Equilibrium decisions on pricing and innovation that impact reference price dynamics

<p style='text-indent:20px;'>Previous studies have confirmed that reference prices play an essential role in consumer purchasing decisions, and some researchers have suggested that reference prices are positively influenced by innovation. Therefore, we construct an interactive effect of innovation and reference price to study their combined impact on supply chain decisions. We model a supply chain, where a manufacturer determines the innovation level and the wholesale price while the retailer controls the retail price, as a dynamic Stackelberg game. We show that the interactive effect causes the steady-state wholesale and retail prices to increase, thus motivating the manufacturer to increase innovation investment. We see that the retail price and the level of innovation increase in reference price effect whereas they decrease in consumer memory. The centralized firm has a higher steady-state innovation level and innovation/price ratio and lower steady-state retail price compared to the decentralized supply chain. Consumers also benefit from the interactive effect as well as from centralization. Finally, we use numerical analysis to demonstrate our results and offer some managerial implications.</p>

Measuring advertising’s effect on mental availability

This study shows that the impact of advertising on consumer memory can be observed using mental availability (MA) metrics. Four MA metrics are used to measure the effect of advertising on a brand’s mental availability, with the results showing that in the majority of cases, MA metrics are greater among both brand users and non-users who are aware of the brand’s advertising, with a greater effect among non-users. From a practical market research perspective, adding MA metrics to existing brand health tracking will have no data collection costs where brand perceptions are already being measured.

Model of Brand Salience of Consumer Skincare Soap Products

Brand salience is the eminence of a brand in the consumer memory and is linked to the brand choice and purchase by consumers. Brand salience is the brand’s propensity to get noticed and influenced by consumers in buying situations. This research is aimed at proposing a model of brand salience for fast-moving consumer goods products, which incorporates brand awareness, brand salience, and brand image leading to the purchase intention. Brand awareness was measured with the dimensions of brand knowledge, brand recall, and brand association. Results of the data analysis conducted using partial least square method with structured equation modelling found empirical evidence of a model of brand salience where there was a significant relationship between brand salience and purchase intention. It was found that predominant brand awareness and brand image substantiated to building brand salience. The evidence supported building a primary brand salience to build the depth and breadth of the brand’s associations in consumer memory. The practical implication of the study is that a marketer can build sufficient brand salience; it increases the probability of purchase intention, which in turn is the most important aspect for any company to increase product sales through enhanced customer equity, customer loyalty, and relationship marketing.