Knowledge that Transforms

Trade shows are a popular venue for firms to demonstrate their portfolio of market-ready new products as well as product concepts under different stages of development. Utilizing auto shows as a context, the authors investigate the effects of concept and product demonstrations on the demonstrating firm's value. Event study results show that abnormal returns follow an inverted U-shaped effect of product development stages: that is, previously demonstrated concepts approaching potential launch have the strongest positive effect, followed by early-stage concepts demonstrated for the first time to the world (i.e., debuts), and then market-ready new products. Trade show locations mediate these effects. The effects of early-stage debut demonstrations appear only when concepts are presented in trade shows located in the home country of the demonstrating firm. However, the effects of displaying previously demonstrated concepts, which have survived product development hurdles, are present in venues within as well as outside the firm's home country.

Retailers determine the assortment for a mix of product categories in a particular space (e.g., the checkout aisle, endcaps, freezer space). Within such a “target” space, shoppers are exposed to a selection of product categories that are not necessarily correlated in consumption. In this article, the authors examine whether the assortment of one category affects consumers’ purchase incidence decision in another, independent category that shares a common display space (e.g., frozen meals and ice cream). They use a multivariate probit model of purchase incidence and incorporate assortment variety captured by an entropy measure. Results from analyses of IRI data and an online experiment provide strong evidence that consumers are less likely to purchase from a category of a given assortment when it is presented with another category assortment of greater variety and that this effect is driven by the display proximity. Furthermore, results from an eye-tracking study indicate consumers’ allocation of limited attention to category assortments as an explanation for the finding. This work serves as one of the first studies to document the impact of product assortment beyond a focal category, and the results highlight a limitation of individual category management when grocery retailers make product assortment decisions.

The days of dominant manufacturers dictating the game to obedient retailers are long gone. When parties believe they have equal bargaining power, negotiations end in deadlock more frequently and result in conflict delistings wherein the manufacturers’ brands get removed from the retailers’ assortments. This might cause major sales losses as consumers are forced to change stores or brands. The authors study both parties’ vulnerabilities by investigating their market share shifts during a highly publicized real-life conflict delisting executed by a major retailer against a major manufacturer, involving multiple brands and categories. Generally, both parties lost sales, yet the retailer was the most vulnerable party. Manufacturer-brand and retailer-assortment characteristics moderated both parties’ vulnerability: the manufacturer and retailer became respectively less and more vulnerable when a high-equity brand was delisted in a small assortment. Both parties lost more in necessity than in impulse categories. The authors additionally investigate long-term consequences that occurred after the conflict was settled: the retailer's market share recovered to the predelisting level, whereas the manufacturer's share underwent a long-term level rise.

The authors study the drivers and performance implications of retailers’ branding strategies for their premium and economy private-label tiers. Retailers can opt for store-banner branding and use their store-banner name and/or logo to reveal their ownership, or they can use stand-alone branding and avoid an explicit link between store brand and retail banner. Hypotheses are tested on a large pan-European sample of premium and economy tiers that were introduced over almost 15 years. For the premium tier, retailers’ propensity to use store-banner branding is higher when they have a hi–lo price format and a higher brand equity, and when they have used store-banner branding in the past (on their standard tier and in other markets). The attractiveness of using store-banner branding for the premium tier also varies across countries: it is more likely to be chosen when the retail environment is less concentrated, when uncertainty avoidance and rule of law are higher, and when power distance is lower. For most of these drivers, the effect is significantly weaker for the economy tier. Retailers whose premium-tier branding decision is congruent with the proposed contingency framework perform better. For the economy tier, congruence is not associated with higher performance.

This article examines whether and how a company's division of segment- and task-related responsibilities among multiple sales channels affects the relationships in the multichannel (MC) system and, ultimately, the company's sales success. Building on open systems theory, the authors develop an overarching framework of organizational MC differentiation that distinguishes between two generic approaches: segment differentiation and task differentiation. They predict that these two approaches affect key relationship and performance outcomes of an MC system, but do so differently and contingent on key characteristics of the company's customers. Drawing on a multi-informant survey in a business-to-business context as well as on objective performance data, the authors find that segment differentiation tends to mitigate horizontal conflict and inhibit cooperation, while task differentiation reduces primarily vertical conflict and promotes cooperation. Moreover, depending on customer characteristics, segment differentiation may damage channel relationships overall and, in turn, limit company sales success, whereas task differentiation unambiguously promotes channel relationships and thus drives company sales success. These findings offer novel insights into the relationship and performance impact of MC systems’ organizational structure and provide useful guidance on how managers should allocate segment- and task-related responsibilities among multiple sales channels.

