The authors propose a new methodology called the "coupled-hazard approach" to study the global diffusion of technological innovations. Beyond its ability to describe discontinuous diffusion patterns, ...the method explicitly recognizes the conceptual difference between the timing of a country's introduction of the new technology (the so-called implementation stage; Rogers 1983) and the timing of the innovation's full adoption in the country (the confirmation stage). To illustrate the method, the authors apply it to the global diffusion of digital telecommunications switches across more than 160 countries.
With the deregulation of the telecommunications industry, a variety of industry structures have been created in hopes of increasing competition. One example is the licensing of cellular telephone ...services in the United States, where the FCC created duopolies in which two firms were granted licenses to compete in strictly defined product and geographic markets. Taking advantage of the unique regulatory environment, we test to what degree duopolistic competition leads to competitive market outcomes. We find that cross-ownership and multimarket contact are important factors in explaining noncompetitive prices.
This paper demonstrates that higher category prices and higher advertising are consistent with markets where low-priced private labels have become more important. In our model, the private label is a ...version of a national brand without the perceived quality enhancement provided by advertising. The unadvertised private label allows a monopolistic channel to price discriminate between customers who want advertised brands and those who do not. This can lead to either increases or decreases in average category prices. When advertising creative and media costs are high, the model predicts that increased private label availability leads to higher average category prices.
A key change in the retail environment over the last 20 years has been the emergence and growth of low priced quality-equivalent store brands. National brand manufacturers with popular products seem ...to help retailers by supplying them with quality-equivalent store brands that are then sold for lower prices. Nevertheless, empirical research has found that this phenomenon often leads to higher average category prices. We explain this apparent contradiction using a model where a national brand manufacturer supports its product with advertising and the retailer may introduce a store brand to better serve its customers. Our analysis shows that when both the manufacturer and the retailer have market power, the launch of a quality-equivalent store brand by the retailer can lead to higher average category prices. Rather than leading to what some call “private label competition”, both the manufacturer and the retailer benefit with the launch of quality-equivalent store brands. As a result, even a dominant manufacturer has an incentive to agree to a retailer's request to supply a quality-equivalent store brand.
Despite their obvious importance, not much marketing research focuses on how business-cycle fluctuations affect individual companies and/or industries. Often, one only has aggregate information on ...the state of the national economy, even though cyclical contractions and expansions need not have an equal impact on every industry, nor on all firms in that industry. Using recent time-series developments, we introduce various measures to quantify the extent and nature of business-cycle fluctuations in sales. Specifically, we discuss the concept of cyclical volatility, and derive a dynamic comovement elasticity between the economy as a whole and the cyclical fluctuations in various performance series. To further enhance our understanding of how consumers adjust their purchasing behavior across different phases of the business cycle, two other notable features related, respectively, to the relative size of the peaks and troughs and the rate of change in upward and downward parts of the cycle, are explicitly considered. Of specific interest in this respect are the notion of deepness and steepness asymmetry. We apply these concepts to a broad set (24) of consumer durables, for which we analyze the cyclical sensitivity in their sales evolution. In that way, we (i) derive a novel set of empirical generalizations, and (ii) test different marketing theory-based hypotheses on the underlying drivers of cyclical sensitivity. Consumer durables are found to be more sensitive to business-cycle fluctuations than the general economic activity, as expressed in an average cyclical volatility of more than four times the one in GNP, and an average dynamic comovement elasticity in excess of 2. This observation calls for an explicit consideration of cyclical variation in durable sales. Interestingly, the combined evidence across all durables suggests that asymmetry is present in the speed of up- and downward movements, as durable sales fall much quicker during contractions than they recover during economic expansions. Finally, key variables related to the industry’s pricing activities, the nature of the durable (convenience vs. leisure), and the stage in a product’s life cycle tend to moderate the extent of cyclical sensitivity in durable sales patterns. Copyright Springer Science+Business Media, Inc. 2004
Physiological needs for thermal comfort, nutritional comfort, and healthiness make colder and hotter climates more demanding than more temperate climates. Affluence may help to meet those thermal ...demands. Two country-level studies indeed show that thermal demands (colder and hotter climates) and wealth-related resources (higher income per capita) are joint roots of happiness (
N=55) and altruism (
N=71). In colder climates richer societies are more but poorer societies are less happy and altruistic. In hotter climates richer societies are happier but poorer societies are unhappier. In both colder and hotter climates richer societies tend to be happier at the expense of being more altruistic whereas poorer societies tend to be more altruistic at the expense of being happier. The findings generate a demands–resources theory on self- and other-directed consequences of thermoclimate.
The focus of this paper is the process of homeostasis by which the body seeks to regulate its internal environment. In particular, we present a global model for a set of consumer behaviors that may ...vary across cultures as a direct response to the intensity and duration of sunlight and experienced temperature. This process creates physical and psychological needs, so that changes in sunlight and temperature may be reflected in various behaviors. We integrate research findings from the neural sciences and psychology to generate testable predictions of relevance to the marketing literature. These hypotheses predict how the physical environment motivates variations in the consumption of different types of products, and how mood, expressed affect, and related affective behaviors may vary across cultures. We also consider how variations in sunlight and temperature may affect consumer behaviors related to consumers' optimal stimulation levels. We conclude by discussing the implications of a physiological model on the debate of global convergence in consumer behavior.
Research conducted primarily in the United States has shown that interpersonal influence arising from opinion exchange behavior is an important factor in consumers' product adoption and brand choice ...decisions. An important managerial question in the international arena is whether information-giving and seeking behaviors depend on culture. In a study representing eleven nationalities, we explore the role of culture in moderating consumers' opinion exhange behavior. Results indicate that the cultural characteristics of power distance and uncertainty avoidance Hofstede 1980 influence the focus of consumers' product information search activities, but not their tendencies to share product-related opinions with others. Following earlier opinion leadership studies, we find that individual characteristics such as product category interest and involvement are most indicative of active opinion leadership behavior.
Little empirical research has been conducted to test the dynamic behavior of elasticities over the product life cycle. Competing specifications of price elasticity dynamics are examined to test the ...prevailing hypothesis that elasticities increase over the adoption life cycle or diffusion process. Though not supporting the hypothesis, the empirical results suggest that certain factors, including the degree to which a product is a necessity and faces competitive substitutes, affect elasticity dynamics.
We study global adoption processes where the units of observation are countries which sequentially adopt a particular innovation. Our goal is to provide a better understanding of how exogenous and ...endogenous country characteristics affect this diffusion process. We develop a general model of global adoption processes that allows researchers to test extant theories of cross-country adoption, and illustrate the approach using data from the cellular telephone industry for 184 countries. In our application, we find support for the existence of a global “demonstration effect”: as the number of countries adopting the technology becomes larger, the likelihood of “similar” countries following their example increases. We also find that isolated economies lag in adopting technologies, and that countries with homogenous and concentrated populations, and with a high level of economic development are, on average, earlier adopters. Finally, our model supports the managerial intuition that, eventually, all countries will adopt cellular technology.
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