Why do public policy-makers ignore marketing and consumer research? A case study of policy-making for alcohol advertising

Public policy-makers have been noted to sometimes ignore marketing/consumer research, even when the policy issue clearly pertains to consumption markets. We embark to identify factors that may explain policy-makers’ limited attention to marketing/consumer research, especially in cases related to consumer affairs that may have public health implications. Empirically, we focus on policy-making around the advertising of alcohol products. Having been involved in this policy-making process in Finland, we elucidate the case through an introspective narrative. We find that the factors explaining policy-makers’ limited attention to marketing/consumer research range from the decision-making characteristics of policy-makers, through inconsistent definitions for key terminology, to the fear of over-generalizing certain theories of marketing/consumer research. Regarding the latter, a key issue in the present case was that public policy-makers were unconvinced about the generic marketing theory stating that in mature markets, advertising will not increase the total consumption demand of a product category.     

Marketing mix and customer equity of SPA brands:Cross-cultural perspectives

Globalization has substantially transformed the fashion industry. Firms that conduct innovative marketing campaigns for SPA brands, also known as fast fashion, are operating worldwide. Because SPA brands tend to have short trend cycles, corporate profitability is sensitive to consumers' attitudinal changes. The authors of this study establish a theoretical framework by examining research trends related to customer equity at home and abroad by delving into the current state of global SPA brands, defining customer equity, developing customer equity measurements, and conducting empirical analyses. This study uses structural equation models to analyze corporate marketing activity effects on customer lifetime value through brand attitude. Although earlier studies identify customer equity as driving value equity, brand equity, and relationship equity, the authors introduce social network equity as another driver.     

Positioning of the stakeholders in the interaction project management–project marketing: A case of a coconstructed industrial project

Based on a business‐to‐business (B‐to‐B) case within the automotive industry, this study proposes logics (constructivist and determinist, respectively) of protagonists and highlights the complexity of their dynamics during the successive project's phases. The concept of milieu will emphasize the complex business in which project marketing takes place; notably, it allows better identification of relevant relationships. Our article focuses on this concept of milieu with regard to the interactions between project marketing and project management actors during project phases. In particular, this article underlines the difference and the accommodation between the dynamics of interaction and the dynamics of congruence of marketing and management logics.     

Struggles in organizational attempts to adopt new branding logics: the case of a marketizing university

Recent research underlines that strong branded identities are created through co-creational processes in which multiple stakeholders are actively involved and brand identities are matched with cultural, political, and economic forces in society. However, there is a lack of in-depth research into how organizations attempt to adopt new branding logics. To address this research gap, we conduct a study of a university that is rebranding itself in accordance with a new market-oriented, service-dominant logic. While harmonic value co-creation between the brand and stakeholders is emphasized in an earlier literature, our study shows that attempts to adopt these logics trigger contradictory and adversarial interpretations among stakeholders about the role and identity of the focal actor vis-à-vis their own. We conclude that adopting new branding logics involves struggles and dynamics of power and resistance, which have passed unnoticed in earlier research. Resistance is not only targeted toward the brand's symbolic meanings and conducted by marginal consumer groups to enhance their own identities. Rather, it can also be targeted toward the tangible resource roles that stakeholders are expected to assume vis-à-vis the brand, and conducted by various stakeholder resistors – with the outcome of undermining and shifting the essence of the brand itself.     

Big splash,no waves? Cognitive mechanisms driving incumbent firms’ responses to low‐price market entry strategies

Research Summary: Low‐price market entries, aiming for rapid sales growth, tend to prompt strong competitive reactions. This research explores whether and how firms using low‐price entry strategies can mitigate retaliatory incumbent reactions. An experiment with 656 managers shows that entrants can attenuate the strength of incumbents’ responses by fostering perceptions of high aggressiveness or low commitment. Entrants may be able to accomplish this by adjusting their entry strategy to embed (subtle) cues of aggressiveness and (lack of) commitment. A replication experiment with university students reinforces our overall theoretical argument. However, the results also indicate that the interpretation of cues embedded in the entry strategy may be affected by the experience of incumbent firm managers. Overall, these results clarify the cognitive foundations of competitive responses to market entry. Managerial Summary: What drives incumbents to respond strongly to market entries, and what can the entrant, if anything, do to mitigate those responses? This research offers empirical evidence and theoretical insights for managers faced with these questions by shedding light on the thinking processes preceding competitive responses. The study shows that while managers are motivated to respond strongly to market entries that appear to be highly consequential to their business, these responses may be mitigated if the entrant manages to foster perceptions of high aggressiveness or low commitment to the market. Managers form these perceptions in part on the basis of the entrant’s behavior, creating an opportunity for entrants to adjust their entry strategies in a manner that demotivates strong competitive responses.     

