Non-price determinants of automotive demand: Restyling matters most
AbstractThis paper analyzes market share changes in automobile and light truck submarkets. We find that new product, as measured by restyling, represents the most consistent, dominant determinant of demand. On average a 10% reduction in relative price would yield only one-tenth the market share impact of a restyling. Alternatively, one would have to double one's relative advertising expenditures to match the impact of a restyling. Several demand determinants not previously modeled, including rebranding and warranty curtailments, were detrimental to domestic manufacturer market shares. Safety appliance adoptions and changes in vehicle reliability had minimal impact on demand.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Business Research.
Volume (Year): 63 (2010)
Issue (Month): 12 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jbusres
Automobile pricing Warranty Safety appliances Rebranding Reliability;
Other versions of this item:
- Oleg Korenok & George E. Hoffer & Edward L. Millner, 2009. "Non-Price Determinants of Automotive Demand: Restyling Matters Most," Working Papers 0903, VCU School of Business, Department of Economics.
- L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kwoka, John E, Jr, 1993. "The Sales and Competitive Effects of Styling and Advertising Practices in the U.S. Auto Industry," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 649-56, November.
- Kim, Chung Koo, 1996. "The interaction between price and long-run variables in a multinational brand market," Journal of Business Research, Elsevier, vol. 37(1), pages 1-14, September.
- Kenneth E. Train & Clifford Winston, 2007.
"Vehicle Choice Behavior And The Declining Market Share Of U.S. Automakers,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1469-1496, November.
- Train, Kenneth E. & Winston, Clifford, 2006. "Vehicle Choice Behavior and the Declining Market Share of U.S. Automakers," Working paper 331, Regulation2point0.
- McCarthy, Patrick S, 1996. "Market Price and Income Elasticities of New Vehicles Demand," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 543-47, August.
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
- Delre, S.A. & Jager, W. & Bijmolt, T.H.A. & Janssen, M.A., 2007. "Targeting and timing promotional activities: An agent-based model for the takeoff of new products," Journal of Business Research, Elsevier, vol. 60(8), pages 826-835, August.
- Bresnahan, Timothy F., 1981. "Departures from marginal-cost pricing in the American automobile industry : Estimates for 1977-1978," Journal of Econometrics, Elsevier, vol. 17(2), pages 201-227, November.
- Boulding, William & Purohit, Devavrat, 1996. " The Price of Safety," Journal of Consumer Research, University of Chicago Press, vol. 23(1), pages 12-25, June.
- Reilly, Robert J & Hoffer, George E, 1983. "Will Retarding the Information Flow on Automobile Recalls Affect Consumer Demand?," Economic Inquiry, Western Economic Association International, vol. 21(3), pages 444-47, July.
- Devavrat Purohit, 1992. "Exploring the Relationship Between the Markets for New and Used Durable Goods: The Case of Automobiles," Marketing Science, INFORMS, vol. 11(2), pages 154-167.
- Chang, Dae Ryun & Cho, Hang, 2008. "Organizational memory influences new product success," Journal of Business Research, Elsevier, vol. 61(1), pages 13-23, January.
- Carbonell, Pilar & Rodriguez, Ana I., 2006. "Designing teams for speedy product development: The moderating effect of technological complexity," Journal of Business Research, Elsevier, vol. 59(2), pages 225-232, February.
- Nakata, Cheryl & Im, Subin & Park, Heungsoo & Ha, Young-Won, 2006. "Antecedents and consequence of Korean and Japanese new product advantage," Journal of Business Research, Elsevier, vol. 59(1), pages 28-36, January.
- Meghan Busse & Jorge Silva-Risso & Florian Zettelmeyer, 2006. "$1,000 Cash Back: The Pass-Through of Auto Manufacturer Promotions," American Economic Review, American Economic Association, vol. 96(4), pages 1253-1270, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If references are entirely missing, you can add them using this form.