(Developments in Marketing Science_ Proceedings of the Academy of Marketing Science) Krzysztof Kubacki (Eds.)-Ideas in Marketing_ Finding the New and Polishing the Old_ Proceedings of the 2013 Academy

Developments in Marketing Science:
Proceedings of the Academy of Marketing Science
Krzysztof Kubacki Editor
Ideas in Marketing:
Finding the New and
Polishing the Old
Proceedings of the 2013 Academy of Marketing Science
(AMS) Annual Conference
Ideas in Marketing: Finding the New and Polishing the Old
Developments in Marketing Science: Proceedings

of the Academy of Marketing Science
More information about this series at http://www.springer.com/series/13409
Krzysztof Kubacki Editor
Ideas in Marketing: Finding

the New and Polishing the Old
Proceedings of the 2013 Academy of Marketing
Science (AMS) Annual Conference
Monterey, CA, USA

May 15-18, 2013
Editor
Krzysztof Kubacki
Griffith University
Nathan, QLD, Australia
Reprint from Original edition

Ideas In Marketing: Finding the New and Polishing the Old - Volume XXXVI
edited by Krzysztof Kubacki
Copyright Academy of Marketing Science 2013
All rights reserved.
ISBN 978-3-319-10950-3
ISBN 978-3-319-10951-0 (eBook)
DOI 10.1007/978-3-319-10951-0
Springer Cham Heidelberg New York Dordrecht London
Library of Congress Control Number: 2014950641
Academy of Marketing Science 2015
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is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting,
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ACADEMY OF MARKETING SCIENCE

Officers 2013
President
Victoria L. Crittenden
Boston College
Vice President for Development

Michael D. Hartline
Florida State University
Executive Vice President/Director

Harold W. Berkman
University of Miami
Secretary/Treasurer
Lauren Skinner Beitelspacher
Portland State University
President-Elect
Linda Ferrell
University of New Mexico
Co-Director of International Programs

Jay D. Lindquist
Western Michigan University
Immediate Past President

Greg W. Marshall
Rollins College
Co-Director of International Programs

Barry J. Babin
Louisiana Tech University
Vice President for Programs

Adilson Borges
Reims Management School
Director of Consortia
John B. Ford
Old Dominion University
Vice President for Publications

O.C. Ferrell
Director of Social Media

Colin Campbell
Kent State University
Vice President for Membership - North America

Julia Guidry Moulard
Director of Doctoral Student and Junior Faculty

Initiatives
Angeline Close
University of Texas
Vice President for Membership - International

Constantine Katsikeas
University of Leeds
Board of Governors
Chairs: Barry Babin, Louisiana Tech University
Joseph F. Hair, Jr., Kennesaw State University
Jean-Charles Chebat
HEC-Montreal
Peter McGoldrick
Manchester Business School
Grard Cliquet
Universit de Rennes
Robert A. Peterson
University of Texas
Mike Ewing
Monash University
Leyland Pitt
Simon Fraser University
John B. Ford
James R. Lumpkin
Michel Laroche
Concordia University
Rosann Spiro
Indiana University


Program and Track Chairs
Program Co-Chair
University of Leeds
Leyland Pitt
Program Co-Chair
Sensory Marketing
Dipayan Biswas
University of South Florida
Advertising
Douglas West
Kings College London
Technology and Marketing

Elsamari Botha
University of Cape Town
Lauren Labrecque
Loyola University
Gerard Prendergast
Hong Kong Baptist University
Tek Thongpapanl
Brock University
Marketing Theory
Rosa Chun
University College Dublin
Sales and Sales Management

Jay Mulki
Northeastern University
Internet Marketing
Jan Kietzman
Pierre Berthon
Bentley University
Bulent Menguc
Kings College London
Philip DesAutels
Royal Institute of Technology,
Stockholm
Retail Marketing
Nic Terblanche
University of Stellenbosch
Product and Brand Management

Michael Ewing
Monash University
Mignon Reyneke
Colin Jevons
Monash University
Services Marketing
Christo Boshoff
Stellenbosch University
Pricing
Kirk Plangger
Adam Mills
Hsiu-Yuan Tsao
Tamkang University
Channels of Distribution
Matthew Robson
University of Leed
Marketing Ethics, Corporate

Social Responsibility and
Sustainability
Bodo Schlegelmilch
Wirtschaftsuniversitat Wien
Colin Campbell
Marketing Education
Donald Bacon
University of Denver
Dianne Bevelander
Rotterdam School of Management
Linda Ferrell
Marketing: European Issues

Simos Chari
University of Leeds
Des Laffey
University of Kent
Marketing: African Issues
Beate Stihler
University of Johannesburg
Frikkie Herbst
University of Stellenbosch
Marketing: Australasian Issues
Deon Nel
Flinders University
Stuart Adam
Deakin University
International Marketing
Leonidas Leonidou
University of Cyprus
Marketing: Latin/South
American Issues
Bruno Silvestre
University of Winnipeg
Stavroula Spyropoulou
University of Leeds
Sergio Carvalho
University of Manitoba
vi
Children and Adolescent

Consumers
Julie Tinson
University of Stirling
Maria Piacentini
Lancaster University
Consumer Behavior
Peter Nuttall
University of Bath
Judy Zaichkowsky
Entrepreneurship and Small
Business Management
Magnus Hultman
University of Leeds
Lida Kyrgidou
International Hellenic University
Relationship Marketing and
Customer Relationship
Management
Joseph Vella
University of Malta
Anthony Chan
Lulea University of Technology
Marketing Research
Ekin Pehlivan
Bentley University
Marketing and Social Media

George Christodoulides
Birbeck, University of London
Political Marketing
Phil Harris
University of Chester
Angeline Close
University of Texas at Austin
Anjali Bal
Dominican University
Marketing Strategy
Robert Morgan
Cardiff University
Marketing and other Business

Functions
Michael Parent
Constantinos Leonidou
University of Leeds
Kurt April
Supply Chain Management

Esmail Salehi-Sangari
Royal Institute of Technology,
Stockholm
Wine Marketing
Wade Jarvis
University of Western Australia
Mehdi Amini
University of Memphis
Barry Babin
B2B Marketing
Asa Wallstrom
Customer Service: The Good,

The Bad, The Theory
Bruce D. Weinberg
University of Massachusetts
Amherst
Russell Abratt
Nova Southeastern University
Social Marketing and Marketing
for Nonprofits
Sharyn Rundle-Thiele
Griffiths University
Sameer Deshpande
University of Lethbridge
Albert Caruana
University of Malta
vii
Karen Robson
Doctoral Colloquium
John Ford
Proceedings Editor
Krzysztof Kubacki
Griffith University

Preface
The Academy of Marketing Science was founded in 1971, held its first Annual Conference in 1977, and has grown and
prospered ever since. The relevancy of the Academy's mission and activities to our chosen target market of the marketing
professoriate has been a key factor in attracting the discipline's best and brightest from all over the world.
The revised Articles of Association of the Academy, approved the Board of Governors in the spring of 1984, and by the
general membership if the fall of that year, define the mission of the Academy as follows:
1.
Provide leadership in exploring the normative boundaries of marketing, while simultaneously seeking new ways of
bringing theory and practice into practicable conjunction.
2.
Further the science of marketing throughout the world by promoting the conduct of research and the dissemination of
research results.
3.
Provide a forum for the study and improvement of marketing as an economic, ethical, social and political force and
process.
4.
Furnish, as appropriate and available, material and other resources for the solution of marketing problems, which
confront particular firms and industries, on the one hand, and society at large on the other.
5.
Provide publishing media and facilities for Fellows of the Academy and reviewer assistance on the Fellows' scholarly
activities.
6.
Sponsor one or more annual conferences to enable the Fellows of the Academy to present research results; to learn by
listening to other presentations and through interaction with other Fellows and guests; to avail themselves of the
placements process; to conduct discussion with book editors; and to exchange other relevant information.
7.
Assist Fellows in the better utilization of their professional marketing talents through redirection, reassignment and
relocation.
8.
Provide educator Fellows with insights and suck resources as may be available to aid them in the development of
improved teaching methods, materials, devices and directions.
9.
Seek means for establishing student scholarships and professional university chairs in the field of marketing.
10. Offer Fellow of the Academy status to business and institutional executives and organizations.
11. Modify the Academy's purpose and direction as the influence of time and appropriate constructive forces may dictate.

