Brand loyalty evolution and the impact of category characteristics

A common managerial belief indicates that brand loyalty declines over the years, with consumers becoming more heterogeneous in their choices. The earlier research investigating the phenomenon of brand loyalty decline is, however, inconclusive and does not offer an answer to the reasons behind brand loyalty evolution. In this study, we investigate brand loyalty evolution and explore the impact that a number of category characteristics have on driving brand loyalty evolution. We use Danish panel data across 54 categories over a period of 6 years (2006–2011). Our findings show that at the aggregate level, brand loyalty declines, but this evolution is category-specific, with only a small number of categories showing a significant decline. We further demonstrate that an increase in category penetration results in a negative impact on brand loyalty evolution, whereas an increase in the share of private label brands has a positive impact. We discuss the implications for theory and practice.

     

Consumer response to food labels in an emerging market: the case of Romania

This study investigates consumer response to food labels in an emerging market. More specifically, it measures the levels of awareness, objective and perceived understanding, perceived usefulness and perceived trustworthiness of the most prominent food labels found in the Romanian market. An online survey was conducted with a convenience sample of 428 respondents (45.6% males of an average age of 30.6 years). Results revealed that for most respondents, awareness levels towards food labels are generally low, except for the Guideline Daily Amount (GDA) and the organic food labels. Objective understanding towards food labels was relatively high, especially towards those food labels that included a clear text element. Perceived understanding, perceived usefulness and perceived trustworthiness were found to be consistently high with regard to the GDA and the national organic food labels, while the European organic label scored lower. Finally, response to food labels was found to differ between aware and unaware respondents.     

What Attracts Foreign Direct Investment Inflows in the United States

The present study evaluates the relative impact of industry and state specific economic factors on inward FDI in several US states that compete for the same inward FDI. It appears that relative labor productivity, relative spending on education, and relative crime rate are important in inter-state competition for the same inward FDI. Also, when the contest in attracting inward FDI comes down to two states, relative tax incentives also become important in attracting FDI inflows.     

Decomposition analysis of consumers' demand changes: an application to Greek consumption data

A decomposition analysis for consumer demand functions is developed. Changes in Marshallian demand or expenditure shares functions over time are decomposed into a total substitution effect, an income effect, and a habit effect. This framework is applied to post-war Greek consumption patterns through a habit persistence version of the Quadratic Almost Ideal Demand System (QUAIDS). It is found that for all commodity categories (i.e., food, beverages and tobacco, footwear and clothing, settling and housing, and others) the income effect was the main driving force in explaining changes in both quantity demanded and expenditure shares, followed by habit and total substitution effects.     

Sustainability and externalities: Is the internalization of externalities a sufficient condition for sustainability?

In an important contribution in Ecological Economics, van de Bergh (2010) correctly concludes that sustainability does not imply zero externalities. However, he continues with the Delphic statement "(Delphic statements were uttered by the renowned oracle of ancient Greece at Delphi. They were phrased in such a way as to be self-fulfilling because alternative interpretations covered every possibility.)" "Without externalities the problem of sustainability vanishes". If this statement refers to an impossible economic process that produces no externalities then he is right. However, it might be interpreted as stating that whenever environmental policy internalizes environmental externalities then sustainability will be ensured. In this note, I assert that in the real world where externalities prevail, their internalization or neutralization in the traditional way cannot lead to sustainability. Only if internalization takes a very specific form that results in the inviolable preservation of environmental rights of future generations in pure biological terms can sustainability be ensured. After revised the original commentary I resubmit it. The issues raised by the editor have been carefully considered.     

A Retrospective View on Designation of Origin Labeled Foods in Europe

In the emergence of ethically conscious consumer segments across Europe, the expectation was that foods with a designation of origin–label (DOL) would make a production system of similar logic. Past analysis of the registration history of DOLs showed that the take-up of this European Union (EU) food quality scheme was concentrated in the south, which was attributed to specific food supply-and-demand conditions prevalent in that part of Europe. The authors shed light on DOL product distribution and examine its evolution during a 14-year period (2001–2014). DOLs remain a quality differentiation scheme predominantly for the southern EU agrifood industry. However, the less restrictive requirements for protected geographical indication certification make it a much more popular DOL in northern EU. To promote its food quality policy, the EU must approach the two DOL types differently, as they have a different growth potential among EU countries. DOLs’ specialization in categories with expertise accumulated in specific EU areas can become a DOL promoter across all of Europe.     

Market demand and the duration of business projects: the housing industry

In this study, we propose that companies strategically choose to pursue projects of certain duration according to the fluctuations in market demand conditions. During a market upturn, when more business opportunities are available, companies choose short projects, committing thus their resources for a short period of time and so to better exploit the upcoming business opportunities. On the other hand, in a market downturn projects of longer duration are preferable, since they protect the company from the consequences of adverse market conditions. Finally, these insights appear relevant at least in the US housing industry, where builders pursue longer building projects during the market downturn and shorter ones during the market upturn. Copyright © 2010 John Wiley & Sons, Ltd.