Showing papers in "Marketing Letters in 2016"

From digital media influencers to celebrity endorsers: attributions drive endorser effectiveness

Abstract: We propose that attributions about an endorser truly liking, using, or desiring a promoted product mediate the relationship between source and message factors and persuasion via endorsement. In this paper, we integrate the persuasion literature into a framework for examining endorser effectiveness via focus factors (e.g., involvement, cognitive load) that determine whether a consumer thinks carefully or superficially about a message, and lead consumers to rely on different source and message elements (e.g., source attractiveness, argument strength). These elements then influence attributional processing. Correspondent inferences about an endorser can lead to enhanced advertisement and brand attitudes, and spur either fleeting identification with the endorsement or more enduring internalization (Kelman, The Public Opinion Quarterly 25:57–78, 1961) of the endorser’s message as a consumer’s own. Implications of our framework and research directions are discussed.

How the Burdens of Ownership Promote Consumer Usage of Access-based Services

Abstract: Services that let customers access goods, such as car-sharing, are gaining increasing relevance as an alternative to ownership. These access-based services allow consumers to avoid the “burdens of ownership”, i.e., risks and responsibilities that come with owning a good. However, the interplay between consumers’ risk perception of ownership, access-based service usage, and the subsequent decision to reduce or forgo ownership has not been sufficiently investigated. Based on risk perception theory, we hypothesize the effects of different risk dimensions (financial, performance, social) on the intensity of access-based service usage, as well as the latter’s influence on ownership reduction. Using a unique dataset that links survey and actual usage data of car-sharing users, we test four corresponding hypotheses. The results reveal that access-based service usage is positively influenced by all three ownership risk perceptions. Moreover, a higher usage of an access-based service increases the likelihood that consumers subsequently reduce ownership.

To Groupon or Not to Groupon: The Profitability of Deep Discounts

Abstract: We examine the profitability and implications of online discount vouchers, a relatively new marketing tool that offers consumers large discounts when they prepay for participating firms’ goods and services. Within a model of repeat experience good purchase, we examine two mechanisms whereby a discount voucher service can benefit affiliated firms: price discrimination and advertising. For vouchers to provide successful price discrimination, the valuations of consumers with access to vouchers must generally be lower than those of consumers who do not have access to vouchers. Offering vouchers tends to be more profitable for firms that are patient or relatively unknown, and for firms with low marginal costs. Extensions to our model accommodate the possibilities of firm price reoptimization and multiple voucher purchases. We find potential benefits of online discount vouchers to certain firms in certain circumstances, but vouchers are likely to increase firm profits under relatively narrow conditions.

Falling in love with brands: a dynamic analysis of the trajectories of brand love

Abstract: This article presents a study designed to investigate and map the trajectories of brand love. Consumers described experiences related to the initiation and evolution of their relationships with their most loved brand. Participants were asked to graphically trace the course of their feelings toward their currently most loved brand and to recall the events that influenced those feelings. The paths toward brand love followed five distinct trajectories, labeled as “slow development,” “liking becomes love,” “love all the way,” “bumpy road,” and “turnabout.” The formative experiences shaping these trajectories often include individual, personal, and private experiences that are largely outside any marketer’s control.

The impact of social media conversations on consumer brand choices

Abstract: This paper estimates the impact of social media conversations on consumer valuation of brand characteristics and demand for carbonated soft drinks (CSDs). We formulate a random coefficient, discrete choice model of consumer demand that includes social media conversations, and estimate it matching Nielsen sales data on carbonated soft drinks to social media conversations on Facebook, Twitter, and YouTube. Empirical results indicate that consumers’ conversations about brands and nutritional aspects of CSDs have a significant impact on their valuation of brand characteristics and ultimately on their choices of CSDs. These findings have important implications not only for firms using social media as a strategic tool for effective brand promotion and product design but also for public health policies aimed at reducing the consumption of sugary beverages and high-calorie foods.

Speaking to the mind or the heart: effects of matching hedonic versus utilitarian arguments and products

Abstract: Message arguments influence beliefs about product benefits which influence overall product evaluations. Three studies show that matching hedonic versus utilitarian arguments and products enhance evaluations of utilitarian products, but not hedonic products. The results generalize across several argument manipulations and several product categories.

