nep-mkt New Economics Papers
on Marketing
Issue of 2017‒11‒05
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. A Large-Scale Field Experiment to Evaluate the Effectiveness of Paid Search Advertising By Lorenzo Coviello; Uri Gneezy; Lorenz Götte
  2. Can Emerging Markets Tilt Global Product Design? Impacts of Chinese Colorism on Hollywood Castings By Hermosilla, Manuel; Gutierrez-Navratil, Fernanda; Prieto-Rodriguez, Juan
  3. Strategic Corporate Social Responsibility By Lisa Planer-Friedrich; Marco Sahm
  4. Value-based Customers Satisfaction and Continuance Intention for Mobile Financial Services: the roles of Utilitarian, Hedonic, and Personal Values By Omigie, N. O.
  5. Apparent Competition in Two-Sided Platforms By Gokhan Guven; Eren Inci; Antonio Russo
  6. Can Television Reduce Xenophobia? The Case of East Germany By Lars Hornuf; Marc Oliver Rieger
  7. Economic aspects of embedded SIM for the telecommunications consumer segment By Wernick, Christian; Gries, Christin Isabel
  8. Fiscal-Food Policies are Likely Misinformed by Biased Price Elasticities from Household Surveys: Evidence from Melanesia By John Gibson and Alessandro Romeo
  9. Online Social Networks: Approval by Design By Matthew Ellman
  10. Does Marketing Widen Borders? Cross-Country Price Dispersion in the European Car Market By Eyal Dvir; Georg Strasser
  11. Customer Consolidated Routing Problem – An Omni-channel Retail Study By Paul, J.; Agatz, N.A.H.; Spliet, R.; de Koster, M.B.M.
  12. The Gift and Pay-What-You-Want Pricing By Egbert, Henrik

  1. By: Lorenzo Coviello; Uri Gneezy; Lorenz Götte
    Abstract: Companies spend billions of dollars online for paid links to branded search terms. Measuring the effectiveness of this marketing spending is hard. Blake, Nosko and Tadelis (2015) ran an experiment with eBay, showing that when the company suspended paid search, most of the traffic still ended up on its website. Can findings from one of the largest companies in the world be generalized? We conducted a similar experiment with, arguably a more representative company, and found starkly different results. More than half of the paid traffic is lost when we shut off paid-links search. These results suggest money spent on search-engine marketing may be more effective than previously documented.
    Keywords: field experiment, online advertising
    JEL: C19 C93 D03
    Date: 2017
  2. By: Hermosilla, Manuel; Gutierrez-Navratil, Fernanda; Prieto-Rodriguez, Juan
    Abstract: In various cultural and behavioral respects, emerging market consumers differ significantly from their counterparts of developed markets. They may thus derive consumption utility from different aspects of product meaning and functionality. Based on this premise, we investigate whether the economic rise of emerging markets may have begun to impact the typical “one-size-fits-all” design of many international product categories. Focusing on Hollywood films, and exploiting a recent relaxation of China’s foreign film importation policy, we provide evidence suggesting that these impacts may exist and be non-negligible. In particular, we show that the Chinese society’s aesthetic preference for lighter skin can be linked to the more frequent casting of pale-skinned stars in films targeting the Chinese market. Implications for the design of international products are drawn.
    Keywords: Emerging Markets, Hollywood, Culture, Product Design, Innovation, Skin Color
    JEL: L7 L70 M3 M31 O3 O30 Z1 Z11
    Date: 2017–09–30
  3. By: Lisa Planer-Friedrich; Marco Sahm
    Abstract: We examine the strategic use of Corporate Social Responsibility (CSR) in imperfectly competitive markets. The level of CSR determines the weight a firm puts on consumer surplus in its objective function before it decides upon supply. First, we consider symmetric Cournot competition and show that the endogenous level of CSR is positive for any given number of firms. However, positive CSR levels imply smaller equilibrium profits. Second, we find that an incumbent monopolist can use CSR as an entry deterrent. Both results indicate that CSR may increase market concentration. Third, we consider heterogeneous firms and show that asymmetric costs imply asymmetric CSR levels.
    Keywords: corporate social responsibility, market concentration, Cournot competition, entry deterrence, strategic delegation, evolutionary stability
    JEL: D42 D43 L12 L13 L21 L22
    Date: 2017
  4. By: Omigie, N. O.
    Abstract: “M-PESA” mobile financial service has remained a dominate player in the Kenya financial service market. This study presents a conceptual research model that is grounded in means-end theory. It connects customer value hierarchy to customer attitudes and post-adoption outcomes behavior. It aims to investigate the impacts of customer value in a hierarchical order on customer satisfaction and continuance use intention. When empirically validated, it will present a value-based framework for examining the influences of customer value on customer attitudes and behavior. The model presents both theoretical and practical implications for both academia and MFS providers and marketing managers.
    Keywords: MFS,M-PESA,means-end theory,customer value hierarchy,utilitarian value,hedonic value,personal values
    Date: 2017
  5. By: Gokhan Guven; Eren Inci; Antonio Russo
    Abstract: We study a platform’s design of membership and transaction fees when sellers compete and buyers cannot observe the prices and features of goods without incurring search costs. The platform alleviates sellers’ competition by charging them transaction fees that increase with sales revenue, and extracts surplus via membership fees. It prices consumers’ membership below its cost to encourage their search. Examples include malls and online marketplaces. Most malls do not charge for parking while most lease contracts include percentage rents as well as fixed rents. Online marketplaces charge sellers for membership and per transaction while letting consumers access website for free.
