Cause marketing and customer profitability

This research marks the first attempt to investigate the cause marketing–customer profitability relationship, and to assess whether features can moderate the influence of cause marketing (CM) on customer profitability for a focal brand and its main rival. We obtain a panel dataset on 7257 customers to evaluate the Yoplait–Susan G. Komen partnership. On a propensity score matched sample, we estimate a multilevel model and find that Yoplait’s CM initiative positively influences Yoplait’s customer profitability (2.70%), along with a deleterious effect on Dannon’s customer profitability (?13.31%). These findings are theoretically meaningful and pragmatically useful as they: (1) provide behavioral evidence of CM’s profit impact, (2) establish CM as an “offensive” strategy that cultivates the rival’s customers, (3) suggest features can amplify the effect of CM on the focal brand’s customer profitability, and (4) support that managers can add CM to their strategic marketing arsenal as an instrument to strengthen brand equity.     

Consumer response to and choice of customized versus standardized systems

Recent research on customization suggests that a need exists to examine conditions under which selling customized versus non-customized offerings will be more beneficial to vendors. To this end, this paper empirically evaluates consumer response to and choice of customized systems (offerings that are integrated and customized) in relation to standardized systems (offerings that feature integration but not customization). Through a series of studies, we demonstrate that the relationship between a buyer's systems purchase strategy and their future repurchase intentions toward the seller is moderated by a buyer characteristic (that is, a consumer's insight into his/her own preferences, or the degree to which a consumer can confidently and consistently express his or her true preferences) as well as a seller characteristic (retailer reputation). Given that consumers who are experts have greater insight into their own preferences than novices, our work also suggests that this greater insight into one's own preferences is a plausible explanation for why experts are more likely to choose a customized system. The main practical implication of our research is that it prompts managers to challenge the contention in some mass customization writings that customized offerings have universal appeal. Although the participants in our studies also tended to be more attracted to customized systems in general, this proclivity was lower for consumers with less product category expertise. This is important because our results convey that repurchase intentions towards a vendor will be higher after the purchase of a non-customized system by those consumers who lack insight into their preferences. As such, firms should try to propose customized systems only to those prospective buyers who possess strong preference insight, and propose standardized systems to those buyers who do not.     

AROUSAL,MEMORY, AND IMPRESSION-FORMATION EFFECTS OF ANIMATION SPEED IN WEB ADVERTISING

Animated advertisements on the Web come in a variety of shapes, sizes, and colors; they also animate at different speeds. Although recent studies have shown animated ads to be more effective than still ads, the role played by the rate of motion in animated ads has been neglected. An experiment was designed to address this issue by focusing specifically on the physiological and psychological effects of animation speeds in Web ads. Hypotheses derived from motion effects, excitation transfer, limited capacity, and vividness effects theories were tested via a mixed-design experiment wherein participants (N = 47) were exposed to both slow-paced and fast-paced animated ads in one of two sequences (fast then slow, or slow then fast). Arousal was monitored during reception, while memory, conation, and impression formation were measured via a postexposure paper-and-pencil questionnaire. Results indicate that animation speed is a psychologically significant variable. Theoretical and practical implications are discussed.     

Is Devolution Democratization?

Recent attempts at introducing new forms of governance in forest management in India have focused on devolution to user-groups or village level “participatory committees.” Success or failure is attributed to the presence or absence of “social capital” among these groups. These groups have never existed outside the state, however, and social relations, including social capital, are continually being transformed by administrative and market forces. This paper argues that what matters is not the degree of government intervention, i.e., more or less devolution, or the degree of social capital among local communities, but state accountability. This can only be ensured through addressing questions of political reform.     

