Why and when firms respond accommodatively to the product-harm crisis: An institutional perspective

Accommodative response, as an attempt to manage product-harm crises to meet consumers' expectations by proactively accepting responsibility and actively taking remedial actions, is gradually becoming institutionalized. Our research explores the impacts of coercive, mimetic, and normative pressure on a firm's accommodating reaction and evaluates the possible mediating effects of top management beliefs (TMB) and participation (TMP), based on institutional theory and upper management echelons theory. The proposed hypotheses are empirically examined with survey data from 178 top managers in Chinese automobile firms. The potential endogeneity problem has been tackled by using firm size as the appropriate instrumental variable. Analysis results suggest that the three types of institutional pressures affect TMB and TMP differently, and TMP influences accommodative response positively while TMB exerts an indirect effect through TMP. Our findings emphasize the crucial mediating effects of top management and uncover the underlying mechanism through which institutional pressures affect accommodative response.     

Value-Expressive versus Utilitarian Advertising Appeals: When and Why to Use Which Appeal

Abstract

Value-expressive advertising appeals are effective when the product is value-expressive, while utilitarian appeals are effective when the product is utilitarian. When the product is value-expressive, audience persuasion is influenced through self-congruity. Conversely, when the product is utilitarian, audience persuasion is influenced through functional congruity. The effectiveness of the value-expressive as opposed to utilitarian appeals is argued also to be a function of such product-related factors as differentiation, life cycle, scarcity, and conspicuousness, and consumer-related factors such as involvement, prior knowledge, and self-monitoring. Future research and managerial implications are discussed.     

A laboratory study of the effect of verbal rhetoric versus repetition when consumers are not directed to process advertising

Rhetorical figures appear frequently in the headlines of magazine ads. This paper examines the effect of repetition on ads containing two types of rhetorical figures: easyto-understand rhymes and challenging puns. The findings indicate that high levels of repetition may not be necessary when ad headlines contain such rhetorical figures, even under conditions where subjects are not directed to process the ads. Moreover, in contrast to some prior work, rhymes appear to be at least as effective as puns when consumers are free to ignore ads. Overall, the research supports the idea that getting the ad message right is probably more important than simply repeating the message a greater number of times.     

Ethnocentric tendencies of Indian consumers: impact on preference for domestic versus foreign products

India is witnessing a plethora of foreign and domestic products competing against each other in its retail market. In order to understand how ethnocentrism among Indian consumers leads to attitudes toward foreign/domestic products, this study aims to understand the antecedents (socio-psychological and demographic) of consumer ethnocentric tendencies (CET) among Indian consumers, the impact of ethnocentrism on attitude toward domestic versus foreign product and service, and the impact of a moderator (perceived economic threat) on the relationship between ethnocentrism and attitudes. Using a sample of 800 Indian consumers, the relationships among variables were analyzed by means of structural equation modeling (SEM) using one product (soap) and one service (mobile phone service) category. The findings suggest that Indian consumers who are ethnocentric prefer domestic product/service to foreign product/service. Ethnocentrism of Indian consumers is influenced by education, income, cultural openness, and collectivism. The relationship between ethnocentrism and attitudes was moderated by perceived economic threat. Implications are provided for both Indian and foreign marketers to successfully promote their products to Indian consumers.     

Contrasting the impact of framing pain versus pleasure for high and low involvement consumers

In this paper we contrast the impact of positive and negative frames on brand attitude formation for an enjoyable product category. We are particularly interested in the role of involvement in this process. We find that (1) positive frames have a greater impact than negative frames on brand attitude formation and (2) enduringly involved consumers are more influenced by positive frames, while less-involved consumers are influenced by negative frames.     

