nep-mkt New Economics Papers
on Marketing
Issue of 2017‒03‒19
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Cost Pass-Through in the Swedish Coffee Market By Durevall, Dick
  2. Consumer switching intentions for telecoms services: evidence from Ireland By Peter D., Lunn; Sean, Lyons
  3. The scope for collusion under different pricing schemes By Rasch, Alexander; Gössl, Florian
  4. On the countervailing power of large retailers when shopping costs matter By Caprice, Stéphane; Shekhar, Shiva
  5. Consumer state dependence, switching costs, and forward-looking producers. A dynamic discrete choice model applied to the diaper market By Rickert, Dennis
  6. KÖLSCH versus ALT: Erkenntnisse aus konsumentenpsychologischen Experimenten By Quack, Helmut
  7. Global Value Chains and Wages: International Evidence from Linked Worker-Industry Data By Aleksandra Parteka; Joanna Wolszczak-Derlacz
  8. Can Television Reduce Xenophobia? - The Case of East Germany By Lars Hornuf; Marc Oliver Rieger
  9. The relationship between R&D intensity and profit-sharing schemes: evidence from Germany and the United Kingdom By Übelmesser, Silke; Uebelmesser, Silke
  10. Services In Global Value Chains: From Inputs to Value-Creating Activities By Sébastien Miroudot; Charles Cadestin

  1. By: Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Cost pass-through to retail prices shows how changes in marginal costs are allocated between producers and consumers, and it is therefore closely related to market structure and competition. This paper uses Swedish data on coffee products at the barcode level to evaluate pass-through from the cost of green coffee beans, the main marginal cost, to the retail price of roasted and ground coffee. First long-run cost pass-through is estimated for each product, and then regression is used to analyse how pass-through varies across market shares, retailer-owned brands and other product characteristics. A general result is that pass-through is roughly complete for products with large market shares, while those with small market shares have low pass-through rates. There is no evidence that retailer-owned brands have higher pass-through than brand-name products with similar market shares, which would be the case if retailer-owned brands avoided double marginalization through vertical integration. Thus, although there is not perfect competition in the Swedish coffee market, a large part of it appears to be highly competitive.
    Keywords: Coffee market; Market power; Pass-through; Market shares
    JEL: L11 L13 L89
    Date: 2017–03
  2. By: Peter D., Lunn; Sean, Lyons
    Abstract: Despite long-standing market liberalisation and efforts to reduce switching costs, many consumers have never switched telecoms provider. This paper investigates how consumer and service characteristics relate to switching intentions, using a sample of fixed-line broadband, mobile telephony and landline telephony customers from a 2015 survey conducted by ComReg, Ireland’s National Regulatory Authority. We add to previous work by examining a rich array of personal and service characteristics while controlling for both bill shock and expected gains from switching. We find that long-standing subscribers who have never switched are exceptionally resistant to switching. Bill shock is strongly associated with intention to switch, especially among those more inclined to switch. A similar effect arises for expected gains, especially gains over 20%. These results are consistent with both a preference for fair treatment and with behavioural barriers to switching that require large gains to overcome. The effects of bundling and of the few socioeconomic, supplier or application use characteristics that are statistically significant are smaller and not consistent across markets. This implies that willingness to switch is not simply a characteristic of certain social groups, but is more complex and context dependent.
    Keywords: telecommunications services, consumer switching, Ireland
    JEL: D03 D12 L96
    Date: 2017–03–10
  3. By: Rasch, Alexander; Gössl, Florian
    Abstract: We analyze and compare the incentives to collude under different pricing schemes in a differentiated-products market where customers have elastic demand. We show that allowing firms to set two-part tariffs as opposed to linear prices facilitates collusion at maximum prices independent of the degree of differentiation. However, compared to a situation where firms can only set fixed fees that are independent of the quantity purchased, collusion at maximum prices is less sustainable with two-part tariffs. The results have important implications for competition policy where the perspective—static or dynamic—may be crucial.
