The past,present, and future of brand research

Marketing Letters - This article discusses the past, present, and future of brand research. We begin by reviewing three historical eras of branding development in the past: the information,...     

Consumer inventory sensitivity and the postpromotion dip

We summarize and critique seven theories that might explain the lack of a postpromotion dip in sales in the weeks following a promotion. We then propose and provide empirical support for a new explanation. We argue that in markets where the consumer category purchase decision is not strongly influenced by inventory levels, the displacement effect of accelerated sales will tend to be distributed fairly uniformly into the future such that clearly defined dips are not observed. We utilize a simulation based on real data to investigate this explanation. The simulation shows that given the degree to which inventory influences the purchase decision, we would not expect to see postpromotion dips, even though promotion influences the purchase decision. However, the simulation shows that if inventory had a greater influence on the purchase decision, we would expect to see postpromotion dips. We conclude with implications for both researchers and managers.     

Channel design,coordination, and performance: Future research directions

The marketing literature has made significant progress toward a better understanding of how firms can effectively design and manage their channels of distribution. However, the complexity of today’s channel systems raises additional issues that remain unaddressed. The purpose of this article is to suggest promising research directions in this domain. We suggest several possible avenues to relate multiple channel design and management to channel-system, channel-relationship, and customer-level outcomes. In particular, we see a great opportunity to integrate multichannel customer management and traditional channel design research. We argue that future research should account for cross-level effects and incorporate variables at more than one relationship level.     

Overcoming the “recency trap” in customer relationship management

Purchase likelihood typically declines as the length of time since the customer’s previous purchase (“recency”) increases. As a result, firms face a “recency trap,” whereby recency increases for customers who do not purchase in a given period, making it even less likely they will purchase in the next period. Eventually the customer is effectively lost to the firm. We develop and illustrate a modeling approach to target a firm’s marketing efforts, keeping in mind the customer’s recency state. This requires an empirical model that predicts purchase likelihood as a function of recency and marketing, and a dynamic optimization that prescribes the most profitable way to target customers. In our application we find that customers’ purchase likelihoods as well as response to marketing depend on recency. These results are used to show that the targeting of email and direct mail should depend on the customer’s recency and that the optimal decision policy enables the average high recency customer, who currently is virtually worthless to the firm, to become profitable.     

Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions

Multichannel customer management is “the design, deployment, and evaluation of channels to enhance customer value through effective customer acquisition, retention, and development” (Neslin, Scott A., D. Grewal, R. Leghorn, V. Shankar, M. L. Teerling, J. S. Thomas, P. C. Verhoef (2006), Challenges and Opportunities in Multichannel Management. Journal of Service Research 9(2) 95–113). Channels typically include the store, the Web, catalog, sales force, third party agency, call center and the like. In recent years, multichannel marketing has grown tremendously and is anticipated to grow even further. While we have developed a good understanding of certain issues such as the relative value of a multichannel customer over a single channel customer, several research and managerial questions still remain. We offer an overview of these emerging issues, present our future outlook, and suggest important avenues for future research.     

The interrelationships between brand and channel choice

We propose a framework for the joint study of the consumer’s decision of where to buy and what to buy. The framework is rooted in utility theory where the utility is for a particular channel/brand combination. The framework contains firm actions, the consumer search process, the choice process, and consumer learning. We develop research questions within each of these areas. We then discuss methodological issues pertaining to the use of experimentation and econometrics. Our framework suggests that brand and channel choices are closely intertwined, and therefore studying them jointly will reveal a deeper understanding of consumer decision making in the modern marketing environment.     

The current and future sales impact of a retail frequency reward program

This research presents an empirical study of the impact of a retail frequency reward program on store sales. We examine both the “points pressure,” or short-term impact, and the “rewarded behavior,” or long-term impact. The points-pressure impact is due to forward-looking customers increasing their purchase levels in order to earn the reward. The rewarded-behavior impact is evidenced as purchases above baseline levels after an individual has received a reward and could result from either behavioral learning reinforcement or positive affect resulting from the reward. We investigate a turkey reward program that awarded free turkeys to shoppers who accumulated the required sales levels during an 8-week period. We find both a points-pressure and rewarded-behavior impact. These effects are statistically significant and managerially relevant in that the program is apparently profitable. The points-pressure impact is especially strong among customers who do not place value on frequent shopper programs that in general deliver immediate price discounts. The key implications are that frequency reward programs of the form, “buy x, then receive xx” can be profitable, are segmentation strategies, and can complement a store's overall frequent shopper program.     

Putting one-to-one marketing to work: Personalization, customization, and choice

The tailoring of a firm’s marketing mix to the individual customer is the essence of one-to-one marketing. In this paper, we distinguish between two forms of one-to-one marketing: personalization and customization. Personalization occurs when the firm decides what marketing mix is suitable for the individual. It is usually based on previously collected customer data. Customization occurs when the customer proactively specifies one or more elements of his or her marketing mix. We summarize key challenges and knowledge gaps in understanding both firm and customer choices in one-to-one markets. We conclude with a summary of research opportunities.