ASPECTS OF GREEN MARKETING, PRODUCTS, PRICES, AND BUYING INTEREST AT SUPER INDO OUTLETS

Green marketing is basically a social marketing concept that protects and builds consumer welfare by paying attention to environmental sustainability. In the business context, the green marketing aspect is starting to become an aspect that is used as the basis for showing the advantages of a business. This study aims to see how green marketing moderates the effect of product and price on consumer buying interest. The aspects studied in this study include product aspects, price aspects, green marketing aspects and their influence on buying interest. The study was conducted in Yogyakarta with random sampling of Super Indo consumers. Field data collection is carried out in the period from May to July 2021. Data collection is carried out by distributing questionnaires with validity and reliability tests first. Data analysis was carried out using the Regression-Moderation model with product and price aspects as independent variables. Aspects of buying interest as an independent variable, while the green marketing variable as a moderating variable. The results of this study indicate that product and price aspects in general still have an effect on consumer buying interest. Meanwhile, an understanding of green marketing has a significant influence in moderating the relationship between products and consumer buying interest in Super Indo Supremarket retail.

The Important Role of Time Limits When Consumers Choose Their Time in Service

A main challenge that service providers face when managing service systems is how to generate value and regulate congestion at the same time. To this end, classical queueing models suggest managers charge per-use fees and invest in capacity to speed up the service. However, in discretionary services, in which consumers value time in service and choose how long to stay, per-use fees result in suboptimal performance and speeding up does not apply. We study a queueing model of a service provider and rational consumers who are heterogenous in their requirements for service duration. Consumers incur disutility from waiting and choose whether to join and how long to spend in service. We consider time limits as a novel mechanism that may help in controlling congestion. Time limits put a cap on the maximum time that customers can spend in service. We analyze their effectiveness when combined with two price schemes: per-use fees and price rates. Time limits are effective because they reduce time in service and impact waiting times and joining behavior. Revenue maximizing firms and social planners who maximize social welfare benefit from implementing time limits in addition to price rates. Social planners who seek to maximize consumer welfare, however, focus on regulating congestion and should, therefore, offer the service for free but implement time limits if congestion levels are high. The attractiveness of time limits goes further. We show that time limits are not only a useful lever that works well when combined with simple price mechanisms, but they are in fact optimal when congestion is high. Service providers can achieve the first-best outcome and extract all customer surplus by coupling a time limit with an optimal price mechanism. The attractiveness of time limits stems from their ability to reduce not only the average time spent in service, but also its variance. This is highly effective in settings in which customers’ service times impose externalities on others’ waiting times. Thus, we conclude that providers of discretionary services should set time limits when congestion is an issue. This paper was accepted by Vishal Gaur, operations management.

Product Ranking on Online Platforms

On online platforms, consumers face an abundance of options that are displayed in the form of a position ranking. Only products placed in the first few positions are readily accessible to the consumer, and she needs to exert effort to access more options. For such platforms, we develop a two-stage sequential search model where, in the first stage, the consumer sequentially screens positions to observe the preference weight of the products placed in them and forms a consideration set. In the second stage, she observes the additional idiosyncratic utility that she can derive from each product and chooses the highest-utility product within her consideration set. For this model, we first characterize the optimal sequential search policy of a welfare-maximizing consumer. We then study how platforms with different objectives should rank products. We focus on two objectives: (i) maximizing the platform’s market share and (ii) maximizing the consumer’s welfare. Somewhat surprisingly, we show that ranking products in decreasing order of their preference weights does not necessarily maximize market share or consumer welfare. Such a ranking may shorten the consumer’s consideration set due to the externality effect of high-positioned products on low-positioned ones, leading to insufficient screening. We then show that both problems—maximizing market share and maximizing consumer welfare—are NP-complete. We develop novel near-optimal polynomial-time ranking algorithms for each objective. Further, we show that, even though ranking products in decreasing order of their preference weights is suboptimal, such a ranking enjoys strong performance guarantees for both objectives. We complement our theoretical developments with numerical studies using synthetic data, in which we show (1) that heuristic versions of our algorithms that do not rely on model primitives perform well and (2) that our model can be effectively estimated using a maximum likelihood estimator. This paper was accepted by Gabriel Weintraub, revenue management and market analytics.

Premature repayment of fixed interest mortgage loans without compensation, a case of misguided consumer protection in the EU

Consumer protection shifts risks from consumers to businesses. This raises marginal costs and equilibrium prices. It is justified when markets are not strong enough to allocate contractual risks or accident risks efficiently, especially in cases of severe asymmetric information between suppliers and consumers. Consumer protection can then increase the consumer’s expected welfare from a contract. We test these considerations in a theoretical and empirical study on consumers' right to early repayment of mortgage loans without damage compensation to the creditor in the European Union. We show in a formal model that such a right can lead to an impairment of consumer welfare, compared with the traditional rule of expectation damages for breach of contract. This applies if the consumer is risk averse and repays a loan with a high interest rate in a low interest period to take up a new loan for the same project at lower interests. From a theoretical point of view, this right has no solid economic underpinning, if it is not restricted to cases of personal hardship of the consumer and serves an insurance purpose. We present empirical evidence supporting this argument. In a panel study on monthly mortgage interest rates of 23 EU Member States between 2005 and 2017 we show how interest rate spreads change with the level of consumer protection.

