Showing papers in "Journal of Marketing in 2003"

Consumer-Company Identification: A Framework for Understanding Consumers¿ Relationships with Companies

Abstract: In this article, the authors try to determine why and under what conditions consumers enter into strong, committed, and meaningful relationships with certain companies, becoming champions of these companies and their products. Drawing on theories of social identity and organizational identification, the authors propose that strong consumer-company relationships often result from consumers’ identification with those companies, which helps them satisfy one or more important self-definitional needs. The authors elaborate on the nature of consumer-company identification, including the company identity, and articulate a consumer-level conceptual framework that offers propositions regarding the key determinants and consequences of such identification in the marketplace.

Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development

Abstract: Scholars have questioned the effectiveness of several customer relationship management strategies. The author investigates the differential effects of customer relationship perceptions and relationship marketing instruments on customer retention and customer share development over time. Customer relationship perceptions are considered evaluations of relationship strength and a supplier’s offerings, and customer share development is the change in customer share between two periods. The results show that affective commitment and loyalty programs that provide economic incentives positively affect both customer retention and customer share development, whereas direct mailings influence customer share development. However, the effect of these variables is rather small. The results also indicate that firms can use the same strategies to affect both customer retention and customer share development.

Psychological Implications of Customer Participation in Co-Production

Abstract: Customer participation in the production of goods and services appears to be growing. The marketing literature has largely focused on the economic implications of this trend and has not addressed customers’ potential psychological responses to participation. The authors draw on the social psychological literature on the self-serving bias and conduct two studies to examine the effects of participation on customer satisfaction. Study 1 shows that consistent with the self-serving bias, given an identical outcome, customer satisfaction with a firm differs depending on whether a customer participates in production. Study 2 shows that providing customers a choice in whether to participate mitigates the self-serving bias when the outcome is worse than expected. The authors present theoretical and practical implications and provide directions for further research.

The Impact of Customer Relationship Characteristics on Profitable Lifetime Duration

Abstract: The authors develop a framework that incorporates projected profitability of customers in the computation of lifetime duration. Furthermore, the authors identify factors under a manager’s control that explain the variation in the profitable lifetime duration. They also compare other frameworks with the traditional methods such as the recency, frequency, and monetary value framework and past customer value and illustrate the superiority of the proposed framework. Finally, the authors develop several key implications that can be of value to decision makers in managing customer relationships.

Teaching Old Brands New Tricks: Retro Branding and the Revival of Brand Meaning

Abstract: Retro brands are relaunched historical brands with updated features. The authors conduct a “netnographic” analysis of two prominent retro brands, the Volkswagen New Beetle and Star Wars: Episode I—The Phantom Menace, that reveals the importance of Allegory (brand story), Aura (brand essence), Arcadia (idealized community), and Antinomy (brand paradox). Retro brand meanings are predicated on a utopian communal element and an enlivening paradoxical essence. Retro brand management involves an uneasy, cocreative, and occasionally clamorous alliance between producers and consumers.

Revenue Premium as an Outcome Measure of Brand Equity

Abstract: The authors propose that the revenue premium a brand generates compared with that of a private label product is a simple, objective, and managerially useful product-market measure of brand equity. The authors provide the conceptual basis for the measure, compute it for brands in several packaged goods categories, and test its validity. The empirical analysis shows that the measure is reliable and reflects real changes in brand health over time. It correlates well with other equity measures, and the measure’s association with a brand’s advertising and promotion activity, price sensitivity, and perceived category risk is consistent with theory.

Corporate environmentalism : antecedents and influence of industry type

Abstract: How does a business firm manage its relationship with the natural environment? What are the factors that influence the choice of such strategies? Does industry type matter? The authors introduce and operationalize the concept of corporate environmentalism in an effort to answer these questions. Using stakeholder theory, the authors identify four important antecedents to corporate environmentalism, namely, public concern, regulatory forces, competitive advantage, and top management commitment. The authors then use a political-economic framework to develop testable hypotheses. To test the hypotheses, the authors perform multigroup path analysis on data gathered from more than 240 firms. They find that corporate environmentalism is related to all hypothesized antecedents and that industry type moderates several of those relationships. In the high environmental impact sector, public concern has the greatest impact on corporate environmentalism, followed by regulatory forces. In the moderate environme...