    JEL: D43 L13 L41
    Date: 2016
  4. By: Caprice, Stéphane; Shekhar, Shiva
    Abstract: We consider a set-up with vertical contracting between a supplier and a retail industry where a large retailer competes with smaller retailers that carry a narrower range of products. Consumers are heterogeneous in their shopping costs; they will either be multistop shoppers or one-stop shoppers. The countervailing power of the large retailer is modeled as a threat of demand-side substitution. We show that retail prices are higher, and industry surplus and social welfare fall, when the large retailer possesses countervailing power. Increasing marginal wholesale prices discourages multistop shopping behavior of consumers, making demand substitution less attractive for the large retailer.
    Keywords: countervailing power, buyer power, polarization of the retail industry,shopping costs.
    JEL: D43 L13 L40 L81
    Date: 2017–03
  5. By: Rickert, Dennis
    Abstract: This study estimates a dynamic discrete choice model to analyze the effect of switching costs on firm market power. Given the presence of switching costs for consumers in the market for disposable diapers, I show how firms apply dynamic strategies to a market for differentiated products and in a context of vertical retailer-manufacturer relationships. My findings support the existence of state dependence in consumer demand. Furthermore, I show that the firm profits would be higher in a counterfactual scenario of no switching costs.
    JEL: L10 L20 L60
    Date: 2016
  6. By: Quack, Helmut (Department of Economics of the Duesseldorf University of Applied Sciences)
    Abstract: In konsumentenpsychologischen Experimenten mit 50 Kölnern und 50 Düsseldorfern im Alter von 35 bis 65 Jahren wurde untersucht, ob man Unterschiede zwischen den beiden Biersorten KÖLSCH und ALT erkennen kann. Dazu wurde zunächst in einem Blindtest der Geschmack von KÖLSCH und ALT beurteilt. Die Bewertungen von KÖLSCH und ALT bzgl. der Merkmale „schmeckt mir“ sowie „schmeckt frisch“, „schmeckt mild“, „schmeckt würzig“ waren nahezu gleich. Weiterhin wurde in einem Blindtest untersucht, ob die Versuchspersonen KÖLSCH und ALT überhaupt identifizieren können. Auch hierbei gab es keine signifikanten Unterschiede. Nur zu 55 % wurde das Bier richtig erkannt, was auf Zufalls- bzw. Rateniveau liegt. Später wurde in einem offenen Test nochmals der Geschmack für KÖLSCH und ALT untersucht. Jetzt zeigt sich, dass den Kölnern das KÖLSCH deutlich besser schmeckt als das ALT. Den Düsseldorfern hingegen schmeckt das ALT signifikant besser als das KÖLSCH. Eine Untersuchung der Präferenzen unterstützt diese Ergebnisse: Während in dem Blindtest die Präferenzen bei annähernd 50:50 lagen, veränderten sich diese im separaten offenen Test mit 78:22 zugunsten des Heimatbieres. Diese Ergebnisse sind schon erstaunlich, da einfach nicht zu glauben ist, dass Männer zwischen KÖLSCH und ALT objektiv nicht unterscheiden können. Die Ergebnisse werden ausführlich psychologisch und wissenschaftstheoretisch interpretiert und daraus Erkenntnisse für das Marketing abgeleitet.
    Abstract: In consumer psychological experiments with 50 men of Cologne and 50 men of Dusseldorf between the age of 35 and 65, we examined whether there are recognizable differences between the two beers, KÖLSCH and ALT. Firstly the taste of KÖLSCH and ALT was judged in a blind test. The results of the evaluation of KÖLSCH and ALT regarding the characteristics “tastes good”, “tastes fresh”, “tastes mild” and “tastes aromatic” were nearly equal. A further blind test examined whether the test subjects could actually recognize KÖLSCH and ALT at all. Again there was no significant difference – only 55 % of the beer was identified correctly which is on a random level. Later, the taste of KÖLSCH and ALT was tested again, but in an open test. This time the men of Cologne clearly prefer the taste of KÖLSCH. The men of Dusseldorf, however, find the taste of the ALT significantly better than the taste of KÖLSCH. A study of the preferences supports these findings: Whereas the preferences in the blind test, were nearly 50:50, the preferences in the separate open test changed to 78:22 in favour of the home beer. These results are quite amazing, because it is unbelievable that men cannot differentiate objectively between KÖLSCH and ALT. The results are psychologically and epistomologically interpreted in detail and thus insights can be derived for marketing.
