Classifying and modeling nonlinearity in commodity prices using Incoterms

ABSTRACT

This paper proposes a novel approach of classifying and modeling the nonlinear behavior of commodity prices using regime-switching models with exogenous transition variables. The approach rests on using the International Commercial Terms (Incoterms), also known as border prices, to classify commodities in groups that tend to display similar dynamics. The suggested border price classification is useful in identifying the key exogenous driving variables in each group. In particular, the classification suggests that inflation and oil price are the best transition candidates that are capable of capturing the nonlinear dynamics of free on board (FOB) and cost insurance and freight (CIF) prices respectively. Our statistical linearity tests and estimation results confirm this prediction and highlight the importance of the suggested border price classification in improving our understanding of the behavior of commodity prices.     

EU Membership and FDI: Is There an Endogenous Credibility Effect?

ABSTRACT

The European sovereign debt crisis has increased the uncertainty regarding the benefits and costs of membership in the Economic and Monetary Union. In this article, we decided not to propose a general model but to focus on one of the important components of the European financial integration. In particular, we develop a structural gravity model, influenced by some very recent theoretical and econometric advancements. This new structural gravity approach provides needed theoretical underpinnings as well as strong support for the econometric estimation of gravity models.     

A new use of importance sampling to reduce computational burden in simulation estimation

Simulation estimators (Lerman and Manski 1981; McFadden, Econometrica 57(5):995–1026, 1989; Pakes and Pollard, Econometrica 57:1027–1057, 1989) have been of great use to applied economists and marketers. They are simple and relatively easy to use, even for very complicated empirical models. That said, they can be computationally demanding, since these complicated models often need to be solved numerically, and these models need to be solved many times within an estimation procedure. This paper suggests methods that combine importance sampling techniques with changes-of-variables to address this caveat. These methods can dramatically reduce the number of times a particular model needs to be solved in an estimation procedure, significantly decreasing computational burden. The methods have other advantages as well, e.g. they can smooth otherwise non-smooth objective functions and can allow one to compute derivatives analytically. There are also caveats—if one is not careful, they can magnify simulation error. We illustrate with examples and a small Monte-Carlo study.     

Seeing through a Glass Onion: broadening and deepening formative research in social marketing through a mixed methods approach

ABSTRACT

The purpose of formative research in social marketing is to understand the target audience to generate consumer insight, which informs the planning, development and initial implementation of social marketing programmes. Focus groups, interviews or surveys, all of which are self-report methods, are the most commonly reported methods employed in formative research. Reliance on a relatively narrow range of methods may constrain understanding and insight gained during formative research. This paper challenges social marketers to mix methods or use multiple methods and research perspectives to generate a broader understanding of the consumer and the context in which they behave. A case study is used to demonstrate how mixed methods were used in a formative research study to inform the development of a social marketing programme designed to change eating behaviour. Challenges of mixed methods are detailed along with recommendations for future research.     

A generalized framework for estimating customer lifetime value when customer lifetimes are not observed

Measuring customer lifetime value (CLV) in contexts where customer defections are not observed, i.e. noncontractual contexts, has been very challenging for firms. This paper proposes a flexible Markov Chain Monte Carlo (MCMC) based data augmentation framework for forecasting lifetimes and estimating customer lifetime value (CLV) in such contexts. The framework can be used to estimate many different types of CLV models—both existing and new. Models proposed so far for estimating CLV in noncontractual contexts have built-in stringent assumptions with respect to the underlying customer lifetime and purchase behavior. For example, two existing state-of-the-art models for lifetime value estimation in a noncontractual context are the Pareto/NBD and the BG/NBD models. Both of these models are based on fixed underlying assumptions about drivers of CLV that cannot be changed even in situations where the firm believes that these assumptions are violated. The proposed simulation framework—not being a model but an estimation framework—allows the user to use any of the commonly available statistical distributions for the drivers of CLV, and thus the multitude of models that can be estimated using the proposed framework (the Pareto/NBD and the BG/NBD models included) is limited only by the availability of statistical distributions. In addition, the proposed framework allows users to incorporate covariates and correlations across all the drivers of CLV in estimating lifetime values of customers.

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Electronic supplementary material  The online version of this article (doi:) contains supplementary material, which is available to authorized users.

Ethics and Social Responsibility in Marketing

ABSTRACT

Ethics are our belief about what is right and wrong. Although these beliefs may vary from one individual to another or one company to another, ethics and business responsibility are an important part to any company's marketing department. The goals of the marketing department are to target an audience, appeal to that audience, and get the audience to purchase that particular product or service. In doing this, a company must make sure that they are first abiding by all laws and regulations, but they should also strive to be sure that they are acting ethically and honestly. One interpretation of morality may vary greatly among individuals, but it still exists.

