Vertical product differentiation in EU markets

the relative position of East European producers by Michael A. Landesmann

Publisher: Wiener Institut für Internationale Wirtschaftsvergleiche in Wien

Written in English
Published: Pages: 32 Downloads: 524
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  • Pricing -- Europe, Eastern.,
  • Product differentiation -- Europe, Eastern.,
  • Quality of products -- Europe, Eastern.

Edition Notes

StatementMichael Landesmann and Johann Burgstaller.
SeriesForschungsberichte = Research reports -- no. 234a, Forschungsberichte (Wiener Institut für Internationale Wirtschaftsvergleiche) -- Nr. 234a.
ContributionsBurgstaller, Johann.
LC ClassificationsHF5416.5 .L36 1997, HB90 .F67 no. 234a
The Physical Object
Pagination13, [32] p. :
Number of Pages32
ID Numbers
Open LibraryOL19470989M

Product differentiation is the strategy of highlighting a product’s features and attributes so as to distinguish it from competitors and from other product offerings. There are many ways that a product can differentiate itself, such as innovation, marketing and distribution. The overall goal of a product differentiation strategy is to make a. receive it’. Therefore product absence, or an aspect of product absence, leads to dissatisfaction and may result in the customer being vulnerable to competition from alternative suppliers. The last decade has been witness to substantial restructuring of the UK energy markets, particularly in the Electricity Supply Industry (ESI). The incremental. Vertical Product Differentiation: Products are different in a way that one product is superior to other and if offered at same price customers will choose one product over the other. Example: i5 processor and i7 processor, pharmaceutical branded drugs and generic drugs etc. Assuming symmetry across firms and constant unit costs Perloff and Salop () show: If product differentiation increases, prices rise in a symmetric equilibrium. This raises the question of whether, in general, more product differentiation leads to higher market by: 9.

On television we see product differentiation all the time, whether the subject of the commercial is a distinguishable good like an automobile or an indistinguishable good like laundry detergent. So, vertical differentiation captures a product’s. quality. while horizontal differentiation captures its. qualities. We study both to learn whether there are strategic, as opposed to economic, differences between them. 2. In our horizontal model, two firms compete in a market where customers differ in their ideal level of. ADVERTISEMENTS: Product Differentiation: Useful notes on Product Product Differentiation! A company’s offer has to be distinct from those of its competitors and should fulfill the requirements of the customers of its target markets. ADVERTISEMENTS: A company’s positioning is the result of whatever the company does. Marketing mix is the most tangible and the most flexible [ ]. Start studying Microecon Chapter Monopolistic Competition and Product Differentiation. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

KEYWORDS: Product Differentiation, Petroleum, Effimax, Profitability, Industry. BACKGROUND Product differentiation is a positioning strategy that many firms use to distinguish their products from those of competitors. (Lamb, Hair, and McDaniel ).Product differentiation is pervasive in File Size: KB. The type of product differentiation which is represented by Hotelling's "location" framework, is labelled "horizontal differentiation". In this frame-work, given any number of sellers offering distinct products at equal prices each seller has a strictly positive market share. We may contrast this with the -case of "vertical differentiation.   Spatial Differentiation and Vertical Mergers in Retail Markets for Gasoline by Jean-François Houde. Published in volume , issue 5, pages of American Economic Review, August , Abstract: This paper studies an empirical model of spatial competition applied to gasoline markets. The main. Product differentiation is the process of distinguishing a product or service from others. This involves detailing the characteristics that are valued by customers that make it unique. When utilized successfully, product differentiation creates a competitive advantage as customers view your product as superior.

Vertical product differentiation in EU markets by Michael A. Landesmann Download PDF EPUB FB2

Vertical Product Differentiation in EU Markets: The Relative Position of East European Producers Article (PDF Available) in Russian and East European Finance and Trade 34(1). Disadvantages of Vertical Differentiation.

