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The New Regulator in Town: The Effect of Walmart's Sustainability Mandate on Supplier Shareholder Value
Abstract
Suppliers are increasingly being forced by dominant retailers to clean up their supply chains. These retailers argue that their sustainability mandates may translate into profits for suppliers, but many suppliers are cynical about these mandates because the onus to undertake the required investments is on them while potential gains may be usurped by the mandating retailer. We examine whether supplier fears are justified by studying the impact of Walmart's sustainability mandate on its suppliers' (short-term) shareholder value. Although about two-thirds of suppliers are indeed financially harmed, approximately one-third benefit. To delve deeper into this variation, we relate suppliers' short-term abnormal returns to Walmart's appropriation power and explore whether and to what extent a supplier's referent and expert power sources, derived from its marketing and operational characteristics, respectively, can counteract Walmart's appropriation attempts. We find that the supplier's marketing characteristics (its environmental reputation, brand equity, and advertising) provide it with the countervailing power needed to resist Walmart's appropriation attempts. In contrast, cost-efficient suppliers and suppliers that invest heavily in R&D have more difficulty withstanding Walmart's squeeze attempts.
... Joshi & Hanssens, 2010;Luo & Donthu, 2006;Wies et al., 2019), and sustainability (e.g. Gielens et al., 2018;Mishra & Modi, 2016;Woodroof et al., 2019) have been shown to impact firms' market valuation. These findings suggest that, despite not getting standardized information on firm's marketing assets as such, the financial markets have learned to pay attention to developments that signal changes in their value (see e.g. ...
... (Exelon) In addition to relationships with customers, relationships with intermediary customers/distributors (e.g. Gielens et al., 2018), suppliers (e.g. Houston & Johnson, 2000), partners (e.g. ...
... Geyskens et al., 2002) or service locations (e.g. Gielens et al., 2018): ...
Building on an in-depth content analysis of letters to shareholders in the annual reports of 54 Fortune 500 firms, this study examines the types of marketing information currently being highlighted to stakeholders external to the firm. The study identifies seven types of marketing assets: customer relationships, other value network relationships, societal relationships, reputational assets, marketing information, offering-related assets, and market position. The study also reveals three distinct profiles of firms’ reporting. The findings shed empirical light on aspects of marketing that diverse firms perceive as meriting disclosure to external stakeholders, thereby providing insights into how senior management perceives marketing.
... While recent research has investigated the impact of CSR activities on firm financial performance, these studies mostly employ either a buyer or an industry-level perspective (e.g., Eccles et al., 2014;Gong et al., 2018;Kraft et al., 2018;Wilhelm et al., 2016). This is justified because large or dominant buyers in some industries are in a key position to lead social and environmental initiatives by mandating that suppliers adopt certain CSR practices, comply with their CSR codes of conduct, or meet CSR-specific performance specifications (Gielens et al., 2018). Such strategies may originate from socially responsible sourcing (Orsdemir et al., 2019), and specific supplier expectations can become embedded in the supply chain contracts enacted by the buyer (Letizia & Hendrikse, 2016). ...
... The literature proposes a possible fit between contextual contingencies and the contextual variables that may affect firms' actual social and financial performance (Sodhi & Tang, 2018) or lead to them enacting their supply chain strategies differently in highly uncertain situations (Ellis et al., 2011). Similarly, collaborative relationships with buyers to improve sustainability practices, reputations, cost-efficiency, investment in R&D (Gielens et al., 2018), and uncertainty in information sharing and financial leverage can moderate suppliers' financial performance (Jayachandran et al., 2013). ...
... Thus, H2A is not supported, while H2B is. 10 In general, these results suggest that demand-driven uncertainty reduces the relationship investment value of a supplier's PP but not of its EP. The results partially align with Gielens et al. (2018), who find that a supplier's EP may have a positive moderating effect on countervailing Walmart's power over suppliers on their financial returns, while PP (R&D investment and cost-efficiency) had a negative moderating effect. Our results show demand-driven uncertainty, mostly coming from the buyer (demand) side, diminishes the value of a supplier's PP on expanding exchange relationships with its major customers. ...
Most studies of corporate social responsibility (CSR) performance in a supply chain context have been conducted from the buyer's perspective. Few have paid attention to how suppliers leverage this kind of performance to expand exchange relationships with major customers. From a resource dependence and social exchange perspective, this article specifically examines whether two supplier CSR performance dimensions—environmental and product performance—can serve as a mechanism to expand a supplier's relationships with a smaller number of major buyers, where its increasing exchange dependence often measures this factor. Moreover, these dependent relationships may further develop and change under different conditions of uncertainty. Using large‐scale longitudinal data to test the proposed model, we find empirical evidence that a supplier's environmental and product performance relate positively to greater customer dependence and improved financial performance across diverse sets of industries. However, the findings also reveal that both demand‐driven and supply‐side uncertainty can weaken the effect. Specifically, the positive effect of environmental performance tends to weaken in the face of supply‐side uncertainty, whereas the positive effect of product performance tends to weaken amid demand‐driven uncertainty. Accordingly, we note important nuances and contingencies for suppliers to consider when considering how investments in these CSR performance dimensions affect exchange dependence.
... On one hand, many brand name manufacturers, including Eastman Kodak and Fuji Photo Film, have adopted green technologies for production processes with their single-use cameras, re-manufacturing them up to 10 times for file processing [10]. Similarly, Mattel and Kimberly-Clark have also revolutionized their supply chain by decreasing the amount of packaging material used, cutting back on their use of toxic chemicals, conserving water, decreasing their greenhouse gas emissions, and so forth [11]. On the other hand, acting as a vigorous new breed of regulators, many powerful retailers have also integrated environmental concerns into their supply chain decisions. ...
... In particular, [30] traced the strategic initiatives that Walmart has undertaken over the last decade in order to implement its ambitious vision of selling more sustainable products. In [11], confronting Walmart's sustainability mandate in a supply chain, the authors addressed issues of whether manufacturer fears are justified by studying the impact of Walmart's sustainability mandate on the (short-term) shareholder values of its manufacturers. It should be noted that the aim of this paper is quite different. ...
Numerous studies on supply chains have indicated that vertical strategic interactions usually involve the classical double marginalization problem, leading to a downward distortion in profitability. However, at present, the implications of vertical strategic interactions for green technology investment in a supply chain are not all that clear. In particular, such a vertical interaction not only can translate into profits between different parties, but usually also involves differentiated environmental performance. A question which arises is: who is the right undertaker for green technology investment in a supply chain, the supplier or retailer? To answer this question, we highlight the implications of vertical strategic interaction for green technology investment in a supply chain. To fill this gap, using a game-theoretic approach, we formulate two models: (a) Model M, in which an upstream manufacturer adopts technologies to meet consumer demand; and (b) Model R, where a retailer integrates environmental concerns into their supply chain decisions. We find that the retailer, who is closer to the customer, is the more effective undertaker for green technology investment, as this not only creates higher profitability for both parties, but also achieves a more sustainable scheme for our environment. When green technologies are invested in by the manufacturer, the double marginalization effect not only may downward-distort their economic performance but can also reduce the equilibrium of product greenness.
... We first estimate a model in which we include a copula for both potentially endogenous variables (crowding and promotional intensity). Following Mathys, Burmester, and Clement (2016) and Gielens et al. (2018), we retain the copula terms that are statistically significant (p < .10 two-sided) and then reestimate the model. ...
... two-sided) (cf. Gielens et al. 2018). ...
Using data from a large-scale field study, we show that (perceptions of) crowding change(s) the composition of a consumer's shopping basket. Specifically, as shoppers experience more crowding, their shopping basket contains (a) relatively more affect-rich (“hedonic”) products, and (b) relatively more national brands. We offer a plausible dual-process explanation for this phenomenon: Crowding induced distraction limits cognitive capacity, increasing the relative impact of affective responses in purchase decisions. As we are the first to show that level of crowding relates to what shoppers buy (at both product and brand level), the implications of these effects for retailers are discussed.
... When manufacturers outsource logistics services to online marketplaces, they unavoidably increase their dependency on marketplaces platforms. In turn, marketplaces gain power over manufacturers and therefore are able to demand concessions from manufacturers (Gielens et al. 2018). Although online marketplaces aid manufacturers by reducing supply chain costs, the decrease in these costs may be not sufficient to cover the increase in concessions due to the power shift. ...
... In addition, we included the same variables in the selection model as in Equation 1, unless the required information was not available for the suppliers that uniquely feature in the selection sample (see, e.g., Robinson, Tuli, and Kohli 2015 or Swaminathan and Moorman 2009 for a similar practice). In addition, we used a manufacturer's selling, general, and administrative expenses (SGA) as a proxy measure for its advertising and its brand equity, as this construct was available for all firms in the selection sample (Gielens et al. 2018). Furthermore, we added year-fixed effects to control for time fluctuations. ...
China is the world’s second largest retail market and is expected to surpass the United States in 2020. This makes China a must-win market for global and local firms. However, manufacturers often find it hard to reach Chinese consumers due to China’s institutional and infrastructure weaknesses. The advent of online third-party marketplaces provides manufacturers with a new model to tackle these challenges. The question remains, however, whether and to what extent joining online third-party marketplaces in China can generate market value. Using an event study methodology, the authors assess the net impact of online marketplace adoption in China on manufacturers’ expected profitability. Although the abnormal returns are, on average, significant and positive, stock markets recognize that not all manufacturers can reap benefits. To delve deeper into this variation, the authors relate the abnormal returns to various sources of manufacturers’ market knowledge and marketing capabilities. They find that less diversified manufacturers with marketplace experience are expected to achieve greater gains, irrespective of their origin. However, the effects of marketing strengths diverge for foreign and local firms.
... To do so, we followed several procedures to rule out potential threats of endogeneity. First, we implemented a Gaussian copulas approach (Park & Gupta, 2012), an instrument-free method that is increasingly popular in business disciplines (e.g., Gielens et al., 2018;Vomberg et al., 2020). Because measurement error (e.g., in the form of common method bias) can also cause endogeneity, Gaussian copulas serve as an additional remedy to alleviate common method variance (CMV) (Vomberg et al., 2020). ...
