bluuebunny/crossref_metadata_2025_split huggingface dataset:
An Economic Analysis of the Introduction of an Electronic Data Interchange System
Authors: Barua Anitesh , Lee Byungtae 
Published: October 2008

Although electronic data interchange (EDI) holds the promise of significantly increasing the efficiency of business transactions, an installed base of proprietary implementations has been detrimental to the widespread acceptance of the technology. Thus, an important research issue involves strategies for facilitating EDI adoption. We analyze the introduction of an EDI system in a vertical market involving one manufacturer and two suppliers. The manufacturer initiates an EDI network, and penalizes a supplier for not joining the system by reducing its volume of business with the supplier. Along with a “stick,” the manufacturer can also use a “carrot” in the form of a subsidy to partially offset a supplier's setup cost. The competition between the suppliers is characterized by incentive types for joining the EDI system (“motivating” or “threatening”) and the Information Technology (IT) efficiency (“efficient” or “inefficient”). We show that regardless of its cost structure, a supplier may have to join the EDI network out of “strategic necessity,” due to the presence of an IT-efficient supplier. Our analysis further shows that depending on the supplier competition structure, the EDI system may prove to be a “beneficial” strategic necessity for a large supplier and an “unfortunate” strategic necessity for a small supplier. Another key result is that by increasing the severity of the penalty, both the manufacturer and the follower supplier can be worse off under certain conditions. The analysis of subsidy strategies reveals that unless leadership and followership positions are reversed due to a subsidy, subsidizing a supplier has no impact on the joining time of its competitor. Thus the EDI initiator cannot induce both suppliers to join earlier by subsidizing one supplier. Also, the larger the slack capacity of the leader, the higher (lower) the manufacturer's incentive to subsidize the leader (follower). These results offer insights for initiators and adopters regarding penalty and subsidy strategies, impact on competition structure, joining decisions and network growth.
News: A Decision-Oriented Model for New Product Analysis and Forecasting
Authors: Pringle Lewis G. , Wilson R. Dale , Brody Edward I. 
Published: October 2008

Modeling efforts in the area of new product introductions have had a significant impact on marketing planning and strategy. One result of these efforts, BBDO's New Product Early Warning System (NEWS), has been used since the late 1960s to provide marketing managers with forecasts and diagnostic information regarding their new product strategies. This article presents the specification of the NEWS model, its parameter estimation methods, and its validation. A brief case history is also included which illustrates how the model is applied in a typical new product situation. NEWS is designed to use a variety of readily obtainable input data to generate forecasts of consumer awareness, trial, repeat purchase, usage, sales, and market share for a new brand. These outputs, combined with diagnostics from the model, can then be incorporated into the marketing plan in a way that will improve the new entry's chances of success in the marketplace. The model can be used to project early test market data (NEWS/Market); or it can be used to analyze pre-test market data (NEWS/Planner).
Application, Predictive Test, and Strategy Implications for a Dynamic Model of Consumer Response
Authors: Hauser John R. , Wisniewski Kenneth J. 
Published: October 2008

This paper describes and evaluates the application of a dynamic stochastic model of consumer response. The model describes, then forecasts, how consumers respond to a new transportation service and to the marketing strategies used during its introduction. The model is estimated on survey data during the first 11 weeks of service. Forecasts over the next 19 weeks are then compared to actual ridership as measured by dispatch records. The model is simple. At any point in time, consumers are described by a set of “behavioral states”, indicating (1) whether they are aware of the new service (DART) and (2) what mode of transportation was used for their last trip. Behavior is described by movement among behavioral states. E.G., If a car user tries DART, he makes a transition from ‘car used for last trip’ to ‘DART used for last trip’. The transition probabilities and the rate of transition are dependent on marketing strategies (direct mail, publicity), word of mouth, consumer perceptions, availability of a mode, and budget allocation to transportation. The advantages and disadvantages of the model and the measurements are discussed with respect to predictive ability and managerial utility.
A Model for the Analysis of Asymmetric Data in Marketing Research
Authors: Harshman Richard A. , Green Paul E. , Wind Yoram , Lundy Margaret E. 
Published: October 2008

