Search results

We propose a simple model consisting of two separated markets: the market for good y and the market for good x. Purchasing information about consumer behavior in the former market helps the monopolist firm, in the latter market, to price-discriminate. Consumers differ in their income and in their level of myopia. Personal data market regulation could both increase consumers' awareness about the treatment of their data and allow them to have their data erased from the data holder. We find that the former aspect of the policy reduces the number of transactions, and hence tends to reduce total surplus, while the second typically boosts willingness to pay of consumers and has positive effects on surplus, provided that the share of high-income consumers is not too high. The overall effect of regulation on total welfare depends on the share of high-income and myopic consumers.

This chapter evaluates the proliferation of supermarkets in developing countries using data collected between May 2005 and June 2006 in Citlalicalli, Mexico. Contrary to the experience of most developed countries, this study revealed that supermarkets and small retailers can coexist by catering to different income groups and product categories. Consumer choices are driven by the desire to reduce transaction costs in terms of time and money. In striking a balance between the two, consumers look for retail outlets that offer them the best value for their money with the least amount of time spent in shopping trips. Location of the store plays a critical role in buying choices that consumers make. In developing countries, generally, only high-income consumers can afford to own cars and choose to buy most products in supermarkets. Consumers without cars buy frequently purchased goods (foods) in small stores and infrequently purchased goods (consumer durables) in supermarkets.

A significant share of U.S. subsistence consumers is both poor and functionally low-literate. A key question that marketers and public policy makers must ask is how vulnerable these consumers are to the persuasiveness of marketing communications. We address this question by identifying who subsistence consumers in the United States are likely to be, exploring what it means to be vulnerable, with an emphasis on cognitive vulnerability; examining two theoretical frameworks for analyzing subsistence consumer vulnerability (elaboration likelihood model and persuasion knowledge model); and offering several propositions incorporating the select cognitive constructs of self-esteem, locus of control, and powerlessness.

Public–private partnerships (PPPs) have been demonstrated to be an effective (although not universally successful) tool for the delivery of infrastructure and infrastructure-based services. For PPPs to achieve optimum results, the service outputs should be inclusive, i.e., they should be available to as wide a spectrum of society as possible, regardless of income level, gender or ethnic background. In developing countries, many PPPs are reliant upon user fees to create the revenue streams that enable private parties to provide such basic services as power, water, wastewater and transport. When these user fees act as barriers to service access (i.e., they are unaffordable to potential recipients of the service), what are the policy and contractual options which may make the services more universally accessible? This chapter examines three PPP projects from different sectors which have utilized creative mechanisms to enhance affordability and expand the user base: the Pamir Power project in eastern Tajikistan; the urban water PPP in Dakar, Senegal and the East Coast Toll Road in Tamil Nadu, India. Based upon these examples, the chapter will draw conclusions on how this experience can be more broadly applied and made a part of the PPP planning process in developing countries to achieve more affordable and sustainable growth.

In the United States, the increasing availability of hormone, antibiotic, and pesticide-free food is largely limited by price and proximity to the upper and middle classes. Similarly, the burgeoning of urban farmers’ markets and other direct marketing venues tend to benefit those who can afford locally raised food. Attempts to rectify this disparity are underway in the movement to link small farmers with residents of low-income neighborhoods in Louisville, Kentucky's largest city. Incipient commercialization and processing channels are intended to aid area farmers as they make the difficult transition out of tobacco dependency, and simultaneously to provide people living in Louisville's food deserts with affordable, locally produced foods. In this activist marketplace, symbiotic and trusting relationships are essential. I explore these issues through a case study of a new farmer–owner food distribution business, one designed to profit while growing the local food system.

