Innovation Cloning: The Introduction and Performance of Private Label Innovation Copycats

A controversial trend in grocery is the practice by retailers to quickly copy innovative national brands (NBs) launched by manufacturers with their own private label (PL). In a sample of 1,100+ NB pioneers launched in The Netherlands between 2005 and 2009, 11.7% faced a PL copycat by at least one of the seven leading grocery retailers. These copycats obtained an impressive 5.8% category share at the retailer in the year after launch, thereby outperforming the NB pioneers they copy (2.1%) as well as non-copycat PLs launched in the same period (4.4%). Using a two-step selection model, we identify what motivates retailers to copy NB innovations, and what factors drive subsequent copycat performance, thereby taking into account retailers’ innovation assortment decisions. As expected, retailers are more likely to copy successful NB innovations, and these copycats indeed perform well in their stores. However, retailers do not only take into account financial considerations. They are especially hesitant to copy heavily promoted NB innovations and those launched by manufacturers with a strong reputation. To enhance copycat performance, retailers should keep prices of the copycat sufficiently below those of the NB pioneer and limit its promotions. Apart from guiding retailers in their copycat decisions, also NB manufacturers can learn from this study how to discourage retailers from imitating their innovations.     

Brand Identification by Product Design: The Impact of Evaluation Mode and Familiarity

Distinctive product design is a cornerstone of sustainable branding. Ideally, consumers will be able to identify brands by product design without seeing any logos. Once companies have established strong associations between product designs and brands in consumers’ minds, they seek protection against imitation as well as consistency in product lines. This research discusses methods for measuring consumers’ abilities to identify brands by product design. Study 1 shows that brand identification depends on the evaluation mode that the identification task evokes. Compared to a task that presents products side by side (comparative mode), participants are more likely to confuse copycats with an original design when they see only one product (noncomparative mode). Study 2 replicates findings of Study 1, demonstrating some robustness of effects across three countries (United States, Spain, Germany) and across three different product categories (beer, smartphones, cars). Study 2 further investigates how familiarity with the product influences brand identification. Although consumers with high (compared to low) familiarity are more likely to accurately identify an original product in a noncomparative evaluation mode, they are also more likely to confuse a copycat with the original product in this mode. Overall, this research extends knowledge about brand identification by product design and provides information brand managers may need for legal decisions in trademark or design patent cases. This research also provides information for brand managers making decisions regarding new product development, for example, product line extensions.     

Looking more or less alike: Determinants of perceived visual similarity between copycat and leading brands

Copycat brands try to gain acceptance from consumers by imitating the trade dress of a leading, incumbent brand, and a crucial question thus is which conditions determine the perceived similarity between a copycat and a leading brand. Two experimental studies, across different product categories and countries, reveal that, as hypothesized, the copycat strategy (copying visual attributes versus themes) and the mindset of the consumer (featural versus relational focus) interact to determine perceived similarity. Consumers in a relational mindset perceive a theme-based copycat to be more similar to a leading brand than consumers in a featural mindset do. These findings have implications for similarity theory and branding practice.     

The moderating impact of perceived globalness on consumers’ purchase intentions for copycats: The pleasure of hurting global brands

Copycats or “me‐too” brands imitate prominent features of market leaders with the intention to benefit from consumers’ positive associations of the imitated brand. However, the imitated market leader can be perceived as being local (=in‐group) or global (=out‐group). Employing social identity theory, Study 1 examined the interaction between copycat strategy and perceived globalness of the brand, showing that consumers have higher purchase intentions for global copycats versus a local counterpart. Study 2 shows that the interacting effect of copycat strategy and perceived globalness is moderated by consumer ethnocentrism. Further, authors demonstrate that a global copycat elicit greater schadenfreude (vs. local brand), which in turn increases consumers’ purchase intentions. Subsequent mediation analysis shows that ethnocentric consumers experience schadenfreude upon encountering copycats of global brands, which in turn increases purchase intention, whereas low ethnocentric consumers show higher purchase intentions for local differentiated brands because they deem a copycat strategy as unacceptable. Finally, Study 3 examines whether the results from Studies 1 and 2 continue to hold for theme copycats.     

