Marketing Innovation

This paper provides an economic analysis of marketing innovation. A dynamic duopoly model is developed to study two forms of marketing innovation: γ, which allows a firm to acquire consumer information effectively; and σ, which reduces consumer transaction costs. The incentives and effects of marketing innovation differ markedly from those of product or process innovations. Although γ benefits the innovating firm, it hurts some consumers; and, while σ benefits all consumers, it may or may not benefit the innovating firm. Increased competition intensity reduces the value of γ but increases the value of σ. The private incentive is too high for γ but too low for σ.     

Herding versus Hotelling: Market Entry with Costly Information

Why do businesses such as fast‐food restaurants, coffee shops, and hotels cluster? In the classic analysis of Hotelling, firms cluster to attract consumers who have travel costs. We present an alternative model where firms cluster because one firm is free riding on another firm's information about market demand. One consequence of this free riding is that an informed firm might forego a market that it knows to be profitable. Furthermore, an uninformed firm might earn higher profits when research costs are high, because it can credibly commit to ignorance.     

浅议医药行业服务营销

医药服务营销是一种新型的医药市场营销模式,在营销过程中更加注重以消费者为核心,通过向消费者提供个性化的无形服务提高其对产品甚至企业的满意度和忠诚度。医药服务营销以无形性、差异性、易逝性及同步性为主要特征,营销策略主要包括服务品质创新策略、消费者满意策略、服务人员优化策略及服务营销组合策略。     

人力、财务、营销——企业管理的铁三角

企业管理就是领导艺术、人才、素质、资金和市场营销等全方位的综合管理。思路明确,发现人才,历练本领,用活资金,流畅营销,并最终以服务和满足消费者切身利益、促使企业经济效益最大化和可持续发展是企业管理的核心和关键条件。有效地将每个细节都思考缜密且适时调整并落在实处,是企业管理取得实质性成效的不二法则。     

Agent-based modeling of the word-of-mouth effect on promoting brand-name agricultural products

Developing brand agricultural products (BAPs) has become a strategic choice for consumption upgrading and agricultural modernization in China. As a powerful marketing method, word-of-mouth (WOM) is rarely applied to BAPs. Based on the particularity of the agricultural environment and products in China, this paper focuses on the WOM behavior of consumers regarding BAPs. An agent-based simulation model was designed, including attitude and motivation functions. The former determines consumers’ attitudes toward BAPs, whereas the latter determines whether consumers will spread information by WOM. The model was validated, and some parameters were measured through a survey of Beijing consumers. Then, experiments were conducted to simulate the evolution process of consumers’ attitudes and willingness to engage in WOM and the influence of consumer heterogeneity on WOM spreading. Exploratory findings mainly show that (1) only when the strength of WOM marketing reaches a certain degree can it affect consumer attitudes toward BAPs, (2) in the early stage of WOM spreading, the greater the strength of economic stimulation to consumers, the greater the rate of WOM communication, and (3) the higher the education level of the target group of WOM marketing, the higher the efficiency of WOM communication.

     

Optimal pricing strategy for foreign market entry: a game theoretic approach

Given that pricing plays an important role in a company's international competitive strategy, researchers have long argued the need for theory building in the area of international pricing. This study develops an optimal pricing strategy for foreign market entry using a game theoretic framework. The proposed model assumes two firms, a local incumbent and a foreign entrant, competing in a market. Consumers know the quality of the incumbent's offering, but do not know how it compares to that of the foreign entrant's. Based on these assumptions, and using the theory of inference making, we propose an upward price distortion by the entrant firm as an optimal entry strategy under incomplete information. The paper presents a game theoretic derivation to establish that the game has a unique intuitive separating equilibrium where the entrant firm stands to gain by engaging in upward price distortion to signal high quality to consumers. Copyright © 2006 John Wiley & Sons, Ltd.     

Positively negative: the impact of negativity upon the political consumer

• For years there has been an ongoing debate as to the role and impact that ‘marketing’ has had on politics. Yet, it is the case that many of the concepts associated with the field of marketing have real relevance and have, in fact, been employed within the field of political campaigning for many decades. This is an empirical paper that focuses upon the concept of political brands and the impact that current trends in campaign strategy, and in particular the growth and continued use of negative campaigning, have upon them. Using a constructivist grounded theory approach, the implications associated with such activity are examined and, in particular, its effect upon the consumer/brand relationship.
• Within the consideration of the results, it becomes clear that political brands' use of negative campaigning is somewhat shortsighted; offering short‐term gains but at the cost of long‐term damage not only to their brand image but also to the wider democratic system as it stands. In a search for political ‘brands’ that more effectively meet their needs, there appears a tendency for political consumers to now look outside of the conventional political sector. The emergent concept of the ‘negative brand’ is explored together with the implications for political consumers, political brands and the wider field of conventional party politics.

Copyright © 2007 John Wiley & Sons, Ltd.     