How Critical are Critical Reviews? The Box Office Effects of Film Critics, Star Power, and Budgets:

Abstract: The authors investigate how critics affect the box office performance of films and how the effects may be moderated by stars and budgets. The authors examine the process through which critics affect box office revenue, that is, whether they influence the decision of the film going public (their role as influencers), merely predict the decision (their role as predictors), or do both. They find that both positive and negative reviews are correlated with weekly box office revenue over an eight-week period, suggesting that critics play a dual role: They can influence and predict box office revenue. However, the authors find the impact of negative reviews (but not positive reviews) to diminish over time, a pattern that is more consistent with critics’ role as influencers. The authors then compare the positive impact of good reviews with the negative impact of bad reviews to find that film reviews evidence a negativity bias; that is, negative reviews hurt performance more than positive reviews help performance, but only during the first week of a film’s run. Finally, the authors examine two key moderators of critical reviews, stars and budgets, and find that popular stars and big budgets enhance box office revenue for films that receive more negative critical reviews than positive critical reviews but do little for films that receive more positive reviews than negative reviews. Taken together, the findings not only replicate and extend prior research on critical reviews and box office performance but also offer insight into how film studios can strategically manage the review process to enhance box office revenue.

Trading off between Value Creation and Value Appropriation: The Financial Implications of Shifts in Strategic Emphasis:

Abstract: Firms allocate their limited resources between two fundamental processes of creating value (i.e., innovating, producing, and delivering products to the market) and appropriating value (i.e., extracting profits in the marketplace). Although both value creation and value appropriation are required for achieving sustained competitive advantage, a firm has significant latitude in deciding the extent to which it emphasizes one over the other. What effect does strategic emphasis (i.e., emphasis on value creation versus value appropriation) have on firm’s financial performance? The authors address this issue by examining the effect that shifts in strategic emphasis have on stock return. They find that the stock market reacts favorably when a firm increases its emphasis on value appropriation relative to value creation. This effect, however, is moderated by firm and industry characteristics, in particular, financial performance, the past level of strategic emphasis of the firm, and the technological envi...

Promoting Relationship Learning

Abstract: The authors develop a theory of how management can develop and promote the learning capabilities of targeted customer-supplier relationships. The theory suggests that a supplier and a customer can improve their joint learning activities by facilitating information exchange, developing common learning arenas, and updating their behavior accordingly. The authors suggest that learning within a customer-supplier relationship cannot be mandated by either organization, but rather learning depends on both parties’ willingness to cooperate in joint learning activities. Management can promote relationship learning by cultivating a collaborative culture, formulating specific objectives for joint learning activities, and developing relational trust. However, as relational trust develops, the effectiveness of learning is reduced as a result of “hidden costs” of trust. The authors use data from 315 dyads to test the theory empirically, and they find that the learning capability of a relationship has a strong,...

The Identity Salience Model of Relationship Marketing Success: The Case of Nonprofit Marketing

Abstract: Researchers suggest that developing long-term relationships with key stakeholders is an important strategy in today’s intensely competitive business environment. Many organizations have embraced this concept, which is referred to as relationship marketing. Much of the research on relationship marketing success has examined relationships that (1) are primarily economic in nature, (2) involve business-to-business marketing, and (3) involve forprofit firms. However, the authors argue that relationship marketing is a viable strategy in such contexts as those involving high levels of social exchange, business-to-consumer marketing, and nonprofit marketing. In these contexts, relationship marketing success may require different relationship characteristics from those identified in previous research. The authors develop “the identity salience model of relationship marketing success,” which they posit is useful for explaining relationship marketing success in exchange relationships that (1) involve indiv...

