Journal of Interactive Marketing

Published by Elsevier
Online ISSN: 1520-6653
Publications
Article
Mobile marketing, which involves two- or multi-way communication and promotion of an offer between a firm and its customers using the mobile, a term that refers to the mobile medium, device, channel, or technology, is growing in importance in the retailing environment. It has the potential to change the paradigm of retailing from one based on consumers entering the retailing environment to retailers entering the consumer's environment through anytime, anywhere mobile devices. We propose a conceptual framework that comprises three key entities: the consumer, the mobile, and the retailer. The framework addresses key related issues such as mobile consumer activities, mobile consumer segments, mobile adoption enablers and inhibitors, key mobile properties, key retailer mobile marketing activities and competition. We also address successful retailer mobile marketing strategies, identify the customer-related and organizational challenges on this topic, and outline future research scenarios and avenues related to these issues.
 
Article
We investigate the causal relationship between brand community identification, brand affect, community loyalty, brand loyalty, brand evangelism, and community evangelism, developing a structural equation model set within the context of online brand communities for newly hybridized roses. The analysis considers size as a moderator for the relationships between constructs, comparing small and large web-based brand communities. Findings highlight that small communities operate differently from larger ones with regard to numerous aspects, and possess specific strengths and weaknesses. Members of small communities develop higher community loyalty; brand loyalty in small community stems more from community loyalty than from brand affect; small communities engage in word of mouth for the community more than in word of mouth for the brand. Managerial implications are addressed.
 
Article
Economic theory indicates that E-retailers competing at price comparison sites, such as Shopper.com, must charge prices that cannot be systematically predicted by their rivals. Consistent with theory, we find significant variation in the identity of the lowprice firm as well as the level of the lowest price for 36 of the best-selling consumer electronics products sold at Shopper.com between November 1999 and May 2001. The observed pricing patterns can be explained by firms engaging in short-term price promotions in an attempt to avoid the deleterious outcome associated with price competition. Based on our arguments and the evidence presented, the managerial implications are clear: Strategic unpredictability in prices—through the use of hit and run sales—is a widely used and effective weapon for avoiding all-out price competition in online markets.
 
Article
How consumer's waiting times affect their retrospective evaluations of Internet Web Sites is investigated in four computer-based experiments. Results show that waiting can but does not always negatively affect evaluations of Web Sites. Results also show that the potential negative effects of waiting can be neutralized by managing waiting experiences effectively. A conceptual framework and formal random utility model is introduced.
 
Research framework. 
Average fixation frequencies per task by experimental conditions. 
a). General effect of animation and format on recognition (percentage of correct responses). b). Interaction effect of animation and format on recognition (percentage of correct responses). 
Article
Based on a general framework of consumer perception and processing of advertising, this study examines the impact of animation and ad format on the attention and memorization of online ads. Consumer attention to a variety of real-world ads was measured with eye tracking and ad memory was assessed with recognition and recall tests. The results suggest that on average, animation had little or no effect on attention. We did nevertheless observe a strong interaction effect between animation and ad format, which suggests that the effect of animation is conditioned by ad format. Animation has a positive effect on attention to skyscrapers, but a negative one on attention to banners. As to memorization, animation improved recognition effects, but mainly for banners. Surprisingly, consumers could recognize ads without having looked at them, which suggests that online consumers are especially parsimonious in allocating their focal attention and memory resources to irrelevant ads when they are involved in other tasks.
 
Strategic pricing and promotional organizational framework. 
Article
In the increasingly complex retailing environment, more and more retailers operate in more than one channel, such as brick-and-mortar, catalogs, and online. Success in this dynamic environment relies on the strategic management and coordination of both online and offline pricing. This article provides an overview of findings from past research in both offline and online domains and presents an organizing framework, as well as an agenda to spur additional research.
 
Article
Online trust is growing in importance as a topic of study and its influence on Internet marketing strategies is increasing. “Online trust includes consumer perceptions of how the site would deliver on expectations, how believable the site's information is, and how much confidence the site commands." (Bart, Yakov, Venkatesh Shankar, Fareena Sultan, and Glen L. Urban [2005], “Are the Drivers and Role of Online Trust the Same for All Web Sites and Consumers? A Large-Scale Exploratory Empirical Study,” Journal of Marketing, 69(4), 133–152). In this article, we review advances in online trust research based on an overarching framework, outlining the key insights learned so far. These insights include: online trust extends beyond privacy and security, is closely connected to website design, its formation is an ongoing process, and is heterogeneous across individuals and products. We propose several ideas for future research relating to multiple aspects of online research, such as the longitudinal component, multichannel element, global aspect, personalization and cross-disciplinary nature.
 
