Showing papers in "Journal of Marketing Research in 2002"

The Field Behind the Screen: Using Netnography for Marketing Research in Online Communities

Abstract: The author develops “netnography” as an online marketing research technique for providing consumer insight. Netnography is ethnography adapted to the study of online communities. As a method, netnography is faster, simpler, and less expensive than traditional ethnography and more naturalistic and unobtrusive than focus groups or interviews. It provides information on the symbolism, meanings, and consumption patterns of online consumer groups. The author provides guidelines that acknowledge the online environment, respect the inherent flexibility and openness of ethnography, and provide rigor and ethics in the conduct of marketing research. As an illustrative example, the author provides a netnography of an online coffee newsgroup and discusses its marketing implications.

The Customer Orientation of Service Workers: Personality Trait Effects on Self-and Supervisor Performance Ratings:

Abstract: Prior research indicates that market orientation is associated with positive outcomes for firms. For service organizations, a market orientation is implemented largely through individual service workers. The authors investigate the mediational role of customer orientation in a hierarchical model of the influence of personality traits on self-rated and supervisor-rated performance. The results support a partially mediated hierarchical model. Three basic personality traits (emotional stability, agreeability, and the need for activity) account for 39% of the variance in the customer orientation of employees. In turn, the customer orientation measure and conscientiousness account for 26% of the variance in self-rated performance. The customer orientation measure, along with the direct effects of conscientiousness and agreeability, account for 12% of the variance in manager ratings. The authors discuss the results and their implications for marketing researchers and managers.

Earning the Right to Indulge: Effort as a Determinant of Customer Preferences toward Frequency Program Rewards:

Abstract: Although frequency programs (FPs) have become ubiquitous in the marketplace and a key marketing-mix tool for promoting customer relationship and loyalty, little is known about the factors that determine how such programs are evaluated by consumers. The authors investigate the impact of the level of effort participants must invest to obtain the reward on the types of rewards they prefer and, consequently, on the decision to join the FP. In particular, the authors propose that higher required effort shifts consumer preferences from necessity to luxury rewards, because higher efforts reduce the guilt that is often associated with choosing luxuries over necessities. A series of studies with approximately 3100 consumers demonstrated that (1) higher program requirements shift preferences in favor of luxury rewards, (2) this effect is also observed when consumers choose between luxury and necessity rewards (of the same value) that they themselves proposed, and (3) the effect of program requirements on r...

The Influence and Value of Analogical Thinking During New Product Ideation

Abstract: Although both the academic and the trade literature have widely acknowledged the need to foster the development of more-innovative products, little empirical research has examined the cognitive processes underlying the creation of these novel product concepts. In this research, three empirical studies examine how analogical thinking influences the idea-generation stage of the new product development process. The first study uses the verbal protocols of real-world industrial designers to trace the role of analogy in the context of a new product development task, and the second and third studies use an experimental approach to assess the effectiveness of different ideation strategies and conditions. Findings from these studies indicate that the originality of the resulting product design is influenced by the extent of analogical transfer, the type of analogies used, and the presence of external primes. In addition, these studies reveal a positive relationship between the originality of the product ...

Measuring Consumers' Willingness to Pay at the Point of Purchase

Abstract: Economists, psychologists, and marketing researchers rely on measures of consumers’ willingness to pay (WTP) in estimating demand for private and public goods and in designing optimal price schedules. Existing market research techniques for measuring WTP differ in whether they provide an incentive to consumers to reveal their true WTP and in whether they simulate actual point-of-purchase contexts. The authors present an empirical comparison of several procedures for eliciting WTP that are applicable directly at the point of purchase. In particular, the authors test the applicability of Becker, DeGroot, and Marschak’s (1964) well-known incentive-compatible procedure for assessing the utility of lotteries to measuring consumers’ WTP. In three studies, the authors explore the reliability, validity, and feasibility of the procedure and show that it yields lower WTP estimates than do non-incentive-compatible methods such as open-ended and double-bounded contingent valuation. They show experimentally t...

The Long-Term Effects of Price Promotions on Category Incidence, Brand Choice, and Purchase Quantity:

Abstract: To what extent do price promotions have a long-term effect on the components of brand sales, namely, category incidence, brand choice, and purchase quantity? The authors answer this question by using persistence modeling on weekly sales data of a perishable and a storable product derived from a scanner panel. Their analysis reveals, first, that permanent promotion effects are virtually absent for each sales component. Next, the authors develop and apply an impulse response approach to estimate the promotional adjustment period and the total dynamic effects of a price promotion. Specifically, they calculate the long-term equivalent of Gupta’s (1988) 14/84/2 breakdown of promotional effects. Because of positive adjustment effects for incidence but negative adjustment effects for choice, the authors find a reversal of the importance of category incidence and brand choice: 66/11/23 for the storable product and 58/39/3 for the perishable product. The authors discuss the implications of the findings an...

