Informative Brand Advertising and Pricing Strategies in Internet Markets with Heterogeneous Consumer Search

The use of information intermediaries has been shown to undermine the effect of brand in online markets. In this paper, the effect of consumer search on the relationship between brand advertising and pricing strategies is analysed. Price data are taken from the leading UK motor insurance comparison website, with the advantage that prices can be related to the search characteristics of consumers and to the advertising expenditure of firms. The paper finds that more-advertised firms have lower price rankings at the comparison site, indicating that advertising is informative in this market. The main result is that consumer search weakens the relationship between advertising and pricing. An implication is that increased usage of price comparison sites will make informative brand advertising less important.     

Configuration of External Influences: The Combined Effects of Institutions and Stakeholders on Corporate Social Responsibility Strategies

This article introduces a theoretical framework that combines institutional and stakeholder theories to explain how firms choose their corporate social responsibility (CSR) strategy. Organizational researchers have identified several distinct CSR strategies (e.g., obstructionist, defensive, accommodative, and proactive), but did not explain the sources of divergence. This article argues that the divergence comes from the variability in the configuration of external influences that consists of institutional and stakeholder pressures. While institutions affect firms’ social behavior by shaping the macro-level incentive structure and sources of legitimacy (distal mechanisms), firms’ stakeholders can amplify or buffer the institutional forces by acting as mediators (proximate mechanisms). The two dimensions are interdependent in that stakeholders draw legitimacy and power from institutions, and institutions are often actualized through stakeholder mechanisms. Together, they form a particular configuration of external influences that shapes how focal firms construct their CSR strategy.     

Priming a Cross‐Category Brand Alliance: The Moderating Role of Attribute Knowledge and Need for Cognition

Firms often enter cross‐category advertising brand alliance strategies with the goal to increase their market share by association with popular but noncompeting brand allies. However, firms are often not aware of the effects of these alliances on consumer perceptions of participating brands. This research explores the factors moderating brand attribute inferences following exposure to a cross‐category advertising brand alliance. It is proposed that attributes of a brand ally may serve as anchors that produce assimilation effects and move perceptions of a target brand toward the ally's attribute value, or as standards of comparison that produce contrast. This work provides evidence that attribute judgments in a cross‐category advertising brand alliance are moderated by attribute knowledge and individual differences in information processing motivation as reflected in self‐reported need for cognition (NFC) ratings.     

The risk effects of combining banking, securities, and insurance activities

We create synthetic universal banks to examine the impact of securities and insurance activities on the banking firms’ risk. We find that these nonbank activities reduce the overall risk to the firm but increase systematic market risk—thus reducing the firm’s ability to diversify. Moreover, the unit price of risk does not appear to contain a risk premium to price the enhanced systemic risk exposure that might be engendered by greater convergence across financial firms. Our finding suggests that if there are net gains to universal banking, potential gains from synergies and demand effects must be powerful enough to overcome the disadvantages of increased systemic risk exposure. The results suggest that diversification benefits, when considered in isolation from the other implications of expanded bank powers, are not sufficiently large to justify expanding bank powers into nonbank securities and insurance underwriting activities.     

Investor sentiment and advertising expenditure

A strategic issue facing marketing managers is ‘how much and when’ to spend on advertising. We argue that investor sentiment in the stock market may influence advertising expenditure by affecting firms' ability to raise new funds. We show that during periods of low (high) investor sentiment, firms decrease (increase) their advertising expenditure, even though the effectiveness of advertising is greater (lower) during such periods. We also find that these results are stronger for financially constrained firms that rely more on external financing. Our findings suggest that marketing managers can improve the efficiency of their advertising expenditure by raising (reducing) it during periods of low (high) sentiment.     

Can socially irresponsible firms benefit from corporate advertising?

Abstract

Can corporate advertising improve firm performance following a brand crisis borne out of corporate social irresponsibility (CSI)? This article investigates socially irresponsible firms and their corporate advertising expenditures, which can be used to counter negative opinions. First, we examine whether firms experiencing a negative brand image due to socially irresponsible behavior alter their corporate advertising expenditures. Next, we assess the resulting impact of corporate advertising spending by CSI firms on overall performance. Using a sample of firms engaging in socially irresponsible behavior between 1995 and 2011, we find that such firms tend to increase their corporate advertising. Such changes in corporate advertising expenditures ultimately impact firm performance. Specifically, an increase in corporate advertising helps to reduce the negative effect of CSI on firm performance.     