Towards a European approach to overindebtedness of consumers

This article summarizes the findings of a study conducted under the supervision of the author on behalf of the European Commission. It focuses on the recommendations from the study Overindebtedness of consumers in the EC Member States: Facts and search for solutions.¹

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Auf dem Wege zu einem europäischen Ansatz zur Lösung der überschuldungs-problematik von Konsumenten

Zusammenfassung Der Beitrag bietet eine Zusammenfassung der Ergebnisse einer Untersuchung, die der Autor im Auftrag der Europäischen Kommission zur Frage der Konsumentenüberschuldung in den EG-Mitgliedstaaten geleitet hat. Statistische Vergleiche der Gesamtvolumina der Verbraucherkredite wie auch der Fälle der überschuldung in den einzelnen Ländern deuten auf einen klaren Unterschied zwischen solchen Ländern hin, in denen die Konsumenten mit den unterschiedlichen Formen von Kredit und den jeweiligen Konsequenzen vertraut sind (England, Frankreich, Deutschland, Dänemark, Holland und Belgien), und solchen Ländern, in denen überschuldung noch immer nicht als allgemeines Problem angesehen wird, sondern als individuelles Schicksal (Italien, Spanien und Griechenland).

     

Unintended effects of incentivizing consumers to recommend a favorite brand

Marketers often use incentives such as coupons, rewards or special membership discounts in order to motivate consumers to purchase or recommend a particular brand. This practice is based on the underlying assumption that an increase in incentives will lead to an increase in consumer response – an idea which has been at the core of traditional economic thinking for decades. Some psychologists have claimed, however, that under specific conditions an increase in incentives can reduce (rather than increase) one's willingness to perform the behavior which is being incentivized. If materialized, the possibility that extrinsic incentives may diminish consumer willingness to recommend a favorite brand could have important theoretical and practical consequences in the context of word-of-mouth or buzz marketing. This study tests that possibility in the context of an experiment about Apple computers, a favorite brand among US college students. Participants were asked to recommend the brand to a friend (1) in absence of any monetary reward and (2) for a small monetary incentive. Students who were promised a small monetary reward experienced a decrease in intrinsic motivation and wrote shorter recommendations than those who were not promised any incentives. Data also suggest that the quality of the recommendation may decrease when incentives are offered. The results are discussed in line of their possible theoretical and practical significance.     

The purchase versus illegal download of music by consumers: the influence of consumer response towards the artist and music

Based on qualitative and quantitative surveys, I show that consumer responses toward a particular song and toward its performer(s) play distinct roles in explaining consumer choices to either buy or illegally download that song. The various types of consumer responses to songs and artists are first identified through qualitative research and then validated through exploratory and confirmatory factor analyses (CFA) of survey data. While consumer responses to music explain the need to reexperience and acquire the song, consumer responses to performers explain purchase over illegal downloading. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.     

Consumer coping strategies: a study of consumers committed to eating local

This paper deals with consumer coping strategies when consumers experience difficulties in implementing an innovation. The particular setting for exploring this issue is a group of consumers in Michigan who are committed to eating local. The paper explores how these consumers cope or balance their commitment to eating local with the constraints they face on buying and preparing local food Following a literature review of coping strategy and consumer coping strategies in relation to innovations, the paper presents the results of three focus groups conducted with members of a Student Organic Farm, a food cooperative and a Slow Food Convivium. The consumers we interviewed mostly adopt problem‐centred, confrontative strategies: they change their food‐consumption habits including shopping, purchasing, cooking, storing and obviously, eating. None of these changes are easy to implement, and most require re‐allocations of time as well as trade‐offs to overcome time and cost barriers. In return, some of these consumers feel empowered. This study allows us to offer a working hypothesis that the process is dynamic: the more committed consumers are, the more they adopt problem‐centred, confrontative strategies and forget more fatalist emotion‐centred or avoidance strategies. These findings contribute to literature on consumers' coping strategies and suggest future research avenues.     

How consumers contribute to the development and continuity of a cultural market

This article examines the “indie” music industry in South Korea. It describes a consumer-led market where network of consumers aided by social media take responsibility for its maintenance and development, specifically the market for indie music in South Korea. With the emergence of digital technology and a participatory culture, the roles of consumers have expanded. Through their commitment and passion for independent music, aided by social media, these consumers have developed a virtual indie music community, which uses a variety of mechanisms, such as producing podcasts, to promote its music. These non-traditional producers regard indie music as an important part of their lives and their existence, which is why they take responsibility for developing the indie community rather than leaving this to a profit-orientated music industry. Therefore, we demonstrate how in South Korea the production of indie music has ceased to be dominated by traditional actors, such as record labels, and is driven by the enthusiasm of music fans. Previous research on cultural markets suggests that consumers play critical roles in the formation and evolution of the market. This study sheds light on this process by depicting a cultural market that is governed by pro-social consumers (rather than anti-market resistance) who pursue a balanced approach between resistance to and negotiated harmony with commercial and social norms rather than drawing a simple boundary between “us” and “other”.     