Making Healthful Food Choices: The Influence of Health Claims and Nutrition Information on Consumers’ Evaluations of Packaged Food Products and Restaurant Menu Items

Abstract: The authors report the results of three experiments that address the effects of health claims and nutrition information placed on restaurant menus and packaged food labels. The results indicate that when favorable nutrition information or health claims are presented, consumers have more favorable attitudes toward the product, nutrition attitudes, and purchase intentions, and they perceive risks of heart disease and stroke to be lower. The nutritional context in which a restaurant menu item is presented moderates the effects of both nutrition information and a health claim on consumer evaluations, which suggests that alternative (i.e., nontarget) menu items serve as a frame of reference against which the target menu item is evaluated.

Trading Off Between Value Creation and Value Appropriation: The Financial Implications of Shifts in Strategic Emphasis (Балансирование между созданием стоимости и присвоением стоимости: финансовые последствия смены стратегической направленности компании)

Abstract: Основная задача маркетинговой стратегии - создание устойчивого конкурентного преимущества, которое, в свою очередь, ведет к положительным финансовым результатам. Для достижения такого результата необходимо сочетание и взаимодействие двух фундаментальных процессов. Первый процесс - создание стоимости (ценности) для покупателя (т.е. разработка и производство товаров, доставка товаров на рынок). Второй фундаментальный процесс - присвоение стоимости на рынке (т.е. извлечение прибылей). Создание стоимости для покупателей является основополагающим принципом маркетинга. Теория маркетинга определяет покупателя/клиента как центральный фокус любой бизнес- организации. Маркетинговая теория постулирует, что для достижения конкурентного преимущества, бизнес-организация должна создавать наибольшую стоимость для своих клиентов. Создания стоимости самого по себе недостаточно для достижения финансового успеха. Второй необходимый процесс касается способности фирмы ограничить конкурентные силы (например, воздвигнуть барьеры для имитации), чтобы присвоить часть созданной стоимости в форме прибыли. В самом деле, у фирм не было бы мотивации заниматься созданием стоимости, если бы не существовало изолирующих механизмов, которые препятствуют немедленному рассасыванию прибылей, полученных в результате деятельности по созданию стоимости (например, разработка новых продуктов). Фирмы, которые не могут ограничить конкурентные силы, не смогут присвоить стоимость, которую они создают. Наоборот, стоимость достанется или покупателям или конкурентам. Примерами изолирующих механизмов, которые находятся в центре внимания менеджеров по маркетингу, являются репутация фирмы, сила бренда, издержки покупателей на переключение, реклама, сетевые эффекты (network externalities). Фирмы должны решить стратегическую проблему - как в своих маркетинговых стратегиях совместить оба эти процесса и как правильно распределить ресурсы между ними. Фирмы должны одновременно развивать (или приобретать) как способности по созданию стоимости, так и способности по присвоению стоимости. Задача распределения ограниченных организационных ресурсов между этими двумя процессами приводит к необходимости выбора стратегических приоритетов. Автор определяет такой выбор стратегической направленности как относительную сконцентрированность фирмы или на процессе создания стоимости или на процессе присвоения стоимости. Несмотря на то что вопрос стратегической направленности компании обсуждался давно, однако, до сих пор никто не изучал, какое влияние стратегическая направленность оказывает на финансовые показатели деятельности компании. В статье исследуется, как изменения в стратегической направленности компании влияют на цену акций компании. В качестве показателя изменений в стратегической направленности автор использует изменения в течении времени в показателе, который вычисляется как [(затраты на рекламу затраты на разработки и исследования)/ активы компании]. По мнению автора, изменения в этом показателе достаточно точно отражают изменения в стратегической направленности компании либо в сторону создания стоимости, либо в сторону присвоения стоимости. Увеличение данного показателя говорит об усилении активности по присвоению стоимости, а снижение данного показателя говорит об усилении активности по созданию стоимости. Исследования автора показали, что фондовый рынок положительно реагирует на изменение в стратегической направленности фирмы в сторону процессов присвоения стоимости. Однако данный эффект опосредован характеристиками фирмы и отрасли, а также технологической средой, в которой работает фирма. Результаты исследований не отрицают важности процессов по созданию стоимости, но указывают на важность совершенствования механизмов по присвоению стоимости.