Revisiting FSAs and CSAs in Sub-Saharan Africa: Evidence from Ghanaian Firms

Sub-Saharan Africa (SSA) is widely perceived as a region of countries with low technological capabilities, weak complementary assets competing on basic country specific advantages (CSAs) and relying on transferred technology. In this paper we argue against this perception. Integrating the extended concepts of Location Bound (LB) and Non-Location Bound (NLB) Firm Specific Advantages (FSAs) within a “revisited” CSAs/FSAs matrix, we provide evidence that home-market grown LB-FSAs and their transformation to NLB-FSAs are induced by domestic Ghanaian firms’ strategic and export orientation.     

It is different than what I saw online: Negative effects of webrooming on purchase intentions

Webrooming is a two-stage shopping process that begins with examining product options online followed by making a purchase at an offline store. In four experiments, we investigate webrooming effects on product evaluation and purchase intentions. The results suggest that webrooming (vs. non-webrooming) has negative impacts on (1) perceived product performance vis-à-vis expectations and (2) purchase intentions for the products offline. Our moderated-mediation analyses show that webrooming leads to lower perceived product performance, which in turn results in lower purchase intentions, and participants’ Need for Touch (NFT) moderates the negative mediation effect, which is stronger with instrumental NFT than autotelic NFT. However, this moderated-mediation effect is attenuated when products are searched across multiple categories. These findings contribute to the marketing literature by providing a more nuanced understanding of how two-stage, webrooming behavior affects consumers’ cognitions and purchase decisions. They also provide several managerial implications that when controlling for time intervals between the stages, (1) webrooming may adversely affect retailers’ business outcomes when webrooming within a single (e.g., blankets), related (e.g., baby products), and unrelated product categories; (2) thus, creating an integrated online-to-offline cross-channel customer experiences is critical to minimize the negative webrooming effects on final sales.     

山寨营销的动因解析及实践启示

山寨现象非常普遍,山寨营销已成为弱势品牌营销创新的模式之一。首先回顾了弱势品牌的山寨营销的起源、背景、定义和类型,然后从品牌成长路径、消费者行为变迁、市场营销战略、利基营销和长尾理论等多个理论角度阐述弱势品牌开展山寨营销的动因。山寨营销的实践启示是山寨营销是在中国特定的市场环境中产生和发展起来的一种弱势品牌快速和低成本发展的营销方式之一,适合企业在初创时期或实力弱小阶段的品牌建设思路。     

Quality wars in the North

This paper investigates two stylised facts about quality wars between Northern firms and a Southern copycat firm in the North. First, due to low wage, a foreign or Southern copycat firm may enter the market of a developed economy inhabited by a high‐quality firm and a low‐quality domestic copycat. When the products of the high‐quality firm and the foreign copycat are vertically differentiated, the foreign copycat firm may choose an intermediate quality between the quality levels of domestic high‐ and low‐quality firms. In the second scenario where the products of the high‐quality firm and the foreign copycat are horizontally differentiated, the quality of the foreign copycat may surpass that of the domestic high‐quality firm. As the wage gap between the developed and developing countries widens, the foreign copycat is more likely to survive in the markets of developed economies.     

The impact of risk perceptions on the attitude toward multi-channel technologies

ABSTRACT

Several studies show that retailers experience favorable outcomes if consumers use multiple channels. Thus, retailers aim to encourage consumers to do so in a convenient way by offering multi-channel technologies (MCTs). However, not much is known about what affects a positive attitude toward such technologies. Our study investigates how different risk perceptions influence the attitude toward specific MCTs in comparison (check and reserve, click and collect, availability check). Moreover, we examine whether the customer’s general purchase channel preference moderates these effects. Results show that three risk dimensions have significant impacts on the attitude toward MCTs. These effects are generally worst for click and collect, as the negative effects (product quality and data risk) are highest, while the positive effect (product availability risk) is lowest, compared to the other two MCTs. Additionally, we generally find that the more a customer prefers buying via the online channel, the weaker the effects of the risk dimensions on the attitude are. Our findings provide implications on how to improve consumers’ attitudes toward the selected MCTs by influencing their perceptions of different risk dimensions.     

