Does online relationship marketing enhance customer retention and cross-buying?

One characteristic of online consumer behavior is the low cost of searching for alternatives. Therefore, customer loyalty is more difficult to achieve in the online context than in the offline one. Although studies have discussed the effectiveness of relationship marketing, nearly all studies examining such constructs have been in the context of ‘offline’ consumer behavior. With regard to the ‘online’ context, the integration of Internet technology with the customer loyalty concept is rarely discussed in the relationship marketing literature. Furthermore, empirical research that integrates the actual purchase behavior of customer retention and cross-buying is relatively sparse. In response to this, the current study develops and empirically tests a model that examines the relations among relationship-bonding tactics, perceived relationship investment, perceived relationship quality, customer loyalty, customer retention, and cross-buying. Using survey data from 766 online customers of a securities corporation, the results demonstrate the effectiveness of relationship marketing as it positively influences online customers' perception, then their loyalty, and ultimately, their actual purchase behavior.     

Does high supply chain integration enhance customer response speed?

The capability of customer response speed is commonly employed by firms that wish to strengthen their relationship with customers in order to maintain a high level of service in a hypercompetitive environment of rapidly changing technology. Improved customer response speed also helps manufacturers respond more rapidly to satisfy customer needs. However, does high level of supply chain integration with customers have positive impact on customer response speed? This study proposes a conceptual model to examine antecedents to better firm performance, with customer response speed as a mediator. The conceptual model was empirically tested using data collected from 809 manufacturing companies in the Greater China Region. The results show that the nature of the relationship between customer integration and customer response speed may vary substantially from one area to another. Also, customer response speed mediates between customer integration and firm performance in China and Taiwan.     

Does customer satisfaction influence the relationship between earnings and firm value?

The aim of this study is to examine the influence of customer satisfaction on the stock market’s response to current earnings. The study extends prior research on the value relevance of customer satisfaction to include the direct and indirect effects of customer satisfaction on firm value. Utilizing an earning-based valuation model and data from the American Customer Satisfaction Index (ACSI) and COMPUSTAT, the study shows that both satisfaction and the interaction between earnings and satisfaction have a significant influence on firm value. Stock market participants are sensitive to changes in customer satisfaction, and this is reflected in the market’s responsiveness to earnings performance.     

Do retail alliances enhance customer experience? Examining the relationship between alliance value and customer satisfaction with the alliance

Abstract

This article evaluates the role of customers in the alliance equation. Using a combination of survey and experimental data, we investigate the role of value offered by retail alliances on customer satisfaction with the alliance. We find that customer value plays a mediating role in the relationship between customer experience with the alliance and customer satisfaction with the alliance. Results also show that the nature of this relationship differs based on the type of value offered by the alliance. Cognitive processing plays a more significant role when the alliance is of a functional nature, while affect plays a more significant role when the retail alliance is of a hedonic nature.     

Does advertising grow markets?

Many observers believe advertising increases market size (with the implication that fewer people would smoke or drink alcohol or buy cars if there were no advertising for those products), and that it works by creating desires. This paper examines the historical evidence and recent case histories of successful marketing campaigns from the UK’s IPA Effectiveness Awards. It turns out that very few advertisers have tried to increase the size of their market or claim to have done so. In the few cases that describe an increase in market size, we see consumers switching from one type of product to another, without increasing their total category consumption. No case claims to have created a new desire. The inference is that banning or restricting advertising may be an ineffective instrument of social policy.     

Do customer participation and cognitive ability influence satisfaction?

Under some circumstances, increased customer participation can enhance customer satisfaction. However, the precise mechanism by which participation might increase satisfaction has not been explored in the literature. This paper considers whether a customer’s cognitive ability might affect the relationship between participation and satisfaction. A causal model has been developed to examine the potential interactive effects of participation and cognitive ability on satisfaction, and a simple quantitative model has been proposed to simulate these effects. The results of both a numerical simulation analysis and a quantitative analysis of case study data indicate a significant main effect of cognitive ability on satisfaction. Additionally, an interactive effect has been observed, whereby higher cognitive ability results in higher satisfaction, given a minimum degree of customer participation in the service. Among this study’s implications is that customers with different cognitive abilities should have different degrees of participation that act to maximize their satisfaction.     

