The impact of formal processes for market information acquisition and utilization on the performance of Chinese new ventures

The authors examine the performance impact of formal market information processes. Specifically, a theoretical model is developed that hypothesizes that formal processes for market information acquisition and utilization have direct and positive main effects on new venture success and is then tested using a sample of 222 new ventures located in China. Findings indicate that new venture success is positively correlated with the use of formal processes for market information acquisition and use. Moreover, the relative importance of formal processes to the acquisition and use of market information depends on whether the new venture serves an emerging or established market. In particular, the impact of formal processes for information acquisition is higher among new ventures that serve emerging markets. In contrast, the impact of formal processes for information use is higher among new ventures that serve established markets. We present managerial implications of our results. For example, a new venture with a strong market orientation can respond quickly to emerging marketplace needs, and can even seize the advantage from incumbents. If it is in an emerging market, however, the new venture management team should strive to excel at information acquisition; in an established market, it is important for the management team to excel at information utilization.     

Minimum variance cross hedging under mean‐reverting spreads,stochastic convenience yields,and jumps: Application to the airline industry

Exchange traded futures contracts often are not written on the specific asset that is a source of risk to a firm. The firm may attempt to manage this risk using futures contracts written on a related asset. This cross hedge exposes the firm to a new risk, the spread between the asset underlying the futures contract and the asset that the firm wants to hedge. Using the specific case of the airline industry as motivation, we derive the minimum variance cross hedge assuming a two‐factor diffusion model for the underlying asset and a stochastic, mean‐reverting spread. The result is a time‐varying hedge ratio that can be applied to any hedging horizon. We also consider the effect of jumps in the underlying asset. We use simulations and empirical tests of crude oil, jet fuel cross hedges to demonstrate the hedging effectiveness of the model. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:736–756, 2009     

Seizing the upside of a downturn

Is it possible for an economic downturn to be a time of managerial inspiration? We found 50 ways to answer that question with a Yes!     

Custom-built

Mass customization has rapidly moved from an abstract theory to a practical source of competitive advantage. Fabrizio Salvador has been studying the companies that have bolstered their business by tapping into the idiosyncratic needs of customers. Tom Brown reports on his latest thinking.     

The effects of role strain on the consumer decision process for groceries in single-parent households

Single-parent families are becoming a larger part of American society. But what is known about their decision-making processes? Role strain is of particular interest when studying single parents because of their need to serve multiple family roles otherwise carried out by dual-parent families. In this study, the consumer decision process for single parents is empirically examined in the context of grocery shopping. Role strain was found to have a significant effect on problem recognition style and reactive shopping behaviors. Advertising positively influenced proactive shopping behaviors and had a negative relationship with reactive shopping behaviors. Implications for food retailers are provided.     

The effect of high fuel costs on liner service configuration in container shipping

For shipping activities, not least container shipping, bunker fuel is a considerable expense. In the last 5 years, bunker prices have risen considerably. An increasing bunker price in container shipping, especially in the short term, is only partially compensated through surcharges and will therefore affect earnings negatively. This paper deals with the impact of increasing bunker costs on the design of liner services on the Europe–Far East trade. The paper assesses how shipping lines have adapted their liner service schedules (in terms of commercial speed, number of vessels deployed per loop, etc.) to deal with increased bunker costs. The paper also includes a cost model to simulate the impact of bunker cost changes on the operational costs of liner services. The cost model demonstrates for a typical North Europe–East Asia loop that the current bunker prices have a significant impact on the costs per TEU even when using large post-panamax vessels. The model also shows shipping lines are reacting quite late to higher bunker costs. The reasons that explain the late adaptation of liner services relate to inertia, transit time concerns, increasing costs associated with fixing schedule integrity problems and fleet management issues.     