A Configuration Theory Assessment of Marketing Organization Fit with Business Strategy and Its Relationship with Marketing Performance

Abstract: Theory posits that organizing marketing activities in ways that fit the implementation requirements of a business’s strategy enhances performance. However, conceptual and methodological problems make it difficult to empirically assess this proposition in the holistic way that it is theoretically framed. Drawing on configuration theory approaches in management, the authors address these problems by assessing marketing organization fit with business strategy as the degree to which a business’s marketing organization differs from that of an empirically derived ideal profile that achieves superior performance by arranging marketing activities in a way that enables the implementation of a given strategy type. The authors suggest that marketing organization fit with strategic type is associated with marketing effectiveness in prospector, defender, and analyzer strategic types and with marketing efficiency in prospector and defender strategic types. The study demonstrates the utility of profile deviatio...

Firms Reap What They Sow: The Effects of Shared Values and Perceived Organizational Justice on Customers' Evaluations of Complaint Handling

Abstract: Employing elements of organizational theory and service recovery research, the authors examine how employees’ perceptions of shared values and organizational justice can stimulate customer-directed extra-role behaviors when handling complaints. They also investigate how these extra-role behaviors affect customers’ perceptions of justice, satisfaction, word of mouth, and purchase intent. The authors capture and match employee and customer perceptions regarding the relevant constructs following a complaint and recovery experience. The results indicate that employees’ perceptions of shared values and organizational justice affect customer-directed extra-role behaviors. Furthermore, the authors find that extra-role behaviors have significant effects on customers’ perceptions of justice and that these behaviors mediate the effects of shared values and organizational justice on customer justice perceptions. Their study reveals that customer ratings of justice affect the customer outcomes of satisfactio...

Sources and Financial Consequences of Radical Innovation: Insights from Pharmaceuticals

Abstract: Radical innovations are engines of economic growth and the focus of much academic and practitioner interest, yet some fundamental questions remain unanswered. The authors use theoretical arguments on the risk associated with radical innovations, and the resources needed for them, to answer the following questions on the sources and financial consequences of radical innovation: (1) Who introduces a greater number of radical innovations: dominant or nondominant firms? (2) How great are the financial rewards to radical innovations, and how do these rewards vary across dominant and nondominant firms? (3) Is it only a firm’s resources in the aggregate or also its focus and leverage of resources that make its innovations more financially valuable? and (4) Which are more valuable: innovations that incorporate a breakthrough technology or innovations that provide a substantial increase in customer benefits? The authors pool information from a disparate set of sources in the pharmaceutical industry to stu...

To Have and To Hold:The Influence of Haptic Information on Product Judgments

Abstract: Haptic information, or information attained through touch by the hands, is important for the evaluation of products that vary in terms of material properties related to texture, hardness, temperature, and weight. The authors develop and propose a conceptual framework to illustrate that salience of haptic information differs significantly across products, consumers, and situations. The authors use two experiments to assess how these factors interact to impair or enhance the acquisition and use of haptic information. Barriers to touch, such as a retail display case, can inhibit the use of haptic information and consequently decrease confidence in product evaluations and increase the frustration level of consumers who are more motivated to touch products. In addition, written descriptions and visual depictions of products can partially enhance acquisition of certain types of touch information. The authors synthesize the results of these studies and discuss implications for the effect of haptic infor...

What to Convey in Antismoking Advertisements for Adolescents: The Use of Protection Motivation Theory to Identify Effective Message Themes

Abstract: Antismoking advertising is increasingly used, but its message content is controversial. In an initial study in which adolescents coded 194 advertisements, the authors identified seven common message themes. Using protection motivation theory, the authors develop hypotheses regarding the message theme effects on cognitions and intentions and test them in an experiment involving 1667 adolescents. Three of the seven message themes increased adolescents’ nonsmoking intentions compared with a control; all did so by enhancing adolescents’ perceptions that smoking poses severe social disapproval risks. Other message themes increased health risk severity perceptions but were undermined by low perceived vulnerability.