Better together: Trait competitiveness and competitive psychological climate as antecedents of salesperson organizational commitment and sales performance

Abstract: This study assesses the direct and interactive effects of trait competitiveness and competitive psychological climate on organizational commitment and sales performance using data collected from industrial salespeople and company records. Findings indicate that the positive impact of trait competitiveness on sales performance is contingent upon a highly competitive psychological climate, helping to explain inconsistent findings in the literature and underscoring the need for firms to manage the fit between salespeople and organizational culture. Additionally, the study reveals continuance commitment’s negative moderation of the affective commitment–sales performance relationship. Taken together, the model reveals an interesting process such that managers should recruit salespeople with high trait competitiveness and foster a competitive climate internally to generate the best sales performance outcomes.

Attributions of blame following a product-harm crisis depend on consumers’ attachment styles

Abstract: This research examines consumers’ attachment styles as a predictor of attributions of blame following a product-harm crisis. Though the interpersonal attachment literature suggests that consumers with the secure attachment style should attribute the least amount of blame to the brand, we introduce a novel and seemingly contradictory hypothesis. Because of the unique nature of brand relationships, we hypothesize that consumers with the fearful attachment style will attribute the least amount of blame to the brand. In an experiment, we find support for both hypotheses. Further, we find that these effects occur via different mechanisms. Whereas the secure attachment style decreases attributions of controllability, the fearful attachment style decreases attributions of stability. Though many relationship tendencies have been transferred from the interpersonal domain to the consumer domain, our findings remind researchers that brands are a distinct type of relationship partner.

The multicollinearity illusion in moderated regression analysis

Abstract: Numerous papers in the fields of marketing and consumer behavior that utilize moderated multiple regression express concerns regarding the existence of a multicollinearity problem in their analyses. In most cases, however, as we show in this paper, the perceived multicollinearity problem is merely an illusion that arises from misinterpreting high correlations between independent variables and interaction terms.

The influence of hedonic versus utilitarian consumption situations on the compromise effect

Abstract: This article reports the influence of two specific consumption situations—hedonic and utilitarian—on the magnitude of the compromise effect. Based on the literatures of different valuation processes (valuation by calculation vs. valuation by feeling) and hedonic versus utilitarian consumption, the authors suggest that the compromise effect will be stronger under the utilitarian (vs. hedonic) consumption situation due to different valuation processes. Three experimental studies were conducted, and the results have supported the prediction. In addition, the authors successfully excluded alternative explanations such as differences in willingness to pay, justification, and attribute importance. The authors concluded with a discussion of the theoretical and managerial implication of this research.

How product–cause fit and donation quantifier interact in cause-related marketing (CRM) settings: evidence of the cue congruency effect

Abstract: We are the first to examine the joint impact of product–cause fit and donation quantifier in the cause-related marketing (CRM) domain We show that these two CRM cues interact in a unique manner, reflecting the cue congruency effect Specifically, congruent combinations of these two cues result in high purchase intentions when the cues individually have positive effects In all other cases, however, purchase intentions are low Furthermore, we identify moderators of the above cue congruency effect In Study 1, we show that the cue congruency effect is moderated by product-type, evidencing only in more hedonic product contexts In Study 2, we show that the above cue congruency effect is moderated by purchase-type, evidencing in planned purchase contexts, but reversing in impulse purchase contexts We discuss the process mechanism driving these effects, specify the contribution of this research for CRM, cue congruency and impulse purchases, and outline implications for practice

The moderating role of construal level on the evaluation of emotional appeal vs. cognitive appeal advertisements

Abstract: This article proposes that construal level moderates consumer evaluation of different appeals (emotional vs. cognitive appeals) in advertisements. Low-level construal is associated with close psychological distance; this condition implies that people with low-level construal can feel an emotion more intensely than those with high-level construal. Consequently, consumers with low-level construal could positively relate with the emotional appeal ad, and they would evaluate an ad with emotional appeal more favorably than an ad with cognitive appeal. However, this effect does not occur among consumers who construe information at high-level, due to the fact that they are able to focus on the central and positive features of different appeals.

Predicting new service adoption with conjoint analysis: external validity of BDM-based incentive-aligned and dual-response choice designs

Abstract: In this paper, we compare the standard, single-response choice-based conjoint (CBC) approach with three extended CBC procedures in terms of their external predictive validity and their ability to realistically capture consumers’ willingness to pay: (1) an incentive-aligned CBC mechanism (IA-CBC), (2) a dual-response CBC procedure (DR-CBC), and (3) an incentive-aligned dual-response CBC approach (IA-DR-CBC). Our empirical study features a unique sample of 2,679 music consumers who participated in a conjoint choice experiment prior to the market entry of a new music streaming service. To judge the predictive accuracy, we contacted the same respondents again 5 months after the launch and compared the predictions with the actual adoption decisions. The results demonstrate that IA-CBC and DR-CBC both increase the predictive accuracy. This result is promising because IA-CBC is not applicable to every research context so that DR-CBC provides a viable alternative. While we do not find an additional external validity improvement through the combination of both extensions, the IA-DR-CBC approach yields the most realistic willingness-to-pay estimates and should therefore be preferred when incentive alignment is feasible.

