Knowledge that Transforms

This article examines the effects of collective layoff announcements on sales and marketing-mix elasticities, accounting for supply-side constraints. The authors study 205 announcements in the automotive industry using a difference-in-differences model. They find that, following collective layoff announcements, layoff firms experience adverse changes in sales, advertising elasticity, and price elasticity. They explore the moderating role of announcement characteristics on these changes and find that collective layoff announcements by domestic firms and announcements that do not mention a decline in demand as a motive are more likely to be followed by adverse marketing-mix elasticity changes. On average, sales for the layoff firm in the layoff country are 8.7% lower following a collective layoff announcement than their predicted levels absent the announcement. Similarly, advertising elasticity is 9.8% lower and price elasticity is 19.2% higher than absent the announcement. Conversely, layoff firms typically decrease advertising spending in the country where collective layoffs have occurred, yet they do not change prices. These findings are relevant to marketing managers of firms undergoing collective layoffs and to analysts of collective layoff decisions.

Nonprofit organizations often rely on individuals to execute their mission of addressing unmet societal needs. Indeed, one of the most significant challenges facing such organizations is that of enlisting individuals to provide support through the volunteering of time or donation of money. To address this challenge, prior studies have examined how promotional messages can be leveraged to motivate individuals to support the missions of nonprofit organizations. Yet promotional messages are only one aspect of the marketing mix that may be employed. The present study examines how donor-based nonprofit organizations can employ the marketing mix—product, price, promotion, place, process, and people—to influence the experiences of sacrifice associated with donation. The authors do so through an ethnographic study of individuals participating in living organ donation. First, they identify the manifestation of sacrifice in donation. Next, they define three complementary and interactive types of sacrifice: psychic, pecuniary, and physical. Then, they articulate how the marketing mix can be employed to mitigate experiences of sacrifice that emerge through the donation process. The authors conclude by discussing implications for marketing practice and identifying additional research opportunities for sacrifice in the realm of donation.

Advertising and research and development (R&D) benefit firms by increasing sales and shareholder value. However, when a firm is in bankruptcy, the cumulative effects of its past advertising and R&D can be a double-edged sword. On the one hand, they increase the firm’s expected future cash flow, which increases the likelihood that the bankruptcy court will decide the firm can survive. On the other hand, they increase the liquidation value of the firm’s assets, which decreases the likelihood that the bankruptcy court will decide that the firm can survive. The author argues that the ability of advertising and R&D to either increase or decrease bankruptcy survival is contingent on the influence that the firm’s suppliers have, relative to other creditors, on the bankruptcy court’s decision. Advertising and R&D increase (decrease) bankruptcy survival when suppliers have a high (low) level of influence. Empirical analyses, conducted on 1,504 bankruptcies, show that advertising (R&D) increases bankruptcy survival when at least 35%−38% (18%−21%) of the bankrupt firm’s debt has been borrowed from suppliers, whereas it decreases bankruptcy survival below this point. Out-of-sample machine learning validation shows that the ability to predict whether a bankrupt customer will survive is substantially improved by considering the firm’s advertising and R&D.

Although reacquiring customers can lead to beneficial outcomes, reacquisition processes are often unpleasant for employees, who may be required to admit and address failures. Because many organizational environments reward success and punish failure, companies need to understand how to create an organizational environment that stimulates customer reacquisitions. This study investigates the impact of failure-tolerant cultures and formal reacquisition policies on successful customer reacquisition management. Drawing on organizational design theory and psychological ownership theory, the authors find that failure-tolerant cultures have an inverted U-shaped effect on reacquisition performance because moderate failure tolerance increases reacquisition attempts while not inducing more failures or increasing their severity. Formal reacquisition policies, in contrast, have a positive linear relationship. Notably, formal reacquisition policies do not conflict with failure-tolerant cultures but enhance the beneficial effects of failure tolerance on reacquisition performance; formal reacquisition policies provide guidance for reacquisition attempts that failure-tolerant cultures inspire. Finally, results show that customer reacquisition performance is positively related to overall firm financial performance, a finding that emphasizes the managerial and organizational-level importance of reacquisition management.

Firms often attribute their service employees’ competent performance to either dedicated effort or natural talent. However, it is unclear how such practices affect customer evaluations of service employees and customer outcomes. Moreover, prior work has primarily examined attributions of one’s own performance, providing little insight on the impact of attributions of others’ performance. Drawing on research regarding the warmth–competence framework and performance attributions, the current research proposes and finds that consumers expect a more communal-oriented and less exchange-oriented relationship when a service employee’s competent performance is attributed to dedicated effort rather than natural talent, as effort (vs. talent) attribution leads consumers to perceive the employee as warmer. The authors further propose customer helping behaviors as downstream consequences of relationship expectations, finding that effort (vs. talent) attribution is more likely to induce customers’ word-of-mouth and idea provision behaviors. The findings enrich existing literature by identifying performance attributions as a managerially meaningful antecedent of relationship expectations and offer practical guidance on how marketers can influence consumers’ relationship expectations and helping behaviors.