New product preannouncements,advertising investments,and stock returns

This study examines the synergistic effects of advertising spending and new product preannouncements (NPPAs) on stock market responses. The empirical results indicate that returns of preannouncing firms over both the short- and long-term could be improved by an increase in advertising expenditure. Additionally, the results also show that the positive impacts of earnings and revenues can be enhanced, while the negative influence of trading costs can be reduced, for preannouncing firms with higher advertising expenditures. The holding returns of institutional investors can also increase with greater spending on advertising. Therefore, marketing communication strategies that aim to reduce information asymmetry within NPPAs, coupled with greater advertising expenditures, would yield more favorable investor responses.     

娱乐营销——品牌营销之幕后推手

随着品牌营销策略日益多样化,娱乐营销应运而生。在娱乐节目强大的收视率的助推下,越来越多的商家选择在娱乐节目中植入广告以增强宣传效果。通过分析品牌的意义与内涵,及企业品牌营销中的品牌定位、品牌形象塑造和品牌营销的策略,提出品牌营销应明确品牌的传播目的;抢占先机,先入为主;灵活运用组合传播策略;注重顾客亲身体验;创新品牌赞助活动形式等对策。     

Adapted or standardized copy: Is non-cultural English the answer?

International advertisers often wonder whether to adapt their copy to each country they operate in or to globally standardize their message, especially in non-Anglophone markets. While the current business lingua franca is English, how easily can it be introduced into advertising without alienating consumers, and would a simpler English message work better? Does the culture of a brand also influence the impact of English use in non-Anglophone markets? This research examines the interaction between language choice and brand culture in a non-Anglophone market. Specifically, the studies review the value of Globish, a non-cultural form of English. The results suggest that using standardized English copy has relevance in non-Anglophone countries for global brands, but that Globish can also be useful for local brands seeking to upgrade their value in a local market. Globish is shown to be an interesting alternative option in adapting or standardizing advertising strategies. Managerial implications close the paper.     

Vertical Product Differentiation and Advertising

A duopoly model is developed in which firms' strategic variables include brand quality, the number of distinct market segments to enter and price. Informative advertising is used to overcome consumer ignorance about brands. In contrast to many existing models in which firms engage in price competition, the subgame perfect equilibria of the game are not characterised by the production of vertically differentiated products. Further, whilst the firms typically produce identical high quality products, in some circumstances the production of homogeneous low quality brands can be an equilibrium strategy.     

产品伤害危机市场恢复策略研究

在产品伤害危机事件后,企业从危机应对状态转入市场恢复状态。面对品牌资产的减少和消费者购买意愿的迅速下降,企业应采用恰当市场策略进行有效的顾客赢回和市场恢复。研究产品伤害危机后的市场恢复策略,根据国内外产品伤害危机相关理论,建立危机后市场恢复策略研究框架,规避危机后产品策略、销售促进策略、广告策略对顾客购买意愿的影响。     

MANAGING INTEGRATED MARKETING COMMUNICATION (IMC) THROUGH STRATEGIC DECOUPLING: How Luxury Wine Firms Retain Brand Leadership While Appearing to Be Wedded to the Past

Firms increasingly leverage cultural sources of authenticity in their communication strategies to derive competitive advantage and brand value. The management of authenticity presents problems for brand managers. This paper draws on institutional theory by examining how firms deliberately decouple projected images from internal operations to create powerful brand images. The authors explore the strategies of 26 prestige wineries across 5 countries, and find that brand managers deliberately decouple outward images from internal practices, walking a fine line between remaining "true" to important values and real commercial considerations. The findings challenge whether integrated marketing communication (IMC) always requires tight integration with internal operations (the "one voice, one look" view of IMC). Our findings have particular relevance for niche marketers.     

Commission deregulation and performance of securities firms: Further evidence from Japan

This study explores the impacts on small securities firms’ performance of the multi-stage commission deregulation in Japan from 1994 to 1999. Different from previous findings, market volume does not rise while commission rates fall following each phase of the deregulation. Therefore, securities firms’ stock performance tends to decline as the deregulation proceeds, contrasting with the stock price increase reported previously. Moreover, the negative price effect tends to vary with firm size and deregulation phase, consistent with the fact that securities firms of different sizes depend to different extent on commission income from transactions covered by different phases of the deregulation.     

The value relevance of brand equity in the financial services industry: an empirical analysis using quantile regression

The purpose of this article is twofold. First, it attempts to explore the factors contributing to the brand values of Taiwan??s financial service companies. Second, it aims to examine the value relevance of their brand equity. Our empirical findings from OLS regression show that advertising expenditure in banking firms have positive significant effects on brand evaluation and that the brand equity of banking firms is positively related to their market value. The general findings remain valid when we apply conditional quantile regressions to re-examine these relationships. Moreover, the quantile estimates indicate that the factor of brand loyalty could bring benefits to the banks with lower levels of brand equity. However, brands do not offer insights into the banks that have extremely low market capitalization.     