While the necessity for ethics in business and marketing has been pointed out in numerous sources, many have contended that a good deal of consumer concern is with marketing and its related activities. Within companies, trade organizations, governmental organizations, and professions, one can observe a shift in the way of thinking about codes of ethics. The moral resistance of an organization is referred to as the degree in which the organization can resist the influencing factors, which exercise a downward pressure on the moral content of the organization. The moral content of the organization is the degree in which that organization makes an effort to fulfill its responsibilities with respect to its stakeholders.     

An analysis of prediction error for new prime-time television programmes: a comparative study between the USA and Korea

This study investigates possible factors in prediction error for audience share for new prime-time television programmes in the USA and Korea. While previous studies have focused on the factors affecting the size of a programme's actual audience, little attention has been paid to the accuracy of audience share prediction. A total of 193 new prime-time TV programmes from 1994 to 1997 for the USA and from 1998 to 2001 for Korea were examined. Advertising industry forecasters' predicted audience share, and actual share data were accumulated from Broadcasting & Cable and Weekly Nielsen Reports. Findings show that the ‘Programme Type’, ‘Returning Lead-Ins’ and ‘Returning Lead-Outs’ worked as significant factors for estimating error in audience share in the USA, and ‘Programme Type’ and ‘Programme Length’ played major roles in forecasting error in Korea. The degrees of relationship with forecasting error are consistent with previous studies' findings. Similarities and dissimilarities in prediction error in both countries were found and are discussed in this study.     

Estimation of innovation diffusion models with application to a consumer durable

A class of birth processes having a variety of practical applications in penetration of new services and products is considered. Typically, statistical inferences on these models are performed by means of simple error structures placed on the deterministic analogs of the underlying stochastic processes. Motivated by the poor performance of conventional estimation methods, the problem of estimating the parameters of these models is readdressed. We develop necessary formulae for performing the maximum likelihood estimation and weighted least squares estimation methods, and demonstrate their superiority through analyses of some real data and simulation studies.     

Viewer Preference Segmentation and Viewing Choice Models for Network Television

Abstract

Individual viewing decisions have a direct impact on the media planning of television advertisers and, consequently, on the revenues of the major television networks. This paper represents an attempt to better understand these decisions. We use Nielsen people meter data to build a perceptual space for programs. That space is then used to develop models explaining viewers' decision to watch television and their choice of programming. The program-choice model is a clusterwise logit model which searches for segments with similar viewing preferences. A segment-level logit model is then used to model the on-off decision. These models can be used by advertisers and advertising agencies to understand the viewing audience better, and thus to help guide their advertising media placement decisions. The models can also help television networks design programs and program schedules that are more attractive to viewers (and thus advertisers).     

The Effects of Humor on Attention in Magazine Advertising

Abstract

It was the objective of this investigation to determine whether humor in advertising heightens attention levels and whether the potential heightening of attention is moderated by audience confounds. The study utilized Starch readership scores obtained for humorous liquor ads which appeared in magazine issues surveyed by Starch from 1976–1979.

The results indicate that humorous ads tended to out perform magazine ad norms and that these effects are moderated by gender and racial audience composition differences.     

‘You really are a great big sister’ – parasocial relationships,credibility, and the moderating role of audience comments in influencer marketing

ABSTRACT

This study examines the moderating role of audience comments in influencer marketing. A YouTube vlog entry by a social media influencer featuring the endorsement of a brand was studied, and an experimental design featuring two conditions related to audience comments was created. The results indicate that a parasocial relationship with the influencer builds the perceived credibility of the influencer, while comments by other audience members moderate the effect. Influencer credibility positively affects brand trust and purchase intention. The findings enhance the understanding of the role of an active audience in influencer marketing.     

A practitioner’s guide to Bayesian estimation of discrete choice dynamic programming models

This paper provides a step-by-step guide to estimating infinite horizon discrete choice dynamic programming (DDP) models using a new Bayesian estimation algorithm (Imai et al., Econometrica 77:1865?C1899, 2009a) (IJC). In the conventional nested fixed point algorithm, most of the information obtained in the past iterations remains unused in the current iteration. In contrast, the IJC algorithm extensively uses the computational results obtained from the past iterations to help solve the DDP model at the current iterated parameter values. Consequently, it has the potential to significantly alleviate the computational burden of estimating DDP models. To illustrate this new estimation method, we use a simple dynamic store choice model where stores offer ??frequent-buyer?? type rewards programs. Our Monte Carlo results demonstrate that the IJC method is able to recover the true parameter values of this model quite precisely. We also show that the IJC method could reduce the estimation time significantly when estimating DDP models with unobserved heterogeneity, especially when the discount factor is close to 1.     

