Abstract

Many mobile app providers offer their apps for free and base their business models on user engagement. However, declining app usage over time threatens the ability of apps to add business value. To keep users engaged, app providers use gamification, i.e., they use game elements (e.g., levels, points) in their non-game apps. Complementing traditional loyalty strategies that reward value-added activities (e.g., purchases) through value rewards, gamification rewards ongoing engagement through game elements. Thus, reward architectures of many apps have become hybrid, with value- and game-reward pursuit simultaneously driving engagement. However, it is unclear to what extent gamification helps to drive user engagement and add business value. To address this question, the authors study unique data from a gamified market research app comprising daily individual-level app usage observations of 18,952 users. The findings show that game rewards increase engagement significantly over and above value rewards, leading to a lift in business value, especially when users are in closer proximity to both types of rewards. However, the analysis also shows a dark side of gamification: when users enter a state of flow in the game, game engagement has a weaker effect on value-added engagement. The authors discuss implications for gamified reward architectures.

https://doi.org/10.1177/00222437241275927

Do firms fully capitalize on the financial strength of their customer-based brand equity (CBBE)? If not, how large is the gap to a benchmark condition where CBBE is financially fully leveraged? Which market strategies, if any, should the firm emphasize to close the gap? This research addresses these questions. The authors introduce a framework and methodology that enables firms to identify and measure their “brand capabilities gap,” which captures the firm’s potential for leveraging CBBE into firm value when the most effective and efficient brand leverage strategy is in place, and, if necessary, take corrective action to realize their brand leverage potential. The authors further examine three market strategy moderators that firms can steer via their marketing programs and tactics to close the brand capabilities gap. The application of the framework and methodology to a wide-ranging sample of firms from 2005-2013 reveals that, on average, firms only realize 35% of their financial brand leverage potential. This translates into an average brand capabilities gap worth $2.1 bn per brand, which represents 4.3% of firm value. These findings have important implications for strategic brand analysis and planning and can help firms design a more effective financial brand leverage strategy.

Given the high failure rates of brand extensions, insights into the drivers of brand extension success are critical for marketing practitioners and scholars. Prior research has inferred that parent brand equity and extension fit are the two key success drivers; however, empirical findings are mixed. Drawing on signaling theory, categorization theory, and a large database of 2,134 effect sizes from research spanning 1990–2020, the authors address these mixed findings through a meta-analysis to develop empirical generalizations. The results show that parent brand equity and extension fit positively influence extension success. However, the multifaceted dimensions of these two drivers have differential effects. For example, among the fit dimensions, usage fit has the weakest effect. While the results suggest an overall positive interaction effect between the two drivers, a fine-grained perspective that considers the drivers’ various dimensions reveals differences. For example, brand familiarity appears to have a lower interaction effect with extension fit than the other dimensions of parent brand equity. Furthermore, the authors provide a comprehensive analysis of five groups of moderators: contextual factors (parent brand, extension, communication, and consumer factors) and research method factors. The authors offer managerial and future research implications for the design of brand extension strategies.

Consumers who are uninterested in a TV ad or are annoyed by it may avoid the ad, limiting the effectiveness of not only the ad but also the remaining commercial break. Active avoidance—known as “zapping”—is potentially a major concern for both advertisers and broadcasters. In two studies, the authors investigate whether and why ad content drives or mitigates zapping and develop a conceptual framework linking multiple content factors to psychological reactions that then affect zapping. They test the content–zapping relationship by drawing on a dataset reflecting the zapping behavior of over 2,500 German television viewers combined with advertising data and content information for 1,315 spots representing 308 brands from 96 categories. The results of the first study show that ad creativity is associated with less zapping, whereas a strong information focus and a prominent or early integration of branding elements are associated with more zapping. The findings also reveal that the effects differ significantly for products with a utilitarian (vs. hedonic) consumption purpose and for search (vs. experience) goods. The results of the second study show that irritation (determined by, e.g., annoyance, feeling offended, or overwhelmed) vis-à-vis enjoyment acts as the central mechanism in explaining why ad content affects zapping.

