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July 2013
Koichi Yonezawa Morrison School of Agribusiness and Resource Management, W. P. Carey School of Business Arizona State University 7231 E. Sonoran Arroyo Mall, Santan Hall, Mesa, AZ 85212 Phone: (480) 304-2018 Email:
[email protected] _____________________________________________________________________________________
DATE OF BIRTH: January 27, 1978
SEX: M
CITIZENSHIP: Japan (F-1 Visa)
EDUCATION W. P. Carey School of Business, Arizona State University, Mesa, AZ, USA (August 2010 - Present) Ph.D., Business Administration (Agribusiness), May 2014 (Expected) University of Wisconsin-Madison, Madison, WI, USA M.S., Economics, May 2006 University of Tsukuba, Tsukuba, Japan M.S., Policy and Planning Sciences, March 2003 Rikkyo University, Tokyo, Japan B.A., Economics, March 2001 FIELDS OF SPECIALIZATION Structural Models, Empirical Industrial Organization, New Product Adoption, Pricing, Food Marketing, Retailing, and Experimental Economics DISSERTATION Title: Three Essays on Consumer Behavior under Uncertainty Essay One: Consumer Risk-Reduction Behavior and New Product Purchases (Job Market Paper) Essay Two: Consumer Risk Attitude and Competitive Non-Linear Pricing Essay Three: Risk Aversion and Preference for Store Price Format Committee: Dr. Timothy J. Richards (Chair), Dr. Carola Grebitus and Dr. Sungho Park Status: Candidacy was attained in January 2013. The defense is planned to take place in May 2014. TEACHING EXPERIENCES Guest Lecturer: AGB 570 Managerial Economics for Agribusiness, Spring 2013 Teaching Assistant: AGB 701 Advanced Agribusiness I, Fall 2012 Page 1 of 6
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RELEVANT POSITIONS Research Assistant to Dr. Timothy J. Richards, Morrison School of Agribusiness and Resource Management, Arizona State University, August 2010 - Present. Research Assistant (Internship), MyWorld, Inc., Scottsdale, AZ, January 2012 - July 2012 Developed a shopping-aid tool for grocery shoppers Analyst, Ipsos-Novaction K.K. (Currently, Ipsos K.K.), Tokyo, Japan, October 2006 - July 2010 Developed simulated test marketing schemes, analyzed research data from the simulated test marketing, and estimated the sales potential of new products in the consumer packaged goods (CPG) market Contributed to marketing decision-making of major global manufacturers through design of new product development and product launch strategies PUBLICATION Sumita, U., Ise, T., & Yonezawa, K. (2006). Stochastic Analysis of Number of Corporations in A Market Derived from Strategic Policies of Individual Corporations for Market Entry and Retreat. Journal of the Operations Research Society of Japan 49(1), pp. 1-18. WORKING PAPERS Richards, T., J., Winter, S., T., & Yonezawa, K. (2012). Cross-Category Effects and Private Labels. European Review of Agricultural Economics, R&R. Yonezawa, K., & Richards, T., J. (2013). Consumer Risk-Reduction Behavior and New Product Purchases. International Journal of Research in Marketing, Under Review. WORK IN PROGRESS Yonezawa, K., & Richards, T., J. (2013). Consumer Risk Attitude and Competitive Non-Linear Pricing. Yonezawa, K., & Richards, T., J. (2013). Risk Aversion and Preference for Store Price Format. PROFESSIONAL ASSOCIATIONS Agricultural and Applied Economic Association (AAEA) American Marketing Association (AMA) Institute for Operations Research and the Management Sciences (INFORMS) Western Agricultural Economics Association (WAEA) SEMINAR AND CONFERENCE PRESENTATIONS AAEA Annual Meeting, August 2012 INFORMS Marketing Science Conference, June 2012 Page 2 of 6
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HONORS, FELLOWSHIPS AND GRANTS Arizona State University, Block Grant Fellowship, 2010, 2012, 2013 The Japan Scholarship Foundation, Graduate Scholarship of the First Kind, 2001 Rikkyo University, Rikkyo Scholarship, 1999, 2000 SELECTED COURSEWORK Area Econometrics
Economic Theory Financial Management Mathematics & Statistics Quantitative Marketing & Empirical Industrial Organization Note:
Course CEE 598 Topic: Travel Behavior Analysis* ECN 725 Econometrics I** ECN 726 Econometrics II** ECN 712 Microeconomic Analysis I** ECN 714 Microeconomic Analysis II** AGB 702 Advanced Agribusiness II
Instructor Dr. Ram M. Pendyala Dr. Seung C. Ahn Dr. Seung C. Ahn Dr. Edward E. Schlee Dr. Madhav Chandrasekher Dr. William E. Nganje
AGB 703 Agribusiness Research Methods ECN 770 Mathematics for Economists** AGB 701 Advanced Agribusiness I MKT 791 Seminar: Applied Marketing Models***
Dr. Troy G. Schmitz Dr. Seung C. Ahn Dr. Timothy J. Richards Dr. Sungho Park
An asterisk indicates a civil engineering class that looked exclusively at discrete choice modeling. A double-asterisk indicates an economic doctoral course. A triple -asterisk indicates an audited class.