viii

Acknowledgements
The Academy of Marketing Science would like to thank the many individuals who willingly donated their time and effort to
assist in organizing the Academy of Marketing Science Annual Conference in Monterey, CA, United States.
Firstly our thanks go to all submitting authors who chose our annual conference as the way to share their research and ideas
with the AMS and the wider community of marketing scholars. Without their continuous support we would never be able to
stage such a successful conference.
Secondly, we would like to acknowledge all the track chairs who worked tirelessly to encourage the submission of many
papers and managed the review process. In particular, we would like to acknowledge the many reviewers who gave up a
considerable amount of time to review the papers submitted to the conference. Their time and expertise were critical in
developing the conference program.
Thirdly, special acknowledgment goes to the conference co-chairs, Leyland Pitt and Constantine Katsikeas, whose
commitment and tireless efforts meant it was possible to successfully overcome the many challenges faced when coordinating
an event of this scale. We also would like to thank Florence Cazenave of the AMS Central Office at Louisiana Tech for her
assistance with many administrative tasks at various stages during the conference organizing process.
Last but not least, the Academy of Marketing Science would like to recognize all the participants of the Academy of
Marketing Science Annual Conference in Monterey. This conference would have not been possible without their generous
support.
Dr. Krzysztof Kubacki, Editor
ix

Distinguished Fellows
Roy Adler
Ken Grant
Greg Marshall
Gerald Albaum
Kent Granzin
John Mentzer
Lyn Amine
Paul Green
Naresh Malhotra
Jill Attaway
Dhruv Grewal
Barry Mason
Julie Baker
Joe Hair
A. Parasuraman
Barry Babin
Doug Hawes
Robert Peterson
Peter Banting
Roger L. Jenkins
Coskun Samli
Sharon Beatty
Roger Kerin
Bodo Schlegelmilch
Leonard Berry
Kathleen Krentler
Stanley Shapiro
Harold W. Berkman
Vishnu Kirpalani
Jagdish Sheth
Vicki Crittenden
Robert King
Joe Sirgy
Michael Czinkota
David Kurtz
Rosann Spiro
Jean Charles Chebat
Charles Lamb
Rajan Varadarajan
William Darden
Michel Laroche
Leyland Pitt
Adel El-Ansary
Jay Lindquist
Mike Ewing
John Ford
Robert Luke
O.C. Ferrell
James Lumpkin

Reviewers

Russell Abratt
Hulda Black
John Dawes
Raj Agnihotri
Jeffrey P. Boichuk
Luigi De Luca
Nwamaka Anaza
Elsamari Botha
Timo Dietrich
Alan Andreasen
Stephanie Boyer
Radu Dimitriu
Alex Antonites
Josko Brakus
James Doyle
Kwaku Appiah-Adu
Marius Bresler
Maria Ek Styven
Denni Arli
Johan Bruwer
Silvia Elaluf-Calderwood
Nick Ashill
Carol Bryant
Dahlia El-Manstrly
Abdul Ashraf
Jack Buffington
Anne Engstrom
Shahin Assadinia
Matthew Bunker
Carla Enslin
Seigyoung Auh
Luka Cacciolatti
Pantelitsa Eteokleous
Bilge Aykol
Colin Campbell
Mana Farshid
Laurie Babin
Ana Canhoto
Maryam Ali Ficociello
Lars Backstorm
Allan Chan
Henry Fock
Paul Baines
Anthony Chan
Anthony Foley
Anjali Bal
Simos Chari
Tim Foster
Makam S. Balalji
Dipanjan Chatterjee
Thomas Fotiadis
Vassiliki Bamiatzi
Jean-Charles Chebat
Ruud Frambach
Bradley Barnes
Ran Chen
Mariette Frazer
Justin Beneke
Shirley Cheng
Jighyasu Gaur
Adele Berndt
Pepukayi Chitakunye
Paul Ger
Dianne Bevelander
Rosa Chun
Charlene Gerber
Michael Beverland
Jodie Conduit
Mehdi Ghazisaeedi
Geoff Bick
Dafnis Coudounaris
Stefanos Giannikis
Carol Bienstock
Geoffrey Crouch
Amaleya Goneos-Malka
Sergio Biggemann
Maria Teresa Cuomo
Steve Goodman
Alessandro Biraglia
Ahmad Daryanto
Mahesh Gopinath
xi

Reviewers

Manto Gotsi
Mark Johlke
Felicia G. Lassk
Sandra Gountas
Shawn Jones
Anne Lavack
Ginger Grant
Yolanda Jordaan
Jol Le Bon
Philip Grant
Vita Kadile
Kenneth Le Meunier-Fitzhugh
Mitch Griffin
Anna Kaleka
Wen-Hsiung Lee
Vassiliki Grougiou
Dimitri Kapelianis
Sheena Leek
Chris Hackley
Heikki Karjaluoto
Dirk Vom Lehn
John Hadjimarcou
Constantinos Leoidou
Andreas Hajis
Azedeh Kazeminia
Birgit Leisen Pollack
Dena Hale
Pinar Kekec
Connie Li
John Hall
Ben Kerrane
Haitao Li
Wade Halvorson
Finola Kerrigan
Eric Lim
Tina Harrison
Theresa Kirchner
Ian Lings
Jayne Heaford
Colleen Kirk
Larry Lockshin
Wendy Hein
Bruce Klemz
Ben Lowe
Candy Ho
Nicola Kleyn
Chris Macleod
Glos Ho
Hb Klopper
Judith Madill
Earl Honeycutt
Sren Kcher
Vincent Magnini
Chun-Kai Hsu
Natalia Kolyesnikova
Michael Mallin
Alice Hu
Theuns Kotze
Stephanie Mangus
Daphne Huang
Krzysztof Kubacki
Lucy Matthews
Magnus Hultman
Fan-Hua Kung
Jane McKay-Nesbitt
Gert Human
Olga Kvasova
Christopher Medlin
Essam Ibrahim
Ho Yan Kwan
Altaf Merchant
Kevin James
Kyriakos Kyriakopoulos
Miwa Merz
Fernando Jaramillo
Des Laffey
Alan Miciak
Wade Jarvis
Gretchen Larsen
Adam Mills
xii

Reviewers

Todd Morgan
Hakan Perzon
Beate Stiehler
Rana Mostaghel
Daniel Petzer
Lei Su
Sandra Mottner
Wojciech Piotrowicz
Zorana Svedic
Simone Muellerloose
Kirk Plangger
Scott Swain
Prokriti Mukherji
Josephine Previte
Kunal Swani
Giuseppe Musarra
John Prpic
Jill Sweeny
Naoum Mylonas
Vanessa Quintal
Radoslaw Szulc
Chinintorn Nakhata
Kumar Ranjan
Amandeep Takhar
Deon Nel
Patrick Reid
Leona Tam
Daina Nicolaou
Mignon Reyneke
Marlize Terblanche-Smit
Nicoletta Occhiocupo
Keith Richards
Aristeidis Theotokis
Shintaro Okazaki
Karen Robson
Marios Theodosiou
Janeen Olsen
Emmanuel Rufasha
Wolfgand Thomas
Vincent Onyemah
Olga Saginova
Frauke Mattison Thompson
Harmen Oppewal
Charalampos Saridakis
Narongsak Thongpapanl
David Ortinau
Aditi Sarkar
Mark Toon
Robyn Oushcan
Setayesh Sattari
Gina Tran
Drew Parker
Anna Scedrova
Alex Tsang
Daydanda Palihawadana
Tobias Schaefers
Aikaterini Valvi
Aishwarya Paliwal
David Shelton
Gene van Heerden
Stanley Paliwoda
Noel Siu
Lucea van Huyssteen
Janet Palmer
Dionysios Skarmeas
Marthinus van Loggerenberg
Stefanie Paluch
Theodora Slini
Johan van Rekom
Photis Panayides
Moxi Song
Gene Vanheerden
Nicholas PAPAROIDAMIS
George Spais
Lucea Vanhuyssteen
Paulina Papastathopoulou
Nathalie Spielmann
Joe Vella
Michael Parent
Anastasia Stathopoulou
Ngo Vi Dung
xiii

Reviewers

Jako Volschenk
Damien Wilson
Xin Yang
Geoff Walters
Marco Wolf
Frederick Hong-Kit Yim
Danny Wang
Yik Man Wong
Jennifer Yule
Fatima Wang
Wei-Ping Wu
Mohamed Zain
Art Weinstein
Walter Wymer
Athina Zeriti
Melanie Wiese
Chunming Yang
xiv