Article
Academic research has focused on the quality perceptions that drive customer satisfaction as the key to achieving e-service success. This paper develops a process-based model that relates perceptions of managerially actionable site characteristics to online satisfaction, which mediates the effects of site characteristics on intention to recommend e-services. A unique data set provided by Web Mystery Shoppers International Inc. (webmysteryshoppers.com), a market research supplier, enables the model to be refined using data from samples of responses to each of the competitive websites for one financial service, and then to be tested using similar data for another financial e-service and then for a travel e-service. The model, which accounts for most of the variance in online satisfaction and online intention to recommend in the fitted data, is largely confirmed on cross validation. Process evaluations and satisfaction mediate the effects of actionable website characteristics on intention to recommend e-services.
 
Article
Today's multichannel, multimedia retail marketing environment presents a number of brand management challenges. From a micro perspective, marketers must manage each individual channel and communication option to maximize their direct sales and brand equity effects, as well as any indirect brand equity effects from being associated with a particular channel or communication option. From a macro perspective, marketers must design and implement channel and communication options such that sales and brand equity effects are synergistic. Concepts, frameworks, and future research directions are put forth to address these different challenges.
 
Article
Companies have made major improvements in improving the ROI in areas such as production, logistics, and services. However, examining the productivity of marketing has long been ignored and has led many companies to view it as an expenditure that can be cut in difficult economic times. Calculating ROI for marketing expenditures such as media can help marketers defend their decisions, allocate limited resources the most profitably, and perhaps obtain larger budgets. In the study presented here, we perform a cross media analysis to compare interactive and traditional media.The Ford F-150 is used as a case example to illustrate how effectively comparing media results can improve resource allocation and maximize productivity from media expenditures.
 
Article
In this article, we review user information technology acceptance literature, formulate a model of consumer adoption of third generation mobile multimedia services, validate it through a qualitative exploratory study comprising 24 focus groups in six markets, and empirically test the proposed model on the Italian market. The results show that perceived usefulness, ease of use, price, and speed of use are the most important determinants of adoption of multimedia mobile services, in that order. They also show that the importance of determinants differs by age groups or segments. The results can help managers proactively design interventions (such as training and marketing activities) targeted at populations of users that may be less inclined to adopt and use new multimedia mobile services.
 
Article
The following study investigates mass media coverage of the consumer privacy issue from 1990–2001 across three media formats: newspapers, consumer magazines, and trade publications. The results indicate that media coverage has increased dramatically in all media formats. Overall, article content has varied relative to the primary privacy domain covered, primary story topic, and the portrayal of the direct marketing industry. Differences were found across media outlets with respect to the source of the privacy problem and the source of the potential solution. Implications and ideas for future research also are presented. © 2003 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
In light of mature markets and increasing competitive pressure, retaining the existing customer base becomes crucial for the future success of a firm. As a consequence, firms are increasingly interested in understanding the factors influencing and driving customer retention. One factor that is hypothesized to have an impact on customer retention is the growing use of the Internet channel. Firms are interested in understanding whether and how the Internet use induces a change in customer retention.The aim of this paper is to empirically quantify the impact of Internet use on customer retention when accounting for potentially present self-selection. Furthermore, the paper will derive managerial implications on how to use customer channel migration to improve overall customer retention. The results of the empirical study indicate a strong positive impact of Internet use on customer retention. Hence, migrating customers to the Internet channel has the potential to increase overall retention rates.
 
Article
We develop hypotheses about the effects of the dimensions (innova-tiveness, optimism, discomfort, and insecurity) of technology readiness on two key stages of Internet acceptance, adoption, and usage of different Internet-based activities, and test them through a two-stage model using U.S. consumer survey data. The findings show that these dimensions have significant enduring effects on the two stages at varying levels of perceived risk.
 
