The government and the market place: An evaluation of the FTC

“The Government and the Market Place: An Evaluation of the FTC” is a critical political and historical analysis of the Federal Trade Commission. It explores the initial reasons for the regulatory agency and then provides an, in-depth study of its legislative history and the subsequent powers Congress provided for the FTC’s operation. Although the Federal Trade Commission occasionally receives favorable headlines, the authors contend that the agency is politically motivated and business oriented. The reasons for the failure of the FTC are assessed and a constructive solution is offered. Reports by the second Hoover Commission, James Landis, the American Bar Association and Roy Ash-as well as others-are cited to support the authors’ thesis that the FTC should be abolished and reorganized along the lines suggested by the President’s Commission on Executive Reorganization. The article is well researched employing government documents and the most recent articles and books on the FTC.     

Antecedents and consequences of adaptive selling confidence and behavior: a dyadic analysis of salespeople and their customers

Personal selling is thought to be a very effective marketing vehicle. The notion of adaptive selling suggests that it should work better than any other means of communication because salespeople are able to develop a unique message for each customer. This research proposes a model of key antecedents and consequences of adaptive selling. In particular, we distinguish, measure, and model the attitudinal and behavioral aspects of adaptive selling, something that is encouraged but not thoroughly examined in the literature. Hypotheses are tested using data from 210 salesperson-customer dyads. The results indicate that a salesperson’s perception of the firm’s customer orientation has an effect on adaptive selling behavior through the salesperson’s adaptive selling confidence, role ambiguity, intrinsic motivation and customer-qualification skills. Adaptive selling behavior increases salesperson’s outcome performance, customers’ evaluations of satisfaction with the product and with the salesperson, which enhance customers’ anticipation of future interactions with the salesperson. The implications for management and theory are discussed.     

Not telling the whole story: Teen deception in purchasing

Teenagers may engage in consumption behaviors that their parents may not approve of, as one way of asserting independence. Such behaviors may lead teens to attempt to deceive their parents about purchases. This research examined teens’ tendency toward such deception. The authors conceptualize deception as being related to the family communication environment and the shopping context in which it takes place. Some family communication environments may stifle open discussion of products and purchases, thereby encouraging teen deception. Moreover, certain patterns of family communication may socialize teens to focus on standards exogenous to the family that, in turn, lead to a greater propensity to deceive. Susceptibility to normative peer influence, the extent of television viewing, and teen materialism may partially mediate the effects of the family communication environment. Except for television viewing, the authors’ predictions are generally supported by the data collected from a sample of high school students. Terry Bristol (terry.bristol@asu.edu; Ph.D., Virginia Polytechnic Institute and State University) is an assistant professor of marketing in the School of Global Management and Leadership at Arizona State University. His research interests are in the areas of consumer socialization, social influence, and brand and promotions management. His work has been published in theJournal of Retailing, the Journal of Advertising, the Journal of Consumer Psychology, theJournal of Consumer Affairs, and elsewhere. Tamara F. Mangleburg (tmangle@fau.edu; Ph.D., Virginia Polytechnic Institute and State University) is an associate professor of marketing in the College of Business at Florida Atlantic University. Her research interests include consumer socialization, family decision-making, and self-concept effects on persuasion. She has published work in these areas in theJournal of the Academy of Marketing Science, the Journal of Retailing, theJournal of Advertising, the Journal of Business Research, and in other outlets.     

The effects of unification: markets,policy, and cyclical convergence in Italy, 1861–1913

This paper uses time-series evidence on construction movements to examine the convergence of regional business cycles in the decades that followed Italy’s unification. The aggregate series point to cyclical convergence, but a sector-level analysis traces this result to the decline in differentiated “regional-policy” shocks. The regional market cycles diverged, as regions specialized in different sectors of production; market-cycle convergence is observed only within the “industrial triangle,” the regions of which also developed different specializations. This suggests that the balance between growing interdependence and growing differentiation is not general, as the current literature presumes, but specialization-specific.     

Creating commitment and loyalty behavior among retailers: what are the roles of service quality and satisfaction?

