Competing Environmental Labels

We study markets in which consumers prefer green products but cannot determine the environmental quality of any given firm's product on their own. A nongovernmental organization (NGO) can establish a voluntary standard and label products that comply with it. Alternatively, industry can create its own standard and label. We compare the stringency of these two types of labels, and study their strategic interaction when they coexist. We find that even with error‐free labels, environmental benefits may be smaller with two labels than with the NGO label alone, and we characterize when label competition is more likely to be environmentally beneficial.     

Product Differentiation by Competing Vertical Hierarchies

We revisit the choice of product differentiation in the Hotelling model, by assuming that competing firms are vertically separated, and that retailers choose products' characteristics. The “principle of differentiation” does not hold because retailers with private information about their marginal costs produce less differentiated products in order to increase their information rents. Hence, information asymmetry within vertical hierarchies may increase social welfare by inducing them to sell products that appeal to a larger number of consumers. We show that the socially optimal level of transparency between manufacturers and retailers depends on the weight assigned to consumers' surplus and trades off two effects: higher transparency reduces price distortion but induces retailers to produce excessively similar products.     

Business,trust and environmental information: Perceptions from consumers and retailers

This paper explores how business sees its role as a provider of information to the public about products marketed with environmental claims. This revolves around issues of depersonalised advice to customers, education of the wider public and, most crucially, justification of company activities. The author demonstrates how people criticise this information because of the way that they perceive the motives of business to colour it, rather than because of the facts it conveys. People distrust aspects of business, especially its environmental information, for these reasons but the perceived expertise of business in comparison with the lack of expertise of the public means that they have little choice but to trust the more general system of information provision. The balance of trust to doubt is precarious and an overall loss of public trust has implications for the regulation of business because self-regulation will no longer be seen as accountable and pressure may build for increasing government intervention, e.g. in eco-labelling. These issues are addressed through the use of qualitative data from in-depth interviews with green consumers and retailers.     

Observability and Sorting in a Market for Names

Can firm names be tradeable assets when changes in name ownership are observable? Earlier literature focuses on trading of firm names when trading is not observable to the consumer. Yet, casual empiricism suggests that shifts in name ownership are often publicly known. This paper studies how firm names can be traded even under full observability. In equilibrium, even when consumers see a reputed name being divested they continue to trust it and so, these names are tradeable. I further demonstrate an appealing “sorting” property of these equilibria. Competent firms can separate themselves by buying valuable names, and incompetent firms can give themselves away by using worthless names.     

On the corporate use of green bonds

When do wholesalers issue green bonds to finance their socially responsible activities instead of charging a premium for the products they produce? We show that in less competitive retail markets when retailers can “skim” more of the premium that end consumers pay for socially responsible products, green bonds provide additional funds to help cover the cost of a wholesaler's socially responsible activities. Similar incentives arise if the wholesaler's input is a small component of the end consumers’ product, or if it is difficult for end consumers to identify the wholesaler's socially responsible activities.     

The role of physical distribution services as determinants of product returns in Internet retailing

Pressure continues to build on Internet retailers to squeeze out inefficiencies from their day-to-day operations. One major source of such inefficiencies is product returns. Indeed, product returns in Internet retailing have been shown to be, on average, as high as 22% of sales. Yet, most retailers accept them as a necessary cost of doing business. This is not surprising since many retailers do not have a clear understanding of the causes of product returns. While it is known that return policies of retailers, along with product attributes, are two important factors related to product return incidents, little is known about which aspects of the online retail transaction make such a purchase more return-prone. In the current study, we seek to address this issue. We use a large data set of customer purchases and returns to identify how process attributes in physical distribution service (PDS) influence product returns. The first attribute involves perceptions of scarcity conditions in inventory availability among consumers when retailers reveal to consumers information on inventory levels for the products that they intend to buy. Our results show that orders in which items are sold when these conditions are revealed to shoppers have a higher likelihood of being returned than orders in which these conditions are not revealed. While prior research has argued that inventory scarcity perceptions have an effect on purchases, our findings suggest that they are also related to the likelihood of these purchases being returned. The second attribute involves the reliability in the delivery of orders to consumers. We find that the likelihood of orders being returned depends on the consistency between retailer promises of timeliness in the delivery of orders and the actual delivery performance of the orders. Moreover, we find that the effect that consistency in the delivery has in the likelihood of returns, is stronger for orders that involve promises for expedited delivery than for orders with less expeditious promises. That is, although the occurrence of returns depends on the delays in the delivery of orders to consumers relative to the initial promises made by the retailers, this effect is more notable for orders that involve promises of fast delivery.     