    Keywords: consumer search, membership fees, retail agglomeration, transaction fees, two-sided platforms
    JEL: D21 D40 D83 L13 R33
    Date: 2017
  6. By: Lars Hornuf; Marc Oliver Rieger
    Abstract: Can television have a mitigating effect 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 P30
    Date: 2017
  7. By: Wernick, Christian; Gries, Christin Isabel
    Abstract: After having been developed for Machine-to-Machine (M2M) communication, standardised embedded SIM (eSIM) solutions are about to be launched in the telecommunications consumer segment. At this early market stage, various details of eSIM implementation have not been fixed yet. Our paper aims to generate a well-founded understanding of characteristics and potential use cases and their likely impact on existing processes and market structures. Overall, eSIM seems unlikely to become a game changer in the mobile market in the short run. It offers, however, some potential to ease existing processes, improve customer satisfaction and generate new sources of revenues at different stages of the value chain.
    Keywords: Mobile,strategy,technological change
    Date: 2017
  8. By: John Gibson and Alessandro Romeo
    Abstract: Fiscal-food policies use taxes to alter relative food prices so as to change diets and are suggested for reducing non-communicable diseases in the Pacific. Price elasticity estimates used by advocates of fiscal-food policies are often biased and may make policy makers too optimistic about small taxes on unhealthy food and drink inducing big changes in diets. The bias is illustrated using the example of the demand for soft drinks in a household survey from the Solomon Islands, with further evidence from Papua New Guinea. About one-third of consumer response to soft drink price variation in the Solomon Islands is on the quantity margin, with two-thirds on the quality margin. If the quality response is wrongly treated as a quantity response to price—as in most studies—the price elasticity of soft drink demand is exaggerated by a factor of two in Papua New Guinea and three in the Solomon Islands.
    Keywords: demand, household surveys, quality, soft drink taxes, Melanesia
  9. By: Matthew Ellman (Institute of Economic Analysis, IAE-CSIC, and Barcelona GSE)
    Abstract: Online social networks (OSN) influence the transmission of information in society. This paper analyzes how a profit-motivated OSN designs the instant feedback options, such as “likes†or up-votes and down-votes or disapprovals, that it aggregates into user ratings, and how these design choices affect social and economic outcomes. The OSN seeks to maximize advertising revenues via maximal engagement. We compare OSN designs that allow users to only up-vote other users' content contributions or “posts†against OSN designs that allow both up and down votes. Users care about what others think of them. The feedback system mediates what users with imperfect private signals learn about each others' contributions and about each other. The OSN design affects both the expected social approval gains from engaging as a contributor and the value to users from engaging as viewers of others' content. Up and down votes improve viewers information but removing the down-vote option can raise user willingness to contribute content by reducing the threat of unambiguous disapproval. We investigate a full set of OSN designs in a range of social contexts.
    Keywords: Online social networks, feedback design, user-generated content, quality, rating systems, platform economics, media economics.
    JEL: L13 L82
    Date: 2017–10
  10. By: Eyal Dvir; Georg Strasser
    Abstract: We study cross-country price differences in the European market for new passenger cars based on detailed pricing and technical data. Car prices in Europe converged until the year 2003, but not thereafter. Within the EU 15 countries the price range of the median model in 2004 was close to 20 percent. We document a source of international price differentiation, which is not related to distribution and border costs, but instead systematically linked to product features. Price dispersion increases with the market segment and varies significantly across models. Marketing appears to position identical goods differently in each country, for example by feature bundles tailored to local consumer preferences. Both the convergence before the actual reduction of barriers to arbitrage and the systematic international price differentiation by product feature point to active pricing-to-market strategies that treat countries as marketing regions.
    Keywords: arbitrage, European car market, international price dispersion, law of one price, market segmentation
    JEL: F15 F31 L11 L62 D22
    Date: 2017
  11. By: Paul, J.; Agatz, N.A.H.; Spliet, R.; de Koster, M.B.M.
    Abstract: In this paper, we study a setting in which a carrier can satisfy customer delivery requests directly or outsource them to another carrier. A request can be outsourced to a carrier that is already scheduled to visit the corresponding customer, if capacity allows. For the customers that receive their deliveries directly, we make a vehicle routing schedule that minimizes transportation costs, while for the outsourced customers we incur additional transfer costs between the carriers. This study is motivated by a collaboration with an omni-channel grocery retailer for which goods that are ordered online can be picked up from the stores. The goal is to save costs by consolidating the supply of pick-up points with the store inventory replenishment. To solve this problem, we present exact and heuristic approaches. Computational experiments on both the real-world grocery retail case and artificial instances show that substantial savings can be achieved.
    Keywords: Consolidation, Omni-channel retailing, Vehicle routing problem, Local Search
    Date: 2017–10–19
  12. By: Egbert, Henrik
    Abstract: This paper addresses the participative pricing mechanism of Pay-What-You-Want pricing as related to Marcel Mauss’s concept of the Gift. Reciprocity is a behavioural pattern imminent to the Gift as well as to Pay-What-You-Want pricing. The paper refers to results from behavioural economics in order to identify factors that positively influence reciprocity. It is argued that the aspects elaborated on in the Gift are also relevant to the PWYW pricing mechanism when it comes to implementations of the latter as one of the corporate pricing strategies.
    Keywords: Gift, Marcel Mauss, Pay-What-You-Want, PWYW, Pricing, Reciprocity
    JEL: M21 Z13
    Date: 2017–10–01

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