Digital platforms that aggregate products and services, such as Google Shopping or Amazon, have emerged as powerful intermediaries to brand offerings, challenging traditional product brands that have largely lost direct access to consumers. As a countermeasure, several long-established brands have built their own flagship platforms to resume control and foster consumer loyalty. For example, sports brands like Nike, adidas, or ASICS launched tracking and training platforms that allow for ongoing versatile interactions among participants beyond product purchase. The authors analyze these emerging platform offerings, whose potential brands struggle to exploit, and provide guidance for brands that aim to platformize their business. This guidance comprises the conceptualization of digital platforms as places of consumer crowdsourcing (i.e., consumers drawing value from platform participants such as the brand, other consumers, or third-party businesses) and crowdsending (i.e., consumers providing value to platform participants) of products, services, and content along with a well-defined framework that brands can apply to assemble different types of flagship platforms. Evaluating the consequences of crowdsourcing and crowdsending for consumer–platform relationships, the authors derive a typology of archetypical relationship states and develop a set of propositions to help offline-born product brands thrive through platformization.

https://doi.org/10.1177/00222429211054073

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Economic conditions may significantly affect households’ shopping behavior and, by extension, retailers’ and manufacturers’ firm performance. By explicitly distinguishing between two basic types of economic conditions—micro conditions in terms of households’ personal income and macro conditions in terms of the business cycle—this study analyzes how households adjust their grocery shopping behavior. The authors observe more than 5,000 households over eight years and analyze shopping outcomes in terms of what, where, and how much they shop and spend. Results show that micro and macro conditions substantially influence shopping outcomes, but in very different ways. Microeconomic changes lead households to adjust primarily their overall purchase volume—that is, after losing income, households buy fewer products and spend less in total. In contrast, macroeconomic changes cause pronounced structural shifts in households’ shopping basket allocation and spending behavior. Specifically, during contractions, households shift purchases toward private labels while also buying and consequently spending more than during expansions. During expansions, however, households increasingly purchase national brands but keep their total spending constant. The authors discuss psychological and sociological mechanisms that can explain the differential effects of micro and macro conditions on shopping behavior and develop important diagnostic and normative implications for retailers and manufacturers.

https://doi.org/10.1177/00222429211036882

Download accepted manuscript version. 

Companies are increasingly held accountable for their corporate social irresponsibility (CSI). However, the extent to which a CSI event causes damage to the firm largely depends on the coverage of this event in high-reach news media. Using the theory of news value developed in communications research, the authors explain the amount of media coverage by introducing a set of variables related to the event, the involved brand, and media outlet. The authors analyze a sample of 1,054 CSI events that were reported in 77 leading media outlets in five countries in the period 2008–2014. Estimation results reveal a significant number of drivers: for example, the number of media covering the story may be 39% higher for salient and strong brands. 80% more media report the event if a foreign brand is involved in a domestic CSI event. When a brand advertises heavily or exclusively in a news medium, this reduces the likelihood of the news medium to cover negative stories about the brand. The average financial loss at the U.S. stock market due to a CSI event amounts to US$ 321 million. However, the market only reacts to the event if 4 or more U.S. high-reach media outlets report on the event.

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Many studies have quantified the effects of TV ad spending or gross rating points on brand sales. Yet this effect is likely moderated by the different types of brand-related messages or cues (e.g., logo, brand attributes) embedded in the ads and by the ways (e.g., explicitly or implicitly) these cues are conveyed to TV audiences. The authors thus measure 17 cues often used within ads to build brand awareness (or salience) and brand image and investigate their influence on ad effectiveness. Technically, the study builds a dynamic model to quantify the effects of advertising on sales; builds a robust and interpretable (i.e., nonparametric and sparse) factor model that integrates correlated, left-censored branding cues; and then models the effects of advertising as a function of the factors identified by these cues. An analysis of 177 campaigns aired by 62 brands finds that salience cues (e.g., logo) and benefit and attribute messages moderate ad effectiveness. It also finds that explicit cues are more effective than implicit ones; nonetheless, the primary drivers of ad effectiveness are visual salience cues: the duration and frequency with which the logo and the duration with which the product are displayed. The study can thus suggest ways brand and ad agency managers can improve the effects of creative ad content on sales.

This article proposes that managers may use local consumer culture (LCC), or the culture of one’s home country, in their brand-building activities by adapting the brand’s positioning to the country image the brand targets. It introduces the concept of brand image–country image (BICI) fit, which measures the extent to which consumers in a specific country perceive a brand image as being congruent with their home country’s image. Using more than 350,000 brand-respondent observations across three countries, we develop and empirically illustrate a multiattribute methodology for operationalizing BICI fit and provide robust evidence that BICI fit is positively associated with consumers’ brand evaluations. A large number of validity and robustness tests support the proposed BICI fit metric and the findings derived from it. For example, we find that age, education, being female, and need for structure enhance the BICI fit effect, whereas materialism diminishes it. Furthermore, BICI fit matters more in categories that are closely tied to a local cultural context or that are characterized by high purchase risk. Given its multiattribute nature, the proposed BICI fit metric identifies concrete image attributes and thereby provides managers with an effective way to develop or revise LCC positioning plans for their brands.

