The Impact of Imports on Price Competition in the Automobile Industry

Ramrattan, Lall

doi:10.1177/056943459103500208

Cited by 7 publications

(5 citation statements)

References 3 publications

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“…To capture the degree of similarity at the product-market level, this research uses three variables: share of domestic competitors, the number of foreign competitors, and the market growth rate. As domestic competitors become stronger, one would expect that they are better able to exert market power in terms of issues like pricing and distribution, as well as blocking access to foreign competitors, who affect prices and product lines [Solvell, 1988;Kirman & Schueller, 1990;Ramrattan, 1991].…”

Section: Methodsmentioning

confidence: 99%

The impact of market similarity on international marketing strategies: The automobile industry in Western Europe

Grein

2000

Thunderbird Int'l Bus Rev

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Executive SummaryThe formulation of an optimal marketing mix is quite complex when that mix must be effective across multiple international markets. At the crux of the problem is whether markets are similar to each other or interdependent and how this influences marketing mix decisions. Examining the marketing mixes of more than 30 automobile companies competing in the five major markets in Western Europe, it was found that easily changed marketing mix elements, such as prices and advertising, reflect market similarity, interdependence, and product-market conditions, although not always in the expected ways. The least flexible element, the number of models offered, does not appear to reflect any of these types of conditions. © 2000 John Wiley & Sons, Inc. eveloping an effective marketing strategy requires the manager to consider a variety of factors to insure that the strategy is successful. In addition to an assessment of the firm's capabilities, the manager must also evaluate changes in overall business conditions, competition, regulation, and consumer behavior. While this is sufficiently complex when planning marketing strategy in a single country environment, it is considerably more complicated planning marketing strategy in a multi-country environment. The manager not only has to assess each market individually, but also evaluate the various markets as they relate to each other.

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Section: Methodsmentioning

confidence: 99%

The impact of market similarity on international marketing strategies: The automobile industry in Western Europe

Grein

2000

Thunderbird Int'l Bus Rev

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“…The ability of domestic firms to capture share, hold on to local distribution channels, lobby for protectionist policies, and so forth represents a restraint on the internationalization of markets (Atamer et al 2000). It has been found that the presence of foreign competitors affects prices and product lines (Kirman and Schueller 1990; Ramrattan 1991; Solvell 1988). These two internationalization variables are distinct, because the first captures the market power of domestic automobile firms whereas the second captures the diversity of foreign competitors.…”

Section: Theory and Research Frameworkmentioning

confidence: 99%

Integration and Responsiveness: Marketing Strategies of Japanese and European Automobile Manufacturers

Grein

Craig

Takada

2001

Journal of International Marketing

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Formulating a strategy to compete effectively in international markets is one of the major challenges a firm faces. The authors provide insight into how automobile firms devise strategies that respond to the conflicting pressures for local responsiveness and integration in the context of Western Europe, where Japanese automobile firms compete with European-based manufacturers. The authors develop a conceptual framework to test integration-responsiveness in terms of marketing-mix responses and market conditions, using data that cover four major European markets (73% of Western European sales) and a critical period in European integration. The findings indicate that Japanese firms are successfully pursuing standardization strategies rather than fully combining integration and responsiveness. These firms competitively adapt to limited differences between markets, and this strategy appears to be quite successful compared with the European firms' strategies of combining integration and responsiveness. The European strategy appears to undermine the ability to respond to Japanese firms' targeted competitive moves, despite the presence of significant barriers to Japanese exports. Whereas Japanese firms were able to maintain market share, European firms' market shares decreased over the three-year period examined.

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“…Sales are dependent on the number of dealers with either exclusive or dual franchises. Regarding price, we will adopt Bain's collusive prediction as validated in a recent study (Ramrattan [1991]) and also in some subtle ways in the broader literature. For instance, Bresna han and Reiss [1985] have emphasized the tradi tional idea that sales are also dependent on price formation, which is developed within a market power struggle between manufacturers and dealers, who both determine prices.…”

Section: Specificationmentioning

confidence: 99%

“…This paper is a sequel to several articles in this journal (Ramrattan [1991]; Ramrattan [1994]; Ramrattan [1998]) that apply Joe Bain's hypothesis to the U.S. auto industry. According to Bain, auto firms engage in dealership rivalry partly to maintain the product preferences of buyers, partly to sell a substantial part of their products through retail deal erships, and partly to promote sales, specialized maintenance, repair service, and easy access to replacement parts (Bain [1956], p. 300).…”

Section: Introductionmentioning

confidence: 97%

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Dealership Competition in the U. S. Automobile Industry

Ramrattan¹

2001

The American Economist

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This paper develops a model of dealership rivalry for the U.S. auto industry in line with the research program of Joe Bain. In Bain's research, the literature depicts the auto, industry as a differentiated oligop oly with non-price competition and price collusion. It has established advertising and R&D rivalry suc cessfully, but has focused little attention to dealership competition. Because Bain has given a dominant role to dealership competition, this paper addresses the dealership rivalry problem. We found that a com petitive model allowing a firm to react to a rival's past levels of advertising, R&D outlays, and the num ber of dealers, represents the firms' non-price competitive behavior well for the 1970-1996 period. The hypotheses we used have captured the joint effects of advertising, R&D, and dealerships, when explicit specifications for the financial constraints facing the firms are accounted for. We are able to statistically validate the hypothesis that U.S. firms do compete in dealership systems, as Joe Bain has predicted, with in the differentiated oligopoly market structure. The results also allow some inferences regarding the sequential nature of non-price competition among the firms.

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The Impact of Imports on Price Competition in the Automobile Industry

Cited by 7 publications

References 3 publications

The impact of market similarity on international marketing strategies: The automobile industry in Western Europe

The impact of market similarity on international marketing strategies: The automobile industry in Western Europe

Integration and Responsiveness: Marketing Strategies of Japanese and European Automobile Manufacturers

Dealership Competition in the U. S. Automobile Industry

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