Session Chairs
Russell Abratt
Nova Southeastern University
Josko Brakus
Leeds University
Philip Grant
Royal Institute of Technology
Sharam Alijani
Reims Management School
Helen Bruce
Cranfield School of Management
Pamela Grimm
Mehdi Amini
University of Memphis
Colin Campbell
Verena Gruber
WU Vienna
Yana G. Andonova
University of Massachusetts Amherst
Brad Carlson
St. Louis University
Daniel Hall
Rachel Ashman
University of Liverpool
Anthony Chan
Ju Yoon (Karen) Han

The University of Texas at Austin
Abdul Ashraf
University of New South Wales
Claude Chapuis
Burgundy Business School,
Kevin James
Indiana State University
Barry Babin
Simos Chari
University of Leeds
Wade Jarvis
University of Western Australia
Donald R. Bacon
University of Denver
George Christodoulides
Birkbeck College, University of London
Margaret Johnston
University of Queensland
Anjali Bal
Dominican University of California
Angeline Close
Jan Kietzmann
Anne-Laure Bartier
UCL
Hayley Cocker
University of Lancaster
Kacy Kim
Arne Baruca
Sacred Heart University
Ian Cross
Bentley University
Tore Kristensen
Copenhagen Business School
Stefanie Beninger
Adamantios Diamantopoulos
Weatherhead Center, Harvard
University
Lauren Labrecque
Loyola University at Chicago
Dianne Bevelander
RSM Erasmus University
Alessandro Bigi
Dipayan Biswas
Jean Boisvert
American University of Sharjah
Edward Boon
Nathaniel Boso
University of Leeds
Linda Ferrell
O.C. Ferrell
Daniel Flint
University of Tennessee
John Ford
Gavin Fox
Texas Tech University
Mika Gabrielsson
University of Eastern Finland
Elsamari Botha
Linda Lee
Constantinos N. Leonidou
University of Leeds
Kate Letheren
Queensland University of Technology
David Locander
Stephanie Mangus
Louisiana State University
Rod McColl
ESC Rennes
Peter McGoldrick
Manchester Business School
xv

Session Chairs
Jamie Murphy
Murdoch Business School
Shannon Rinaldo
Texas Tech University
Marie Taillard
ESCP Europe Business School
Chinintorn Nakhata
Anne Roggeveen
Babson College
Gina Tran
University of North Texas
Russell Nelson
University of California at Irvine
Esmail Salehi-Sangari
Hsiu-Yuan (Jody) Tsao

Tamkang University
Patricia Norberg
Quinnipiac University
Sigal Segev
Florida International University
Juan Carlos-Sosa Varela

Turabo University
David Ortinau
Aviv Shoham
University of Haifa
Joseph Vella
University of Malta
Stefanie Paluch
TU Dortmund University
Jeremy Sierra
Texas State University
sa Wallstrm
Kirk Plangger
Michael Solomon
St. Josephs University
Bruce Weinberg
University of Massachusetts
Theeranuch Pusaksrikit
University of the Thai Chamber of
Commerce
Young-A Song
Sarah J.S. Wilner

Wilfred Laurier University
Stavroula Spyropoulou
University of Leeds
Marco Wolf
University of Southern Mississippi
Beate Stiehler
University of Johannesburg
Ekin Pehlivan Yalcin

Bentley University
Courtney Szocs
Frederick Hong-Kit Yim

Hong Kong Baptist University
Charles Ragland
University of Toledo
Martin Reimann
University of Southern California
xvi
Table of Contents
Customer Satisfaction and Loyalty in the Service Sector
Customer relationships across search, experience and credence services
Anastasia Stathopoulou, Birkbeck College, University of London, UK

George Balabanis, Cass Business School, City University, UK
Typology of moderators of the customer satisfactionrepurchase intention

relationship: escape assistants and capture assistants
Birgit Leisen Pollack, University of Wisconsin Oshkosh, USA
Personality, satisfaction, and customer citizenship behaviors

6
in an online shopping context

Nwamaka A. Anaza, Francis Marion University, USA
Embarrassment during social coupon-redemption in sit-down dining restaurants:

7
antecedents and consequences

Chinintorn Nakhata, University of South Florida, USA
Sales Process and Performance

Salesperson profitability in relationship marketing
Sad Echchakoui, University of Quebec in Abitibi-Tmiscamingue, Canada

The effect of sales people, processes, and provisions on performance:
12
the 4P-sales management model

Vijaykumar Krishnan, Northern Illinois University, USA
Robert Peterson, Northern Illinois University, USA
Mark D. Groza, Northern Illinois University, USA
Effects of job embeddedness on salesperson customer orientation: the roles
of organization-based self-esteem and collectivism
Frederick Yim, Hong Kong Baptist University, Hong Kong
Henry Fock, Hong Kong Baptist University, Hong Kong
xvii
13
Saying the right thing at the right time: the moderating role of career stage
on the sales manager feedback sales performance link
14
Edward Nowlin, Southern Illinois University, USA

Todd McClure, Southern Illinois University, USA
Social Media Branding & Human Brands

Embedding consumers mediation of social media engagement effects on
15
consumerbrand relationships
Julia Schamari, EBS Business School, Oestrich-Winkel, Germany
Tobias Schaefers, EBS Business School, Oestrich-Winkel, Germany
Korean consumer perspectives toward soicl media advertising and intention
16
to join brand pages

Alexander Muk, Texas State University- San Marcos, U. S. A.
Christina Chung, Ramapo College of New Jersey, U. S. A.
Jonghoon Kim, University of Incheon, South Korea
If celebrities can do it, so can i: me, my celebrity and my brand an exploratory
investigation of celebrity influence on online personal branding
17
Arne Baruca, Sacred Heart University, USA

Ebru Ulusoy, University of Maine, USA
Michael Minor, University of Texas Pan American, USA
Online personal branding in the middle east and north america: a comparison
of social capital accumulation and community response
18
Fathima Z Saleem, ESADE Business School, Universitat Ramon Llull, Spain

Oriol Iglesias, ESADE Business School, Universitat Ramon Llull, Spain
Social Consumption and the Self

Overconfidence and underconfidence in usage experience
Kamran Razmdoost, Cranfield School of Management, UK
Radu Dimitriu, Cranfield School of Management, UK
xviii
22
The score is not the music: practices and value in collaborative

23
consumption contexts
Carol Kelleher, University College Cork, Ireland and Cranfield School of Management,
United Kingdom
Hugh Wilson, Cranfield School of Management, United Kingdom
Joe Peppard, Cranfield School of Management, United Kingdom
Creative consumers cook up value in conversations
24
Marie Taillard, ESCP Europe Business School, UK

Alkmini Gritzali, ESCP Europe Business School, UK
Understanding Pricing & Consumer Behavior

The role of altruistic and egoistic motivations in pay what you want situations
28
Frank Huber, Johannes Gutenberg-University Mainz, Germany

Michael Lenzen, Johannes Gutenberg-University Mainz, Germany
Frederik Meyer, Johannes Gutenberg-University Mainz, Germany
Eva Appelmann, Johannes Gutenberg-University Mainz, Germany
The effects of price promotions on new and mature products
32
Sunhee Choi, Shippensburg University, U.S.A.

Wesley Friske, Texas Tech University, U.S.A.
Sangno Lee, Chonbuk National University, South Korea
James Wilcox, Texas Tech University, U.S.A.
Consumer Behaviour in Retail Settings

The role of product and emotional dissonance in retail returns
33
Thomas L. Powers, University of Alabama at Birmingham, USA

Eric P. Jack, University of Alabama at Birmingham, USA
Man, i shop like a woman! effects of gender and emotions on consumer

shopping outcomes and perceptions of retail environments
Marcia Herter, Reims Management School, France
Cristiane Pizzutti dos Santos, Universidade Federal do Rio Grande do Sul, Brazil
Diego Costa, Reims Management School, France
xix
34
Investigating consumer attitudes toward customized apparel:

a look at uniqueness, involvement, apparel fit, and body size
35
Gina A. Tran, University of North Texas, United States of America
The impact of hassles and uplifts on stress, excitement and satisfaction

39
in a retail setting
Marion Brandstaetter, Karl-Franzens-University Graz, Austria
Thomas Foscht, Karl-Franzens-University Graz, Austria
Florian Dorner, Karl-Franzens-University Graz, Austria
Cesar Maloles, California State University East Bay, USA
Sustainable Marketing
International research on business sustainability in business networks:
40
current status and future studies