Socially Responsible Target Marketing and Marketing Communications – Concerns and Initiatives

Companies are in business to generate revenues and profits and achieve business excellence. Now-a-days, companies are becoming sensitive towards their social responsibilities of ensuring not only consumer welfare but also the welfare of all stakeholders including the society at large. Companies do target marketing and marketing communications to communicate about their offerings to target markets. They adopt socially responsible target marketing, marketing communications, and advertising campaigns. Various issues in advertising campaigns include deceptive advertising, and unethical practices in fashion advertising and in cosmetics industry. Companies adopt advertising campaigns for social causes, socially responsible sales promotion, and personal selling. Companies should ensure consumer privacy, safety, and security. Various stakeholders want to be assured that businesses care about their welfare. Businesses should ensure consumer welfare and welfare of the society at large. This will allow them to achieve business excellence and stay ahead in the competition.

Promotion of Sustainable Marketing - Strategies and Initiatives

Companies and businesses operate with the primary objectives of generating revenues and profits for themselves. In the present business scenario, apart from ensuring consumer welfare and achieving excellence in the competition, companies should be sensitive towards the well-being of the society at large and towards creating and maintaining a sustainable society and physical environment for the present and future generations. Both consumers and businesses should appreciate consumerism and environmentalism. Companies should be sensitive towards the adverse effects of business activities on the environment and realize their responsibilities towards the environment. They adopt a number of initiatives and sustainability visions to ensure creating a sustainable society for the present and future generations. The study will make all the stakeholders understand the importance of promoting sustainable marketing and their roles and responsibilities towards the society.

Consumer Online Search with Partially Revealed Information

Modern-day search platforms generally have two layers of information presentation. The outer layer displays the collection of search results with attributes selected by platforms, and consumers click on a product to reveal all its attributes in the inner layer. The information revealed in the outer layer affects the search costs and the probability of finding a match. To address the managerial question of optimal information layout, we create an information complexity measure of the outer layer, namely orderedness entropy, and study the consumer search process for information at the expense of time and cognitive costs. We first conduct online random experiments to show that consumers respond to and actively reduce cognitive cost for which our information complexity measure provides a representation. Then, using a unique and rich panel tracking consumer search behaviors at a large online travel agency (OTA), we specify a novel sequential search model that jointly describes the refinement search and product clicking decisions. We find that cognitive cost is a major component of search cost, while loading time cost has a much smaller share. By varying the information revealed in the outer layer, we propose information layouts that Pareto-improve both revenue and consumer welfare for our OTA. This paper was accepted by Juanjuan Zhang, marketing.

Customer Review Provision Policies with Heterogeneous Cluster Preferences

Companies often post user-generated reviews online so that potential buyers in different clusters (age, geographic region, occupation, etc.) can learn from existing customers about the quality of an experience good and cluster preferences before purchasing. In this paper, we evaluate two common user-generated review provision policies for selling experience goods to customers in different clusters with heterogeneous preferences. The first policy is called the association-based policy (AP) under which a customer in a cluster can only observe the aggregate review (i.e., average rating) generated by users within the same cluster. The second policy is called the global-based policy (GP) under which each customer is presented with the aggregate review generated by all users across clusters. We find that, in general, the firm benefits from a policy that provides a larger number of “relevant reviews” to customers. When customers are more certain about the product quality and when clusters are more diverse, AP is more profitable than GP because it provides cluster-specific reviews to customers. Otherwise, GP is more profitable as it provides a larger number of less relevant reviews. Moreover, we propose a third provision policy that imparts the union of the information by AP and GP and show that it is more profitable for the firm. Although the third policy always renders a higher consumer welfare than GP, it may generate a lower consumer welfare than AP. This paper was accepted by Martínez-de-Albéniz Victor, operations management.

Quality determinates of rice price in open bag markets in Sub-Saharan Africa

PurposeWeaknesses in the grades and standards system in low-income countries across Sub-Saharan Africa undermine the transparency of agricultural markets. In the Democratic Republic of the Congo (DRC), Ghana and Mozambique rice is predominately sold in open bags and if rice price does not reflect its quality, then inefficiencies may lead to consumer welfare losses. Importantly, it is possible that impoverished communities are priced out of the market due to inflated and inefficient prices. The objective of this study is to examine determinates of rice price by estimating the impact of selected rice quality attributes on rice prices in Democratic Republic of the Congo, Ghana and Mozambique.Design/methodology/approachWe collected 363 rice samples from open air markets in Bukavu (DRC), Nampula (Mozambique) and across Ghana in 2019. Each rice sample was analyzed in a food science lab for the quality attributes: percentage of chalk and brokens, chalk impact, length and length-to-width ratio. We used multiple regression analysis to estimate if and to what extent quality attributes were the drivers of price.FindingsFindings suggest that there are irregularities in the Ghanaian market for broken rice and that regardless of quality, imported rice is priced higher than domestic rice. In the DRC and Mozambique, our results indicate price is driven by length and length-to-width ratio in the former and length-to-width ratio in the latter.Research limitations/implicationsRice samples were purchased from market vendors and thus consumer preferences for attributes were not revealed.Originality/valueThese results provide valuable insight to policymakers regarding the need for proper labeling and regulation of open bag rice sales in an effort to increase consumer welfare and improve food security.