Companies pursuing vertical differentiation face two potential risks. Vertical differentiation is impacted by sudden or unexpected changes in the marketplace that might make this strategy obsolete. Consider the fast-changing technology market.

When a new feature-packed product comes out, its price is. In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target involves differentiating it from competitors' products as well as a firm's own products.

The concept was proposed by Edward Chamberlin in his The Theory of Monopolistic. Product differentiation is a marketing process that showcases the differences between products.

Differentiation looks to make a product more attractive by contrasting its unique qualities with. • Spatial-differentiation model – Linear city (Hotelling, ) – Circular city (Salop, ) • Vertical differentiation model – Gabszwicz and Thisse (, ); – Shaked and Sutton (, ) • Monopolistic competition (Chamberlin, ) • Advertising and Informational product differentiation (Grossman and Shapiro, ) 1File Size: KB.

In this respect, vertical differentiation seems endemic to the presence of consumption network externalities, which in turn suggests that models of vertical differentiation, as originally developed in Gabszewicz and Thisse (), could prove useful in modelling price competition in markets with network by: Product Differentiation and Quality in Food Markets: Industrial Organization Implications Article (PDF Available) in Annual Review of Resource Economics 2(1) October with 1, Reads.

Vertical Differentiation Models Vertical Differentiation - consumers agree on ideal product, but vary on willingness to pay (because of preferences or income); Guille: "faster is better, but different rates of return for speed" Quality - look at scale with min and max feasible level of quality.

Vertical product differentiation and competition in the supermarket industry This thesis examines the mechanisms by which retail markets converge to a concentrated structure where competition is dominated by only a few large firms. Using a model of competition based on the vertical product differentiation (VPD) enciogenous sunk cost Cited Vertical product differentiation in EU markets book 3.

Downloadable (with restrictions). Building on the current theory of industrial concentration, we analyze the relation between market size and product differentiation, and show how product differentiation impacts market share turbulence.

We first propose that in markets where vertical product differentiation dominates, firms will have an incentive to escalate investment in. Product differentiation research has attracted considerable attention in both economics and marketing (LancasterRatchford ).

Using Lancaster's notion of product space (Lancaster), two variants of product differentiation can be distinguished: horizontal (variety) differentiation and vertical (quality) differentiation.

In this way, you can vertically position different brands and product versions, also using clues from advertising campaigns, which depends, among other things, from the vertical instance, googs in the extremely high class will be advertised in fashion or other niche magazine or website, using seductive and counterintuitive wording, underlying unique traits, eternal.

14 n EconoQuantum Vol. Núm. 1 for good n is determined by the upper end of the income distribution p n falls, more consumers are willing to purchase good n compared to good n – 1 at a zero price, and if p n falls enough, even consumers at the lower end of the income distribution a are willing to pay for good n, i.e., the total demand for good n being (b-a), good n covering File Size: 2MB.

Vertical: Goods are different and all consumers would prefer one to the other if they were sold at the same price.

Goods are of different qualities. Example: Pentium III y Pentium II, BMW y Fiat. Industrial Organization-Matilde Machado Product differentiation 4 Product Differentiation Examples of Horizontal product differentiation File Size: 66KB.

Product differentiation Last updated Ap In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target involves differentiating it from competitors' products as well as a firm's own products.

The concept was. Vertical integration and product differentiation. In view of Lemma 1, the effect of product differentiation on the vertical structure of the industry, and hence on the threat of rent extraction, rests on the sign of the net surplus from integration, S (γ) − E, over the product substitutability range γ ∈ [0, 1].Cited by: 5.

Product differentiation and price discrimination are two strategies used in marketing and economics. Product differentiation is the process used to distinguish one company's goods and services Author: Steven Nickolas. Falvey, Rod & Nelson, Doug, "Introduction: Special issue on years of antidumping," European Journal of Political Economy, Elsevier, vol.