How does the learning climate affect customer satisfaction?

This study investigates the role of the learning climate in the effective management of salespersons' behaviour in service encounters. This paper reports the development and testing of a two-level model in which salespersons' perceptions of the learning climate are related to their adaptive selling behaviour and their adaptive selling behaviour is, in turn, related to customers' evaluation of the salespersons' knowledge of customers and customer satisfaction. A total of 417 service encounters involving 88 bank consultants were analysed using hierarchical linear modelling, with results that support most of the proposed model. More specifically, learning climate was positively related to adaptive selling behaviour, and adaptive selling behaviour was directly related to customer satisfaction. In addition, adaptive selling behaviour was associated with customer satisfaction through customers' perception of the salesperson's knowledge. Both theoretical and practical implications are discussed.     

Does gay-themed advertising haunt your brand?

This study is designed to investigate the effect of gay-themed advertising as well as consumers’ gender, tolerance towards homosexuality (low vs high tolerance) and consumers’ brand commitment (low vs high commitment) on attitude towards ad and attitude towards brand. The study result suggests that people exposed to non-gay-themed ads had more positive attitudes towards the brand than did people exposed to gay-themed ads. The study findings suggest that ads featuring homosexual imagery could lead to negative brand evaluation. The study finds that heterosexual males exposed to such ads had less favourable attitudes towards the advertising and brand as well. The study finds that subjects with high tolerance towards homosexuality have more positive attitudes towards the ad and brand, and have higher purchase intention than do subjects with low tolerance. Furthermore, the results suggest that people with high brand commitment had more favourable attitudes towards ad and brand. Practical and theoretical implications are discussed.     

Why offer lower prices to past customers? Inducing favorable social price comparisons to enhance customer retention

Price discrimination policies vary widely across companies. Some firms offer new customers the lowest price; others give preferential prices to their past customers. We contribute to the literature on price discrimination in behavior-based pricing by exploring how customers’ social price comparisons, i.e., comparing one’s price to that received by similar peers, impact the optimal structure of price discrimination. Social price comparisons have a negative (positive) impact on customers’ transaction utility if the price charged to past customers is higher (lower) than a new customer’s price. Using an analytical model with vertically differentiated firms, we show that a firm with relatively large market share will reward its past customers with relatively low prices when social price comparisons have a sufficiently large impact on utility. Furthermore, we find that social price comparisons lead to a relaxation of the price competition for new customers. Thus, both firms can earn higher profits when such comparisons are made than when they are absent. We also examine how other factors, such as horizontal competition and strategic customers, interact with social price comparison concerns to impact pricing strategies. Finally, we show how pricing behavior differs when price comparisons are based on historic reference prices rather than on peers’ prices.     

Investment in online advertising and return on sales: Does it pay to outsource the services to an advertising agency?

Abstract

The effect of investing in online advertising on a firm’s financial outcomes can depend on whether or not the development and implementation of advertising campaigns are managed by advertising agencies. Agencies may have experienced professionals or workload to perform these jobs, but the costs are greater. This paper aims to investigate the effects of investments in digital marketing on the financial outcome of a company’s services, comparing whether or not it is outsourced to advertising agencies. The secondary data relates to services advertised and marketed by a firm. We tested the possible moderating effect of outsourcing the service in the relationship between investment in online advertising (Google and Facebook) and return on sales (profit margin), by controlling the effect of covariates. Through four regression analyses, the results showed that outsourcing the service moderates the relationship. Specifically, the higher the amount of advertising investment, the more it pays to outsource the service to an advertising agency in order to generate greater profit margin. But with a low investment value, it does not pay to outsource. This study helps to identify situations in which it pays to outsource digital marketing services to an advertising agency.     