An empirical comparison of methods for measuring consumers’ willingness to pay

A valid procedure for measuring consumers’ willingness to pay (WTP) is crucial in designing optimal pricing policies or for estimating demand for new products. Understanding potential sources of differences in WTP estimates that emerge from value elicitation studies constitutes an important step in research on how managers should estimate consumers’ WTP. This research presents an empirical analysis of two potential sources of differences and discusses possible means of mitigating them. We find substantial and significant differences between the WTP reported by subjects when payment of the stated price is real or hypothetical. Notwithstanding the dichotomy between real and hypothetical WTP, we find significant differences among the WTP estimates of a broad range of value elicitation methods.     

The rules of engagement: how to motivate consumers to engage with branded mobile apps

ABSTRACT

This research presents and validates a framework, which illustrates how to motivate consumers to engage with branded mobile applications, or apps. The framework shows that consumer involvement with branded apps underpins two sets of consumer perceptions of the benefits that the app offers, which reflect the different motives for engaging with the app, as consumers experience them. These perceptions include the utilitarian motives of security, usefulness and ease of use; and the hedonic motives of interpersonal utility, attachment (with the device) and entertainment. This range of motives leads to the willingness to pay for the app and the willingness to recommend it. This research contributes to marketing theory by clarifying specific details of the psychological process through which it is possible to motivate consumer engagement with branded apps - i.e. by means of binding involvement, perceptions of how apps’ benefits meet individual needs and two key outcomes. The findings also yield managerial relevance. Above all, the outcomes of this research suggest that, by involving and motivating consumers through the improvement of the benefits that a branded app offers, it is possible to increase the app’s revenues and to encourage word-of-mouth, creating value for app providers and consumers.     

The liability to consumers of manufacturers of defective goods — An Australian perspective

There is an increasing tendency for consumers to regard the manufacturer as being primarily responsible for the safety and quality of consumer goods, even though in many if not most legal systems the common assumption by the consumer that the manufacturer rather than the retailer bears the primary liability for defective goods is not in fact correct. The legal position of the consumer in Australia under the general law of contract and tort is outlined as a background to the reforms made in 1978 by an important amendment to the Federal Trade Practices Act. A manufacturer (or importer) of consumer goods now is bound by statutory obligations, enforceable by the consumer, in respect of the quality of his goods. He is also bound by any express warranty given by him, and is liable where the goods require to be repaired or where replacement parts are required, but repair facilities or spare parts are not reasonably available. Except in the case of the obligations relating to the provision of spare parts and repair facilities, the manufacturer's statutory obligations cannot be excluded or limited. The Act also contains provisions limiting the time during which a consumer can commence an action against a manufacturer.Although the author considers that there are some defects in the legislation, he concludes that it represents a significant advance in the legal protection of the consumer's economic interests. There is a need for the expansion of existing mechanisms for the informal resolution of consumer claims, but the author also believes that the existence of the new legislative code setting out reasonably clearly defined rights will often in practice greatly strengthen the position of government agencies and others in attempting to negotiate a settlement on behalf of a consumer. Damages recoverable by a consumer from a manufacturer extend to consequential losses, including death or personal injury. As a result, a measure of strict liability for personal injury caused by defective products has been imposed on manufacturers. The legislation does not, however, offer a comprehensive regime of strict liability for personal injury and many anomalous situations will arise. The author considers that there is therefore a need in Australia for a review of the whole question of strict liability for personal injury caused by defective products, although even were this to occur there would still exist a strong need for a scheme such as that discussed in the article to govern the claim of a consumer for economic losses caused by the supply of defective or inferior products.