All that glitters is not gold: An investigation into the undesired effects of gamification and how to mitigate them through gamification design

Although gamification has received considerable attention from both researchers and practitioners, its influence on consumers remains ambiguous. This paper proposes that a negative process through decreased attention and a positive process through increased enjoyment explain the effects of gamification on different outcome variables. Study 1 examines these two processes and gamification’s downstream consequences on purchase intention and product information recognition. For purchase intention, the two processes operate in parallel and produce a null effect of gamification. For product information recognition, only the negative process emerges, resulting in a negative effect of gamification. Studies 2 and 3 focus on the negative effect of gamification on product information recognition and show that the negative effect disappears in gamification designs that link the game elements with meaningful information about the product (Study 2) or make consumers aware of the distraction potential of game elements (Study 3). The studies’ findings provide managerial insights into why not all gamification endeavors yield the desired results; they also specify two boundary conditions (i.e., meaningfulness and disclosure) that may help managers avoid potentially detrimental effects of gamification.     

Flag backlash: Why does the presence of the American flag reduce product evaluation?

The American flag is often incorporated into product branding. However, little research has investigated how the use of American flag imagery as a marketing tool for products influences consumer behavior. The present research examines (1) whether the presence of the American flag on a product affects consumers’ evaluation of products and (2) the social cognitive mechanisms underlying the effect of the flag on product‐related judgments. This research provides evidence that the presence of the American flag on a product induces negative product evaluation (Study 1). This negative effect is found to be moderated by participants’ trait level of psychological reactance (Study 2) and mediated by participants’ outrage (Study 3a) and perceived persuasion (Study 3b). When the American flag's link with the product is broken, its negative impact on product evaluation disappears (Study 4).     

A global perspective on combating Shanzhai products: Cross-cultural solutions

To compete on the world market, companies from emerging economies often adapt their innovations to satisfy unique cultural needs. They do so, in part, by copying the products of their western counterparts with a degree of modification. This approach is referred to as Shanzhai, which is a Chinese neologism meaning “copycat.” In this article, we discuss the Shanzhai phenomenon and explain Shanzhai's development stages and threats to original brands across the globe. Then, we examine how cultural factors (i.e., power distance belief, face consciousness, and analytic vs. holistic-thinking style) influence consumers’ perception towards Shanzhai products. We further suggest that original manufacturers should adopt selected strategies to combat Shanzhai threats vis-à-vis three cultural drivers. One driver entails launching full product lines and developing new distribution channels in high power distance belief cultures but promoting brand originality in low power distance belief cultures. A second alternative involves embracing a sustainable and green brand image in low face-sensitive cultures but strengthening brand logo impacts and enhancing intangible brand benefits—such as social value (e.g., brand user profile, prestige)—in high face-sensitive cultures. The third entails communicating integrated product values in holistic-thinking cultures but highlighting an offering's most competitive and unique features in analytic-thinking cultures.     

Naming strategies as a tool for communication: application to movie titles

Abstract

Product naming is regarded as one of the most important communication decisions for firms to deliver information on their new products, particularly in the case of products with unobservable attributes, such as motion pictures, music, books, and games. Despite its importance, there has been little research on “how to name a product” as a communication decision. Hence, we propose a conceptual framework to describe naming decisions as two-stage strategic decisions. The first-stage decision involves “what kind of information to be communicated via product names,” which we call the “information choice” strategy. The second-stage decision is how to express this information through product names, which we call the “expression” strategy. We applied a two-level hierarchical Bayesian model to a data set consisting of opening weekend box-office sales, names, and release dates for 393 movies released in seven countries. Our empirical study provides useful findings on movie naming. First, the information choice for movie titles significantly impacts movies’ viewership. Second, the effects of “what to choose” depend on “how to express”. Third, significant interaction effects occur between information choice strategies and product characteristics, which implies that naming strategies depend on the product’s characteristics. One particularly noteworthy finding in this study is that although it is common sense to avoid negative wording in product names in most industries, negative content in movie titles positively impacts box-office sales.     

