nep-mkt New Economics Papers
on Marketing
Issue of 2016‒10‒16
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The Impact of Market Orientation, Brand Image and Internal Marketing on Brand Orientation and Strengthening Br By MUHAMMAD ADAM; MIRZA TABRANI
  2. The effectiveness of offering food samples to increase purchase involvement in supermarket settings By Dario Dunković
  4. Risk Marketing By Jérôme Boutang; Michel De Lara
  5. The Formation of Consumer Brand Preferences By Bart J. Bronnenberg; Jean-Pierre H. Dubé
  6. Why firms should care for all consumers By Planer-Friedrich, Lisa; Sahm, Marco
  7. Ethnic segmentation in marketing: a tool for social domination in France. By Sondes Zouaghi
  8. Melons as Lemons: Asymmetric Information, Consumer Learning and Seller Reputation By Jie Bai
  9. The Effect of Corporate Reputation on Commitment, Trust, and Loyalty and Its Impact on Customer Behavior of Garuda Indonesia Airline Passengers in Banda Aceh, Indonesia By MIRZA TABRANI; MUSLIM ABDUL DJALIL
  10. Building the attractiveness of the sector based on solid co-opertition relations By Anna Wiśniewska-Sałek; Sylwia Šęgowik-Świącik; Marcin Stępień; Katarzyna Grondys
  11. Investing in Long-Term Customer Relationships. By Arthur Fishman; Ziv Hellman; Avi Weiss
  12. The countervailing power hypothesis when dominant retailers function as sales promoters By Noriaki Matsushima; Shohei Yoshida
  13. Monetization Strategies for Internet Companies By Voigt, Sebastian
  14. The 2014 survey of consumer payment choice: summary results By Greene, Claire; Schuh, Scott; Stavins, Joanna

    Abstract: Brand performance related concepts, such as brand strength and brand equity have been proven out to provide several positive outcomes for a firm. This research study aims to estimate the impact of market orientation, internal marketing and brand image on brand orientation and strengthening brand performance. The study tests whether market orientation, internal marketing and brand image affects brand orientation and in turn whether brand orientation affects brand performance in coffee industry of Aceh - Indonesia. A standardized questionnaire was distributed among different people pertinent to coffee industry (distributors, whole sellers, retailers, sales force and employees etc). A total of 200 questionnaires were used by random sampling technique. A model with hypotheses of the relationships between the constructs was built. The results of the structural equation model suggest that market orientation and internal marketing, has positive effect on brand orientation, while brand image has a non-significant effect. Moreover, the study concludes that brand orientation has a substantial impact on strengthening brand performance. Results of this study can help organizations to improve their company performance through more awareness of the determinants of brand performance.
    Keywords: market orientation, internal marketing, Brand Image, brand orientation, brand performance
    JEL: M31 M39 M38
  2. By: Dario Dunković (Faculty of Economics and Business, University of Zagreb)
    Abstract: This study contributes to researching and strengthening the role of the concept of purchase decision involvement in the management decision processes. The results of the study provide information on how to boost sales innovation in supermarkets and which product categories to choose in order to encourage shopper involvement and improve customer loyalty. Products included in the survey are items usually found in the shopping basket of today’s consumers that have been assessed as important items of store promotions in several national retail markets in Europe. It is important to discuss how to accommodate the costs arising from new operations and how this would reflect on other operations and merchandise categories. The study examines consumer attitudes in the context of the Southeast European market. The paper suggests that offering food samples moderately affects the level of consumer purchase involvement. The results for all three categories of food included in the empirical study show that providing grocery store shoppers with an opportunity to taste food while they are shopping is an effective way to change their attitudes. The proposed hypotheses were confirmed.
    Keywords: consumer purchase involvement, food samples, store
    JEL: M30 C38
    Date: 2016–08–24
  3. By: Wioleta Kucharska (Gdansk University of Technology, Gdansk, Poland)
    Abstract: Social network brand sites are increasingly attracting the attention of scientists and managers intrigued by their potential application for brand value creation. The aim of this research is to fill the gap in understanding how users choose among social networking sites as an act of brand identification. Social network users, unlike it is in real life, do not need to own branded products to use their image. For this reason their identification with brands can bring interesting implications for those who study brand value creation. The study presents a new model whose structure of social network brand sites identification drivers varies for customer brand identification in the real and virtual worlds. The presented model reveals that personal branding is a planned effect of brand identification and is crucial for brand value creation in social networks.