The unrealized value of incentivized eWOM recommendations

Abstract: While companies have recognized the perceived economic benefits of encouraging and managing electronic word-of-mouth (eWOM), the benefits may be understated. Companies take into account the influence on the audience. But, what about any effects on the person who communicates the eWOM? We explore the impact that incentivized eWOM has on communicator attitude. Using the saying is believing effect as our theoretical foundation, we suggest that providing eWOM induces a change in the communicator’s attitude. By generating and providing a biased recommendation, the communicator will believe the biased recommendation. Furthermore, the communicator is likely to remember the biased recommendation and will use it to update their attitude. We examine how valence of recommendations (negative versus positive) and the number of opportunities to recommend affect the change in attitude. Our findings indicate that providing recommendations changes communicator’s attitude. Implications of the results are discussed.

Do I know you? How brand familiarity and perceived fit affect consumers’ attitudes towards brands placed in movies

Abstract: The present study uses Associative Network Theory to construct a model that explains effects of brand placement in movies. Based on a field experiment (n = 167), we investigate the effects of plot connection and prominence on brand attitude, as well as the mediating role of brand-movie fit and the moderating role of brand familiarity. Results show that more closely connecting a brand to the plot of a movie positively impacts brand attitude by increasing the perceived fit between the brand and the movie. Brand familiarity moderates the effect of the interaction between a placement’s plot connection and prominence on brand attitude. When brand familiarity is high, there is no significant effect of plot connection on brand attitude, nor is this effect moderated by the prominence of the placement. However, when brand familiarity is low, both prominently and subtly connecting the brand to the plot of the movie positively influences brand attitude. More importantly, the effect of plot connection is significantly stronger when an unfamiliar brand is prominently placed, than when it is subtly placed.

Shopping plans, buying motivations, and return policies: impacts on product returns and purchase likelihoods

Abstract: Product return behavior and factors that contribute to product returns are an under-researched area, despite significant importance to manufacturers and retailers. The current research attempts to fill the gap by focusing on two factors that shape consumer purchase behavior: (1) whether purchases are planned or unplanned, and (2) whether hedonic or utilitarian motivations drive purchases. The findings show that purchase plans and buying motivations have distinctive and interactive impacts on pre-purchase concerns, self-estimated likelihood of returning purchases, and purchase intentions with or without return policies. When hedonic motivation drives purchases, unplanned (vs. planned) purchases lead to higher return concerns, higher return likelihood, and lower buying intentions. When utilitarian motivation drives purchases, planned and unplanned purchases have comparable return concerns, return likelihood, and buying intentions. This interaction effect on buying intentions dissipates when a lenient return policy is offered.

Indicators of opinion leadership in customer networks: self-reports and degree centrality

Abstract: In this paper, we assess two alternative indicators of opinion leadership, self-reported opinion leadership and degree centrality, on the same dataset. We also investigate the interaction effect of these two indicators and the social network environment on opinion leadership. We use social network and survey data from the mobile telecom industry to analyze opinion leadership in smartphone adoption. We find that degree centrality indicates opinion leadership, but that self-reported opinion leadership indicates opinion leadership only under the right social circumstances. In case of weak to moderate network ties, the effect of self-reported opinion leadership is not significant. However, self-reported opinion leaders more effectively influence their strong ties. This study sheds light on indicators of opinion leadership and provides insights for managers to improve their social marketing campaigns.

The role of emotions in decision-making on employer brands: insights from functional magnetic resonance imaging (fMRI)

Abstract: Branding is a key concept in marketing for which extensive research has provided valuable insights into how to attract and retain customers. However, far less is known about how to use branding to attract and retain employees. The work presented here aims to narrow this research gap by drawing on dual-process theories from research on decision-making. First, using functional magnetic resonance imaging (fMRI), we show that decision-making for employer first-choice brands (as compared to less attractive employer brands) is associated with increased activation in brain areas linked to emotions and with decreased activation in areas linked to working memory and reasoning. Second, our region-of-interest (ROI) analyses reveal that neural processing of employer brands differs from the processing of consumer brands. Results support our theorizing on dual-processing regarding the role of emotions in decision-making on employer brands and, further, they indicate that decision processes differ between employer and consumer brands.