The impact of influencer motives and commonness perceptions on follower reactions toward incentivized reviews

Brands often incentivize influencers to review their products. However, such incentivized product reviews may reflect negatively on the influencers’ credibility and authenticity, especially if the reviews are positive. Given the more personal nature of influencer-crafted reviews than other product review formats, we posit that the motives to accept incentives—disclosed by the influencer—determine followers’ reactions to incentivized reviews. In one survey, three experiments, and one field study, we contribute to prior research by showing that intrinsic incentivization acceptance motives can mitigate the negative effects of positive incentivized reviews on credibility and, ultimately, revisit intention and behavior. Moreover, we extend past work by demonstrating that influencer type (review vs. lifestyle) determines followers’ perceptions of influencer authenticity, feelings of betrayal, word of mouth, and revisit intention in reaction to an incentivized review. Specifically, we find that review influencer followers’ reactions are determined by their perceptions of incentivized review commonness, such that motives matter more if incentivization is less common, while motives matter less if incentivized review are perceived to be more common. By contrast, we show that lifestyle influencer followers’ reactions are driven by the communicated incentivization acceptance motives, regardless of the perceived commonness of incentivized reviews.     

The Effect of Word of Mouth on Consumers’ Attitudes Toward Products and Their Purchase Probability

The purpose of this study is to investigate the effects of word of mouth on consumers’ attitudes toward the product and its purchase probability. Furthermore, we examine the moderating influence of susceptibility to interpersonal influence, which is a personal characteristic of the receiver of word of mouth information. A quasi experiment was conducted, in which subjects were asked to evaluate a product, while being subjected to positive or negative word of mouth. Our results indicate that negative word of mouth has an impact on consumers’ attitudes and purchase probability, while the influence of positive word of mouth was not significant. Interestingly, susceptibility to interpersonal influence does not play a moderating role. While the experimental design with an unknown word of mouth source and fictitious brand allowed the comparison of results for the positive, negative, and control group, such conditions do not correspond to an actual market setting.     

Chirping birds and barking dogs: The interactive effect of ambient sensory cue source and valence on consumers’ choice of natural products

A longstanding assumption underlying retail atmospherics is that positive sensations are inherently more advantageous to sales than negative ones. Using an approach-avoidance motivation framework, we challenge this assumption and highlight situations where unpleasant sensations may be beneficial to both consumers and businesses. In two studies with consequential decisions involving natural and conventional/processed products, we demonstrate an interactive effect of ambient sensory cue source and valence on product choices. We find evidence for this effect across auditory and olfactory sensory modalities. We further demonstrate that this effect is mediated by accessibility of natural (vs. non-natural) concepts and that it occurs primarily among individuals who are intrinsically motivated to consume natural products. Taken together, these results support the hypothesis that ambient sensory cues may have a strong impact on consumers’ product choices. Our findings extend prior work on ambient sensations within retail environments and highlight the role of affect-laden sensations, particularly negative ones – an area that has received very little attention in the literature.     

