Integrating service and design: the influences of organizational and communication factors on relative product and service characteristics

The aim of this study is to identify the organizational and communication antecedents, and evaluate the consequences on relative product and service characteristics, of the use of service-sourced information by product designers during new product development. An empirical study of 121 product design managers demonstrates that a firm’s market orientation is improved by a healthy working relationship between product designers and service employees. Such a relationship motivates designers to use service-sourced information disseminated to them, enhancing both product and service characteristics of the new offering. The authors discuss how communication channels and information content affect the information use of product designers. Product designers value written information most. Information use does not relate to the frequency of receiving verbal or electronic information. Information about product ergonomics positively influences product designers’ perceptions of the information, whereas information on product aesthetics negatively influences their perceptions.

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Market-based capabilities and financial performance of firms: insights into marketing’s contribution to firm value

While there is recognition that market-based capabilities contribute to a firm’s financial performance, the exposition is largely conceptual (Srivastava et al. Journal of Marketing 62:2–18, 1998; Journal of Marketing 63:168–179, 1999). Using a resource based view of the firm, the present study proposes that (1) market-based assets and capabilities of a firm impacts (2) performance in three market-facing business processes (new product development, supply-chain and customer management), which in turn, influence (3) the firm’s financial performance. It develops related hypotheses and tests the framework empirically. The study also examines for the first time the interrelationship among the three business processes and their impact on the market value of firms. Further, the study examines the moderating influence of two organizational variables—size and age of the firm. Overall, the major contribution of the study is that it offers a process linkage between capabilities, process performance and financial performance. The results of this research will provide strategic insights to managers on optimal customer management, product development and supply chain strategies.

The market value impact of indirect ties within technology alliances

Researchers have typically studied the relationship between technology alliances and market value from a direct tie or dyadic perspective. Yet any given technology alliance is typically embedded in a network of indirect ties created by the alliance partners’ relationships with other firms. We argue that whether an indirect tie enhances or detracts from the market value a firm creates in a technology alliance depends upon factors related to inter-firm competencies at both an alliance- and partner-level of analysis. Empirical analysis of abnormal stock returns reveals support for the hypothesized contingent relationship between indirect ties and value creation within technology alliances. Theoretically, the paper clarifies opposing perspectives in the literature regarding the performance implications of indirect ties and identifies market value as a hitherto unrecognized effect associated with this type of tie. Managerially, the findings improve marketers’ ability to leverage the complex interactions that occur between technology alliances in a value-creating manner.

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The moderating role of institutional networking in the customer orientation–trust/commitment–performance causal chain in China

This study uncovers the ignored role of institutional environment for marketing strategy and customer relationship management. Hypothesis tests in a sample of Chinese firms find support that channel networking strengthens the customer orientation–customer trust/commitment–firm performance (CTP) causal chain. In addition, the results show that government networking moderates this chain in a non-linear fashion. The CTP linkages are most salient when the firm develops a moderate level, rather than a high or low level of networking ties with government agencies.

An examination of Peter Drucker's work from an institutional perspective: How institutional innovation creates value leadership

This paper uses an institutional perspective to analyze Peter Drucker's contributions to management, marketing and marketing strategy. Drucker recognizes the importance of institutions in society. Further, his work reflects a variety of institutional views from sociology, economics and marketing. Drucker uses a form of comparative institutional analysis for evaluating both management and strategy issues. At the heart of each institutional comparison is the customer and the value created for the customer by the organization. Institutional comparisons help managers understand how the organization can create customers by adjusting its customer value proposition. Drucker influences marketers by focusing on how the organization's values are used to develop the organization's customer value proposition. Further, it is shown that the organization's values and its customer value propositions are manifested in its transaction rules, termed marketing institutions. Based on Drucker's work, a framework for comparing marketing institutions is introduced: the value leadership framework.

The chain from customer satisfaction via word-of-mouth referrals to new customer acquisition

It has often been argued that word-of-mouth (WOM) can contribute significantly to a firm’s success in a variety of ways. Here, we analyze the functional linkage between customer satisfaction, WOM, and new customer acquisition. Using data from two empirical studies we conceptualize and test the direct, non-linear, and moderated relationship between satisfaction and WOM. We further explore the circumstances under which WOM leads to new customer acquisition using a logistic regression model. We do so for two groups (new customers and long-term customers) from the customer base of a large energy provider (n = 688), and for a random sample of B2B customers (n = 416) in the same market. Results indicate that the satisfaction-WOM link is non-linear and is moderated by several customer involvement dimensions. Based on our results, we demonstrate how the satisfaction-WOM-new customer acquisition link can enrich return on quality and satisfaction models. Further, we draw conclusions about how companies can make use of both the satisfaction-WOM and the WOM-new customer acquisition link for better allocating their marketing resources.

Commitment to a friend,a service provider,or a service company—are they distinctions worth making?

