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This study aims to analyse the effect of competition on retail fuel prices in a small European Union (EU) country with high market concentration.
Abstract
Purpose
This study aims to analyse the effect of competition on retail fuel prices in a small European Union (EU) country with high market concentration.
Design/methodology/approach
The researchers use a panel data set to estimate a fuel price equation that includes supply and demand factors as well as time-fixed effects.
Findings
The study finds that more competitors in the local market decrease prices, whereas the high market share of oligopoly brands does not condition this effect. Additionally, independent brands set lower prices than wholesalers, and gas stations located near the borders of almost all neighbouring countries are associated with higher prices.
Research limitations/implications
The study suggests that Slovenia’s retail fuel market maintains competitive pricing despite high oligopolistic shares because of historical regulatory influences that shaped firm behaviour and pricing strategies, along with geographical and economic factors such as Slovenia’s role as a transit country. External competitive pressures from neighbouring countries and high levels of traffic, combined with the remnants of regulatory structures, help prevent market abuses and keep fuel prices lower than in other EU countries.
Practical implications
It also indicates that policy should encourage fiercer competition in the local market by increasing the density of gas stations, especially from independent brands.
Originality/value
These findings may be associated with specific country characteristics. This paper introduces unique findings that shed light on the impact of a small market on competition, with a particular focus on highlighting the effect of oligopolistic brands.
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María D. Illescas-Manzano, Sergio Martínez-Puertas and Manuel Sánchez-Pérez
Hotels are immersed in a very competitive environment and hoteliers have to plan and redesign their strategies to stay in the hospitality industry while faced with a steady rise…
Abstract
Purpose
Hotels are immersed in a very competitive environment and hoteliers have to plan and redesign their strategies to stay in the hospitality industry while faced with a steady rise in competition. Hoteliers can employ horizontal differentiation strategies and pricing decisions to gain a competitive advantage over their competitors. The goal of our work is to analyse the effect of pricing and horizontal differentiation strategy of a hotel on its online reputation and to analyse if the hotel location and agglomeration of competitors moderates their relationship with online reputation.
Design/methodology/approach
With a sample of 264 hotels from Paris, an empirical study is developed that aims to analyse, using regression techniques, the impact of price, differentiation, location and competitive environment on online ratings given by consumers in the hospitality context.
Findings
The paper provides empirical evidence of how a good location improves the online reputation of a company and how pricing strategies should take into account the location and number of competitors since a good location allows premium prices to be valued positively by consumers while an inappropriate location can produce the opposite effect. Depending on location, the number of competitors can intensify or reduce the effect of price on online reputation. Finally, online reputation only benefits from horizontal differentiation strategies when the degree of agglomeration is low.
Originality/value
This work provides insights about how hotels can strengthen their online reputation through pricing and differentiation strategies, incorporating elements of their environment such as location and competition in this decision-making process.
研究目的
酒店處於一個競爭非常激烈的經營環境中,營運者要面對競爭日益加劇的挑戰,在這情況下,他們必須計劃並重新設計其策略,以在酒店服務業中仍能繼續其業務。營運者可採用水平分化策略和定價決策,以取得比同業更大的競爭優勢。本研究旨在分析,若酒店採用價格及水平差異之策略,這對它們的網上聲譽會起什麽效應;研究亦探討酒店所處的位置及競爭者的凝聚會否減弱其與網上聲譽的關係。
研究設計/方法/理念
研究樣本為來自巴黎264間酒店。研究人員採用實驗研究法,透過迴歸分析法,去分析在酒店服務的背景下,價格、差異化、地點和競爭環境如何影響消費者所給予的網上評分。
研究結果
本文提供了經驗性證據,證明良好的地點會改善公司的網絡聲譽; 同時,亦證明釐定價格策略時,經營者應考慮競爭者的位置和數目,這是因為良好的地點會讓消費者正面評價溢價,而不合適的地點則會導致相反的效應。根據所在的地點,消費者的數目能增強或減弱價格對網絡聲譽的影響。最後,本文也證明了網絡聲譽只會在凝聚程度低的情況下才會受惠於水平分化策略。
研究的原創性/價值
本研究提供啟示,使我們更明瞭酒店如何能透過價格及差異化策略,同時亦透過把它們的環境元素如地點和競爭等納入決策程序中,來強化網絡聲譽。
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F. Javier Rondan-Cataluña, Bernabe Escobar-Perez and Manuel A. Moreno-Prada
This research enables the authors to highlight the importance of proper pricing for retailers. The purpose of this paper is to demonstrate the importance of demand-based pricing…
Abstract
Purpose
This research enables the authors to highlight the importance of proper pricing for retailers. The purpose of this paper is to demonstrate the importance of demand-based pricing, providing empirical results that reveal the validity of this pricing philosophy in the sport retailing industry. In particular, this study has identified the limits of acceptable prices for the products studied, selected the most appropriate method for pricing products suffering from high competition and compared the impact produced on price perceptions according to different retail environments to be able to relate changes in the acceptable prices ranges according to the geographical location of each point of sale, differentiating between rural or urban environment and type of client.
