nep-mkt New Economics Papers
on Marketing
Issue of 2018‒08‒20
five papers chosen by
Marco Novarese
Università del Piemonte Orientale

  1. Multiproduct retailing and buyer power: The effects of product delisting on consumer shopping behavior By Jorge Florez-Acosta; Daniel Herrera-Araujo
  2. Product Proliferation and Pricing in a Market with Positional Effects By George Deltas; Eleftherios Zacharias
  3. Participatory Budgeting in Poland – Finance and Marketing Selected Issues By Bednarska-Olejniczak, Dorota; Olejniczak, Jaroslaw
  4. An Empirical Analysis of Competition in Print Adversiting among Paid and Free Newspapers By Geoffrey Brooke; Lydia Cheung
  5. How where I shop influences what I buy: the importance of the retail format in sustainable tomato consumption By Baum, Chad M.; Weigelt, Robert

  1. By: Jorge Florez-Acosta (Universidad del Rosario - Universidad Nacional de Rosario [Santa Fe]); Daniel Herrera-Araujo (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper empirically examines the effects of product delisting on consumer shopping behavior in a context of grocery retailing by large multiproduct supermarket chains. A product is said to be delisted when a supermarket stops supplying it while it continuous being sold by competing stores. We develop a model of demand in which consumers can purchase multiple products in the same period. Consumers have heterogeneous shopping patterns: some find it optimal to concentrate purchases at a single store while others prefer sourcing several separate supermarkets. We account for this heterogeneity by introducing shopping costs, which are transaction costs of dealing with suppliers. Using scanner data on grocery purchases by French households in 2005, we estimate the parameters of the model and retrieve the distribution of shopping costs. We find a total shopping cost per store sourced of 1.79 e on average. When we simulate the delisting of a product by one supermarket, we find that customers' probability of sourcing that store decreases while the probability of sourcing competing stores increases. The reduction in demand is considerably larger when consumers have strong feelings of loyalty for the delisted brand. This suggests that retailers may be hurting themselves, and not only manufacturers, when they delist a product. However, when customers are loyal to the store, such effects are lower, suggesting that inducing store loyalty in customers (through strong private labels and loyalty programs, for example) appears to have an effect on vertical negotiations and, in particular, it enables powerful retailers to impose vertical restraints on manufacturers.
    Keywords: one-and multistop shopping,Simulated Maximum likelihood,Grocery retailing, supermarket chains, buyer power, vertical,restraints, product delisting, shopping costs, D12, L13, L22, L81
    Date: 2017–02
  2. By: George Deltas; Eleftherios Zacharias
    Abstract: We provide an explanation for product versioning that is not driven by differential costs or consumer preference heterogeneity, and investigate its implications. Consumers care whether a product they own is better than that owned by others, and whether others own a better product than them. These positional effects can induce a firm to offer products of different quality, with the high quality product becoming more exclusive as these effects strengthen. Consumers with no positional preferences become worse off when the broader market acquires them, except following the introduction of the second product, when some such consumers become better off. Positional preference also reduce total consumer surplus holding the number of products fixed; however, they increase consumer surplus if they lead the firm to introduce a second product of sufficiently high quality. We discuss empirical implications of the theory.
    Keywords: Relative consumption, status effects, positional externalities, Veblen goods
    JEL: L11 D11 D42
    Date: 2018
  3. By: Bednarska-Olejniczak, Dorota; Olejniczak, Jaroslaw
    Abstract: This article is an attempt to present and analyse the changes in the scale and scope of the significance of participatory budgets introduced in the years 2014-2016 in most Polish cities with district rights (MNP), as well as to determine the importance of activities in the field of marketing communication for the effective implementation of the objectives related to its functioning. The analysis carried out in the article concerning PB development in MNP clearly indicates the rise of interest of this form of citizens’ participation in deciding about MNP expenses. Simultaneously, differences in scale and range of implemented PB among examined groups might be visible. As an example, the city of Wrocław shows that an adequate marketing communication of the city as well as local project leaders with inhabitants is a fundamental factor influencing forming an active participation among inhabitants.
    Keywords: local government – participatory budgeting
    JEL: H72 O18 O30
    Date: 2017
  4. By: Geoffrey Brooke (School of Economics, Auckland University of Technology); Lydia Cheung (School of Economics, Auckland University of Technology)
    Abstract: This paper examines the competition in the print newspaper advertising market in New Zealand, which involves paid daily and free weekly titles. This is the first study to explore how different ownership structures across two newspaper segments affect the competitive forces in local geographic markets. We do so by constructing an original dataset of advertising rates. This has particular relevance in light of the Commerce Commission's recent rejection of the proposed NZME-Fairfax merger, and Fairfax's subsequent closure of 15 newspaper titles. We find strong evidence for competition between overlapping free weekly suburban titles. It is associated with a 11% decrease in the full tabloid page display advertising rate. We also find evidence of joint profit maximization between co-owned free weeklies and paid dailies. Our results support the Commission's decision and give crucial implication on market definition: small and large display ads in free weekly titles constitute two separate markets with dif erent clients. The large display ad market also includes advertising in paid daily titles. This market is competitive and will likely suffer if the merger were granted.
    Keywords: Newspaper, Print, Advertising, Ownership structure, Competition, Merger
    Date: 2018–08
  5. By: Baum, Chad M.; Weigelt, Robert
    Abstract: Although interest in sustainable food has increased substantially in recent years, the actual demand for such products has typically proceeded quite unevenly across consumers. Making sense of the variable pace of behavioral change requires that we explore the foundations of sustainable consumer behavior, especially the importance attached to particular attributes and the types of tradeoffs that exist. For this reason, this study utilizes a discrete choice experiment (DCE) that integrates the type of retail format to establish the potential for interaction effects with attributes. Stated-preference methods like DCEs have proven useful to explain how and why individuals’ willingness to pay (WTP) for qualities such as organic, fair trade, and locality can differ. However, by mostly focusing on product qualities alone, the importance of the retail formats where products are actually purchased – and their potential impact on the valuation of attributes – is left unexplored. Framing this DCE in relation to sustainable tomato consumption, we can conclude that the type of retail format is a significant determinant of purchasing behavior, both on its own and in its interaction with the other qualities.
    Keywords: Agricultural and Food Policy, Consumer/Household Economics, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Marketing, Research Methods/ Statistical Methods
    Date: 2017–03–16

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