Consumer Feelings and Equilibrium Product Quality

This paper considers the possibility that a firm can invest not only in the true product quality, but also in activities such as merchandizing and store atmospherics that influence consumer perception of the product quality. Consumers make their purchase decisions based on the signal (perception) of quality they experience, where the signal is influenced by both the true product quality valued by the consumer and the affect of the consumer at the time of the signal formation. In this situation, a firm finds it optimal to invest in both product quality and in variables inducing affect, even though rational consumers, in equilibrium, correctly solve back for the true product quality. We uncover an asymmetry in the effects of the cost of producing quality and the cost of inducing affect. As a firm's cost of quality decreases, the firm will find it optimal to invest more both in the true quality and in the affect inducement, even if it does not have a lower cost of inducing affect. Conversely, if a firm finds it easier to induce affect, then the product quality decreases but affect-inducing activities increase.
Under competition, we find that the firm investing more in quality also invests more in affect creation. An implication of this is that in a competitive environment, consumers can rationally associate an up-lifting store atmosphere, affect inducing merchandizing, or mood-creating communication with high quality products even when the firm has no need to signal their private cost of quality information, and when there is no consumption externality of the affect. We also analyze the case in which firms might have different costs and consumers are uncertain about the costs incurred by a given firm. Here again we show that the perceived quality production is positively correlated with both the true quality and the affect inducing activities.     

企业微博营销的SWOT分析及策略研究

微博是中国互联网的又一个"舶来品",展现了同twitter在美国一样迅猛的发展速度,仅两年时间,中国的微博用户已达数亿。微博的价值在于简练,在于实现信息的无障碍双向沟通,在于面向最广大的消费者。微博的兴起和广泛应用,同时也为企业开辟了前所未有的信息传播、交流沟通的网络平台,其蕴涵着巨大的商业价值,将逐渐成为企业网络营销的新阵地。因此,全面地研究和探讨微博的价值,运用SWOT分析方法,分析企业微博营销自身的优势、劣势,外部环境中所面临的机会、威胁,并用系统的思想将这些独立的因素相互匹配起来进行综合分析,制定出科学全面具体的企业微博营销策略,对企业有效地认识微博营销、充分开展好微博营销工作、提高企业竞争力具有重要的现实意义。     

Accounting information,salesforce compensation and acquisition of new customers

The need for the management accounting system (MAS) to support marketing decisions has been identified in literature and practice. Accordingly, several improvements have been suggested with the main intention of providing more detailed information on marketing segments. Yet, even with respect to these improved systems it has to be acknowledged that the quality of the information provided will not be identical for all marketing segments: it can be assumed that it will be more precise for existing segments, which are already served by the firm, than for new ones, with which the firm has comparatively little experience. Further, it has to be considered that the MAS will seldom be the only source of useful information, as the example of the good salesforce having gained a ‘deep understanding’ of the market while doing his job shows. A problem arises if the acquisition of this additional information is (personally) costly and unobservable and therefore has to be motivated by incentive compensation schemes. This paper emphasizes that standard compensation contracts, as recommended by literature and practice, may fail to induce goal-congruent behaviour. It is shown that ranking commission rates according to the profitabilities reported by the MAS may be dysfunctional and that a non-intuitive rank order may be necessary to motivate the salesforce to become better informed and to use this knowledge appropriately.     

Consumer Search with Limited Product Evaluation

Consumers need not evaluate all available product information before making a purchase. This may arise because shopping environments prevent a full evaluation (e.g., online). We develop a model of simultaneous search in which consumers have limited ability in product evaluation in order to study the impact of search cost on prices, consumer surplus, and social welfare. If consumers are endowed with the ability to choose how much information to acquire from a searched product, they may choose limited product evaluation. We find that consumers may evaluate more firms, enjoy lower prices, and higher surplus despite this limited ability. This implies that prices can decrease and consumer surplus can increase in search costs. We then extend our setting to the case of multiproduct firms and find similar effects due to changes in within‐firm search costs.     

What's in it for the customers? Successfully marketing green clothes

Most green marketing literature is strongly based on the assumption that a consumer's environmental awareness is a pre‐condition for green purchasing. While following such a ‘behaviouristic’ green marketing both scholars and companies seem to have neglected that green products are bought only if customers perceive the products as superior to competitors’ offerings. This paper argues that economic theory can give additional valuable input to green marketing. A first important step for marketing according to the economic approach is to identify how consumers perceive the products' cost and benefits. In this paper, cost and benefits are differentiated into different categories, which may help companies in finding their products' value added. In a second phase, companies can focus on stressing product advantages rather than on overcoming barriers. Using the example of green clothes this contribution shows what such a marketing strategy can look like. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment     

Increased word‐of‐mouth via strategic cause‐related marketing

• This research examines word‐of‐mouth (WOM) promotions as an additional consequence of a successful cause‐related marketing (CRM) partnership. Firms properly aligned in CRM partnerships should increase positive feelings that can translate into positive WOM from the public. WOM efforts should be considered in marketing campaigns to develop successful long‐term CRM strategies. Additionally, carefully planned CRM campaigns with positive WOM give firms a competitive advantage without the backlash of consumer skepticism often reported when firms attempt to manipulate WOM campaigns. This study is grounded in associative learning theory which provides support for the strengthened associative links between firm and charity when the relationship is properly aligned. This empirical study suggests that strategically aligned CRM relationships can improve positive WOM recommendations. Results of ANOVA and factor analysis indicate that consumers are more receptive to CRM partnerships that consist of compatibility between firm and charity that persist over time. Results suggest that consumers are more likely to recommend the more properly aligned partnerships to others.