COMPUTER SKILLS Gauss, LaTeX, Limdep/Nlogit, Matlab, MS-Word, MS-Excel, MS-PowerPoint, Oracle Express, Qualtrics, R, SAS and SPSS
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REFERENCES Timothy J. Richards (Dissertation Committee Chair) Marvin and June Morrison Chair of Agribusiness and Resource Management Morrison School of Agribusiness and Resource Management, W. P. Carey School of Business Arizona State University 7231 E. Sonoran Arroyo Mall, Santan Hall, Mesa, AZ 85212 Phone: (480) 727-1488 Email:
[email protected] Carola Grebitus (Dissertation Committee Member) Assistant Professor of Food Industry Management Morrison School of Agribusiness and Resource Management, W. P. Carey School of Business Arizona State University 7231 E. Sonoran Arroyo Mall, Santan Hall, Mesa, AZ 85212 Phone: (480) 727-4098 Email:
[email protected] Sungho Park (Dissertation Committee Member) Assistant Professor of Marketing Marketing Department, W. P. Carey School of Business Arizona State University PO Box 874106, Tempe, AZ 85287 Phone: (480) 965-6264 Email:
[email protected]
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APPENDIX - DISSERTATION ABSTRACT In the CPG market, consumers make decisions under uncertainty. There are two sources of uncertainty: (1) unfamiliarity with the product, implying a lack of information about its quality and (2) price variability across time and retailers, implying a lack of information about price. When consumers purchase an unfamiliar product, they typically do not know whether it meets their prior expectations. While product information such as nutritional and caloric content is observable on the package, taste and aroma are unobservable because they are inherently indeterminable until the product is purchased and used. Even through substantial usage experience, consumers still make decisions under uncertainty because prices vary from day to day and from place to place. Empirical research shows that perceived risk caused by attribute uncertainty decreases utility and the probability of choosing unfamiliar products. Do consumers exhibit any other behaviors under uncertainty which are overlooked in the literature but of perhaps equal importance? CPG manufacturers may recognize such behaviors, and implicitly adopt pricing, promotion, and product design strategies to take advantage of consumer uncertainty. My dissertation examines how uncertainty effects consumers decision-making process and how CPG companies optimally react to this consumer behavior. Success in new product introduction is critical for sales growth, yet most new products ultimately fail. Consumers purchase lower quantities of new products compared to those that they have purchased in the past. In essay one (job market paper), I explain this observation as a result of risk-averting behavior by utility-maximizing consumers. If a new product involves a higher degree of risk that quality expectations will not be met compared to an incumbent product, we derive a theoretical model that shows utility will be more concave for the new product. Greater concavity, in turn, implies that satiation occurs at a lower level of quantity. I test this hypothesis using a multiple-discrete / continuous extreme value (MDCEV) model of demand applied to household-level data for the yogurt category. Estimates of the MDCEV model largely confirm my hypothesis, and show that utility is indeed more concave for new products relative to previously-purchased products. Packaged-good manufacturers ameliorate this satiation-effect when introducing new products in a number of ways: By offering free samples, reducing package sizes for new products, or by offering price discounts for new products. In essay two, I consider how CPG companies react to risk-averse consumer behavior, namely by varying unit prices over package sizes. Most manufacturers charge a higher unit price for a smaller package size within a same product line, which is called quantity discount. I explain this observation as an equilibrium outcome of the interactions between utility-maximizing consumers with different risk attitudes and profitmaximizing firms. To this end, I extend the MDCEV model of demand that explicitly accounts for satiation regarding purchase quantity and apply this model to household-level data for the carbonated soft drink (CSD) category. To investigate pricing behavior of CPG companies, a supply-side model is developed in which manufacturers set wholesale prices and retailers set retail prices taking into account consumer demand and manufacturer and retailer costs. To analyze manufacturers pricing behavior, I endogenize prices as manufacturers likely realize their consumers are risk averse when designing priceand-package strategies. My results suggest that consumers who are unfamiliar with a product prefer a smaller package size because they can minimize the risk that quality expectations will not be met in a subsequent consumption occasion and that the heterogeneity in consumers’ risk attitudes allows manufacturers to charge a higher unit price for a smaller package. Further, counterfactual analysis reveals that changes in the degree of consumer uncertainty, removal of a smaller package size, and changes in pricing schemes for different package sizes significantly influence manufacturers’ profitability. In essay three, I relax the assumption implicit in the previous two studies that the retailer is a passive participant in the CPG supply chain. Prices consumers pay are not set by manufacturers, but by retailers. How retailers respond to consumers’ risk-reduction strategies is critical to understanding how CPG markets work. Retailers design pricing strategies that can be characterized as a choice of store price Page 5 of 6
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format between offering everyday low prices (EDLP) and high / low prices (HILO). EDLP stores set prices which are constant over time, while HILO stores set prices which are higher than EDLP stores on average, but use frequent sales featuring deep discount prices on a smaller set of products. When consumers decide where to shop, they are typically uncertain about retail prices that vary from day to day and place to place. My hypothesis is that a consumer’s choice of store price format is driven by attitudes toward the risk involved in basket price variation. To test this hypothesis, I devise a laboratory experiment that consists of two stages. In the first part of the experiment, I use an incentive-compatible lottery choice experiment to identify subjects’ risk attitudes. In the second part of the experiment, I use an incentive-compatible choice-based conjoint experiment. My mixed logit model largely confirms the hypothesis. I find that risk-averse consumers tend to choose EDLP stores while risk-taking consumers HILO stores. Risk-averse consumers may perceive that shopping at HILO stores is risky due to higher price variability and have an incentive to choose EDLP stores. Shopping at EDLP stores may allow consumers to minimize the risk that unplanned purchases of expensive products may increase their basket price. On the other hand, risk-taking consumers prefer HILO stores because they may have a positive probability of finding a product with lower price. The practical implication of the result is that retailers may use store price format as a screening device to attract particular types of consumers. Retailers may design appropriate marketing strategies to their target customers.
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