scholarly journals Multi-Category Competition and Market Power: A Model of Supermarket Pricing

2017 ◽  
Vol 107 (8) ◽  
pp. 2308-2351 ◽  
Author(s):  
Øyvind Thomassen ◽  
Howard Smith ◽  
Stephan Seiler ◽  
Pasquale Schiraldi
Keyword(s):  
Market Power ◽  
Demand Model ◽  
Retail Pricing ◽  
Product Categories ◽  
Price Effects ◽  
One Stop ◽  
Consumer Data ◽  
Multiple Product ◽  
Category Effects ◽  
Category Pricing

In many competitive settings, consumers buy multiple product categories, and some prefer to use a single firm, generating complementary cross-category price effects. To study pricing in supermarkets, an organizational form where these effects are internalized, we develop a multi-category, multi-seller demand model and estimate it using UK consumer data. This class of model is used widely in theoretical analysis of retail pricing. We quantify cross-category pricing effects and find that internalizing them substantially reduces market power. We find that consumers inclined to one-stop (rather than multi-stop) shopping have a greater pro-competitive impact because they generate relatively large cross-category effects. (JEL D12, L11, L13, L81)

A Flexible Demand Model for Complements Using Household Production Theory

2020 ◽  
Vol 39 (4) ◽  
pp. 763-787
Author(s):  
Ludovic Stourm ◽  
Raghuram Iyengar ◽  
Eric T. Bradlow
Keyword(s):  
Consumer Preferences ◽  
Spillover Effect ◽  
Household Production ◽  
Production Theory ◽  
Demand Model ◽  
Product Categories ◽  
Perfect Complementarity ◽  
Price Effects ◽  
Level Model ◽  
Household Production Theory

According to household production theory, consumers buy inputs and combine them to produce final goods from which they derive utility. We use this idea to build a micro-level model for the quantity demanded by a consumer across product categories. Our model proposes an intuitive explanation for the existence of negative cross-price effects across categories and can be estimated on purchase data in the presence of corner solutions and indivisible packages. We find that, even when reusing the same functional form as some previous models of demand for substitutes, our model can accommodate very different patterns of consumer preferences from perfect complementarity to no complementarity between goods. We estimate the model on purchase data from a panel of consumers and find that it yields a better fit than a set of benchmark models. We then show how the demand system estimated can be used to increase the profitability of couponing strategies by taking into account the spillover effect of coupons on demand for complementary categories and by manufacturers to make decisions regarding the size of packages by taking into account cross-category consumption. We also use the model to simulate demand under a shift in the proportions used in joint consumption, which could be stimulated via marketing efforts.

Sex-Oriented Advertising and its Impact on Attitude of Teenagers: Application of Behaviuoral Intention Model across Product Categories

2005 ◽  
Vol 9 (4) ◽  
pp. 15-26 ◽  
Author(s):  
Tapan K. Panda
Keyword(s):  
Product Category ◽  
Behavioural Intention ◽  
Commercial Product ◽  
The Public ◽  
Mature Adults ◽  
Product Categories ◽  
Adult Programs ◽  
Consumer Data ◽  
Family Setting ◽  
Sex In Advertising

Use of Sex in advertising continues despite the public outcry against it. Exposing mature adults to sex based advertising often invites lesser criticism compared to advertising that targets teenagers. Its use in advertising is no more confined to adult programs on television or adult literature; its consequences are far reaching in the context of exposure through mass media. Although some level of sex content might help in selling, the real questions are: how much sex content is appropriate; when is the use of such content appropriate, and for which target audience. The present research aims to explore some of these questions through consumer data in which teenagers are shown a series of print and television advertisements with different degree of sex content for different product categories. This paper attempts to find out the effectiveness of sex based advertising on the overall attitude and behavioural intention of respondents by application of Fishbien Behavioural Intention Model. The paper tries to find out the relationship between the use of sex content in advertisements for commercial and non-commercial product category at different levels of depiction and behavioural intention towards product categories. The results show that the respondents find sex-content based advertisement to be in bad taste in the context of family setting and there is a relatively moderating effect on the behavioural intention of consumers upon exposure to commercial product advertisements.

scholarly journals Loss Leading as an Exploitative Practice

2012 ◽  
Vol 102 (7) ◽  
pp. 3462-3482 ◽  
Author(s):  
Zhijun Chen ◽  
Patrick Rey
Keyword(s):  
Social Welfare ◽  
Market Power ◽  
Consumer Surplus ◽  
Complementary Products ◽  
One Stop ◽  
Established Firms

We show that large retailers, competing with smaller stores that carry a narrower range, can exercise market power by pricing below cost some of the products also offered by the smaller rivals, in order to discriminate multistop shoppers from one-stop shoppers. Loss leading thus appears as an exploitative device rather than as an exclusionary instrument, although it hurts the smaller rivals as well; banning below-cost pricing increases consumer surplus, rivals' profits, and social welfare. Our insights extend to industries where established firms compete with entrants offering fewer products. They also apply to complementary products such as platforms and applications. (JEL L11, L13, L81)

scholarly journals Measuring the Intensity of Competition in the Japanese Beef Market

2004 ◽  
Vol 36 (1) ◽  
pp. 113-121 ◽  
Author(s):  
Michael R. Reed ◽  
Sayed H. Saghaian
Keyword(s):  
New Zealand ◽  
Market Power ◽  
Marginal Cost ◽  
Demand Curve ◽  
Market Demand ◽  
Demand Model ◽  
Market Segments ◽  
Residual Demand ◽  
Intensity Of Competition ◽  
Beef Market

