Applications of Structural Modeling in Marketing

Wanqing Zhang, Purdue University

Abstract

Structural modeling is an important topic for marketing research. It is a bridge to link the real business world and theoretical investigation. Through structural modeling, researchers can better understand the mechanism underlying the decision making process of consumers and business customers. Using this, they can develop marketing strategies to help improve business performance. In this dissertation, we aim to provide evidence of using structural modeling and present three applications of important fields of marketing.In the first essay, we examine to what extent, if any, natural environmental factors affect consumer purchase decisions regarding "green" products. We collect and combine several unique datasets to study the impact of air pollution on consumers' choices of passenger vehicles in China. Exploiting cross-city variation, we find that air pollution levels negatively affect the sales of fuel-inefficient cars on average. This relationship, though, is U-shaped over the observed air pollution levels, in that fuel inefficient car purchases rise with air pollution beyond some threshold. Furthermore, a city's income level is a significant factor in this non-monotonic relationship, in the sense that consumers of higher-income cities are less likely to suffer this reversal. All these results are consistent with the literature's theoretical predictions of hope. The rich findings of our study yield important implications to both marketers and policy makers.In the second essay, we investigate the impact of detailing process and incidental factors in influencing physicians' prescription intention. Based on previous literature in personal selling, communication, psychology and advertising, we generate a number of hypotheses regarding how salespersons' quality, detailing contents and weather conditions affect physicians' decision making. Our empirical tests find that salesperson's quality and detailing contents significantly affect physicians' prescription intention. Moreover, salesperson's quality can mediate the impact of detailing content on physicians' decision making. Although, we don't observe that weather conditions influence prescription intention, we find that bad weather conditions, such as cloudy days, can affect the effectiveness of informativeness of detailing contents in influencing prescription intention.In the third essay, we study the impact of social media on the adoption of a radical innovation in a business-to-business environment. Our specific research question is whether new social media is useful in promoting diffusion of radical innovation? If it is, how effective is it compared to traditional marketing communication channels? In addition, we would like to study the role played by opinion leaders and monetary referral programs in the diffusion process through social media. The empirical setting of this study is the diffusion of a new pesticide technology in rural areas of China. To quantify the effects of social learning and marketing mix, we adopt an experimental approach. Specifically, we apply three different learning interventions a rm-directed WeChat discussion group, an opinion-leader-directed WeChat discussion group, and a traditional demonstration class and two marketing interventions (referral programs) on several groups of randomly selected respondents (villages). Based on our result of this undergoing research, we found that new social media, such as WeChat, has greater influence in promoting adoption behavior than the control group. Even though opinion leaders do not exert significant influence in promoting adoption, they play a positive role in enhancing word-of-mouth spread and sustaining a "healthier “online environment for spreading product information.

Degree

Ph.D.

Advisors

Kalwani, Purdue University.

Subject Area

Marketing

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