Gran Svensson, Oslo School of Management, Norway
Carmen Padin, Vigo University, Spain
Juan Carlos Sosa Varela, Universidad del Turabo, Puerto Rico
Beverly Wagner, Strathclyde University, UK
Daniel J. Petzer, North-West University, South Africa
HB Klopper, Monash University, South Africa
Nils M. Hgevold, Oslo School of Management, Norway
Sustainable initiatives: the antecedents of organizational learning and unlearning
41
Kelly L. Weidner, Dominican University of California, USA

Cheryl C. Nakata, University of Illinois at Chicago, USA
Ethical aspects of international product sourcing

Peter McGoldrick, Manchester Business School, United Kingdom
Verena Gruber, WU Vienna, Austria
Bodo B. Schlegelmilch, WU Vienna, Austria
Terry Newholm, Manchester Business School, United Kingdom
xx
42
Changing Brand Perceptions

The infleunce of brand value, brand trust and brand attitude on brand attachment
43
Nthabeleng Rammile, University of the Free State, South Africa
Controversial use of religious symbols in advertising
47
Justina Gineikien, Vilnius University, Lithuania

Ignas Zimaitis, Vilnius University, Lithuania
Sigitas Urbonaviius, Vilnius University, Lithuania
Role of anti-brand websites on brand image
51
Mana Farshid, Lulea University of Technology, Sweden

Leila Ashrafi, Lulea University of Technology, Sweden
sa Wallstrm, Lulea University of Technology, Sweden
Anne Engstrm, Lulea University of Technology, Sweden
A rhetorical perspectve on quelling negative word-of-mouth
57
Gavin L. Fox, Texas Tech University, USA

Yulan Bai, Texas Tech University, USA
Kyung Ah Byun, Texas Tech University, USA
Social marketing: Corporate and strategic perspectives

Marketing strategy in social enterprise organizations in canada:
61
a structured abstract
Alex Mitchell, Queens University, Canada
Judith J. Madill, University of Ottawa, Canada
Samia Chreim, University of Ottawa, Canada
Less buzz more action! patient empowerment = responsibility + adoption +

involvement.
65
Marzena Nieroda, University of Manchester, UK

Debbie Keeling, Loughborough University, UK
Kathleen Keeling, University of Manchester, UK
xxi
How to adopt social behavior to achieve efficient social marketing
66
Kuei-Feng Chang, Da-yeh University, Taiwan, R.O.C.

Hao-Wei Yang, Chaoyang University of Technology, Taiwan, R.O.C.
The influence of time orientation on personal finance behaviours
67
Daniel Rutledge, University of Lethbridge, Canada

Sameer Deshpande, University of Lethbridge, Canada
Political Marketing Theory: Targeting the Consumer Voter

Asymmetric political image effects and the logic of negative campaigning
77
Roger Mortimore, Ipsos MORI, UK

Paul Baines, Cranfield School of Management, UK
Rober Worcester, Ipsos MORI, UK
Clifford Young, Ipsos USA
Julia Clark, Ipsos USA
Political party brand identity and brand image: an empirical assessment
81
Alessandro Bigi, Royal Institute of Technology - Stockholm, Sweden

Michelle Bonera, Universit degli Studi di Brescia, Italy
Understanding choice behavior in political marketing context: a favorable

91
voter responses model

Oguzhan Aygoren, Bogazici University, Turkey
Cengiz Yilmaz, Middle East Techncal University, Turkey
Appearance management in political marketing: examining perspectives

95
of local politicians and campaign workers

Minita Sanghvi, University of North Carolina Greensboro, USA
Nancy Hodges, University of North Carolina Greensboro, USA
xxii
Consumer Behavior Trends from a Latin American Perspective

Hispanics and green consumption: exploring the green attitude-behavior gap
99
Sigal Segev, Florida International University

Maria Elena Villar, Florida International University
Yu Liu, Florida International University
Consumers and companies on facebook fan pages: an analysis of online

communication strategies for small companies
100
Maria Carolina Zanette, Fundao Getlio Vargas, Brazil

Benjamin Rosenthal, Fundao Getlio Vargas, Brazil
Carla Abdalla, Fundao Getlio Vargas, Brazil
Mateus Ferreira, Fundao Getlio Vargas, Brazil
Eliane Pereira Zamith Brito, Fundao Getlio Vargas, Brazil
The relationship between trust, value and loyalty in the internet era: a study
103
in the tourism market

Karen Beatriz Haas Dornas, Universidade FUMEC, Brazil
Jos Marcos Carvalho de Mesquita, Universidade FUMEC, Brazil
Rachel Farias do Patrocnio, Universidade FUMEC, Brazil
AHOY THERE! ENSURING SUCCESSFUL RELATIONSHIPS

113
Branded flash mobs: why they fail

Philip Grant, KTH Royal Institute of Technology, Sweden
Edward Boon, KTH Royal Institute of Technology, Sweden
Refusal and interference of communicationanalysis of the effects of a new

116
phenomenon on customer relationships

Judith Schloffer, University of Graz, Austria
Thomas Foscht, University of Graz, Austria
Cesar Maloles III, California State University, East Bay, USA
xxiii
Relationship maintenance through firm-initiated service devlivery change:

117
a process of proactive communication

R. Bret Leary, University of Wyoming, U.S.A.
Interactivity and psychological ownership in consumer value co-creation
121
Colleen P. Kirk, Mount Saint Mary College, USA

Scott D. Swain, Clemson University, USA
Green Consumer Behavior

What is waste? defining the concept of waste
122
Philip Sugai, International University of Japan, JAPAN

Lukman Aroean, Bournemouth University, UK
An analysis of the environmental claims made in international industrial

123
advertisements
Leonidas C. Leonidou, University of Cyprus, Cyprus
Constantinos N. Leonidou, University of Leeds, UK
John S. Hadjimarcou, University of Texas at El Paso, USA
Irina Lytovchenko, Odessa National Economics University, Ukraine
Influence of buyer attitudes on the organizations green buying
124
Michael Defty, 3M United Kingdom PLC, UK

Sarah Hong Xiao, University of Durham, UK
Gopalkrishnan Iyer, University of Durham, UK
Doctoral Colloquium Session 4: Strategic Issues

The effect of a countrys reputation, and country-of-origin on fdi attractiveness
127
Carlos Brcio, ISCTE-IUL Lisbon University Institute, Portugal
Customer empowerment and firm performance: benefits and potential harm

Valentin Chernikov, Graduate School of Management,
St. Petersburg State University, Russia
Sergey Kushch, Graduate School of Management, St. Petersburg State University, Russia
Henrikki Tikkanen, Aalto University School of Business, Finland
xxiv
138
The green machine: does being environmentally friendly pay off?
139
Amiee Nisius, Old Dominion University, United States

Michael Nisius, University of Maryland University College, United States
Market Orientation, Product Innovation, and Performance

Which is more important for innovation? what you know or how you share
140
it within your firm?

H. Erkan Ozkaya, California State Polytechnic University- Pomona, U.S.
G. Tomas M. Hult, Michigan State University, U.S.
Roger Calantone, Michigan State University, U.S.
Cornelia Droge, Michigan State University, U.S.
The role of improvisation in new product creativity
149
Kyriakos Kyriakopoulos, ALBA Graduate Business School at The American

College of Greece, Greece
Partly true and partly rhetorical: conceptualizing firm images of authenticity
150
Ian D Parkman, University of Portland, USA

Samuel S Holloway, University of Portland, USA
An empirical study to construct a systematic model for product bundles
151

The influence of market orientation on firm performance: company

152
and customer perspectives

Karen N. Kennedy, University of Alabama at Birmingham, USA
Richard, M. Shewchuk, University of Alabama at Birmingham, USA
Haiyan Qu, University of Alabama at Birmingham, USA
xxv
B2B Relationship Capabilities, Value and Benefits

Value co-destruction in complex B2B relations: conceptualization and mechanisms
153
Javier Marcos-Cuevas, School of Management, Cranfield University, UK

Daniel D. Prior, School of Business, University of New South Wales, Australia
Matias G. Enz, School of Management, Cranfield University, UK
A capability perspective on relationship ending and its impact on innovation

154
and performance
Ghasem Zaefarian, University of Leeds, UK
Sebastian Forkman, Manchester Business School, UK
Maciej Mitrega, University of Economics in Katowice, Poland
Stephan Henneberg, Manchester Business School, UK
Peter Naude, Manchester Business School, UK
The role of relationship benefits in building brand equity in a B2B services