A residual demand model for beef exports to Japan is specified and estimated. The objective is to estimate the extent of market power. It is assumed that each exporting country faces a downward-sloping residual demand curve, which reflects the market demand minus the supplies of competitors, and that exporters maximize profit through their output decisions. The analysis is disaggregated by beef cut and form to capture the variation by beef market segments. The results indicate that the highest markup of price over marginal cost belongs to U.S. frozen ribs, the only indication of market power by U.S. exporters. Canada is found to have limited market power, whereas Australia and New Zealand enjoy some market power, including five chilled beef categories.

scholarly journals Adolescents Influence on Family Purchase Process in India

2019 ◽  
Vol 9 (2) ◽  
pp. 4772-4777
Keyword(s):  
Purchase Decisions ◽  
Product Categories ◽  
The Past ◽  
The Family ◽  
Purchase Process ◽  
Multiple Product ◽  
Work Done ◽  
The Relationship ◽  
Structured Questionnaire ◽  
Buying Decisions

Considering the significance of Adolescents behaviour in family purchase decisions, the study initiated with the objective to unearth the adolescents influence on the buying decisions of the family. The purpose of the study is listed down into three parts: Firstly, to explore the relationship between the age of adolescents and its effect on buying decisions of family. The next objective is to catalogue and position the products on the basis of influence of Adolescents. Subsequently, the other task is to examine and establish the comparative analysis of Adolescents influence for three different goods categories (so designed) and also analysing it at various stages of Family purchase process. The research methodology is based on the study of relevant review work done in the past and an interview conducted amongst the adolescents for the data collection. Furthermore, a structured questionnaire is circulated amongst adolescents aged between 14-19 years. Data was collected from 350 adolescents. Study also exhibited that there are three product categories identified by factor analysis explicitly “Prominent” Products, “Popular” Products and “Common” Products– It was observed that Popular products gained maximum attention of adolescents, followed by Prominent Products and the least attention seeker for adolescents are Common Products. These categories are designed in context to Indian families & environment. Multivariate Analysis of Variance, i.e., MANOVA was also applied for third objective which presented the outcome that in case of Prominent and Popular Products, adolescent’s impact is greatest at the beginning stage of the purchase process and least at exploration stage. But in case of Common Products, Adolescents influence is highest at the stage of decision making and selection. This study can have enormous future relevance for the marketers by the way of providing them with broad scope of adolescents’ behavioural understanding in family in context to different product categories and at multiple buying stages of family purchase process. This could be considered as the base for formulating and executing various marketing plans. The paper bears uniqueness in terms of analysing adolescents’ behaviour in relation to multiple product catalogues and relating the segmentation across various family buying stages.

scholarly journals “Worse Than What I Read?” The External Effect of Review Ratings on the Online Review Generation Process: An Empirical Analysis of Multiple Product Categories Using Amazon.com Review Data

2021 ◽  
Vol 13 (19) ◽  
pp. 10912
Author(s):  
Young Joon Park ◽  
Jaewoo Joo ◽  
Charin Polpanumas ◽  
Yeujun Yoon
Keyword(s):  
Online Reviews ◽  
Online Review ◽  
Generation Process ◽  
Product Categories ◽  
Consumer Review ◽  
Online Consumer ◽  
Multiple Product ◽  
Online Consumer Review ◽  
Fake Reviews ◽  
Better Than

In this paper, we study the online consumer review generation process by analyzing 37.12 million online reviews across nineteen product categories obtained from Amazon.com. This study revealed that the discrepancy between ratings by others and consumers’ post-purchasing evaluations significantly influenced both the valence and quantity of the reviews that consumers generated. Specifically, a negative discrepancy (‘worse than what I read’) significantly accelerates consumers to write negative reviews (19/19 categories supported), while a positive discrepancy (‘better than what I read’) accelerates consumers to write positive reviews (16/19 categories supported). This implies that others’ ratings play an important role in influencing the review generation process by consumers. More interestingly, we found that this discrepancy significantly influences consumers’ neutral review generation, which is known to amplify the effect of positive or negative reviews by affecting consumers’ search behavior or the credibility of the information. However, this effect is asymmetric. While negative discrepancies lead consumers to write more neutral reviews, positive discrepancies help reduce neutral review generation. Furthermore, our findings provide important implications for marketers who tend to generate fake reviews or selectively generate reviews favorable to their products to increase sales. Doing so may backfire on firms because negative discrepancies can accelerate the generation of objective or negative reviews.

Brand implications of advertising products with their reflections

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nazuk Sharma ◽  
Marisabel Romero
Keyword(s):  
Signaling Theory ◽  
Quality Uncertainty ◽  
Brand Trust ◽  
Content Type ◽  
Product Categories ◽  
Brand Advertising ◽  
Negative Effect ◽  
Multiple Product ◽  
Purchase Likelihood ◽  
The Impact

Purpose The purpose of this study is to investigate the impact of advertising products with their reflections on some important brand outcomes such as brand purchase likelihood, brand trust and consumer willingness to pay for the advertised product. Design/methodology/approach This research uses four experiments to assess the effects of advertising products with (vs without) reflections on the focal brand outcomes. Findings Results evidence a robust negative effect of advertising products with their reflections on the investigated brand outcomes across multiple product categories. Following Signaling Theory, product reflections are found to act as negative signaling devices in brand advertising contexts given that these inverted, false object reproductions are processed with a sense of confusion, ambiguity and uncertainty. Further in line with Signaling Theory, increased product quality uncertainty is determined as the underlying process and brand confidence signaling is tested as a relevant moderator to the proposed effects. Originality/value This inquiry is the first to systemically investigate brand implications of advertising products with their reflections. Counter to marketers’ aesthetic intuitions, the current research finds that this common advertising practice can actually hurt critical brand outcomes such as brand trust.

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