nep-mkt New Economics Papers
on Marketing
Issue of 2018‒05‒14
eleven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Are consumers leaning towards hedonic, symbolic or functional attributes ? Brand benefits scale development and validation in emerging markets: case of Tunisia By Jérôme Lacoeuilhe; Selima Ben; Hager Turki; Samy Belaid
  2. Measuring the Welfare of Intermediation in Vertical Markets By Javier D. Donna; Pedro Pereira; Tiago Pires; André Trindade
  3. Dynamic pricing with reference price dependence By Régis Chenavaz
  4. Buying the Verdict By Lauren H. Cohen; Umit G. Gurun
  5. Impact of private labels and information campaigns on organic and fair trade food demand By Douadia Bougherara; Carole Ropars-Collet; Carole Jude Saint-Gilles
  6. Consumers' Privacy Choices in the Era of Big Data By Dengler, Sebastian; Prüfer, Jens
  7. Pre-release leaks as one-time incentives for switching to unauthorised sources of cultural content By Wojciech Hardy
  8. Des jardins partagés dans les quartiers d’habitat social : un moyen de repenser les pratiques alimentaires ? By Nicole Darmon; Pauline Martin; Pascale Scheromm; Florence Ghestem; Paul Marchand; Jean-Noël Consalès
  9. Price or Variety? An Evaluation of Mergers Effects in Grocery Retailing By Elena Argentesi; Paolo Buccirossi; Roberto Cervone; Tomaso Duso; Alessia Marrazzo
  10. Firm and Market Response to Saving Constraints: Evidence from the Kenyan Dairy Industry By Casaburi, Lorenzo; Macchiavello, Rocco
  11. Pricing of Complements in the U.S. freight railroads: Cournot versus Coase By Alexandrov, Alexei; Pittman, Russell; Ukhaneva, Olga

  1. By: Jérôme Lacoeuilhe (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Selima Ben (Nova Southeastern University); Hager Turki (IHEC - Institut des Hautes Etudes Commerciales [Carthage] - Université de Carthage); Samy Belaid
    Abstract: Branding is an important part of consumer decision making whether domestically or internationally. Brand choices are the reflection of consumers’ motivations. Given the importance of branding to international marketers, its role has been studied in different markets developed as well as developing economies. However, most of the studies have focused on developed economies without taking into consideration the value of branding in less developed economies. The North African Market is a market that has been neglected in such research. This study seeks to understand brands benefits in the Tunisian market. The purpose of this study is to develop a psychometric scale measuring brand benefits in Tunisia. The scale development is based on Churchill’s paradigm. Results show that brand benefits converge towards a two-factor structure consisting in a functional and symbolic factor. Since the choice of a brand reflects the motivations an individual seeks to satisfy through its possession, marketing managers could use such a scale to measure the benefits associated with the brands they commercialize in a north-african environment.
    Abstract: Que ce soit au plan national ou international, les marques jouent un rôle important dans le processus de choix du consommateur. Les choix de marques reflètent les bénéfices du consommateur. Vu l’importance que revêt la marque pour les praticiens du marketing au plan international, son rôle a été étudié tant dans les économies développées que dans celles en développement. Cependant, la plupart des études se sont focalisées sur les économies développées sans englober l’intérêt de la marque dans les pays les moins développés. Le marché nord-africain fait partie des marchés laissés à l’écart par ces recherches. La présente étude vise à appréhender les bénéfices rattachés aux marques sur le marché tunisien. Le but de cette étude consiste à développer une échelle psychométrique de mesure des bénéfices rattachés aux marques en Tunisie. Le développement de cette échelle s’appuie sur le paradigme de Churchill. Les résultats montrent que les bénéfices reliés aux marques convergent vers une structure à deux facteurs – les facteurs fonctionnels et symboliques. Dans la mesure où le choix d’une marque reflète les aspirations qu’une personne cherche à satisfaire au travers de sa possession, les gestionnaires en marketing pourraient utiliser cette échelle pour mesurer les bénéfices associés aux marques qu’ils commercialisent dans un contexte nord-africain.
    Keywords: Utilitaire ,Échelle ,Fonctionnel ,Symbolique ,Marque ,Bénéfices ,Affectif ,Expérientiel ,Économies
    Date: 2017
  2. By: Javier D. Donna (The Ohio State University); Pedro Pereira; Tiago Pires (Department of Economics, University of North Carolina); André Trindade (FGV EPGE Brazilian School of Economics and Finance)
    Abstract: We empirically investigate the welfare implications of intermediaries in oligopolistic markets, where intermediaries offer additional services to differentiate their products from the ones of the manufacturers. Our identification strategy exploits the unique circumstance that, in the outdoors advertising industry, there are two distribution channels: consumers can purchase the product either directly from manufacturers, or through intermediaries. We specify a differentiated products’ equilibrium model, and estimate it using product-level data for the whole industry. On the demand side, the model includes consumers who engage in costly search with preferences that are specific to the distribution channel. On the supply side, the model includes two competing distribution channels. One features two layers of activity, where manufacturers and intermediaries bargain over wholesale prices, and intermediaries compete on final prices to consumers. The other is vertically integrated. The estimated model is sed to simulate counterfactual scenarios, where intermediaries do not offer additional services. We find that the presence of intermediaries increases welfare because the value of their services outweighs the additional margin charged.