Optimal Design for Multinomial Choice Experiments

Abstract: The author derives D-optimal designs for main-effects, multinomial choice experiments using attribute levels as design parameters. The design solutions are similar to standard main-effects designs except that one attribute is used to manipulate response probabilities. The manipulator is key to implementing optimal designs in practice.

Informants in Organizational Marketing Research: Why Use Multiple Informants and How to Aggregate Responses

Abstract: Organizational research frequently involves seeking judgmental response data from informants within organizations. This article discusses why using multiple informants improves the quality of response data and thereby the validity of research findings. The authors show that when there are multiple informants who disagree, responses aggregated with confidence- or competence-based weights outperform those with response data–based weights, which in turn provide significant gains in estimation accuracy over simply averaging informant reports. The proposed methods are effective, inexpensive, and easy to use in organizational marketing research.

Pleasant Surprises: Consumer Response to Unexpected In-Store Coupons

Abstract: This article studies the impact of in-store “surprise” coupons (e.g., electronic shelf coupons, peel-off coupons) on consumers’ total basket of purchases. A conceptual model is developed that (1) predicts that the use of a surprise coupon will increase the size of the shopping basket and the number of unplanned purchases made on the shopping trip and (2) predicts the type of these unplanned purchases. The authors present the results of an in-store experiment and analysis of the Stanford Market Basket Data to test these predictions.

Extending Discrete Choice Models to Incorporate Attitudinal and Other Latent Variables

Abstract: One of the nagging issues in using discrete choice models is how softer attributes, such as attitudes and perceptions, that are not explicitly manipulated within the context of the choice experiment can be accommodated. In many cases, it is reasonable to expect that the choice of a particular alternative may be influenced by non–product-related attributes. For example, latent attitudes and perceptions may play as much of a role in shaping choice as the attributes that have been manipulated and used to define the alternative offerings. In this article, the authors present several full information models that can accommodate latent variables such as attitudes and satisfaction within the context of binary and multinomial choice models. The models proposed are particularly useful when the focus is on understanding how softer attributes can influence choice decisions. The authors accomplish this by integrating structural equation models within the basic framework of binary and multinomial choice model...

Whose Culture Matters? Near-Market Knowledge and Its Impact on Foreign Market Entry Timing

Abstract: Market entry decisions are some of a firm’s most important strategic choices. Although some recent studies have begun to consider the impact of learning and experience on foreign market entry, no study has examined the impact of a firm’s own operations in similar markets on subsequent entry decisions. In this study, the authors introduce the concept of near-market knowledge to reflect the knowledge firms generate by operating in markets that are culturally and economically similar. The authors compile extensive data on the complete foreign market entries of 19 multinational firms. They use a hazard model on 722 entry observations to evaluate the impact of the dynamic near-market knowledge measures and other economic and cultural variables on foreign market entry timing. In contrast with much previous research, the authors find that cultural distance from the domestic market is not a significant factor. However, the authors find significant effects for the new measures of near-market cultural and ...

An Empirical Investigation of the Spillover Effects of Advertising and Sales Promotions in Umbrella Branding

Abstract: The authors investigate and find evidence for advertising and sales promotion spillover effects for umbrella brands in frequently purchased packaged product categories. The authors also capture the impact of advertising (as well as use experience) on both utility mean and variance across two categories. They show that variance of the random component of utility declines over time on the basis of advertising (and use experience) in either category. This constitutes the first empirical evidence for the uncertainty-reducing role of advertising across categories for umbrella brands.

Investigating Category Pricing Behavior at a Retail Chain

Abstract: In studying retailer pricing behavior, researchers typically assume that retailers maximize profits across all brands in a focal product category. In this article, the author attempts to study empirically the extent to which three factors affect retail prices: (1) the effects of payments from manufacturers to the retailer other than regular promotions, as well as the effects of additional costs borne by the retailer for these brands; (2) the retailer’s objectives specific to its store brand, such as maximizing store brand share; and (3) the effects of retail competition and store traffic. By specifying a demand function at the brand-chain level for each brand in the product category, the author derives pricing rules for the retailer. The author decomposes the retail price of a brand into effects due to wholesale price, markup (obtained from the demand functions), additional promotional payments, retail competition, and the retailer’s objectives for the store brand. The author carries out empirica...

