Article Abstract:
A brand switching model that explores customer choice in terms of past, present and substitute choices is introduced. This model characterizes the market as comprised of two categories of consumers: the 'Loyals' and the 'Shoppers.' Use of the model will yield estimates of the ratio between the two groups in various submarkets, measures of the submarkets' success in capturing Shoppers, and criteria for evaluating some of the market's competitive structures based on loyalty and shopping proportions. An empirical application of the model to the US automobile market offers several interesting conclusions pertaining to such issues as the American market's competitiveness as compared to that of foreign markets, the nature of competition between submarkets in terms of form, and loyalty and shopping as influenced by previous dealer experience.
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Article Abstract:
Research into decision-making and decision factors related to advertising management is examined under two market conditions: (1) random response to advertising, as evidenced by random sales figures, and (2) advertising in a market segment characterized by several brand-name competitors. Competitive factors analyzed exist not only between companies but also between brands produced by the same company. A theoretical model is developed related to advertising decision-making that accounts for sales-advertising relationships and the advertising company's attitude toward risk related to advertising decisions. The model developed is econometric, by design. The econometric model is finally applied to the cigarette advertising industry, which meets the two criteria originally established by the research design.
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Article Abstract:
Research on airfares argues that market power plays a significant role in airline mergers while studies on stock prices conclude that market power is not a prime determinant in horizontal mergers. To find clarification on these contrasting views, a study was conducted that combines the two lines of research by investigating the same set of airline mergers from a capital market perspective. It relates stock-market changes to product-market changes, thereby coming up with a dual market point of view. Potential sources of noise are removed by sampling airline mergers during the 1985-1988 timeframe when implementation of the antitrust policy was not strict. Results suggest that airline mergers lead to both greater market power and more efficient operations. Implications are discussed.
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