The effect of advertising on brand awareness and perceived quality: An empirical investigation using panel data

We use a panel data set that combines annual brand-level advertising expenditures for over three hundred brands with measures of brand awareness and perceived quality from a large-scale consumer survey to study the effect of advertising. Advertising is modeled as a dynamic investment in a brand’s stocks of awareness and perceived quality and we ask how such an investment changes brand awareness and quality perceptions. Our panel data allow us to control for unobserved heterogeneity across brands and to identify the effect of advertising from the time-series variation within brands. They also allow us to account for the endogeneity of advertising through recently developed dynamic panel data estimation techniques. We find that advertising has consistently a significant positive effect on brand awareness but no significant effect on perceived quality.

Image feedback effects of brand extensions: Evidence from a longitudinal field study

This paper examines the issue of image feedback effects and potential drivers of these effects by analyzing real-world extensions that have been introduced successfully in the market, using a longitudinal field study. Within the context of typical FMCG extensions, the authors find strong evidence that even for successful extensions, negative image feedback effects can occur, particularly when the perceived quality of the extension fails to meet the quality level of the parent brand. Strong brands tend to be more vulnerable to negative image feedback effects because consumers have a higher reference level for their extensions than for those of weaker brands. The likelihood of negative feedback effects decreases as the level of perceived fit and consumers’ perceptions of the general extendibility of the parent brand increases. But managers cannot, at least in the short run, mitigate negative image feedback effects through increased advertising support. Finally, the findings demonstrate that the feedback effects of a new extension product on parent brand image diminish over time.

Brand competition in CPG industries: Sustaining large local advantages with little product differentiation

In direct competition between national brands of consumer packaged goods (CPG), one brand often has a large local share advantage over the other despite the similarity of the branded products. I present an explanation for these large and persistent advantages in the context of local competition on perceived quality or brand image. The main result of the analysis is a relation between varying degrees of product similarity and equilibrium outcomes of local share advantages. Namely, I find that asymmetric quality positioning and associated local share advantages emerge especially when competing brands are objectively similar. Conversely, local share asymmetries based on brand positioning occur less when brands are dissimilar. This paper provides two reinforcing intuitions for this result. First, if brands are objectively similar, different levels of investment in local quality perceptions co-exist in equilibrium in the same market, because this investment is often borne as fixed cost. Also, early movers will invest in high perceived quality, whereas late movers have less incentive to invest because of demand sharing and increased price competition. Second, if the local advantages are shared by competitors across markets, the persistence of these advantages is reinforced by multimarket contact. Even when local brand building is free, firms may not want to improve perceived quality in their “weak” markets if it initiates retaliation by the competition in their “strong” markets. The increase in multimarket profits from collusion is large when the products are similar, because price competition looms large.

Compromising the compromise effect: Brands matter

Consumer behavior research has a long history indicating that preferences are influenced by the relative positions of members of a choice set. The realism of this work, however, is somewhat limited because alternatives are typically labeled with letters rather than with real brand names. We investigate the boundaries of prior research by testing whether preferences for alternatives in compromise and superior positions generalize to a more realistic market scenario that includes choices between real brands. In particular, we conduct two studies that examine if preferences for brands in a choice set are moderated by the inclusion of more or less familiar brand names. We find that consumers prefer extreme brands when compromise brands are relatively less familiar and compromise brands when they are relatively more familiar. In this scenario brand familiarity and not the position of the alternatives determine choice. In situations where a choice alternative is superior, we find no moderation due to brand familiarity.

Quality of past performance: Impact on consumers’ responses to service failure

The conceptual model developed in this paper for the airline industry examines the relationship between quality of past service performance and consumers’ responses to service failures (causal attributions, emotions and satisfaction). The empirical results obtained indicate that for those consumers with higher perceptions of quality the causes underlying service failures are seen as less stable and less controllable by the firm than the causes identified by consumers with lower perceptions of quality. Attributions about the failure not only influence satisfaction directly but also moderate the effect of quality on satisfaction. We also analyse the mediating effect of negative emotions on the relationship between service failure attributions and consumer satisfaction.

Technological advances in digital cameras: Welfare analysis on easy-to-use characteristics

This paper examines the characteristics attributed to the success of digital cameras by studying both the demand and the supply sides of the digital-camera market. A discrete choice model is employed to investigate consumer preferences over digital camera characteristics during the period 1996–1998. The empirical findings reveal that Sony’s ‘Easy-to-Use’ storage system contributes significantly to Sony’s demand advantage and profitability. Also, the welfare analysis demonstrates that ‘Easy-to-Use’ attributes significantly contribute to social welfare improvement.