Hold-Out Sample Performance With Different Penalty Weights
Article
This article considers the supermarket manager's problem of forecasting-demand for a product as a function of the product's attributes and of market-control variables. To forecast sales on the stock keeping unit (SKU) level, a good model should account for product attributes, historical sales levels, and store specifics, and to control for marketing mix. One of the challenges here is that many variables which describe product, store, or promotion conditions are categorical with hundreds or thousands of levels in a single attribute. Identifying the right product attributes and incorporating them correctly into a prediction model is a very difficult statistical problem. This article proposes an analytical engine that combines techniques from statistical market response modeling, datamining, and combinatorial optimization to produce a small, efficient rule set that predicts sales volume levels.
 
Article
How consumers feel about themselves—particularly in relation to technology—may have an important influence on their adoption and use of technology. Although research on electronic channels has shown that Web site and consumer characteristics are important predictors of consumer trust, researchers have not considered the role played by consumers' commitment to their identity as technology users. This paper explores whether consumer identity commitment and calculative commitment to electronic channels impact consumer use of electronic channels and perceived value from the service firm. More specifically, it examines whether these effects are mediated by trust in technology and trust in the firm. Using survey data from 834 consumers engaged in both offline and online banking, plus transaction frequency data supplied by a host firm, the study finds that identity commitment plays an important role in building consumer trust in technology and that calculative commitment increases transaction frequency directly, unmediated by trust in technology. Theoretical and managerial implications of these findings are explored.
 
Article
Free, content-oriented Web sites depend on advertising revenues that are based on the number of visitors to the site. To induce visitors to acquire information quickly, these sites present information items according to their popularity.We empirically examine two key determinants of a visitor's inter-acquisition time (popularity and the number of information items previously acquired by the visitor) using a hazard model estimated from data obtained from del.icio.us, a social bookmarking site. The results indicate that interacquisition times are longer for heavy users and for less popular information items. The results are relevant for other free content-providing sites such as cnet.com and music.yahoo.com.
 
Article
When consumers employ more than one channel within a single transaction,-they can obtain services from one retailer and place their business with another, hence they can engage in free riding. Conversely, customers may be inclined to stay with thesameretailer,evenwhenthey switch channels.We used empirical data to determine the magnitude of both effects in two directions: from online shops to traditional retail stores and vice versa.We found that over 20% of consumers are free riders, and that retailers retain substantially fewer customers in both directions.To explain the variance within the free-riding rate and the customer-retention rate, we investigated the influence of selected product characteristics (search characteristics, speed of technological change, and purchase frequency) on cross-channel consumer behavior.Managerial recommendations based on the magnitude of the effects concern channel management and the relationship between retailers and manufacturers.
 
Article
We investigate consumer preference for online versus offline purchasing of a complex service (home mortgage), across the three stages of purchasing, namely, pre-purchase, purchase, and post-purchase. Our analysis of data from 300 consumers shows that (1) the offline channel is generally preferred over the online channel across all the stages, and (2) the channel usage intention in a particular stage is moderated by the consumer's Internet experience. Specifically, in both the pre- and post-purchase stages, the usage intention for the online channel is higher when consumers have more favorable Internet experience. In the purchase stage, consumers prefer the offline channel over the online channel, regardless of their Internet experience. Furthermore, we find that the drivers of channel preference are substantially different across the three buying stages due to (in)congruities between channel benefits desired and channel capabilities offered.
 
Article
There is growing evidence of the increasing participation in, and influence of, virtual communities in digital environments. To help explain this irresistible allure, the individual and social determinants of the member's intentions to participate are investigated. Conceptualizing virtual community participation as intentional social action, we explicate the concept of “we-intentions”, and use the Model of Goal-Directed Behavior to explain members' we-intentions. Virtual community influences pertaining to compliance, internalization, and social identity are also elaborated on. An empirical study of regular virtual community participants (N = 157) finds that we-intentions to participate are functions of both individual determinants (positive anticipated emotions and desires), and community influences (social identity). Implications for marketing and future research opportunities are discussed. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Increasing costs of direct marketing campaigns coupled with declining response rates have prompted many direct marketers to turn to more sophisticated techniques to model response behavior. The underlying premise is that even a small improvement in response rate can have significant implications for the bottom line. This article investigates the use of a recently developed technique, Multiple Adaptive Regression Splines (MARS), together with logistic regression in the context of modeling direct response. Specifically, our goal is to assess the relative effectiveness of MARS models vis-à-vis logistic regression with original predictor variables in modeling direct response behavior. Our analysis shows that the MARS models outperforms the logistic model in general, leading us to conclude that MARS offers a number of advantages over a logistic model. Direct marketing strategy implications are also discussed. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
This case study shows how interactive marketing campaigns can be systematically fine-tuned and made more productive through adaptive experimentation. It details the use of adaptive experimentation in a viral marketing campaign at Plaxo, Inc., a company that provides Internet-based updating of personal contact information. The experiences of Plaxo highlight that even for a product that is amenable to viral marketing, growth is not guaranteed. To achieve a desired level of growth, Plaxo identified the product features that contributed to greater adoption conversion of recipients of its marketing message and improved them through continuous experimentation. To overcome potential negative side effects of aggressive viral growth, the company used a carefully crafted feedback loop via internet alert services that tapped into the blogging community. This practice allowed management to better understand negative perceptions of the product and take timely corrective actions.
 