    Keywords: Intermediaries, vertical markets, search frictions, bargaining, outdoor advertising
    JEL: L81 L42 D83 M37
    Date: 2018–05
  3. By: Régis Chenavaz (LTCI - Laboratoire Traitement et Communication de l'Information - Télécom ParisTech - Institut Mines-Télécom [Paris] - CNRS - Centre National de la Recherche Scientifique, GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)
    Abstract: A firm that accounts for consumer behavior sets the selling price of a product considering the reference price of consumers. In the literature, a reference price is usually modeled as depending on past selling prices. That is, past selling prices implicitly constrain the current selling price of a product. In this article, the author explicitly measures this constraint with an optimal control framework. He works on the structural properties of a general demand function, which depends on both selling and reference prices. Analytical results prove the following claims. Adjusting reference prices effects increase the price elasticity of demand, the demand function becoming flatter. Thus, the reference price effect weakens the market power of the firm. Also, the reference price effect constitutes a main driver of the dynamics of the selling price. But contrary to intuition, selling price dynamics does not systematically imitate reference price dynamics.
    Keywords: Dynamic pricing, Optimal control, behavioral pricing, reference price dependence,behavioral pricing,reference price dependence,optimal control
    Date: 2016–09
  4. By: Lauren H. Cohen; Umit G. Gurun
    Abstract: We document evidence that firms systematically increase specialized, locally targeted advertising following the firm being taken to trial in that given location - precisely following initiation of the suit. In particular, we use legal actions brought against publicly traded firms over the 20 year sample period that progress to trial from 1995-2014. In terms of magnitude, the increase is sizable: targeted local advertising increases by 23% (t=4.39) following the suit. Moreover, firms concentrate these strategic increases in locations where the return on their advertising dollars are largest: in smaller, more concentrated advertising markets where fewer competitor firms are advertising. They focus their advertisement spikes specifically toward jury trials, and in fact specifically toward the most likely jury pool. Lastly, we document that these advertising spikes are associated with verdicts, increasing the probability of a favorable outcome.
    JEL: D22 G30 K41 K42 L14 M21 M37
    Date: 2018–04
  5. By: Douadia Bougherara; Carole Ropars-Collet; Carole Jude Saint-Gilles
    Abstract: We use Almost Ideal Demand Systems (AIDS) models estimated by the nonlinear seemingly unrelated regression (SUR) method on scanner data (i) to examine the demand for ecolabeled food products (organic and fair trade) as a function of the good having a private label (PL) or a national brand (NB) and (ii) to assess the impact of information campaigns promoting organic and fair trade products. We find that while demand is elastic for NB organic milk and NB fair trade coffee, it is inelastic for their PL counterpart. As for organic eggs, demand is always inelastic. Cross-price elasticities show substitutability between ecolabeled and conventional goods but only within the NB goods (milk and eggs) and within the PL goods (milk and coffee), but also complementarity between NB conventional and PL ecolabeled goods (milk and coffee). Finally, we find that while information campaigns increase the predicted expenditure shares of PL organic milk by 33%, of NB fair trade coffee by 50%, they decrease the predicted expenditure shares of PL conventional eggs but only by 3%. These effects are non-lasting.
    Keywords: organic, Fair trade, information campaign
    JEL: D12 Q5 D82
    Date: 2018–05
  6. By: Dengler, Sebastian (Tilburg University, TILEC); Prüfer, Jens (Tilburg University, TILEC)
    Abstract: Recent progress in information technologies provides sellers with detailed knowledge about consumers' preferences, approaching perfect price discrimination in the limit. We construct a model where consumers with less strategic sophistication than the seller's pricing algorithm face a trade-off when buying. They choose between a direct, transaction cost-free sales channel and a privacy-protecting, but costly, anonymous channel. We show that the anonymous channel is used even in the absence of an explicit taste for privacy if consumers are not too strategically sophisticated. This provides a micro-foundation for consumers' privacy choices. Some consumers benefit but others suffer from their anonymization.