Internet of Things (IoT) is one of the enabling technologies of Industry 4.0. Although IoT has shown great promise for organizations, its practical use in generating value alone or in combination with existing IT capabilities remains unclear. Drawing upon the literature on dynamic capabilities and innovation capability, we propose IoT-enabled innovation capability (IoT-IC), consisting of three dimensions (IoT use for sensing, seizing, and reconfiguring) to explain competitive advantage. We examine three ordinary IT capabilities (flexible IT infrastructure, IT business experience, and relationship infrastructure) as the predictors of IoT-IC. We also test the moderating effect of competitive aggressiveness in influencing the relationship between IoT-IC and competitive advantage. Analysis of survey data from 175 U.S. companies provides empirical support for our research model. The results suggest that flexible IT infrastructure, IT business experience, and relationship infrastructure are positively associated with IoT-IC. Furthermore, the effect of IoT-IC on competitive advantage is positively moderated by competitive aggressiveness. The results point to the important role of existing IT capabilities in shaping IoT-IC and expand our understanding of the relationship between IoT-IC and competitive advantage at different levels of competitive aggressiveness.
... Therefore, we augment Equation 1 with Gaussian copula terms that absorb the correlation between potentially endogenous marketing-mix variables and the normally distributed error term (Park and Gupta 2012). The copula method, which was recently used in, for example, Datta, Foubert, and Van Heerde (2015) and Gielens et al. (2018), does not require instrumental variables and thus is particularly useful when valid instruments are hard to find (Rossi 2014). ...
The field's knowledge of marketing-mix elasticities is largely restricted to developed countries in the North-Atlantic region, even though other parts of the world-especially the Indo-Pacific Rim region-have become economic powerhouses. To better allocate marketing budgets, firms need to have information about marketing-mix elasticities for countries outside the North-Atlantic region. The authors use data covering over 1,600 brands from 14 product categories collected in 7 developed and 7 emerging Indo-Pacific Rim countries across more than 10 years to estimate marketing elasticities for line length, price, and distribution and examine which brand, category, and country factors influence these elasticities. Averaged across brands, categories, and countries , line-length elasticity is .459, price elasticity is −.422, and distribution elasticity is .368, but with substantial variation across brands, categories, and countries. Contrary to what has been suggested in previous research, the authors find no systematic differences in marketing responsiveness between emerging and developed economies. Instead, the key country-level factor driving elasticities is societal stratification, with Hofstede's measure of power inequality (power distance) as its cultural manifestation and income inequality as its economic manifestation. As the effects of virtually all brand, category, and country factors differ across the three marketing-mix instruments, the field needs new theorizing that is contingent on the marketing-mix instrument studied.
... Many retailers can serve as a distribution point for reused, remanufactured, or recycled products from suppliers, etc. (Vadakkepatt et al. 2021). With their unique position, retailers can impact suppliers by cleaning up their supply chains (Gielens et al. 2018). ...
... In this research, we focus on sustainability in the form of environmental responsibility. Corporate sustainability includes initiatives around the nature of the product (i.e., recyclability) and the process by which it was produced (i.e., materials or resources used to make the product; Gielens et al. 2018). Like other CSR efforts, corporate sustainability helps create "shared value" (i.e., value for the company and for society) and thus can be used to align multiple corporate identities (e.g., internal and external; Hildebrand, Sen, and Bhattacharya 2011). ...
Consumer perceptions of brand motives related to corporate environmental responsibility affect the decisions of both corporations and consumers. Yet prior literature has typically viewed these firm motives as dichotomous, either solely intrinsic or solely extrinsic. The authors argue for a novel approach to positioning sustainability motives, where the brand communicates both intrinsic and extrinsic benefits together, as a joint motive. With a joint motive, a brand can highlight how an effort can benefit both planet and business with a “doing well by doing good” approach. Across five experiments, including a field study on Facebook, this research investigates the positive impact of the joint motive and its ability to enhance the credibility of sustainable initiatives via heightened perceptions of trustworthiness and expertise. Results provide converging evidence for the benefits of presenting a joint motive for sustainability efforts with implications for policy and practice.
... Yet, there have been some challenges to selecting qualified, responsible suppliers because suppliers consider CSR costly and financially damaging. A study by Gielens, Geyskens, Deleersnyder, and Nohe (2018) tested this view by examining the impact of Walmart's sustainability mandate on its suppliers' shareholder value (stock market returns). On the contrary, they found that at least one-third of suppliers benefit from the sustainability program. ...
This article provides a review of the literature on corporate social responsibility/sustainability (CSR in short) in business-to-business markets (B2B). Focusing on socially responsible practices and sustainable activities between buyers and suppliers within supply chains and distribution channels, we offer an integrated framework that synthesizes the literature of CSR research in the buyer-supplier contexts. This theoretical framework delineates the important drivers and motives at different levels (institutional, organizational, interorganizational, individual), the key CSR practices (responsible purchasing and sustainable procurement, responsible supplier selection and governance, strategic CSR integration) and the resulting triple bottom line performance outcomes (social, environmental, economic). Drawing on the findings from the literature, we also include the value- and relationship-driving variables that mediate the CSR-performance links as well as the internal and external conditions that moderate these links. Further, our review assesses the diverse theoretical perspectives and methodological issues in the literature to reveal important knowledge gaps. Based on the gaps, a future research agenda with theoretical and managerial implications for CSR research in B2B markets is offered.
... Next, while we account for time-invariant unobserved heterogeneity across salespeople using a fixed-effects estimation, we acknowledge that time-varying unobservables could be correlated with the social capital and transaction efficacy variables, thereby creating a bias in the coefficients. We follow recent applications (e.g., Atefi et al., 2018;Datta et al., 2017;Gielens et al., 2018) that account for the potential endogeneity bias using Gaussian copulas (Park & Gupta, 2012) and use them in our estimation. Compared to classical instrument-based approaches that partial out exogenous variation in the endogenous regressors, the copula approach uses a control function that specifies the endogenous regressor and the error as being jointly distributed. ...
In B2B markets, salespeople often act as market makers, connecting customers with suppliers while collaborating with other salespeople to form a complex network of relationships. The authors propose that in such a relationship network, the salesperson's social capital, or “who they know”, and transaction efficacy, or “what they do”, have direct and interactive effects on performance. To test the proposed model, the authors use a transaction‐level dataset from a large brokerage firm in the residential construction materials industry. The dataset spans three years enabling authors to observe changes in network structure and model the interplay between social capital and transaction efficacy and their impact on performance. They find that while a salesperson's social capital has a direct effect on performance, these effects are contingent on the salesperson's transaction efficacy. With these results, the authors establish that the joint consideration of the salesperson's network position and transaction efficacy are important determinants of salesperson performance. This article is protected by copyright. All rights reserved
... Brand equity as a collective organizational resource is closely associated with performancebased outcomes (Pogacar, Angle, Lowrey, Shrum, & Kardes, 2021), like enhanced revenue from increasing consumer preferences (Aaker, 1992;Farquhar, 1989). Organizations consistently and strategically allocate resources (De Chernatony, 2010;Keller, Parameswaran, & Jacob, 2011) to create and reinforce their brand equities (Gielens, Geyskens, Deleersnyder, & Nohe, 2018) for competitive advantages (Aaker, 1992). These brand equity-related resource allocation and leveraging decisions are hierarchically driven (Heinberg, Ozkaya, & Taube, 2018). ...
Homogenous resource endowment, contrary to resource heterogeneity, is an unlikely source of competitive advantage. Likewise, a proliferation of similar organizations in a given environment, triggers intense incumbent rivalry. In this study, we present evidence of how resource homogeneity amongst industry peer firms leads to non-competitive aggregation under a confederated structure. The creation of that structure is facilitated by quasi-normative, esoteric governance mechanisms, leading to creation, and leveraging of common brand equity as a collective resource, that provide members with competitive advantages. Using an emerging market case study on an ethnic group of about 2,000 independent restaurants, we highlight how the founder’s esoteric beliefs nearly a century ago, coupled with formalized and standardized processes and practices, and the spawning of newer restaurants via replication, reinforce the collective brand equity. Complementing the case study, we adopted the survey method to empirically test and validate the existence of brand equity from customers’ side.
... Sustainability is "development that meets the needs of the present without compromising the ability of future generations to meet their own needs," according to a widely used definition from the Brundtland Report (WCED, 1987, p.24). From a marketing standpoint, sustainability is typically viewed as initiatives related to the product itself (i.e., recyclability) and the process by which it was produced (i.e., materials or resources used to make the product; Gielens et al., 2018). As such, sustainability initiatives are typically focused on product creation and consumer response to these products. ...
Brands are responding to the increasing importance that consumers and society have placed on sustainable practices and products. The present work is designed as the first academic research to examine the attributions consumers make towards dominant brands and their sustainability initiatives. This research demonstrates a negative bias that exists with consumer perceptions of brand size and sustainability related to perceptions of authenticity. Thus, this work examines consumer perceptions of brand size and sustainability, and its impact on purchase intent. Across seven studies, including a field experiment on Facebook, this work identifies a negativity bias that exists with consumers towards large brands and sustainability efforts. This is rooted in a perceived incongruence between profitability, which strong dominant brands represent, and societal good, which sustainability is focused on. This work builds on previous research asserting that critical to achieving authenticity is being linked to a commitment motivated beyond profits. As such, an authenticity deficit that arises out of the paradox between sustainability which is focused on “taking less” (i.e. less energy, chemicals, materials) and the prevailing measure of success in business which is focused on “making more” (i.e. more profit, production). Moreover, the challenge of a brand becomes further amplified as the brand is perceived as bigger and more profit centric. Importantly, while this authenticity deficit significantly impacts purchase intent, it can be attenuated with increased commitment or third-party certification. Thus, the objective of this paper is to further enhance the understanding of how consumers perceive sustainability initiatives, and more specifically, to establish a negativity bias towards large brands. However, overcoming the negative bias surrounding large brands is not only important to further understand consumers, but also has big implications for society and the planet. This work proposes recommendations for practionners and hopefully leads to impactful sustainability commitments by brands. This research incorporates an interdisciplinary viewpoint (i.e. marketing, economics, management, psychology) to contribute to the literatures on authenticity, branding and sustainability.KeywordsSustainabilityBrandingCorporate social responsibilityAuthenticity
... • Gielens, Geyskens, Deleersnyder, and Nohe (2018) studied the effect of Walmart's 2012 sustainability mandate (e.g., shrink packaging materials, reduce toxic chemicals) on stock returns of 118 of its suppliers for cereals, meat products, and nonfood items. For suppliers over which Walmart held greater power, the suppliers' returns were boosted if the supplier had strong brand equity, a strong environmental reputation, and spent more on TV advertising. ...
