A Dynamic Model of Cross-Category Competition: Theory, Tests and Applications

Recent marketing studies use scanner data to diagnose the influence of a change in a brand's marketing mix on other brands in the same category. A few studies also use scanner data to model inter-category effects between substitutes (e.g., tea and coffee) or complements (e.g., tea and sugar). No study models the dynamic effects of cross-category competition though.We present a dynamic model that shows how different products in a typical market basket influence demand of one another. Empirical tests use single-source, market-level data for ice cream and some substitute and complement categories. On the basis of in-sample fit, out-of-sample forecasts, and formal causality tests, this study demonstrates that the marketing mix decisions for ice cream influence the sales and market shares of ice cream toppings and frozen yogurt. As a check on the predictive validity of the model, model parameters, using 16-month data, predict behavior in the subsequent 3 months.     

US Multinational Involvement in the International Hotel Sector An Analysis

This paper seeks to explain the structure of the international hotel industry and the involvement of US multinational hotel corporations in it. This involvement has taken the non-traditional form of management contracts and franchising agreements, with little, if any, direct investment. From the point of view of the multinational corporation this form of involvement can be explained by the desire to expand rapidly to gain a major share of the world market, while minimising capital outlay and the risk of operation in an uncertain environment. Obviously, however, such involvement by multinational corporations would not have been possible, had not host countries looked on it with favour. Interestingly, such involvement has not only been merely acceptable, but indeed desirable to host countries, for it maximises skills transfer and access to a global marketing system, while reducing the control of the multinational corporation on domestic industry.     

A cross-cultural study of influence strategies and satisfaction in marketing channels

The relationship between communication in the form of influence strategies used by suppliers in marketing channels and dealer satisfaction is examined in the two diverse cultures of the US and India. The frequencies of use of six types of influence strategies by suppliers-information exchange, recommendation, request, promise, threat and legal plea-are measured. The same measurement scales for the six influence strategies and dealer satisfaction are applied in the electric lamp and lighting equipment channels in the two countries. In both cultures, a structural equation model relating the influence strategies with dealer satisfaction is found to be statistically significant. However, when the impact of individual influence strategies on dealer satisfaction is considered, differences are found between the two countries. In the US, recommendations affect dealer satisfaction positively whereas requests and threats affect it negatively. In India, recommendations and legal pleas impact on dealer satisfaction positively.     

Developing a framework to improve retail category management through category captain arrangements

Manufacturers and retailers have divergent profit objectives. A manufacturer wants to maximize the profits of its own brands. The retailer, on the other hand, wants to maximize the profit of the entire product category. In spite of these apparently diverging profit objectives, both manufacturers and retailers are increasingly realizing that profit margins of both can be increased through cooperation rather than confrontation. Category management is one such cooperative strategy that often involves the appointment of a leading manufacturer as the “category captain”. A category captain advises the retailer on the best way to price, display, and promote products in a category, including those of the competitors. This arrangement, therefore, ensures retail efficiency but raises doubt about possible misuse of power by the category captain to circumvent fair competition. In this paper, we outline the antitrust concerns about this arrangement, and provide a framework that effectively addresses these concerns.     

Endogenous effort in a Dynamic Model of Union–Firm Interaction

This paper studies the implications of union deviation by reducing effort in the context of a repeated game model. We find that a failure to account for the possibility of union deviation may lead to an overestimation of the possibility of cooperation. In contrast to the existing literature, we find that unions may reach the efficient outcome despite wage hikes because they work harder under cooperation. We also find that when effort is an endogenous variable, the cooperative wage is likely to be higher than otherwise. Finally, our model predicts that if the union alone deviates, effort will fall as the endgame approaches. However, wages could either rise or fall.     

Forests, biomass use and poverty in Malawi

Malawi is one of the poorest countries in Africa and has faced significant deforestation over the years. This paper seeks to examine the nature of the relationship between poverty and forests in Malawi. We try to answer three sets of questions: a) what is the extent of biomass available for meeting the energy needs of the poor in Malawi and how is this distributed? b) To what extent does fuelwood scarcity affect the welfare of the poor? And c) do households spend more time in fuelwood collection in response to scarcity? We answer these questions by matching household surveys with remote-sensing data.Our analyses suggest that biomass scarcity is associated with small but significantly lower household welfare, particularly for the rural poor. At current high levels of scarcity, 80% of rural poor households are likely to benefit from an increase in biomass in the community. Rural women spend more time on fuelwood collection where biomass is scarce. The small decrease in welfare associated with biomass scarcity suggests that households cope with scarcity in a variety of ways. Any effort to reduce degradation and deforestation in Malawi has to build on a clear understanding of household adaptation to fuelwood scarcity.