Digitization of selling activity and sales force performance: An empirical investigation

Firms are creating a digitized selling capability by developing Web sites designed to provide information and conduct transactions with customers, replacing many routine sales force activities. The authors use the motivationability framework to shape a conceptual model that examines the effects of the digitization of selling activity on two salesperson outcomes: salesperson effectiveness and salesperson job-insecurity. Using data from salespeople in 168 firms, they assess the moderating effects of environmental-level motivational factors and firm-level ability factors on the impact of digitization of selling activity on salesperson effectiveness and job insecurity. The results reveal that digitization has the paradoxical effect of improving salesperson effectiveness and heightening job insecurity concerns, and also that managers can improve the technology-enabled multichannel capabilities of the firm by giving priority attention to human capital improvement, sales force control systems, and communication of the digitization strategy. Devon S. Johnson (Ph.D., London Business School, dj@devonjohnson.com) is currently an assistant professor of marketing at Northeastern University, Boston. Previously, he was an assistant rofessor of marketing in the Giozueta Business School at Emory University. His research interests are the role of social capital in relational exchange and technology consumption and implementation. Sundar Bharadwaj (Sundar_Bharadwaj@bus.Emory.edu) is an associate professor of marketing in the Goizueta Business School at Emory University. His general research interests focus on marketing strategy and performance and risk. His research has been published in theJournla of Marketing, Management Science, and theJournal of the Academy of Marketing Science, among others.     

Trade Imbalances and Inventory Effects in Long-term S&P 500 Index Options

This article investigates how trade imbalances affect prices in the S&P 500 Long‐term Equity Anticipation Securities (LEAPS) market. From 1994 to 1996, put volume was 30 times higher than call volume, and public purchases of puts vastly outnumbered sales. We find that LEAPS put quotes are revised following trade imbalances by more than can be explained by information effects, suggesting that put prices are subject to price pressure or inventory effects. The results suggest market frictions are important in the pricing of options, at least in settings in which arbitrage is particularly costly and public demand leans toward one type of order.     

The impact of offshored and outsourced call service centers on customer appraisals

Firms are increasingly relying upon offshored and/or outsourced call centers to provide post-sales assistance to their customers. Although the motivation to engage in these practices is efficiency gains, the possibility exists that offshored and outsourced call centers may have a detrimental impact on customer appraisals. The aim of this research is to posit the conceptual reasons as to why differences may arise in customer evaluations from these practices. To this end, we rely on the homophily principle and hybrid organization theory to provide conceptual grounding, and utilize a company dataset of customer post-call evaluations to offer an initial test of the hypotheses.

A meta-analysis of the determinants of organic sales growth

We present the results of a meta-analysis on drivers of organic sales growth conducted using a Hierarchical Bayes estimation technique. Based on a comprehensive review of a diverse set of literatures on organic sales growth, we identify eleven drivers of organic sales growth performance of firms: (i) innovation, (ii) marketing orientation (iii) advertising (iv) interorganizational networks, (v) entrepreneurial orientation, (vi) management capacity, (vii) firm age, (viii) firm size, (ix) competition, (x) munificence, and (xi) dynamism. Among the variables under a manager's control, innovation, advertising, market orientation, interorganizational networks, entrepreneurial orientation and managerial capacity serve as positive drivers of organic growth. Older firms and firms operating in dynamic and competitive environments face constraints in terms of organic growth. We find that the omission of marketing variables in empirical models biases the elasticities of eight of the drivers of organic growth. Three study design characteristics impact the magnitude of elasticity of organic growth drivers: using cross-sectional data instead of panel data, using growth rates instead of absolute change as operationalization of growth and using market share instead of sales as a measure of revenues.     

How product aesthetics cues efficacy beliefs of product performance

Aesthetics of package design is an important consideration when consumers make purchase decisions. We argue that this is particularly the case for purchase decision of products in the beauty category. This paper advances current understanding of the role of packaging in product purchase behavior by identifying heuristic cues exhibited in packaging (i.e., that beautiful packaging is more effective at making the consumer more beautiful). Across a pilot field study and four lab studies, we demonstrate that package aesthetics informs inferences of how well the product can perform, which, in turn, drives purchase decisions. Importantly, we show that in the presence of a diagnostic cue such as a brand name, or an explicit promise (e.g. tagline of an advertisement), this effect is attenuated and rendered irrelevant. Further, we show that this effect is rendered ineffective to a category to which beauty is irrelevant. Hence, by signaling product efficacy, the beauty-in-a-bottle heuristic appears to inform purchase decisions.