Knowledge spillovers and new ventures’ export orientation

We draw on the knowledge spillover literature to suggest that a country’s proportion of export-oriented new ventures represents an outcome of knowledge spillovers that stem from foreign direct investment (FDI) and international trade (export spillovers) as well as a source of knowledge spillovers (entrepreneurship spillovers). To test the hypotheses, we use macrolevel data from 34 countries during the period 2002–2005. We find that the relationship between FDI and international trade on the one hand and a country’s proportion of export-oriented new ventures on the other differs for higher- and lower-income countries. In addition, a country’s proportion of export-oriented new ventures affects the subsequent emergence of new businesses.

Different Pathways that Suggest Whether Auditors’ Going Concern Opinions are Ethically Based

Several critics have reopened the continuing debate regarding the credibility of the auditing profession in part because of auditors’ reluctance to issue warning signals to investors. At the root of auditors’ lack of independence issues are conflicts of interest resulting from the structural features of auditor–client relationship. The Throughput Model (TP) is advanced to illustrate how ethical issues may be influenced by conflicts of interest. In the first stage, the TP provides an isolation of auditors’ ethical positions from six ethical different perspectives. In the second stage, previous TP theory is built upon by arguing a simultaneous analysis of how conflicts of interests may induce auditors’ behavior. We conclude that in the current low litigation risk environment, auditors’ ethical behavior (both conscious and unconscious) is clearly ‹unbalanced’ favoring the reluctance to issue warning signals. Finally, we offer a discussion of potential solutions to improve ethical issues.

The Impact of Anti-Intellectualism Attitudes and Academic Self-Efficacy on Business Students’ Perceptions of Cheating

College cheating represents a major ethical problem facing students and educators, especially in colleges of business. The current study surveys 666 business students in three universities to examine potential determinants of cheating perceptions. Anti-intellectualism refers to a student’s negative view of the value and importance of intellectual pursuits and critical thinking. Academic self-efficacy refers to a student’s belief in one’s ability to accomplish an academic task. As hypothesized, students high in anti-intellectualism attitudes and those with low academic self-efficacy were least likely to perceive college cheating as unethical. Considering that college cheating has been found as a predictor of workplace cheating, the results urge business instructors to reduce anti-intellectualism among students and to encourage them to put forth their best efforts. The results also serve employers by focusing attention on these two psychological variables during the hiring and promotion processes.

Small business survival and inheritance: evidence from Germany

This paper investigates whether small businesses face financial constraints that affect their survival. A model of moral hazard is developed in which financial constraints arise endogenously. The model predicts that higher private assets relax financial constraints and have a positive effect on the firm’s probability of survival. The empirical analysis confirms that the entrepreneur has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs who switch from self-employment into wage employment.

Consideration, choice, and classifying loyalty

Presented is an approach to classify a brand’s buyers into groups with varying degrees of loyalty along a continuum from “hard-core loyal” to “hard-core switcher.” A taxonomy is developed based on the joint use of stated consideration set and brand-switching data. In an empirical application to the automobile industry, classic stochastic models such as Grover-Srinivasan (J Mark Res 24:139–153, 1987) and Colombo-Morrison (Mark Sci 8(1):89–99, 1989), which attempt to recover the heterogeneity existing in the switching matrix overstate the number of hard-core loyals (buyers who repurchase with probability one) by 48% and 67%, respectively. The proposed taxonomy illuminates the sources of the overestimation and provides insights into the brand health of competing automotive makes.

Entry for supermarket feature me-too brands: An empirical explanation of incidence and timing

Anticipating the speed of market entry can help the feature pioneer and me-too brands develop more informed product launch strategies. This paper explains imitation speed, broken down into the incidence and timing of imitation, across 144 imitators and 847 nonimitators in 22 consumer packaged goods subcategories. On average, it takes 85 weeks for a me-too brand to introduce its feature imitation. Increasing category market share increases the incidence of imitation and, conditional on their occurrence, decreases the time to market of feature imitators. Faster entry arises for store brands as they are more likely to imitate and tend to take shorter times to market. Price premium does not have a significant effect on the incidence or timing of a me-too brand as it tends to dissipate after the first year. Brands imitate innovative features more often than noninnovative features. Some evidence indicates these imitators can take a longer time to enter the market. New product managers may benefit from the direction as well as the magnitude of these results.