    Keywords: Kölsch, Alt, Bier, Geschmack, Experiment, Biermarketing, beer, taste, beer marketing
    JEL: M31 C83 L66
    Date: 2016–07
  7. By: Aleksandra Parteka; Joanna Wolszczak-Derlacz
    Abstract: Using a rich dataset on over 110,000 workers from nine European countries and the USA we study the wage response to industry dependence on foreign value added. We estimate a Mincerian wage model augmented with an input-output interindustry linkages measure accounting for task heterogeneity across workers. Low and mediumeducated workers and those performing routine tasks experience (little) wage decline due to major dependency of their industries on foreign inputs. Workers from former EU15 are more in danger of unfavourable wage effects than workers from new EU member states. American workers employed in service industries are more exposed than manufacturing workers.
    Keywords: wage, global value chains, foreign value added, interindustry linkages
    JEL: F14 F16 J31
    Date: 2016–09
  8. By: Lars Hornuf (Institute for Labour Law and Industrial Relations in the EU, Trier University); Marc Oliver Rieger (Trier University)
    Abstract: Can television have a mitigating e?ect on xenophobia? To examine this question, we exploit the fact that individuals in some areas of East Germany – due to their geographic location – could not receive West German television until 1989. We conjecture that individuals who received West German television were exposed more frequently to foreigners and thus have developed less xenophobia than people who were not exposed to those programs. Our results show that regions that could receive West German television were less likely to vote for right-wing parties during the national elections from 1998 to 2013. Only recently, the same regions were also more likely to vote for left-wing parties. Moreover, while counties that hosted more foreigners in 1989 were also more likely to vote for right-wing parties in most elections, we find counties that recently hosted more foreign visitors showed less xenophobia, which is in line with intergroup contact theory.
    Keywords: Mass media; Television; Xenophobia; Attitudes towards foreigners; East Germany; Natural experiment
    JEL: D72 L82 P3
    Date: 2017–02
  9. By: Übelmesser, Silke; Uebelmesser, Silke
    Abstract: We study the determinants of the use of profit sharing schemes (PSS) by exploiting two datasets for Germany and the United Kingdom. Our results replicate studies for the U.S. which report a positive correlation between R&D activity and PSS use. For Germany, Granger-causality tests support a causal interpretation. Similarly to U.S.-based studies, we also find that a firm's turnover is strongly associated with PSS use whereas this does not hold for the age of a firm and its organizational characteristics.
    JEL: L20 J33 O31
    Date: 2016
  10. By: Sébastien Miroudot; Charles Cadestin
    Abstract: This report provides new evidence on the role of services in global value chains (GVCs). With the release of the Trade in Value Added database, it was highlighted that services account for a larger share of world trade than suggested by traditional statistics. But this evidence does not tell the whole story about services in GVCs. In addition to services bought as inputs, there are also services activities within manufacturing firms. Moreover, manufacturing companies increasingly produce and export services either as complements or substitutes to the goods they sell. This shift to services is related to strategies aiming at adding more value and creating a long-term relationship with customers. The report highlights that services inputs, whether domestic or foreign, account for about 37% of the value of manufacturing exports in the sample of countries covered. By adding service activities within manufacturing firms, this share increases to 53% and the overall contribution of services to exports is close to two-thirds. Across countries, between 25% and 60% of employment in manufacturing firms is found in service support functions such as R&D, engineering, transport, logistics, distribution, marketing, sales, after-sale services, IT, management and back-office support. SMEs are also part of this “servicification” and contribute to exports of services bundled with goods.
    Keywords: bundles of goods and services, business functions, Global Value Chains, Services, servicification, trade in services, trade in value-added
    JEL: F13 F14 F23 F68 L80
    Date: 2017–03–15

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