Choosing the Right Metrics to Maximize Profitability and Shareholder Value

There is an ever-present need for managers to justify marketing expenditures to the firm. This can only be done when we can establish a direct link between marketing metrics and future customer value and firm performance. In this article, we assess the marketing literature with regard to marketing metrics. Subsequently, we develop a framework that identifies key metrics that firms should focus on that can give a firm a better picture of how they got to where they are now and insights towards how they can continue to grow into the future. We then identify several organizational challenges that need to be addressed in order for firms to build the capabilities of collecting the right data, measuring the right metrics, and linking those metrics to customer value and firm performance. Finally, we offer guidelines for future research with regard to marketing metrics to help firms establish successful marketing strategies, measure marketing effectiveness, and justify marketing expenditures to top management.     

“It's nice to get a wee treat if you've had a bad week”: Consumer motivations in retail loyalty scheme points redemption

Research into loyalty schemes focuses primarily on business (strategy) rather than consumer perspectives. This paper investigates consumer motivations in retail loyalty scheme points redemption, through a qualitative study of participants in a major UK retail loyalty scheme. Academic research tends to neglect investigation of points redemption, despite its probable significance to consumers and certain value to businesses. The research identifies planned behavior towards redemption goals, plus interruptions by various circumstances and events. Self-gifting for reward and/or therapy purposes is common. Redemption activities have positive implications for consumer perceptions of the scheme and the retailer and appear to enhance future purchasing behavior. From these findings, this paper draws implications for theory and practice.     

Would African Countries Benefit from the Termination of Kenya’s Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses

This paper assesses the impact of Kenya’s preferential status on EU demand for imported roses by country. Import demand equations were estimated using a production version of the Rotterdam model in an Armington framework. With the expiration of the Lomé Convention, tariffs (up to 24%) on Kenyan roses were likely if an Economic Partnership Agreement (EPA) was not signed by January 2008. Roses from African countries not subject to tariffs were expected to displace Kenya’s exports in the future. However, results of this study showed that roses from African countries were complements in the EU market and those exports from Zimbabwe and Other African countries would have been negatively impacted if a Kenya–EU EPA was unsuccessful. Given the maximum import duty on Kenyan roses, EU imports from Kenya would decrease by 9.1% and imports from Zimbabwe and Other African countries would decrease by 6% and 4%, respectively.     

Apparent Gains,Hidden Costs: Examining Adoption Drivers,Yield, and Profitability Outcomes of Rotavator Tillage in Wheat Systems in Nepal

The ‘high speed’ rotavator is used for shallow tillage to create a fine tilth and incorporate crop residues, often with a single tractor pass. Rotavator tillage has spread quickly in many parts of South Asia, despite short-term experimental trials suggesting deteriorating soil quality and crop yield penalties. Evidence of rotavator impacts on farmer fields across soil gradients and time is largely absent. From a farm household survey conducted among wheat farmers in Nepal, we estimate wheat yield and profitability outcomes for rotavator adopters and non-adopters using propensity score matching. We find that rotavator adoption leads to inferior outcomes, despite significant cost savings for land preparation (US$ 11–15 per hectare). With rotavator adoption, farmers lose about 284–309 kg of wheat grain and about US$ 93–101 of profits on average per hectare per season, and these penalties increase with longer-term use of the technology. Adoption of rotavator appears to be driven by the cost and time savings for land preparation. Against this backdrop, new policy and extension efforts are required that discourage rotavator use and favour more sustainable tillage technologies.     