Design/methodology/approach
The authors have carried out surveys of 350 customers in each of the three points of sale analysed. Therefore, there are a total of 1,050 interviewees, for the three products analysed. The direct method of acceptable prices setting is developed. In addition, ANOVA and t-test have been carried out to find differences between the three shops.
Findings
One main finding is that the acceptable price range is not unique. Each point of sale has one that is distinct because it depends on many factors: the competition, the economic capacity of the closest residents, the location of the point of sale or the ability to attract customers.
Originality/value
The foremost contribution of this paper is to demonstrate empirically how considering the local demand at setting prices would generate larger earnings, even for a small retail chain. The direct method of setting acceptable prices enables us to set the prices according to the demand. The best option is if these prices are above the costs. It can be noted that the prices should be set according to each shop, and a different price used in each point of sale to maximise profits and to adapt to what the typical customer of each shop is willing to pay, despite the products being the same and the points of sale belonging to the same retail chain.
Objetivos
Esta investigación nos permite resaltar la importancia de una fijación de precios adecuada para los minoristas. El objetivo principal de esta investigación es demostrar la importancia de la fijación de precios basada en la demanda, proporcionando resultados empíricos que revelan la validez de esta filosofía de fijación de precios en el sector minorista de productos deportivos. En particular, en este estudio se han identificado los intervalos de precios aceptables para los productos estudiados; se ha seleccionado el método más apropiado para la fijación de precios de productos que sufren alta competencia; y se ha comparado el impacto en las percepciones de precios según el entorno detallista y se han encontrado cambios en los intervalos aceptables de precios en función de la localización geográfica del punto de venta, diferenciando entre entorno rural y urbano, y el tipo de cliente.
Metodología
Los autores han realizado encuestas a 350 clientes en cada uno de los 3 puntos de venta analizados. Por lo tanto, hay un total de 1050 entrevistados, para los 3 productos analizados. Se desarrolla el método directo de fijación de precios aceptables. Además, se han realizado pruebas ANOVAs y T para encontrar diferencias entre las 3 tiendas.
Resultados
Un hallazgo principal es que el intervalo de precios aceptable no es único. Cada punto de venta tiene uno distinto porque depende de muchos factores: la competencia, la capacidad económica de los residentes más cercanos, la ubicación del punto de venta o la capacidad de atraer clientes.
Originalidad/valor
La principal contribución de este artículo es demostrar empíricamente cómo considerar la demanda local al establecer precios generaría mayores ganancias, incluso para una pequeña cadena minorista. El método directo de establecer precios aceptables nos permite establecer los precios de acuerdo con la demanda. La mejor opción es si estos precios están por encima de los costos. Se puede observar que los precios deben establecerse de acuerdo con cada tienda, y se debe usar un precio diferente en cada punto de venta para maximizar los beneficios y adaptarse a lo que el cliente típico de cada tienda está dispuesto a pagar. A pesar de que los productos son los mismos y los puntos de venta pertenecientes a la misma cadena minorista.
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Hojin Jung, Kyoung-min Kwon and Gun Jea Yu
Using panel data on gasoline and grocery transactions in Korea, the purpose of this paper is to empirically explore the effect of a retail chain store’s establishment of on-site…
Abstract
Purpose
Using panel data on gasoline and grocery transactions in Korea, the purpose of this paper is to empirically explore the effect of a retail chain store’s establishment of on-site fuel sales. The empirical analyses present strong empirical evidence that the sale of fuel had statistically and economically significant effect on retail store traffic and revenue in the short run. However, the effect did not remain significant in the longer run. To explain the dramatic decrease in the effect of the fuel sale, the authors consider the enhanced competition in the local gasoline retail industry and examine cross-sectional price variations at the station level. The results suggest that the increased competition led to the reduction in the price dispersion across stations and thereby to an increase in consumer welfare.
Design/methodology/approach
Using a linear specification that has traditionally been used to model retail chain data, the authors developed a series of difference-in-differences models. This technique is ideal for estimating the effect of a treatment in the presence of possible selection bias and has been widely employed in many social-science studies on policy intervention.
Findings
In a certain environment, introducing fuel sales did not increase retail chain store traffic or revenue in the long run, despite having statistically and economically significant effects in the short run. The results document empirical evidence of myopic management in a common marketing practice, which often leads to a negative impact on the firm value in the long run.
