Industrial sales people as market actors

We develop the concept of boundaries in the context of sales personnel and their counterparts encountering and negotiating these while they undertake work to shape markets and build relationships. Drawing on a case study from production chemistry, we show that market shaping implies a mutual development of relationships, goods and services exchanged, and boundaries. In particular, we show that while relationships can submerge and obscure parts or dimensions of boundaries to other market actors, normal business activities such as testing new products and adapting products to changes in environmental legislation make visible some material dimensions of the exchange object, which can attract attention from other sellers. Visibility finds an expression as those market objects are exchanged, such that objects can be devices by which other actors join in and position themselves and their objects within markets.     

Unfolding implementation in industrial market segmentation

Market segmentation is an important method of strategic marketing and constitutes a cornerstone of the marketing literature. It has undergone extensive scientific inquiry during the past 50 years. Reporting on an extensive review of the market segmentation literature, the challenging task of implementing industrial market segmentation is discussed and unfolded in this article. Extant literature has identified segmentation implementation as a core challenge for marketers, but also one, which has received limited empirical attention. Future research opportunities are formulated in this article to pave the way towards closing this gap. The extent of implementation coverage is assessed and various notions of implementation are identified. Implementation as the task of converting segmentation plans into action (referred to as execution) is identified as a particularly beneficial focus area for marketing management. Three key elements and challenges connected to execution of market segmentation are identified — organization, motivation, and adaptation.     

Generalized linear interactive model for market segmentation: The air freight market

This study aims to provide a case study that improves the effectiveness of the macro segmentation approach. Generalized linear interactive model is applied to link macro indicators with customer consumption under the assumption of competition. The empirical portion of this study segments the air freight market of Taiwanese high-tech industry. Five segmentation variables are identified and examined using 511 air shipment contracts collected from 151 high-tech manufacturers. The study results conclude that market classification between forwarder and express is less clearly defined due to carriers' service enlargements and customers' changing needs. Shipment destination and size may still serve as effective market classifications to divide air freight market into twelve segments, whereas time in transit, shipment frequency, and product status, have lost their validation in segmenting the market. The segmentation examinations may help air carrier industry understand customer defection and attrition and provide strategic insights for targeting segments and positioning service strategies.     

Local network externalities and market segmentation

This paper models interaction between groups of agents by means of a graph where each node represents a group of agents and an arc represents bilateral interaction. It departs from the standard Katz–Shapiro framework by assuming that network benefits are restricted only amongst groups of linked agents. It shows that even if rival firms engage in Bertrand competition, this form of network externalities permits strong market segmentation in which firms divide up the market and earn positive profits. The analysis also shows that some graphs or network structures do not permit such segmentation, while for others, there are easy to interpret conditions under which market segmentation obtains in equilibrium.     

Implementing market segmentation using full-refund and no-refund customer returns policies in a dual-channel supply chain structure

Products returned by customers are common in the retail industry and result in costs to both the supplier and the retailer. In practice, retailers implement returns policies that may give customers a full, partial, or no refund for returned products. In this paper, we examine how a firm that faces customer returns can enhance profit by using different customer returns policies, full-refund and no-returns, as a device to segment its market into a dual-channel structure. We also show the impact of customer returns on the firm's pricing and ordering decisions, as well as on the firm's profit in such a dual-channel structure.     

The making of a petrol station and the “on-the-move consumer”: Classification devices and the shaping of markets

This paper addresses the issue of classification devices and their role in shaping markets. We depart from the notion that markets are shaped by multiple calculative agencies and examine how particular forms of calculation are made viable. Classification devices are the infrastructure that makes calculation possible and sustains particular economic orders. We illustrate these notions with an empirical, longitudinal study of a fuel retail company and its initiative to re-classify its network of petrol stations across Europe. Our study focuses on the extensive and protracted negotiations over what constituted relevant categories and the multiple perspectives involved in defining petrol station types. We illustrate how a store typology plays an important role in making assemblages of ideas (e.g. consumer-on-the-go), objects (e.g. store planograms), and managerial roles (e.g. category managers) coalesce around particular constellations of practices which impact upon the outline of markets.     

The benefits of being small: Duopolistic competition with market segmentation

Consider a duopolistic market in which consumers are not necessarily aware of the firms' existence. The market is characterized by the existence of four segments: a duopolistic segment which consists of consumers who are aware of both firms, a segment of consumers who are unaware of either firm and two captive market segments. We assume that by advertising, firms control the proportion of consumers who are aware of their existence. The relative sizes of the four segments affect the equilibrium of the duopolistic pricing game. We show that being large may be disadvantageous, and that even if gaining awareness is costless firms may wish to remain small.We would like to thank Paul Klemperer and an anonymous referee for valuable comments.     