The Causes and Consequences of Sectoral Reallocation: Evidence from the Early 21st Century

A number of industries underwent large and permanent reductions in employment growth at the beginning of this decade. We investigate the sources of these permanent changes in employment growth and what the consequences were for the U.S. economy. In particular, we find that relative declines in demand rather than technological innovations were the key drivers of the elevated levels of job destruction and permanent layoffs in the affected industries. In addition, most workers that were displaced in downsizing industries relocated to other sectors. While this process of reallocation led to large increases in productivity (and a reduction in labor's share of aggregate income) in industries shedding workers, it also resulted in prolonged periods of unemployment for many displaced workers, along with sizable reductions in earnings that were consistent with substantial losses in their specific human capital. Putting these pieces together, we estimate the costs to those adversely affected by these events to have been 1/2 percent to 1 percent of aggregate income per year.     

Insufficient discriminant validity: A comment on Bove, Pervan, Beatty, and Shiu (2009)

Bove, Pervan, Beatty, and Shiu [Bove, LL, Pervan, SJ, Beatty, SE, Shiu, E. Service worker role in encouraging customer organizational citizenship behaviors. J Bus Res 2009;62(7):698-705.] develop and test a latent variable model of the role of service workers in encouraging customers' organizational citizenship behaviors. However, Bove et al. [Bove, LL, Pervan, SJ, Beatty, SE, Shiu, E. Service worker role in encouraging customer organizational citizenship behaviors. J Bus Res 2009;62(7):698-705.] claim support for hypothesized relationships between constructs that, due to insufficient discriminant validity regarding certain constructs, may be inaccurate. This research comment discusses what discriminant validity represents, procedures for establishing discriminant validity, and presents an example of inaccurate discriminant validity assessment based upon the work of Bove et al. [Bove, LL, Pervan, SJ, Beatty, SE, Shiu, E. Service worker role in encouraging customer organizational citizenship behaviors. J Bus Res 2009;62(7):698-705.]. Solutions to discriminant validity problems and a five-step procedure for assessing discriminant validity then conclude the paper. This comment hopes to motivate a review of discriminant validity issues and offers assistance to future researchers conducting latent variable analysis.     

Real estate issues in corporate relocation in Western Europe

If you plan to relocate an office or plant in Europe to take advantage of Europe 1992, you need some understanding of European real estate markets and their effects on corporate relocation decisions.     

Fenced in: Common property struggles in the management of communal rangelands in central Eastern Cape Province,South Africa

This paper takes as its starting point the assertion that current rangeland management in the central Eastern Cape Province (former Ciskei) of South Africa, is characterised primarily by an ‘open-access’ approach. Empirical material drawn from three case-study communities in the region is used to examine the main barriers to management of rangeland as a ‘commons’. The general inability to define and enforce rights to particular grazing resources in the face of competing claims from ‘outsiders’, as well as inadequate local institutions responsible for rangeland management are highlighted as being of key importance. These are often exacerbated by lack of available grazing land, diffuse user groups and local political and ethnic divisions. Many of these problems have a strong legacy in historical apartheid policies such as forced resettlement and betterment planning.     

When worlds collide: The implications of panel data-based choice models for consumer behavior

Panel data, both diary and scanner, have been analyzed by marketing scientists for over thirty years. One of the important uses of panel data is to better understand consumer behavior by developing and testing hypotheses using the revealed preference data rather than experimental data that uses only self-reported behavior or behavior in a simulated choice environment. The purpose of this paper is to suggest areas of research where panel data can be used to better understand the underlying behavior of the panel members.     

Negotiation in engineering design

Concurrent design may shorten the duration of a design project, reduce cost, and improve quality of the final design. However, due to the diversified problem-solving knowledge and different goal setting between design agents, it may increase the number of conflicts and make the project more difficult to manage. In this article, a goal-directed negotiation model for resolving conflicts in a cooperative design environment is presented. The proposed model generates negotiation sets, analyzes utilities derived for each design agent, and evaluates them based on three decision rules: maximization of the joint utility, minimization of individual utility differences, and minimization of individual utility differences and maximization of joint utility. A compromise solution is reached iteratively. The approach proposed in this articles is concerned not just with satisfying design constraints, but attempts to maximize system objectives. An example of the poppet relief valve is used to demonstrate the negotiation concept.