Effects of outdoor advertising: Does location matter?

The growth and success of outdoor advertising is in large part due to the medium's ability to reach an increasingly elusive and mobile consumer. However, this success has come with a price. Public pressure and regulation have begun to eliminate or curtail many outdoor advertising locations, leading practitioners to question the effectiveness of the remaining outdoor advertising sites. Using associative learning techniques, these studies investigate what effect, if any, the environment in which outdoor advertising appears has on the attitudes, beliefs, and purchase intent of the advertised brand. The results of four experiments presented here suggest that the background environment does not impact advertising effectiveness, and practitioner concern of such may be unfounded. © 2011 Wiley Periodicals, Inc.     

Does emotional labor moderate customer participation and buying?

Two studies examined whether employees’ emotional labor as perceived by customers, moderates the relationship between customers’ participation and money spent. In Study I, 30 in-depth interviews were conducted with customers to examine participation during shopping as well as customers’ awareness of their service employees’ behaviors. The interviews revealed two types of customer participation: emotional engagement and physical effort. Based on Study I, Study II investigated 114 customers, and the moderating role of perceived employees’ emotional labor on the relationships between customer participation and spending money. Even when customers were highly involved in the purchasing process, they spent less money when they observed employee inauthenticity as manifested in Surface Acting. However, Deep Acting positively moderated the relationship between customer participation and spending money. These findings help shed light on the circumstances in which customer participation is strengthened (leading to greater spending) or weakened.     

Does poor fit always lead to negative evaluations? Extension advertising and perceived brand quality

This article investigates the moderating roles of advertising strategy (relational vs. elaborational) and perceived parent brand quality on the influence that parent brand–extension fit exerts on consumer evaluations of both extensions and the parent brand. Two studies manipulate fit in terms of either brand concept consistency or product feature similarity. Lower fit results in negative consumer responses, yet an elaborational advertising strategy mitigates the negative effects of lower fit on extension evaluations. This mitigating effect is stronger for high quality than for average quality brands. The results also indicate extension feedback effects for the parent brand, suggesting that elaborational advertising strategies may reduce the impact of fit on parent brand feedback effects. This latter link is not moderated by parent brand quality.     

Does a companion always enhance the shopping experience?

Shopping is inherently a social experience. Extant research has shown that shopping with someone enhances the overall shopping experience. Interestingly, little research qualifies the shopping companion effect. Here, we take into account just who the other person is as well as the level of identification that a shopper has with the shopping environment (high vs. low identification). This study shows limits to the classical effects (shopping with somebody is better) because the improved reactions when shopping with a family member are evident only when the consumer has a low level of identification. However, when the consumer identifies highly with a shopping environment, s/he finds more enjoyment and value shopping alone than with a family member. The results are consistent with theory suggesting consumers will act to protect a preferred experience.     

Does managing customer accounts receivable impact customer relationships,and sales performance? An empirical investigation

The impact of accounts receivables on the performance of salespersons is largely ignored in sales literature. However, in many sales contexts, managing customers' accounts receivables is directly managed by the salespeople, and therefore substantially impacts their sales performance. Towards such sales contexts, in this empirical study, we study the effect of customer account receivables and salespersons' customer orientation on their relationship orientation and customer-related performance. We further analyse the direct impact of relationship orientation on customer-related performance. Using survey-based data from 224 salespersons based out of India, we empirically test the proposed model using partial least squares structural equation modelling. Our findings suggest that accounts receivables from customers and salespersons ‘customer orientation strongly impact relationship building and also improves customer-related performance. The salespersons’ relationship orientation also partially mediates the relationship between customer account receivables and customer-related performance. Therefore, this study provides much-required evidence to establish the salience of salesforce appropriately managing customers' account receivables so that its impact on their sales performance customer relationships are not adversely affected.     