    Keywords: CBI, social network, personal branding, brand loyalty
    JEL: M30 M31 Y1
    Date: 2016–10
  4. By: Jérôme Boutang (CITEPA - Centre Interprofessionnel Technique d'Etude des Pollutions Atmosphériques); Michel De Lara (CERMICS - Centre d'Enseignement et de Recherche en Mathématiques et Calcul Scientifique - École des Ponts ParisTech (ENPC) - UPE - Université Paris-Est)
    Abstract: In a modern world increasingly perceived as uncertain, the mere purchase of a household cleaning product, or a seemingly harmless bottle of milk, conveys interrogations about potential hazards, from environmental to health impacts. The main purpose of this article is to suggest that risk could be considered as one of the major dimensions of choice for a wide range of concerns and markets, alongside aspiration/satisfaction, and tackled efficiently by mobilizing the recent findings of cognitive sciences, neurosciences and evolutionary psychology. We feel that consumer research could benefit more widely from psychological and evolutionary-grounded risk theories. We have examined some fifty years of marketing management literature, as well as risk specialized literature, in an attempt to get a grasp of how risk is handled by consumer sciences and of whether or not they make some use of the most recent academic works on mental biases, non mainstream decision-making processes, or evolutionary roots of behavior. We have then tested and formulated several hypothesis regarding risk profiles and preferences in the domain of insurance, by participating to an Axa Research Fund--Paris School of Economics research project. We suggest that consumer profiles could be enriched by risk-taking attitudes, that risk could be part of the 'reason why' of brand positioning, and that brand as well as public policy communication could benefit from a targeted use of risk perception biases. We propose to apply evolutionary based psychological concepts to build perceptual maps describing people and consumers on both aspiration and risk attitude axis, and to design communication tools according to psychological research on message framing and biases. Such an approach mobilizes not only the recent findings of cognitive sciences and neurosciences, but the understanding of the roots of risk attitudes and perception. Those maps and framing could probably be applied to many sectors, markets and public issues, from commodities to personal products and services (food, luxury goods, electronics, financial products, tourism, design or insurance).
    Keywords: communication,bias,risk,attitude,positioning,perceptual map,perception,framing,questionnaire,promise
    Date: 2016–08–14
  5. By: Bart J. Bronnenberg; Jean-Pierre H. Dubé
    Abstract: Brands and brand capital have long been theorized to play an important role in the formation of the industrial market structure of consumer goods industries. We summarize several striking empirical regularities in the concentration, magnitude and persistence of brand market shares in consumer goods categories. We then survey the theoretical and empirical literatures on the formation of brand preferences and how brand preferences contribute to our understanding of these empirical regularities. We also review the literature on how brand capital creates strategic advantages to firms that own established brands.
    JEL: A3 D12 D4 L0 L00 L11 L15 M31 M37 Y1 Y10 Y5 Y50
    Date: 2016–09
  6. By: Planer-Friedrich, Lisa; Sahm, Marco
    Abstract: We compare the strategic potential of Corporate Social Responsibility (CSR) and Customer Orientation (CO) as commitments to larger quantities in Cournot competition, modeled as a multi-stage game. First, in addition to profits, firms can choose to care for the surplus of either all consumers (CSR) or their own customers only (CO). Second, they decide upon the weight of this additional objective. We find that firms prefer to care for all consumers, choosing positive levels of CSR. This result provides an explanation for the recent shift from CO to CSR in both, corporate culture and economic research.
    Keywords: Corporate Social Responsibility,Customer Orientation,Cournot Duopoly,Commitment
    JEL: D43 L13 L21
    Date: 2016
  7. By: Sondes Zouaghi (THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Purpose – The present article deals with the issue of researchers' responsibility for the dissemination of ideologies which have led to the cultural marginalization and categorization of minority social groups into a dominant/dominated relationship in France. One telling example is the way ethnic segmentation-as now used in marketing-finds its roots in the colonial paradigm. Design/methodology/approach – A critical and analytical review of the literature on ethnic marketing. Findings – The current paradigm which splits the world into centre and periphery or dominant and dominated, in the French context, is not the only existing one. In the framework of postcolonial studies, researchers in marketing now approach the ethnic market by being as close to consumers as possible and by adapting their methodology to the Consumer Culture Theory. Originality/value – Some researchers become aware that the feeling of ethnic self-identification would not exist without the involvement of the dominant group who imposes their view on minorities. As to multicultural individuals, minorities have to adjust to a great variety of social situations by drawing from a set of available cultural identities. It is therefore more a question of multiple selves than ethnic identity. Multicultural individuals create their own identity and co-create new social categories from the grey area between dominant and dominated groups. The postcolonial approach raises the question as to whether ethnicity is a mere ideological construct with no underlying reality but the actual domination of minorities.