158
environment
Brett Kilpatrick, Gordon Institute of Business Science, University of Pretoria, South Africa
Nicola Kleyn, Gordon Institute of Business Science, University of Pretoria, South Africa
The organization of marketing in B2B organizations
162
Geoffrey Bick, University of Cape Town, South Africa

Agit Singh, University of the Witwatersrand, South Africa
166
The effect of recession on B2B loyalty

Erzsbet Hetesi, University of Szeged, Hungary
Customer Satisfaction and Customer Service

Does all consumer retaliation have the same reason? the goals and emotions
169
behind consumer retaliation

Patricia Rossi, Reims Management School, France
Adilson Borges, Reims Management School, France
xxvi
Determining customer outcomes by managing employee emotional display: a

170
multilevel approach
Christin Vo, University of Muenster, Germany
Thorsten Hennig-Thurau, University of Muenster, Germany
Michael Paul, University of Augsburg, Germany
Reconciling the customer satisfaction word of mouth relationship
171
Bodo Lang, The University of Auckland Business School, New Zealand
Compensation disclosure on product review blogs and persuasion

175
with uncertainty
Mehdi Ghazisaeedi, Lule University of Technology, Sweden
Esmail Salehi-Sangari, KTH- Royal Institute of Technology, Sweden
sa Wallstrm, Lule University of Technology, Sweden
Advances in Mobile Marketing and Its Many Tentacles

179
Extending flow theory to mobile shopping

Esther Swilley, Kansas State University, USA
Kelly O. Cowart, Grand Valley State University, USA
The intention of the sales force to use mobile crm: model development
180
and validation
Aarne Tllinen, University of Jyvskyl, Finland
Heikki Karjaluoto, University of Jyvskyl, Finland
Chanaka Jayawardhena, University of Hull, UK
Flood twittering: a marketing and public policy perspective through

181
the lens of actor-network theory

Panom Gunawong, Chiang Mai University, Thailand
Theeranuch Pusaksrikit, University of the Thai Chamber of Commerce, Thailand
An exploratory study of consumer attitudes towards qr code reader applications

Selcuk Ertekin, Missouri Western State University, U.S.A.
Lou E. Pelton, University of North Texas, U.S.A.
xxvii
185
Theories of Attitude, Memory, Love

192
Self discrepancy and consumption attitudes

Thuy D. Nguyen, University of North Texas, USA
Waros Ngamsiriudom, University of North Texas, USA
Thanks for the memories. towards a model of memorable service experiences
196
Rod McColl, ESC Rennes School of Business, FRANCE

Jan Mattsson, Roskilde University, DENMARK
Managerial aversion to ambiguity: a decision theory perspective with a note on

197
innovation
Mayoor Mohan, Oklahoma State University, USA
Kevin E. Voss, Oklahoma State University, USA
Predicting business customer potential disloyalty and share of wallet:

proposition of a new theory and moderating effects
198
Jol Le Bon, University of Houston, USA
Technology Application and Analyses In Retailing

From mobile phone to smartphone: whats new about m-shopping?
199
Grard Cliquet, University of Rennes 1 Graduate School of Management, France

Christine Gonzalez, University of Rennes 1 Graduate School of Management, France
Elodie Hur, University of Rennes 1 Graduate School of Management, France
Karine Picot-Coupey, University of Rennes 1 Graduate School of Management, France
Optimizing geofencing for location-based services: a new application

203
of spatial marketing
Odile J. Streed, Offutt School of Business, Concordia College, Moorhead, MN, USA.
Grard Cliquet, CREM, IGR-IAE, Universit Rennes 1, France.
Albert Kagan, Offutt School of Business, Concordia College, Moorhead, MN, USA.
Customer-based corporate reputation: a study of supermarket customers

Nic S Terblanche, Stellenbosch University, South Africa
xxviii
207
The influence of special occasions on the retail sales of womens apparel
213
Elsa B. Nieves-Rodrguez, University of Puerto Rico, Puerto Rico

Jos J. Cao-Alvira, University of Puerto Rico, Puerto Rico
Myra Mabel Prez, University of Puerto Rico, Puerto Rico
CROWD MARKETING FOR THE MARKETING CROWD

Social influence and customer loyalty in a collaborative community:
222
an exploratory study
Cheng-Chieh Hsiao, National Chengchi University, Taiwan
Jyh-Shen Chiou, National Chengchi University, Taiwan
The influence of online product review variance on consumer evaluations:

an examination of intrinsic and extrinsic cues
223
Ryan Langan, University Of South Florida, USA

Ali Besharat, University Of Denver, USA
Sajeev Varki, University Of South Florida, USA
224
Interactivity: does one size fit all?

Larry Chiagouris, Pace University, USA
Vishal Lala, Pace University, USA
Jennifer Thomas, Pace University, USA
Consumer generated luxury brand communication on the internet
225
Anita Radn, University of Bors, Sweden
Doctoral Colloquium Session 1: Research Methods and

Measurement
229
A new way to measure relationship learning

Xinchun Wang, Texas Tech University, USA
xxix
Investigating the impact of student samples on data quality and research

outcomes
230
Jennifer A. Pelletier, University of South Florida, Tampa, FL

Nazuk Sharma, University of South Florida, Tampa, FL
Co-creation as a research method in B2C new product development
231
Lena Reimers, TU Dortmund University, Germany

Stefanie Paluch, TU Dortmund University, Germany
Targeting the New Consumer

Toward a theory of bubble psychology: current approaches
and a consumer-level explanation
232
Richard J. Vann, University of Wyoming, USA
Subject to interpretation: individual managers concepts of consumers

during NPD
236
Sarah J.S. Wilner, Wilfrid Laurier University, Canada
Equity exchange theory: an explanation of prosocial consumption
237
Spencer M. Ross, University of Massachusetts Amherst, USA
Employee-brand ownership in customer service interactions
238
Adam J. Mills, Simon Fraser University, Canada

Anjali S. Bal, Dominican University of California, USA
Kirk A. Plangger, Simon Fraser University, Canada
Social marketing and social communication

The roles of mass media and personal information sources on adoption
of pandemic vaccines
239
Sanjit Sengupta, San Francisco State University, USA

Hui-Ming (Deanna) Wang, San Francisco State University, USA
xxx
Alcohol warning statement effectiveness under different alcohol category

243
conditions
Wade Jarvis, University of Western Australia
Simone Pettigrew, University of Western Australia
Doina Olaru, University of Western Australia
From crisis to control - all about communication?
253

Maria Ek Styvn, Lulea University of Technology, Sweden
Esmail Salehi-Sangari, Royal Institute of Technology, Sweden
Social marketing and social media: helping students discern the difference
256
Jane McKay-Nesbitt, Bryant University, USA

Srdan Zdravkovic, Bryant University, USA
An exploratory investigation of social responsibility in DTC

257
advertising evidence from outlier analysis

Kabir Chandra Sen, Lamar University, USA
Vivek S. Natarajan, Lamar University, USA
Avinandan Mukherjee, Montclair State University, USA
Entrepreneurship: Orientation, Planning and Performance

Startup accelerators: entrepreneurial match makers
259
Dhruv Bhatli, IRG, Universit Paris Est, France

Paolo Borella, Boro Oy, Finland
Tawfik Jelassi, ENPC School of International Management, France
Nicolas Saillant, University of Warwick, United Kingdom
Is planning overrated? effectual marketing practices among silicon

260
valley tech companies

Fabian Eggers, Menlo College, USA
Deborah Brown McCabe, Menlo College, USA
xxxi
New product development performance: the interplay of entrepreneurial

264
orientation and market orientation

Todd Morgan, Kent State University, United States
Sergey Anokhin, Kent State University, United States
Andrey Kretinin, Kent State University, United States
Johan Frishammar, Lulea University of Technology, Sweden
Complementary effects of entrepreneurial orientation, market orientation

and network ties on performance of entrepreneurial firms in a developing
economy
268
Nathaniel Boso, University of Leeds, United Kingdom

Vicky M. Story, University of Nottingham, United Kingdom
John W. Cadogan, Loughborough University and Lappeenranta University, United Kingdom
Ebenezer Ashie, Nestle Business Services - Africa, Ghana
Political Marketing: Lessons from North American Campaigning

Understanding the role of others preferences in voter decision making
269
in us primary elections
Neil Bendle, Ivey Business School, Western University, Canada
Mihaela-Alina Nastasoiu, Ivey Business School, Western University, Canada
Marketing happiness in politics: strange bedfellows, but a winning presidential