Consumer behavior in the Italian mobile telecommunication market

This paper investigates the characteristics of Italian cell phone users. A multidimensional segmentation approach was adopted, using concurrently three sets of variables: consumer/user lifestyles, use motivations and product/service attributes. Data on a national sample (1067 individuals) were collected and factor and cluster analysis were then performed on the database. The study led to the identification of three user segments, each with a diverse combination of the segmentation variables. Findings provide implications for the mobile telecommunication industry and could suggest strategic choices to mobile operators—especially cell phone producers—and constitute the basis for their strategic positioning.     

Industrial market segmentation by the structure of the purchasing process

This article presents a methodology for segmenting industrial markets on the basis of functional involvement in phases of the purchasing decision process. A decision matrix is developed as a structured measurement instrument to collect information about the composition of decision making units within target firms. The implications of this segmentation approach for industrial marketing strategy formulation are discussed.     

Consumer market segments for biofortified iron beans in Rwanda: Evidence from a hedonic testing study

An understanding of consumer market segments is important for efficient and effective targeting of new technologies, such as biofortified foods. In this paper, we use cluster analysis to identify distinct consumer segments in Rwanda for four biofortified iron bean varieties. Data on consumer liking of various sensory attributes of beans was collected by using a 7-point hedonic scale through the application of home-use and central location tests implemented in two rural and two urban locations. Cluster analysis reveals the existence of several distinct consumer segments in each one of the four study locations. Further analysis is conducted by using multinomial probit and logit models to predict consumer segment membership based on the consumer characteristics. Results reveal that, depending on the location, consumer’s source of income and whether or not they received information about nutritional benefits of the iron bean varieties have a bearing on their preference of these varieties. The paper presents a profile of each one of the consumer market segments identified to assist targeting of various iron bean delivery, marketing and promotion efforts in Rwanda.     

New product announcements as market signals: A content analysis in the DRAM chip industry

New-product announcements (NPAs) have considerable effects on competitors in industrial markets. Several studies have shown that the perceived threat caused by an NPA may trigger severe competitive reactions. Yet, it is still unclear how the perception of threat by competitors is related to the specific content of the announcement.This study explores the actual content of NPAs observed in a particular market. This is done through a multi-year content analysis of new-product announcements in the DRAM memory chip industry. The study analyzes patterns in the occurrence of attributes and demonstrates how firm strategy affects NPA content. Findings from this study provide important insights for managers about the design of NPAs. It also triggers further research on the use of NPAs in competitive industrial markets.     

Exploiting the B2B knowledge network: New perspectives and core concepts

This editorial introduces the articles in this special issue of Industrial Marketing Management, which presents the best papers from the 23rd Annual IMP Conference, held at Manchester Business School, UK in September 2007. The papers have been selected to represent the interaction, relationship and network perspectives and encompass, value, relationship assets, trust, commitments and the constitution of networks.     

Industrial marketing firms and knowledge transfer: Toward a basic typology of community structures

Industrial firm boundaries are dynamic, changing with every new alliance or acquisition. As boundaries evolve, managers must develop organizational structures that effectively leverage knowledge. This paper presents and explains the analytical foundation of a typology of community structures, featuring the basic structures of Crew, Séance, and Guru. This typology is applied to three examples of knowledge transfer in industrial marketing. A competence exploitation example examines knowledge transfer between a firm and a subsidiary established primarily for increasing existing product sales in a new market. A competence creation example examines the community structures for utilizing the product and market knowledge of a subsidiary to benefit the firm's new product development decisions. The final example examines the “tech vs. touch” tradeoffs in interpersonal communication and knowledge transfer. The back-to-basics typology of community structures helps stimulate strategic thinking, and facilitates future explorations of knowledge management in industrial marketing.     

Market-driving versus market-driven: Divergent roles of market orientation in business relationships

This study focuses on market orientation (MO) and customer intimacy (CI) in business-to-business marketing. These are generally regarded as key success factors in marketing. The authors argue, however, that the relationship between MO and customer relationship has not been properly examined, nor has its dependence on a firm's strategic market posture been understood. A contingency framework is proposed to test the postulated relationships between the key constructs. Our results indicate a strong positive association between MO and CI. Furthermore, this linkage is clearly influenced by the market focus and business logic adopted. In managerial terms, business executives must carefully match the strategic posture of the firm, its MO, and customer relationship management (CRM). Our findings strongly support a contingency modeling approach in studying the factors underlying marketing performance in business markets.     