The structural influence of marketing journals: A citation analysis of the discipline and its subareas over time

Abstract: The authors investigate the overall and subarea influence of a comprehensive set of marketing and marketing-related journals at three points in time during a 30-year period using a citation-based measure of structural influence. The results show that a few journals wield a disproportionate amount of influence in the marketing journal network as a whole and that influential journals tend to derive their influence from many different journals. Different journals are most influential in different subareas of marketing; general business and managerially oriented journals have lost influence, whereas more specialized marketing journals have gained in influence over time. The Journal of Marketing emerges as the most influential marketing journal in the final period (1996-97) and as the journal with the broadest span of influence across all subareas. Yet the Journal of Marketing is notably influential among applied marketing journals, which themselves are of lesser influence. The index of structural inf...

Market Situation Interpretation and Response: The Role of Cognitive Style, Organizational Culture, and Information Use:

Abstract: Improving marketing decision making requires a better understanding of the factors that influence how managers interpret and respond to a market situation. Building on extant literature, the authors develop a model that delineates antecedents of and responses to the interpretation of a market situation. Using case-scenario methodology, the authors test the model in the context of a marketing decision (annual advertising and promotion budget recommendation) with data collected from a nationwide sample of hospital marketing executives. The results of the partial least squares analysis show that (1) cognitive style, organizational culture, and information use affect the extent to which managers perceive a given market situation as one in which they can control the outcomes of their decision; (2) the more managers perceive a situation as controllable, the more they appraise that situation as an opportunity; and (3) the more managers appraise a situation as an opportunity, the greater is the magnitude...

Reciprocal Spillover Effects: A Strategic Benefit of Brand Extensions:

Abstract: A commonly advanced rationale for the proliferation of brand extensions is companies’ motivation to leverage the equity in established brands, thereby developing profitable products relatively easily. A more interesting strategic argument for brand extensions that has been advanced is that extensions would favorably affect the image of the parent brand and thereby influence its choice. In this research, the authors investigate the existence of such reciprocal spillover effects emanating from the advertising of a brand extension. The authors use scanner panel data and study spillover effects of advertising on brand choice. They develop implications for brand and product line management.

Cognitive Lock-In and the Power Law of Practice

Abstract: The authors suggest that learning is an important factor in electronic environments and that efficiency resulting from learning can be modeled with the power law of practice. They show that most Web sites can be characterized by decreasing visit times and that generally those sites with the fastest learning curves show the highest rates of purchasing.

Plural Governance in Industrial Purchasing

Abstract: This article examines the phenomenon of plural governance, a firm’s simultaneous use of market contracting and vertical integration for the same basic transaction. The author studies two particular aspects of plural governance, namely the conditions that motivate firms to deploy plural governance and the manner in which one governance form influences the other when the two coexist in a joint structure. Drawing on agency theory and information economics, the author develops a set of research hypotheses and tests them empirically in the context of industrial purchasing decisions. The results suggest that the plural governance phenomenon can be understood from the perspective of solving information asymmetry problems between buyers and suppliers. The author discusses the implications of a “make and buy” approach to extant theory of interfirm governance, relationship management, and marketing strategy in business-to-business settings.

An Exploratory Study of the Introduction of Online Reverse Auctions

Abstract: Buyers are increasingly turning to online reverse auctions in their negotiations with suppliers. How do these price competition mechanisms affect buyer-supplier relationships? The author considers this question in the context of a quasi experiment involving six online reverse auctions conducted in the supply base of a major industrial buyer. The results indicate that these auctions increase both new and current suppliers’ beliefs that buyers act opportunistically, particularly in open-bid auctions. Current suppliers are generally more willing than new suppliers to make dedicated investments toward the buyer. Paradoxically, in sealed-bid auctions, both current and new suppliers increase their willingness to make dedicated investments toward the buyer. Although these auctions can yield cost savings, the savings are category specific and are not systematically related to an open- or sealed-bid format. The author also discusses implications for the use of online reverse auctions in industrial sourcin...

Implementing a Customer Orientation: Extension of Theory and Application

Abstract: The marketing literature affirms the value of a customer orientation to organizational performance, but it is relatively silent on the implementation of this orientation. This research reports the results of a paired-comparison ethnographic study of the dynamics of implementing a customer orientation in a major public school district. Changes at a progressing site are compared with those at a struggling site. The study provides answers to the question of how an organization adopts a customer orientation by refining understanding of the roles of leadership, interfunctional coordination, and the collection and dissemination of customer-focused data in the transformation process.