Does advertising indicate product quality? Evidence from prelaunch and postlaunch advertising in the movie industry

Literature on the informative role of advertising indicates that advertising quantity can serve as an indicator of product quality. As product life cycles grow shorter, firms in many industries spend significant amounts on advertising during the prelaunch period to create large initial demand. Thus, the role of prelaunch advertising may differ from that of postlaunch advertising, and a proper understanding of these differences is important. This study provides an empirical investigation of whether advertising is a reliable indicator of quality before and after product launches, using the data from the movie industry. Analyses of 1078 movies released during 2003–2011 show that postlaunch advertising is a reliable quality indicator and increases revenues, whereas prelaunch advertising is not a reliable quality indicator, even if it leads to higher revenues.     

Disparate satisfaction scores? Consider your customer’s country-of-origin: a case study

Although post-transaction surveys (i.e. trailer calls) allow service organizations to better understand their customers, these surveys inherently assume that all customers have the same service expectations of the organization’s service quality. This research reveals that telecommunications customers from different countries of origin have different service expectations; thus, post-transaction surveys based on this assumption can be flawed. We conduct in-depth interviews with recent immigrants in Israel, as well as local customers, to evaluate their expectations of their remote (i.e. telephone) service recovery encounters. Interviews included customers from each of the three primary regions from which they originated: Israel (home), former Soviet Union, and Ethiopia. The data show that the organization’s customers have vastly different expectations of how the firm should handle a called-in service failure, which influenced their post-transaction survey scores. Organizations must realize that their customers have varying service expectations due to cultural influences, which in turn affect their post-transaction survey scores.     

Is there really an Asian connection? Professional service quality perceptions and customer satisfaction

Scenarios involving dental services investigate whether Asian cultures are similar enough to allow standardization of service offerings. The authors control and manipulate levels of service quality and performance to yield a 2 × 2 experimental design, with Japanese, Chinese, and Korean subjects (N = 637) selected to test the invariance of the measures. The findings yield significant cultural differences with the Chinese respondents perceiving significantly higher service quality and expressing greater customer satisfaction when performance is high and expressing less customer satisfaction when performance is low than do the Japanese and Korean respondents. Thus, even though all three countries are considered high-context cultures, having their roots in Confucianism, differences in national culture lead to the conclusion that “one size does not fit all” in terms of service offerings.     

Does involvement matter in online shopping satisfaction and trust?

Consumer involvement in online shopping can play a moderating role when explaining Web site effect on satisfaction and trust. This study proposes a set of hypotheses based on the Elaboration Likelihood Model (ELM) of persuasion, a conceptual model that explains the formation of individual attitudes that are prompted by central and peripheral cues. The model proposes the use of central signals when the buyer is highly involved and peripheral signals when the buyer is less involved. Nevertheless, the results of this study would suggest that these relationships are not so clearly defined in the case of online buying, which implies that certain assumptions associated with the ELM need to be revised to take the particularities of the online context into account. © 2011 Wiley Periodicals, Inc.     

Does foreign direct investment really enhance China's regional productivity?

While foreign direct investment (FDI) is widely recognized as one of major driving forces on promoting the regional economic growth in China, its impact on regional productivity is unclear and less systematically investigated. This article investigates the effect of FDI on regional productivity in China. Specifically, we adopt a newly developed measure of total factor productivity (TFP) to deal with the endogenous inputs choice accompanied with various measures of FDI, enabling to provide robust estimates on the TFP effect of FDI. Moreover, we examine the role of absorptive ability on the FDI-TFP nexus and explore the existence of FDI spillover effect on productivity across regions. The potential difference in productivity effect of FDI between coastal and non-coastal regions is also examined. Based on the province-level panel dataset over the period 1997–2006, the various estimates show that the overall productivity effect of FDI is significantly positive, while this effect depends heavily on the host region's absorptive ability. Technological gap is found to associate with a significantly negative coefficient along with the finding that FDI tends to exhibit a higher impact on productivity in coastal regions than their non-coastal counterparts, highlighting a widening income inequality between coastal and non-coastal regions in China.