91 research outputs found
Informative Advertising: An Alternate Viewpoint and Implications
Our objective is to broaden the current understanding of how horizontal differentiation interacts with both advertising and pricing by extending the analysis of Grossman and Shapiro (1984) to look at a full range of differentiation conditions. We seek to offer a useful perspective on the relationship between advertising and pricing by focusing attention on competitors whose essential difference prior to advertising and price decisions is product differentiation.We construct a model where demand for a firm's products is driven by three factors: consumers' awareness of products and their attributes, pricing, and the degree of fit between a product's attributes and the needs of the consumer. Following Salop (1979), differentiation is captured by representing the firms as equally spaced points in a unitary circular spatial market. We assume that product attributes are fixed and the firms make decisions about how much to advertise and what prices to set for their products.A distinct element of the model is the mechanism by which advertising makes consumers aware of products. Similar to Grossman and Shapiro (1985), advertising is represented as a series of messages received randomly by consumers in the market and consumers only have interest in a product if they have seen advertising about it. It is important to underline that advertising only affects consumers' awareness of a product and not their valuation of it. In addition, the probability of a consumer seeing a firm's advertising is independent of the consumer's location.The primary finding of our analysis is that the impact of informative advertising on market prices and profits is a function of the pre-existing level of differentiation in the market. Advertising is observed to create distinct groups of consumers based on the advertising to which they have been exposed. The optimal pricing is a function of competing firms balancing the needs of each of the groups that have interest in their products.When the level of differentiation between products is high, increases in advertising have no effect on observed prices. However, when the level of differentiation between products is moderate, increases in advertising tend to drive up prices. Finally, when the level of differentiation is low, we show that higher advertising leads to lower prices and profits.We also find that total welfare can increase when higher advertising leads to higher prices. This highlights the risk of reaching conclusions about the anti-competitive effects of high advertising based solely on an observed relationship between advertising and pricing.In a modified version of the model, we assume that the probability of a consumer seeing a firm's advertising depends on that consumer's location. More specifically, we consider situations in which firms can target heavier advertising to a) customers that are locationally close to them or b) customers that are locationally distant from them. This captures the notion of two different types of markets, one in which firms aggressively pursue the competitor's customers and the other in which firms focus their effort on loyal customers. We find that the targeting of advertising does affect the relationship between advertising and pricing. While the general pattern of results regarding the impact of differentiation on the advertising/price relationship is consistent across the three conditions examined, targeting has a particularly interesting effect in conditions of moderate differentiation. In fact, when distant consumers are targeted, the positive relationship observed with no targeting is reversed and prices fall with higher levels of advertising. However, the most interesting effect of targeted advertising is its effect on overall pricing. In conditions of low differentiation, targeting consumers who are nearby exacerbates price competition and reduces price below the no-targeting price. On the other hand, targeting consumers who are distant results in equilibrium prices that are higher than the no-targeting price. Exactly the opposite is observed when differentiation is moderate. These findings underline the importance of existing differentiation between firms for determining the effect that targeted advertising has on pricing. They also provide a potential explanation for offensive or defensive postures that firms employ in media buying that has not been considered previously.Advertising/price competition, informative advertising, persuasive advertising, spatial competition, targeted advertising ,
Designing the Content of Advertising in a Differentiated Market (CEIBS Working Paper, No. 006/2020/MKT)
Giving more detailed information about health insurance encourages consumers to choose compromise options