22(3), pages, Jørgen Drud & Møller Nielsen, Jørgen Ulff, "Economic Integration and Quality Standards in a Duopoly Model with Horizontal and Vertical Product Differentiation," Journal of Economic. Product differentiation is a marketing strategy whereby businesses attempt to make their product unique to stand out from competitors.

Businesses do this to gain an edge in industries where. Quality Differentiation, Vertical Disintegration and The Labour Market Effects of Intra-Industry Trade Giuseppe Celi Università di Bari October, Summary The work offers a new treatment of the labour market effects of international trade building on.

Differences Between Product Differentiation & Market Segmentation. Product differentiation and market segmentation are two distinct, important marketing strategy concepts. Product differentiation refers to the basic need to have product-related qualities that set your brand apart from the competition.

Market. The wine market is an excellent example of monopolistic competition, demonstrating both vertical and horizontal product differentiation. The propensity toward monopolistic competition and the asymmetric preferences of wine consumption can justify the coexistence of different sized wineries.

The main goal of this chapter is to analyze the economic performance of wineries, Author: João Rebelo, Sofia Gouveia, Lina Lourenço-Gomes, AnaAlexandra Marta-Costa.

VERTICAL PRODUCT DIFFERENTIATION AND ENTRY QUALITIES follower (a potential entrant) is free to choose any quality level by incurring a sunk and deterministic entry cost F> That is, the entry cost is invariant with respect to eventual quality by: When developing your product differentiation plan, assess whether or not the following can be unique and whether or not that uniqueness is a competitive advantage: The size, the shape and the components of the product (for example, a cup of coffee can be short, tall, etc.).

differentiation and cost leadership. Product differentiation being the most commonly used one of these two strategic typologies (Spencer, Joiner, and Salmon, ). A differentiation strategy involves the firm creating a product/service, which is considered unique in some aspect that the customer values because the customer’s needs are.

In the yearI put the word "differentiation" in play, just as 20 years earlier I'd put the word "positioning" into the business language. It was the subject of a book. Product differentiation and non-price competition: horizontal product differentiation; brand proliferation and entry deterrence; vertical product differentiation.

Price discrimination: first-degree, second-degree and third-degree price discrimination; non-linear pricing; tie-in sales. Vertical restraints: efficiency explanations for vertical. Competing Vertical Hierarchies (as a price for truthful information revelation) are likely to affect product differentiation and pricing decisions, and ultimately social welfare.1 The objective of this paper is to analyze firms’ choice of their products’ charac.

Product Differentiation Product differentiation is the path chosen by most brand leaders in any industry. The fact that cellulose tape became known as ‘Sellotape’ and the vacuum cleaners are referred to as ‘Hoovers’ is a great credit to the originators. They become natural first choice brands against which allFile Size: KB.

product quality) 2nd stage: Firms compete in prices simultaneously) A x B ax p i A Ui Industrial Organization- Matilde Machado Vertical Differentiation 10 Vertical Differentiation The equilibrium is the solution of the system: 2 2 22 32() >0 and 0 42 3 3 B A B A B BB A p p p ba pba pFile Size: 55KB.

Product differentiation and market performance in oligopoly (EUI working paper) [Stephen Martin] on *FREE* shipping on qualifying : Stephen Martin.3. In monopolistically competitive markets, entry and exit drive economic profit to zero in the long run. 4. There are several important variables such as the # of firms in the industry, the degree of product differentiation, entry barrier, and the presence or absence of collusion that determine the competitiveness of a market.PRODUCT DIFFERENTIATION AND OLIGOPOLY IN INTERNATIONAL MARKETS: THE CASE OF THE U.S.

AUTOMOBILE INDUSTRY BY PINELOPI KouJIANOU GOLDBERG1 This paper develops and estimates a model of the U.S. Automobile Industry. On the demand side, a discrete choice model is adopted, that is estimated using micro data from the Consumer Expenditure .