Selected Literature on Customer Relationship Management
Applications of "Adaptive" Learning and "Proactive" CRM
Article
Customer Relationship Management (CRM) is about introducing the right product to the right customer at the right time through the right channel to satisfy the customer's evolving demands; however, most existing CRM practice and academic research focuses on methods to select the most profitable customers for a scheduled CRM intervention. In this article, we discuss a two-step procedure comprising “adaptive learning” and “proactive” CRM decisions. We also discuss three key components for customer-centric CRM: adaptive learning, forward-looking, and optimization. We then formulate CRM interventions as solutions to a stochastic dynamic programming problem under demand uncertainty in which the company learns about the evolution of customer demand as well as the dynamic effect of its marketing interventions, and make optimal CRM decisions to balance the cost of interventions and the long-term payoff. Finally, we choose two examples to demonstrate the input, output, and benefit of “adaptive” learning and “proactive” CRM.
 
Article
Technological changes and innovations have created the means by which organizations can centralize the selling function into a call-center environment. While there are numerous benefits to this centralization, the fact that potential customers are drawn to a call center via telephone or Web-based communication media from a wide geographic area heightens the need for sales representatives to perform adaptive-selling behaviors. In this study we found evidence to confirm this belief, suggesting that a premium is placed on sales representatives who can accurately assess each situation using limited information (e.g., through tone of voice) and then to correctly adapt their behavior to fit the situation. The results also offer implications for Web-based call centers that link sales representatives with potential customers through text-based communication. © 2002 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
This research aims to explain the adoption of mobile gaming based on a refined model of Rogers' adoption theory, including context-specific factors and consumer traits. Overall, the empirical findings suggest that perceived risk plays a crucial role in the adoption process, followed by complexity and compatibility. Moreover, through cluster analysis we identified three consumers segments, termed “Value Seekers,” “Risk Avoiders,” and “Game Players.” Whereas perceived risk remains the most important factor for the Risk Avoiders, Value Seekers also are concerned about compatibility. Game Players emphasize navigation, communicability, and payment options. © 2004 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Virtual try-on technology (referred to in this article as Virtual Try-on) can deliver product information that is similar to the information obtained from direct product examination. In addition, the interactivity and customer involvement created by Virtual Try-on can enhance the entertainment value of the online shopping experience. We used focus group interviews and an online national survey to investigate online apparel shoppers' use of Virtual Try-on to reduce product risks and increase enjoyment in online shopping.We also examined the impact of two important external variables (innovativeness and technology anxiety) that are not included in the electronic Technology Acceptance Model (e-TAM) but were expected to influence adoption of Virtual Try-on and whether or not gender differences existed in the Virtual Try-on adoption process. We examined this dual (functional and hedonic) role of Virtual Try-on by applying a modified e-TAM model to the Virtual Try-on technology adoption process and tested model invariance among male and female shoppers using Virtual Try-on in a simulated online shopping experience. The extended research model was validated in the context of Virtual Try-on adoption.Technology anxiety and innovativeness had significant moderating effects on the relationship between attitude and use of Virtual Try-on technology; however, there was no significant gender difference in the overall adoption process for Virtual Try-on.
 
