Customer Profitability Analysis Reports for Resource Allocation: The Role of Complex Marketing Environments

Most decision making research in management accounting remains focused on cost information in a production context. Little is known on the relevance of customer profifitability analysis (CuPA) reports, which more accurately reflect revenue and marketing support variations acrosscustomers, for marketing decisions. This study uses an experimental design to examine the impact of such reports on resource allocation decisions (that affect the firm's profits) in marketing environments varying in complexity. The main result of the experiment suggests that the value of CuPA reports depends on the complexity of the marketing setting. Only in a highly complex marketing setting do they enhance resource allocation decisions and resultant firm profitability. Conversely, in the simple marketing environment, decision makers can combine their traditional volume-based cost data with other available types of feedback to perform as well as under a more accurate CuPA report. These findings on complexity contrast with those of a prior study in a production context ( Gupta and King, 1997 ). It is argued that improvements in the current research design, in the form of regularly updated profitability reports and concerning accuracy, increase the relevance of CuPA reports in a complex marketing setting.     

Utterly fresh perspectives on consumer research and advertising: Introducing the special issue from the 2013 La Londe conference

This article provides an overview of the papers from the 40th La Londe Marketing Communications and Consumer Behavior Conference that were selected for this special issue of the Journal of Business Research. The La Londe conference is a biennial event that attracts top researchers from across the world. A small and selective conference, its intimacy combined with high-quality presentations serves as an incubator for new ideas and fresh perspectives on consumer research, and does so through an international lens that is reflected in the diversity of countries represented on the conference program, the co-chairs of the conference, and the La Londe Conference Scientific Committee.     

The Car Cushion Hypothesis: Bigger Cars Lead to More Risk Taking—Evidence from Behavioural Data

Journal of Consumer Policy - Car traffic and accidents involving cars create an enormous societal cost, particularly in terms of negative consequences for public health. Mitigating these effects is...     

Too much of a good thing? Consumer response to strategic changes in brand image

The current research investigates a potential disadvantage of building brand associations that resonate with consumers' identities and facilitate consumer–brand bonding. The authors propose a theory of consumer response to changes that either dampen or augment the associations central to brand image (e.g., due to brand acquisitions or repositioning). The results show that consumers with a high degree of self–brand connection respond more negatively than others do to changes that dampen brand associations. Counterintuitively, changes augmenting brand associations can also lead to unfavorable consumer sentiments in certain instances. When brand connection was linked to an ideal self-identity (i.e., self-enhancement motives), changes that augmented the brand image increased the brand's ability to signal an ideal identity. Conversely, when brand connection was linked to the actual self-identity (i.e., self-verification motives), augmenting brand image reduced the perceived similarity between the self and the brand, thus causing brand identification to deteriorate.     

The effect of cost information on buyer–supplier negotiations in different power settings

We investigate the influence of total cost of ownership (TCO) information on buyer–supplier negotiations in different power settings. Based on social exchange theory and recent literature on information processing, we expect that buyers with detailed TCO information and less power than their negotiation partners may try to (re)gain control over their own outcomes by sharing information. The results of our experiment indicate that the performance disadvantage of less powerful buyers is less pronounced when the buyer has detailed TCO information, whereas more powerful buyers do not seem to be able to profit from TCO information. These somewhat counterintuitive findings are explained through detailed analysis of the buyer’s negotiation behavior, which shows that less powerful buyers who have access to TCO data use problem solving techniques more frequently than powerful buyers, who tend to rely on distributive bargaining techniques instead. We conclude that power can motivate a failure to share TCO information, resulting in less effective interfirm negotiation outcomes.     

On the role of sunk costs and asset specificity in outsourcing decisions: a research note

The accounting literature has argued that firms overengage in outsourcing because they tend to ignore the transaction costs involved in buying services from external suppliers. A field experiment with managers of health care organizations shows that decision makers are actually quite sensitive to the asset specificity associated with the “buy” option in an outsourcing decision. However, they also appear inappropriately sensitive to the sunk costs inherent in most real-life outsourcing decisions, and may actually underengage in outsourcing. Prior commitment to internal procurement systematically reduced the willingness to outsource, relative to a pure “make or buy” scenario.     

The Piecemeal Approach to Comparative Advertising

When attempting to portray the attractiveness of a brand vis-à-vis its competitors, an ad may make global claims about superiority or specific claims about one or more attributes. A special case of latter is the piecemeal ad in which the advertised brand is compared to a competitor on one attribute, a different competitor on a second attribute, another competitor on a third attribute, and so on. The present research demonstrates the effectiveness of this technique and explores the parameters of its influence. We find that piecemeal messages are persuasive because they make seemingly strong claims in a believable manner. Consumer skepticism appears to arise only when conditions for scrutiny are very favorable.