Transnational Governance of Workers’ Rights: Outlining a Research Agenda

In twentieth century Europe and the USA, industrial relations, labour, and workers’ rights issues have been handled through collective bargaining and industrial agreements between firms and unions, with varying degrees of government intervention from country to country. This industrial relations landscape is currently undergoing fundamental change with the emergence of transnational industrial relations systems that complement existing national industrial relations systems. Despite the significance of this ongoing change, existing research has only started to explore the implications of this change for how workers’ rights are governed around the globe. This paper addresses this gap by outlining an agenda for future research into the transnational governance of workers’ rights. Fulfilling such a research agenda would be both challenging, as it requires combining the so far divergent industrial relations and business ethics research streams, and rewarding, as it provides ample scope for promising future research.

Location strategies of multiunit service businesses: spatial differentiation and agglomeration among hamburger restaurants in Paris, 1984–2004

In this article, we study how multiunit service businesses locate their units, choosing between two opposite spatial strategies. Whereas, locating one’s units close to competitors’ brings positive agglomeration externalities, locating one’s units far away from others’ allows local monopolies through spatial differentiation. We examine location strategies of the two biggest hamburger restaurant chains—namely McDonald’s and Quick—in Paris between 1984 and 2004. Results show that competitive standings impact locational strategy choices. The market leader favors spatial differentiation, thus preempting premium locations. Conversely, the challenger favors locations close to the leader, thus aiming at agglomeration externalities.

Gender differences in new brand name response

Conventional guidelines for naming new products overlook possible individual-level differences that may affect response to new brand names. This research draws on sound symbolism theory to investigate whether gender affects response to new brand names. Specifically, two studies are conducted to examine whether females respond more favorably than males to brand names with front vowels and whether males respond more favorably than females to brand names with back vowels. Results indicate that gender is associated with brand name response and that the gender asymmetries appear to be more pronounced in product categories where masculinity–femininity is a more salient product attribute. An implication is that gender targeting can be facilitated through the use of particular letters in brand names.

Development of a technological competition model in the presence of network effects from the modified law of Metcalfe

The objective of this paper is to propose a new model of competence in presence of network effects. We will introduce some modifications in the Lotka-Volterra model, in order to solve its deficiencies. The main improvement is to introduce a modification of Metcalfe’s Law, what allow us to reflect the effect of congestion externalities. The model’s validation, developed by numerical simulation, confirms that its behaviour is quite similar to that observed in real markets.

Entrepreneurship in post-socialist economies: A typology and institutional contexts for market entrepreneurship

There is growing recognition among post-socialist (PS) economies that free-market entrepreneurship is essential for ultimately improving their economic future. The promotion of market entrepreneurship, however, has been a challenging experience for these economies. This paper examines various forms of entrepreneurship in PS economies. Drawing upon the institutional theory, we also highlight the clear contexts and attendant mechanisms associated with institutions–entrepreneurship nexus in PS economies’ contexts.

Spiritual Climate of Business Organizations and Its Impact on Customers’ Experience

This study examines the notion of ‹spirituality’ as a dimension of human self, and its relevance and role in management. Major thesis of this research is that spirituality of employees is reflected in work climate. This may in turn affect the employees’ service to the customers. In the first part of the study a Spiritual Climate Inventory is developed and validated with the data from manufacturing and service sector employees. In the later part, hypothesis of positive impact of spiritual climate on customers’ experience of employees’ service is examined and found to be substantiated empirically.

Manufacturer-owned retail stores

Increasingly, manufacturers sell their products in their own retail stores, and many of these stores appear to be in direct competition with independent retailers; i.e., both types of retail stores are physically co-located. We analyze one way this practice affects the retail market. We find that, when independent retailers compete against company stores (instead of just against other independent retailers), they (1) charge higher prices and (2) are more willing to engage in marketing efforts on behalf of the manufacturer’s brand. Furthermore, when company stores and independent retailers compete in the same market, the company store charges higher prices and provides more marketing effort. Anecdotal data are consistent with these model predictions.

Framing the Corporation: Royal Dutch/Shell and Human Rights Woes in Nigeria

Transnational corporations are often implicated in conflicts over environmental problems and human rights in developing countries. As a result they become targets of both local and transnational campaigns. Given the lack of resources and influence of local activists, campaigning groups often turn to consumer audiences abroad to pressurize a certain company or brand. That requires agenda-setting and “framing” of the issues concerned in order to gain consumers’ attention. Local activists and campaigning groups use the public sphere to call attention to allegedly dubious corporate policies and practices that lie behind the consumer goods offered for sale in the Western world. Based on an analysis of the public discourse about the operations of the oil multinational Royal Dutch/Shell in Nigeria in the year 1995, this paper suggests that once the corporation is framed as a moral actor, it gets difficult for the corporation to deny its responsibility for human rights—even though the actual influence of the corporation may be limited.