Over the last decade, numerous methods for the multidimensional scaling (MDS) of perceptions and preferences have been applied by researchers in marketing. However, one notable gap in MDS methodology has been the lack of suitable models for analyzing inherently asymmetric data relationships. Recently, Harshman (Harshman, R. A. 1978. Models for analysis of asymmetrical relationships among N objects or stimuli. Paper presented at the First Joint Meeting of the Psychometric Society and the Society for Mathematical Psychology. McMaster University, Hamilton, Ontario, August; Harshman, R. A. 1982a. DEDICOM: A family of models generalizing factor analysis and multidimensional scaling for decomposition of asymmetric relationships. Unpublished manuscript, University of Western Ontario.) has proposed a new family of models—called DEDICOM (DEcomposition into Directional COMponents)—for analyzing data matrices that are intrinsically asymmetric. In this article, the single-domain DEDICOM model is described and applied to two illustrative cases in marketing research. The examples demonstrate that DEDICOM solutions will sometimes make more substantive sense and provide significantly better fits to asymmetric data than solutions obtained by factor analysis or MDS. DEDICOM also provides a novel type of information—a description of asymmetric relations among dimensions or clusters. Such information will often have useful marketing implications.
An Empirical Analysis of the Relationship Between Brand Loyalty and Consumer Price Elasticity
Authors: Krishnamurthi Lakshman , Raj S. P. 
Published: October 2008

This empirical paper explores the relationship between consumer brand preference or loyalty and price elasticity in purchase behavior. This behavior is conceptualized as resulting from two distinct but related decisions, namely a brand choice decision and a purchase quantity decision. We argue that loyal consumers will be less price sensitive in the choice decision than nonloyal consumers. However, this direction is expected to be reversed in the quantity decision with loyal consumers expected to be more price sensitive than nonloyal consumers. We model the choice and quantity decisions jointly using the limited dependent variable framework described in Krishnamurthi and Raj. The data used are diary panel data on a frequently purchased product class from BURKE and caffeinated ground coffee scanner data from IRI. We show that loyals are less price sensitive than nonloyals in the choice decision but more price sensitive in the quantity decision. Managerial implications of the differing elasticities are discussed.
A Dynamic Model of Channel Member Strategies for Marketing Expenditures
Authors: Chintagunta Pradeep K. , Jain Dipak 
Published: October 2008

We develop a dynamic model for determining the equilibrium marketing effort levels for a manufacturer and a retailer in a two-member marketing channel. The existence of carry-over effects of marketing effort of channel members leads to an accumulation of goodwill for them over time. This necessitates modeling the relationship between the effort and channel sales in a dynamic framework as goodwill accumulation creates an incentive for channel members to invest in marketing effort in order to obtain future benefits. By explicitly recognizing that each member's decision is affected by the other's actions, we derive their equilibrium effort levels over time when they follow either a coordinated or an uncoordinated strategy and also determine the profit implications of these strategies for the channel members. We examine the effect of channel dynamics on the difference in profits resulting from following coordinated as opposed to uncoordinated strategies and identify situations in which this profit differential provides an incentive for channel members to coordinate their marketing efforts. Further, we derive empirically testable hypotheses that provide a basis for predicting when channel coordination would take place in a dynamic context.
A Probit Model of Choice Dynamics
Authors: Papatla Purushottam , Krishnamurthi Lakshman 
Published: October 2008

There are many products which are repeatedly purchased by consumers. In such cases it is likely that choice history, that is the sequence of choices made in the past, as well as marketing variables affect subsequent choice decisions. Attempts to model the effects of choice history have been generally based on the inclusion of variables that represent brand loyalty and/or variety seeking behavior. In this paper we present a model of dynamic choice behavior which is more general and incorporates four characteristics. The first characteristic labeled preference reinforcement and preference reduction represents loyalty and variety seeking. The second is the short-term reluctance of a consumer to move from the current brand (inertia) or the willingness to move to another brand (mobility). The third characteristic captures the effect of repetitive consumption (the long term effect) on inertia and mobility. The fourth characteristic incorporates the similarity or dissimilarity of choice alternatives. This is important in a dynamic model because choice on the current purchase occasion can be affected by whether a similar or dissimilar alternative was chosen on the previous occasion. Similarities of alternatives are represented in terms of distances. The effect of price on choice behavior is also modeled. Individual-level purchase data from a consumer panel are used to estimate a covariance probit and an independent probit specification of the model. From a substantive perspective the model gives interesting insights into the dynamics of choice behavior. The model predicts switches better than a benchmark model which incorporates only loyalty. In addition, it is superior to three benchmark models in overall predictive ability.
Pulsing Policies for Aggregate Advertising Models
Authors: Feinberg Fred M. 
Published: October 2008

