Group influences of selling teams on industrial salespeople’s cross-selling behavior

Cross-selling offers tremendous benefits for both vendors and customers. However, up to 75% of all cross-selling initiatives fail, usually for sales force–related reasons. Yet prior research has largely ignored the role of salespeople in the field of cross-selling. Using a motivation–opportunity–ability (MOA) framework, this research addresses factors that determine a salesperson’s cross-selling performance, including the predominant role of the selling team as a social environment in which individual behavior occurs. A dataset of 231 industrial salespeople working in 55 teams reveals that 37% of overall variation in behavior is caused by differences across teams. The team-specific hypotheses, based on social norms and reputation theory, are tested with a hierarchical linear modeling approach with matched data from three sources. Individual cross-selling motivation has a stronger effect when a selling team has strong cross-selling norms, and in the specific context of cross-selling, selling team reputation can constrain individual behavior that might damage that reputation. Salespeople also develop beliefs about the reasons for their team reputation, including its cross-selling ability, which can reduce an individual salesperson’s reputational concerns and hence reinforce individual cross-selling behavior. These results have significant theoretical and managerial implications.     

The dual role of price: decomposing consumers’ reactions to price

Price plays two distinct roles in consumers’ evaluations of product alternatives: as a measure of sacrifice and as an informational cue. This article merges two streams of empirical research into the effects of price on consumers’ product evaluations by combining stated preferences, obtained from conjoint measurement, with data on self-reported measures in the form of beliefs or attitudes. It thus offers new, substantive insights into the dual role of price. Specifically, it differentiates between the informational and sacrifice effects of price using a choice-based conjoint approach and differentiates further among different subcomponents of these two main effects by combining choice-based measures with self-reported measures that pertain to potential sources of the dual role of price (price response drivers) and underlying consumer characteristics. Thus, this article presents a general procedure to quantify the impact of the dual role of price on choice shares for product alternatives within a market simulation. This procedure enables managers to simulate the choice share effects of changes in price response drivers, as well as modifications in segmentation and targeting strategies that involve changes in the levels of the price response drivers and thus the levels of the informational and sacrifice components of the price response of demand.     

Delusive perception—antecedents and consequences of salespeople’s misperception of customer commitment

Although salespeople’s perception of their customers is often systematically biased, research on the antecedents and consequences of perceptual inaccuracy in customer–salesperson relationships is still scarce and limited in scope. Drawing on findings from personality research and social psychology, we therefore empirically examine potential antecedents and consequences of salespeople’s misperception of customer commitment in 233 customer–salesperson dyads. Results provide evidence of the effects of customer-related factors, relationship-related factors, and salesperson-related factors on the extent of salespeople’s misperception of customer commitment. Moreover, we show that salespeople with an upwardly biased perception of customer commitment engage in less relationship-building effort, which in turn negatively affects customer behavior.     

The effects of perceived scarcity on consumers’ processing of price information

This research examines how perceived scarcity influences consumers’ processing of price information. To explain the effects of scarcity, a conceptual framework which incorporates both the motivational and the interference effects of scarcity on information processing is developed. The results from two studies show that under scarcity, consumers’ perceptions of quality and monetary sacrifice exhibit different response patterns, depending on the relative price level and consumers’ motivation to process information. We provide insights into how these perceptions of quality and sacrifice are integrated to form perceptions of value. Additional analyses of thought measures provided further understanding of the underlying processes that influenced the evaluation of price information under scarcity.

The effect of investment in children’s education on fertility in 1816 Prussia

The interaction between investment in children’s education and parental fertility is crucial in recent theories of the transition from Malthusian stagnation to modern economic growth. This paper contributes to the literature on the child quantity–quality trade-off with new county-level evidence for Prussia in 1816, several decades before the demographic transition. We find a significant negative causal effect of education on fertility, which is robust to accounting for spatial autocorrelation. The causal effect of education is identified through exogenous variation in enrollment rates due to differences in landownership inequality. A comparison with estimates for 1849 suggests that the preference for quality relative to quantity might have increased during the first half of the nineteenth century.     