Time delays,competitive interdependence,and firm performance

Research summary: Competitors' experiences of prior interactions shape patterns of rivalry over time. However, mechanisms that influence learning from competitive experience remain largely unexamined. We develop a computational model of dyadic rivalry to examine how time delays in competitors' feedback influence their learning. Time delays are inevitable because the process of executing competitive moves takes time, and the market's responses unfold gradually. We analyze how these lags impact learning and, subsequently, firms' competitive behavior, industry profits, and performance heterogeneity. In line with the extant learning literature, our findings reveal that time delays hinder learning from experience. However, this counterintuitively increases rivals' profits by reducing their investments in costly head‐to‐head competition. Time delays also engender performance heterogeneity by causing rivals' paths of competitive behavior to diverge. Managerial summary: While competitive actions such as new product launches, geographical expansion, and marketing campaigns require up‐front resource commitments, the potential lift in profits takes time to materialize. This time delay, combined with uncertainty surrounding the outcomes of competitive actions, makes it difficult for managers to learn reliably from previous investment decisions. This results in systematic underinvestment in competitive actions. The severity of the underinvestment grows as the time delay between an investment and its positive results increases. Counterintuitively, however, competitors' collective underinvestment increases profit‐making opportunities. In industries with large time delays, companies that do invest in competitive actions are likely to enjoy high returns on investment. It is also likely that rivals' paths of competitive behavior bifurcate. Together, these mechanisms generate large differences in competitors' profits. Copyright © 2016 John Wiley & Sons, Ltd.     

Is more capability always beneficial for firm performance? Market orientation,core business process capabilities and business environment

This study examines the role of capabilities in core marketing-related business processes–product development management (PDM), supply chain management (SCM) and customer relationship management (CRM)–in translating a firm’s market orientation (MO) into firm performance. The study is the first to examine the interplay of all three business process capabilities simultaneously, while investigating how environmental conditions moderate their performance effects. A moderated mediation analysis of 468 product-focused firms finds that PDM and CRM process capabilities play important mediating roles, whereas SCM process capability does not mediate the relationship between MO and performance. However, the relative importance of the capabilities as mediators varies along the degree of environmental turbulence, and under certain conditions, an increase in the level of business process capability may even turn detrimental.     

The interrelationship of stock ownership and customer relationship volume: Case of a Nordic retail bank

Researchers have been increasingly interested in the fact that individuals who own stocks of publicly listed companies may also act as the same companies’ customers, buying their products and services. This article studies the relationship between an individual's stock ownership and his/her customer relationship (purchase/sales) volume. Examining a large sample of customers of a Nordic retail bank, the authors find that the proportion of high-volume customers is significantly greater among stock-owning customers than among non-stock-owning customers. Generally, it is found that there is a positive relationship between a customer's relationship volume and his/her stock ownership.     

Incentive Asymmetries in the Mergers and Acquisitions Process*

abstract This paper focuses on the relationship between incentive asymmetries and some potentially undesirable outcomes along the mergers and acquisitions (M&A) process which could potentially destroy the shareholder value of the merged corporate entity. Incentive asymmetries are seen as belonging to the three categories of ‘risk‐antecedent’, ‘information‐antecedent’ and ‘pure self‐interest antecedent’. We propose that incentive asymmetries are responsible for increases in the number of M&A projects and that they might create a ‘lemons problem’ with M&A candidates. Incentive asymmetries are also suggested to lead to prolonged contract‐writing phases, biased financial evaluations and acquisition price escalation, as well as undermined post‐M&A integration plans. If resolutions to these problems are sought, the use of high‐ and low‐powered incentive schemes will need to reflect risk, information and pure self‐interest.