nep-mkt New Economics Papers
on Marketing
Issue of 2017‒12‒03
eleven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Uniform Pricing in US Retail Chains By Stefano DellaVigna; Matthew Gentzkow
  2. Marketing Agencies and Collusive Bidding in Online Ad Auctions By Francesco Decarolis; Maris Goldmanis; Antonio Penta
  3. Causal analysis in marketing: a customer satisfaction problem By Gloria Gheno
  4. Multi-product firms and product quality By Manova, Kalina; Yu, Zhihong
  5. Measuring Consumer Sentiment Toward Marketing in Russia By Golovacheva, Ksenia S.; Smirnova, Maria M.
  7. Buyer Power and Non-Binding Retail Price Recommendations By In Kyung Kim; Vladyslav Nora
  8. Top Executives on Social Media and Information in the Capital Market: Evidence from China By Feng, Xunan; Johansson, Anders C.
  9. How Does Divestment Affect Brand Image: A Communication Perspective By Brown, Tashauna Andrene
  10. Costly Information Intermediation as a Natural Monopoly By Pinheiro, Roberto; Monte, Daniel
  11. Travel Information’s Search, Planning and Purchase of Travel Service: The Bulgarian Tourists Behaviour By Zhelyu Vladimirov; Sonia Mileva

  1. By: Stefano DellaVigna; Matthew Gentzkow
    Abstract: We show that most US food, drugstore, and mass merchandise chains charge nearly-uniform prices across stores, despite wide variation in consumer demographics and the level of competition. Estimating a model of consumer demand reveals substantial within-chain variation in price elasticities and suggests that the average chain sacrifices seven percent of profits relative to a benchmark of flexible prices. In contrast, differences in average prices between chains broadly conform to the predictions of the model. As possible explanations for nearly-uniform pricing, we discuss advertising, tacit collusion, fairness concerns, and managerial fixed costs, and find the most support for the last explanation. We show that the uniform pricing we document significantly increases the prices paid by poorer households relative to the rich, likely dampens the overall response of prices to local economic shocks, and may also shift the incidence of intra-national trade costs.
    JEL: D9 L1 L2 M31
    Date: 2017–11
  2. By: Francesco Decarolis; Maris Goldmanis; Antonio Penta
    Abstract: The transition of the advertising market from traditional media to the internet has induced a proliferation of marketing agencies specialized in bidding in the auctions that are used to sell ad space on the web. We analyze how collusive bidding can emerge from bid delegation to a common marketing agency and how this can undermine the revenues and allocative efficiency of both the Generalized Second Price auction (GSP, used by Google and Microsoft-Bing and Yahoo!) and the of VCG mechanism (used by Facebook). We find that, despite its well-known susceptibility to collusion, the VCG mechanism outperforms the GSP auction both in terms of revenues and efficiency.
    JEL: C72 D44 L81 M37
    Date: 2017–10
  3. By: Gloria Gheno (Free university of Bozen-Bolzano)
    Abstract: In recent years, shopping streets are declining in aid of shopping centers. Consequently, to maximize loyalty and competitiveness in an increasingly competitive market it is essential to understand the distinctions characterizing the customers who choose shopping centers from those who opt for shopping centers. To analyse this differentiation, I use the log-linear causal models but, since these have not a complete causal theory, I use a new causal analysis to remedy this problem (Gheno, 2016). Starting from a complex model, I come to a simpler model to understand the different behaviors of the two types of customers. The data analysis shows that shopping centers customers are more driven by the emotions than the more rational and concrete ones who choose shopping centers.
    Keywords: causal analysis, customer satisfaction, log-linear models, shopping centers, shopping street
    JEL: C40 M31 C00
    Date: 2017–10
  4. By: Manova, Kalina; Yu, Zhihong
    Abstract: We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006, we empirically establish that firms allocate activity across products in line with a product hierarchy based on quality. Firms vary output quality across their products by using inputs of different quality levels. Their core competence is in varieties of superior quality that command higher prices but nevertheless generate higher sales. In markets where they offer fewer products, firms concentrate on their core varieties by dropping low-quality peripheral goods on the extensive margin and by shifting sales towards top-quality products on the intensive margin. The product quality ladder also governs firms' export dynamics, both in general and in response to the exogenous removal of MFA quotas on textiles and apparel. Our results inform the drivers and measurement of firm performance, the effects of trade reforms, and the design of development policies.
    Keywords: trade; trade reforms; multi-product firms; product quality; export prices
    JEL: L81
    Date: 2017–02
  5. By: Golovacheva, Ksenia S.; Smirnova, Maria M.
    Abstract: The study aims to identify how consumer sentiment toward marketing relates to consumer behaviors at different stages of buying process. Based on the survey of Russian consumers the study measures the index of consumer sentiment toward marketing and reports the preliminary results regarding the effect of consumer sentiment toward marketing on different consumer behavior tendencies, including information seeking, reliance on firm-related information sources, purchase and complaining behavior, and supportiveness of government regulation of marketing practices.