Research limitations/implications
The span of data and sample size were limited to meet the company’s data protection policy.
Practical implications
Considering that many of developed countries are characterized by a gasoline retail environment similar to that which is investigated in this paper, the authors believe that the implications of the results are particularly valid for practitioners and policy makers.
Social implications
The findings document empirical evidence of myopic management in a common marketing practice, which often leads to a negative impact on the firm value in the long run. Marketing researchers should make efforts in establishing metrics to help identify myopic management decision.
Originality/value
This paper addresses an interesting and practical issue related to the effects of the introduction of gasoline sales by a supercenter store on its store traffic.
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Antonios Marios Koumpias, Jorge Martínez-Vázquez and Eduardo Sanz-Arcega
The purpose of this paper is to quantify to what extent the housing bubble in the early-to-mid 2000s in Spain exacerbated land planning corruption among Spain’s largest…
Abstract
Purpose
The purpose of this paper is to quantify to what extent the housing bubble in the early-to-mid 2000s in Spain exacerbated land planning corruption among Spain’s largest municipalities.
Design/methodology/approach
The authors exploit plausibly exogenous variation in housing prices induced by changes in local mortgage market conditions; namely, the rapid expansion of savings banks (Cajas de Ahorros). Accounting for electoral competition in the 2003–2007 and 2007–2009 electoral cycles among Spanish municipalities larger than 25,000 inhabitants, the authors estimate a positive relationship between housing prices and land planning corruption in municipalities with variation in savings bank establishments using instrumental variables techniques.
Findings
A 1% increase in housing prices leads to a 3.9% points increase in the probability of land planning corruption. Moreover, absolute majority governments (not needing other parties’ support) are more susceptible to the incidence of corruption than non-majority ones. Two policy implications to address corruption emerge: enhance electoral competition and increase scrutiny over land planning decisions in sparsely populated.
Originality/value
First empirical evidence of a formal link between the 2000s housing bubble in Spain and land planning corruption.
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Nguyen Le Hoa Tuyet and Le Khuong Ninh
This paper aims to examine the impact of competition on firm performance using a data set of 352 firms listed on Vietnam’s stock exchanges from 2015 to 2019.
Abstract
Purpose
This paper aims to examine the impact of competition on firm performance using a data set of 352 firms listed on Vietnam’s stock exchanges from 2015 to 2019.
Design/methodology/approach
The two-step system generalized method of moments is used to estimate this impact.
Findings
The findings reveal an inverted U-shaped relationship between competition and firm performance. Competition improves firm performance if its intensity is moderate. However, if the competition intensity exceeds the optimal level, the performance deteriorates accordingly.
Research limitations/implications
The authors only studied Vietnamese firms due to the limited ability in data collection. It would be better to validate the findings using data from other transition economies.
Practical implications
The non-linear relationship between competition and performance implies that government should pay more attention to retaining competition at an appropriate level.
Social implications
Firms contribute a lot to the prosperity of Vietnam. Therefore, the findings have a meaningful implication for Vietnam’s government to moderate competition to improve its firms’ performance.
Originality/value
This paper contributes to the extant literature by providing firsthand evidence of the impact of competition on firm performance in Vietnam – a transition economy.
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Senyu Xu, Huajun Tang and Yuxin Huang
The purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven…
Abstract
Purpose
The purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven marketing (DDM) quality, cross-channel-return (CCR) rate and financing interest rate on the members' pricing and delivery-lead-time decisions and optimal performances, and analyzes `how to achieve the coordination within a dual-channel supply chain (DSC) by contract coordination.
Design/methodology/approach
This work establishes a DSC model with DDM, and the offline retailer can provide internal financing to the capital-constrained online manufacturer. The demand under the price is determined based on DDM quality, customer channel preference and delivery lead time. Then, combined with the Stackelberg game, the optimal pricing and delivery-lead-time decisions are discussed under the inconsistent and consistent pricing strategies with decentralized and centralized systems. Furthermore, it designs a manufacturer-revenue sharing contract to coordinate the members under the two pricing strategies.
Findings
(1) The increase of DDM quality will reduce the delivery-lead-time under the inconsistent or consistent pricing strategy and will push the selling prices; (2) The growth of the CCR rate will raise selling prices and extend the delivery-lead-time under the decentralized decision; (3) Under price competition, the offline selling price is higher than the online selling price when customers prefer the offline channel and vice versa; (4) The retailer and the manufacturer can achieve a win-win situation through a manufacturer-revenue sharing contract.
Originality/value
This paper contributes to the studies related to DSC by investigating pricing and delivery-lead-time decisions based on DDM, CCR, internal financing and supply chain contract and proposes some managerial implications.
