selected food products falling into three sectors: meat products, dairy products and cereal products. More specifically, the objective is to determine the share of consumer food prices taken by each actor along the food supply chain: primary production, processing, and retailing, as well as government taxes.
    Keywords: Food, price margin, primary production, processing, retailing, Agribusiness, Demand and Price Analysis,
    Date: 2016–05

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