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The launch of a new product is one of the most critical activities that product and brand managers are faced with. It requires a substantial communications budget to introduce the new product to the market. As the number of media channels proliferates, however, managers are increasingly held accountable to demonstrate the efficient use of resources.    

This article introduces a new decision support tool to optimize advertising campaigns for new product launches based on learnings from an ex post analysis of prior campaigns. The tool builds on a distinct data collection approach combined with econometric modeling to produce advertising elasticities, which are the key information in the media mix optimization.    

The approach was implemented at Mercedes-Benz and applied to four major new car launches in Germany in 2012 and 2013. It revealed estimated savings of 15-30% or EUR 2 million per campaign, respectively, from more efficient use of resources.

Marketing managers and creatives alike believe that authenticity is an essential element for effective advertising. However, there is no common understanding of authenticity in advertising and limited empirical knowledge about its impact on consumer behavior. In this study, the authors use a comprehensive literature review and qualitative studies to identify four dimensions of authenticity in an advertising context. Based on 323 television ads across 67 brands and four years, they investigate these dimensions’ effects on the sales performance of advertised products. As the impact of authenticity might depend on brand or product characteristics, the authors also analyze how these effects vary with brand size or across hedonic and utilitarian products. The results suggest that authenticity influences consumer behavior in a more nuanced manner than previously recognized. For instance, while showing an ad congruent with the brand’s essence has, in most cases, a positive effect on sales, an overly honest advertising message can actually hurt performance; the latter is true especially for hedonic products where consumers rely more on subjective information to make purchase decisions.

The global importance of online advertising calls for a detailed understanding of consumer-specific responses to online ad repetitions. A key concern for advertisers is not only whether some consumers display degrees of “wearout” but also whether they can surpass a point at which additional exposures have a negative marginal effect: “weariness.” The authors examine a large-scale advertising campaign aimed at driving viewers to a target website, which comprises more than 12,000 users across over 400 websites. These data are analyzed using a flexible discrete mixture specification that accommodates different response shapes over ad stock and timing and parcels ad viewers into response classes based on their internet usage metrics. The resulting classes display varying degrees of wearout, with one subgroup, accounting for about 24% of the sample, evincing weariness. The model also estimates differential publisher effectiveness, with the most effective publisher being nine times more effective than the one 26 places down. The authors demonstrate that the finding of weariness is robust to all the model’s main components, with one key exception: heterogeneity in users’ ad response. Analysis further suggests that an appropriate “profiling and capping” strategy can improve ad deployment by as much as 15% overall for these data.

We develop a hierarchical choice model to account for the choice utility heterogeneity of individual shoppers that belong to the same household. Our model allows us to measure how much variability in purchase behavior exists among individuals in a household, and to compare this to the variability that exists across households. Due to the presence of multiple shoppers from the same household, we also extend the concept of household-level state dependence to consider state dependence at the individual level. We apply our model to five different grocery categories. We find that the intra-household heterogeneity in estimated brand intercepts and (to a lesser extent) price sensitivities is about 20-30% of the inter-household heterogeneity in these parameters. However, with promotion sensitivities we find intra-household heterogeneity, in most cases, to be as large as inter-household heterogeneity. Our state dependence results show that past brands purchased by an individual have a much stronger influence on subsequent purchases than those purchased by anyone in the household. We use our estimated utility parameters to compare the expected profitability of promotions targeted at the individual rather than at the household and find substantial (more than 50%) improvements in the incremental revenue of supermarket promotions. 

The impact of market share on financial firm performance is one of the most widely studied relationships in marketing strategy research. Since the meta-analysis by Szymanski, Bharadwaj, and Varadarajan (1993), substantial environmental (e.g., digitization) and methodological (e.g., accounting for endogeneity) developments have occurred. This meta-analysis presents an update and extension based on all available 863 elasticities drawn from 89 studies and provides the following new empirical generalizations: (1) The average raw market share-financial performance elasticity is .132, which is substantially lower than the effectiveness of other intermediate marketing metrics. This result questions a universally valid strategy that solely focuses on increasing market share. (2) Elasticities differ significantly between contextual settings. For example, they are lower for B2B firms than B2C firms, for service firms than manufacturing firms, and for US markets than emerging and Western European markets. The authors also observe differences between countries with respect to a general time trend (e.g., lower elasticities in recent times for Western European markets) and recessionary periods (i.e., lower elasticities in the US, higher elasticities in non-Western economies).

