Oded Lowengart

Rural tourism in Israel: service quality and orientation.

Abstract Rural tourism in Israel is a growing trend, augmented by declining agricultural income. The concept of service quality and service orientation in rural tourism establishments (B&Bs) in Israel is investigated. Utilizing Gronrooss model of perceived service quality, an exploratory empirical study of 206 guests and 23 entrepreneurs revealed gaps between expected and experienced service dimensions. Based on these findings, management and marketing implications for service quality improvements are discussed along with the acute need for appropriate training.

Explicit Solutions of Optimization Models and Differential Games with Nonsmooth (Asymmetric) Reference-Price Effects

Models in marketing with asymmetric reference effects lead to nonsmooth optimization problems and differential games which cannot be solved using standard methods. In this study, we introduce a new method for calculating explicitly optimal strategies, open-loop equilibria, and closed-loop equilibria of such nonsmooth problems. Application of this method to the case of asymmetric reference-price effects with loss-aversive consumers leads to the following conclusions: (1) When the planning horizon is infinite, after an introductory stage the optimal price stabilizes at a steady-state price, which is slightly below the optimal price in the absence of reference-price effects. (2) The optimal strategy is the same as in the symmetric case, but with the loss parameter determined by the initial reference-price. (3) Competition does not change the qualitative behavior of the optimal strategy. (4) Adopting an appropriate constant-price strategy results in a minute decline in profits.

The dynamics of price elasticity of demand in the presence of reference price effects

The authors derive an expression for the price elasticity of demand in the presence of reference price effects that includes a component resulting from the presence of gains and losses in consumer evaluations. The effect of reference price is most noticeable immediately after a price change, before consumers have had time to adjust their reference price. As a result, immediate-term price elasticity is higher than long-term elasticity, which describes the response of demand long after a price change, when reference price effects are negligible. Furthermore, because of the differential effect of gains and losses, immediate-term price elasticity for price increases and price decreases is not equal. The authors provide a quantitative definition for the terms immediate term and long term, using the average interpurchase time and the discrete “memory” parameter. Practical consequences of the distinction between immediate- and long-term elasticities for the estimation and use of elasticity values are discussed.

Zooming In: Self-Emergence of Movements in New Product Growth

In this paper, we propose an individual-level approach to diffusion and growth models. By zooming in, we refer to the unit of analysis, which is a single consumer instead of segments or markets and the use of granular sales data daily instead of smoothed e.g., annual data as is more commonly used in the literature. By analyzing the high volatility of daily data, we show how changes in sales patterns can self-emerge as a direct consequence of the stochastic nature of the process. Our contention is that the fluctuations observed in more granular data are not noise, but rather consist of accurate measurement and contain valuable information. By stepping into the noise-like data and treating it as information, we generated better short-term predictions even at very early stages of the penetration process. Using a Kalman-Filter-based tracker, we demonstrate how movements can be traced and how predictions can be significantly improved. We propose that for such tasks, daily data with high volatility offer more insights than do smoothed annual data.

Applying international reference price ‐ Market structure, information seeking and consumer welfare

Examines the conditions and different structural settings in which a retailer is likely to apply an international reference price strategy to an imported product. We define the term “international reference price” as an external reference price that reflects the product’s price in different countries. It can be set by providing true but incomplete information rather than by outright manipulation of the reference price, which may involve providing consumers with false information. This study offers a model that describes both the consumer’s utility calculations regarding price information seeking and the retailer’s utility calculations regarding the application of international reference price. It is shown that instability of economic markets combined with access to information technology motivate consumers to seek information about prices. It is also shown that in unstable markets retailers have incentive to provide true but incomplete information about the product’s price in another market. In this setting, the retailer’s use of an international reference price might actually damage consumer welfare. This potential damage may be reduced by international cooperation to establish economic agreements.

The paradox of simplicity: Effects of role on the preference and choice of product visual simplicity level

Abstract Human-computer interaction (HCI) experts advocate simplicity as a key factor in designing usable products. Some observations, however, suggest that people actually prefer complex interfaces to simpler ones. This gap between advocated design guidelines and observed behavior, referred to as the paradox of simplicity, can be explained by the persons role vis-a-vis the interactive product. Role, i.e., whether the person involved is in the capacity of a user or a consumer, influences motives for interacting with visually simple or complex products and in turn influences preference and choice of these products. We examine how interactive products, different in their visual simplicity levels (VSLs), are evaluated for ease of use, functionality, and aesthetics – while the simple end of the continuum is perceived as easier to use, the more complex end of the continuum is perceived as more functional. Role affects preference and choice of a design. In their role as users, participants chose simplicity more often than those in the role of consumers. Aesthetics was a consistent predictor of preference regardless of VSL or role. The contribution of this work lies in unravelling the effect of VSL on the perceived quality of interactive products, and in the effect of role on preference and choice of these products. The implications of this analysis suggest that simplicity of interactive products is not necessarily a required or appreciated design feature.

How Do Revolutions Emerge

In 1968, a young high jumper named Dick Fosbury revolutionized his field by winning the Olympic gold medal with a back-first flop that he himself had invented. Through an in-depth analysis of the case of the Fosbury flop, we explore the process through which radical innovations can be achieved. Observations relating to the evolution of radical innovations are highlighted, and similarities between this case and a variety of well-known business cases are discussed.

The context of choice as boundary condition for gender differences in brand choice considerations

Marketers often assume that functional, hedonic and socially conspicuous utilities in choosing a brand differ for men and women, thus different marketing strategies are required for each gender. To date, most of the research studies have used self-reported measures when shopping in general or in regard to a single product. The purpose of this research is to examine this question using two different contexts of brand choice: single choice evaluation (SCE) and brand selection context (BSC). This assessment will clarify whether male and female utilities when choosing a brand are indeed inherent and consistent.,Data were collected using surveys in three studies (N = 923). Conjoint analysis and ICLV (integrated choice and latent variables) models were examined.,BSC analysis that more closely mimics real-life contexts revealed that the consideration of these utilities is generally similar for men and women, while the SCE analysis showed significant gender differences.,In the context of choosing between brands, stereotypical gender targeting may be ineffective and might not be the best allocation of resources for marketers.,Gender stereotypes in advertising seem to reconstruct differences that are not significant in a realistic brand selection context.,The context of choice was found to be a condition boundary for gender differences in brand choice considerations. Gender differences are not evolutionary or inherent.

Options as a Marketing Tool: Pricing a Promotional Scheme for a Product with a Secondary Market

Adding options to durable products allows new opportunities for manufacturers and retailers in markets with a secondary market to create better segmentation schemes, provide creative means to differentiate their products and services, and increase the value they offer consumers. This raises the need for sellers to properly price such options. This work presents a few examples of incentive programs for the car industry, develops models and calculates their cost to the seller, demonstrating the applicability of the proposed methodology. Our numerical results indicate that such options are surprisingly inexpensive for car manufacturers and dealers. Copyright

Tsukahara's Vault and Fosbury's Flop: A Comparative Analysis of Two Great Inventions

Studies on innovation and creativity have been quite rare, thus far in the sport management literature. In this study, a comparative analysis was conducted between two great inventions — Tsukaharas Vault and Fosburys Flop. Mitsuo Tsukahara and Dick Fosbury responded to open-ended questions designed to capture various dimensions in the development of their innovations. A content analysis was conducted on the data obtained through this semi-structured interview technique. The comparison between these two cases revealed an amazingly similar pattern in the structure of the innovative process. The major conclusion drawn from this analysis is that the principles of optimisation and creativity-enhancement should be conceived as being complimentary, in the promotion of innovative processes in various areas.