As a result of weakening brand image/loyalty, little differentiation, and intense price competition, manufacturers are now increasingly pressed to ensure retailers’ shelf space and/or salesperson attention. This research contributes to the literature by empirically examining an underrepresented body of literature in the B2B context—retailer loyalty. Specifically, this study fills a gap by investigating retailer evaluations of the technical and relational dimensions of a manufacturer’s order fulfillment service quality as predictors of retailer satisfaction, affective versus calculative commitment, and ultimately loyalty behavior. Results suggest that both technical and relational order fulfillment service quality influence satisfaction, which in turn positively affects both affective and calculative commitment. By separating the affective and calculative dimensions, loyalty behavior is associated directly only with affective commitment. Further examination reveals that relational order fulfillment service quality has a direct impact on affective commitment. When the sample was split based on “share of wallet,” results suggest that satisfaction impacts both affective and calculative commitment, regardless of “share of wallet.” For “high share” retailers, the positive relationship of calculative to affective commitment creates an indirect route (through affective commitment) by which calculative commitment affects behavioral loyalty.     

Including the effects of prior and recent contact effort in a customer scoring model for database marketing

Database marketers often use a scoring model to predict the likely value of contacting customers based on their purchase histories and demographics. However, when purchase history has been a partial result of the firm’s own contacting efforts, these contacts should also be accounted for in the scoring model. The current work extends the existing literature to account for the firm’s contacts by focusing on each customer’s most recent purchase. Contacts prior to that purchase are designated “prior contacts” and those after that purchase “recent contacts.” A new latent variables formulation of the customer’s propensity to respond is used to predict the likelihood and time of response as well as the relationship to the independent variables. The methodology also addresses the statistical problems of “selection bias” and “endogeneity,” which have been largely ignored in most customer scoring models. An application to the database of a charitable organization confirms that, in this case: (1) the effect of the firm’s customer contact efforts is associated with a stronger propensity to respond than is the case for the included demographics; (2) the firm’s “recent contact” efforts are associated with larger returns in customers’ propensity to respond than the “prior contact” efforts; and (3) the “recent contact” efforts are associated with an at-first increasing but then diminishing propensity to respond up to a point beyond which actual decreasing returns are observed with further contacts. Clearly, too much contacting can alienate would-be donors. The proposed model is general enough to calibrate such impacts in other database marketing applications where the relative effects might be different.

A comment on patterns of store choice and customer gain/loss analysis

We explore patterns of store choice and shopping behavior in the domain of women’s specialty clothing stores. Based on previous research, four exploratory research propositions are examined to note patterns in customer loyalty to their “favorite” stores and the incidence of shopping at competing stores. We conduct a vulnerability analysis to note which stores have customer segments most vulnerable to marketing efforts of competitors. Our findings suggest customers in the women’s specialty clothing market do not exhibit 100 percent loyalty to the favored retailer, and the share of trips to the favored retailer is generally constant among stores. The primary implications to retail managers are that they should be most concerned withincreasing the customer franchise base (those naming the retailer’s store as “favorite”) rather than focusing on increasing thefrequency of shopping trips among those customers that comprise the current franchise base.     

A simple procedure for finding a composite of several multidimensional scaling solutions

One of the better known procedures for finding a representative composite of several different MDS solutions is based on Carroll’s generalized canonical correlation model (Carroll 1968). However, the program for implementing the fitting of this model has not received wide distribution. The present paper provides a simple computational method for implementing Carroll’s approach and shows its relationship to ordinary principal components analysis. In addition, we provide an algorithm for computing the parameters of Carroll’xs model in the presence of missing data. Each method is illustrated with data sets drawn from a marketing research study.     

Unofficial FTC judgments of deception Vs. Adults' and students' judgments of deception

Ninety-six adults and one hundred seventy-eight students rated five experimental television advertisements for their deceptiveness. These ratings were then compared with the ratings of four attorneys, active in the evaluation of actual advertisements at the Federal Trade Commission. Both students and adults did not agree with the unofficial deception ratings made by the attorneys at the Federal Trade Commission. Although there was major disagreement between the subject groups and the FTC, it was difficult to determine whether subjects had been literally deceived by the ads or whether true disagreement existed.     

Using the analytic hierarchy process to assess gender differences in the evaluation of microcomputer vendors

The influence of the decision maker’s sex on the choice process in specific business buying situations is not well-established. Within an organizational buying context, this study compares men’s and women’s evaluations of decision criteria and examines whether they form different preferences in the selection of microcomputer vendors. Expert Choice, a microcomputer software package for performing the analytic hierarchy process methodology, served as the decision support tool to structure the decision process, to collect the data, to derive the importance weights for the decision criteria, and to synthesize them with the vendor preferences. The results of a multivariate analysis of the experimental data indicate that men and women do not differ in weighting the importance of decision criteria nor in forming preferences for alternative PC vendors. Instead, the type of organization employing the subjects and the influence of their boss’s decision rules were found to significantly affect the vendor evaluation process.     

