Articles in Refereed Journals
Edeling, A., & Himme, A. (2018). When Does Market Share Matter? New Empirical Generalizations from a Meta-Analysis of the Market Share-Performance Relationship, Journal of Marketing, 82(3), 1-24. Click here for the abstract.
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).
Edeling, A., Hattula, S. & Bornemann, T. (2016). Over, out, but present: recalling former sponsorships. European Journal of Marketing, 51 (7/8), 1286-1307. Click here for the abstract.
This study aims at developing and testing a conceptual model that shows the antecedents of the recall of a former sponsorship. Design/methodology/approach Primary (n = 1,146) and secondary data from German professional soccer build the empirical base for this research. Multilevel logistic regression is used for data analysis.
The results show that retroactive interferences in the form of replacement sponsors for the same object reduce the recall of a former sponsorship, while the mere passage of time does not have a significant main effect. To counteract such forgetting, the empirical analysis shows that sponsor managers can influence recall of a former sponsorship positively after sponsorship termination by switching to a lower-level sponsorship for the same object or by engaging in subsequent sponsorships with other congruent objects in the same context.
The focus on one type of sponsorship (sport sponsorship) in one country (Germany) is the main limitation of this research.
The findings of this paper should encourage managers to consider the long-term consequences of sponsorship engagements beyond the duration of the sponsorship contract. Managers can influence the recall of a sponsorship not only prior to and during an engagement, but also after the loss of sponsorship rights.
Previous research on former sponsorships has mainly focused on the phenomenon of former sponsor recall per se, without considering the determinants of the construct. This paper contributes to sponsorship literature by showing that the number of replacement sponsorships, a construct unique to the former sponsorship context, dominates the time since sponsorship ending as the main driver of forgetting. Moreover, it provides managers with new post-sponsorship strategies that help maintaining the recall of a former sponsorship at a high level.
Edeling, A., & Fischer, M. (2016). Marketing's impact on firm value: Generalizations from a meta-analysis. Journal of Marketing Research, 53 (August), 515-534. Click here for the abstract.
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.
Refereed Research Reports
Edeling, A., & Fischer, M. (2014). Marketing's impact on firm value: Generalizations from a meta-analysis. MSI Report Series No. 14-107. Cambridge: Marketing Science Institute. Click here for the abstract.
Despite the growing body of research on the marketing-finance interface, there have been only limited attempts to integrate results and derive empirical generalizations. Such generalizations would be especially relevant to marketing managers seeking to increase marketing’s accountability within and outside of the firm, as well as to the investor community, which is still reluctant to integrate marketing variables within their investment decisions and firm valuations.
Alexander Edeling and Marc Fischer fill this research gap by conducting a meta-analysis of econometric elasticity estimates of the impact of marketing variables on firm value. Analyses are based on 488 elasticities drawn from 83 studies using data from North and South America, Europe, and Asia spanning 40 years (1971-2011). They reveal a mean elasticity of .04 for advertising-expenditure variables and .54 for marketing-asset variables that include brands and customer relationships.
The finding that most marketing firm-value elasticities are positive offers two important insights for managers: First, it shows that investing in marketing is indeed value-relevant, since the majority of elasticities is positive. In particular, the large magnitude of marketing-asset elasticities suggests that the potential for firm value growth is substantial.
Second, from an optimization point of view, the results suggest that firms are still underinvested in brands and customer relationships, since the elasticities should be zero at optimal investment levels. This again appears to be more relevant to marketing assets than advertising expenditures, since marketing-asset elasticities are, on average, much greater than advertising elasticities.
With respect to marketing-asset variables, their results also suggest that it is preferable to combine brand and customer perspectives, rather than focus narrowly on one “right” marketing metric.
Finally, the analysis reveals heterogeneous firm-value effects of marketing variables between different industries.