Designing Loyalty-Building Programs for Packaged Goods Brands:

Abstract: The authors investigate the effects of loyalty programs on loyalty to packaged goods brands. Findings from a series of experiments indicate that the incentive that is offered in a loyalty program is important to whether the program succeeds or fails at building brand loyalty. The data reported suggest that incentives that have overlap with brand associations, which the authors term cue-compatible incentives, can prompt rehearsal that increases the accessibility of favorable brand associations. This, in turn, helps boost postprogram loyalty. At the same time, incentives that are tangible or concrete can undermine postprogram loyalty. This seems to occur because elaboration is attracted to the incentive at the expense of the brand. Incentive associations may thus gain in accessibility and interfere with access to brand associations.

Do We Care What Others Get? A Behaviorist Approach to Targeted Promotions

Abstract: Increased access to individual customers and their purchase histories has led to a growth in targeted promotions, including the practice of offering different pricing policies to prospective, as opposed to current, customers. Prior research on targeted promotions has adopted a tenet of the standard economic theory of choice, whereby what a consumer chooses depends exclusively on the prices available to that consumer. In this article, the authors propose that consumer preference for firms is affected not just by prices the consumers themselves are offered but also by prices available to others. This departure from the conventional strong-rationality approach to targeted promotion results in a decidedly different optimal policy. Through a laboratory experiment, calibration of a stochastic model, and game-theoretic analysis, the authors demonstrate that ignoring behaviorist effects exaggerates the importance of targeting switchers as opposed to loyals. This occurs, though with intriguing differences...

Is the First to Market the First to Fail? Empirical Evidence for Industrial Goods Businesses

Abstract: When entering a new market, the first entrant typically faces the greatest market and technological uncertainties. Memorable phrases reflect the associated survival risk, such as “the first to market is the first to fail” and “the pioneer is the one with the arrows in its back.” Although research estimates the market pioneer’s survival rate, the typical pioneer survival rate has not been compared with that of early followers. The authors’ study compares survival rates for 167 first-entrant market pioneers versus 267 early followers. For these industrial goods businesses, 66% of the pioneers versus 48% of the early followers survived at least ten years. The main conclusion is that the pioneer’s temporary monopoly over the early followers plus its first-mover advantages typically offset the survival risks associated with market and technological uncertainties. These results are consistent with previous research in the sense that first-mover advantages that increase a pioneer’s market share also hel...

An Empirical Comparison of Logit Choice Models with Discrete versus Continuous Representations of Heterogeneity

Abstract: Currently, there is an important debate about the relative merits of models with discrete and continuous representations of consumer heterogeneity. In a recent JMR study, Andrews, Ansari, and Currim (2002; hereafter AAC) compared metric conjoint analysis models with discrete and continuous representations of heterogeneity and found no differences between the two models with respect to parameter recovery and prediction of ratings for holdout profiles. Models with continuous representations of heterogeneity fit the data better than models with discrete representations of heterogeneity. The goal of the current study is to compare the relative performance of logit choice models with discrete versus continuous representations of heterogeneity in terms of the accuracy of household-level parameters, fit, and forecasting accuracy. To accomplish this goal, the authors conduct an extensive simulation experiment with logit models in a scanner data context, using an experimental design based on AAC and other...

Effects of Implicit Memory on Memory-Based versus Stimulus-Based Brand Choice:

Abstract: The author introduces implicit (versus explicit) memory to examine advertising effects on brand choice. Whereas explicit memory is demonstrated by the conscious recollection of an event, implicit memory is inferred by an improvement in some task performance as the result of having experienced the event. This research shows that memory-based choice benefits from advertising that enhances conceptually driven implicit memory whereas stimulus-based choice benefits from advertising that enhances perceptually driven implicit memory. The findings provide evidence that the two types of implicit memory and explicit memory are distinct constructs of memory; the findings also suggest that implicit memory measures may be more useful indicators of advertising effectiveness than explicit memory measures.