This chapter reviews marketing scholarship on environmental sustainability. The literature covers several themes of both consumer behavior and firm-level topics. Consumer issues include their assessment of efficacy and the extent to which they are aware and sensitive to environmental issues. Numerous interventions and marketing appeals for modifying attitudes and behaviors have been tested and are reported. Consumers and business managers have both been queried regarding attitudes of recycling and waste. Firm-level phenomena are reflected, including how brand managers can signal their green efforts to their customers, whether doing so is beneficial, all in conjunction with macro pressures or constraints from industry or governmental agencies. This chapter closes with a reflection on the research.
... The literature shows that some organizations are committed to green strategies and have goals to contribute to positive economic development, social cohesion, and the protection and valorization of the environment [6,7], and these firms have managed to gain significant competitive advantages, such as cost reduction, better risk management, and a growing positive reputation in the market [4,[8][9][10][11]. Hence, it is essential for companies that a sustainable plan is present in all its structures and business processes, including the value chain [6,10,12,13]. ...
The literature shows that companies increasingly need to become more sustainable. To achieve sustainable development, supply chain management needs to be related to sustainable business practices, which include relevant values and sustainable purchasing policies. Focusing on these principles on the topic of coffee, this study shows the difficulties associated with this product. The study finds that coffee production is dependent on factors unrelated to management. This paper presents a case study of Delta Cafés owned by Grupo Nabeiro, a Portuguese company that shows relevant ways of achieving sustainable business methods to be incorporated in supply chain management. Our research shows a business based on sustainable, efficient handling of the food safety of its product and certification along the supply chain, as well as an adaptable purchasing policy. By reviewing the literature and information provided by the company, we confirm that the case study is a business leader in innovation, thought process, and action related to sustainability practices. Our research illustrates how business operations and culture can be explored to achieve sustainable buying processes and practices.
... Therefore, we augment Equation 1 with Gaussian copula terms that absorb the correlation between potentially endogenous marketing-mix variables and the normally distributed error term (Park and Gupta 2012). The copula method, which was recently used in, for example, Datta, Foubert, and Van Heerde (2015) and Gielens et al. (2018), does not require instrumental variables and thus is particularly useful when valid instruments are hard to find (Rossi 2014). ...
Our field’s knowledge of marketing-mix elasticities is largely restricted to developed countries in the North-Atlantic region, even though other parts of the world—especially the Indo-Pacific Rim region—have become economic powerhouses. To better allocate marketing budgets, firms need to have information about marketing-mix elasticities for countries outside the North-Atlantic region. We use data covering over 1,600 brands from 14 product categories collected in 7 developed and 7 emerging Indo-Pacific Rim countries across more than 10 years to estimate marketing elasticities for line length, price, and distribution, and examine which brand, category, and country factors influence these elasticities. Averaged across brands, categories, and countries, line-length elasticity is .459, price elasticity is -.422, and distribution elasticity is .368, but with substantial variation across brands, categories, and countries. Contrary to what has been suggested, we find no systematic differences in marketing responsiveness between emerging and developed economies. Instead, the key country-level factor driving elasticities is societal stratification, with Hofstede’s measure of power inequality (power distance) as its cultural manifestation and income inequality as its economic manifestation. As the effects of virtually all brand, category, and country factors differ across the three marketing-mix instruments, the field needs new theorizing that is contingent on the marketing-mix instrument studied.
... Retailers who invest in sustainable initiatives and report on them (Gielens, Geyskens, Deleersnyder, & Nohe, 2018). Since the concept of sustainable development is still permeated in the retail sector of the FMCG, the concept 'green atmosphere' was coined in terms of greening retail environments with the aim of creating a green business image (Hendrigan, 2020). ...
The shift in shopping methods from physical (offline) stores to virtual (online) stores has crystallized even more. Gradually the shift allows consumers to feel easy and comfortable in respect to buying products by online methods. This earliness paradigm shift becomes interesting if it becomes a topic of the research regarding the possibility of its sustainability in the triple bottom line. The clarity of the consumer's perspective on brand sustainability in terms of the main three pillars is being tested to clarify the roots of the paradigm by becoming a hypothesis in this research. The hypothesis was tested using Structural Equation Modeling on the answers of 278 respondents to identify the significant path. The findings are quite surprising so that entrepreneurs require to put forward the sustainability side of their brand. Future research should be aimed at adding more detailed factors related to the need for the process of achieving sustainability.
... Marketing mix In line with recent studies in marketing (e.g., Gielens et al., 2018;Guitart et al., 2018;Lim et al., 2018), we adopt Park and Gupta's (2012) Gaussian copulas to account for the potential endogeneity of the four marketing mix variables, which is the most feasible approach in a setting with multiple brands and categories like ours (Rutz & Watson, 2019). More specifically, we add a copula for weekly relative regular price, relative feature/display intensity, relative price promotion and relative distribution in Equation 1. ...
Manufacturers increasingly adopt health symbols, which translate overall product healthiness into a single symbol, to communicate about the overall healthiness of their grocery products. This study examines how the performance implications of adding a front-of-pack health symbol to a product vary across products. We study the sales impact of a government-supported health symbol program in 29 packaged categories, using over four years of scanner data. The results indicate that health symbols are most impactful when they positively disconfirm pre-existing beliefs that a product is not among the healthiest products within the category. More specifically, we find that health symbols are more effective for (i) products with a front-of-pack taste claim, (ii) lower priced products, and (iii) private label products. Furthermore, these results are more pronounced in healthier categories than in unhealthier categories. Our findings imply that health symbols can help overcome lay beliefs among consumers regarding a product’s overall healthiness. As such, adding a health symbol provides easy-to-process information about product healthiness for the consumer and can increase product sales for the manufacturer.
... Following prior studies (Gielens et al., 2018;Villena and Craighead, 2017), we calculate the percentage of revenues the supplier realises through the top five buyers to measure supplier dependence. A higher index value indicates that supplier sales are more concentrated among few buyers, and it can be assumed that the supplier is more dependent Fig. 1. ...
To improve corporate social responsibility (CSR) in the supply chain, focal buyers may use supplier dependence to influence the supplier's resource strategy to promote the supplier's CSR initiatives. Thus, supplier dependence is particularly critical to the supplier's CSR, especially for Chinese suppliers with resource constraints. However, there is limited understanding and research on the degree to which a supplier depends on major buyers for the supplier's CSR from the supplier's perspective. Based on a sample of 284 Chinese listed companies, this study analyses the relationship between supplier dependence and suppliers' CSR through the lens of resource dependence theory (RDT). In addition, we investigate the moderating roles of industrial dynamism and corporate transparency in the relationship between supplier dependence and suppliers' CSR. The results indicate that supplier dependence has a negative impact on the Chinese supplier's CSR performance. Meanwhile, the negative impact of supplier dependence is mitigated for the supplier's more volatile industrial context, while improving corporate transparency enhances the negative impact of supplier dependence. This study verifies the applicability of RDT for the analysis of CSR in the supply chain in emerging markets such as China. Moreover, the study further extends research on the role of buyer-supplier relationships in CSR in the supply chain by extending the research perspective to the supplier side and adding the external and internal uncertainty of the supplier to the theoretical framework for analysis. We also provide managerial implications for implementing Chinese suppliers' CSR from the buyer's and supplier's perspectives.
... To overcome this limit, Gielens et al. (2017) evidenced that retailers can play a key role in pushing the supply chain to become more sustainable, even if the time and efforts required to translate sustainability strategies to the market limits this move (Lehner, 2015). In doing so, retailers should improve their communication strategies, found as sometimes failing in impacting on consumer behaviours (Jones et al., 2011). ...
Purpose
Environmental concern is getting increasing importance in consumer shopping decisions. Nevertheless, to date, sustainable packaged foods are not always the first option when consumers go shopping. This paper analyses how environmental concern moderates the role played by external factors – preference towards sustainable retailers and trust in sustainable producers – in determining consumer purchase intentions for sustainable packaged foods. Consumer involvement in eco-friendly labels, increasingly present in food packages, is investigated as indirectly impacting pro-environmental purchase intentions.
Design/methodology/approach
An online survey administered to a sample of Italian food shoppers is used for the empirical analysis. A total of 278 structured questionnaires were modelled using a structural equation modelling approach.
Findings
Findings show that producers and retailers' policies in favour of sustainability are key in determining consumers' sustainable purchase intentions. Further, coherent uses of labels and logos in light of sustainability can support consumer purchase decisions. Relevant is the influence played by the environmental concern in both supporting pro-environmental purchase intentions and in amplifying the trust in sustainable producers-purchase intentions path.
Originality/value
This study contributes to the literature on sustainability showing how producers and retailers may together influence consumers' pro-environmental purchase intentions. Findings extend the retail literature on the impact of producers and retailers' policies on consumers' sustainable purchases. Further, environmental concern is investigated in its moderating role on the impact of external factors on consumers' pro-environmental purchase intentions.
... As such, we reestimated our model with the addition of copula terms for both EI and ESE using the software package REndo (Gui et al. 2020). Consistent with prior research, we retain only statistically significant copula terms (Gielens et al. 2018;Mathys, Burmester, and Clement 2016). Our results reveal that neither copula term is significant (p > .05), ...
The authors propose that the emotional intelligence (EI)-sales performance link can be better understood by considering a salesperson’s confidence in how they use emotions, known as emotional self-efficacy (ESE). Four multi-source studies across diverse sales industries offer evidence of the interactive effect of a salesperson’s EI and ESE – which we term emotional calibration – on salesperson performance. We find that sales performance suffers when salespeople are either overconfident or underconfident in their emotional skills and perform best when they are calibrated. Further, we demonstrate that the performance gains associated with emotional calibration (1) are attenuated when salespeople are under stress, and (2) occur because it encourages positive avoidance emotions (calmness and relaxation) among salespeople that result in improved customer rapport, but only among salespeople with relatively longer job tenures. Overall, the research highlights the critical role of ESE as an essential but neglected aspect of a salesperson’s emotional competence.
