Knowledge that Transforms

The PIMS (Profit Impact of Marketing Strategies) data entail sparse time-series observations for a large number of strategic business units (SBUs), In order to estimate disaggregate marketing mix elasticities of demand, a natural solution is to pool different SBUs. The traditional, a priori approach is to pool together those SBUs which one believes in advance to be very similar with respect to their marketing mix elasticities. We propose an alternative maximum likelihood, latent-pooling method for simultaneously pooling, estimating, and testing linear regression models empirically. This method enables the determination of a “fuzzy” pooling scheme, while directly estimating a set of marketing mix elasticities and intertemporal covariances for each pool of SBUs. Our analyses reveal different magnitudes and patterns of marketing mix elasticities for the derived pools. Pool membership is influenced by demand characteristics, business scope, and order of market entry.

Building on previous work suggesting that trust is critical in facilitating exchange relationships, the authors describe a comprehensive theory of trust in market research relationships. This theory focuses on the factors that determine users’ trust in their researchers, including individual, interpersonal, organizational, interorganizational/interdepartmental, and project factors. The theory is tested in a sample of 779 users. Results indicate that the interpersonal factors are the most predictive of trust. Among these factors, perceived researcher integrity, willingness to reduce research uncertainty, confidentiality, expertise, tactfulness, sincerity, congeniality, and timeliness are most strongly associated with trust. Among the remaining factors, the formalization of the user's organization, the culture of the researcher's department or organization, the research organization's or department's power, and the extent to which the research is customized also affect trust. These findings generally do not change across different types of dyadic relationships.

“Quadrads” (double dyads) of interviews, each conducted with a pair of marketing executives at a Japanese vendor firm and a pair of purchasing executives at a Japanese customer firm, provided data on corporate culture, customer orientation, innovativeness, and market performance. Business performance (relative profitability, relative size, relative growth rate, and relative share of market) was correlated positively with the customer's evaluation of the supplier's customer orientation, but the supplier's own assessment of customer orientation did not correspond well to that of the customer. Japanese companies with corporate cultures stressing competitiveness (markets) and entrepreneurship (adhocracies) outperformed those dominated by internal cohesiveness (clans) or by rules (hierarchies). Successful market innovation also improved performance.

This research addresses three questions: (1) Why are some organizations more market-oriented than others? (2) What effect does a market orientation have on employees and business performance? (3) Does the linkage between a market orientation and business performance depend on the environmental context? The findings from two national samples suggest that a market orientation is related to top management emphasis on the orientation, risk aversion of top managers, interdepartmental conflict and connectedness, centralization, and reward system orientation. Furthermore, the findings suggest that a market orientation is related to overall (judgmental) business performance (but not market share), employees’ organizational commitment, and esprit de corps. Finally, the linkage between a market orientation and performance appears to be robust across environmental contexts that are characterized by varying degrees of market turbulence, competitive intensity, and technological turbulence.

Alpha-numeric brand names include referent and nonsense mixtures of letters and numbers. Several significant features of alpha-numeric brand names are identified, such as the magnitude of the number used in the brand name, its shape or spoken sound, and the symbolism of the words or letters that are used with the number to form the brand name. The inferences that consumers draw from an alphanumeric brand name influence their understandings and expectations of the product.

A number of researchers in the marketing, management, and economics disciplines have expressed reservations regarding the validity and generalizability of the reported relationships between market share and profitability. Against this backdrop, the authors performed a meta-analysis on 276 market share-profitability findings from forty-eight studies to address whether market share and profitability are positively related and to examine the factors that moderate the magnitude of that relationship. The authors found that, on average, market share has a positive effect on business profitability. However, the magnitude of the market share-profitability relationship is moderated by model specification errors, sample characteristics, and measurement characteristics. The relationship is moderated the most (and, on average, the relationship could be artifactual) when firm-specific intangible factors are specified in the profit model or the estimate of the market share-profitability relationship is based on an analysis of non-PIMS businesses. The authors discuss the implications of these results for the evaluation and utilization of market share information by managers in reference to strategies that focus on building market share as a means for increasing profits.

The author presents a conceptual model of brand equity from the perspective of the individual consumer. Customer-based brand equity is defined as the differential effect of brand knowledge on consumer response to the marketing of the brand. A brand is said to have positive (negative) customer-based brand equity when consumers react more (less) favorably to an element of the marketing mix for the brand than they do to the same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product or service. Brand knowledge is conceptualized according to an associative network memory model in terms of two components, brand awareness and brand image (i.e., a set of brand associations). Customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in memory. Issues in building, measuring, and managing customer-based brand equity are discussed, as well as areas for future research.