Implementing market orientation in industrial firms: A multiple case study

The literature on market orientation is silent on the process of change involved in moving firms to a market orientation. Understanding this process is important for commodity sellers or industrial organizations with a traditional sales focus. We examine the change programs of two New Zealand-based agricultural organizations. Drawing upon Lewin's three-stage change process model (unfreezing-movement-refreezing) we identify that the creation of a market orientation involves uncovering long-held assumptions about the nature of commodity products, the nature of production and marketplace power, and the ‘commodity cycle’. Moving the firm towards a new set of values involves changes in the role of leadership, the use of market intelligence, and organizational learning styles. To refreeze these values, supportive policies are needed that form closer relationships between the organization and the marketplace. The degree of refreezing affects the quality of market orientated outcomes, with less effective refreezing leading to sub-optimal market-oriented behaviors.     

Innovation and integration in the agri-food industry

We deal with the link between innovation and market structure using the empirical example of the Danish agri-food industry. Vertical integration may resolve hold-up problems and here we test for the importance of vertical integration and networks on innovation. We further examine the effects of network relationships on innovation behaviour. We use data from an extensive survey of 444 Danish firms over two years, 2000 and 2005 to estimate a bootstrapped zero-inflated Poisson regression model. The first and most significant result is that organization matters. Further we find that vertical integration as well as contractual arrangements are significant determinants for firms’ innovation behaviour. The direction of integration is important as well. Also, economies of size seem to play an important role. Similarly, the export orientation of the firm is a significant determinant of innovation whereas the sector the firm is operating in is not significant for its innovation behaviour.     

成功的市场进驻策略是决定市场地位的关键——宝洁公司在中国的市场进驻成功个案

美国宝洁公司在中国改革开放之际,敏锐地察觉到中国市场的巨大潜力,向中国日用品市场进驻。在多元品牌政策和差异性市场策略的总体策略指引下,宝洁公司充分考虑中国经济,政治,文化背景,以中国东西部经济差距,城乡消费者需求差异,中国消费者对传统文化的要求和可持续发展为基础,开发具有中国传统品味的高科技环保产品,建立特殊的分销体系,建立了在中国市场的首席地位。同时,宝洁公司以遵守中国法律,履行社会责任和道德准则为己任,与当地政府配合,协助开展文化和经济辅导活动,保护生态环境与自然资源,在消费者心目中建立了良好的企业形象,为进一步发展提供了有利基础,达到了双赢的目的。     

Incumbents in a dynamic Internet related services market: Does customer and competitive orientation hinder or help performance?

The Internet challenges many incumbent firms to adapt their marketing strategies by developing and offering new products involving Internet technology. Existing literature on market orientation and performance of services suggests that market orientation, and its components, are likely to facilitate effective adaptation. In contrast, the marketing innovation literature suggests market orientation may be too reactive and inhibit effective adaptation. Our results suggest some merit to both perspectives. Client orientation hindered performance of Internet advertising services, while competitive orientation facilitated performance. In addition, limited support was found that suggested superior performance occurs in an environment with a diverse client base and clients possessing in-house capabilities that “compete” with agencies for Internet advertising services. Implications for incumbents pursuing product growth strategies via new, technology related services in dynamic environments are discussed.     

Interorganizational cooperation: a new view of strategic alliances: The case of Swedish firms in the international market

Looking at the rate at which organizations/firms are entering into strategic alliances these days, one can understand and/or appreciate the increased research in the area of strategic alliances. The tremendous amount of research on this type of interorganizational cooperation, more or less, have one thing in common. Thus, all seek to increase our knowledge and/or understanding of the potentialities, as well as the challenges inherent in the formation of strategic alliances. What is missing in the existing literature on strategic alliances is an emphasis on the importance of the interacting parties' (i.e., parties in any strategic alliance) interconnected exchange relationships with third parties (i.e., actors who are not officially regarded as partners in an alliance). There is a lack of empirical studies on the nature of and the extent to which networks (third parties) may affect and be affected by the achievement of goals pursued by some focal strategic alliance partners. The paper presents case studies that shed light on this issue. The purpose of this paper, therefore, is to deepen our understanding of the relevance of third parties in a strategic alliance formed between specific focal actors. One important conclusion of the study is that the achievement of the focal actors' goals is affected, in large, by third parties.