Theory and external validity

Winer (1999 [this issue]) proposes that external validity concerns require more attention in theoretical research. The author argues that one cannot “enhance” external validity by choosing one method over another. External validity can only be “assessed” by better understanding how the focal variables in one’s theory interact with moderator variables that are seen as irrelevant early in a research stream. Findings from single real-world settings and specific sets of “real” people are no more likely to generalize than are findings from single laboratory settings with student subjects. Both the laboratory and real world vary in background facets of subject characteristics, setting, context, relevant “history,” and time. It is only when these facets vary and we see how they interact that understanding of external validity is enhanced. For this to happen, the observable “background” factors have to be conceptualized in terms of more general constructs and incorporated as moderators into the researcher’s theory. Enriched theory—not method—confers confidence in our understanding of whether effects will be robust or highly contingent. To map this knowledge to some specific substantive system requires an added step of understanding the mapping from observables in that system onto theoretical constructs. The author proposes “friendly amendments” to Winer’s three proposals to pursue a better understanding of external validity through theory. John G. Lynch, Jr. is the Hanes Corporation Foundation Professor of Business Administration at Duke University. His research and teaching interests are in consumer behavior, electronic commerce, and validity issues in research methodology. He a past president of the Association for Consumer Research, past associate editor for theJournal of Consumer Research, and past associate editor and coeditor of theJournal of Consumer Psychology. He has been the recipient of the MSI/Paul Root Award atJournal of Marketing, the William O’Dell Award atJournal of Marketing Research, and has twice been the recipient of theJournal of Consumer Research best article award.     

Customer relationship management and firm performance: the mediating role of business strategy

As managers and academics increasingly raise issues about the real value of CRM, the authors question its direct and unconditional performance effect. The study advances research on CRM by investigating the role of critical mechanisms underlying the CRM-performance link. Drawing from the sources → positions → performance framework, the authors build a research model in which two strategic postures of firms—differentiation and cost leadership—mediate the effect of CRM on firm performance. This investigation also contributes to the literature by drawing attention to the differential impact of CRM in diverse industry environments. The study analyzes data from in-depth field interviews and a large-scale, cross-industry survey, and results reveal that CRM does not affect firm performance directly. Rather, the CRM-performance link is fully mediated by differentiation and cost leadership. In addition, CRM’s impact on differentiation is greater when industry commoditization is high.     

Resistance to technological innovations: An examination of the role of self-efficacy and performance satisfaction

Technological innovation is seen as the key to survival and success for many firms. Whether intended for internal use or for customers, adoption decisions must consider the response of the final user to such technological alternatives. This paper argues for greater attention to the factors which cause individual resistance to technological innovations. The results of two studies are reported which examined the effects of self-efficacy (Bandura 1977) and performance satisfaction on consumers’ response to technological changes. Results indicate that a person’s perceived ability to use a product successfully affects their evaluative and behavioral response to the product. In addition, the level of satisfaction experienced with an existing behavior increases resistance to and reduces likelihood of adopting an alternative.     

Developing a deeper understanding of post-purchase perceived risk and behavioral intentions in a service setting

Researchers and service providers have realized that a disproportionate share of a firm’s sales and profits come from a relatively small number of loyal customers that repeatedly purchase the firm’s services. In many service settings, such as health care, repeated interactions between the service provider and the client are necessary for service delivery. While service quality is certainly important, it is also important that customers’ perceptions of perceived risk are taken into account and that customers perceive a degree of control over the services provided. We develop a conceptual model of linkages between the physical environment of the service, perceived control over the service and service quality and, demonstrate through two empirical studies, how these factors affect perceived risk and post-purchase behavioral intentions. Both studies were conducted in health care settings. In the first study, we collected data using a mail survey of 192 patients after their treatment from a regional hospital. In the second study, survey data were collected from 101 patients of a specialized clinic providing alternative therapies within a major hospital. Our results provide confirmation that the favorable physical environment of the service setting enhances perceived control and perceptions of service quality. Moreover, perceived control and perceived quality of the service provider reduces post-purchase perceived risk. Finally, post-purchase perceived risk reduces behavioral intentions, while perceived quality of the service provider enhances behavioral intentions. Authors contributed equally to the research.     