    Keywords: privacy; big data; perfect price discrimination; level-k thinking
    JEL: L11 D11 D83 D01 L86
    Date: 2018
  7. By: Wojciech Hardy
    Abstract: Pre-release leaks of cultural content incentivise consumers to look for unauthorised sources. I find that such events may induce some television viewers to switch to unauthorised sources to gain access even to content that had not been leaked. To demonstrate that this is the case, I use a unique dataset on a sample of TV shows aired around the time of a pre-release leak of a very popular TV show (Game of Thrones). The results of a difference-in-differences analysis indicate that the leaked TV show lost viewership for both the leaked episodes and those that followed. Moreover, the event also had negative effects for other TV shows that may share an audience with the leaked show. Finally, my results for the shows with a shared audience are corroborated by evidence of an increase in Google searches for phrases including the show names and the words “watch online”, after the leak. I argue that the one-time incentive to use unauthorised sources caused some viewers to engage in unauthorised consumption even of shows not affected directly by the leak. These conclusions are consistent with the existence of one-time costs of switching channels of content acquisition.
    Keywords: file-sharing, copyright, intellectual property rights, tv, piracy, Game of Thrones
    JEL: D12 K42 L82 O34 Z11
    Date: 2018–04
  8. By: Nicole Darmon (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - CIHEAM - Centre International des Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, NORT - Nutrition, obésité et risque thrombotique - AMU - Aix Marseille Université - INRA - Institut National de la Recherche Agronomique - INSERM - Institut National de la Santé et de la Recherche Médicale); Pauline Martin (AMU - Aix Marseille Université, INRA - Institut National de la Recherche Agronomique, Institut National de la Santé et de la Recherche Médicale, MMSH Telemme - CNRS - Centre National de la Recherche Scientifique); Pascale Scheromm (UMR Innovation - Innovation et Développement dans l'Agriculture et l'Alimentation - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA - Institut National de la Recherche Agronomique - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement); Florence Ghestem (PADES - Programme d’Autoproduction et Développement Social); Paul Marchand (AMU - Aix Marseille Université, Telemme - MMSH - CNRS - Centre National de la Recherche Scientifique); Jean-Noël Consalès (AMU - Aix Marseille Université, , Telemme - MMSH - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Social inequalities in diet are attributed to sociocultural determinants, economic constraints, and unequal access to healthy food. Fruits and vegetables are lacking in the diets of disadvantaged populations. The objective was to test the hypothesis that, in poor neighborhoods, community gardeners will have larger supply of healthy food, especially fruit and vegetables, than non-gardeners. We examined community gardens from the perspective of production, economics and nutrition, and social and symbolic dimensions, through multidisciplinary investigations involving women with access to a community garden plot in a poor neighborhood of Marseille, France. Gardeners’ monthly household food supplies (purchases and garden production) were analyzed and compared with those of women with a similar socio-economic profile living in the same neighborhoods, without access to a garden. Twenty-one gardeners participated. Only eleven of them harvested during the month of the study, and the amount they collected averaged 53g of produce per household member per day. Whether they harvested or not, most gardeners gave preference to diversity, taste and healthiness of produce over quantity produced. Interviews revealed a value assigned to social, cultural and symbolic dimensions: pride in producing and cooking their own produce, related self-esteem, and sharing their produce at the meal table. The only significant difference between the food supplies of gardener and non-gardener households was seen for fruit and vegetables (369 vs. 211g/d per person). This difference was due to larger purchases of fruit and vegetables, and not to higher quantities produced. In spite of the cross-sectional nature of our study and the small quantities harvested, our results suggest that having access to a community garden could encourage socio-economically disadvantaged women to adopt dietary practices that more closely meet dietary recommendations.
    Abstract: Il existe de fortes inégalités sociales en matière d’alimentation, notamment pour la consommation de fruits et de légumes. L’objectif de cette étude était de tester l’hypothèse selon laquelle, dans les quartiers pauvres, les jardiniers cultivant dans des jardins partagés auraient des approvisionnements en fruits et légumes plus élevés que des non-jardiniers. Une enquête pluridisciplinaire a été réalisée auprès de femmes ayant accès à une parcelle individuelle dans des jardins partagés de quartiers pauvres de Marseille. Les approvisionnements alimentaires mensuels des foyers de ces jardinières (achats et production du jardin) ont été analysés et comparés à ceux de femmes de profil socioéconomique similaire, vivant dans les mêmes quartiers mais n’ayant pas accès à un jardin. Au total, 21 jardinières ont participé à l’enquête. Seulement 11 d’entre elles ont récolté des produits potagers au jardin durant le mois d’enquête, les quantités produites s’élevant en moyenne à 53g de produits potagers par personne vivant dans le foyer et par jour. Qu’elles aient récolté ou non, les jardinières privilégiaient la diversité, le goût et la valeur santé des produits plutôt que les quantités produites. Les enquêtes ont révélé les valeurs sociale, culturelle et symbolique du jardinage (fierté de produire et de cuisiner sa propre production, estime de soi, commensalité). Concernant les approvisionnements alimentaires, la seule différence significative entre les foyers des jardinières et des non-jardinières concernait les fruits et légumes : 369 vs. 211 g par personne et par jour, respectivement, du fait d’achats plus importants de légumes dans les foyers des jardinières. Bien que l’étude soit transversale et malgré la faible quantité de produits potagers récoltés, nos résultats suggèrent que l’accès à un jardin partagé pourrait favoriser l’adoption de pratiques alimentaires plus favorables à la santé par les habitants de quartiers défavorisés.
