So,how long have you been in the market? The effect of the timing of observation on purchase

Concentrating on the duration of the purchase deliberation process, we set out to address the following two questions: (1) Given that an individual is at a certain point in the deliberation process, what factors affect the likelihood of purchase? (2) Do the factors affecting purchase vary with the duration of the deliberation process? An empirical analysis of new car purchase survey data suggests that there are in fact significant differences at different stages of the deliberation process. Considerable differences are also found between those individuals who trade in a vehicle and those who do not.     

Market Share and Price Setting Behavior for Private Labels and National Brands

In this paper, we focus on the nature of demand and competitive response in the market for private label and national branded grocery products. Specifically,we employ less restrictive functional forms than usedin prior research. Specifically, we incorporateLA/AIDS demands and the corresponding price reactionequations to estimate consumer price sensitivities andsupply side price strategies for national brand andprivate label products. Oligopolistic priceinterdependence is explored further by specifyingbrand share, brand Herfindahl, and a measure of thestructure of the local retail markets in the supplyside relations to evaluate explicitly the impact ofmarket structure.In our empirical analysis, we estimate a system of market share and price equations simultaneously inorder to examine (i) the determinants of the demandresponse to pricing and promotion decisions and (ii)the determinants of private label and national brandpricing behavior. Using data for 143 food productcategories and 59 geographic markets, we develop amodel that captures the variation in privatelabel-national brand share and pricing acrosscategories and markets. Key findings include: (i)demand response to price and promotion is decidedlyasymmetric, (ii) price followship between privatelabels and national brands is positive, but notstrong, and (iii) markets characterized by highernational brand market share and higher supermarketconcentration tend to have higher prices forboth national brands and private labels.     

Revealed preferences for car tax cuts: an empirical study of perceived fiscal incidence

In this paper, the authors examine the economic and policy implications of the National Football League (NFL) ‘blackout rule,’ a league rule that prohibits local television broadcast of games that are not sold out at least 72 hours prior to game time. The foundation for understanding and assessing the impact of the blackout rule is an analysis of attendance using data on games during the 1996–1997 National Football League season. Expanding on previous research, three separate components of attendance (season ticket sales, game day ticket sales, and game day noshows) are examined in detail. Accounting for the endogeneity of key variables, Tobit and Probit analyses are used to estimate and predict individual game attendance. These empirical estimates are then used as a vehicle to assess the implications of game day blackouts and the potential for public policy intervention. More specifically, the authors begin by estimating the impact of the blackout on game day attendance. Using these estimates, they assess the implications of imposing a local blackout for individual team revenues. The gain in on-site stadium revenue due to the blackout (e.g., through additional ticket and concession sales) are then viewed in the broader context of the societal loss due to the game not being broadcast in the local area. The empirical results suggest that the gain in team revenue is small in comparison to the loss of viewership rights. This suggests that public policy intervention may be possible that would result in a Pareto superior market outcome. The paper concludes by exploring possible intervention strategies.     

Share,price and category expenditure—geographic market effects and private labels

Focusing on the interaction between national brands and private labels, this paper has two main empirical contributions: (i) a simultaneous system of demand (share), price and expenditure equations is estimated, and (ii) differences in the structure of the local geographic market are incorporated into the analysis. The former represents an important step in understanding the complete nature of private label and national brand interaction, while the latter is important for understanding the impact of the local retail environment on market behaviour. IRI scanner data from 1991 and 1992 are used to estimate a five‐equation system across 135 food product categories and 59 geographic markets. The results suggest that concentration at both the manufacturer and retailer level can significantly affect private label and national brand price. However, while increased retailer concentration is associated with higher national brand and private label prices, higher manufacturer concentration is associated with higher national brand but lower private label prices. Increases in national brand advertising has the effect of raising national brand price and share, but lowering private label price and share. This is consistent with previous research and suggests that advertising and local market conditions play a significant role in the ability of national brands to price at a premium over private labels. Finally, marketing decision variables, such as display activity and private label distribution, can have an important impact on total category expenditure. Copyright © 1999 John Wiley & Sons, Ltd.     

Are Brand Promotions Just a Zero-Sum Game – or Can They Increase the Size of the Pie?

Packaged goods companies now "spend" more on promotions – special offers, in-store displays and the like – than on media advertising. Until recently, it was generally believed that while promotions benefit individual brands, they usually do not result in an increase in overall category sales. Recent research, however, suggests that promotions can increase total category sales in a wide range of circumstances. This article starts by discussing the relationship between brand promotion and category sales, outlines research to date, and then describes the author's own most recent research on this topic. It concludes by pointing to implications for managers.     

Why Put Off Until Tomorrow What You Can Do Today: Incentives and the Timing of New Product Introduction

Using related statistical studies and specific industry examples, William Putsis, Jr. illustrates how incentives for delaying the introduction of a new technology has played a major role in the development of certain consumer electronics markets over the past 25 years. Specifically, the introduction of a new product which incorporates some new technology can often be delayed until the firm's need for growth exceeds the fear of cannibalizing the firm's current product line. This concern is viewed as only one of many concerns that may delay or speed a new technology to market.     

Product diffusion,product differentiation and the timing of new product introduction the television and VCR market 1964-85

An econometric model of the demand and supply of color televisions, black and white televisions and video cassette recorders in the United States from 1964 to 1985 is developed and estimated. Supply and demand parameter estimates are obtained using a simultaneous equation system estimated by three-stage least squares. The model employed integrates theories of product diffusion from the marketing literature with those of the economic literature on discrete choice. Particular attention is paid to the relationship between product saturation and demand, as well as to supply decisions pertaining to product differentiation and the timing of new product introduction. The central hypothesis that product differentiation and new product introduction are more likely to occur as demands for established products slow at critical saturation levels is supported by the empirical results and actual market occurrences.     

An Empirical Study of the Effect of Brand Proliferation on Private Label – National Brand Pricing Behavior

This paper investigates the competitive pricing interaction between national brand and private label food products, focusing on the effect of brand proliferation. IRI scanner data from 1991 and 1992 for 135 food product categories and 59 geographic markets are used. Empirical findings are grouped into three categories: i) price, promotion and competitive effects, ii) brand proliferation and entry deterrence, and iii) local market effects. Results indicate that both private label and national brand reaction functions are positively sloped and asymmetric. Successful private label penetration, as measured by total private label share, lowers the average price of national brands. The paper's central finding is that the impact of brand proliferation on market pricing behavior is multi-dimensional. First, an increase in the number of brands increases the ability of national brand manufacturers to raise price. Second, the effectiveness of a brand proliferation strategy depends upon the distribution of market share. The more concentrated the brand structure, the lower the market price of national brands. Thus, the net effect of brand proliferation strategies is dependent upon not only the number of brands, but upon the actual distribution of brand shares. Finally, local market conditions play only a small role in the competitive interaction between private labels and national brands.     

The Many Faces of Competition

Marketing Letters - Despite a great deal of theoretical research on competition, there has been limited empirical work assessing the type of competitive interaction that actually exists in the...