    Keywords: ethnic marketing,segmentation,consumer culture theory,identity,Colonial and post-colonial societies
    Date: 2016–10–07
  8. By: Jie Bai
    Abstract: There is often a lack of reliable high quality provision in many markets in developing countries. I designed an experiment to understand this phenomenon in a setting that features typical market conditions in a developing country: the retail watermelon market in a major Chinese city. I begin by demonstrating empirically that there is substantial asymmetric information between sellers and buyers on sweetness, the key indicator of quality for watermelons, yet sellers do not sort and price watermelons by quality. I then randomly introduce one of two branding technologies into 40 out of 60 markets-one sticker label that is widely used and often counterfeited and one novel laser-cut label. I track sellers' quality, pricing and sales over an entire season and collect household panel purchasing data to examine the demand side's response. I find that laser branding induced sellers to provide higher quality and led to higher sales profits, establishing that reputational incentives are present and can be made to pay. However, after the intervention was withdrawn, all markets reverted back to baseline. To rationalize the experimental findings, I build an empirical model of consumer learning and seller reputation. The structural estimates suggest that consumers are hesitant to upgrade their perception about quality under the existing branding technology, which makes reputation building a low return investment. While the new technology enhances consumer learning, the resulting increase in profits is not sufficient to cover the fixed cost of the technology for small individual sellers. Counterfactual analysis shows that information frictions and fragmented markets lead to significant under-provision of quality. Third-party interventions that subsidize initial reputation building for sellers could improve welfare.
    Date: 2016
    Abstract: The objective of this research is to investigate the influence of corporate reputation on commitment, trust and loyalty and its impact on customer behavior of Garuda Indonesian Airline’s passengers in Banda Aceh, Indonesia. The respondents are the Garuda passengers which are selected by using non-probability sampling procedures. SEM analytical model is employed with Amos as its statistical software. The results showed that corporate reputation has a positive effect on commitment, trust, and loyalty; and commitment, trust and loyalty have a positive affect on customer behavior; commitment, trust, and loyalty mediate the relationship between the company's reputation and customer behavior. The originality of this study is the combined using of three intervening variables of commitment, trust, and loyalty to investigate the relationship between corporate reputation and consumer behavior in the context of airline industry as a conceptual research as far as the researcher’s concerned. This would contribute to the development of consumer behavior knowledge. The limitations of this research are that it does not capture a deep picture of the consumer behavior in the designated airline industry in Indonesia and varied education of pasengers which may have led to a biased response of questionnaire’s items.
    Keywords: Corporate Reputation, Commitment, Trust, Loyalty, Customer Behavior
    JEL: M00
  10. By: Anna Wiśniewska-Sałek (Czestochowa University of Technology); Sylwia Šęgowik-Świącik (Czestochowa University of Technology); Marcin Stępień (Czestochowa University of Technology); Katarzyna Grondys (Czestochowa University of Technology)
    Abstract: The analysis of the sector, therefore, both micro- and macro-economic factors constitute the source of valuable information for companies wishing to be or being a part of the local economy. Generating profits in the sector is associated with demand and competition. To generate profits, the enterprise must create value for the customer so that the price the consumer is willing to pay is higher than the costs incurred by the company to produce goods. The higher the competition in the sector the more significant portion of the surplus goes to competitors and the smaller one to manufacturers. Profits generated by companies in the sector are also dependent on the bargaining power of producers in relation to suppliers and customers. It is important to build solid relationships with the immediate environment of the company and particularly with competitors. Establishing relationships in the sector companies from the same industry is difficult. In order to make competitiveness bring beneficial effects it is worthwhile to consider coopetitive relationships – particularly in terms of attractiveness in the industry and, at the same time, the sector. The paper presents the analysis of the furniture sector as the industry being one of 10 sectors placed in the latest strategy for the Benefit of Responsible Development in Poland.