270
election framework?
Theresa Billiot, Cameron University, USA
T.F.J. Steyn, Cameron University, USA
A political marketing perspective on social media adoption by us congressional

274
campaigns
Christine B. Williams, Bentley University, United States
Girish J. Jeff Gulati, Bentley University, United States
xxxii
Marketing Communication in Social Media

Expressing consumer dissatisfaction online: antecedents and effects
282
of negative WOM in social media

Oliver Cruz-Miln, University of Texas Pan American, USA.
Social media game design: unintended effects on consumer choice
286
Richard C. Hanna, Northeastern University, USA

Online social networks: motivations and value co-creation
287
Carolyn (Casey) Findley Musgrove, Indiana University Southeast, USA

Timothy Butler, The University of Alabama, USA
Yuna Kim, California State University Fullerton, USA
Are we locked in print? exploring consumer perceptions of digital versus print

291
magazines
Anjala S. Krishen, University of Nevada Las Vegas, USA
Sheen Kachen, LHS, USA
Zeenath Haniff, University of Nevada Las Vegas, USA
Antecedents and consequences of users attitudes towards OSNS advertising:

292
a conceptual framework
Caroline Lancelot Miltgen, University of Angers, France
Yolanda Jordaan, University of Pretoria, South Africa
Melanie Wiese, University of Pretoria, South Africa
Consumption and Health

The role of health-related product attributes, health concerns, and childrens
age on attitudes and intentions toward organic food
Hyun-Joo Lee, Oklahoma State University, USA
Zee-Sun Yun, Western Michigan University, USA
xxxiii
294
How does positive mood moderate message framing effect on safety

295
communication persuasiveness?
Sidney Su Han, University of Guelph, Canada
Karen Gough, University of Guelph, Canada
Lefa Teng, University of Guelph, Canada
Consumer characteristics, nutrition labels and dietary choices
296
Khaled Aboulnasr, Florida Gulf Coast University, USA
Probing determinants of intentions to purchase processed foods and soft

297
drinks: explanation through mediation

Jeremy J. Sierra, Texas State University, United States
Harry A. Taute, Utah Valley University, United States
Anna M. Turri, Texas State University, United States
SEX, DRUGS AND HUMOR.....THEMES IN ADVERTISING

A cross-cultural comparison of female nudity perception in print advertising
among female consumers in the uk and the netherlands
298
Alexandra Rome, University of Edinburgh, UK

Essam Ibrahim, University of Edinburgh, UK
Are blondes more hedonic than brunettes? stereotype effects on willingness

299
to pay for hedonic and utilitarian products

Ethical ideology effects on alcohol advertising appraisals: the moderating role

300
of ethnic identification
Miguel A. Ziga, Morgan State University, USA
Ivonne M. Jasso, New Mexico State University, USA
xxxiv
Humor determinants and relevance in high engagement social TV ads
301
James Barry, Nova Southeastern University, USA

Dena Hale, Nova Southeastern University, USA
Do happy brand placements lead to happy brands?
305
Anvita Kumar, Cass Business School, U.K.

George Balabanis, Cass Business School, U.K.
Lamb-Hair-McDaniel AMS Outstanding Marketing Teacher

Award
A talent based approach to learning and teaching in marketing undergraduate
306
and graduate programs

Paul S. Busch, Texas A&M University, USA
Engagement and evaluation: creating a meaningful student learning experience
307
Brian A. Vander Schee, Aurora University, USA
Value-based learning building a bridge to change
308
Charles H. Fifield, Baylor University, USA
Contemporary Issues in Wine Marketing

Wine and tourism: a good blend goes a long way
309
Jasha Bowe, University of South Australia

Larry Lockshin, University of South Australia
Cam Rungie, University of South Australia
Richard Lee, University of South Australia
Telling the story or selling the experience: winery managers' perceptions

313
from around the world

Daniel J. Flint, The University of Tennessee, United States
Susan L. Golicic, Colorado State University, United States
xxxv
Country-of-origin and wine knowledge: an empirical study on chinese

314
consumers wine evaluations

Fang Liu, University of Western Australia, Australia
Jamie Murphy, Australian School of Management, Australia
The perception of price premium policy for single malt scotch whisky
by consumers: is there a trading-up phenomenon within the industry?
324
work-in-progress
Benot LECAT, Burgundy School of Business, France
A Potpourri of Bricks and Clicks Issues

When web-sites change: the consumer's emotional response to perceived
325
environmental change in the retail web-site

Jeremy Ainsworth, University of Canterbury, New Zealand
Investigating post product recall sales dynamics using functional data analysis
328
Kyung-Ah, Byun, Texas Tech University, USA

Mayukh Dass, Texas Tech University, USA
Are health websites ready for the mobile world? a study of readability among
329
traditional and mobile websites

Janice R. Cunningham, Royal Institute of Technology, Sweden
Linda Lee, Royal Institute of Technology, Sweden
Shoppers adaptation strategies under conditions of crowding: theory, evidence

330
and implications
Yue Pan, University of Dayton, USA
New Insights into Students Learning in Groups

Social relations beyond team-based learning
M Wiese, University of Pretoria, South Africa
E Botha, University of Cape Town, South Africa
G van Heerden, University of Pretoria South Africa
xxxvi
331
The fifty percent rule: the challenge of engaging students in social media
335
in the classroom
Debra Zahay, Northern Illinois University, USA
Alex Eddy, Northern Illinois University, USA
Ira Kaufman, Lynchburg College, USA
Effects of a client sponsored project on student attitudes toward client sponsors

336
and learning
TaxI: a statistic describing the accuracy of multiple-choice question difficulty

337
classifications
John R. Dickinson, University of Windsor, Canada
The Critical Role of Marketing in Supply Chain Management

An investigation of effective advertising strategies for recruiting long haul
338
truck drivers
Carol C. Bienstock, Radford University, USA
Marla Royne Stafford, University of Memphis, USA
Improving cross-border logistics: the role of public-private partnerships
341
Donna F. Davis, Texas Tech University, U.S.A.

Design and development of packaging in supply chain management: a case study
342
Vahid Sohrabpour, Lund University, Sweden

Annika Olsson, Lund University, Sweden
Pejvak Oghazi, Linnaeus University, Sweden
Advertising: Theory and Environment

Taking products to the market: decision-making within creative industries
Douglas C. West, Department of Management, Kings College London, United Kingdom
xxxvii
346
Aikaterini C. Valvi, Department of Management, Birkbeck, University of London,

United Kingdom
Mobile applications (apps) in advertising: a grounded theory of effective

349
uses and practices

Aikaterini C. Valvi, Department of Management, Birkbeck, University of London,
United Kingdom
Advertising effect evaluation based on means-end chain theory
353
Chin-Feng Lin, National Pingtung Institute of Commerce, Taiwan
How about financially healthy? the role of fit between self-regulatory focus
and message framing in the effectiveness of financial service advertisement
354
Retno Tanding Suryandari, University of North Texas, USA
Links between Brands

Brand origin recognition accuracy and its influencing factors in emerging
358
markets pc market in shanghai as a case

Pan Yu, Beijing University of Posts and Telecommunications, China
Gao Li, Shanghai International Studies University, China
Zhu Ling, East China University of Science and Technology, China
Gerard Cliquet, University of Rennes 1, France
The motivating force of visual attractiveness in product design
367
Gratiana Pol, University of Southern California, Marshall School of Business, USA

C. W. Park, University of Southern California, Marshall School of Business, USA
Martin Reimann, University of Southern California, Department of Psychology / Brain &
Creativity Institute, USA
Revisiting determinants of sports sponsorship response: a schema theory

369
perspective
Angeline Close, University of Texas at Austin, USA
Young-A Song, University of Texas at Austin, USA
xxxviii
In Search of Gratification
Sex and the university: the exploratory study of students perception
of the relationship between alcohol consumption and sex
373
Dariusz Siemieniako, Biaystok University of Technology, Poland

Krzysztof Kubacki, Griffith University, Australia
Mind, heart, and body: everyday consumption experiences

374
and consumer happiness

J. Joko Brakus, Leeds University Business School, UK
Bernd H. Schmitt, Columbia University, USA
Lia Zarantonello, IESEG School of Management, France
An exploration of fantasy football consumption as a technological playground

of consumer empowerment and social interactions
375
Mujde Yuksel, University of Massachusetts, Amherst, USA