Cake or fruit? Influencing healthy food choice through the interaction of automatic and instructed mental simulation

Abstract: Promoting healthy food choice is a central issue for public welfare and a continuous challenge for marketers and policy makers. This research examines how marketing communication elements, such as visuals and text, can be used to encourage healthy food choices. Extending previous research in automatic process mental simulation, this research examines whether visual presentations of food items can trigger a different type of automatic mental simulation that is outcome oriented. Results from four studies show that visual presentations of food items in an advertisement can trigger process and outcome automatic mental simulation (AMS) of food consumption, and AMS interacts with an advertisement’s instructed mental simulation (IMS) to influence consumer healthy food choice. Contributing to marketing research in using IMS in advertising to promote product offerings, this research demonstrates that the success of IMS cues varies depending not only on the amount, but more importantly, the type of AMS triggered from visual cues.

Powerlessness following service failure and its implications for service recovery

Abstract: This research examines whether service failure in hospitality settings reduces situational power and whether feelings of powerlessness have implications for service recovery efforts. Three studies demonstrated that service failure reduced consumers’ situational power, but only among those with high dispositional power motivation (studies 1 and 2). Moreover, those with high dispositional power motivation evinced greater satisfaction with service recovery efforts that involved status-enhancing compensation as opposed to utility-enhancing compensation (study 2), and when status-enhancing compensation was presented in public as opposed to in private (study 3). These findings suggest that consumers with high dispositional power motivation prefer service recovery attempts that counteract the feelings of powerlessness they experience from service failure. Service managers can benefit from these findings by understanding how feelings of power interact with service recovery efforts.

The effects of behavioral, cognitive, and decisional control in co-production service experiences

Abstract: Companies are encouraging customers to participate in the process of creating and delivering their offering(s). In this strategy, not only do providers select a level of customer co-production, but also the level of customer control. This study examines the effects of control types (cognitive, behavioral, and decisional) and their interaction on customers’ affective responses in service operations with varying levels of co-production. An extensive two-study design, across two service contexts, tests the interaction of different levels of co-production and control types on customers’ affective responses. Results show when decisional control is low, one additional control type (behavioral or cognitive) in the operational process can compensate for low decisional control. Theoretical and practical implications are discussed.

Effects of personalized e-mail messages on privacy risk: Moderating roles of control and intimacy

Abstract: New communication platforms have enabled firms to collect personal data on their consumers and provide more personalized services. Personalized service facilitates interpersonal communication and interactions based on consumers’ personal and preference information, and therefore constitutes a way to improve firm–customer relationships. However, such personalized services may be vulnerable to privacy issues. This study investigates the effects of personalized e-mail messages (an archetypal example of personalized service) on consumers’ risk perceptions and two moderating variables: consumers’ control and message intimacy. In three experiments, we show that an increase in the level of personalization in e-mail messages increases consumers’ privacy risk perceptions. However, giving consumers more control over their personal information and adding intimate cues to e-mail messages moderate the negative effects of personalized e-mail messages on their privacy risk perceptions. The study provides important implications for both academics and managers in developing and employing personalized service in new media communication.

Attention to social comparison information and brand avoidance behaviors

Abstract: This research links brand avoidance behaviors to attention to social comparison information (ATSCI). We posit that high (vs low) ATSCI consumers will suffer from more social-evaluative uncertainty, i.e., more uncertainty regarding others’ reactions to their brand choices. To alleviate this problem, high ATSCI consumers will avoid distinctive or conspicuous brands and brand icons that might draw the attention of others, playing safe in their brand choices, rather than risking social disapproval. Two preliminary studies provide support for the theoretical assumptions, confirming that ATSCI is positively associated with brand consciousness, brand social-evaluative uncertainty, and brand avoidance motivated by social-evaluative concerns. Study 1 examines brand identification and shows that although high and low ATSCI consumers identify themselves with equally prestigious brands, the former avoid identifying with distinctive brands. Study 2 demonstrates that unlike their low ATSCI counterparts, high ATSCI consumers avoid conspicuous brand logos even in the case of highly prestigious brands.

The effect of attribute-based and alternative-based processing on consumer choice in context

Abstract: The current research proposes that the extent to which consumer choices are affected by the decision process depends on the underlying nature of the choice problem. Specifically, choices resulting from substantial inter-brand comparisons and tradeoff analyses are vulnerable to whether product information is evaluated by attribute- or alternative-based processing. By contrast, choices resulting from a minimal cognitive processing are less sensitive to variations in the decision strategy employed. We test our theory in the well-known domain of choice context effects. Across three studies using multiple operationalizations of the decision process (i.e., information display format, product presentation mode, and processing goal), we find converging evidence that the more cognitively involving compromise choice increases when the environment facilitates attribute- versus alternative-based processing. Conversely, the choice of asymmetrically dominating option, which is characterized by relatively little analytical processing, does not depend on the type of decision strategy highlighted by the task.