The Integrated Networks Model: Explaining Resource Allocations in Network Markets

Abstract: The last decade has witnessed a shift from a focus on the value created by a single firm and product to an examination of the value created by networks of firms (or product ecosystems) in which assets are comingled with external entities. The authors examine these market-based assets in the context of network markets and propose an Integrated Networks model in which three types of networks—user, complements, and producer—add value or enhance the attractiveness of the associated focal product. The authors empirically test the proposed model by surveying information technology professionals on their resource allocation decisions regarding the Unix and Windows NT operating systems. The findings suggest that the value added by these three networks is significantly and positively associated with resources allocated by business customers to competing products. The results also show that the three networks mediate the relationship between stand-alone product performance and resource allocation.

Antecedents and Consequences of Merit Pay Fairness for Industrial Salespeople

Abstract: How do salespeople make judgments of merit pay fairness? By what mechanisms do fairness judgments influence the performance and commitment of salespeople? Using equity and social exchange theories, the authors examine these questions for industrial salespeople who work in a Fortune 500 firm and provide four key findings. First, of the three dimensions of fairness judgments, they find the interactional fairness dimension to be relatively more important than procedural or distributive fairness in influencing job outcomes of salespeople. Second, supervisory behaviors have significant influence in shaping salespeople’s fairness judgments, particularly judgments of distributive and interactional fairness. Third, the results underscore the contrasting mediating role of trust in supervisor and job satisfaction. Although trust in the supervisor is important in reducing salespeople’s opportunistic behaviors, the authors find job satisfaction to be important in enhancing their loyalty to the organization. ...

Price-based global market segmentation for services

Abstract: In business-to-business marketing, managers are often tasked with developing effective global pricing strategies for customers characterized by different cultures and different utilities for product attributes. The challenges of formulating international pricing schedules are especially evident in global markets for service offerings, where intensive customer contact, extensive customization requirements, and reliance on extrinsic cues for service quality make pricing particularly problematic. The purpose of this article is to develop and test a model of the antecedents of business customers’ price elasticities of demand for services in an international setting. The article begins with a synthesis of the services, pricing, and global marketing literature streams and then identifies factors that account for differences in business customers’ price elasticities for service offerings across customers in Asia Pacific, Europe, and North America. The findings indicate that price elasticities depend on ...

What will the future bring? dominance, technology expectations, and radical innovation

Abstract: Are dominant firms laggards or leaders at innovation? The answers to this question are conflicting and controversial. In an attempt to resolve conflicting answers to this question, the authors argue that dominance is a multifaceted construct in which individual facets result in differing (and countervailing) propensities to innovate. To identify the overall effects of dominance, it is necessary to consider the effects of these facets taken together. The authors also study a hitherto ignored yet important driver of innovation, technology expectations, and show that managers have widely divergent expectations of the same new technology. Furthermore, even when their expectations are the same, managers of dominant firms display investment behavior at odds with their counterparts at nondominant firms. The authors use a triangulation of research methods and combine insights from lab studies with those from field interviews, archival data, and a survey of bricks-and-mortar banks’ responses to Internet b...

Mass-Communicated Prediction Requests: Practical Application and a Cognitive Dissonance Explanation for Self-Prophecy

Abstract: Marketers often promote socially beneficial actions or discourage antisocial behaviors to the benefit of their firms, target markets, and society as a whole. One means by which marketers accomplish such influence is a technique referred to as the “self-prophecy effect,” or the behavioral influence of a person making a self-prediction. Researchers have yet to establish the efficacy of self-prophecy in influencing large target markets. In addition, the theoretical mechanism underlying the effect remains in question. The authors report two field studies that demonstrate successful application of self-prophecy through mass-communicated prediction requests. Furthermore, in three laboratory experiments, the authors provide theoretical support for a dissonance-based explanation for self-prophecy, and they discuss practical implications for marketers interested in influencing socially normative behavior.