    Keywords: consumer sentiment, marketing, consumer behavior, Russia, purchase behavior, marketing practices, government regulation,
    Date: 2016
    Abstract: As the global boundaries shrink and vanish day by day, the logistics and supply chain nightmares of the multinational players go up day by day. This paper looks into the core aspects of marketing function along with the operations of the supply chain for the purpose of value creation in the eyes of customer. Value creation is the process of providing and delivering goods and services to the customers for which they are ready to pay for and also takes the product or service more towards its logical conclusion, in other words, it adds something to the product or service. The paper introduces the basic concepts of value creation from customers? perspective, it then goes on to relate the vital role the marketing-operations plays in various performance metrics of any supply chain network. These performance metrics are then detailed out from a qualitative and quantitative perspective. In the end, the paper does touch upon the areas of overlap and major concern for any organization with footprint across a big geographical region.
    Keywords: supply chain, marketing-operations, value creation, customer, products, services
    JEL: M11
    Date: 2017–10
  7. By: In Kyung Kim (Nazarbayev University); Vladyslav Nora (Nazarbayev University)
    Abstract: We study how the use of non-binding retail price recommendations (RPRs) is affected by buyer power in grocery retail market. Adopting the idea that RPRs serve as information sharing device between manufacturers and retailers, we show that increasing buyer power discourages the use of RPRs. Using the hand collected data set on the presence of RPRs for grocery products in Korea, we find that the more the sales of a product rely on powerful retailers, the less likely the manufacturer is to recommend a price, and hence share the information.
    Keywords: buyer power, manufacturer suggested retail prices, and grocery retailing
    JEL: L11 L13 L81
    Date: 2017–07
  8. By: Feng, Xunan (Southwestern University of Finance and Economics); Johansson, Anders C. (Stockholm China Economic Research Institute)
    Abstract: Social media platforms are becoming increasingly important channels for information dissemination. This study examines how microblogging by top executives affects the information environment for listed firms in an emerging market. Using manually collected set from Sina Weibo, one of China’s most popular and largest social media platforms, we find that a board chair having a Weibo account is associated with the dissemination of more firm-specific information to the capital market. This result holds up to a battery of robustness tests. We also show that the relationship between board chairs’ Weibo usage and information dissemination is stronger for smaller firms, firms that went public more recently, and firms characterized by less analyst coverage. Findings in this study have important implications for the understanding of the role of social media in the dissemination process of corporate information.
    Keywords: Social Media; Information dissemination; Capital market; Investors; China
    JEL: G12 G14 M41 N20
    Date: 2017–11–17
  9. By: Brown, Tashauna Andrene
    Abstract: While divestment activities have been a popular business strategy, little is known about the impact of these activities on the brand image. In this paper, we take a communication perspective and argue that divestment activitiesÙ impact on companyÙ³ brand image is moderated by the announcement frame companies use. Based on this argument, we also develop several testable propositions about the impact of different divestment decisions on the companyÙ³ brand image for different announcement frames.
    Keywords: divestment, brand image, announcement frame, communication perspective, companyÙ³ image,
    Date: 2016
  10. By: Pinheiro, Roberto (Federal Reserve Bank of Cleveland); Monte, Daniel (São Paulo School of Economics, FGV)
    Abstract: In this paper, we show that information trade has similar characteristics to a natural monopoly, where competition may be detrimental to efficiency due either to the duplication of direct costs or the slowing down of information dissemination. We present a model with two large populations in which consumers are randomly matched to providers on a period-by-period basis. Despite a moral hazard problem, cooperation can be sustained through an institution that gives incentives to information exchange. We consider different information pricing mechanisms (membership vs. buy and sell) and different competitive environments. In equilibrium, both pricing and competitive schemes affect the direct and indirect costs of information transmission, represented by directed fees paid by consumers and the expected loss due to imperfect information, respectively.
    Keywords: Information; pricing; monopoly;
    JEL: D83 D85
    Date: 2017–11–16
  11. By: Zhelyu Vladimirov (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration); Sonia Mileva (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration)
    Abstract: The search and accumulation of information online for the travel purposes follows three different stages: pre-trip, during-trip, and post-trip. We study the online behavioural patterns before the trip (planning), responsible for the creation of reliable own expectations, obtain ideas and make selection of attractions and places to be visited; evaluation, comparison of alternatives, booking and payment or other transactions to service suppliers. The data are obtained through the standardised questionnaire from 212 tourists in Bulgaria. The research reveals the tourists’ attitudes and practices in respect to the Internet as a source of information and a means for booking and buying online tourist products/services. The obtained results contribute to more in-depth understanding of tourist’s behavioural patterns of tourist in Bulgaria, practical feedback for suppliers and stakeholders in tourism about the quality of the websites and metasearch engines functionalities.
    Keywords: travel information search, on line purchase, behavioural pattern, Bulgaria
    JEL: L83
    Date: 2017–11

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