Article
This research examines the effects of inclusion of a reference price in an Internet advertisement on consumer price perceptions and price-search intentions both (1) on the Internet and (2) in brick-and-mortar retail channels. Proposed differences between Internet sites and brick-and-mortar channels are examined across three studies using different methodologies: (1) a survey administered in a classroom setting, (2) an Internet survey, and (3) a mail panel survey. Findings show that both price perceptions and price-search intentions differ for the Internet and brick-and-mortar retail channels. There is mixed evidence for the prediction that the reference price impact on price perceptions for the brick-and-mortar retailer is attenuated for the Internet channel. Finally, respondents with Internet access had different price perceptions and price-search intentions than those without access. © 2003 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Click-through rates are still the de facto measure of Internet advertising effectiveness. Unfortunately, click-through rates have plummeted. This decline prompts two critical questions: (1) Why do banner ads seem to be ineffective and (2) what can advertisers do to improve their effectiveness? To address these questions, we utilized an eye-tracking device to investigate online surfers' attention to online advertising. Then we conducted a large-scale survey of Internet users' recall, recognition, and awareness of banner advertising. Our research suggests that the reason why click-through rates are low is that surfers actually avoid looking at banner ads during their online activities. This implies that the larger part of a surfer's processing of banners will probably be done at the pre-attentive level. If such is the case, click-through rate is an ineffective measure of banner ad performance. Our research also shows that banner ads do have an impact on traditional memory-based measure of effectiveness. Thus, we claim that advertisers should rely more on traditional brand equity measures such as brand awareness and advertising recall. Using such measures, we show that repetition affects unaided advertising recall, brand recognition, and brand awareness and that a banner's message influences both aided advertising recall and brand recognition.
 
Article
This article reports the results of a study of permission-based advertising via mobile phones. The study, part of the proof of concept for a UK startup, specifically explored the effectiveness of SMS text messaging as an advertising medium for reaching young adults. The results suggest that, with the right execution, the mobile channel has the potential to benefit both advertisers and consumers. The findings also include some suggestions about when and how to use this emerging new medium. Although confined to SMS text messaging in the UK, the results are also likely to be relevant to other countries, and to more advanced mobile communication technologies as these are rolled out. © 2002 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Self-Assessment Manikin Measures (SAM) of Pleasure and Arousal
Article
Marketers often compete to incorporate fast-moving images in their online banner ads to break through the ad clutter, in the hope for a positive perception of the ads. However, the findings of this study suggest that this strategy may not work. An experiment was designed to explore the effects of the degree of animation on memory and attitudes toward ads. The results showed inverted U-shaped relationships between the level of animation and both recognition rates and A ad, suggesting the existence of unintended negative effects of highly animated online banner ads. Under high-animation conditions, subjects experienced negatively valenced thoughts and unpleasant feelings, which negatively influenced A ad. Also, subjects were highly aroused, as indicated by the increased level of emotional intensity; this arousal inhibited subjects' ad recognition performance. These findings show different processing mechanisms under different animation levels, and suggest that marketers should exercise caution when using animation in their ads.
 
Article
Consumers have become increasingly savvy about technology in recent years, and many of them ignore Web ads during online activities. In this context, measuring advertising effects based on the traditional cognitive models of information processing may undervalue the effectiveness of Web ads. This study experimentally examined the effects of unconscious processing of Web ads by manipulating the level of attention paid to the ad (directed vs. nondirected attention). Online advertisers should be encouraged by the findings of this study. The results suggest that, upon exposure to Web ads, consumers experience priming caused by implicit memory and build a more favorable attitude toward the advertised brand regardless of the levels of attention they paid to the advertisements. Furthermore, those who unconsciously processed Web ads did not remember seeing the ad explicitly, but they were more likely to include the advertised brand in the consideration set than those who had no exposure.
 