In two studies, the authors examine three targets of commitment in service provider–consumer relationships and their effects on customer loyalty. The results indicate that service consumers distinguish between commitment to a service company, commitment to an individual in the role of service employee, and commitment to an individual outside of the role of service employee (e.g., a personal commitment such as a friendship). In addition, these three targets of commitment are hierarchically related and have differential effects on various customer responses. The results have implications for both customer relationship managers and researchers studying such relationships.

Measuring and maximizing customer equity: a critical analysis

Customer equity, the asset value of customers, can be measured using different aggregate- and disaggregate-level approaches. The authors compare how customer equity is measured and maximized under various approaches. We find that, in the disaggregate-level approach, customer lifetime value is maximized by implementing customer-level strategies such as optimal resource allocation, purchase sequence analysis and balancing acquisition and retention spending. At the aggregate-level, improving the drivers of customer equity maximizes customer equity. A comparison of different aggregate approaches shows that, while an emphasis on retention is a common feature across approaches, conceptual differences in terms of accounting for existing customers and prospects, acquisition, and the projection period exist across the different approaches. The authors propose a hybrid approach, which addresses the issues and challenges in existing approaches and helps firms to measure and manage customer equity.

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.

How to get lost customers back?

Most research in the field of customer relationship management has focused on keeping existing customers. However, some companies also systematically address lost customers and try to revive these relationships. This facet of customer relationship management has been largely neglected by academic research. Our study provides a theoretical discussion and an empirical analysis of factors driving the success of relationship revival activities. Drawing on equity theory, we find that the customer’s perceived interactional, procedural, and distributive justice with respect to revival activities positively affect his or her revival-specific satisfaction which in turn, has a strong impact on revival performance. Furthermore, revival performance depends on customer characteristics (variety seeking, involvement, age), and the overall customer satisfaction with the relationship.

See no evil,hear no evil,speak no evil: a study of defensive organizational behavior towards customer complaints

Despite substantial benefits of an effective complaint management for companies, there is ample evidence that many firms do not handle customer complaints appropriately. This paper aims at providing a theoretical explanation for this surprising phenomenon. Drawing on psychological and organizational theory, the authors introduce the concept of defensive organizational behavior towards customer complaints as well as provide a rich conceptualization and operationalization of this phenomenon. Moreover, in an empirical study, they systematically analyze how defensive organizational behavior towards customer complaints is driven by organizational antecedents and, based on a dyadic data set, how it affects customer post-complaint reactions.

The effect of market orientation and its components on innovation consequences: a meta-analysis

While there is a rich body of research on market orientation’s effect on business performance, much little attention has been given to its effect on innovation consequences. This is the first meta-analytic effort to study the independent effects of market orientation components (customer orientation, competitor orientation, interfunctional coordination) on innovation consequences. Also, it is the first meta-analysis to study the impact of contextual characteristics on the way market orientation affects innovation consequences. The study finds that market orientation components positively affect innovation consequences but that competitor orientation’s effect depends on a minimum level of customer orientation. The study also suggests that the relationship between market orientation and innovation consequences is stronger in highly competitive environments but weaker in technology turbulent ones. Finally, findings suggest that the relationship is stronger in large firms, service companies, and in countries characterized by high individualism and high power distance national cultures.

How do enhanced and unique features affect new product preference? The moderating role of product familiarity

Companies often introduce products with enhanced or unique features to compete with the dominant brands in the market. This paper examines the moderating role of product familiarity in consumer preferences of products with enhanced or unique features in two experimental studies. Study 1 (208 participants) operationalizes product familiarity at the product category level and Study 2 (168 participants) measures it at the individual level as one’s prior experience with the product. The findings of two experiments show that when consumers are unfamiliar with a product category, they prefer a product with enhanced features to one with unique features. In contrast, when consumers are experienced, they perceive a product with unique features more favorably than an enhanced one. Furthermore, this effect is due to consumer perceived differentiation of and performance uncertainty about new products with enhanced or unique features.

Strategic fit to resources versus NPD execution proficiencies: what are their roles in determining success?

This research examines the roles of strategic ‘fit’ versus execution proficiency in creating superior performance for new products. Specifically, we compare main effects versus moderation effects models of execution proficiency within a resource-based view (RBV) framework. Four new product success dimensions are outcomes. Marketing ‘fit’ and technological ‘fit’ are viewed as resource fit advantages and are antecedents in the model; marketing versus technical execution proficiencies relate to the project’s execution. The results show that the proficiencies-as-moderators model is the better fitting one; marketing but not technical proficiency is the key moderator. The results regarding resource fit advantage show that (1) both marketing fit and technological fit were positively related directly to profitability and to new product advantage; (2) marketing fit had direct positive effects on customer need met; and (3) neither marketing fit nor technological fit predicted speed. Concerning execution proficiencies: (1) technical execution proficiencies led to higher profitability and customer needs met, as well as speed; and (2) marketing execution proficiency was the only construct that led directly to increased success on all four dimensions examined in this research. Overall, support was found for the general premise that both marketing and technological resource fit advantages and marketing and technical execution proficiencies are significant predictors of new product success factors, with marketing proficiencies having additional moderating effects on the relationship of resource fit to performance.