Sustainable Development and the Consumer: Exploring the Role of Carbon Labelling in Retail Supply Chains

This empirical article contributes to the sustainable development debate by examining consumer responses to carbon labels within a real world context. Given the limitations of methodologies that use self‐reported or intended measures of purchasing behaviour, we use the loyalty card data of the largest supermarket retailer in the UK to measure the impact of carbon labels on sales by different consumer segments. The data show that the trial of carbon labels on supermarket own brand products has had no discernible impact on shifting demand to lower carbon products. In order to explore possible reasons for lack of impact, nine focus groups were held using purposive sampling by retailer consumer segments to allow an exploration of awareness, understanding and use of carbon labels. The findings from the focus groups identified possible reasons for this lack of impact: lack of awareness and understanding of carbon labelling; constraining or facilitating social and cultural influences; and the heterogeneous nature of consumers. As a result, a number of implications for stakeholders are discussed. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

消费者敌意与品牌信任——基于中国市场上日本品牌的实证研究

目前在营销研究的文献中还没有关于消费者敌意与品牌信任之间关系的实证研究。本文旨在填补此空白,研究消费者敌意与品牌信任不同维度之间的关系。本文采用定量研究的方法,在互联网上进行了问卷调查,共获得85份答卷。研究表明消费者敌意对品牌的能力信任没有显著影响,而对品牌的善意信任有负面影响并且需要通过善意信任对品牌总体信任产生影响;研究结果支持了金玉芳的品牌信任结构模型,为弱化消费者敌意对品牌信任的负面影响提供了策略方向。     

Resale price maintenance in a model of consumer search

A retail search model of Salop and Stiglitz (1977) is adapted to analyze manufacturer incentives for resale price maintenance. For some retailer cost functions and distributions of consumer search costs, imposition of a minimum price for retailers causes a price distribution to collapse to an intermediate price. Manufacturers may benefit from price floors when sales to high-search-cost consumers that have obtained lower prices increase sufficiently so as to offset decreased sales to other consumers facing higher prices. In contrast to previous work, no free-riding problem with respect to dealer services is necessary for manufacturers to prefer banning discounting of their products.     

Are green consumers really green? Exploring the factors behind the actual consumption of organic food products

The increasing interest in sustainable consumption has lead several scholars to investigate the determinants that drive the consumption of organic food. Most of this research is based on consumers' self‐reports of their purchasing behavior by exploring declared behavioral intentions. There is a lack of understanding concerning the determinants of organic food consumption based on actual purchasing behavior. To fill this gap, this study is based on a combination of actual purchasing data and self‐reported data from a sample of 79 Italian consumers. The determinants of organic food consumption are explored by analyzing the effects of subjective norms, attitude, perceived behavioral control, intention to buy, organic knowledge, and health consciousness on actual purchasing behavior. Our results suggest that actual purchasing behavior is positively influenced by intention to buy and negatively by subjective norms. Although attitude towards buying organics is positively affected by health consciousness and perceived behavioral control, consumer knowledge about organics is found to influence purchase intentions. Theoretical and managerial implications, along with avenues for future research, are discussed.     

No Merit in State Education

Supporters of the welfare state have contended that health and education are 'merit goods' which will be undervalued by individual consumers so that they must be provided by the state. Dr Graham Dawson, a specialist in the economics of education, considers means of paying for private education which will keep the consumer better informed of his costs and options and avoid the wastage which follows when state action divorces producer from consumer.     