Classical continuous-time models of advertising expenditure tend to fall into two categories, those that prescribe spending at a constant level and those that prescribe switching infinitely quickly between several different levels of spending. The latter practice, chattering, though impossible literally, can be interpreted in practice to imply that the faster the switching the better. Empirical evidence, however, sometimes suggests the superiority of pulsing, alternating between different spending levels with finite frequency, for example in a periodic fashion. Furthermore, the actual behavior of marketing managers, who often advertise in flights or pulses, appears to differ from the optimal policies many current models prescribe. Showing how structural properties of common advertising models rule out finite-frequency pulsing a priori, we develop a continuous-time model for which finite-frequency pulsing can be optimal. Relaxing these structural assumptions yields a new class of models which, for certain values of their parameters, lead to periodic pulsing optima; this is accomplished by inclusion of both S-shaped response and an exponential-smoothing filter. These theoretical results are illustrated through simulation of a variant of the Vidale-Wolfe model.
An Aggregate Advertising Pulsing Model with Wearout Effects
Authors: Mesak Hani I. 
Published: October 2008

This paper, guided by empirical findings in the literature, develops an advertising pulsing model for established frequently purchased products under the presence of advertising wearout effects. Using such a model, the superiority of Advertising Pulsing Policy over an equivalent Uniform Advertising Policy is explored analytically for both S-shaped and concave advertising response functions in relation to initial sales and the employed discount rate. The basic results of the research, summarized in four propositions, indicate that under the presence of advertising wearout and for both S-shaped and concave advertising response functions that: —Pulsing is superior to the even policy for a zero discount rate. —For all positive values of the discount rate, pulsing is superior to the even policy provided that initial sales are close enough to the equilibrium sales of the even policy. —If initial sales are much different from the equilibrium sales of the even policy, pulsing would be superior for small values of the discount rate whereas the even policy would be superior for large values of the discount rate.
Estimating a Multinomial Probit Model of Brand Choice Using the Method of Simulated Moments
Authors: Chintagunta Pradeep K. 
Published: October 2008

The multinomial probit model of brand choice is theoretically appealing for marketing applications as it is free from the “independence of irrelevant alternatives” property of the multinomial logit model. However, difficulties in estimation have restricted its widespread use in marketing. This paper presents an application of the method of simulated moments, a new methodology that enables easy estimation of probit models with a large number of alternatives in the choice set. We describe the theoretical development of the technique and using pseudo-simulated data, conduct numerical experiments to compare the method with existing techniques for estimating probit models. Using the scanner panel data on the purchases of catsup, we provide an empirical application of the method of simulated moments to the estimation of the parameters of a multinomial probit model. Estimating the covariance structure associated with the underlying latent variable probit model enables us to identify broad patterns of similarities across alternatives. It also enables us to derive a pairwise similarity matrix across choice alternatives which when input into a multi-dimensional scaling routine provides us with a graphical representation of competitive structure in the catsup market. For completeness, we compare the substantive implications for the effects of marketing variables obtained from the multinomial probit model with those obtained from models in the extant marketing literature.
The Measurement and Determinants of Brand Equity: A Financial Approach
Authors: Simon Carol J. , Sullivan Mary W. 
Published: October 2008

This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products. The estimation technique extracts the value of brand equity from the value of the firm's other assets. This technique is useful for two purposes. First, the macro approach assigns an objective value to a company's brands and relates this value to the determinants of brand equity. Second, the micro approach isolates changes in brand equity at the individual brand level by measuring the response of brand equity to major marketing decisions. Empirically, we estimate brand equity using the macro approach for a sample of industries and companies. Then we use the micro approach to trace the brand equity of Coca-Cola and Pepsi over three major events in the soft drink industry from 1982 to 1986.
Scale and Scope Effects on Advertising Agency Costs
Authors: Silk Alvin J. , Berndt Ernst R. 
Published: October 2008

Economies of scale are evident when a firm's average costs decline while its output expands, as when an advertising agency raises its gross income by serving more accounts and/or larger accounts. Economies of scope appear when cost savings can be realized by a single agency producing several products jointly, as compared to many agencies each producing them separately. How important are economies of scale and scope in advertising agency operations? In this paper cost models are formulated which represent how the principal component of agency costs, employment level, varies according to the mix of media and services an agency provides and the total volume of advertising it produces. These models are estimated and tested cross-sectionally utilizing data pertaining to the domestic operations of 401 U.S. agencies for 1987. The empirical evidence reported here indicates that both scale and particularly scope economies are highly significant in the operations of U.S. advertising agencies. We find that of the 12,000 establishments comprising the industry in 1987, approximately 200–250 had domestic gross incomes of $3–4 million or more (or equivalently, billings of $20–27 million) and therefore had service mixes and operating levels sufficiently large to take full advantage of all available size-related efficiencies. Furthermore, the overall structure of the industry is one where these large, fully efficient firms created and produced more than half of all the national advertising utilized in the U.S. during 1987. At the same time, vast numbers of very small agencies appear to operate with substantial cost disadvantages compared to large firms as a consequence of these scale and scope economies. These findings carry important implications concerning possible future changes in the industry structure. It seems highly doubtful that scale economies could motivate further mergers among the largest 200–250 agencies. On the other hand, for small agencies, mergers and acquisitions might be attractive as means of mitigating their size-related cost disadvantages. Finally, our findings demonstrating the existence of scale and scope economies are consistent with the diminishing reliance on fixed rates of media commissions as the principal basis of agency compensation. They also cast strong doubts on size-related economies in operating costs as a viable explanation for the limited degree of vertical integration of agency services by large advertisers.
Predicting Advertising Pulsing Policies in an Oligopoly: A Model and Empirical Test
Authors: Villas-Boas J. Miguel 
Published: October 2008