Many firms are allocating increasing parts of their advertising budgets to banner advertising. Yet, for firms that predominantly sell offline, existing research provides little guidance on online advertising decisions. In this study, the authors analyze the impact of banner advertising on consumers’ online and offline behavior across multiple distinct campaigns for one focal firm, which predominantly sells through the offline channel. Results suggest that banner and TV advertising increase website visit incidence for consumers who have not visited the focal firm’s website in the previous four weeks (nonrecent online consumers). For these consumers, banner and TV advertisements indirectly increase offline sales through website visits. For consumers who have visited the firm’s website in the previous four weeks (recent online consumers), the authors find evidence for a cross-campaign, brand-building effect of banner advertising, and TV ads also directly affect offline purchases. Overall, the findings indicate that for firms that predominantly (or even exclusively) sell offline, banner advertising is most suitable to generate awareness for a firm’s new products among nonrecent online consumers, and to build their brand(s) among recent online consumers.

One of the most important tasks in marketing is to create and communicate value to customers to drive their satisfaction, loyalty, and profitability. In this study, the authors assume that customer value is a dual concept. First, in order to be successful, firms (and the marketing function) have to create perceived value for customers. Toward that end, marketers have to measure customer perceived value and have to provide customer perceptions of value through marketing-mix elements. Second, customers in return give value through multiple forms of engagement (customer lifetime value, in the widest sense) for the organization. Therefore, marketers need to measure and manage this value of the customer(s) to the firm and have to incorporate this aspect into real-time marketing decisions. The authors integrate and synthesize existing findings, show the best practices of implementation, and highlight future research avenues.

The interest in the value relevance of marketing investments has given rise to numerous studies on the marketing-finance interface. This study integrates extant research findings and establishes empirical generalizations on marketing's impact on firm value. Specifically, the authors conduct a meta-analysis of prior econometric elasticity estimates of the stock-market impact of marketing actions and marketing assets. Analyses based on 488 elasticities drawn from 83 studies reveal a mean elasticity of .04 for advertising-expenditure variables and of .54 for marketing-asset variables. Among marketing assets, customer-related assets show a higher mean elasticity of .72 compared to .33 for brand-related assets. Further analyses show that advertising elasticities are lower in more concentrated industries and marketing-asset elasticities are higher during recession times. Researchers should also be aware that characteristics of the research design, e.g., the type of firmvalue metric used, omission of control variables, or not accounting for endogeneity, may affect the estimation results.

Although volatile marketing spending, as opposed to even-level spending, may improve a brand’s financial performance, it can also increase the volatility of performance, which is not a desirable outcome. This article analyzes how revenue and cash-flow volatility are influenced by own and competitive marketing spending volatility, by the level of marketing spending, by the responsiveness to own marketing spending, and by competitive response. From market response theory, we derive propositions about the influence of these variables on revenue and cash-flow volatility. In addition, we extend the Dorfman–Steiner theorem to derive the optimal level and volatility of expenditures if volatility effects are taken into account. Based on a large sample of 99 pharmaceutical brands in four clinical categories and four European countries, we test for the empirical relevance of the propositions and assess the magnitude of the different sources of marketing-induced performance volatility. We find broad support for the predicted volatility effects. Volatility elasticities are significant and may be as large as 1.10 for cash-flow variance with respect to marketing responsiveness. The findings imply that common volatility-increasing marketing practices such as price promotions or volatile advertising plans may be effective at the top line, but they could turn out to be ineffective after all costs are taken into account. Optimal marketing volatility needs to trade off sales effectiveness and extra costs resulting from marketing volatility.

The author provides a guide for effectively communicating and organizing ideas in an academic marketing paper in a manner that allows reviewers to best see their merit. He argues that it is often not the central idea of a piece that falters, but rather the mechanical and stylistic expression of that idea. He posits a straightforward methodology for eschewing ambiguity and appropriately highlighting salient research against a backdrop that is clean and well constructed.