... Grewal, Riedl, and Serafim's (2018) study of market reactions to environmental disclosure finds that markets reacted negatively to the 2014 European Union's directive mandating more nonfinancial disclosure. Finally, one marketing study examines the wide set of suppliers' reactions to Walmart's new sustainability mandate, showing that such mandates have highly-nuanced firm-specific impacts (Gielens, Geyskens, Deleersnyder, & Nohe, 2018). ...
As corporations’ environmental impact comes under greater scrutiny by global financial,
regulatory, and societal stakeholders, management scholars have increasingly focused on the role of corporate governance as a tool for driving environmental initiatives. Still, we lack a comprehensive and systematic understanding of this emergent body of inquiry and a holistic agenda for future research. To address this gap, our integrative framework relates the key corporate governance actors to environmental sustainability outcomes from the extant literature and highlights its main methodological approaches and theoretical arguments. Our framework provides a critical analysis of what we know and points to the knowledge gaps around owners, boards of directors, CEOs, top management teams, and employees as corporate governance actors. We then highlight limitations in the existing literature as significant opportunities for further research to resolve ambiguous conceptualizations of environmental sustainability constructs, various methodological and theoretical challenges, its incomplete engagement with the global dimension of environmental sustainability, and its limited analysis of how corporate governance actors may interact to shape environmental sustainability outcomes. We conclude by proposing novel approaches for addressing these issues, which we believe could generate a better
way forward on studying the corporate governance of environmental sustainability.
... Grewal, Riedl, and Serafim's (2018) study of market reactions to environmental disclosure finds that markets reacted negatively to the 2014 European Union's directive mandating more nonfinancial disclosure. Finally, one marketing study examines the wide set of suppliers' reactions to Walmart's new sustainability mandate, showing that such mandates have highly-nuanced firm-specific impacts (Gielens, Geyskens, Deleersnyder, & Nohe, 2018). ...
As corporations’ environmental impact comes under greater scrutiny by global financial, regulatory, and societal stakeholders, management scholars have increasingly focused on the role of corporate governance as a tool for driving environmental initiatives. Still, we lack a comprehensive and systematic understanding of this emergent body of inquiry and a holistic agenda for future research. To address this gap, our integrative framework relates the key corporate governance actors to environmental sustainability outcomes from the extant literature and highlights its main methodological approaches and theoretical arguments. Our framework provides a critical analysis of what we know and points to the knowledge gaps around owners, boards of directors, CEOs, top management teams, and employees as corporate governance actors. We then highlight limitations in the existing literature as significant opportunities for further research to resolve its ambiguous conceptualizations of environmental sustainability constructs, various methodological and theoretical challenges, incomplete engagement with the global dimension of environmental sustainability, and limited analysis of how corporate governance actors may interact to shape environmental sustainability outcomes. We conclude by proposing novel approaches for addressing these issues, which we believe could generate a better way forward on studying the corporate governance of environmental sustainability.
... Because of retailers' unique position connecting suppliers and customers, retailers can motivate suppliers to adopt sustainability goals by implementing standards, norms, and guidelines that drive suppliers' sustainability efforts (Gielens et al. 2018;Hermes 2012). Retailers can also educate their upstream supply chain members on customers' sustainability needs, willingness to pay for a sustainable product, and ways to effectively communicate with them. ...
As consumers seek products that cause minimal environmental harm and bring about positive social impact, and as awareness of supply chain impact grows, retailers must embrace sustainability. Given their unique position in the supply chain between upstream suppliers and downstream consumers, retailers are key to a circular economy in which products at the initial end-of-life stage are returned to the supply chain for continued use. By serving as a connection between suppliers and consumers, retail initiatives can help to reduce, reuse, and recycle. Furthermore, retailers can leverage their unique position in the supply chain to enable and legitimize a focus on social issues across the supply chain. We discuss such actions, the challenges that need to be overcome to have scalable impact, and the mechanisms retailers can utilize to make such progress.
... • Gielens, Geyskens, Deleersnyder, and Nohe (2018) studied the effect of Walmart's 2012 sustainability mandate (e.g., shrink packaging materials, reduce toxic chemicals) on stock returns of 118 of its suppliers for cereals, meat products, and nonfood items. For suppliers over which Walmart held greater power, the suppliers' returns were boosted if the supplier had strong brand equity, a strong environmental reputation, and spent more on TV advertising. ...
This chapter reviews marketing scholarship on environmental sustainability. The literature covers several themes of both consumer behavior and firm-level topics. Consumer issues include their assessment of efficacy and the extent to which they are aware and sensitive to environmental issues. Numerous interventions and marketing appeals for modifying attitudes and behaviors have been tested and are reported. Consumers and business managers have both been queried regarding attitudes of recycling and waste. Firm-level phenomena are reflected, including how brand managers can signal their green efforts to their customers, whether doing so is beneficial, all in conjunction with macro pressures or constraints from industry or governmental agencies. This chapter closes with a reflection on the research.
... 13 In the second step, copula variables are created for the Adstock variables and the price variable; Eq. (1) is extended with the copula variables one-at-a-time, and those that have a significant impact (p b .10) are retained (for a similar practice, see Gielens, Geyskens, Deleersnyder, & Nohe, 2018;Gim, Tuli, & Dekimpe, 2018). In the third step, Eq. (1) is re-estimated nonlinearly including the set of retained copula variables. ...
This study examines how online display ads, alone or in combination with more conventional media (television and print), can help drive sales in the consumer packaged goods (CPG) sector. It also assesses how the combined sales effect of online and offline ads depends on the volatility of their expenditures over time. We explore these relations for 154 brands across 68 Dutch CPG product categories. We find that, even though display ads are not effective for the “average” CPG brand, they do have a significant impact for a sizable, and considerably larger than expected by chance, subset of brands. Importantly, this impact depends on the type of product. While display ads are found to be ineffective for low-involvement utilitarian products, they can significantly enhance sales for other CPG product types. Moreover, the effect depends on whether they are used in combination with other media: while display ads are best used as a stand-alone medium for high-involvement utilitarian products, it is better to combine them with traditional media for hedonic products. Finally, the long-term effectiveness of display messages increases significantly when they are spread more evenly in time.
... Results remain robust, and both copula terms are non-significant (p > .10), suggesting that, likely due to the other modeling steps (e.g., control variables), neither variable is endogenous (Gielens et al. 2018;Mathys, Burmester, and Clement 2016). ...
Grocery retailers are investing in “natural” product offerings to compete for shoppers. At the same time, many brands’ new product offerings claim to be “natural.” Such new products appear to be congruent with retail customers’ goals. However, the term “natural” is not regulated by any U.S. government agency. Uncertainty remains regarding what “natural” implies to the marketplace and the value it brings to interorganizational exchange between brands and their retail customers. We investigate these issues with a multimethod approach involving in-depth qualitative interviews with 30 managers possessing extensive category management experience, secondary data compiled from 628 brands’ new product introductions across 18 consumer packaged goods categories over 11 years, and primary data from a survey-based experiment collected from 101 managers involved with category management.
Results indicate the extent to which a brand is using retailer shelf space productively can determine whether the relationship between a brand’s “natural” new product introductions and brand distribution is positive or negative. Category managers find the term “natural” is difficult to evaluate – especially in non-food categories. They navigate this uncertainty by turning to brands’ “shelf space productivity” (i.e. the brand’s category sales contribution relative to its share of in-store shelf space) as a critical decision-making heuristic. If a non-food brand is using its shelf space productively, it is in position to gain access to greater overall distribution by focusing on “natural” new products. However, if a non-food brand is underutilizing its shelf space, category managers perceive the brand’s focus on “natural” new products as more opportunistic, which lowers their trust in the brand’s use of the claim. This distrust ultimately results in a larger withdrawal of the brand’s access to retailers’ distribution resources than had the brand focused more on non-“natural” new products.
These results suggest non-food brand managers should proceed with caution when considering whether their new products will focus on “natural” (vs. non-“natural”) offerings. It may seem “natural” products can only help—or at least not hurt—brand distribution. However, we find “natural” claims can be detrimental to distribution if the brand underutilizes its in-store shelf space. It is difficult for brands to escape downward performance spirals, and emphasizing “natural” claims seems to accelerate the descent for unproductive non-food brands.
As part of our analyses, we also propose, validate, and use a novel and straightforward measure that category managers and brand managers will find useful for estimating brand shelf space and shelf space productivity.
... Suppliers may similarly have a greater degree of influence on companies' sustainability focus than other stakeholder groups because companies view them as business partners (Buysee and Verbeke 2003;Mishra and Suar 2010). However, an alternative explanation is that companies that meet more regularly with suppliers about sustainability may be more committed to sustainability because they are not just addressing their direct impacts on society and the environment but are also addressing their indirect impacts throughout their value chain (Ciliberti, Pontrandolfo, and Scozzi 2008;Andersen and Skjoett-Larsen 2009;Blomgren 2011;Gielens, Geyskens, Deleersnyder, and Nohe 2018). ...
Capital constraints require companies to prioritize among the host of sustainability issues to which they can allocate capital. In this study, we investigate the role of three important factors that can affect this prioritization process: key decision-makers, sustainability reporting models, and stakeholder communications. We investigate these factors through the lenses of economic theory (i.e., the shareholder value approach), stakeholder theory, and enlightened stakeholder theory by collecting survey evidence from 104 managers in the resource transformation sector who are involved in or familiar with their company’s prioritization process. This study contributes to the literature by providing important insights into companies’ internal decision-making processes regarding sustainability issue prioritization.
... As Hart (1995) states, the field of strategic management needs to shift paradigm towards sustainability and introduce new concepts of strategy. For instance, product stewardship capability must incorporate the "voice of environment" by stakeholder engagement and environmental legitimacy (Gielens, Geyskens, Deleersnyder, & Nohe, 2018;Martínde Castro, Amores-Salvadó, & Navas-López, 2016). In this vein, we introduce CER as a key construct that connects a firm's environmental strategy and its stakeholders, both market and non-market ones. ...