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Die Haftung des Warenherstellers bei Mängeln der Sache — eine australische Position zum Verbraucherschutz

Zusammenfassung Konsumenten gehen in immer stärkerem Maße davon aus, daß primär der Hersteller für die Güte und Sicherheit von Bedarfsgegenständen verantwortlich ist. Dem steht bislang die Rechtstradition der meisten Länder entgegen, wonach der Verkäufer und nicht der Hersteller primär für Fehler und Mängel verantwortlich ist.Der Aufsatz stellt die rechtliche Stellung des Konsumenten in Australien vor dem Hintergrund allgemeiner vertrags- und deliktsrechtlicher Regelungen dar. 1978 ist durch eine Novelle des Federal Trade Practices Act eine wichtige Reform eingeführt worden. Der Hersteller oder Importeur von Verbrauchsgütern (consumer goods) ist jetzt kraft Gesetzes, das vom Verbraucher im Klagewege durchgesetzt werden kann, einstandspflichtig für die Qualität seiner Waren. Er ist gleichermaßen unter einer Garantieerklärung haftbar. Er hat auch dafür einzustehen, daß Güter, die Wartung, Reparatur oder Ersatzteile benötigen, ordnungsgemäß und zu vernünftigen Bedingungen gewartet werden können. Die Pflichten des Herstellers können durch vertragliche Abrede nicht ausgeschlossen oder eingeschränkt werden, mit der Ausnahme der Wartungsverpflichtung. Die Novelle enthält schließlich Bestimmungen über Ausschluß- und Verjährungsfristen für die Ansprüche des Verbrauchers, wobei sie sich an den EG-Richtlinienentwurf zur Produkthaftung anlehnt.Auch wenn der Autor einige Vorschriften der Novelle kritisch würdigt, so geht er davon aus, daß sie einen wichtigen Fortschritt im rechtlichen Schutz der wirtschaftlichen Interessen des Verbrauchers darstellt. Daneben besteht weiterhin ein Bedarf zur Verbesserung der Rechtsdurchsetzung, aber die Existenz der Novelle und der dort enthaltenen klar definierten Pflichten des Herstellers erleichtert staatlichen Behörden und anderen den Schutz der Rechte des Konsumenten. Die vom Hersteller zu liquidierenden Schäden betreffen auch Folgeschäden einschließlich Tod und Personenschäden. Im Ergebnis haftet der Hersteller ohne Verschulden für Produktfehler. Allerdings ist die Gesetzeslage nicht vollständig befriedigend; es fehlt ein umfassendes System der Gefährdungshaftung für Produktfehler, etwa gegenüber Dritten, die das fehlerhafte Produkt lediglich benutzen, ohne es selbst gekauft zu haben. Nach Auffassung des Autors muß deshalb in Australien die Produkthaftung für Personenschäden neu überdacht werden. Daneben bleibt die — durch die Novelle befriedigte — Notwendigkeit, den Verbraucher gegenüber Vermögensschäden bei Lieferung eines mangelhaften Produktes dadurch zu schützen, daß man ihm einen Direktanspruch gegen den Hersteller zuerkennt.

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David Harland is Professor of Law, University of Sydney Law School, 173–175 Phillip Street, Sydney, N.S.W. 2000, Australia.     

The effectiveness of information interventions to improve domestic food safety among rural consumers

Consumer education on food handling behavior is regarded as an effective method to improve domestic food safety and prevent foodborne illness, but is usually overlooked in rural areas. Using a presurvey and two rounds of postsurveys targeted at rural consumers from China included in a randomized controlled trial, this study investigated the effectiveness of two information interventions—a leaflet with tips for best practices and the leaflet plus consumer education sessions conveyed by phone—and compared them with a control group. Cloth use behavior was the target in the trial and five specific aspects were evaluated: (1) whether the cloth was made of old clothes, (2) whether the one used to clean kitchen tables was also used to wash dishes, (3) whether it was hung to dry, (4) how it was disinfected, and (5) how long the cloth was used before being discarded. Firstly, consumers' behavior was scored by summing the above-mentioned five behaviors. The results estimated using the difference-in-difference model showed that respondents in the leaflet-only group improved to a greater extent than those in the control group, but their difference in progress was not statistically significant until the second round of the postsurvey. Respondents in the leaflet-plus-phone group were quicker to adopt suggested practices and made discernible improvements compared with those in the leaflet-only group in the first round of the postsurvey, but the gap between these groups narrowed to statistically insignificant in the second round of the postsurvey. It was concluded that one consumer education session was effective and made a difference in the long term, whereas more education sessions produced normative behavior at faster rates, showing a significant improvement in the short term. Then, the study estimated the effectiveness of interventions on the five specific behaviors separately. The results were estimated using a probit difference-in-difference model and showed that the suggested behaviors with lower costs or a greater difference from past behaviors were more likely to be adopted by consumers. Consumer education facilitates proper food handling practices among rural households, which should be considered by policy makers.     