Current complex dynamic markets are characterized by numerous brands, each with multiple products and price points, and differentiated on a variety of product attributes plus a large number of new product introductions. This study seeks to analyze dynamic pricing paths in a highly complex branded market, consisting of 663 products under 79 brand names of digital cameras. The authors develop a method to classify dynamic pricing strategies and analyze the choice and correlates of observed pricing paths in the introduction and early growth phase of this market. The authors find that, despite numerous recommendations in the literature for skimming or penetration pricing, market pricing dominates in practice. In particular, the authors find five patterns: skimming (20% frequency), penetration (20% frequency), and three variants of market-pricing patterns (60% frequency), where new products are launched at market-prices. Skimming pricing launches the new product 16% above market price and subsequently increases the price relative to the market price. Penetration pricing launches the new product 18% below the market price and subsequently lowers the price relative to the market price. Firms exhibit a mix of these pricing paths across their portfolio. The specific pricing paths correlate with market, firm, and brand characteristics such as competitive intensity, market pioneering, brand reputation, and experience effects. The authors discuss managerial implications.

Aguirre-Urreta and Marakas [Aguirre-Urreta MI, Marakas GM (2014) Research note—Partial least squares and models with formatively specified endogenous constructs: A cautionary note. Inform. Systems Res. 25(4):761–778] aim to evaluate the performance of partial least squares (PLS) path modeling when estimating models with formative endogenous constructs, but their ability to reach valid conclusions is compromised by three major flaws in their research design. First, their population data generation model does not represent “formative measurement” as researchers generally understand that term. Second, their design involves a PLS path model that is misspecified with respect to their population model. Third, although their aim is to estimate a composite-based PLS path model, their design uses simulation data generated via a factor analytic procedure. In consequence of these flaws, Aguirre-Urreta and Marakas' (2014) study does not support valid inference about the behavior of PLS path modeling with respect to endogenous formatively measured constructs.

The marketing mix (MM) is an integral part of a firm’s marketing strategy sitting at the nexus between a company and the marketplace. As such, it evolves together with the marketplace and its stakeholders. Over the past decade, three fundamental global drivers have emerged—advancements in technology, socioeconomic and geopolitical shifts, and environmental changes—that have caused major ongoing and intensifying evolutions in the marketplace, its stakeholders, and, in turn, the MM. We describe the resulting evolutions in the MM along four central questions: who is involved in the MM, what constitutes the MM, how is it implemented, and where is it deployed. We identify a blurring of roles and responsibilities relating to the MM (who), an extension and integration of the MM instruments (what), an increase in customization and fragmentation of its actions (how), and a growing recognition of emerging-market idiosyncrasies (where). Taking a look into the future, we observe that along each of the four dimensions, the MM has arrived at a crossroad, with opposing scenarios for its future: (i) more inter-firm collaboration versus marketing-mix protectionism, (ii) added complexity versus increased simplicity, (iii) further automation versus an increased recognition of the human touch, and (iv) local adaptation versus global uniformity in the marketing mix. Applying a contingency approach, we derive relevant moderators for these forthcoming evolutions and provide an extensive set of future research questions.

Paper in open access available at https://doi.org/10.1016/j.ijresmar.2021.09.001

Recent research reveals meaningful uses of digital marketing instruments, though without addressing internal, organizational antecedents of a firm’s social media performance. Drawing on resource-based theory and the concept of dynamic capabilities, this article identifies social media–specific resources and dynamic capabilities that can enhance social media performance. It also offers theoretically supported and validated scales to measure them. The authors empirically investigate their performance effects using different kinds of data pertaining to consumer brands, gathered from manager surveys, brands’ financial statements, Facebook fans, Instagram followers, YouTube subscribers, and brand image measures. The proposed social media resources and capabilities improve social media performance directly and brand perception indirectly. In particular, the impact of the social media strategy and measurement is moderated by firm size. A profile deviation analysis further reveals that the social media capabilities gap between top-performing versus other brands explains significant variance in social media performance. The advantages of developing social media capabilities early on also persist in the long-term, with substantial relevance for managers.

Many online retailers, such as Amazon, use automated product recommender systems to encourage customer loyalty and cross-sell products. Despite significant improvements to the predictive accuracy of contemporary recommender system algorithms, they remain prone to errors. Erroneous recommendations pose potential threats to online retailers in particular, because they diminish customers’ trust in, acceptance of, satisfaction with, and loyalty to a recommender system. Explanations of the reasoning that lead to recommendations might mitigate these negative effects. That is, a recommendation algorithm ideally would provide both accurate recommendations and explanations of the reasoning for those recommendations. This article proposes a novel method to balance these concurrent objectives. The application of this method, using a combination of content-based and collaborative filtering, to two real-world data sets with more than 100 million product ratings reveals that the proposed method outperforms established recommender approaches in terms of predictive accuracy (more than 5% better than the Netflix Prize winner algorithm according to normalized root mean squared error) and its ability to provide actionable explanations, which is also an ethical requirement of artificial intelligence systems.