George R. Milne, University of Massachusetts, Amherst, USA
Sport Sponsorship
Ambush marketing of the london olympics: a content analysis
379
Debbie Vigar-Ellis, KTH, Royal Institute of Technology, Sweden

Daniel Hall, KTH, Royal Institute of Technology, Sweden
Country image and international segmentation

The Made-in-EU label: an entitativity perspective on country-of-origin effects
380
Marc F. Herz, University of Vienna, Austria

Adamantios Diamantopoulos, University of Vienna, Austria
Nicole Koschate-Fischer, University of Erlangen-Nuremberg, Germany
Matching tourism type and destination image perceptions in a country context
Stella Kladou, Hellenic Open University, Greece
xxxix
381
Ioannis Assiouras, ESC Toulouse Business School, University of Toulouse, France

Antonios A. Giannopoulos, Athens University of Economics & Business, Greece
The effect of business segment strategy and culture values on the market
385
performance of international companies

Tianjiao Qiu, California State University Long Beach, USA
Activities and resources of institutional actors in international development

386
projects
Richard A. Owusu, Linnaeus University, Sweden
Rana Mostaghel, Linnaeus University, Sweden
Catherine Welch, University of Sydney, Australia
Intangible Factors Affecting Brands

Modeling buying intentions the role of nostalgic value, authenticity
387
and brand attachment

Ruben Chumpitaz, Catholic University of Lille, IESEG, France
Valerie Swaen, Catholic University of Louvain, Belgium
Nicholas G. Paparoidamis, Catholic University of Lille, IESEG, France
Anne Laure Bartier, Catholic University of Louvain, Belgium
Intangible cultural heritage: the new frontier of destination branding
388
Jason Ryan, California State University, San Bernardino, USA
Impact of university heritage and reputation on attitudes of prospective students
391
Altaf Merchant, University of Washington, Tacoma, USA

Geoffrey Moody, University of Washington, Tacoma, USA
Nostalgia evoked by brands: a first step towards scale development

392
and validation
Anne-Laure Bartier, Universit Catholique de Louvain, Belgium
Mike Friedman, Universit Catholique de Louvain Mons, Belgium
xl
Doctoral Colloquium Session 2: Consumer Behavioral Issues

The impact of process versus outcome simulation on information search
393
behaviors of online reviews

Carlin Nguyen, University of South Florida, USA
The power of stories: a research proposal of learning styles and the persuasive
394
power of stories
David Locander, Louisiana Tech University, US.
How to reduce post-purchase information search tendency behavior through

395
mental simulation
Channel structures, relationships and contexts

Online retail service quality dimensions and retail channel-product congruence
396
Retailer and manufacturer bundling in distribution channels
397
Minghui Ma, University of Kansas, USA

Suman Mallik, University of Kansas, USA
Factors Affecting Good and Bad Relationships in the

Marketplace
Assessment of buyer- supplier relationships in Puerto Ricos SMEs
400

Enid Miranda, Universidad del Turabo, Puerto Rico
Word of mouth communication and its effect on the affective commitment

xli
403
Perceived justice & emotions in a negative service encounter:

413
a latin American perspective

Flvio Rgio Brambilla, Universidade de Santa Cruz do Sul, Brazil
Mario Eduardo Giraldo Oliveros, Universidad del Norte, Colombia
Understanding reactions of brazilian consumers in service failures
417
Flavia Plutarco, Fundacao Getulio Vargas, Brazil

Ana Augusta Freitas, State University of Ceara, Brazil
Marcio Mota, State University of Ceara, Brazil
Retail Staff Interaction and Outcomes

Enhancing contact employees fit with their environment and willingness
419
to report service complaints

Achilleas Boukis, Strathclyde Business, School, UK
Giannis Kostopoulos, Bedfordshire University, UK
Ilianna Katsaridou, Strathclyde Business, School, UK
Kostas Kaminakis, Athens University of Economics and Business, Greece
Customer bargaining in retail settings: employee perspectives
428
Stephanie T. Gillison, University of Tennessee at Chattanooga, USA

William Magnus Northington, University of Alabama, USA
Sharon E. Beatty, University of Alabama, USA
Antecedents and consequences of climate for retail service innovation:

432
a multilevel investigation
George D. Deitz, The University of Memphis, US
Emin Babakus, The University of Memphis, US
436
Retailer success: value and satisfaction

Kevin James, Indiana State University, USA
Barry J. Babin, Louisiana Tech University, USA
xlii
Online Advertising and WOM

Consumer evaluations of video ads portraying human-like avatars
439
Fernando R. Jimnez, University of Texas at El Paso, USA

Bashar S. Gammoh, University of Toledo, USA
Rand Wergin, University of South Dakota, USA
Advances in Sustainable Supply Chain Management

Achieving triple bottom-line performance in sustainable supply chains:
440
explicating the role of capabilities

Karthik N. S. Iyer, University of Northern Iowa, U.S.A.
Huyen Ngo, University of Northern Iowa, U.S.A.
Sustainable purchasing in the retail industry: a model of environmentally

441
responsible purchasing
Kaveh Peighambari, Lulea University of Technology, Sweden
Mehdi Amini, The University of Memphis, USA
Environmentally and socially responsible buyer supplier relationship

management
445
Arash Kordestani, Lulea University of Technology, Sweden

Mehdi Amini, The University of Memphis, United States
Esmail Salehi-Sangari, Royal Institute of Technology (KTH), Sweden
International Marketing Strategy

Antecedents and consequences of marketing and innovation competence:
447
does orientation matter?

xliii
The journey from market orientation to new product performance in foreign

markets: a knowledge and learning perspective
457
Mike Chen-Ho Chao, William Paterson University, U.S.A.

Shan Feng, William Paterson University, U.S.A.
Fuan Li, William Paterson University, U.S.A.
Multiple sales channel strategy and performance: the moderating

role of international experience and globalization potential
458
Mika Gabrielsson, University of Eastern Finland, Finland

Peter Gabrielsson, University of Vaasa, Finland
Tomi Seppl, Aalto University, Finland
The role of conflict resolution strategies and power in the conflict-export

459
performance relationship
Gregor PFAJFAR, Faculty of Economics, University of Ljubljana, Slovenia
Maja MAKOVEC BRENI, Faculty of Economics, University of Ljubljana, Slovenia
Aviv SHOHAM, Graduate School of Management, the University of Haifa, Israel
Doctoral Colloquium Session 3: B2B Issues

A framework for examining international students recruitment
460
from B2B relationship perspective

Xu Huang, School of Business, University of the West of Scotland, United Kingdom
Pravin Balaraman, School of Business, University of the West of Scotland, United Kingdom
Heather Tarbert, School of Business, University of the West of Scotland, United Kingdom
Stealing the show? how the salesperson affects the industrial

461
brand management
Jasmin Ulrich, TU Dortmund University, Germany
Markus Blut, Newcastle University Business School, United Kingdom
Predictors of franchisee performance: the role of communication, conflict

462
and satisfaction
Yi-Chia Wu, University of Texas-Pan American, USA
Mohammad Ali Zolfagharian, University of Texas-Pan American, USA
xliv
ADVERTISING: MEASUREMENT AND SPONSORSHIP ISSUES

Beyond the return on advertising: elasticity of the return on advertising
463
as a diagnostic metric to maximize profit

Ted Mitchell, University of Nevada, Reno, USA
Igor Makienko, University of Nevada, Reno, USA
Advertisement-evoked arousals and advertisement repetition effects
464
Jingyi Duan, University of Rhode Island, USA

Daniel Sheinin, University of Rhode Island, USA
Timing of sponsorship announcements: a test of temporal distance

468
and construal level effects

Tobias Schaefers, EBS Business School, Germany
Joe Cobbs, Northern Kentucky University, USA
The value and versatility of billboard advertising: management

469
and consumer perspectives

John L. Fortenberry, Jr, Louisiana State University Shreveport, United States
Peter J. McGoldrick, University of Manchester, United Kingdom
Does sports athletes credibility affects attitude toward advertisement

among consumers in penang, malaysia: a structured abstract
470
Xin Jian Leong, Tunku Abdul Rahman College, Penang, Malaysia

Yen Nee Goh, Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia
Salmi Mohd Isa, Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia
International Market Expansion

A factor endowment approach to international market selection for direct selling
Charles B. Ragland, University of Toledo, USA
Scott Widmier, Kennesaw State University, USA
Lance E. Brouthers, Kennesaw State University, USA
xlv
474
To what extent can being an evening country influence its reputation

475
and FDI attractiveness?

