A Theory of Size and Product Diversity of Marketplaces with Application to the Trade Show Arena

Markets involve the exchange of information and products between buyers and sellers in marketplaces created by market organizers. This paper develops a theory to explain the differences in the size (number of participants) and diversity (range of products displayed) across these marketplaces. We assume that successful transactions require information transmission between parties calling for investment in time/effort. Two key factors affect this process of information interchange: diminishing marginal returns to effort encouraging diversification and congestion cost resulting from participant overload. We study a sequential model of interaction between buyers, sellers and marketplace organizers. Organizers choose the number and nature of marketplaces to organize, and set entry fees for them while buyers and sellers make participation and effort allocation decisions. We show that participants' breadth of product interest, their buying and selling intensities (i.e. how frequently they are likely to engage in future product transactions) as well as the technological innovativeness of the industry have important influences on the size and range of product diversity in the marketplace. We apply this model to the industrial trade show arena to explain differences in trade show types (horizontal with broad product focus vs. vertical with narrow product focus) across industries. Empirical tests of several propositions derived from our model provide an encouraging degree of support for our theory. Our analysis identifies several industries that appear to be underserved by one type of show or the other, suggesting possible future opportunities for organizers.

The photovoltaic market analysis program : background, model development, applications and extensions

The purpose of this report is to describe and motivate the market analysis program for photovoltaics that has developed over the last several years. The main objective of the program is to develop tools and procedures to help guide government spending decisions associated with stimulating photovoltaic market penetration.The program has three main components: (1) theoretical analysis aimed at understanding qualitatively what general types of policies are likely to be most cost effective in stimuating PV market penetration; (2) operational model development (PV1), providing a user oriented tool to study quantitatively the relative effectiveness of specific government spending options and (3) field measurements, aimed at providing objective estimates of the parameters used in the diffusion model used in (2) above.Much of this report is structured around the development and use of PV1, an interactive computer model designed to determine allocation strategies for (constrained) government spending that will best accelerate private sector adoption of PV. To motivate the model's development, existing models of solar technology diffusion are reviewed, and it is shown that they a) have not used sound diffusion principles and b) are not empirically based. The structure of the PV1 model is described and shown to address these problems.Theoretical results on optimal strategies for spending federal market development and subsidy funds are then reviewed. The validity of these results is checked by comparing them with PV1 projections of penetration and cost forecasts for fifteen government policy strategies which were simulated on the PV1 model. Analyses of these forecasts indicate that photovoltaics will not diffuse significantly during the time horizon studied if government market development funds (money allocated to the purchase and installation of PV systems) are withheld. Market development spending has the most positive effect on photovoltaic diffusion in strategies where it is deployed early and concentrated in the residential and commercial sectors. Early subsidy spending had little influence on ultimate diffusion. The analyses suggest that any subsidies for PV should be delayed until photovoltaic costs drop substantially. Extensions of the model and approach to other technologies are discussed

Market diffusion and the effect of demonstrations : a study of the Denver Metro Passive Solar Home program

This paper is a report on the reactions to and effects of the Denver Metro Passive Solar Home demonstration program, conducted in the Spring of 1981. The purpose of the program was to provide impetus to builders for incorporating passive solar designs in spec-built homes and to demonstrate those designs to prospective buyers to increase buyer-receptivity.A pre-post exposure analysis of the effect of the program is reported on here, with four separate groups of prospective new home buyers studied. The first group heard publicity about and voluntarily visited a demonstration home. The second group saw the home, but was recruited to come to the site. The third group, also in Denver, did not see the site, but answered the same set of questions after receiving a description of and pictures of passive solar homes. The fourth group was a control group, similar to the third, but located in Kansas City. A total of 245 individuals participated.Analysis of the study results leads to the following conclusions: 1. Due to the high level of prior awareness and pre-disposition toward passive solar in Denver, relatively few changes in attitudes occurred. 2. The demonstration was effective in reducing concern about aesthetics and about builders' capability of producing passive solar homes. 3. The demonstration encouraged those individuals exposed to the site to actively seek additional information about passive solar. 4. Exposure to the demonstration program reduced individuals' sensitivity to the cost of passive solar.The study identified the following actions and communications program-messages that builders and public policy makers should consider in accelerating the diffusion of passive solar: 1. Teach prospective buyers how to evalute the financial aspects of passive solar. 2. Show how passive solar can provide protection against fuel price increases. 3. Develop statistics showing that passive solar increases the resale value of homes. 4. Develop relationships with the financial community so that passive solar can easily be included in conventional mortgages.The implication of the study for evaluating the impact of a demonstration program on market penetration is discussed in terms of the theory of diffusion of innovations and implications for further research are reviewed

Medical Innovation Revisited: Social Contagion versus Marketing Effort

This article shows that Medical Innovation—the landmark study by Coleman, Katz, and Menzel—and several subsequent studies analyzing the diffusion of the drug tetracycline have confounded social contagion with marketing effects. The article describes the medical community’s understanding of tetracycline and how the drug was marketed. This situational analysis finds no reasons to expect social contagion; instead, aggressive marketing efforts may have played an important role. The Medical Innovation data set is reanalyzed and supplemented with newly collected advertising data. When marketing efforts are controlled for, contagion effects disappear. The article underscores the importance of controlling for potential confounds when studying the role of social contagion in innovation diffusion

Minimizing Technological Oversights: A Marketing Research Perspective

Technological advances provide vast opportunities for new product development. Some technologies are transformed into successful new products; others are not. In this paper we investigate the role that marketing research methods as currently conceived can play in aligning marketplace needs with technological potential. We discuss the types of opportunities that new technologies present to the marketplace and why the existing set of market research methods are insufficient to assess the potential for all of these new technologies. We then discuss some emerging, non-traditional marketing research methods and assess their potential for addressing the technological oversights problem. We conclude with implications for academics and for practitioners

Exploring the constraint profile of winter sports resort tourist segments

Many studies have confirmed the importance of market segmentation both theoretically and empirically. Surprisingly though, no study has so far addressed the issue from the perspective of leisure constraints. Since different consumers face different barriers, we look at participation in leisure activities as an outcome of the negotiation process that winter sports resort tourists go through, to balance between related motives and constraints. This empirical study reports the findings on the applicability of constraining factors in segmenting the tourists who visit winter sports resorts. Utilizing data from 1,391 tourists of winter sports resorts in Greece, five segments were formed based on their constraint, demographic and behavioral profile. Our findings indicate that such segmentation sheds light on factors that could potentially limit the full utilization of the market. To maximize utilization, we suggest customizing marketing to the profile of each distinct winter sports resort tourist segment that emerge

Modeled to Bits: Decision Models for the Digital, Networked Economy

Leeflang and Wittink (2000) sketch a future for marketing modeling that differs primarily in scale and scope from today’s environment. We have a different vision: the digital networked economy will induce significant structural changes in (a) how models are developed and deployed, (b) who uses marketing models, and (c) what types of models are developed. To be successful, marketing modelers must adapt by gaining a better understanding of the role of marketing modeling in the new environment and by learning how to use emerging IT technologies for developing, deploying, and validating marketing models