Access-based services—in which consumers do not physically own material goods but gain access to services by registering with the provider—have risen in popularity as an alternative to individual ownership and conventional consumption. Yet, companies still face key challenges in promoting these services. Prior research indicates that consumers assign significant importance to their material possessions; the current study investigates how psychological ownership, or the mental state of perceiving something as one’s own, attained through access-based services might lead customers to increase their service use and forgo material ownership and consumption. Four studies, using cross-sectional, longitudinal, and experimental data, as well as combined self-reports with usage data, demonstrate this effect. Firms that offer access-based services can increase customers’ service psychological ownership, which acts as a psychological substitute for physical ownership and increases access-based service use. The results suggest ways managers can leverage the psychological power of ownership feelings, rather than try to fight the lack of actual ownership, in access-based consumption contexts.

Many digital service providers have adopted gamification to promote customer engagement. Critical questions, however, remain about the most effective way to enhance customer engagement and increase sales by applying gamification. With a research design that combines qualitative and quantitative methods, including the use of objective sales data from a large field study and replication of the findings across different contexts, this study explores how gamification fosters customer engagement. Both field study results and a simulation study reveal gamification principles (i.e., social interaction, sense of control, goals, progress tracking, rewards, and prompts) that promote hope and consequently increase customer engagement and digital sales. Furthermore, we find that hope is more strongly associated with customer engagement than the psychological condition of compulsion, which even exerts a negative impact. This research thus explores how gamification creates value for customers and provides actionable insights for managers to foster hope through gamification as opposed to get customers hooked.

Consumers have traditionally made purchase decisions at the store shelf, giving institutional brick-and-mortar retailers great power to learn about and influence behaviors and preferences. With the rise of e-commerce, mobile shopping, and most recently smart technologies, new competitors threaten this long-standing supremacy. Adopting a value-creation perspective, we analyze how digitization started the erosion of institutional retailing as the primary interface to the customer. We develop a framework that identifies five new sources of value creation and propose how these advance and transform competition for this interface. Depending on the importance of the new sources of value creation (in different purchase situations), stationary retailing may prevail as an important interaction point in a multichannel decision journey. However, increasing diffusion of branded-product platforms including connected devices and online retail platforms is shifting this authority to new players. For the parties involved in this multilayered competition, acknowledging the changes and actively managing their position in the evolving eco-systems is crucial.

Many studies use variables from the Compustat database to measure various marketing constructs, yet no clear guidelines detail which metrics correspond with which constructs. Justifications rest mainly on the ready availability of easy-to-use measures that seem related to a particular construct. As a result, various metrics have been utilized to capture the same construct, and the same metric—such as selling, general, and administrative expenses (SGA)—has been applied to capture vastly different constructs. But using SGA inappropriately can lead to biased estimates, questionable support for the hypotheses, and potentially misleading implications for research and practice. To test the validity of SGA for multiple relevant marketing and sales constructs, this study gathers data on benchmark variables from alternative data sources and applies a multitrait-multimethod (MTMM) approach. Results show that, in general, SGA has been applied too liberally in marketing contexts; SGA is an appropriate operationalization only for some constructs. This article provides guidelines for the proper conceptualization and operationalization of marketing constructs.

More: https://www.springerprofessional.de/selling-general-and-administrative-expense-sga-based-metrics-in-/15807968

The expansion of the Internet and social media have triggered a differentiation of the word-of-mouth (WOM) concept, with consumer communication about brands and products now taking place in various settings and forms. Two important digital WOM types are microblogs and consumer reviews. To clarify their differential roles for product success, this study offers a theoretical framework of the influence of these two types of WOM, drawing from consumer information search theory and diffusion theory. The tests of the proposed framework use a longitudinal data set of video game sales and weekly information gathered from microblogs (i.e., over 13 million tweets from Twitter) and consumer reviews (i.e., more than 17,000 Amazon consumer reviews). Analyzing a system of equations provides evidence that the influence of microblogs and consumer reviews on new product success changes over time. Prior to launch, the volumes of microblogs and consumer reviews, together with advertising, represent primary sales drivers. After launch, the volume of microblogs is initially influential, then loses impact, whereas the impact of the volume of consumer reviews continues to grow. The valence of consumer reviews gains significance only near the end of the observation period, but the valence of microblogging is never influential.  