Patients at risk for hepatocellular carcinoma or liver cancer should undergo semiannual screening tests to facilitate early detection, effective treatment options at lower cost, better recovery prognosis, and higher life expectancy. Health care institutions invest in direct-to-patient outreach marketing to encourage regular screening. They ask the following questions: (1) Does the effectiveness of outreach vary among patients and over time?; (2) What is the return on outreach?; and (3) Can patient-level targeted outreach increase the return? The authors use a multiperiod, randomized field experiment involving 1,800 patients. Overall, relative to the usual-care condition, outreach alone (outreach with patient navigation) increases screening completion rates by 10–20 (13–24) percentage points. Causal forests demonstrate that patient-level treatment effects vary substantially across periods and by patients’ demographics, health status, visit history, health system accessibility, and neighborhood socioeconomic status, thereby facilitating the implementation of the targeted outreach program. A simulation shows that the targeted outreach program improves the return on the randomized outreach program by 74%–96% or $1.6 million to $2 million. Thus, outreach marketing provides a substantial positive payoff to the health care system.

New products can evoke anticipatory emotions such as hope and anxiety. On the one hand, consumers might hope that innovative offerings will produce goal-congruent outcomes; on the other hand, they might also be anxious about possible outcomes that are goal-incongruent. The authors demonstrate the provocative and counterintuitive finding that strong anxiety about potentially goal-incongruent outcomes from a new product actually enhances (vs. weakens) consequential adoption intentions (Study 1) and actual adoption (Studies 2 and 3) when hope is also strong. The authors test action planning (a form of elaboration) and perceived control over outcomes as serial mediators to explain this effect. They find that the proposed mechanism holds even after they consider alternative explanations, including pain/gain inferences, confidence in achieving goal-congruent outcomes, global elaboration, affective forecasts, and motivated reasoning. Managerially, the findings suggest that when bringing a new product to market, new product adoption may be greatest when hope and anxiety are both strong. The findings also point to ways in which marketers might enhance hope and/or anxiety, and they suggest that the use of potentially anxiety-inducing tactics such as disclaimers in ads and on packages might not deter adoption when hope is also strong.

Although scholars have established that customer satisfaction affects different dimensions of firm financial performance, a managerially important but overlooked aspect is its effect on a firm’s future cost of selling (COS), that is, expenditures associated with persuading customers and providing convenience to them. Accordingly, this study presents the first empirical and theoretical examination of the impact of customer satisfaction on future COS. The authors propose that while higher customer satisfaction can lower future COS, the degree to which a firm realizes this benefit depends on its strategy and operating environment. Analyzing almost two decades of data from 128 firms, the authors find that customer satisfaction has a statistically and economically significant negative effect on future COS. While the negative effect of customer satisfaction on future COS is weaker for firms with higher capital intensity and financial leverage, this effect is stronger for more diversified firms and for firms operating in industries with higher growth and labor intensity. The authors also find that these effects may vary across two components of COS, cost of persuasion and convenience.

The authors examine consumers’ information channel usage during the customer journey by employing a hedonic and utilitarian (H/U) perspective, an important categorization of consumption purpose. Taking a retailer-category viewpoint to measure the H/U characteristics of 20 product categories at 40 different retailers, this study combines large-scale secondary clickstream and primary survey data to offer actionable insights for retailers in a competitive landscape. The data reveal that, when making hedonic purchases (e.g., toys), consumers employ social media and on-site product pages as early as two weeks before the final purchase. By contrast, for utilitarian purchases (e.g., office supplies), consumers utilize third-party reviews up to two weeks before the final purchase and make relatively greater usage of search engines, deals, and competitors’ product pages closer to the time of purchase. Importantly, channel usage is different for sessions in which no purchase is made, indicating that consumers’ information channel choices vary significantly with the H/U characteristics of purchases. The article closes with an extensive discussion of the significant implications for managing customer touchpoints.

Although creativity is often considered a key success factor in advertising, the marketing literature lacks a systematic empirical account of when and how advertising creativity works. The authors use a meta-analysis to synthesize the literature on advertising creativity and test different theoretical explanations for its effects. The analysis covers 93 data sets taken from 67 papers that provide 878 effect sizes. The results show robust positive effects but also highlight the importance of considering both originality and appropriateness when investing in advertising creativity. Moderation analyses show that the effects of advertising creativity are stronger for high- (vs. low-) involvement products, and that the effects on ad (but not brand) reactions are marginally stronger for unfamiliar brands. An empirical test of theoretical mechanisms shows that affect transfer, processing, and signaling jointly explain these effects, and that originality mainly leads to affect transfer, whereas appropriateness leads to signaling. The authors also call for further research connecting advertising creativity with sales and studying its effects in digital contexts.