Despite its growing strategic importance, the concept of Corporate Environmental Reputation (CER) still lacks a specific definition and content delimitation in the literature. This fact, together with its difficult differentiation from other similar constructs, hides the key role of this construct in the connection between management and environmental studies and in the development of corporate environmental management strategies. To address this issue, in this research, we develop a literature review on CER conceptualisation, operationalisation and measurement, and analyse its main effects on firm competitiveness and performance drawing on the Institutional Theory and the resource‐based view. As a result, we propose a CER definition, highlighting its main characteristics and drivers and delimitating it in relation to closely related concepts such as green corporate image and corporate environmental legitimacy.
... We therefore can add the copula term as additional control variable to Eq. (1). Also in this case, we will proceed with the model without the additional copula term in case the associated coefficient would turn out to be insignificant (see also Gielens, Geyskens, Deleersnyder, & Nohe, 2018 for a similar practice). Finally, there is not only a potential self-selection present in the choice whether or not to adopt an LP, but also in the LP design selection. ...
Many grocery retailers carry a loyalty program (LP). However, little is known under what conditions these programs are more or less effective. We provide a contingency framework that considers various design, retailer, and country characteristics that can moderate an LP's impact on a retailer's sales productivity. We test the framework across a large sample of 358 grocery banners from a broad cross-section of 27 western and eastern European countries. We find a positive effect of the more basic LP variant that offers direct and immediate rewards. This positive effect, however, disappears when retailers operate a more complex progressive-reward system and when they are part of a multivendor program. An LP's impact also differs between retailers and countries: it is lower when operated by discounters, and higher in countries that are more individualistic and long-term oriented, and where fewer competitors also carry a loyalty program.
... In detail, WAL-MART directly takes part in his upstream manufactures' production plan. Furthermore, it even puts forward some rigid rules, such as deferred payment, goods return, and return fee (Gielens et al. 2018). Huang and Li (2001) and Li (2002) take advertising as a way to promote cooperation and establish a game model of manufacturers and retailers. ...
Cooperative (co-op) advertising is an arrangement between manufacturer and retailer, where two members initiate their respective advertising to help develop brand, motivate sales, and other purposes. This paper focuses on cooperative advertising in a supply chain consisting of one manufacturer and one retailer. As two basic elements of a supply chain, the channel power structure and information structure affect the firm’s pricing and advertising decisions. We attempt to investigate how they optimally decide their marginal returns and advertising investments. Utilizing the Stackelberg game theory, we derive the equilibrium of five scenarios in two different cases, i.e., (1) either the manufacturer or the retailer is acting as the Stackelberg leader and (2) whether the Stackelberg leader knows the advertising investment of his follower. Then we make a comparison and obtain some managerial implications as follows: (1) the supply chain power structure and the relative advertising effectiveness coefficient exert great influence on the optimal supply chain decisions, (2) the supply chain members’ profit is not parallel to their corresponding power structure, if the retailer’s advertising effectiveness is greater than the manufacturer’s, the Manufacturer-dominated Stackelberg game is a win–win strategy, and vice versa, (3) the dominant member can improve his and the overall performance of the supply chain by having the advertising information of the other.
Brands are responding to the increasing importance that consumers and society have placed on sustainable practices and products. In the current research, the authors investigate the unique challenges of dominant brands in the marketplace related to sustainability. We demonstrate that consumer assessments of sustainability initiatives lead to perceptions of inauthenticity in dominant brands. We argue this disadvantage is tied to the inherent conflict between sustainability initiatives, which are focused on “taking less,” and the prevailing measure of success in business, which is “making more.” Within this paradox, the challenge of a dominant brand becomes further amplified as the brand is perceived as being larger in size and more profit centric. Seven studies, including a field experiment on Facebook, document this effect and provide practical implications for brands to help alleviate these challenges with increased brand commitment, including third-party certification.
Purpose
Rapid changes in technologies and customer preferences are increasing market uncertainty. Hence, despite the benefits of reactive and adaptive marketing in the industrial market, such marketing is sometimes insufficient for suppliers to survive and succeed. This phenomenon is prevalent among the small and medium-sized suppliers (SMSs) who fail to build technological capability. This suggests that SMSs should be entrepreneurial to survive and succeed in today’s environment. Against this backdrop, the purposes of this study are to understand the process by which entrepreneurial marketing of SMSs enhances their technological capability and to explore factors that stimulate SMSs to implement entrepreneurial marketing.
Design/methodology/approach
Based on a survey data set on 249 industrial SMSs in South Korea, the authors test the hypotheses formulated in this work using structural equation modeling.
Findings
Based on effectuation theory, this study conceptualizes entrepreneurial marketing as a process by contrasting entrepreneurial marketing with reactive and adaptive marketing. The results show that proactive market orientation and subsequent exploratory market behavior enhance technological capability, and proactive market orientation is stimulated by relational satisfaction and perceived technological turbulence.
Originality/value
This study advances effectuation theory in the industrial marketing literature by exploring the value of entrepreneurial marketing in today’s industrial market. Further, this study extends the entrepreneurial marketing literature by conceptualizing and testing the process by which entrepreneurial marketing of SMSs enhances their technological capability.
Purpose
The objective of this paper is to develop a map of the contours of the phenomenon of retailer failure by aggregating, parsing and extracting known findings regarding business failure in marketing, business and other streams of inquiry to provide a comprehensive understanding of research on the topic. Defined as the converse of retailer performance, an understanding of retail failure is expected to yield insights for performance measurement and benchmarking studies.
Design/methodology/approach
The paper includes a systematic literature review, employing state-of-the-art tools such as VOSViewer.
Findings
The analysis reveals patterns in the intellectual structure of the research on retail failure, as well as patterns of influence. While the discipline of marketing has been surprisingly limited in the study of retail failure, study of retail failure has been pursued by other branches of the business discipline, and even some disciplines other than business.
Originality/value
This paper provides a comprehensive and systematic literature review on the topic of retail failure.
Even as more companies integrate artificial intelligence (AI) into their new products and services, little research outlines the strategic implications of such AI adoption. Therefore, the present study investigates how investors respond to announcements of new product innovations integrated with AI by non-software firms (AI-NPIs), with the prediction that they respond favorably if the firms feature a marketing department with substantial power; such firms likely possess the marketing resources and assets needed to ensure the success of AI-NPIs. An event study with a sample of 341 announcements by 77 S&P 500 firms between 2009–2018 supports this prediction. Furthermore, the relationship between marketing department power and investor response intensifies when the announcement (1) occurs in later innovation stages, (2) involves the sourcing of external innovation assets, and (3) refers to more complex innovations. These findings have both theoretical and managerial implications.
Chief executive officer (CEO) narcissism is an ingrained personality trait referring to the degree to which an individual CEO has an inflated level of self-admiration and seeks to gain attention and social praise by pursuing vanity-driven strategic objectives. We find evidence that narcissistic CEOs are less likely to dispose of brands but more likely to acquire brands than their less narcissistic counterparts. Further, narcissistic CEOs are more likely than their counterparts to lead their companies to acquire high-awareness brands and more likely to dispose of low-awareness brands. We also propose a moderated mediation model in which CEO narcissism increases target brand asset overvaluation, and through this mediator, CEO narcissism has a negative indirect impact on the acquirer’s abnormal returns but a positive indirect impact on the seller’s abnormal returns associated with the brand transactions. Brand awareness and perceived quality weaken the relationship between target brand asset overvaluation and abnormal returns.
Advocacy bias is characterized by a preponderance of published articles that support an academic discipline’s favored causes and paradigms, and by the consequent relative absence of bias countering skeptical/falsifying publications. Such imbalance between paradigm/cause advocates and skeptics can be an indication of a research process that has been corrupted by a widely shared scholarly desire to generate supportive results. The current research makes an empirical contribution to the advocacy bias literature with a content analysis based framework that assesses the level of green marketing (GM) advocacy bias among 107 GM related articles from marketing’s Financial Times (FT) list journals and 9 GM related special issues (SI). Evidence of widespread GM advocacy bias is indicated by the almost complete lack of GM skeptical/falsifying articles. It is hoped that this first empirical examination of advocacy bias within the marketing discipline will inspire more discussion and research on the topic.
This paper proposes a panel data generalization for a recently suggested IVfree estimation method that builds on joint estimation. The author shows how the method can be extended to linear panel models by combining fixed-effects transformations with the common GLS transformation to allow for heterogeneous intercepts. To account for between-regressor dependence, the author proposes determining the joint distribution of the error term and all explanatory variables using a Gaussian copula function, with the distinction that some variables are endogenous and the others are exogenous. The identification does not require any instrumental variables if the regressor-error relation is nonlinear. With a normally distributed error, nonnormally distributed endogenous regressors are therefore required. Monte Carlo simulations assess the finite sample performance of the proposed estimator and demonstrate its superiority to conventional instrumental variable estimation. A specific advantage of the proposed method is that the estimator is unbiased in dynamic panel models with small time dimensions and serially correlated errors; therefore, it is a useful alternative to GMM-style instrumentation. The practical applicability of the proposed method is demonstrated via an empirical example.
The marketing mix (MM) is an integral part of a firm’s marketing strategy sitting at the nexus between a company and the marketplace. As such, it evolves together with the marketplace and its stakeholders. Over the past decade, three fundamental global drivers have emerged—advancements in technology, socioeconomic and geopolitical shifts, and environmental changes—that have caused major ongoing and intensifying evolutions in the marketplace, its stakeholders, and, in turn, the MM. We describe the resulting evolutions in the MM along four central questions: who is involved in the MM, what constitutes the MM, how is it implemented, and where is it deployed. We identify a blurring of roles and responsibilities relating to the MM (who), an extension and integration of the MM instruments (what), an increase in customization and fragmentation of its actions (how), and a growing recognition of emerging-market idiosyncrasies (where). Taking a look into the future, we observe that along each of the four dimensions, the MM has arrived at a crossroad, with opposing scenarios for its future: (i) more inter-firm collaboration versus marketing-mix protectionism, (ii) added complexity versus increased simplicity, (iii) further automation versus an increased recognition of the human touch, and (iv) local adaptation versus global uniformity in the marketing mix. Applying a contingency approach, we derive relevant moderators for these forthcoming evolutions and provide an extensive set of future research questions.