Copyright © 2010 John Wiley & Sons, Ltd.     

Observability and Sorting in a Market for Names

Can firm names be tradeable assets when changes in name ownership are observable? Earlier literature focuses on trading of firm names when trading is not observable to the consumer. Yet, casual empiricism suggests that shifts in name ownership are often publicly known. This paper studies how firm names can be traded even under full observability. In equilibrium, even when consumers see a reputed name being divested they continue to trust it and so, these names are tradeable. I further demonstrate an appealing “sorting” property of these equilibria. Competent firms can separate themselves by buying valuable names, and incompetent firms can give themselves away by using worthless names.     

Food contamination incidents: what do consumers seek online? Who cares?

• Consumers can play an active role in managing their health during food contamination incidents. With the popularity of the internet, consumers may seek online information to minimize health risks associated with the incidents. This study examines information demand and supply for consumers' online‐information seeking by investigating the search queries commonly used by consumers during the incidents and returned first page search results. We use a stage of change model to frame our hypotheses about information demand and stakeholder and agenda setting theories to frame our hypotheses about information supply. Results show that consumers' information seeking may progress through stages of precontemplation (seeking no special information), contemplation (seeking information related to the facts of the incidents), preparation and action (seeking information related to safety precautions and practices), and maintenance and termination (seeking no special information). Mainstream news media play the most important role in providing online information related to the facts of the incidents during the contemplation stage of consumers' information seeking. Online citizen journalism is the major online source for information related to safety precautions and practices during the preparation and action stage of information seeking. A diversity of other stakeholders also provide online information related to the incidents but are not primary information sources for consumers. We suggest that stakeholders, especially those who are responsible for providing accurate and timely information to consumers such as government agencies, establish online marketing strategies to make their information more accessible by consumers. Copyright © 2016 John Wiley & Sons, Ltd.

     

Personalized Pricing and Quality Customization

We embed the principal–agent model in a model of spatial differentiation with correlated consumer preferences to investigate the competitive implications of personalized pricing and quality allocation (PPQ), whereby duopoly firms charge different prices and offer different qualities to different consumers, based on their willingness to pay. Our model sheds light on the equilibrium product-line pricing and quality schedules offered by firms, given that none, one, or both firms implement PPQ. The adoption of PPQ has three effects in our model: it enables firms to extract higher rents from loyal customers, intensifies price competition for nonloyal customers, and eliminates cannibalization from customer self-selection. Contrary to prior literature on one-to-one marketing and price discrimination, we show that even symmetric firms can avoid the well-known Prisoner's Dilemma problem when they engage in personalized pricing and quality customization. When both firms have PPQ, consumer surplus is nonmonotonic in valuations such that some low-valuation consumers get higher surplus than high-valuation consumers. The adoption of PPQ can reduce information asymmetry, and therefore sellers offer higher-quality products after the adoption of PPQ. Overall, we find that while the simultaneous adoption of PPQ generally improves total social welfare and firm profits, it decreases total consumer surplus.     

Partner Characteristics,Information Asymmetry,and the Signaling Effects of Joint Ventures

We provide theory and evidence regarding the signaling effects of joint venture (JV) announcements. We argue that when a firm characterized by information asymmetry with respect to the stock market announces a JV, the growth opportunities and the quality of resources of the partner provides a signal to investors about the true value of the firm. Our study shows that (i) apart from synergies, JV announcements impact firm value also because of the information they convey about future growth opportunities; and (ii) JVs may not only validate but also ‘invalidate’ the quality of a firm by revealing that it is unable to attract strong partners. Copyright © 2011 John Wiley & Sons, Ltd.     

The Role of Public Information in Corporate Social Responsibility

Many of the attributes that make a good “socially responsible” (SR) are credence attributes that cannot be learned by consumers either through search or experience. Consumers, then, use for their purchasing decisions “noisy” information about these attributes obtained from potentially contradictory channels (media, advertisement, NGOs). In this paper we model such informational framework and show the positive relationship between the accuracy of the information transmitted to consumers and corporate social responsibility. We also show that a firm may be tempted to add noise to the information channel (through lobbying of the media), which might reduce the supply of the SR attributes and even harm the firm itself (with lower profits). It might then be profitable to the firm to commit ex ante to not manipulate the information regarding the firm's business practices (e.g., with a partnership with an NGO). Finally, we extend our model to a competition framework endogenizing the number of firms active in the SR segment. We show both that in more transparent markets a larger number of firms will be SR, and that in a market with more intense competition, a higher degree of transparency is required in order to sustain a given number of SR firms.