Advertising Spending Efficiency Among Top U.S. Advertisers from 1985 to 2012: Overspending or Smart Managing?

The current study tests two competing predictions of long-term adspend efficiency: the “overspending perspective” predicts continued high inefficiency, while the “smart manager perspective” predicts improved efficiency. Longitudinal analysis of efficiency among top 100 U.S. advertisers from 1985 to 2012 using data envelopment analysis reveals that inefficiency has increased over time. Approximately 61% of top advertisers are inefficiently using their ad dollars and are overspending by an average of 34%. Findings also indicate that the Internet, a medium highly praised and utilized for the amount and depth of consumer data it generates, has not impacted overall efficiency in any meaningful way.     

Impact of Wal-Mart on Market Share in a Rural Grocery Market: An Application of the Markov Chain Model

With Americans spending up to 13% of their income on grocery shopping, smart shopping can help a typical family save. Many scholars have studied the effects on market share and profits from changing market share using the Markov model, and also studied the competitive strategies of grocery retailers under these conditions. While the forecast of the steady state is highly useful, examining the transition periods before the steady state is reached is also useful. In these transition periods, a retailer may opt for a new competitive strategy; therefore, the transition periods may provide greater insight into the dynamics of the competitive response. More attention should be paid to the revenues for groceries in transition periods before a steady state is reached—especially in markets dominated by retail giants, such as Wal-Mart. This study attempts to model that phenomenon and to explore appropriate competitive strategies.     

Value Innovation in Export Marketing Strategy: The Case of a Canadian Firm in Japan

Maple Leaf Foods Inc. maintains a market leadership in Canada for its food processing and export business and sustains its relatively high growth. MLF has an innovative approach to strategy as it reduces head-to-head competition with other major pork exporters in Japan and raises its premium image with an innovative food safety program. MLF is creating a new market segment in Japan's pork market by positioning itself between the domestic premium segment and the import commoditized segment and attracting consumers who are interested in both brand and price. This article illustrates how MLF innovates value in a competitive marketplace, using Kim and Mauborgne's blue ocean strategy framework.     

How Knowledge Management Capabilities Help Leverage Knowledge Resources and Strategic Orientation for New Product Advantages in B-to-B High-Technology Firms

ABSTRACT

Purpose: Current understanding of how new product development (NPD) teams use knowledge management capabilities to acquire, disseminate, and apply knowledge resources to achieve competitive advantages is limited by a lack of compelling theory supported by empirical evidence. This study provides a theoretical framework and empirical validation for how an NPD team manages knowledge resources and strategic orientation to enhance its knowledge management capabilities, which, in turn, lead to business-to-busienss (B-to-B) new product advantages.

Methodology/approach: A total of 100 sets of data was collected from B-to-B firms in U.S. high-tech industries. In order to validate the proposed hypotheses, we estimated the main effects using path analysis in AMOS, and tested for interaction effects using interaction term regressions.

Findings: Our findings show that the two dimensions of NPD knowledge management capabilities—acquisition and application—are important but differential drivers of product quality superiority and product differentiation. In testing whether NPD management capabilities matter for two product advantage constructs, we confirmed that product quality superiority can be enhanced by both NPD knowledge acquisition and application capabilities, whereas product differentiation can be increased strongly by NPD knowledge acquisition capabilities.

Research implications: Our research confirms the importance of strategic orientation as a driver of NPD knowledge management capabilities, which enhances understanding of how strategic factors operate under a resource-based view. Our results further provide direct empirical support for the knowledge-based view of firms, in that an NPD team’s abilities to manage and deploy knowledge-based resources by acquiring and applying NPD knowledge lead to competitive advantages, for outcomes of quality superiority and differentiation.

Practical implications: Our findings have relevance for managers in three ways. First, NPD knowledge acquisition and application capabilities have differential impacts on product quality superiority and differentiation. Second, in exploring NPD resource factors as antecedents, managers should manage levels of NPD market intelligence, resource tacitness, and NPD resource deployment differentially to directly improve NPD teams’ acquisition and application capabilities. Third, managers should not underestimate the importance of market and technological orientations in enhancing NPD knowledge management capabilities. Market orientation drives both NPD knowledge acquisition and application capabilities; technological orientation drives NPD knowledge application capabilities. Originality/value/contribution of the paper: An NPD team’s knowledge management capabilities generally, but differentially, mediate the relationships of knowledge resources and strategic orientation factors with new product competitive advantage. However, simply enhancing NPD knowledge management capabilities is not a panacea for developing product competitive advantage in B-to-B settings, because of their differential effects.     

Performance implications of store format diversification for international retailers

Abstract

International retailers face formidable tasks in trying to replicate, or improve upon, their home country success abroad. Their market-seeking efforts sometimes require strategic diversifications of their store format portfolios capable of serving customers in different host countries. In this study, we examine whether the degree of store format diversification helps improve the performance of international retailers. We also assess the possible moderating effects of three factors—internationalization speed, political distance, and cultural distance—on this relationship. Utilizing 2001–2015 panel data for 19 retailers originating from several home countries and operating in multiple host countries, we employ a fixed effects model to examine the hypothesized relationships. Our results show that the performance of international retailers is influenced negatively by store format diversification. This relationship is moderated by internationalization speed and political distance, but not by cultural distance.     