Service companies invest billions of dollars to develop and maintain long-term customer relationships by offering corporate gifts. Yet several questions remain regarding such relationship marketing instruments: What impact do different kinds of gifts have on customers? Which perceptions allow gifts to affect customer behavior? What financial outcomes do these gifts imply for firms? To answer these questions, the authors use data from 1,950 airline customers—combining a longitudinal field experiment with internal customer database information—and explore the effects of different gift designs on customer perceptions and actual spending behavior. The experiment manipulates four gift designs (economic related/unrelated; social related/unrelated) and measures customer perceptions and behavior at different points in time. Multivariate analyses of covariance (MANCOVAs) and spotlight analyses reveal that the congruent combinations of economic related and social unrelated gift dimensions have the strongest effects on customer perceptions of relationship investment. Serial mediation analyses further reveal that the impact of gifts on customer spending is fully mediated by customer perceptions of perceived relationship investment and repurchase intention. Economic related gifts produce the highest contribution margins. Service managers may use these findings to design effective gifts and management processes (e.g., gift success tracking).

In colloquial speech, people frequently link emotions to temperature (e.g., “warm love” or “cold fear”). Likewise, in the business world, the use of emotionally warm and cold appeals reflects an ongoing trend in advertising. However, the conditions in which emotionally warm versus cold appeals are more effective remain unclear. Drawing on homeostasis theory, the authors investigate whether and why feeling physically warm versus cold influences the effectiveness of emotional advertising appeals. Using both laboratory experiments and field data, they show that emotions play a homeostatic role. Specifically, they demonstrate that the effects of particular emotional stimuli depend not only on physical temperatures per se but on homeostasis/thermoregulation. Namely, when consumers are below their homeostatic optimum (i.e., physically cold), they perceive emotionally cold stimuli less favorably (than emotionally warm stimuli) as these stimuli bring them further away from the optimum. Likewise, when consumers are above their homeostatic optimum (i.e., physically hot), they perceive emotionally warm stimuli less favorably (than emotionally cold stimuli) as these stimuli bring them further away from the optimum. Finally, once consumers are at their homeostatic optimum, they perceive both emotionally warm and cold stimuli similarly favorably. These results have implications for a wide range of marketing activities (in particular advertising) across seasons and international markets.

Marketing and finance executives follow different objectives and focus on different stakeholder groups. Marketers want to create sales impact. Finance executives are concerned about the financial health of the firm. As a result, both worlds tend to be rather disconnected in their daily business. We argue that this does not reflect the dynamics of the firm where important marketing and financial metrics in fact interact. As long as marketing and finance officers do not fully appreciate the interplay of their key metrics, their decisions are likely to be suboptimal.

This article proposes a simultaneous equation model that reflects the interaction of marketing and finance-domain variables in the value creation process. We focus on brand-building activities and the attraction of capital as major tasks of marketing and finance officers. Our model shows how advertising and other investments increase customer-based brand equity (CBBE) that in turn impacts financial leverage and credit spread and ultimately elevates the level of financial resources.

Based on a broad sample of 155 firms covering various B2C industries, we test for the empirical relevance of our model. We also assess the practical significance of our results by transforming them into elasticities. Our results suggest that marketing and finance executives need to consider the dynamic interaction of their decision and performance variables to fully evaluate the effects of their decisions on the firm's financial health.

Movie industry experts continuously debate whether the industry's enormous investments in stars pay off. Although a rich body of research has addressed the question whether stars are critical to the success of movies, previous research does not provide a consistent picture of the impact of stars on the economic success of the respective product. To derive empirical generalizations, the authors (1) provide a meta-analysis of the relationship between star power and movie success based on 61 primary studies reporting 172 effects of star power on movie success and (2) analyze a comprehensive dataset from that industry with n = 1545 movies using two different types of star power measures (commercial and artistic success), while controlling for selection effects of stars. Based on these two studies, four empirical generalizations emerge. First, when ignoring selection effects of stars, the impact of star power on box office revenues is strongly upwards biased. Second, artistic star power (cf. commercial) is associated with significantly lower box office revenues. Third, on average, movies with a commercially successful star (cf. without a commercially successful star) generate 12.46 million US$ additional box office revenues. In contrast, artistic star power does not result in a statistically significant revenue premium. Fourth, commercially (artistically) successful stars have a statistically significant “multiplier effect” of 1.127 (1.083) on other characteristics that influence a movie's box office revenues.