When Are Stockpiled Products Consumed Faster? A Convenience--Salience Framework of Postpurchase Consumption Incidence and Quantity

Abstract: When people stockpile products, how do they decide when and how much they will consume? To answer this question, the authors develop a framework that shows how the salience and convenience of products influence postpurchase consumption incidence and quantity. Multiple research methods—including scanner data analysis, a field study, and two laboratory studies—show that stockpiling increases product salience and triggers consumption incidence among high-convenience products. However, when the decision is made to consume a product, stockpiling increases the consumption quantity for both high- and low-convenience products. In addition to providing new insights on how consumers make postpurchase consumption decisions, these results have implications for the debate on the value of promotions that induce stockpiling.

Hierarchical Bayes Versus Finite Mixture Conjoint Analysis Models: A Comparison of Fit, Prediction, and Partworth Recovery

Abstract: A study conducted by Vriens, Wedel, and Wilms (1996) and published in Journal of Marketing Research found that finite mixture (FM) conjoint models had the best overall performance of nine conjoint segmentation methods in terms of fit, prediction, and parameter recovery. Since that study, hierarchical Bayes (HB) conjoint analysis methods have been proposed to estimate individual-level partworths and have received much attention in the marketing research literature. However, no study has compared the relative effectiveness of FM and HB conjoint analysis models in terms of fit, prediction, and parameter recovery. To conduct such a comparison, the authors employ the simulation methodology proposed by Vriens, Wedel, and Wilms with some modification. The authors estimate traditional individual-level conjoint models as well. The authors show that FM and HB models are equally effective in recovering individual-level parameters and predicting ratings of holdout profiles. Two surprising findings are that (...

Search and Alignment in Judgment Revision: Implications for Brand Positioning

Abstract: The authors propose a model of judgment revision, which posits that counterattitudinal challenges to a brand initially trigger a memory search for proattitudinal information about the brand. The proattitudinal information accessible from memory is then aligned with information contained in the challenge in order to assess the diagnosticity of the challenge, that is, how much it “damages” the retrieved brand information. If the challenge is not perceived to be diagnostic, the retrieved brand information is used to defend the previous attitudinal position. If the challenge is perceived to be diagnostic, judgments are revised in direct proportion to the amount of damage identified in the alignment phase. Four experiments test the model’s predictions about the influence of abstract versus attribute-specific brand positioning on judgment revision. Consistent with the model’s predictions, results show that compared with attribute-specific positioning, abstract positioning will result in less judgment r...

Assessing When Increased Media Weight of Real-World Advertisements Helps Sales

Abstract: A prevailing view is that increased media weight for frequently purchased brands in mature product categories usually does not lead to increases in sales. However, the role of advertising executional cues and viewer responses on media weight–induced sales has not yet been examined. The authors find that whether weight helps or has no sales impact depends on the creative characteristics of the advertisements and the responses they evoke in viewers. Study 1 showed that real-world advertisements for frequently purchased brands in mature categories were likely to create greater media weight–induced sales when they used affectively based executional cues. Study 2 found that greater media weight was related to the sales impact of advertisements that evoked positive feelings and failed to evoke negative feelings in viewers. The authors develop hypotheses related to these results within the context of prior work on consumer persuasion (including the elaboration likelihood model), memory processes, and ad...

Marketing the Unfamiliar: The Role of Context and Item-Specific Information in Electronic Agent Recommendations

Abstract: Electronic agents have the capacity to help consumers discover new products and generate demand for unfamiliar products. This article explores how consumers respond to recommendations of unfamiliar products made by electronic agents. Two studies using simulated music shopping agents show that (1) additional recommendations of familiar products serve as a context in which unfamiliar recommendations are evaluated; (2) when the presentation of the recommendations makes unfamiliar and familiar products appear similar, evaluative assimilation results; and (3) when additional information about unfamiliar products is given, consumers discriminate them from the familiar products, which produces evaluative contrast. These results establish that information that leads to higher evaluations when context is absent can lead to contrast and lower evaluations in the presence of attractive contextual recommendations.

Developing synergies between promotions and brands in different price-quality tiers.

Abstract: Brands are promoted in many different ways. In this research, the authors examine synergies between different types of promotions and characteristics of the brands that offer the promotions. Specifically, the authors examine interactions among feature advertising, display, price promotions, and the price–quality tier of the brand offering them. Using both scanner data and experiments, the authors find that high-tier brands benefit more than low-tier brands from price promotions, displays, or feature advertising when these promotional tools are used by themselves. This advantage disappears, however, when certain promotional tools are used in combination with one another. In particular, the authors find that price promotions have a more equal effect on low-tier and high-tier brands when these promotions are offered in settings where comparisons are difficult (end-of-aisle displays or feature advertising). Furthermore, the combined effects of displays and price promotions, or feature advertising and...