Stability of membership in market segments identified with a disaggregate consumption model

This paper examines the stability of membership in market segments formed from groups of households with consumption functions that indicate similar responsiveness to price, advertising, and habitual consumption rates. Four segments were identified for a particular brand of a frequently bought product: About 10% of the sample consume the brand at a steady rate; about 30% shift quantities consumed systematically over time; about 30% are very price sensitive; and the largest group of 35% are moderately price sensitive. The four segments do not have sharp demographic differences. Results indicate a high degree of instability in segment membership, with half of the households switching segments in two successive years. In a field experiment contaminated by heavy promotion, a sharp increase in advertising to an experimental group tended to inhibit household segments switching (particularly to more price-sensitive segments) relative to switching that occurred in a control group under more nearly normal advertising pressure.     

Simultaneous positioning and segmentation analysis with topologically ordered feature maps: a tour operator example

Positioning analysis seeks spatial representations of brands. Segmentation analysis searches for perceptually or preferentially homogeneous consumer segments. While these analytical steps often are taken sequentially, the positioning and segmentation problems are interrelated and need to be treated simultaneously. Topologically ordered feature maps (self-organizing maps, SOM) are neural network models for feature extraction and classification. Extracting prototypes corresponds with finding market segments; ordering them topologically resembles a perceptual mapping exercise. SOM modeling may thus be relevant for deriving low-dimensional and parsimonious representations of multidimensional profile data. The application of SOMs is explored in a case study on tour operator images. The results simultaneously inform about the firms’ image positions and their perceptually homogeneous customer segments.     

Legitimately luxurious: Creating authentic luxury brands

In recent years, greater disparities in incomes and growth in wealthy consumers have fueled new opportunities in luxury markets. As firms launched luxury brands, some have thrived as others stumbled. One important difference between those who succeed and those who struggle, we suggest, is brand authenticity. Scholars have studied authenticity extensively, and research has isolated different sources of authenticity. How firms draw on these sources to create legitimate luxury brands has, however, received surprisingly little attention. In this article, we discuss the research on the sources of brand authenticity, and we explore how brands rely on those sources to craft authentic luxury brands. Using the examples of Canada Goose and Shinola, we illustrate how one firm drew on multiple sources of authenticity and, through the symbolism of its actions, successfully created an authentic luxury brand. We conclude with a discussion of the implications for other firms seeking to enter the luxury market.     

What Makes German Banks Different

The past few years have seen a revival in the academic debate over the economic functions of German banks. This paper takes the position that large non-financial firms have become highly autonomous of the banks, and the corporate governance role of banks, while still important, is much less significant than widely presumed. German banks, however, do fulfill certain economic functions to a greater degree and in a different manner than banks in other countries. These bank functions of long-term commercial financing, comprehensive management consulting, and supporting diversified quality production strategies are made possible by the institutional character of the banking system itself and the institutional context in which it operates. A complex web of government laws, regulations, and government financial aid combine with bank group competition to create an extensive and successful financial support system for German SMEs. This system faces various adjustment challenges — from international financial market integration to EU regulatory harmonization — but it has thus far managed to adapt while sustaining its core functions.     

Synergy between R&D and advertising on shareholder value: Does firm size matter?

Using the hierarchical linear model, we examine whether R&D and advertising and their synergy influence firm value. We also investigate whether firm size moderates the market value effects of R&D, advertising, and the synergistic effect of R&D and advertising on firm value. We find that R&D and the synergy between R&D and advertising have significant positive effects on shareholder value. Moreover, we find that the effects of R&D and advertising are significantly higher in large firms than small firms, while the synergistic effect is significantly positive in small firms but not in large firms. These results offer important insight for executives on the implications of resource allocation on R&D and advertising expenditures to create firm value. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Firm Networking and Bribery in China: Assessing Some Potential Negative Consequences of Firm Openness

Economic openness, both in terms of increased international trade exposure and enhanced inter-firm networking, has been a key element of China’s economic emergence since the implementation of market reforms and the “opening-up policy” over 30 years ago. Unfortunately, these changes have also coincided with the increased incidence of bribery and corruption. Both in general, and in the specific context of China, research on the relationship between a firm’s tendency toward openness and its propensity to engage in bribery is scarce. This study seeks to fill this gap based on empirical evidence provided by a large sample of Chinese firms. The findings of the study reveal that firms’ increased networking and openness tend to occur contemporaneously with greater bribery and corruption. We suggest that this may be due to the misuse of guanxi-based networks that coincide with the presence of firms’ open network strategies, heightened by the potential loss of resource and capability heterogeneity (and hence reduced competitive advantages) in the context of openness. We further find that firms paying bribes do so as an attempt to overcome unnecessary bureaucratic processes and ineffective institutional support that might tend to hinder their development.