Article
The article describes how one company improved banner advertising response rates by taking advantage of the medium's rich data to optimize placement. The study identified Web surfers who were frequent visitors to the banner advertiser's site. It then identified 100 Websites that these surfers tended also to visit. These sites were cluster analyzed to yield site genre definitions (affinities). In this manner a model was built to identify a group of affinities whose visitors were disproportionately likely to respond to banner advertising. These predictions were tested by placing banners on sites forecast to perform well. The average cost per response was nine times lower for sites predicted to belong to high affinity groups than low groups. © 2001 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Permission marketing suggests an evolution of direct marketing, particularly used with e-mail. It combines databases of customers who agree to receive marketing messages with low-cost, customized e-mails that attempt to slice through advertising clutter, attract increased customer support, and change behavior.This applied research examined implementing permission marketing, relevant literature, and permission marketing's effectiveness influencing consumer interest and behavior. A case study tested the propositions resulting from the literature review and evaluated responses to a permission marketing campaign that used traditional and new media. This study found that relevance—personalization, brand equity, and previous relationships—influenced response rates. This article adds to the growing body of research on permission marketing's role in marketing theory, as well as its applied effectiveness in the marketplace. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
The Internet opens new opportunities for conducting pre-purchase information search. Lower search costs have been found to affect use of the Internet for this purpose. Benefits in terms of the large amounts of information available and freedom from physical contact with sales staff have also been found to affect the use of the Internet for information search positively. In this paper, low costs and benefits are put together in a model. The model was tested by means of structural equation modeling on a sample of Danish Internet users (n = 233). The main result is that the amount of Internet use affects use of the Internet for pre-purchase information search more than perceived low search costs and perceived availability of information. Further, the test of the model did not support that pleasure in shopping and a preference for personal contact to sales staff affect the use of the Internet for information search.
 
Article
This study examines the impact of having an anthropomorphic information agent (a humanlike chatbot that acts as an interactive online information provider) in an online store on consumers' attitude toward the Web site, product, and their purchase intentions. Using consumer experiments, we show that the impact of the anthropomorphic information agent is moderated by the amount of static product information available on the Web site and the consumer's consumption motive at the time of visiting the Web site. Our results indicate that the anthropomorphic information agent has a positive effect when static product information on the Web site is limited. Furthermore, we show that when detailed product information is readily available on the Web site, the anthropomorphic information agent can prove detrimental when the consumer has a utilitarian consumption motive.
 
Article
This article examines one of the functions of “intelligent agents” used by service providers on the Internet (e.g., retailers and information search engines) that compare a user's profile to data on other users to determine which users in the database are similar to the focal user, and which recommendations (of products or information strings) might thereby be useful to the focal user. We characterize these questions as Internet modelers “rediscovering the wheel” of cluster analysis. We draw from the literature on cluster analysis to begin to address the questions being posed in this new application arena. © 2000 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Increasingly, inbound call centers are being employed to manage customer complaints and maintain customer loyalty. The purpose of this research is to identify the customer relationship management and oral communication competencies of inbound call center agents that have a significant influence on callers' repurchase intentions. Previous research has typically obtained customers' retrospective evaluations of their experience with customer service employees. Unfortunately, a caller's memory for specific agent behaviors is likely to fade with delay. As a result, retrospective ratings of behaviors are likely to be inferred from the caller's overall perceptions of the service experience. Therefore, an expert supervisor's on-line observational measures of agent competencies were used for the present study. Callers' repurchase intentions were determined by a mail survey. Results showed that several specific agent competencies were related to callers' repurchase intentions. For example, results showed that personalization of the call, the offer of additional services, an optimal rate of speech, and the absence of vocalized pauses were all significantly related to higher caller repurchase intentions. These results add to the literature on the effects of employee behaviors on customer loyalty and show that the behavior of inbound call center agents can have a significant influence on customers' relationships with the firm. © 2000 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
This paper studies how smart recommendation agents (those that filter and integrate information and offer feedback to customers) influence consumer decision making in online stores, in comparison to recommendation agents that are merely “knowledgeable” of the alternative options that exist in a product assortment. The cognitive cost model is used to propose hypotheses that link information search and alternative evaluation with two shopping environment influences that are typical of online settings. A study that simulates search and evaluation in a Web-based choice environment is conducted to test the hypotheses. The results offer insights into how the “feedback” provided by a recommendation agent on the product options available may have an effect on search and evaluation in an online store.
 