Price Competition under Stockpiling and Flexible Consumption

Abstract: Conventional wisdom suggests that the main effect of price promotion is on brand switching (i.e., secondary demand); however, some recent studies demonstrate that the primary demand expansion effect can be considerably larger than previously believed. A significant driver of this primary demand effect is consumer stockpiling in response to price promotions. Indeed, experimental studies have shown that additional inventory on hand can lead to an endogenous increase in consumption. The authors develop a model of price competition between firms in response to the stockpiling and subsequent consumption dynamics of consumers. In this setting, the flexible consumption effect causes more intense price competition, deeper promotions, and an increase in the frequency of promotions. The authors use two years of scanner panel data from eight product categories and 4313 stockkeeping units to test three implications of the theoretical model; they find strong support for each.

Using multimarket data to predict brand performance in markets for which no or poor data exist

Abstract: The authors show how multimarket data can be used to make predictions about brand performance in markets for which no or poor data exist. To obtain these predictions, the authors propose a model for market similarity that incorporates the structure of the U.S. retailing industry and the geographic location of markets. The model makes use of the idea that if two markets have the same retailers or are located close to each other, then branded goods in these markets should have similar sales performance (other factors being held constant). In holdout samples, the proposed spatial prediction method improves greatly on naive predictors such as global-market averages, nearest neighbor predictors, or local averages. In addition, the authors show that the spatial model gives more plausible estimates of price elasticities. It does so for two reasons. First, the spatial model helps solve an omitted variables problem by allowing for unobserved factors with a cross-market structure. An example of such unobse...

Understanding the role of preference revision and concession in group decisions

Abstract: In this article, the authors contend that member influence in a group’s decision could be decomposed into two distinct elements of preference revision and concession. Using a hierarchical Bayes model of dyadic decision making, the authors show that the degree of preference revision and concession varies across product attributes, individuals, and product categories. The authors demonstrate that converging preferences affect a member’s concession, which in turn affects members’ satisfaction with the joint decision. More important, a member’s satisfaction is higher when his or her concession is reciprocated.

The Effects of Temporal Consistency of Sales Promotions and Availability on Consumer Choice Behavior

Abstract: The importance of consistency of the marketing mix is widely regarded as a key marketing principle. Consistency is commonly understood to apply among marketing mix elements, but it also involves a temporal dimension: Marketing messages and, more generally, marketing mix strategies should achieve some degree of consistency over time. In this article, the authors focus on a particular aspect of marketing mix consistency over time in the context of frequently purchased packaged consumer goods: They investigate the impact of temporal consistency on store promotions, as well as the availability of the product on the shelf, on consumer product evaluations (utilities) and choices. In this specific context, temporal (in)consistency captures the degree of variability of prices, displays, and features, as well as availability over time, for a stockkeeping unit. The authors find that sales promotion mix consistency over time affects both consumer utility mean and scale and thus consumers’ choices and brand ...

The Asymmetric Share Effect: An Empirical Generalization on Cross-Price Effects

Abstract: Prior empirical literature states that asymmetry in cross-price effect favors the high-share brand. That is, when high-share brands discount, they have a greater impact on low-share brands than the reverse. This conclusion is based on consideration of cross-price elasticities. The authors point out that focusing on cross-price elasticities for assessing asymmetry is inappropriate for determining the incremental profitability from price promotions. Instead, asymmetries should be investigated in absolute cross-price effects, that is, change in market share of a competing brand for a unit price change of the focal brand. The authors theoretically and empirically demonstrate that asymmetry reverses when absolute cross-price effect is considered. That is, the absolute cross-price effect of a price reduction of a low-share brand on the market share or sales of a high-share brand is greater than the reverse. The authors discuss the implications of the findings and future research directions.

The role of issue valence and issue capability in determining effort investment

Abstract: How decision makers invest their effort among various issues is critical to organizational success (Ocasio 1997). The authors investigate the effects of issue valence and issue capability on how decision makers allocate effort to an issue. They develop hypotheses regarding these constructs and test them in three studies. Results show that in the condition of high capability, decision makers are more likely to invest effort in an issue that is negatively, rather than positively, framed. Conversely, with low capability, they are more likely to invest effort in an issue that is positively, rather than negatively, framed. Results also clarify the variable focus on upside potential and risk taking as two mechanisms that underlie this preference reversal.