Pricing and persuasive advertising in a differentiated market

Abstract: This paper examines the effects of consumer preferences, firms’ costs, and advertising efficiencies on firms’ pricing and persuasive advertising strategies. We show that as the firms’ horizontal differentiation increases, the firm with a lower value-added product tends to increase persuasive advertising, whereas its competitor tends to reduce advertising. Second, the firm receiving a favorable shock in product valuation will complement the favorable change with additional persuasive advertising rather than reduce advertising spending. Third, an equal improvement in advertising efficiency in the industry will lower the profits for both firms, whereas a decrease in advertising efficiency in the industry can benefit both firms. Fourth, a larger shock that improves a firm’s product valuation or unit cost is more likely to induce higher advertising spending in the industry. Lastly, an exogenous increase in the separation between firms’ product valuations or perceived qualities may actually reduce the price dispersion in the industry.

Managing sub-branding affect transfer: the role of consideration set size and brand loyalty

Abstract: Although the essential role of affect transfer has been evidenced in the brand extension literature, scant research has focused on affect transfer when a firm attempts to add sub-brands into its brand portfolio. We conducted a series of four experiments to demonstrate that affect associated with a family brand does in fact transfer to its sub-brand, and the effect is more pronounced for a sub-brand that is closer to (vs distant from) its family brand. Further, the transfer of affect is contingent upon consideration set size and brand loyalty. While affect transfer is observed when consideration set is small, this effect dissipates when consideration set expands; such moderation effect further interacts with consumers’ loyalty to a family brand and a competing brand. Our findings caution brand managers to take into account consumers’ consideration set size and brand loyalty when managing their brand portfolios.

Consumer emotional intelligence and its effects on responses to transgressions

Abstract: This research suggests that consumer emotional intelligence (CEI) is an important construct in explaining why some consumers react destructively to conflicts in consumer-brand relationships whereas others approach them constructively. The results of the study show that (1) when encountering transgressions in relationships with brands, consumers low in CEI are more likely to respond to transgressions destructively than those who are high in CEI; (2) the effects of CEI on destructive responses are greater if a transgression affects consumers’ self interests rather than society’s interests; and (3) low CEI consumers are more likely to attribute negative intentions to the company and are therefore more likely to respond destructively than high CEI consumers.

Loyalty as a matter of principle: the influence of standards of judgment on customer loyalty

Abstract: Ethicists refer to people who make judgments based on normative principles as deontologists Their ethical standards are such that loyalty is an important characteristic to them—which could make them appealing consumers for marketers to target In a series of three studies, we illustrate the following: whether deontological standards of judgment positively impact their consumer loyalty, if normative advertising campaigns are more effective for deontologists than for utilitarians, and whether the loyalty proneness of deontologists is a function of selective processing While standards of judgment have been addressed in the literature to measure practices of marketers, our research is the first that speaks to the impact that standards of judgment can have on consumer decision-making

Does advertising indicate product quality? Evidence from prelaunch and postlaunch advertising in the movie industry

Abstract: Literature on the informative role of advertising indicates that advertising quantity can serve as an indicator of product quality. As product life cycles grow shorter, firms in many industries spend significant amounts on advertising during the prelaunch period to create large initial demand. Thus, the role of prelaunch advertising may differ from that of postlaunch advertising, and a proper understanding of these differences is important. This study provides an empirical investigation of whether advertising is a reliable indicator of quality before and after product launches, using the data from the movie industry. Analyses of 1078 movies released during 2003-2011 show that post- launch advertising is a reliable quality indicator and increases revenues, whereas pre- launch advertising is not a reliable quality indicator, even if it leads to higher revenues.

Benchmarking buyer behavior towards new brands

Abstract: New brand launches are risky endeavors for marketers, as many fail to attract a sustainable customer base. This research examines the buying behavior of customers acquired by a new brand and revisits the theoretical norms of the NBD-Dirichlet model benchmarks. Investigating 40 new brand launches in the UK, across a wide range of brand and category conditions, we find that in the first 12 months, new launches have more, but less loyal buyers than expected from NBD-Dirichlet benchmarks, irrespective of type, price point, or the sales gained by the new launch. Further we find exploratory evidence that new buyers of brands have weaker associations than existing buyers. We propose that the combination of the new experience that lacks distinctiveness in encoding means that the experience of buying the new brand creates weaker memory traces in new buyers and that these buyers need additional marketing reinforcement to consolidate the memory of buying the brand to establish the brand in their ongoing repertoire.