Manufacturers invest in customer solutions to differentiate their offerings and sustain profitability despite declining margins from goods sales. Notwithstanding strong managerial and academic interest, an examination of whether and explanations for when and why solutions translate into superior performance are lacking. We test hypotheses developed from the resource-based theory and transaction cost economics, supplemented with in-depth theory-in-use interviews, on primary and secondary data collected from 175 manufacturers. From a model that corrects for endogeneity, the findings suggest that, compared with other service offerings, solutions are associated with increased return on sales. This positive profitability effect is enhanced in firms with greater sales capabilities; it is stronger in industries with greater buyer power but weaker in technology-intensive industries. These results caution against the simplistic view of solutions as a universal route to gaining competitive advantage and aid in better identifying the role of solutions in a manufacturer’s offering portfolio.  

Declining demand in later stages of product lifecycles challenges managers. Especially in system markets, content providers must decide whether to publish new content in late lifecycle stages or wait for the next system generation. This study investigates whether content providers can compensate for declines in demand for a system by relying on the benefits offered by a large installed base in later lifecycle stages. Drawing on extensive market data from the video game industry – an underresearched but economically and culturally relevant category of the entertainment sector – this study examines ways to achieve such compensation. The data analyses show a negative association between the age of a system generation and content sales. However, an online multiplayer feature can counteract this negative effect by exploiting the large installed base and providing consumers with additional social value through direct network effects. These findings should help managers position their products more successfully in the late lifecycle stages of a particular system generation.

Firms make significant marketing investments in online, mobile and offline media and channels such as search engines, social media, e-mail, display advertising, print, TV, etc., to draw in customers to their websites, mobile apps, and stores to effect conversions and spur sales. As customers go through a series of touch points across media, channels and devices on their paths to purchase, attributing the appropriate credit for each touch point has emerged as an important problem. By focusing on estimating the incremental value of a touch point and spillover effects across channels, attribution models can provide insights for allocating marketing investments across channels and targeting customers across channels and devices. In this paper, we provide a survey of the state-of-the-art in attribution modeling and analytics. As part of the survey, we also introduce the articles in this special section and position them in our classification framework. Finally, we propose a research agenda to guide future work in the area. 

The vast number of channel types and broad range of possible channel configurations makes identifying a product’s most efficient route to end-users challenging for today’s managers. This study analyzes drivers of a firm’s distribution intensity and their respective effects on performance. The simultaneous analysis of the two dimensions of distribution intensity (i.e., the variety of channels and the degree of channel usage) reveals the two decisions to be positively interrelated, reflecting a firm’s intention to achieve market coverage. Moreover, firms align their distribution intensity to their individual context (their business strategy and environmental conditions), leading to efficient intensity levels. Inefficient intensity levels get penalized by market mechanisms. The results reveal that more is not necessarily better: a more offensive-minded intensity of distribution particularly creates a positive performance effect when complex products are being offered and even more so when the customer base contains a large share of demanding key accounts.

High financial risks in production and marketing, the hedonic nature of products, and the global cultural relevance of movies have encouraged a substantial number of researchers to analyze the success drivers of movies. This research provides empirical generalizations in managing the supply and demand of motion pictures. Prior empirical research either ignored the endogeneity of box office and screen allocation or was based on selective samples, ignoring the large amount of smaller movies released to the market. Using two large and unique samples of all movies released in two major movie markets, the US (2000-2010; n=2,098) and Germany (2002-2010; n=1,360), we extend prior research and present empirical generalizations and new fields of research.

Recent marketing studies suggest that non-financial metrics, such as customer satisfaction and brand value, help explain the variation in the cost of equity and the cost of debt. These studies typically focus on only one non-financial metric and one component of capital cost. In this study, we broaden the understanding of the relevance of non-financial metrics to the cost of capital. We investigate the joint role of customer satisfaction, brand value, and corporate reputation for stock market beta and credit ratings, which reflect variation in equity and debt risk premiums across firms. In addition to the joint direct influence of these metrics on capital cost, we also study their interaction effects. We develop a conceptual model to explain the effects on capital costs and test the resulting hypotheses in a broad sample of 344 firms from diverse industries using data from the 1991–2006 period.

Our results suggest that higher satisfaction ratings reduce both the cost of equity and cost of debt, whereas brand value and corporate reputation only show a negative direct association with the cost of debt. In addition, both measures moderate the effect of satisfaction on the cost of debt. Brand value attenuates the influence of satisfaction, whereas corporate reputation amplifies this effect.