Dynamic Adjustment of Eco‐labeling Schemes and Consumer Choice – the Revision of the EU Energy Label as a Missed Opportunity?

Products with a superior environmental performance, such as a high level of energy efficiency, are typically subject to information asymmetries. Therefore these product attributes are often undervalued in purchase decisions. Signaling, e.g. energy labeling, can overcome these asymmetries, with positive implications for effective consumer decisions, competitive advantage for suppliers of energy‐efficient goods, and for societal goals such as mitigating climate change. However, there is a scarcity of research investigating how energy labels actually influence consumer choice. The recent revision of the European Union energy label provided a unique opportunity to investigate the effectiveness of energy labeling in a quasi field‐experimental setting. We show that the proposed extension of the seven‐point A–G rating scale by adding new classes A+, A++, etc. will result in a lower perceived importance of energy efficiency in consumer decision‐making. Based on a stated preference survey investigating 2244 choices by German consumers, we conclude that the revision actually undermines the label's ability to overcome information asymmetries, hence potentially contributing to market failure. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

The demand for retailer-financed instalment credit: An econometric analysis

During the mid- to late 1980s the UK's Chancellor of the Exchequer has attempted to reduce the volume of consumer credit extended by increasing interest rates rather than by re-introducing terms controls. This paper presents estimates of demand functions for new credit extended by retailers which was financed by them and repaid by instalments. Following earlier papers, a stock-adjustment model is presented that is extended to allow for credit rationing. The results suggest that the demand for such new credit extended is related negatively to terms control and positively to personal disposable income and expectations. Demand was not found to be related to (a proxy for) the nominal interest rate charged by retailers (although it was found to be positively related to the real rate). The former finding is consistent with questionnaire evidence that consumers are unaware of the interest rate that they pay for credit. Elasticities of demand are presented.     

Consumer Feelings and Equilibrium Product Quality

This paper considers the possibility that a firm can invest not only in the true product quality, but also in activities such as merchandizing and store atmospherics that influence consumer perception of the product quality. Consumers make their purchase decisions based on the signal (perception) of quality they experience, where the signal is influenced by both the true product quality valued by the consumer and the affect of the consumer at the time of the signal formation. In this situation, a firm finds it optimal to invest in both product quality and in variables inducing affect, even though rational consumers, in equilibrium, correctly solve back for the true product quality. We uncover an asymmetry in the effects of the cost of producing quality and the cost of inducing affect. As a firm's cost of quality decreases, the firm will find it optimal to invest more both in the true quality and in the affect inducement, even if it does not have a lower cost of inducing affect. Conversely, if a firm finds it easier to induce affect, then the product quality decreases but affect-inducing activities increase.
Under competition, we find that the firm investing more in quality also invests more in affect creation. An implication of this is that in a competitive environment, consumers can rationally associate an up-lifting store atmosphere, affect inducing merchandizing, or mood-creating communication with high quality products even when the firm has no need to signal their private cost of quality information, and when there is no consumption externality of the affect. We also analyze the case in which firms might have different costs and consumers are uncertain about the costs incurred by a given firm. Here again we show that the perceived quality production is positively correlated with both the true quality and the affect inducing activities.     

How much do online consumers really value free product returns? Evidence from eBay

Consumer return rates have been steadily rising in recent years, resulting in growing costs for retailers who must manage the returns process and the disposition of returned products. This cost pressure is driven in part by extremely generous return policies, such as giving consumers a full refund upon return. Interestingly, this common retail practice of full refunds is inconsistent with the recommendations of many analytical models of returns, which nearly always show that a partial refund is optimal. Such inconsistencies between theory and practice might arise when the decision drivers included in the analytical models do not match the decision drivers in practice. It might also be the case that retailers are overly optimistic about the value that consumers assign to a full refund, and thus assume that the value of such a policy outweighs its costs. In this paper, we use data collected from eBay, where identical products are sold with different return policies, to investigate these open questions in the literature. We analyze both the return policy drivers from the retailer's perspective and the return policy value from the consumer's perspective. Our results suggest that the value of a full refund policy to consumers may not be as large as one might expect, and it also exhibits a large heterogeneity across buyers with different levels of online purchase experience. In addition, we provide empirical evidence for what has long been suspected by online retailers – that a non-refundable forward shipping charge quickly erodes any value that consumers assign to return policies. The generality of our results is limited by the fact that eBay differs from traditional retail contexts in many respects, including the fact that eBay buyers may not be representative of the general buyer population. However, our study of how eBay consumers value free returns provides new insights into an understudied area, and it can serve as a starting point for future studies of the value of return policies in other retail contexts.     

