Showing papers in "Marketing Letters in 2006"

Some antecedents and outcomes of brand love

Abstract: Survey research is employed to test hypotheses involving brand love, a new marketing construct that assesses satisfied consumers’ passionate emotional attachment to particular brands. Findings suggest that satisfied consumers’ love is greater for brands in product categories perceived as more hedonic (as compared with utilitarian) and for brands that offer more in terms of symbolic benefits. Brand love, in turn, is linked to higher levels of brand loyalty and positive word-of-mouth. Findings also suggest that satisfied consumers tend to be less loyal to brands in more hedonic product categories and to engage in more positive word-of-mouth about self-expressive brands.

The effects of relationship quality on customer retaliation

Abstract: This research examines the effects of relationship quality (RQ) on customers' desires to retaliate after service failures. We posit that the effects of RQ are contingent upon the attributions customers make about the firm's controllability over a service failure. Two competing hypotheses are examined and reconciled. The "love is blind" hypothesis posits that when low controllability is inferred, high RQ customers experience a lesser desire for retaliation than low RQ customers. On the other hand, the "love becomes hate" hypothesis specifies that when high controllability is inferred, high RQ customers experience a greater desire for retaliation than low RQ customers. The hypotheses are tested with a survey- based design and a partial least squares (PLS) model that incorporates a multiplicative latent construct.

An empirical comparison of methods for measuring consumers’ willingness to pay

Abstract: A valid procedure for measuring consumers’ willingness to pay (WTP) is crucial in designing optimal pricing policies or for estimating demand for new products. Understanding potential sources of differences in WTP estimates that emerge from value elicitation studies constitutes an important step in research on how managers should estimate consumers’ WTP. This research presents an empirical analysis of two potential sources of differences and discusses possible means of mitigating them. We find substantial and significant differences between the WTP reported by subjects when payment of the stated price is real or hypothetical. Notwithstanding the dichotomy between real and hypothetical WTP, we find significant differences among the WTP estimates of a broad range of value elicitation methods.

The consumer as advocate: Self-relevance, culture, and word-of-mouth

Abstract: This research examined the relation between self-relevance and word-of-mouth (WOM). The results of two studies suggest consumers are more likely to provide WOM for products that are relevant to self-concept than for more utilitarian products. There was also some indication that WOM was biased, in the sense that consumers exaggerated the benefits of self-relevant products compared to utilitarian products. Finally, self-relevance had a greater impact on WOM in individualist cultures than collectivist cultures, consistent with differences in the way self-concept is typically construed by these groups. Implications for marketing strategies concerning WOM are discussed.

Brand value creation: Analysis of the Interbrand-Business Week brand value rankings

Abstract: Brand value has become an important corporate performance metric, as can be observed from the close following of the annual Top 100 Brand Values ranked by brand consultancy firm Interbrand and reported in Business Week. In this study, we employ a simultaneous equations model to examine the non-linear influence of lagged advertising, marketing promotions and R&D expenses on brand value after controlling for net income and lagged brand valuation. We infer that these lagged expenses yield diminishing returns to brand value. The effect of R&D expense is the weakest, possibly because it is confounded with the advertising and promotional effects. Differences across industry segments or country base are not statistically significant.

The no-choice option and dual response choice designs

Abstract: Choice set designs that include a constant or no-choice option have increased efficiency, better mimic consumer choices, and allow one to model changes in market size. However, when the no-choice option is selected no information is obtained on the relative attractiveness of the available alternatives. One potential solution to this problem is to use a dual response format in which respondents first choose among a set of available alternatives in a forced-choice task and then choose among the available alternatives and a no-choice option. This paper uses a simulation to demonstrate and confirm the possible gains in efficiency of dual response over traditional choice-based conjoint tasks when there are different proportions choosing the no-choice option. Next, two choice-based conjoint analysis studies find little systematic violation of IIA with the addition/deletion of a no-choice option. Further analysis supports the hypothesis that selection of the no-choice option is more closely related to choice set attractiveness than to decision difficulty. Finally, validation evidence is presented. Our findings show that researchers can employ the dual response approach, taking advantages of the increased power of estimation, without concern for systematically biasing the resulting parameter estimates. Hence, we argue this is a valuable approach when there is the possibility of a large number of no-choices and preference heterogeneity.

Measuring and managing the essence of a brand personality

Abstract: Brand managers constantly face the dilemma of adapting their brands to changing consumer taste without diluting the brand’s essence. This study presents an approach that can be used to establish which features constitute the essence of a brand, and how candidate new features would affect the perceived essence of the brand. We build on Ahn’s (1998) causal status hypothesis, which holds that the essence of concepts (e.g., brands) consists of those features perceived to cause most other features of the brand. We empirically illustrate how this approach provides important information about consumer perceptions of envisaged changes to an existing brand.