We analyze several dimensions of food security in Ethiopia, taking into account projected population growth, economic growth, and price information to estimate future food consumption by income decile. The analysis looks at the potential impact of large consumer price increases on food security metrics. We use the new USDA/ERS demand-based modeling framework in order to carry out this study. The modeling approach captures economic behavior by making food demand systematically responsive to income and price changes based on a demand specification well-grounded in microeconomic foundations. The projected change in food consumption can be apportioned to population growth, income growth, and changes in food prices and real exchange rates. We found that Ethiopia is highly food insecure, with 54% of the population consuming less than 2,100 calories a day at calibration levels. Income growth under unchanged prices mitigates food insecurity with the number of food-insecure people falling to 42.5 million in 2016. If domestic prices were free to fall with world market prices, the food-insecure population would decrease farther to 36.1 million. If domestic prices increased because of domestic supply shocks and constrained imports, the food-insecure population could rise to 64.7 million. The food gap (i.e., the amount of food necessary to eliminate Ethiopia’s food insecurity) would reach 3.6 million tons. The practical implications of this are that measures of food security are sensitive to changes in prices. Maintaining higher prices when global prices are low maintains higher levels of food insecurity than would otherwise prevail. Expanded access to lower cost imports could significantly improve food security in Ethiopia.

The COVID-19 bubonic plague, ravaging and reoccurring in waves globally, has impacted all aspects of human lives including the understanding and practice in the marketing discipline. The situation has pushed human behavior to its fringes with measures such as complete and partial lockdown of communities, cities and countries enforced to mitigate spread. Hence, consumers appeared to have subliminally reviewed their priorities in life as evident in the buying of essentials, neighbourhood shopping and the shift from offline to online buying behavior. Prior to the emergence of the viral disease, there has been a gradual change in consumer behavior, with respect to buying practices, and firm behavior with respect to distribution and supply chain management; largely induced by advances in technology and e-commerce. However, the COVID-19 pandemic appears to have raised the bar and accelerated behavioral change in consumers and marketing organizations. With the attendant economic instability, consumers and organizations are experiencing behavioral transformation in response to the perceived vanities of life, changes in market dynamics, market -competitiveness, and the larger economic indices. In addition, there has been observable decline in capacity utilization and employee retention in response to the forced drop in demand and corresponding supply. This book chapter, with the aid of an in-depth review of literature, discusses the effects of COVID-19 on consumer and firm behavior with emphasis on the consequences of the sustained economic disruption for marketing strategies and policies. This was hinged on the relativity of business down cycles to the present pandemic in providing a basis for future post-COVID-19 crisis studies in order to understand consumer sentiments to crisis and its implications in the marketing discipline.

Under the Patient Protection and Affordable Care Act (ACA), many low-income consumers have become eligible for government support to buy health insurance. Whether these consumers are able to take advantage of the support and to make sound decisions about purchasing health insurance likely depends on their knowledge and skills in navigating complex financial products. This ability is frequently referred to as “financial literacy.” We examined the level and distribution of consumers' financial literacy across income groups, using 2012 data collected in the RAND American Life Panel, an internet panel representative of the US population. Low financial literacy was particularly prevalent among individuals with incomes between 100% and 400% of the federal poverty level, many of whom will be eligible for health insurance subsidies. In this group, people who are young, less educated, female, and have less income were more likely to have low financial literacy. Our findings suggest the need for targeted policies to support vulnerable consumers in making good choices for themselves, possibly above and beyond the support measures already part of the ACA.

This exploratory study identifies key pillars on which innovative business models rely in the Latin American retail landscape. First, using qualitative research methods, we delve into the minds of Latin America's emerging consumers to uncover their needs and paradigms. In a region where retail innovation has traditionally been targeted at high-income consumers, we find a new breed of retailers that cater to the large mass of emerging consumers. Second, we explore the avenues of innovation retailers have followed to serve this impoverished segment and find that retailers' efforts to innovate have resulted in at least three original retail formats: one centered on providing access to durable goods, another centered on offering a wide assortment of goods and a convenient location, and the last one centered on incorporating design and quality. Based on the wheel of retailing theory, we show how these new formats are changing the structure of the retail industry in the region.