Linking cause-related marketing to sales force responses and performance in a direct selling context

The influence of a firm’s cause-related marketing efforts on sales representative attitudes and behavioral performance is investigated. Results from a field study indicate that the influence of a representative’s construed customer attitude toward the cause campaign on selling behavioral performance is mediated through cognitive identification and selling confidence. Further, the influence of construed customer attitude toward the campaign on selling confidence is moderated by cognitive identification such that the effects are stronger for salespeople with lower levels of identification with the company. The authors discuss the implications of the research and offer directions for further research.

A confirmatory investigation of industrial buyer image of the Saleswoman

An intervening variable between ability and sales performance is the receptivity of professional purchasing agents. In this article we examine the extent to which purchasing agents’ perceptions of female sales representatives constitute a barrier to the latter’s sales performance and effectiveness. The present investigation replicates the work of Swan et al. (1984) with two substantive improvements; (1) it is based on a sample representative of purchasing agents throughout the United States, and (2) the study introduces importance ratings for each of the attributes thought to contribute to buyer preference for a salesperson. In addition to replication, the present investigation allows for comparison of changes in purchasing agent’s perception of differences between male and female industrial salespersons during the decade of the 1980s. Results support the earlier study in finding no overt evidence of negative stereotyping of female sales representatives. Directions for future research are also discussed.     

Rethinking marketing: Peter Drucker’s challenge

Just as Peter Drucker pointed out the importance of assessing whether a company’s “theory of business” is relevant, marketers need to consider whether the current “theory of marketing” still fits in a world of rapid change. The author examines how Drucker challenged the theory of business at financial services firm Edward Jones, helping to identify new market opportunities. For example, he urged the company to move into metropolitan areas, which now account for 60 percent of the firm’s business. The article then considers how the field of marketing needs to reexamine its own mental models. Finally, the article considers how Drucker’s seminal insights on marketing, particularly his emphasis on an interdisciplinary approach, might point the way to new approaches.     

A comprehensive model of customer direct and indirect revenge: understanding the effects of perceived greed and customer power

This article develops and tests a comprehensive model of customer revenge that contributes to the literature in three manners. First, we identify the key role played by the customer’s perception of a firm’s greed—that is, an inferred negative motive about a firm’s opportunistic intent—that dangerously energizes customer revenge. Perceived greed is found as the most influential cognition that leads to a customer desire for revenge, even after accounting for well studied cognitions (i.e., fairness and blame) in the service literature. Second, we make a critical distinction between direct and indirect acts of revenge because these sets of behaviors have different repercussions—in “face-to-face” vs. “behind a firm’s back”—that call for different interventions. Third, our extended model specifies the role of customer perceived power in predicting these types of behaviors. We find that power is instrumental—both as main and moderation effects—only in the case of direct acts of revenge (i.e., aggression and vindictive complaining). Power does not influence indirect revenge, however. Our model is tested with two field studies: (1) a study examining online public complaining, and (2) a multi-stage study performed after a service failure.     

Exploring the effectiveness of business gifts: A controlled field experiment

To measure the effectiveness of business gifts, a controlled field experiment was designed to isolate the attitudinal and behavioral intent effects of business gift giving by an actual company and its customers. Customers were randomly assigned to experimental groups, (who received a business card file) and control groups (who received no business gift) according to a Solomon four-group design. Mail questionnaires were utilized to collect data on respondent attitudes toward four product attributes (price, quality, service, and delivery) across three product lines, and on customers’ likelihood to contact the donor company versus the majority of its major competitors., Consistent with the reciprocal intent of business gift giving, the results indicate the ability of business gifts to work in synergy with the other elements of an organization’s marketing communications program.     

New dimensions in unhidden persuasion

Two potent promotional forces have been operating in the marketing environment. One utilizes direct persuasion techniques. The other attempts to obtain a positive consumer response through hidden persuasion. Today’s shoppers, however, are better educated and are less influenced by hidden persuasion methods. Studies indicate that impulse buying has increased and that consumers want to make their “own” buying decisions. Point-of-purchase advertising is one method of meeting today’s environmental needs. Space is limited and the advertiser must be forthright and precise in his persuasive techniques. In spite of the many constraints imposed on point-of-purchase advertising it has proven to be a powerful persuader, because it is the only medium that can employ the full range of perceptual devices which are so vital to the communication process. Lever Brothers Company, Inc.