Motivators and barriers to sustainable food consumption: Qualitative inquiry about organic food consumers in a developing nation

The present research attempts to qualitatively explore the motivators and barriers of organic food consumption in the Indian context. The data were collected using semistructured in‐depth interviews and analyzed using grounded theory. The theoretical sampling technique was used to interview 34 consumers who have purchased organic food in the past. The findings reported health consciousness, environmental consciousness, social identity, consumer ethnocentrism, and concern for farmers as the factors that motivate organic food purchase among consumers. The factors such as high prices of organic food, unavailability, trust issues, and limited marketing communications from the firms were identified as major barriers to organic food purchase and consumption. The study is one of the initial attempts to qualitatively explore the consumers' motivation for organic food consumption in the Indian context. The findings will help policymakers to devise suitable strategies so that they can effectively target the organic food choices by understanding the motivators/barriers, and promote the sustainable lifestyle in the society, as food consumption plays a crucial role in achieving environmental sustainability.     

Remanufacturing for the Circular Economy: An Examination of Consumer Switching Behavior

For the circular economy to be tenable, consumers need to not only return products after use, but also purchase products that are remanufactured. However, research finds that consumers have a poor opinion of remanufactured products and are typically not prepared to adopt them. Thus, development of the circular economy is dependent upon deeper understanding of consumers’ attitudes and behaviors. Research typically considers either micro‐level or macro‐level factors when assessing consumer perceptions of remanufactured products. The current research incorporates macro‐level factors of price, government incentives and environmental benefits with the moderating influence of micro‐level consumer attitudes to examine consumers’ intention to switch from purchasing new products to remanufactured products. The findings suggest that a consumer's attitude toward remanufactured products is an important moderating factor predicting consumer switching behavior to remanufactured products. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Direct Marketing in Oligopoly

We consider a game in which symmetric manufacturers decide whether to set up sites (e.g., web sites) where consumers can buy their products directly. Following this decision, the manufacturers choose quantities to sell to the retailers, and then the manufacturers with direct‐sales sites and retailers choose quantities to sell to the consumers. We show that since an increase in the number of retailers may drive the direct‐selling manufacturers from the retail market, it may raise the retailers’ profit and reduce social welfare. Finally, we discuss two cases: an oligopolistic wholesale market and a market with price competition and differentiated products.     

Data-driven manufacturer-retailer collaboration under competition

This research employs game theoretic models to investigate how and when data-driven collaborations between manufacturers and retailers are beneficial. In the models, two symmetric retailers each offer two products from two different manufacturers. Each manufacturer may choose to collaborate with one or both retailers through data-driven initiatives in providing retail value to the consumers. The results show that the main incentive behind these collaborations arise from the efficient allocation of resources. Surprisingly, greater brand differentiation reduces profit margins and the incentive to collaborate. We also find that market leaders can endogenously arise through data-driven collaborations.     

Does social influence turn pessimistic consumers green?

The current research investigates the role of social influence on pessimistic consumers' approach toward organic food consumption using the self-focused regulations theoretical framework. It also examines the mediating and moderating role of environmental concern and social influence on the proposed relationships, respectively. An e-survey was conducted on 300 Indian consumers. The findings reveal that pessimistic consumers do not typically consume organic food. However, they have a strong concern for the environment, which, in turn, is likely to change them into optimistic consumers who begin to consume organic foods. Further, social influence significantly motivates pessimistic consumers to adopt organic foods and reduces the concern-behavior gap. The study provides significant implications for organic food marketers and retailers.