To survive in the competitive retail landscape, retailers launch service innovations designed to grant additional value to consumers. This study investigates whether and in which circumstances retail service innovations create shareholder value, using stock returns to capture investors’ point of view. An event study is used to analyze a broad, varied set of 350 service innovation announcements by publicly listed retailers. The study shows that the customer value benefit(s) aimed for by the retail service innovation (i.e., its level of convenience and engagement) has an impact on shareholder value. Moreover, this impact is contingent upon the stage of the consumer purchase process that the innovation targets, and upon the hedonic or utilitarian nature of the products offered by the retailer that initiates the innovation. The impact on retailer shareholder value is more positive for service innovations high on convenience that speed up and simplify the shopping process, when implemented at the purchase stage or by retailers offering utilitarian products. Service innovations high on engagement that focus more on non-transactional initiatives instead fare well in the post-purchase stage.
Firms facing a dynamic marketplace associated with the increasing adoption of new-age technology, the growth of big data and analytics, and the increased importance of stakeholders seek guidance on the investment of scarce resources across these three primary dimensions. The key questions facing firms are: How can we capitalize on the three primary dimensions (the increasing new-age technology adoption, the growth of big data and analytics, and the increased importance of key stakeholders) and overcome their associated challenges to achieve sustainable firm growth? This study aims to revive the thinking based on the growth strategy literature in the current environment, by presenting a 4E growth strategy matrix comprising of entrenching, empowering, enterprising, and enriching growth strategies. We propose that a firm can invest resources to maximize on one, two, or all three primary dimensions to produce the four growth strategies. We present an organizing framework based on insights from our triangulated research approach. Each of the growth strategies discussed will result in building certain types of firm capabilities, which will then lead to serving the needs and well-being of the key stakeholders. We also present an extensive research agenda that emerges from the four growth strategies.
Manufacturers frequently face the challenge of motivating distributor salespeople to focus efforts on their products rather than competitors’ products. The present research explores two mechanisms that manufacturers use to address this challenge: training and incentives (spiffs). The authors find that the impact of these mechanisms on distributor salespeople’s efforts (toward a manufacturer’s products) largely depends on the extent to which manufacturers also provide training and incentives to distributor sales managers. More specifically, providing greater incentives to distributor sales managers undermines the relationship between their salespeople’s training and effort but enhances the relationship between their salespeople’s incentives and effort. Furthermore, greater sales manager training enhances the impact of salespeople’s incentives on effort; however, greater salesperson training undermines the relationship between salesperson incentives and effort. Thus, this research shows that the combination of mechanisms (training and incentives) and the levels at which manufacturers provide them (distributor salespeople and sales managers) can have different implications for distributor salespeople’s efforts.
Capital constraints require companies to prioritize among the host of sustainability issues to which they can allocate capital. In this study, we investigate the role of three important factors that can affect this prioritization process: key decision-makers, sustainability reporting models, and stakeholder communications. We investigate these factors through the lenses of economic theory (i.e., the shareholder value approach), stakeholder theory, and enlightened stakeholder theory by collecting survey evidence from 104 managers in the resource transformation sector who are involved in or familiar with their company's prioritization process. This study contributes to the literature by providing important insights into companies' internal decision-making processes regarding sustainability issue prioritization.
JEL Classifications: G34; M14; M41.
Data Availability: The data are available from the authors upon request.
The authors demonstrate that a target's attitude toward an influencer is affected by both (1) the influence type used by the influencer to achieve the target's compliance and (2) the performance outcomes that result from the behavior adopted by the target in compliance with that influence. Before performance outcomes are known, the target's satisfaction and trust are strongly affected by the type of influence exercised; more dominating influence types result in less positive attitude. When outcomes of compliance become evident, however, favorable outcomes appear to ameliorate negative attitudes, whereas unfavorable outcomes seem to undermine positive attitudes. These findings indicate the significance of performance outcomes for understanding the ramifications of successful influence.
The authors advance a conceptual model of channel member satisfaction that distinguishes between economic and noneconomic satisfaction. The resulting model then is tested using meta-analysis. Meta-analysis enables the empirical investigation of a model involving several constructs that never have been examined simultaneously within an individual study. More specifically, the authors unify the stream of research on power use—the focus of many satisfaction studies in the 1970s and 1980s—with more recent work on trust and commitment, which usually explores antecedents other than power use. The results indicate that economic satisfaction and noneconomic satisfaction are distinct constructs with differential relationships to various antecedents and consequences. Furthermore, this study demonstrates that satisfaction is both conceptually and empirically separable from the related constructs of trust and commitment.
A national survey of 145 reseller buyers was used to study how brand entry order into new categories affects reseller buyers’ attitudes toward new items. The literature on pioneer brand advantage is extended by finding empirical support for an advantage to pioneer brands with resellers. Also, an important distinction is found between the first me-too follower brand and second or later me-too follower brands. Specifically, reseller buyers have a very favorable attitude toward pioneer brands, a less favorable but still positive attitude toward first me-too follower brands, and an unfavorable attitude toward second or later me-too follower brands. An adaptation of the multiattribute attitude model (that of “importance-likelihood”) served as the psychological basis in an effort to explain how and why these attitudinal differences occurred. A causal model framework then was applied to the data to investigate the significant interrelationships between brand order of entry and reseller buyer beliefs, attitudes, and behavior. The theoretical and managerial implications of entry order effects are discussed.
The marketing literature uses regression models based on observational data for causal inferences. Endogeneity issues are a threat to inferring causal effects. Endogeneity—the correlation between the regressors and the model error term—will lead to inconsistent estimates of the regression effects and potentially erroneous conclusions. We discuss this in more detail in Sect. 18.2. The standard approach to deal with endogeneity is to use an instrumental variables (IV) approach. In Sect. 18.3, we briefly introduce this technique before we highlight key aspects of IV selection.
We examine the effect of consumer and market factors on the trial probability of new consumer packaged goods. We distinguish between three sources of variation in consumer trial probability: (1) within new products, across consumers; (2) within new products, over time; and (3) across new products. Hypotheses are developed for the different variables concerning their likely effect on trial probability. The hypotheses are tested on weekly household-panel scanner data on the occurrence and timing of first purchases for 239 new consumer packaged goods over a 52-week period after introduction for a sample of over 3,500 consumers. We combine these household panel purchase data with consumer questionnaire data, retail scanner data, data on advertising expenditure, and expert ratings. We find support for most hypotheses. One of our main findings is that the effects of the consumers' personal makeup on the probability that they will try the new product are systematically moderated by elements of the marketing strategy associated with the new product and by category characteristics. The extensive data set provides a strong context for the generalizability of the findings. T he consumer purchase environment changes continuously. Each year, thousands of new products are introduced in the United States and elsewhere. Thus, decisions concerning whether to purchase a new product constitute an important component of consumer behavior. However, relatively little research has examined the adoption decision and the consumer and market factors influencing these individual consumer decisions (Moreau, Lehmann, and Mark-man 2001). Van den Bulte for constructive comments on earlier versions of this article, and Scott Neslin for providing the categories of ability to stockpile and impulse buying scores. The helpful suggestions of Dominique Hanssens, Valentina Melnyk, Vincent Nijs, Luk Warlop, and Michel Wedel are also much appreciated. chase, and sometimes it is interpreted more loosely to refer to the first few purchases. We focus on the decision concerning the first, or " trial, " purchase. This decision typically is associated with higher risk and lower product knowledge, while reactions by the social system are also less clear (Rog-ers 1995). Moreover, repeat purchases are contingent on trial purchase to have taken place, while trial is not contingent on repeat. The contribution of this study is twofold. First, although the consumer behavior literature recognizes both consumer and market factors as important drivers of the trial probability of new products (e.g., Gatignon and Robertson 1991), adoption research has typically focused either on consumer factors or on marketing variables (e.g., models like ASSESSOR). However, ignoring either type of factor can seriously bias one's conclusions about adoption processes (e.g., Van den Bulte and Lilien 2001). We study simultaneously consumer and market factors, including their main and interaction effects, on the trial probability of new CPGs. We examine these effects in a systematic fashion, developing and testing theory-based hypotheses. The focus in this study will be on understanding and explanation rather than on forecasting or normative prescription. Second, our data set on the occurrence and timing of first purchases for 239 new CPGs over a 52-week period after introduction for a sample of over 3,500 consumers allows for empirical generalizations regarding the factors underlying the consumer trial probability of new products, at least within the domain of CPGs. As Bass and Wind (1995, p.
The critical role of research and development (R&D) and advertising in the marketing strategy of the firm is well established. This paper conceptually and empirically examines why and how much the effectiveness of these two marketing instruments differs between times of economic expansions versus periods of economic contractions-and whether these results depend on the cyclicality of the industry in question. We consider a key marketing metric (market share) and a key financial metric (firm profit). Our empirical setting is 1,175 U.S. firms across a time period spanning over three decades. We find that R&D and advertising contribute to firm performance but that their effectiveness is not constant across the business cycle. Increasing advertising share in contractions has a stronger effect on profit and market share than increasing advertising share in expansions. Likewise, investments in R&D in contractions lead to higher gains in market share and profit than R&D investments in expansions, albeit only in subsequent years. If in contractions the firm faces tight budget constraints and has to choose between either maintaining R&D or advertising, our simulation results show that maintaining R&D is associated with better company performance. We find that advertising effectiveness, in general, and in contractions, in particular, is systematically moderated by the degree of cyclicality of the industry in which the firm operates. In relatively stable industries, advertising effects are small or even nonsignificant, and they do not go beyond the year the firm advertises. However, in highly cyclical industries, advertising effects are long-lasting, its total effect being 50% larger (market share) and 200% larger (profits) than in industries of average cyclicality. The effect of industry cyclicality on advertising effectiveness is especially pronounced in contractions. Collectively, these findings provide valuable and actionable insights into how firms should respond to contractions in order to grow profits and market share.