Remembering versus knowing: Issues in buyers’ processing of price information

A traditional assumption concerning how prices influence buyers’ purchasing behaviors has been that buyers know the prices of the products and services that they consider for purchase. However, empirical research during the past four decades repeatedly has discovered that buyers often are not able to remember the prices of items they had recently purchased. One conclusion that has been drawn is that buyers often do not attend to price information in purchase decisions. The authors argue that this conclusion may be incorrect in that what consumers can explicitly remember is not always a good indicator of what they implicitly know. Price information not consciously remembered can still influence internal reference prices and product evaluations. In this article, the authors discuss the conceptual and methodological ramifications of the distinction between remembering and knowing to reassess and refine our understanding of how buyers process and use price information. Kent B. Monroe is the J. M. Jones Professor of Marketing at the University of Illinois, Urbana-Champaign. He has pioneered research on the information value of price and is the author ofPricing: Making Profitable Decisions (2nd ed., McGraw-Hill, 1990). His research has been published in theJournal of Marketing Research, theJournal of Consumer Research, theJournal of Marketing, Management Science, theJournal of the Academy of Marketing Science, theJournal of Retailing, theJournal of Business, and theJournal of Business Research. He was chairman of the American Marketing Association’s Development of Marketing Thought Task Force from 1984 to 1988, was the editor of theJournal of Consumer Research from 1991 to 1993, is a Fellow of the Decision Sciences Institute, and serves as editor ofPricing Practice and Strategy. Angela Y. Lee is an assistant professor of marketing in the J. L. Kellogg Graduate School of Management at Northwestern University. Her research focuses on how people process information, both consciously and nonconsciously. She is particularly interested in studying the effects of exposure on memory, judgment, and choice behavior, and has examined changes in information-processing strategies adopted by individuals under different mood states and under different involvement conditions. Her research has been published in theJournal of Personality and Social Psychology andAdvances in Consumer Research. Her more recent work is forthcoming in theJournal of Consumer Research andPsychological Science.     

Relational benefits in services industries: The customer’s perspective

This research examines the benefits customers receive as a result of engaging in long-term relational exchanges with service firms. Findings from two studies indicate that consumer relational benefits can be categorized into three distinct benefit types: confidence, social, and special treatment benefits. Confidence benefits are received more and rated as more important than the other relational benefits by consumers, followed by social and special treatment benefits, respectively. Responses segmented by type of service business show a consistent pattern with respect to customer rankings of benefit importance. Management implications for relational strategies and future research implications of the findings are discussed. Kevin P. Gwinner is an assistant professor of marketing in the School of Business at East Carolina University, North Carolina. His primary research interest centers on improving and managing the performance of frontline, customer-contact employees. His research has been published in theInternational Journal of Service Industry Management, International Marketing Review, and theJournal of Marketing Education. Dwayne D. Gremler is an assistant professor of marketing in the College of Business and Economics at the University of Idaho. His current research interests are in services marketing, particularly customer loyalty and retention, relationship marketing, service encounters, and word-of-mouth communication. His work has been published in theInternational Journal of Service Industry Management, theJournal of Professional Services Marketing, andAdvances in Services Marketing and Management. Mary Jo Bitner is a professor of marketing and the research director for the Center for Services Marketing and Management at Arizona State University. Her research focuses on customer evaluations of service, service quality, and service delivery issues. She has published in theJournal of Marketing, Journal of the Academy of Marketing Science, Journal of Business Research, Journal of Retailing, and theInternational Journal of Service Industry Management. She is coauthor of the textServices Marketing (McGraw-Hill, 1996).     

The effects of supplier capabilities on industrial customers’ loyalty: the role of dependence

This research examines whether suppliers’ capabilities impact OEM customers’ dependence on the supplier and thereby generate customer loyalty. Using a sample of purchasing managers focusing on a single key component supplier, we examine three supplier capabilities, two dependence dimensions, and three aspects of customer loyalty. Core offering capability increases the customer firm’s benefit-based dependence. Operations capability has a more comprehensive effect, enhancing both benefit-based and cost-based dependence. Benefit-based dependence leads to relational loyalty and, through its effect on relational loyalty, to insensitivity to competitive offerings and future purchase expansion. Cost-based dependence motivates insensitivity to competitive offerings, but does not affect relational loyalty or purchase expansion. The supplier’s communication capability is associated with relational loyalty, but this effect does not flow through the customer firm’s dependence. The divergent pattern of antecedents and effects of benefit-based dependence and cost-based dependence may explain the inconsistent and insignificant research findings in previous research on dependence. Our results suggest that adopting a bi-dimensional model of dependence more fully captures the theoretical domain of dependence, thereby permitting researchers to better examine its role in supply chain, channel, and marketing relationships.     