Article
This article deals with a possible future of e-commerce, not with how consumers or marketers currently shop on the Internet. In the future, artificial shopping agents may change e-commerce markets by significantly extending the search and evaluation capabilities of consumers. These agents have the potential to change current market relationships because they work on behalf of individual consumers, rather than offer advice to consumers on behalf of retailers. Additionally two types of shopping agents are possible, one of which may result in different patterns of choice than at present. The prospect of consumers relying on artificial agents for shopping decisions has raised concerns about negative impacts on both consumer welfare and the stability of markets. The article evaluates these concerns and concludes that major dislocations in consumer choice patterns are unlikely in the short run, but increasingly possible in the long run. © 2002 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Scoring models predict responses to some contact that will be made in the future, helping an organization decide which customers to target. They are usually built from a single “proxy” contact from the past, for which responses have already been observed. This approach is risky because there could be differences between the proxy and future contact, and other exogenous factors could have changed. We propose averaging predictions from multiple scoring models and develop a rationale for this approach by showing under certain assumptions that the expected squared difference between the true responses to the future contact and the predicted values from the averaged model is less than or equal to the expected squared difference from a single previous contact. The improvement of the aggregated model over the single model increases as (1) the variation in effect sizes across contacts increases, (2) the number of averaged contacts increases, and (3) the variance of the effect estimates increases. We incorporate the effects of external factors in our model by weighting the coefficients with a general linear model (GLM). Using data from a retail catalog company and a nonprofit organization, we evaluate our model empirically by testing whether our assumptions hold, examine the extent of variation in slopes and predicted values across models build from various previous contacts, evaluate the amount of improvement over extant models in terms of prediction error and performance as measured by a gains table, and study how improvement depends on the number of averaged contacts. Conservative estimates suggest that our method could increase annual profits for the nonprofit organization by over a half-million dollars and tens of thousands of dollars for the small catalog company.
 
Article
While much has been made of the ocean of information available on the Internet, much less emphasis has been placed on how Web surfers might actually be able to process it. This article compares an interactive (user-inputted attribute importance weights) linear computer–assisted decision aid (CADA) format with three passive CADA formats in two studies. The decision environments for these tests are difficult, involving 20 to 30 brands rated on 6 attributes, one of which is negatively correlated with the others. Because the Linear CADA rank order is based on user-inputted attribute weights, it is expected to be more in concordance with the user's preference and hence is predicted to offer higher decision quality and be better liked than the passive formats. Contrary to expectations, however, a passive Equal Weight format performed as well or better than the Linear format on all objective and subjective comparison criteria, while the other two passive formats were not significantly worse on several decision quality criteria. The implications of these findings for information providers on the Internet are also discussed. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
This article examines the impact of using incremental amounts of purchasing data on the ability to classify consumers in consumer packaged goods categories for direct marketing purposes. Building on the work of Rossi, McCulloch, and Allenby (1996), who focused on the impact of three information sets—(a) demographics only, (b) demographics and one purchase made by a consumer, and (c) demographics plus an entire purchasing history of a consumer—we examine the impact of each additional purchase, starting with no purchasing information (i.e., demographics only) through 20 purchases. Using two different classification models, a Multinomial Logit model and an Artificial Neural Network model, we examine the sensitivity of classification accuracy to each additional purchase. We use these results in a profitability analysis of a hypothetical direct marketing campaign to determine the optimal number of purchases to use for classification in the category studied. The findings suggest an optimal number of purchasing observations exists for classification and targeting purposes and this optimal number falls between one purchase and a “history” of purchases as studied by Rossi et al. Our findings illustrate the importance of conducting a sensitivity analysis to identify the optimal amount of purchasing data to use when classifying consumers for the purpose of a direct marketing campaign.
 
Article
The primary research objective of this study rests on presenting and validating a model for the antecedents and consequences of consumer trust in the context of online purchase decision-making by means of simulation and survey methods. For this purpose, the study seeks to validate the correlation and causal relationships among the model's elements involving antecedents to trust (transactional security, web-site properties, search functionality, and personal variables), consequences (purchase intention), and mediating variable (web-site awareness).Based on the findings of a controlled simulation study involving 122 college students, are the following major results: (1) web-site trust showed a significant response to site properties including the image-related variables such as company awareness and company reputation, while satisfaction significantly responded to navigation functionality; (2) personal variables such as familiarity with e-commerce and prior satisfaction with e-commerce were found to have high correlation with web-site satisfaction as well as trust; (3) web-site trust, web-site satisfaction, and web-site awareness all influenced the online-purchase intention, and (4) web-site trust and web- site satisfaction had a high correlation.The findings of this study suggest a new approach to understanding and identifying the antecedents and consequences of web-site trust whose importance is increasing in the study of Internet commerce. Also, the study findings provide the Internet marketers with the managerial implications to establish effective online marketing strategy. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Correlation Matrix of the Independent Variables
Article
Price is an important factor affecting consumer preference for online brands and, not surprisingly, has played a dominant role in the Internet marketing literature. Concurrently, important nonprice factors that account for individual online brand preferences have received scant attention. This research examines nonprice influences on preferences for online brands and demonstrates that brand character, brand offerings, prior Internet shopping experience, brand familiarity, and brand evaluation affect online brand preference. Using data from cyber and extension brands, our results show that influences on consumer preference for the types of brands examined are different. In the case of cyber brands, familiarity, character, and brand offerings are related to brand preference. In contrast, extension brands benefit from having market-based counterparts, and for these firms, brand familiarity is not a predictor of consumer preference. Breadth of offerings is the most important predictor for both cyber- and extension-brand preference. Future research and managerial implications are discussed.
 