During retailer-initiated price wars (PWs), hundreds of brands are involved simultaneously, affecting brands’ and retailers’ positioning and ultimately making the performance outcome for individual brands difficult to predict. Likewise, the impact on brand performance after the PW, when prices are restored, is unclear. The authors use a natural experiment approach to track brand sales and shares before, during, and after a long-lasting supermarket PW in the Dutch grocery market. They find that PWs are not truly revenue, sales, or share generators for most brands, unless prices remain reduced permanently by the retailer. Only after the PW, when rivals’ prices are restored and the focal brand’s reduced retail price is maintained, can substantial sales, revenues, and share gains be realized. Moreover, restoring prices without additional price promotion support can severely damage brands’ performance. Overall, national brands can gain share, sales, and revenue, but at the cost of not restoring regular prices, while private labels can benefit even when prices are restored after the PW ends.
A national survey of 145 reseller buyers was used to study how brand entry order into new categories affects reseller buyers' attitudes toward new items. The literature on pioneer brand advantage is extended by finding empirical support for an advantage to pioneer brands with resellers. Also, an important distinction is found between the first me-too follower brand and second or later me-too follower brands. Specifically, reseller buyers have a very favorable attitude toward pioneer brands, a less favorable but still positive attitude toward first me-too follower brands, and an unfavorable attitude toward second or later me-too follower brands. An adaptation of the multiattribute attitude model (that of "importance-likelihood") served as the psychological basis in an effort to explain how and why these attitudinal differences occurred. A causal model framework then was applied to the data to investigate the significant interrelationships between brand order of entry and reseller buyer beliefs, attitudes, and behavior. The theoretical and managerial implications of entry order effects are discussed.
The conventional wisdom concerning environmental protection is that it comes at an additional cost imposed on firms, which may erode their global competitiveness. However, during the last decade, this paradigm has been challenged by a number of analysts (e.g., Porter & van der Linde, 1995), who have argued basically that improving a company's environmental performance can lead to better economic or financial performance, and not necessarily to an increase in cost. The aim of this paper is to review empirical evidence of improvement in both environmental and economic or financial performance. We systematically analyze the mechanism involved in each of the following channels of potential revenue increase or cost reduction owing to better environmental practices: (a) better access to certain markets; (b) differentiating products; (c) selling pollution-control technology; (d) risk management and relations with external stakeholders; (e) cost of material, energy, and services; (f) cost of capital; and (g) cost of labor. In each case, we try to identify the circumstances most likely to lead to a "win-win" situation, i.e., better environmental and financial performance. We also provide a diagnostic of the type of firms most likely to reap such benefits.
This study examines 171 brand licensing announcements and subsequent changes in the licensor firms' shareholder values using the event study method. We find that although brand licensing announcements lead to positive abnormal returns on average, nearly 44% of the announcements in our sample are followed by negative abnormal returns. We argue that investors react more favorably to a brand licensing announcement when they believe (i) the brand has greater ability to stimulate licensee product sales (and thus generate higher royalties for the licensor) and (ii) the licensor firm has greater ability to limit licensee opportunism (and thus limit brand dilution and its adverse effect on sales of other products marketed under the brand name). In line with our hypotheses related to a brand's ability to stimulate licensee product sales, the study's findings suggest that investors react more favorably to announcements involving brands with greater brand fit and greater brand breadth. However, investors appear to react less favorably to announcements involving brands with higher advertising investments. In line with our hypotheses related to a licensor firm's ability to limit licensee opportunism, the study's findings suggest that investors react more favorably to announcements involving larger licensors; however, investors' reactions do not appear to be influenced by licensor firms' licensing experience.
This paper was accepted by Pradeep Chintagunta, marketing.
Corporate social performance (CSP) consists of actions in different domains that vary in the information they provide stakeholders, and hence, in their effect on firm performance. To demonstrate this, the authors examine the impact of CSP on firm performance in two areas—the product and the environment, referred to as product social performance (PSP) and environmental social performance (ESP), respectively. PSP has a stronger positive impact on firm performance compared to ESP. The findings using disaggregated measures of PSP and ESP indicate negativity bias in that PSP weakness has a stronger negative impact on firm performance compared to PSP strength. Copyright © 2013 John Wiley & Sons, Ltd.
Editors' Summary: Information is a key factor in shaping and regulating envi-ronmental behavior from various perspectives: that of a stockholder looking into the sound nature of an investment, of a consumer choosing a product, or of a government official determining compliance with law. The authors of this Ar-ticle set out to identify and collate what they thought would be a significant amount of environmental compliance information available on the Internet that could serve these purposes. In so doing, however, they discovered that while the basic technical infrastructure exists within the current state and federal data-bases, there are few sources of enforcement information that are truly accessi-ble and useful to the consumer, investor, and even the regulatory community. The authors thus argue for a publicly accessible assemblage of existing enforce-ment and compliance data from all environmental regulatory agencies. While the data presented below demonstrate what information is available to the pub-lic today, more importantly, they serve as a starting point for the eventual goal of providing the public with all enforcement data in an accessible format.
The current study investigates the effects of green advertising and a corporation’s environmental performance on brand attitudes and purchase intentions. A 3X3 (firm’s environmental performance and its advertising efforts as independent variables) experiment using n=302 subjects was conducted. Results indicate that the negative effect of a firm’s low performance on brand attitudes becomes stronger in the presence of green advertising compared to general corporate advertising and no advertising. Further, when the firm’s environmental performance is high, both green and general corporate advertising result in more unfavorable brand attitudes than no advertising. The study’s counter-intuitive findings are explained by attribution theory.
Though considerable research has been reported on the effects of coercive and noncoercive power sources in marketing channels, the particular effects of power sources that have been exercised, as opposed to those that remain unexercised, have not been identified. The authors summarize the findings of a research project examining these differential effects on selected variables of interest to channel managers, including power, conflict, dealer satisfaction, and channel performance.
Several distribution channel studies have examined the effects of various sources of a channel member's power on such phenomena as power, conflict, and satisfaction. However, as causal relationships among these power sources have not been considered, the author investigates some aspects of this issue. Specifically, the effects of reward and coercion on the expert, referent, and legitimate power sources in a marketing channel are identified. Results indicate that (1) a supplier's application of reward and punishment does affect the strength of its other three power sources and (2) these relationships exert a major influence on whatever impact reward and coercion may have on other channel phenomena such as supplier power and dealer satisfaction. The implication of this finding of a compound effect of the use of certain power sources is that channel entities should be even more circumspect about such action than would be advised on the basis of prior research in this area.
Information integration theory and the integrated information response model are used to explore how consumers combine information from advertising and trial. Also investigated is the ability of attitude toward the ad to mediate advertising's effects on brand cognitions and brand attitudes after trial. An experiment is conducted in which three independent variables are manipulated: the information source (ad only, trial only, and ad plus trial), information sequence (ad/trial and trial/ad), and favorability of trial (positive and negative). Results show that (1) advertising can lessen the negative effects of an unfavorable trial experience on brand evaluations, especially when the ad is processed first, (2) when negative trial precedes exposure to advertising, cognitive evaluations of the ad are more negative, (3) the ability of ad attitudes to influence brand cognitions and brand attitudes is significantly reduced after trial, and (4) the ability of brand cognitions to influence brand attitudes is significantly increased after trial. Implications for advertising research and practice are discussed.
The measurement of power is a prerequisite for the analysis of the distribution channel as a behavioral system. This article presents a model for power measurement and the results of a first attempt to empirically measure power relationships within a specific channel of distribution.
Three hypotheses are discussed: that the power of a channel leader is a result of his control over some power sources, and of dependency of other channel members upon him, and that such power can be offset by the countervailing power available to the channel members. Results of an empirical study which tested and confirmed these hypotheses in a conventional channel framework are presented. Several implications are derived which pertain to channel management decisions and proper selection of channel control mix.
With the availability of “canned” computer programs, it is extremely easy to run complex multivariate statistical analyses. However, it is not as easy to interpret the output of these programs. This article offers some comments about the well-known technique of linear discriminant analysis; potential pitfalls are also mentioned.
The authors develop a conceptual framework of the marketing–finance interface and discuss its implications for the theory and practice of marketing. The framework proposes that marketing is concerned with the task of developing and managing market-based assets, or assets that arise from the commingling of the firm with entities in its external environment. Examples of market-based assets include customer relationships, channel relationships, and partner relationships. Market-based assets, in turn, increase shareholder value by accelerating and enhancing cash flows, lowering the volatility and vulnerability of cash flows, and increasing the residual value of cash flows.
Event studies examine stock price movements around corporate events. These events can be voluntary firm announcements (e.g., new product introduction, alliance formation, channel restructuring) or announcements made by other entities such as regulatory bodies (e.g., FDA approval) or competitors (e.g., new market entry). The event study methodology was developed by finance researchers but has been widely adopted in other fields, including marketing. We review the manner in which event studies have been used in the marketing literature and summarize the current state of knowledge about the design and interpretation of event studies. We provide guidelines for researchers who use this methodology and for readers who draw inferences from results obtained from event studies, and we highlight a few areas where the methodology can be leveraged to help us better understand the financial value of marketing actions.
A model of distributor firm and manufacturer firm working partnerships is presented and is assessed empirically on a sample of distributor firms and a sample of manufacturer firms. A multiple-informant research method is employed. Support is found for a number of the hypothesized construct relations and, in both manufacturer firm and distributor firm models, for the respecification of cooperation as an antecedent rather than a consequence of trust. Some implications for marketing practice are discussed briefly.
Introducing new products necessitates that manufacturers not only carefully craft the initial contract terms with retailers but also consider how the specificity of the terms influences a retailer's relational behaviors throughout the duration of the contract, contingent upon the new product's success. The authors develop a series of hypotheses to investigate new product introductions using a multimethod design consisting of a survey of manufacturers and a repeated measures experiment with retailers. The results indicate that manufacturers craft increasingly specific contract terms as new product creativity increases when frequency of new product introductions and performance ambiguity are higher. When they are lower, the positive influence of new product creativity on contract specificity weakens and can in some instances become negative. The results also indicate that there is no significant change in a retailer's relational behaviors throughout a contract's duration when contract specificity is lower, regardless of the new product's success. However, under the condition of higher contract specificity, the retailer's relational behaviors increase (decrease) over a contract's duration when the new product is successful (unsuccessful).