Volunteering personal information on the internet: Effects of reputation, privacy notices, and rewards on online consumer behavior

Abstract: Accurate personal information provision is one of the most important determinants of the commercial development of the Web. However, consumers are usually reluctant to provide personal information or tend to provide false information online because of their concern about privacy violation risks. We employ a 2× 2× 2 experimental design to examine the effects of reputation, privacy notices, and rewards on online consumer behavior in volunteering two types of personal information on the Internet: demographic information and personally identifiable information. We discuss the theoretical and practical implications of the findings.

An exploratory analysis of the determinants of cooperative advertising participation rates

Abstract: The paper offers an exploratory empirical investigation of the determinants of cooperative advertising participation rates. Using data for 2,286 brands, we examine the relationship of participation rates to national advertising expenditures by brand. We also consider how participation rates vary with average manufacturers’ margins by industry, average retail margins by category, and additional category-level variables. Reflecting the discrete nature of the dependent variable, the analysis employs discrete choice estimation techniques instead of OLS regression. The results reveal a significant quadratic relationship between advertising and participation rates. We interpret this and other significant findings in the context of existing work.

Can good marketing carry a bad product? Evidence from the motion picture industry

Abstract: We examine the relative roles of marketing actions and product quality in determining commercial success. Using the motion picture context, in which product quality is difficult for consumers to anticipate and information on product success is available for different points in time, we model the effects of studio actions and movie quality on a movie’s sales during different phases of its theatrical run. For a sample of 331 recent motion pictures, structural equation modeling demonstrates that studio actions primarily influence early box office results, whereas movie quality influences both short- and long-term theatrical outcomes. The core results are robust across moderating conditions. We identify two data segments with follow-up latent class regressions and explore the degree of studio actions needed to “save” movies of varying quality. We finally offer some implications for research and management.

Comparing the generalizability of online and mail surveys in cross-national service quality research.

Abstract: To compare the generalizability of online and mail surveys in a cross-national service quality study, the authors use G-theory and find a comparable level of generalizability, though online surveys benefited from considerably lower costs. This article contributes to the current comparison of the response quality between online and mail surveys. Furthermore, the authors illustrate how G-theory can be used to compare online and mail surveys and take data collection costs into account. Important implications include the process and results of comparing two survey modes and the effects for service research.

When giving some away makes sense to jump-start the diffusion process

Abstract: This paper uses an analytical model to examine when it makes sense to provide incentives to innovators to adopt a new product. The model allows for separate segments of innovators and imitators, each of which follows a Bass-type diffusion process. Interestingly “seeding” the market is optimal for a limited range of situations and these do not appear to include those where there is a downturn in sales (chasm) as sales move from the first to the second segment.

The effects of gender on processing advertising and product trial information

Abstract: Consistent with past research and theory explaining gender differences in information processing, the empirical study reported here showed that men process two forms of marketing information (advertising and product trial) differently than women. Specifically, women are more sensitive to the comprehensiveness of the trial information, recognizing manipulated differences in trial diagnosticity. In contrast, men tend to use readily available information to form brand judgments and are less likely to notice that other attribute information is unavailable in the product trial.

Brand purchasing by older consumers: An investigation using the Juster scale and the Dirichlet model

Abstract: Marketers are becoming more aware of the growing importance of older consumers. In this paper the brand purchasing behavior of these consumers is investigated. The procedure uses Juster-scale purchase probabilities of brand choice as inputs to a Dirichlet model, enabling brand performance measures to be analyzed across age groups (< 40 years, 40–59 years, and 60–74 years). This approach is recommended for circumstances where it is too costly, too time-consuming, or too difficult to collect consumer panel data. The procedure is used to analyze purchasing in four contrasting types of product category that are representative of repertoire, subscription and mixed markets. Findings show age-based differences in product category purchasing, which impact on within-category brand purchasing (for instance, in terms of opportunities to buy more than one brand). However, patterns of buying between brands within a product category do not reveal marked age-based differences and leading brands tend to be leading for all age groups.

The effects of emotion and need for cognition on consumer choice involving risk

Abstract: Building upon previous research, this article proposes that the effect of mood on risk-taking is moderated by the individual’s need for cognition. The hypothesized effect of mood and the need for cognition are tested with different types of consumer choices in three studies. Consistent with the hypotheses, the results indicate that the subjects in happy mood tend to be risk-aversive while the subjects in sad mood incline to take risks. Furthermore, the mood affects risk-taking behavior more for the low-NFC subjects than for the high-NFC ones. Finally, implications of the findings and suggestions for future research are discussed.

Means matter, but variance matter too: Decomposing response latency influences on variance heterogeneity in stated preference experiments

Abstract: Response time latencies have been shown to influence consumer’s choice behaviour in choice-based-conjoint studies. The literature has shown that response time latencies affect the mean outputs of parameter estimates derived from models of discrete choice. In this paper, we add further insight into the influences response time latencies have on such models by modelling latent response information associated with the variance of random parameter distributions through parameterisation of variance heterogeneity (or heteroskedasticity). We demonstrate that response time latencies influence not only the means of random parameter distributions, but also the variances, and that failure to account for both may result in incorrect model inferences being drawn.