The impact of a sales team’s perceived entitativity on customer satisfaction

This research investigates the impact of a sales team’s entitativity—the extent to which a group of individuals is perceived as a unified single entity—on customer satisfaction. Four studies demonstrate that a sales team entitativity cue, either based on appearance (e.g., wearing the same outfit) or based on behavior (e.g., explicit coordination in service), leads to heightened perceptions of service quality, which subsequently enhances customer satisfaction. Further, these two entitativity cues are shown to have interactive effects. Specifically, when both cues indicate high entitativity, customer satisfaction with the sales team exceeds the average evaluation of individual team members. However, if at least one cue suggests low entitativity (e.g., different outfits or no explicit coordination), the positive influence of the entitativity cue is undermined and customer satisfaction with the team’s service is mitigated. Product category is identified as an important moderator of the main effect.     

Effects of price framing on consumers’ perceptions of online dynamic pricing practices

The viability of online dynamic pricing, or differential pricing for the same product from the same seller, is still debatable given the contradictory findings reported in both modeling and behavioral price research. This paper examines tactical ways for online merchants to mitigate consumers’ negative reactions when adopting dynamic pricing strategies. In three experiments, we show that using various price-framing tactics, compared to no framing, can induce price-disadvantaged consumers to perceive their ostensibly similar transactions differently relative to their comparative other parties. As the degree of perceived transaction dissimilarity increases, price-disadvantaged consumers’ perceived price fairness, trust, and repurchase intentions are enhanced. We further compare different price framing tactics and demonstrate that they have different effects on consumers across different product price levels, customer segments, and framing formats. The paper concludes with theoretical and managerial implications of the research.     

Reducing marketing’s conflict with other functions: The differential effects of integrating mechanisms

To operate effectively, marketing must work in harmony with other functional departments in a firm. This study focuses on marketing’s interactions with three functions that play a key role in the achievement of marketing goals—finance, manufacturing, and R&D. The authors combine insights from previous studies and interviews with practicing managers to identify six integrating mechanisms proposed to mitigate manifest interfunctional conflict (behavior that frustrates marketing initiatives). In addition, they investigate the role of internal volatility (turbulence within an organization) in shaping manifest conflict. Based on a large-scale, multi-informant empirical study, the authors identify the more effective of these six integrating mechanisms. Furthermore, they argue and demonstrate these mechanisms are differentially effective across the marketing-finance, marketing-manufacturing, and marketing-R&D interfaces. Implications for theory and practice are discussed. Elliot Maltz received his MBA from the University of California at Davis and his Ph.D in marketing from the University of Texas at Austin. Prior to coming to the Atkinson School, he taught at the Marshall School of Business at the University of Southern California. Dr. Maltz’s research focuses on how market information can be effectively transmitted from marketing to other functions within a firm (e.g., R&D, manufacturing) or across firms (e.g., in distribution channels, strategic alliances) to facilitate new product development or marketing initiatives designed to respond to changes in market conditions. His research has been published in theJournal of Marketing, theJournal of Marketing Research, theJournal of Business Research, and theJournal of Product Innovation Management and Long Range Planning Ajay K. Kohli is the Isaac Stiles Hopkins Professor of Marketing at the Goizueta Business School at Emory University. His undergraduate degree is in electrical engineering, and his master’s and Ph.D. degrees are in business administration. He has also taught at the Harvard Business School, the University of Texas at Austin, Koblenz School of Corporate Management in Germany, and at the Norwegian School of Management, Norway. His published work focuses on market orientation, sales management, and B2B Marketing. He has received several research and teaching awards including the Jagdish N. Sheth Award for the best article published in theJournal of the Academy of Marketing Science in 1997, the Alpha Kappa Psi award for best practice-oriented article published in theJournal of Marketing (1990), and the Jack Taylor award for excellence in teaching at the University of Texas at Austin.     

Does advertising spending really work? The intermediate role of analysts in the impact of advertising on firm value

Both managers and investors are increasingly concerned with the impact of advertising spending on shareholder returns. This study investigates the analyst-based processes by which advertising may create firm value. Using a large longitudinal dataset with 1,052 firms over 20 years, we find that firms decreasing from the top 20% to the bottom 20% of advertising spending group when compared to all industry competitors would experience a drop of abnormal return by 4.08% in 1 year and a cumulative total of 81.6% in 20 years. Also, analyst activities partially mediate the impact of advertising on firm return and risk. These findings indicate that analysts may act to externally validate the business logic underlying the advertising expense. The more analysts factor in firm advertising spending and reflect it in their earnings forecasts, the more likely the benefits of advertising are channeled into firm value. The results bridge research interests across marketing, accounting, and finance disciplines and help managers understand how product and financial markets are united. Main Street could better align with Wall Street via corporate disclosure of advertising spending to equity analysts.     