Market orientation (MO) and marketing performance measurement (MPM) are two of the most widespread strategic marketing concepts among practitioners. However, some have questioned the benefits of extensive investments in MO and MPM. More importantly, little is known about which combinations of MO and MPM are optimal in ensuring high business performance. To address this research gap, the authors analyze a unique data set of 628 firms with a novel method of configurational analysis: fuzzy-set qualitative comparative analysis. In line with prior research, the authors find that MO is an important determinant of business performance. However, to reap its benefits, managers need to complement it with appropriate MPM, the level and focus of which vary across firms. For example, whereas large firms and market leaders generally benefit from comprehensive MPM, small firms may benefit from measuring marketing performance only selectively or by focusing on particular dimensions of marketing performance. The study also finds that many of the highest-performing firms do not follow any of the particular best practices identified.

Firms routinely engage in relationship marketing (RM) efforts to improve their relationships with business partners, and extant research has documented the effectiveness of various RM strategies. According to the perspective proposed in this article, as customers migrate through different relationship states over time, not all RM strategies are equally effective, so it is possible to identify the most effective RM strategies given customers’ states. The authors apply a multivariate hidden Markov model to a six-year longitudinal data set of 552 business-to-business relationships maintained by a Fortune 500 firm. The analysis identifies four latent buyer–seller relationship states, according to each customer's level of commitment, trust, dependence, and relational norms, and it parsimoniously captures customers’ migration across relationship states through three positive (exploration, endowment, recovery) and two negative (neglect, betrayal) migration mechanisms. The most effective RM strategies across migration paths can help firms promote customer migration to higher performance states and prevent deterioration to poorer ones. A counterfactual elasticity analysis compares the relative importance of different migration strategies at various relationship stages. This research thus moves beyond extant RM literature by focusing on the differential effectiveness of RM strategies across relationship states, and it provides managerial guidance regarding efficient, dynamic resource allocations.

Brand equity is the differential preference and response to marketing effort that a product obtains because of its brand identification. Brand equity can be measured using either consumer perceptions or sales. Consumer-based brand equity (CBBE) measures what consumers think and feel about the brand, whereas sales-based brand equity (SBBE) is the brand intercept in a choice or market share model. This article studies the extent to which CBBE manifests itself in SBBE and marketing-mix response using ten years of IRI scanner and Brand Asset Valuator data for 290 brands spanning 25 packaged good categories. The authors uncover a fairly strong positive association of SBBE with three dimensions of CBBE—relevance, esteem, and knowledge—but a slight negative correspondence with the fourth dimension, energized differentiation. They also reveal new insights on the category characteristics that moderate the CBBE–SBBE relationship and document a more nuanced association of the CBBE dimensions with response to the major marketing-mix variables than heretofore assumed. The authors discuss implications for academic researchers who predict and test the impact of brand equity, for market researchers who measure it, and for marketers who want to translate their brand equity into marketplace success.

Understanding factors that influence online shopping and managing consumer relationships is not a trivial task for firms, considering the many pertinent factors that influence behavior, including the product being shopped (i.e., the “what”) and the context of the website itself (i.e., the “where”). This study investigates the impact of these characteristics on an online transaction's basket value, after incorporating the role of other aspects of the browsing process including page views and visit duration. The authors estimate a multivariate mixed-effects Type II Tobit model with a system of equations to explain variation in shopping basket value, using data involving 773,262 browsing sessions resulting in 9,664 transactions across 43 product categories from 385 unique websites. The results support the assertions that contextual factors are associated with online browsing. For example, a website's scope in terms of product variety is associated positively with visit durations and basket values but negatively with page views. Furthermore, a website's communication functionality is positively associated with basket value for hedonic products. Insights suggest managerial implications involving product and website strategies for online retailers.

Understanding customer experience and the customer journey over time is critical for firms. Customers now interact with firms through myriad touch points in multiple channels and media, and customer experiences are more social in nature. These changes require firms to integrate multiple business functions, and even external partners, in creating and delivering positive customer experiences. In this article, the authors aim to develop a stronger understanding of customer experience and the customer journey in this era of increasingly complex customer behavior. To achieve this goal, they examine existing definitions and conceptualizations of customer experience as a construct and provide a historical perspective of the roots of customer experience within marketing. Next, they attempt to bring together what is currently known about customer experience, customer journeys, and customer experience management. Finally, they identify critical areas for future research on this important topic.