How online reviews and coupons affect sales and pricing: An empirical study based on e-commerce platform

With rapid economic growth largely fueled by digital technologies, online reviews are among the new wave of technologies that still make a significant contribution to this new digital economy. However, there is scarce academic research in promoting or responding online reviews using reduction coupons with threshold issued by sellers and pricing decisions. We employ a three-stage least squares (3SLS) model to estimate the effects of online reviews and coupons on online product sales and price. We also extend our research using the data of two product categories. Our results mainly include: (1) Negative impact of negative online reviews on sales is moderated by price, and consumers are more tolerant of negative reviews of high-priced products. (2) Consumers' perceived usefulness of online coupons helps promote more sales and weaken the relationship between negative reviews and sales. (3) Positive online reviews weaken the negative relationship between online negative reviews and the price of product. (4) Consumers’ increased perceived usefulness of online coupons will encourage sellers to set a higher price and weaken the negative relationship between negative reviews and the price of product. (5) Compared with the search product, sellers regard negative reviews from the product with experience attributes as less helpful and apply less effective coupon promotion to response to negative reviews. Our study clarifies the interaction between online reviews and online coupons on e-commerce platforms under the operation scenario. We also provide empirical support for accurate promotion and higher sales revenue through reasonable pricing decisions and specified reduction coupons.     

Tariff evasion in global trade data

ABSTRACT

We find evidence of pervasive tariff evasion in the global data on trade from 1988 to 2015. Using over 35 million observations of data on import and export flows at the HS6 product category level, we find evidence of substantial underreporting of imports relative to export data on average and particularly when tariffs on product categories are high. These effects are stronger in more corrupt destination countries, as measured by the World Bank's Worldwide Governance Indicators [World Bank. 2016. Worldwide Governance Indicators. September 25, 2016]. In addition, evidence of tariff evasion increases significantly in economic downturns. We document these patterns in the global data and explore the welfare effects of this evasion by (1) putting a lower bound on the extent to which there are revenue losses from tariff evasion, and by (2) estimating the effects of corruption as measured by this indicator on global trade in a simple gravity model. We estimate that in total, revenue losses from tariff evasion are currently likely to exceed 400 to 670 million USD globally per year, and find that the effects of corruption on trade flows are ambiguous overall but change from weakly positive (‘grease the wheels’) to largely negative over the years in our sample.     

Diversification patterns and survival as firms mature

We focus on the relationship between age and diversification patterns of German machine tool manufacturers in the post-war era. We distinguish between ‘minor diversification’ (adding a new product variation within a familiar submarket) and ‘major diversification’ (expanding the product portfolio into new submarkets). Our analysis reveals four main insights. First, we observe that firms have lower diversification rates as they grow older, and that eventually diversification rates even turn negative for old firms on average (where negative diversification corresponds to exit from certain product lines). Second, we find that product portfolios of larger firms tend to be more diversified. Third, with respect to consecutive diversification activities, quantile autoregression plots show that firms experiencing diversification in one period are unlikely to repeat this behavior in the following year. Fourth, survival estimations reveal that diversification activities reduce the risk of exit in general and to a varying degree at different ages. These results are interpreted using Penrosean growth theory.     

Let them talk! Managing primary and extended online brand communities for success

It is clear that customer-to-customer contact through informal social networking and more formal company-sponsored platforms, such as discussion forums, is an increasingly integral element in building brand communities. There are many benefits to this interaction, such as nurturing brand champions and ‘super users,’ and reduced service costs through customer-to-customer solutions for product problems. However, there are also hazards inherent in these largely unregulated communities, such as the potential damage of widely spread negative information, which may be based on fact or on malicious intent. Herein, we summarize the results of several years of research examining these communities in an attempt to understand why they succeed, what benefits can be extracted from them, and—in particular—how negative information emerging in these environments can be strategically managed. Based on a series of quantitative and qualitative studies, we identified several key drivers of online brand community success (i.e., intervention, conversion, value creation, and harvesting) and the different combinations of community players who must collaborate to achieve such success. Delving more deeply into the issue of negative information management, we find that the topic being discussed (i.e., core versus augmented product) and the validity of the claim greatly influence a firm's appropriate strategic response. Throughout this article, we offer managerial guidance on the most effective ways to develop primary brand communities that encourage loyalty, purchases, and positive word of mouth.