Impact of Advertising Model's Body Size on Perceived Product Quality: Category-Based Induction Approach

Abstract

Thin female models are aggressively employed in advertisements (Slater, Tiggemann, Hawkins, & Werchon, 2012; Wasylkiw, Emms, Meuse, & Poirier, 2009). Previous studies showed that physically attractive advertising are effective because image-transfer occurs between the models and advertised products (e.g., Kamins & Gupta, 1994). Considering that the current standard for physical attractiveness is thinness for women (Gurung & Chrouser, 2007), the effect of thin female spokespersons can be attributed to the image-transfer. To explain the mechanism of image-transfer, the current study employed category-based induction as a theoretical foundation. The results confirmed that consumers evaluated advertised products based on category-based induction. Specifically, consumers classified a thin female model into positive categorization, which was used to evaluate advertised products. The study also investigated the moderating role of various psychographic factors. The results showed that adherence to traditional gender roles and perfectionism interacted with the model's body size, influencing on how consumers evaluated the quality of advertised products.     

The moderating effect of innovation protection mechanisms on the competitiveness of service firms

This empirical study examines the effectiveness of innovation protection mechanisms (IPMs) in capturing returns from innovation in service firms. To identify their effects, we set five types of IPMs (patents, other intellectual property rights, speed to market, secrecy, and complementary resources) as a moderator of the relationships between the innovation and firm competitiveness. Through a sample of service firms from the Korean Innovation Survey, the results of this study indicated that firm competitiveness cannot be influenced by service innovation alone but rather it is influenced by service innovation used in conjunction with IPMs other than patents. The results contribute to understanding innovation protection strategies for better competitiveness of service firms.     

Investigating brand preferences across social groups and consumption contexts

Using a unique dataset on U.S. beer consumption, we investigate brand preferences of consumers across various social group and context related consumption scenarios (??scenarios??). As sufficient data are not available for each scenario, understanding these preferences requires us to share information across scenarios. Our proposed modeling framework has two main building blocks. The first is a standard continuous random coefficients logit model that the framework reduces to in the absence of information on social groups and consumption contexts. The second component captures variations in mean preferences across scenarios in a parsimonious fashion by decomposing the deviations in preferences from a base scenario into a low dimensional brand map in which the brand locations are fixed across scenarios but the importance weights vary by scenario. In addition to heterogeneity in brand preferences that is reflected in the random coefficients, heterogeneity in preferences across scenarios is accounted for by allowing the brand map itself to have a discrete heterogeneity distribution across consumers. Finally, heterogeneity in preferences within a scenario is accounted for by allowing the importance weights to vary across consumers. Together, these factors allow us to parsimoniously account for preference heterogeneity across brands, consumers and scenarios. We conduct a simulation study to reassure ourselves that using the kind of data that is available to us, our proposed estimator can recover the true model parameters from those data. We find that brand preferences vary considerably across the different social groups and consumption contexts as well as across different consumer segments. Despite the sparse data on specific brand-scenario combinations, our approach facilitates such an analysis and assessment of the relative strengths of brands in each of these scenarios. This could provide useful guidance to the brand managers of the smaller brands whose overall preference level might be low but which enjoy a customer franchise in a particular segment or in a particular context or a social group setting.     

Order Effect and Vendor Inspection in Online Comparison Shopping

In the context of online comparison shopping, the phenomenon of order effect and its impact has profound theoretical and practical significance, as many search engines and shopping portals offer paid placement and paid inclusion in search results. In this study, we investigate how order effects and other market competitive factors work together to attract consumers’ attention to online vendors, which is manifested by the time spent on collecting more vendor information, and the probability of a vendor being included in a consumer’s consideration set. We found that the effect of serial position of a vendor in a list is mediated by consumers’ attention which in turn affects the probability of the vendor being accepted.     

The Amplifying and Buffering Effects of Virtuousness in Downsized Organizations

Virtuousness refers to the pursuit of the highest aspirations in the human condition. It is characterized by human impact, moral goodness, and unconditional societal betterment. Several writers have recently argued that corporations, in addition to being concerned with ethics, should also emphasize an ethos of virtuousness in corporate action. Virtuousness emphasizes actions that go beyond the “do no harm” assumption embedded in most ethical codes of conduct. Instead, it emphasizes the highest and best of the human condition. This research empirically examines the buffering and amplifying effects of virtuousness in organizations. The study hypothesizes that virtuousness has a positive effect on organizations because amplifying dynamics make subsequent virtuous action more likely, and buffering dynamics reduce the harmful effects of downsizing. The study reveals that two types of virtuousness – tonic and phasic – are associated with these effects.