“Pay 80%” versus “get 20% off”: The effect of novel discount presentation on consumers’ deal perceptions

Abstract: Consumers often undervalue price promotions because they discount the discounts. In this research, we examine the effect of using a novel type of discount presentation (e.g., “Pay 60% of the regular price”) on deal evaluations, and compare it to that of an equivalent discount presentation commonly used in the U.S. (e.g., “Get 40% off the regular price”). In three experiments we show that the former discount presentation results in higher perceived savings and higher purchase likelihood than the latter. Using process measures, we demonstrate that this effect is due to increased systematic processing induced by the novelty of the discount presentation, which improves calculation accuracy and hence decreases the underestimation of discounts. We also report a boundary condition of the effect of discount presentations on deal evaluations by showing that it is eliminated when consumers do not need to expend effort to accurately process price information.

The moderating effects of need for cognition and cognitive effort on responses to multi-dimensional prices

Abstract: We investigate how need for cognition and cognitive effort associated with multi-dimensional pricing combine to influence demand Experiment 1 shows that individuals with low (vs high) need for cognition are less likely to purchase products that list price and relative discount separately The direction of the effect of need for cognition on demand is found to depend on whether consumers’ inaccurate arithmetic generally leads them to overestimate or underestimate final prices Therefore, experiment 2 finds that individuals with low (vs high) NFC are more likely to purchase products that list price and relative surcharge separately As expected, the effect is eliminated for absolute discounts or surcharges and mediated by recalled purchase prices

A latent structure factor analytic approach for customer satisfaction measurement

Abstract: The linkage of customer satisfaction, customer retention, and firm prof- itability has been well established in the marketing literature, and provides ample justification as to why customer satisfaction measurement (CSM) has been a focal point in marketing decision making. Although aggregate market level research on un- derstanding the determinants of customer satisfaction is abundant, CSM decisions at segment level are possible only if the individual or market segment differences in the formation of overall satisfaction judgments and subsequent heterogeneity in the role these various determinants play are understood. Based on expectancy-disconfirmation theory in customer satisfaction, we propose a maximum likelihood based latent struc- ture factor analytic methodology which visually depicts customer heterogeneity re- garding the various major determinants of customer satisfaction judgments involving multiple attributes, and provides directions for segment-specific CSM decisions. We first describe the proposed model framework including the technical aspects of the model structure and subsequent maximum likelihood estimation. In an application to

Interaction between two types of information on reactions to delays

Abstract: This study examines the effects of the interaction of two types of information about delays—information about the duration of a delay (delay duration information) and information about the reason for a delay (delay reason information)—on people’s reactions to delays. In this paper, we argue and demonstrate that the two types of delay information interact to affect attribution for the delay and perceived delay duration. The results obtained from an experimental study indicated that there was a stronger effect of delay reason information on attribution for the delay when delay duration information was absent than when the information was present. When no reason was given for the delay, the subjects attributed greater control to the service provider and perceived the delay to be longer when delay duration information was absent than when the information was present.

Personal loan users' mental integration of payment and consumption

Abstract: Buying a good on a loan entails numerous consumption and payment episodes. Loan users can either mentally integrate or separate these episodes. In order to identify the actual mental structures, we conducted 29 semi-structured interviews with current and prospective loan users. A content analysis revealed that a majority of loan users established a hedonically efficient one-way connection from the loan to the good; i.e., the good was perceived as unrelated to the loan, whereas, concurrently, payments were buffered by thoughts of the good. Furthermore, the analysis revealed that mental structures are less stable than sometimes assumed.

The effects of discussion and question wording on self and proxy reports of behavioral frequencies

Abstract: Marketing research surveys often rely on one person to report about the consumption and purchase behavior of other household members. We report the results of an experiment examining how the level of discussion among household members and the wording of a recall question affect the accuracy of reports about the frequency of another household member’s behavior. The findings suggest two important implications. First, asking respondents for a count versus an estimate of the behavior affects both the level of reporting for others as well as the accuracy of such reports. Second, screening potential respondents on their level of discussion on a topic with their partner or family member may help reduce reporting error.

“I love it” or “I hate it”? The positivity effect in stated preferences for agent evaluation

Abstract: Consumers often interact with agents to obtain advice about products and services. A consumer’s evaluation of an agent as a source of personalized advice depends, in part, on the extent to which the consumer believes the agent knows and shares her tastes. In this research, we show a positivity effect in the agent evaluation process, whereby consumers perceive alternatives they love (compared to hate) to be more informative to agents about their tastes, and hence more diagnostic to agents for predicting their future evaluations. Further, we show that this positivity effect is moderated by the agent’s level of agreement with the consumer, and is driven by the greater accessibility of information about loved, compared to hated, alternatives. We discuss the implications of these results for interpersonal judgments and agent choice.