A theatrical perspective on service performance evaluation: The customer-critic approach

Abstract

In this article, the customer-critic approach is presented as a complementary approach to existing service performance evaluation. It is based on methods, derived originally by Patrice Pavis, that have a distinguished pedigree in the evaluation of theatrical performances. An adaptation of Pavis's evaluation framework is illustrated in the context of a restaurant service performance. A focus on the work of Pavis directs attention to the mise-en-scène or metatext of a performance as a vehicle for consumer analysis, and explicitly acknowledges the value of nurturing and enhancing the critical capacity of an audience. Although an audience should be made aware of the main components of a performance, most importantly they should be encouraged to take a holistic, rather than fragmented, view of what is being presented. In addition, unlike other research approaches, the customer-critic process involves customers before, during, and after the performance, and builds in the opportunity for both reporting and reconstruction. It is an approach to data collection and analysis more closely aligned to the Service-Dominant Logic of marketing than methods currently adopted by service managers, recognising consumers as operant resources and the ‘value in use’ of the performance from a consumer experience perspective.     

Value-Expressive versus Utilitarian Advertising Appeals: When and Why to Use Which Appeal

Abstract

Value-expressive advertising appeals are effective when the product is value-expressive, while utilitarian appeals are effective when the product is utilitarian. When the product is value-expressive, audience persuasion is influenced through self-congruity. Conversely, when the product is utilitarian, audience persuasion is influenced through functional congruity. The effectiveness of the value-expressive as opposed to utilitarian appeals is argued also to be a function of such product-related factors as differentiation, life cycle, scarcity, and conspicuousness, and consumer-related factors such as involvement, prior knowledge, and self-monitoring. Future research and managerial implications are discussed.     

Behavioral frontiers in choice modeling

We review the discussion at a workshop whose goal was to achieve a better integration among behavioral, economic, and statistical approaches to choice modeling. The workshop explored how current approaches to the specification, estimation, and application of choice models might be improved to better capture the diversity of processes that are postulated to explain how consumers make choices. Some specific challenges include how to capture and parsimoniously describe heterogeneous mixes of heuristic choice rules, methods for building realistic models of choice, and nontraditional methods for estimating models. An agenda for important future work in these areas is also proposed.     

Political Issue Promotion in the Age of 9–11

SUMMARY

This study presents an exploratory investigation of the effect of political frames applied in advertising communication on audience evaluations of source credibility. Framing is the filtering of reality by any message that leads the audience to a certain conclusion of what and how to think about an issue. However, this process is not automatic since variables like communication source and the credibility attributed to that source can influence the communicator's ability to transfer the salience of issue frames to the audience. The results of this study show that societal issues, such as terrorism, might be more productively sponsored by governmental offices or not-for-profits than by for-profit organizations.     

Market Potential Estimation in International Markets: A Comparison of Methods

ABSTRACT

Marketers use various market potential estimation techniques in international markets. These include method of analogy, proxy indicators, chain ratio method, time series analysis, and multiple regression modeling. This study shows how demand or market potential can be estimated using these methods and compares the findings. The study should be useful to both managers and academics interested in the theory and practice of demand estimation. Although emerging markets and durables are used as examples, the methods discussed are universal and can be applied in any country market.     

Engaging the audience through videography as performance

ABSTRACT

The audience is an important part of videography, but its role tends to be seen as passive and unengaged. The audience’s experience is often guided in videography, with intended reaction made clear. Yet such an approach to the audience does not make use of the possibilities of videography for inciting active interaction and incorporating multiple interpretations. Previous research has suggested that videography has potential for interventional influence on audiences by taking on the performative turn in research. Developing more deeply the notions of performance and performativity in the context of videography, this paper proposes that one way to activate audiences, interact directly with them and engage them in meaning-making is to approach videography as performance. To provide practical suggestions for creating such performance, the paper contextualises videography as a recording medium, thus establishing its ontological position and ties to other media.     

Explanation,Correlations and Causal Relations

Abstract

The purpose of this article is to help advertising planners evaluate audiences as they relate to cable television and new technologies. Fundamental assumptions made about television audiences and advertisers are examined with regard to new services. The article reviews and organizes the recent empirical studies concerning the audiences of new technologies. It presents a model which analyzes audience similarities and differences between new and conventional media. Also considered are directions for planning, research and the immediate future of cable advertising.     

Issues in the Use of Benchmarking by Church Leaders

ABSTRACT

With church attendance falling, church leaders are searching for methods to reverse that trend. Benchmarking the practices of successful churches offers one such avenue. This article points to issues of internal and external fit which should be considered before those benchmarked best practices are implemented by church leaders.