"Proxy Power" and Corporate Democracy:

A bstract . Separation of corporate ownership from control has permitted the rise of a self perpetuating managerial elite , which operates businesses in its own self interest. The attempt of the corporate democracy and corporate responsibility movements to curb unbridled management power through stockholder proxy proposals has been highly publicized. Analysis of stockholder initiated resolutions contained in the proxy statements of 626 corporations indicates that relatively few companies receive even one resolution, that proposers are usually small shareholders operating independently or in loose coalitions with limited resources and divergent interests, that managements use massive resources to oppose virtually all proposals and defeat most overwhelmingly, and that the handful of management concessions to stockholder activists is actually cosmetic mollification. We conclude the proxy power is structurally weak and is not a realistic agent of corporate change, in that management structure and policy-making power remain intact.     

Are consumers' perceptions of price–quality relationships well calibrated?

Past research has shown that, to varying degrees, consumers tend to believe price is an indicator of quality, even though there is in fact often very little correlation between objective measures of price and quality (PQ). Moreover, consumers have been observed to be poorly calibrated in their knowledge of precisely which categories exhibit the strongest association between PQ for products. Given the profound changes that have occurred in consumer markets, such as the rise of the Internet and the flood of product quality information now readily available online, the present work seeks to update this line of research. Specifically, it seeks to determine if changes in the marketplace have affected (1) consumers' perceptions of the PQ relationship; and (2) consumers' PQ calibration. Data from two sources were collected and compared: (1) Subjective ratings of the PQ relation for various common products, collected using a questionnaire format in a survey of 313 US consumers; and (2) Objective estimates of the actual PQ association of the same products, gathered from independent third‐party information providers who report both prices and rank‐ordered quality measures for each. Results indicate that consumers today (1) continue to perceive a modest positive relationship between PQ (more so for durables, less for non‐durables); and (2) are modestly calibrated for durable products. But they are much less well calibrated in the realm of non‐durables, where consumers expect a positive link between price and quality in precisely those product categories in which the relationship is actually negative. Relative to past research, the calibration of consumers has apparently ‘flipped’ from non‐durables to durables today. Potential explanations for this result include (1) the rise of the Internet as an information source for quality ratings of durables; (2) a higher level of perceived risk for durable goods purchases; (3) a greater tendency for durables to exhibit a positive correlation between actual quality and price; and (4) the rising quality level of private label brands, which may render prior price–quality perceptions for non‐durables outdated or obsolete.     

Epistemic communities and the global alliance against tobacco marketing

The World Health Organization's (WHO's) Framework Convention on Tobacco Control (FCTC) is a major blow to the worldwide expansion strategies and marketing practices of transnational tobacco companies. As expected, the industry vehemently opposed the treaty, lobbying instead for voluntary agreements and regulation by the market. However, in spite of bitter and persistent opposition by the tobacco industry, the FCTC was adopted by WHO. If the tobacco industry “lost” its battle to prevent FCTC from being institutionalized, who “won” and how? Our research suggests that the efforts of the epistemic community—a like‐minded network of professionals whose authoritative claim to consensual knowledge provides them with a unique source of power in public policy decision making—won the battle by being able to better convince the decision makers as to the needs of the FCTC by relying on, and successfully disseminating, its knowledge, expertise, and ideas. © 2009 Wiley Periodicals, Inc.     

Click Here for Internet Insight: Advances in Clickstream Data Analysis in Marketing

Clickstream data are defined as the electronic record of Internet usage collected by Web servers or third-party services. The authors discuss the nature of clickstream data, noting key strengths and limitations of these data for research in marketing. The paper reviews major developments from the analysis of these data, covering advances in understanding (1) browsing and site usage behavior on the Internet, (2) the Internet's role and efficacy as a new medium for advertising and persuasion, and (3) shopping behavior on the Internet (i.e., electronic commerce). The authors outline opportunities for new research and highlight several emerging areas likely to grow in future importance. Inherent limitations of clickstream data for understanding and predicting the behavior of Internet users or researching marketing phenomena are also discussed.