Article
The purpose of this study was to identify the factors that influence customers' perceptions of the effectiveness of business-to-business Websites and to test empirically the significance of these factors. Based on a review of academic and trade press literature, we identified eight factors that are thought to influence business-to-business Website effectiveness. Following standard scale development procedures, we developed valid and reliable scales for measuring each of these eight factors. A Web survey-based field study was conducted in which 540 business customers of a power tool company gave their opinions about one of eight construction industry Websites with which they were most familiar. We simultaneously tested the significance of these eight factors in explaining the effectiveness of Websites. Our results suggest that of the eight factors considered, informativeness, organization, transaction-related interactivity, and personalization are significant predictors of Website effectiveness. We found no direct relationship between the other factors (non-transaction-related interactivity, privacy/security, accessibility, and entertainment) and Website effectiveness. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
The present study examines the interrelationships among antecedents and consequences of privacy concerns. The results indicate, among other things, that a consumer's attitude toward direct marketing and his/her desire for information control act as antecedents to privacy concerns. Privacy concerns, in turn, are negatively related to purchase behavior and the purchase decision process. Understanding the antecedents of privacy concerns provides a foundation for developing effective policies and practices to reduce such concerns while understanding the consequences of privacy concerns is essential to gauging just how important dealing with these concerns really are for marketers. © 2001 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Due to its potential for interactive communication, the Internet is considered a promising tool for relationship marketing. However, the effects of interactive communication on marketing effectiveness may depend on several factors related to each individual consumer, such as Internet experience. In this study, two of the most common applications for interactive communication—personalized Web sites and customer communities—were compared for their ability to develop consumer-brand relationships as measured by the Brand Relationship Quality (BRQ) framework of Fournier (1998). No main effects of the applications were observed. However, significant effects of Internet applications were found when Internet experience was included as a moderating variable. Specifically, it was found that personalized Web sites developed stronger consumer-brand relationships for respondents with extensive Internet experience than for respondents with limited Internet experience. Conversely, it was found that customer communities developed stronger relationships among respondents with limited Internet experience than among respondents with extensive Internet experience. Implications for marketing management and future research in this area are discussed. © 2002 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.
 
Article
Marketers face a myriad of decisions when developing a Web site for e-commerce. In this article, we attempt to organize our current understanding of consumer behavior into streams of research that address the development of marketplaces for the digital economy. We start by characterizing computerbased decision environments as Marketplaces of the Artificial, arguing that the unbundling of product information from products presents many decisions and opportunities for the design of decision environments. We then review four areas of research, identifying themes in each area. These areas are (a) the economics of search, (b) cognitive cost approaches, (c) constructed preference approaches, and (d) phenomenological approaches. We illustrate each approach, highlighting its assumptions and discussing examples of research questions and results.
 
Article
Each customer varies in his/her lifetime value to a firm. A firm would like to estimate the lifetime value of each customer and use this information in planning differential marketing initiatives targeted at each customer. Customer lifetime value computations require different approaches depending on the business application that a firm is looking at. The authors present two approaches of computing customer lifetime value and offer some best practice applications. The authors also address challenges that firms typically face in implementing the customer lifetime value approach to marketing.
 
Top-cited authors
Thorsten Hennig-Thurau
  • University of Münster
Dwayne D. Gremler
  • Bowling Green State University
Sonja Gensler
  • University of Münster
Roderick J. Brodie
  • University of Auckland
Mark Glynn
  • Auckland University of Technology