A segmentation of Turkish consumers based on their motives to visit shopping centres

This paper aims to contribute to the literature by providing a segmentation of Turkish consumers based on their motives for visiting shopping centres. First, we identified the motives that Turkish consumers had for visiting shopping centres and then we used those motives to segment consumers. Data were collected through a survey from 390 participants living in the six largest cities in Turkey. First, the results showed that Turkish consumers had five groups of motives when it comes to visiting shopping centres. The results of a two-step cluster analysis used for segmentation revealed four distinct segments of Turkish shopping centre visitors. Those segments were named as serious consumers, recreational consumers, enthusiast consumers, pragmatic consumers. These findings suggest that Turkish shopping centre managers need to recognize that Turkish consumers are not a homogeneous unit when it comes to visiting shopping centres. Finally, academic and managerial implications of our findings are discussed.     

Capturing the voice of older consumers in relation to financial products and services

The purpose of this pilot study was to focus on the suitability of selected financial products for older people. Bank accounts and equity release products were selected for this study by an expert advisory panel. New marketing initiatives are being used to promote bank accounts, including forms of insurance, for the ‘50+’ market. Also, older people are now expected to provide for their retirement and it is anticipated that equity release will be one product which may be used to fund and maintain consumer lifestyles. In the first phase of the study, a questionnaire was distributed to 152 people aged over 50 years in Scotland. Eighty‐three were completed, a response rate of 55%. The results informed the development of questions for the second phase which were discussed with 46 participants via the World Café in June 2008, enabling a deeper insight into their opinions. The research found that consumers had lost trust in financial product and service providers because of the perceived excessive profits of banks and lack of customer service. Further, many products and services were prohibited for or incurred extra costs to those aged over 60 or 65 years, leaving limited choices, and equity release products were seen as a last resort for those in financial difficulty. Although the profitability of banks has changed dramatically since the completion of data collection, the issues identified by older consumers in Scotland will be of international interest. The demographic changes resulting in an increasing proportion of elderly people in the population are reflected throughout the UK and many Organisation for Economic Co‐operation and Development countries. Similar financial products and services, which were the focus of this study, are promoted internationally, offering opportunities to replicate the research methods.     

Successful exporting to the Arabian gulf region: A survey of Bahraini consumers

This paper details the emerging need for relational skills in marketing. The challenges of fostering relational resources within marketing practice and pedagogy are then discussed. Next, the paper explores the value of experiential learning approaches in education and considers different experiential models for fostering relational resources. An African Drumming circle was chosen, because it offers exciting opportunities to explore relational principles both through the actual lived experience as well through the active exploration of the metaphor. The paper concludes that the drumming circle offers an interesting access to experiencing the movement from being an individual actor to collaborating as part of a wider network of actors. Thus, insights are generated at the level of lived experience as well as at a more metaphoric one. The paper therefore serves to foreground the role of pedagogy in Relationship Marketing     

How venture capitalists respond to unmet expectations: The role of social environment

In this paper, we seek to explain venture capitalists' reactions to disappointments caused by entrepreneurs. Our basic assumption is that venture capitalists' social environment, defined as exposure to venture capital and business communities, will influence their responses to problematic situations. The results of our study suggest that venture capitalists with strong ties to their colleagues and with managerial experience are more inclined to use active and constructive approaches than venture capitalists with a lesser exposure to the venture capital and business communities.