Does innate consumer innovativeness relate to new product/service adoption behavior? The intervening role of social learning via vicarious innovativeness

Empirical studies provide an inconsistent picture of the relationship between an innovative personality predisposition (i.e., innate consumer innovativeness [ICI]) and innovative behavior (i.e., new product adoption behavior). Such inconsistencies suggest intervening variables that may mediate the relationship have not been considered. Using data from a panel of consumers (n = 296 in a cross-sectional phase, n = 147 in a matched, two-phase longitudinal analysis), we find that ICI does not directly influence adoption behavior but does so indirectly through two of three components of vicarious innovativeness (modeling and engagement in word of mouth but not exposure to advertising). Furthermore, despite the evidence that consumers’ decision processes differ for service versus product adoption, extant studies largely ignore the role of ICI in new service adoption. Our findings suggest that vicarious innovativeness plays a similar intervening role in service contexts. Finally, divergent operationalizations of adoption behavior (ownership, relative time of adoption) appear to perform equally well.

The moderating role of institutional networking in the customer orientation–trust/commitment–performance causal chain in China

This study uncovers the ignored role of institutional environment for marketing strategy and customer relationship management. Hypothesis tests in a sample of Chinese firms find support that channel networking strengthens the customer orientation–customer trust/commitment–firm performance (CTP) causal chain. In addition, the results show that government networking moderates this chain in a non-linear fashion. The CTP linkages are most salient when the firm develops a moderate level, rather than a high or low level of networking ties with government agencies.

The copycat CMO: firms’ imitative behavior as an explanation for CMO presence

The present study adds to the CMO literature the perspective of firms’ imitative behavior on why firms have CMOs in their TMT. We propose that a firm’s decision to have a CMO on its TMT is driven not only by contingency-reated considerations but also by social ones, as the decision is significantly influenced by industry peers. Empirical findings based on 505 large US firms from 2000 to 2012 indicate that firms’ imitative behavior is a significant driver of CMO presence, especially when firm uncertainty is strong and inference uncertainty is low. Post hoc analyses indicate that this imitation behavior tends to be performance neutral at best.     

The effect of cause-related marketing on firm value: a look at Fortune’s most admired all-stars

Companies are increasing their use of cause-related marketing as a means of communicating their commitment to corporate social responsibility while accomplishing their strategic goals. Although prior studies suggest that consumers react positively to cause-related marketing programs, understanding of their impact on financial performance remains limited. To address this gap, the authors employ an event study to examine the effects of cause-related marketing announcements on shareholder value using a sample of firms that appeared on Fortune’s Most Admired All-Star list between 2005 and 2017. Study results show that announcement of these initiatives results in a significant loss of shareholder value. These losses are most pronounced for firms making monetary-only contributions, in comparison to those that make in-kind donations. In addition, the negative effects are mitigated for firms that have stronger reputations, have greater resource slack, and operate in more dynamic industries. Moreover, low-reputation and low-slack firms benefit most from in-kind contributions.

     

The effects of customer acquisition and retention orientations on a firm’s radical and incremental innovation performance

The effect of a firm’s strategic focus on acquiring new customers and/or retaining existing customers (customer acquisition and retention orientations) on innovation performance is evaluated. With dyadic primary data collected from 225 strategic business units, the authors demonstrate that a firm’s focus on customer acquisition enhances its radical innovation performance but hinders its incremental innovation; a firm’s strategic orientation toward customer retention has the opposite effects. These effects are mediated by both customer knowledge development and the firm’s resource configuration decisions. In addition, the authors provide insight into the impact of managerial decision trade-offs when implementing customer engagement strategies. The results suggest that the effect of customer acquisition and retention orientations on customer knowledge and investment decisions, and ultimately on innovation performance, is amplified when a firm consistently implements a specific engagement strategy. Implementing a dual strategy by attempting to focus on both acquiring and retaining customers undermines resource configuration decisions, with diverse effects on both radical and incremental innovation.