    Keywords: poverty,fruit and vegetable,food purchases,social inequality,sociocultural determinant,economic constraint,dietary practice,women,garden,urban life,food consumption,buying,rural poverty,femme,vie urbaine,jardin,jardin collectif,fruit et légume,consommation alimentaire,achat,pauvreté,nutrition,budget alimentaire,france
    Date: 2018
  9. By: Elena Argentesi; Paolo Buccirossi; Roberto Cervone; Tomaso Duso; Alessia Marrazzo
    Abstract: Assortment decisions are key strategic instruments for firms responding to local market conditions. We assess this claim by studying the effect of a national merger between two large Dutch supermarket chains on prices and on the depth as well as composition of assortment. We adopt a difference-in-differences strategy that exploits local variation in the merger’s effects, controlling for selection on observables when defining our control group through a matching procedure. We show that the local change in competitive conditions due to the merger did not affect individual products’ prices but it led the merging parties to reposition their assortment and increase average category prices. While the low-variety and low-price target’s stores reduced the depth of their assortment when in direct competition with the acquirer’s stores, the latter increased their product variety. By analyzing the effect of the merger on category prices, we find that the target most likely dropped high priced products, while the acquirer added more of them. Thus, the merging firms reposition their product offerings in order to avoid cannibalization and lessen local competition. Further, we show that other dimensions of heterogeneity, such as market concentration, whether a divestiture was imposed by the Dutch competition authority, and the re-branding strategy of the target stores, are important for explaining the post-merger dynamics. A simple theoretical model of local-market variety competition explains most of our findings.
    Keywords: Variety, assortment, mergers, ex-post evaluation, retail sector, supermarkets, grocery
    JEL: L1 L41 L66 L81 D22 K21 C23
    Date: 2018
  10. By: Casaburi, Lorenzo (University of Zurich); Macchiavello, Rocco (London School of Economics)
    Abstract: Despite extensive evidence that preferences are often time-inconsistent, there is only scarce field evidence of willingness to pay for commitment. Infrequent payments may naturally provide commitment for lumpy expenses. Multiple experiments in the Kenyan dairy sector show that: i) farmers are willing to incur sizable costs to receive infrequent payments and demand for commitment is an important driver of this preference; ii) poor contract enforcement, however, limits competition among buyers in the supply of infrequent payments; iii) in such a market, the effects of price increases on sales depend on both buyer credibility and payment frequency. Infrequent payments are common in many goods and labor markets, but they may not be competitively offered when contracts are not enforceable.
    Keywords: Saving Constraints; Commitment; Agricultural Markets; Contract Enforcement; Interlinked Transactions. JEL Classification: O12, O16, D90, Q13.
    Date: 2018
  11. By: Alexandrov, Alexei; Pittman, Russell; Ukhaneva, Olga
    Abstract: Monopolists selling complementary products charge a higher price in a static equilibrium than a single multiproduct monopolist would, reducing both the industry profits and consumer surplus. However, firms could instead reach a Pareto improvement by lowering prices to the single monopolist level. We analyze administrative nationally-representative pricing data of railroad coal shipping in the U.S. We compare a coal producer that needs to ship from A to C, with the route passing through B, in two cases: (1) the same railroad owning AB and BC and (2) different railroads owning AB and BC. We do not find that price in case (2) is higher than price in case (1), suggesting that the complementary monopolist pricing inefficiency is absent in this market. For our main analysis, we use a specification consistent with the previous literature; however, our findings are robust to propensity score blocking and machine learning algorithms. Finally, we perform a difference-in-differences analysis to gauge the impact of a merger that made two routes wholly-owned (switched from case 2 to case 1), and these results are also consistent with our main findings. Our results have implications for vertical mergers, tragedy of the anticommons, mergers of firms selling complements, and royalty stacking and patent thickets.
    Keywords: pricing of complements, vertical mergers, Cournot, Coase, railroads
    JEL: D21 D22 D43 D86 L13 L14 L4 L40 L92
    Date: 2018–04–18

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