On the importance of matching strategic behavior and target market selection to business strategy in high-tech markets

Business strategy is fundamentally concerned with the actions required to create superior customer value in the firm’s target markets with the ultimate goal of achieving superior performance. Marketing theory suggests that two critical marketing activities required to achieve this end are: (1) the adoption of appropriate strategic behaviors (i.e., customer-oriented, competitor-oriented, technology-oriented) and (2) targeting of the appropriate market segments (i.e., innovators, early adopters, early majority, late majority, laggards). This study builds on prior research which demonstrates that the strategic behavior—firm performance relationship is contingent on the firm’s strategy by examining this relationship in high tech markets and by considering the incremental contribution of appropriate target market selection. Responses from 160 senior marketing managers in high-tech firms reveal strong support for our framework. Thus, this study provides useful guidance to executives and managers in high-tech firms regarding the steps that they should take to increase their probability of success.

Toward a theory of repeat purchase drivers for consumer services

The marketing discipline’s knowledge about the drivers of service customers’ repeat purchase behavior is highly fragmented. This research attempts to overcome that fragmented state of knowledge by making major advances toward a theory of repeat purchase drivers for consumer services. Drawing on means–end theory, the authors develop a hierarchical classification scheme that organizes repeat purchase drivers into an integrative and comprehensive framework. They then identify drivers on the basis of 188 face-to-face laddering interviews in two countries (USA and Germany) and assess the drivers’ importance and interrelations through a national probability sample survey of 618 service customers. In addition to presenting an exhaustive and coherent set of hierarchical repeat-purchase drivers, the authors provide theoretical explanations for how and why drivers relate to one another and to repeat purchase behavior. This research also tests the boundary conditions of the proposed framework by accounting for different service types. In addition to its theoretical contribution, the framework provides companies with specific information about how to manage long-term customer relationships successfully.

Spontaneous visualization and concept evaluation

This paper proposes that customers often respond to brand extension concepts by visualizing the product. We call this process spontaneous visualization and suggest that it precedes concept evaluations. In two studies, we show that spontaneous visualization is enhanced by the fit between the parent brand and the extension category and by the ease with which the product category can be imagined. The appeal of the visualized image in turn determines whether visualization enhances or decreases concept evaluations. In addition, we find a stronger link between product evaluations and delayed choice when evaluations are based on visualization; evaluations based on visualization hence appear to be more “valid” in the sense of predicting subsequent behavior. Implications of these findings and ideas for future research are discussed.

Preannouncing pioneering versus follower products: what should the message be?

Despite the high practical relevance, prior research does not provide a clear picture whether the effectiveness of new product preannouncements is contingent upon order of entry and whether the message content of preannouncements for pioneering products should be different from those for followers. Drawing on diffusion research, the authors examine how preannouncements that focus on risk reduction and the product’s relative advantage influence the relationship between preannouncement intensity and new product success, taking into account order of entry. A cross-industry study investigating 151 new product launches shows that for pioneers, a message focus aimed at reducing perceived product risk positively influences preannouncement effectiveness. Furthermore, a relative advantage focus negatively affects preannouncement effectiveness and thus is rather counterproductive for pioneers. With regard to early followers, results indicate a positive influence of a risk reduction focus on preannouncement effectiveness. A relative advantage focus, however, is only effective if the product category is already established when the early follower product is launched. Finally, for late followers, only preannouncements which strongly emphasize the relative product advantage lead to a positive effect of preannouncements on new product success.

The effect of superstitious beliefs on performance expectations

We explore superstitious beliefs as a basis of product performance expectations and their impact on initial purchase likelihood and subsequent satisfaction. In doing so, we demonstrate instances when superstition-driven expectations cause consumers to make purchase decisions that run counter to economic rationality. In the first set of studies we find that Taiwanese consumers are relatively more likely to purchase a product with positive superstitious associations based on its “lucky” color, and are more likely to purchase and are willing to pay more money for a product with a smaller but “lucky” number of units contained in the package (e.g., eight tennis balls compared to ten). In contrast, consumers who do not hold such superstitious beliefs adhere to the more rational choice paradigm. Next, we show that the differences in purchase likelihood are driven by superstition-based performance expectations. We further generalize these findings to product satisfaction, and find support for expectation disconfirmation sensitivity as a moderator of the effect.

Organizational antecedents to and consequences of service business orientations in manufacturing companies

Although various manufacturing companies have developed into total solution providers, no research addresses their service orientations. Building on the literature on organizational service climate, this study explores the organizational parameters and service business orientations that explain relative product sales and service volume of manufacturing companies. Following an exploratory study involving in-depth interviews, the authors conducted an empirical survey of 137 companies in The Netherlands, Belgium, and Denmark. The study assesses the effects of organizational parameters on the implementation of service business orientations and validates the important distinction between services in support of the client’s actions (SSC) and services in the support of the product (SSP). The findings demonstrate that services in support of the client’s action leverage relative product sales, while services in support of the product generate service volume. In addition to the main effects, the moderating effects of the organizational parameters are discussed.