    Keywords: coopetitive, cooperation, industry
    JEL: M21
  11. By: Arthur Fishman (Bar-Ilan University); Ziv Hellman (Bar-Ilan University); Avi Weiss (Bar-Ilan University)
    Abstract: In many markets consumers form long-term relationships with firms. In such settings, a firm’s existing customers are valuable assets whose ‘loyalty’ must be maintained through continued investment. In this paper we assume that consumer loyalty is strengthened with repeated buying but may erode if the relationship is interrupted. In this context we show how a firm’s history of costs and sales and the size of its customer base determine the extent to which it invests in maintaining its long term customer relationships by satisfying demand even when this involves a short-term loss. In particular, our model shows that very young firms with small customer bases will prefer losing customers in the short run to absorbing losses in high cost periods, middling sized firms will take the opposite position, absorbing losses for the sake of continuing to build customer bases, while established firms with very large customer bases revert to a willingness to lose customers in the short run.
    Date: 2016–07
  12. By: Noriaki Matsushima; Shohei Yoshida
    Abstract: We consider a downstream oligopoly model with one dominant and several fringe retailers, who purchase a manufacturing product from a monopoly supplier. We then examine how the supplier's outside option influences the relation between the dominant retailer's bargaining power and the equilibrium retail price. If the market demand shrinks due to a breakdown of bargaining between the supplier and the dominant retailer, who works as a sales promoter for the product, there is a negative relation between the bargaining power and the retail price. Furthermore, retailers' efficiency improvements increase the retail price if the dominant retailer's bargaining power is strong.
    Date: 2016–10
  13. By: Voigt, Sebastian
    Abstract: Many Internet service companies such as providers of two-sided markets, social networks, or online games rely on the social interaction between their user base and thus capitalize from positive network effects. For such companies, a common strategy is to offer (basic) services for free (and thereby abolish entry barrier of a one-off or recurring price) and to charge their users for premium services. Companies such as eBay, PayPal, LinkedIn, or Skype added paid services to their originally free business models, either via subscriptions, PAYG, or direct sales of virtual items. Their strategy how to make money and whom to bill however differs widely. In the Internet business, ‘monetization’ has become a frequently used buzzword for all aspects of a company’s revenue strategy which includes the decision who should be billed (e.g., for a two-sided market: seller vs. buyer vs. advertisers only), with which price model (e.g., mandatory subscription vs. optional subscriptions vs. selling virtual currency or items) and price level (e.g., differentiated between user groups), and – in case of a freemium strategy – how a new (free) user can be converted most efficiently into a paying and remunerative customer (e.g., via effective CRM measures). The overarching objective of all monetization measures is to maximize the company’s revenue and/or profit. The field of monetization offers a wide field of research opportunities. Four of these are covered in this dissertation: The Name-your-own-price model, users’ spending behavior in virtual communities, the monetization of network effects in social networks, and the legal boundaries of social network usage. As a result, this dissertation solves a series of questions currently being worked on by practitioners and uses a wide range of methods from various disciplines such as economic, psychological, and game theory.
    Date: 2016
  14. By: Greene, Claire (Federal Reserve Bank of Boston); Schuh, Scott (Federal Reserve Bank of Boston); Stavins, Joanna (Federal Reserve Bank of Boston)
    Abstract: In 2014, the average number of U.S. consumer payments per consumer per month decreased to 66.1, in a statistically insignificant decline from 67.9 in 2013. The number of payments made by paper check continued to decline, falling by 0.7 to 5.0 checks per month, while the number of electronic payments (online banking bill payments, bank account number payments, and deductions from income) increased by 0.6 to 6.9 of these payments per month. The monthly shares of debit cards (31.1 percent), cash (25.6 percent), and credit cards (23.3 percent) continued to be largest; while the share of electronic payments rose a significant 1.2 percentage points to 10.5 percent. Consumers’ average cash holdings dropped by about 10 percent to $207 in 2014. The number of cash withdrawals made by consumers per month also declined by about one withdrawal per month to 5.6. There was no significant change in cash use, however. About half of 1 percent of U.S. consumers held bitcoin or other virtual currencies. The 2014 SCPC includes a formal measure of “underbanked” consumers for the first time.
    Keywords: cash; checks; checking accounts; debit cards; credit cards; prepaid cards; electronic payments; payment preferences; unbanked; Survey of Consumer Payment Choice
    JEL: D12 D14 E42
    Date: 2016–08–15

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