Given that firms pulse in advertising, should firms pulse in or out of phase? It is shown that out of phase maximizes the oligopoly profits and is also the Markov perfect equilibrium of the infinite horizon game. The basic intuition for this result comes from the following fact: it is more profitable to increase consideration when the competitor's consideration is lower. Evidence from several product categories seems to support this theoretical result.
Truth in Concentration in the Land of (80/20) Laws
Authors: Schmittlein David C. , Cooper Lee G. , Morrison Donald G. 
Published: October 2008

Among the more prominent truisms in marketing are 80/20 type laws, e.g., 20 percent of the customers account for 80 percent of the purchases. These kinds of statistics indicate a certain degree of concentration in customer purchases; i.e., the extent to which a large portion of the product's total purchases are made by a small fraction of all customers. Such concentration levels, suggesting that markets can be segmented in various ways, are often reported in basic marketing texts. We show that a meaningful interpretation of these concentration statistics is not nearly as easy or immediate as it is to compute them. The key factors influencing the degree of apparent concentration in purchases are reviewed, and we present a modeling approach for estimating the true level of relevant concentration among customers.
Investigating Purchase Incidence, Brand Choice and Purchase Quantity Decisions of Households
Authors: Chintagunta Pradeep K. 
Published: October 2008

We develop a comprehensive utility maximizing framework to study the impact of marketing variables on the category purchase, brand choice and purchase quantity decisions of households for frequently purchased packaged goods. The model allows for dependence among the three decisions while ensuring that these decisions provide, in combination, the greatest possible utility to the household. By accounting for variations in reservation prices and intrinsic brand preferences across households, the modeling framework explicitly captures the effects of unobserved heterogeneity on all three purchase decisions. The principal empirical finding from analyzing the A. C. Nielsen data for the yogurt product category is that the substantive implications for the effects of marketing variables are sensitive to whether these effects are determined conditional or unconditional on a product category purchase. Our results show that reservation prices and intrinsic brand preferences vary across households, and not accounting for these variations in the estimation could lead to biased estimates for the coefficients of the marketing variables. A comparison of our results to those obtained from a nested logit model of purchase incidence and brand choice reveals that our proposed model performs better using both a formal statistical test as well as the criterion of predictive validity in a holdout sample of panelists. Further, the purchase quantity model compares favorably with two alternative models of quantity choice in the validation sample.
Modeling Loss Aversion and Reference Dependence Effects on Brand Choice
Authors: Hardie Bruce G. S. , Johnson Eric J. , Fader Peter S. 
Published: October 2008

Based upon a recently developed multiattribute generalization of prospect theory's value function (Tversky and Kahneman 1991), we argue that consumer choice is influenced by the position of brands relative to multiattribute reference points, and that consumers weigh losses from a reference point more than equivalent sized gains (loss aversion). We sketch implications of this model for understanding brand choice. We develop a multinomial logit formulation of a reference-dependent choice model, calibrating it using scanner data. In addition to providing better fit in both estimation and forecast periods than a standard multinomial logit model, the model's coefficients demonstrate significant loss aversion, as hypothesized. We also discuss the implications of a reference-dependent view of consumer choice for modeling brand choice, demonstrate that loss aversion can account for asymmetric responses to changes in product characteristics, and examine other implications for competitive strategy.
Nonlinear Pricing to Produce Information
Authors: Braden David J. , Oren Shmuel S. 
Published: October 2008

We investigate the firm's dynamic nonlinear pricing problem when facing consumers whose tastes vary according to a scalar index. We relax the standard assumption that the firm knows the distribution of this index. In general the firm should determine its marginal price schedule as if it were myopic, and produce information by lowering the price schedule; “bunching” consumers at positive purchase levels should be avoided. As a special case we also consider a market characterized by homogeneous consumers with a static, but unknown, demand curve. We show that when there are repeat purchases the forward-looking firm should tend towards penetration pricing; otherwise its strategy should tend towards skimming. We extend our insights to more general settings and discuss implications for pricing product lines.