Despite the positive societal implications of corporate social responsibility (CSR), there remains an extensive debate regarding its consequences for firm shareholders. This study posits that marketing capability plays a complementary role in the CSR-shareholder wealth relationship. It further argues that the influence of marketing capability will be higher for CSR types with verifiable benefits to firm stakeholders (i.e., consumers, employees, channel partners, and regulators). An analysis utilizing secondary information for a large sample of 1,725 firms for the years 2000-2009 indicates that the effects of overall CSR efforts on stock returns and idiosyncratic risk are not significant on their own but only become so in the presence of marketing capability. Furthermore, the results reveal that although marketing capability has positive interaction effects with verifiable CSR efforts - environment (e.g., using clean energy), products (e.g., providing to economically disadvantaged), diversity (e.g., pursuing diversity in top management), corporate governance (e.g., limiting board compensation), and employees (e.g., supporting unions) - on stock returns (and negative interaction effects with these CSR efforts on idiosyncratic risk), it has no significant interaction effect with community-based efforts (e.g., charitable giving).
The economic value of celebrity brands is heavily influenced by their ability to generate large-scale consumer interest. We develop a comprehensive framework for the drivers of celebrities' market popularity (in terms of consumer interest generated by celebrities) including variables related to actors, movies, and actor-movie fit. To test the framework, Internet search histories are examined for 161 film stars over the course of more than 6 years (January 2004-June 2010). In particular, we test three hypotheses. First, with regard to actor-related variables, we do not find support for the postulated inverted U-shaped effect from the frequency of movie appearances on the market popularity of film stars (H1). Rather, the results indicate a monotone and positive relationship between a film star's frequency of movie appearances and consumer interest in the film star. Second, with respect to movie-related factors, the findings indicate that both positive and negative abnormal movie revenues increase the popularity of film stars (H2). Third, concerning variables related to actor-movie fit, the results support the hypothesized U-shaped effect from actor-movie fit on the market popularity of film stars (H3). On a managerial level, this study provides insights for film stars on how to enhance their market popularity by increasing the frequency of their movie appearances and by selecting films that are likely to generate abnormal revenues and have a certain fit with their image.
Upstream biotech firms (i.e., upstream partners) and downstream pharmaceutical firms (i.e., downstream partners) often form alliances to cope with performance uncertainty and to exploit product specificity in new product development. Although the performance implications of such alliances have been investigated, research has not offered insight into how the timing of such codevelopment alliances influences partner returns. The authors develop and test predictions that timing changes the costs and benefits accruing to upstream and downstream partners and that the effect of timing is influenced by a set of alliance, firm, and market conditions. An event study of 276 codevelopment agreements between biotech and pharmaceutical firms during 1998-2010 reveals that alliance governance structure, partner technological capability, and the competitiveness of market environments change the abnormal returns achieved by partners entering these relationships in important ways.
The authors demonstrate that a target's attitude toward an influencer is affected by both (1) the influence type used by the influencer to achieve the target's compliance and (2) the performance outcomes that result from the behavior adopted by the target in compliance with that influence. Before performance outcomes are known, the target's satisfaction and trust are strongly affected by the type of influence exercised; more dominating influence types result in less positive attitude. When outcomes of compliance become evident, however, favorable outcomes appear to ameliorate negative attitudes, whereas unfavorable outcomes seem to undermine positive attitudes. These findings indicate the significance of performance outcomes for understanding the ramifications of successful influence.
This study examines whether shareholders are sensitive to corporations' environmental footprint. Specifically, I conduct an event study around the announcement of corporate news related to environment for all US publicly traded companies from 1980 to 2009. In keeping with the view that environmental corporate social responsibility (CSR) generates new and competitive resources for firms, I find that companies reported to behave responsibly toward the environment experience a significant stock price increase, whereas firms that behave irresponsibly face a significant decrease. Extending this view of "environment-as-a-resource," I posit that the value of environmental CSR depends on external and internal moderators. First, I argue that external pressure to behave responsibly towards the environment-which has increased dramatically over recent decades-exacerbates the punishment for eco-harmful behavior and reduces the reward for eco-friendly initiatives. This argument is supported by the data: over time, the negative stock market reaction to eco-harmful behavior has increased, while the positive reaction to eco-friendly initiatives has decreased. Second, I argue that environmental CSR is a resource with decreasing marginal returns and insurance-like features. In keeping with this view, I find that the positive (negative) stock market reaction to eco-friendly (-harmful) events is smaller for companies with higher levels of environmental CSR.
Service innovativeness, or the propensity to introduce service innovations to satisfy customers and improve firm value at acceptable risk, has become a critical organizational capability. Service innovations are enabled primarily by the Internet or people, corresponding to two types of innovativeness: E- and p-innovativeness. The authors examine the determinants of service innovativeness and its interrelationships with firm-level customer satisfaction, firm value, and firm risk and investigate the differences between e- and p-innovativeness in these relationships. They develop a conceptual model and estimate a system of equations on a unique panel data set of 1049 innovations over five years, using zeroinflated negative binomial regression and seemingly unrelated regression approaches. The results reveal important asymmetries between e- and p-innovativeness. Whereas e-innovativeness has a positive and significant direct effect on firm value, p-innovativeness has an overall significantly positive effect on firm value through its positive effect on customer satisfaction but only in human-dominated industries. Both e- and p-innovativeness are positively associated with idiosyncratic risk, but customer satisfaction partially mediates this relationship for pinnovativeness to lower this risk in human-dominated industries. The findings suggest that firms should nurture e-innovativeness in most industries and p-innovativeness in human-dominated industries.
Information integration theory and the integrated information response model are used to explore how consumers combine information from advertising and trial. Also investigated is the ability of attitude toward the ad to mediate advertising's effects on brand cognitions and brand attitudes after trial. An experiment is conducted in which three independent variables are manipulated: the information source (ad only, trial only, and ad plus trial), information sequence (ad/trial and trial/ad), and favorability of trial (positive and negative). Results show that (1) advertising can lessen the negative effects of an unfavorable trial experience on brand evaluations, especially when the ad is processed first, (2) when negative trial precedes exposure to advertising, cognitive evaluations of the ad are more negative, (3) the ability of ad attitudes to influence brand cognitions and brand attitudes is significantly reduced after trial, and (4) the ability of brand cognitions to influence brand attitudes is significantly increased after trial. Implications for advertising research and practice are discussed.
Several distribution channel studies have examined the effects of various sources of a channel member's power on such phenomena as power, conflict, and satisfaction. However, as causal relationships among these power sources have not been considered, the author investigates some aspects of this issue. Specifically, the effects of reward and coercion on the expert, referent, and legitimate power sources in a marketing channel are identified. Results indicate that (1) a supplier's application of reward and punishment does affect the strength of its other three power sources and (2) these relationships exert a major influence on whatever impact reward and coercion may have on other channel phenomena such as supplier power and dealer satisfaction. The implication of this finding of a compound effect of the use of certain power sources is that channel entities should be even more circumspect about such action than would be advised on the basis of prior research in this area.
Although companies are devoting significant resources to corporate social responsibility (CSR) initiatives, insights into the optimal formulation, implementation, and effectiveness estimation of CSR strategies are currently scarce. This article takes an indepth look at when, why, and how CSR works from a consumer's perspective. In contrast to the simple, monotonie relationships between CSR and consumer purchase behavior evident in marketplace polls, this article proposes a more complex, contingent model of consumer responses to CSR. It articulates both the internal outcomes (e.g., awareness, attitudes, attachment) and external outcomes (e.g., word of mouth, purchase, loyalty) of CSR initiatives for not just the company, but also the consumer and the CSR issue/cause. This article delineates the key factors that are likely to moderate the extent to which the inputs lead to the internal outcomes and the internal outcomes lead to the external ones. This framework can help guide companies in not only formulating and implementing their CSR initiatives, but also measuring the effectiveness of these initiatives.
Though considerable research has been reported on the effects of coercive and noncoercive power sources in marketing channels, the particular effects of power sources that have been exercised, as opposed to those that remain unexercised, have not been identified. The authors summarize the findings of a research project examining these differential effects on selected variables of interest to channel managers, including power, conflict, dealer satisfaction, and channel performance.
With the availability of "canned" computer programs, it is extremely easy to run complex multivariate statistical analyses. However, it is not as easy to interpret the output of these programs. This article offers some comments about the well-known technique of linear discriminant analysis; potential pitfalls are also mentioned.
Despite the high relevance of corporate social responsibility (CSR) in current business practice and the considerable research on CSR outcomes in consumer markets, investigations of its influence on organizational business relationships are scarce. Relying on instrumental stakeholder theory, the authors develop and empirically test a framework of the influence of a supplier's CSR engagement on organizational customer outcomes. Findings from an examination of 200 cross-industry supplier-customer dyads reveal positive effects of two facets of a supplier's CSR efforts on customer loyalty through distinct mechanisms. Business practice CSR fosters customers' trust, whereas philanthropic CSR strengthens customer-company identification. The authors distinguish a supplier's actual CSR engagement and customers' perception of these CSR activities. In addition, they consider central contingency factors reflecting uncertainty and dependence in business-to-business relationships that determine the effectiveness of CSR.
This paper examines the diffusion of information around the initial public offering (IPO) process and identifies transaction partners on which IPO firms are dependent. Using a resource payments perspective, we argue that this dependence will lead to greater cumulative abnormal stock returns for transaction partners when this information is revealed in the market (when the initial form S-1 is filed with the SEC). Moreover, we examine the uniqueness of the resource configuration between the IPO firm and transaction partners and find that greater uniqueness is associated with higher valuation for these transaction partners. We also find that multiple dependencies (by the IPO firm) reduce the valuation effect for transaction partners, indicating that a bargaining effect reduces the potential value that any transaction partner can appropriate. Copyright © 2013 John Wiley & Sons, Ltd.
Although most companies confine their operations organizations to restricted, tactical roles, in some of the most successful firms operations has served as the foundation for-indeed, the driver behind-successful strategic attacks and defenses. This is most clearly seen in cases where small companies-although lacking the advantages of size, marker position, and proprietary technology-take on big companies and in a relatively short time push their way to industry dominance. In such cases, the key to success often is an operations-based advantage. The peculiar nature of this advantage provides insight into the reasons many former industry leaders did not react more promptly and vigorously to such attacks, and why others, in contrast, were able to defend themselves successfully.