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Giuseppe Festa, Ashutosh Kolte, Maria Rosaria Carli and Matteo Rossi
This study aims to access, analyze and highlight opportunities and problems of the Indian pharmaceutical sector in the broader national health-care industry. The recent changes in…
Abstract
Purpose
This study aims to access, analyze and highlight opportunities and problems of the Indian pharmaceutical sector in the broader national health-care industry. The recent changes in the field, at the institutional and corporate levels, have placed India in the spotlight of the global pharmaceutical market, but several threats and weaknesses could limit this expansion.
Design/methodology/approach
Descriptive and inferential analyses have been based on empirical data extracted from authenticated data sources. Subsequently, a narrative strengths, weaknesses, opportunities and threats analysis was performed based on the results of prior investigations and on qualitative data that were retrieved from a marketing intelligence examination to generate an overall scenario analysis.
Findings
Indian pharmaceutical companies have faced several challenges on various fronts. In the home market, drug prices are controlled by the drug price control order; therefore, there is strong pressure on revenues and subsequently on costs. In the international market, threats derived from pharmaceutical multinational companies are emerging as tough obstacles to overcome.
Practical implications
More focus on patents for innovative drugs is required, instead of concentrating primarily on generic drugs. There is a need for policymakers to work on the sustainability and development of the industry, while the companies must redesign their orientation toward enhancing innovation capabilities. In addition, at the level of corporate strategy, firms should establish collaborations and alliances and expand their industrial marketing vision.
Originality/value
This study provides a global overview of the potential growth and development of the Indian pharmaceutical sector, comparing it with internal trends and external competition. The most relevant contribution of the research relies on the shift to innovative production that Indian companies must adopt (after years of focusing only on generic drugs), and in this vein, appropriate industrial marketing solutions are indispensable.
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Switching behavior is predominantly seen in the consumer buying behavior of the mobile industry. This research aims to identify the factors influencing consumers to switch from…
Abstract
Purpose
Switching behavior is predominantly seen in the consumer buying behavior of the mobile industry. This research aims to identify the factors influencing consumers to switch from their present mobile service provider. The consumer of the mobile industry operates in a dynamic and ever-changing environment that is difficult to predict, so this paper aims to focus on these issues.
Design/methodology/approach
The selection of factors was made with the help of qualitative study and quantitative research methods for further findings; with the help of a structured questionnaire, a total of 514 valuable responses were collected to get the results. Exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modeling (SEM) were used to analyze the data.
Findings
The finding shows that technology and edge-on-competition (TEC) and pricing have a negative influence on customer switching behavior. The switching cost (SC) is the most significant factor and has a positive impact, while service encounter failure (SEF) also positively impacts switching behavior.
Research limitations/implications
The findings provide important implications for consumers switching brands if they are finding alternative offers that are cost-effective and SEF from service providers
Practical implications
The study of one of the largest mobile markets is learning lessons for other markets around the world. This study will be helpful for mobile service provider companies in their branding and marketing strategies. This study will also be helpful to practitioners, educators and researchers in understanding the consumer behavior of mobile users.
Social implications
The learning of the largest mobile market will be a great learning lesson for other mobile markets around the world. Consumer behavior will help marketers follow ethical practices and make their strategy so a consumer does not switch brands and remain satisfied with the existing brand.
Originality/value
The study provides unique learning for practitioners, educators and researchers to understand the consumer behavior of mobile users. This will help marketers create factors that stop consumers from switching brands and develop strategies to retain customers.
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Over the past decades, the global solar photovoltaic (PV) market has experienced an unprecedented development associated with a substantial decline in solar PV module prices. A…
Abstract
Purpose
Over the past decades, the global solar photovoltaic (PV) market has experienced an unprecedented development associated with a substantial decline in solar PV module prices. A body of literature has attempted to identify and evaluate the different sources of price variation. However, the impact of international trade on the price of solar PV modules has not yet been empirically examined. This paper contributes to filling this gap in the literature by providing a comprehensive empirical examination on the relationship between international trade and solar PV module prices.
Design/methodology/approach
The author uses a sample of 15 countries over the period 2006–2015 and proposes a linear dynamic panel data model based on a new specification, including a number of relevant factors influencing solar PV module prices.
Findings
The empirical analysis reveals that an increase in imports of solar PV cells and modules is associated with a decline in solar PV module prices. This finding suggests that international trade could lead to further price reductions, thus fostering the deployment of solar PV technology. The study reveals several other important findings. Market and technological development are key factors explaining the decline in solar PV module prices. Moreover, government policies such as public budget for R&D in PV and feed-in tariff for solar PV are effective in reducing the price of solar PV modules.
Originality/value
This paper examines the influence of international trade, government policies, market development and technological development on solar PV module prices. The results may be of interest to both academic research and policy analysis.
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