IntroductionTo investigate how the provision of additional information about the health events and procedures covered by a healthcare plan affect the level of coverage chosen by young adults taking their first full time job.MethodsUniversity students were recruited for a study at two behavioral laboratories (one located at the University of Toronto and the other located at INSEAD-Sorbonne University in Paris) in which they imagine they are making choices about the healthcare coverage associated with the taking a new job in Chicago, Illinois. Every participant made choices in four categories: Physician Care, Clinical Care, Hospital Care, and Dental Care. Participants were randomly assigned to one of two conditions: Low Detail or High Detail coverage information and they chose between three levels of coverage: Basic, Enhanced, and Superior. The study took place in March 2017 with 120 students in Toronto and 121 students in Paris.ResultsThe provision of more detailed information about the health events and procedures covered by a healthcare plan leads to a compromise effect in which participants shift their choices significantly towards Enhanced (moderate coverage) from Basic (low coverage) and Superior (high coverage). The compromise effect was observed at both locations; however, Paris participants choose significantly higher levels of coverage than Toronto participants.DiscussionProviding more detail to employees about the health events and procedures covered by a healthcare plan will increase the fraction of employees who choose the intermediate level of coverage. It is beyond the scope of this study to conclude whether this is good or bad; however, in a context where employees gravitate to either insufficient or excessive coverage, providing additional detail may reduce these tendencies
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CD200R1 Supports HSV-1 Viral Replication and Licenses Pro-Inflammatory Signaling Functions of TLR2
The CD200R1:CD200 axis is traditionally considered to limit tissue inflammation by down-regulating pro-inflammatory signaling in myeloid cells bearing the receptor. We generated CD200R1−/− mice and employed them to explore both the role of CD200R1 in regulating macrophage signaling via TLR2 as well as the host response to an in vivo, TLR2-dependent model, herpes simplex virus 1 (HSV-1) infection. CD200R1−/− peritoneal macrophages demonstrated a 70–75% decrease in the generation of IL-6 and CCL5 (Rantes) in response to the TLR2 agonist Pam2CSK4 and to HSV-1. CD200R1−/− macrophages could neither up-regulate the expression of TLR2, nor assemble a functional inflammasome in response to HSV-1. CD200R1−/− mice were protected from HSV-1 infection and exhibited dysfunctional TLR2 signaling. Finally, both CD200R1−/− mice and CD200R1−/− fibroblasts and macrophages showed a markedly reduced ability to support HSV-1 replication. In summary, our data demonstrate an unanticipated and novel requirement for CD200R1 in “licensing” pro-inflammatory functions of TLR2 and in limiting viral replication that are supported by ex vivo and in vivo evidence
CD200R1 Supports HSV-1 Viral Replication and Licenses Pro-Inflammatory Signaling Functions of TLR2
The CD200R1:CD200 axis is traditionally considered to limit tissue inflammation by down-regulating pro-inflammatory signaling in myeloid cells bearing the receptor. We generated CD200R1−/− mice and employed them to explore both the role of CD200R1 in regulating macrophage signaling via TLR2 as well as the host response to an in vivo, TLR2-dependent model, herpes simplex virus 1 (HSV-1) infection. CD200R1−/− peritoneal macrophages demonstrated a 70–75% decrease in the generation of IL-6 and CCL5 (Rantes) in response to the TLR2 agonist Pam2CSK4 and to HSV-1. CD200R1−/− macrophages could neither up-regulate the expression of TLR2, nor assemble a functional inflammasome in response to HSV-1. CD200R1−/− mice were protected from HSV-1 infection and exhibited dysfunctional TLR2 signaling. Finally, both CD200R1−/− mice and CD200R1−/− fibroblasts and macrophages showed a markedly reduced ability to support HSV-1 replication. In summary, our data demonstrate an unanticipated and novel requirement for CD200R1 in “licensing” pro-inflammatory functions of TLR2 and in limiting viral replication that are supported by ex vivo and in vivo evidence
Leukotriene B4 mediates p47phox phosphorylation and membrane translocation in polyunsaturated fatty acidâ stimulated neutrophils
Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/142119/1/jlb0976.pd
It's a whole new ball-game
Today, a big challenge for business is dealing with the change created by the information revolution. The industrial revolution created the need of urbanization, mass production created homogeneity in consumption patterns and mass media created tremendous homogeneity in the news and information that people are exposed to. The information revolution has the created (1) the opportunity for individuals to work and buy at home, (2) the opportunity for firms to implement 'mass customization' and provide customized offerings for smaller segments of customers and (3) tremendous splintering in the channels that people use to exchange information. The information revolution effectively has the ability to reverse characteristics that are prototypical of 20th century society. To deal with these 'reversals', a successful firm will have to use information technology to understand both itself and its customers better.
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