An insight into Greek SMEs internationalization behavior
479
Lida Kyrgidou, International Hellenic University, Greece
The relationships between international orientations, capabilities, strategies

483
and performance: a theoretical perspective

Yoel Asseraf, University of Haifa, Israel
Aviv Shoham, University of Haifa, Israel
Marketing Research and Methods

Estimating online reviews adoption: a bayesian network approach
486
Ana Alina Tudoran, Aarhus University, Denmark

Ilona Heikkinen, Aarhus University, Denmark
Performance of two procedures for assessing discriminant validity:

model comparisons versus confidence intervals
496
George R. Franke, University of Alabama, U.S.A.
An empirical comparison of exploratory versus conventional structural

497
equation modelling
Bjarne Taulo Srensen, Aarhus University, Denmark
Political Marketing: Cases, Culture, and Policy

The americanisation of southern african political campaigns: a comparative
study of malawi and south africa general elections
Easton D. Simenti-Phiri, University of Chester, UK
Philip C. Harris, University of Chester, UK
David Perrin, University of Chester, UK
xlvi
506
Political art: an investigation of the jacob zuma spear painting
516
B.E. Stiehler, University of Johannesburg, South Africa

G. Toscani, EADA, Spain
526
Kony 2012: mega viral politival activism

Anjali Bal, Dominican University of California, USA
Chris Archer-Brown, Bath University, UK
Karen Robson, Simon Fraser University, CA
Daniel Hall, KTH Royal Institute of Technology, Sweden
Kelly Weidner, Dominican University of California, USA
When spying is not just: a consumer surveillance framework
527
Kirk Plangger, Simon Fraser University, Canada

Leyland Pitt, Simon Fraser University, Canada
Adam Mills, Simon Fraser University, Canada
Pricing Implications for Promotion Strategy

The impact of price promotion types on sales and brand perception
528
of premium products
Felix Zoellner; EBS University, Germany
Tobias Schaefers; EBS University, Germany
Reference price reductions through repeated contacts with price

promotions - the role of the saving format: a structured abstract
529
Silke Bambauer-Sachse, University of Fribourg, Switzerland

Laura Massera, University of Fribourg, Switzerland
Investigating the cost-benefit of sponsorship: an analysis of price, exposure,

533
and marginal returns in motorsports

Jonathan A. Jensen, The Ohio State University, United States
Joe Cobbs, Northern Kentucky University, United States
Modeling country-of-origin effects in the car market: implications for pricing

Charalampos Saridakis, University of Leeds, United Kingdom
George Baltas, Athens University of Economics and Business, Greece
xlvii
534
Managing Product Information Online

How to manage information sharing in online marketplaces an exploratory
538
study
Leyland Pitt, KTH Royal Institute of Technology, Sweden
Esmail Salehi-Sangari, KTH Royal Institute of Technology, Sweden
Competing for consumers online: the advertising strategies of vertically

542
differentiated firms
Elie Ofek, Harvard University, USA
Taylan Yalcin, Chapman University, USA
Ethical Marketing Issues

Enhancing organizational & marketing efficiency through ethical decision
making: implications and propositions for stakeholders
543
Sharam Alijani, Reims Management School, France
Consumer perceived ethicality of products, categories, brands and countries:

547
a networked perspective
Valry Bezenon, University of Neuchtel, Enterprise Institute, Switzerland
Ethical consumerism: movement from desire to decision to buy green
548
Leslie E. Sekerka, Menlo College, USA

Richard P. Bagozzi, University of Michigan, USA
Marginalized morality: making sense of questionable sport fan behaviors

Brent Smith, Saint Josephs University, United States of America
John Lord, Saint Josephs University, United States of America
Stephanie Tryce, Saint Josephs University, United States of America
xlviii
558
Sustainability and Consumers

Motivating sustainability: extending the decisional balance scale
559
Peter J McGoldrick, University of Manchester, United Kingdom

Kathleen A Keeling, University of Manchester, United Kingdom
Self-control and sustainable consumer behavior
560

Audhesh Paswan, University of North Texas, USA
A predictive model for affective, cognitive and behavioral consumers reactions

to product-harm crises: applying product involvement, product type and crisis
564
response strategies
Chryssoula Rouvaki, Athens University of Economics and Business, Greece
George Siomkos, Athens University of Economics and Business, Greece
Time to be slow? slow movement in the apparel business
565
Sojin Jung, University of North Carolina at Greensboro, U.S.A

Byoungho Jin, University of North Carolina at Greensboro, U.S.A
Emerging Concepts in Service Engagement

Marketing golden bytes: a revised online value creation model
569
Des Laffey, University of Kent, United Kingdom

Deon Nel, Flinders University, Australia
Enhancing customer service through theatre improvisation: a theory
570
Karen Robson, Simon Fraser University, Canada
E-service tariffs: investigating the moderating effects of ease of use

and usefulness on tariff choice of video on demand services
Soeren Koecher, TU Dortmund University, Germany
xlix
574
The moderator effect of switching costs dimemsions on the relatioships

575
between customer value, trust and loyalty

Dahlia El-Manstrly, University of Edinburgh, UK
Social Media Affinity and Empowerment

If we build it they will come: understanding social network affinity
576

Leanne Trembath, Learning Services State Library of Victoria, Australia
Siva Muthaly, RMIT University, Australia
Exploring the role of social media in news consumption
577
Iryna Pentina, University of Toledo, USA

Adam Covault, University of Toledo, USA
Monideepa Tarafdar, University of Toledo, USA
A model for the adoption of social media by B2B organizations
578
George Christodoulides, Birkbeck College, University of London, UK

Nikoletta-Theofania Siamagka, Henley Business School, University of Reading, UK
Nina Michaelidou, Loughborough University, UK
The evolution of consumer empowerment in the social media era:

582
a critical review
Lauren I. Labrecque, Loyola University Chicago, USA
Jonas vor dem Esche, Westflische Wilhelms-Universitt Mnster, Germany
Charla Mathwick, Portland State University, USA
Thomas P. Novak, University of California Riverside, USA
Charles F. Hofacker, Florida State University, USA
Emotions, Associations, and other Brand Influences

Consumer behavior: how the "brand love" affects you
Paula Rodrigues, Universidade Lusada, Portugal
Raquel Reis, Universidade Lusada, Portugal
Isabel Cantista, Universidade Lusada, Portugal
583
Co-creation and brand love: developing a theoretical framework
589

George Skourtis, University of Piraeus, Greece
The influence of sponsorship on brand and event attitudes: understanding

590
the role of emotions

Rajdeep Chakraborti, IBS, India
The effect of vertical line extensions on reciprocal brand associations

structure: an accessibility-diagnosticity perspective
591
Jean Boisvert, American University of Sharjah, UAE
Strategies, Preferences and Pestering: Understanding the

Young Consumer
Preferences of young news consumers: a conjoint analysis
595
Setayesh Sattari, Linnaeus University, Sweden

Tim Foster, Lulea University of Technology, Sweden
The collective coping strategies of vulnerable consumers
599
Peter Nuttall, University of Bath, UK

Julie Tinson, University of Stirling, UK
Maria Piacentini, University of Lancaster, UK
Hayley Cocker, University of Lancaster, UK
600
Pester power in low income families

Taryn ONeill, University of KwaZulu-Natal, South Africa
Debbie Vigar-Ellis, University of KwaZulu-Natal, South Africa
Samantha Paterson, University of KwaZulu-Natal, South Africa
li
Im lovin it: the salience of mcdonalds logo, slogans and colors on children
601

Amanda J. Allen, Mt. Saint Marys College, USA
Leyland F. Pitt, Simon Fraser University, USA
Pierre Berthon, Bentley College, USA
International Consumer Behavior

The effect of culture on peception: a critical review and research agenda
602
for consumer research

Minas N. Kastanakis, ESCP Europe, United Kingdom
Ben Voyer, ESCP Europe, United Kingdom
Local or global: the effects of generation yethnic struggles and cultural values
603

Lou E. Pelton, University of North Texas, USA
Subsistence consumer-merchant deviance: a conceptual foundation
607

R. Bret Leary, University of Wyoming, USA
Shikha Upadhyaya, University of Wyoming, USA
Sonia Camacho, Universidad de los Andes, Colombia
Courtney Nations Baker, University of Wyoming, USA
Jos Antonio Rosa, University of Wyoming, USA
Immigrant consumers: ethnic identity, religiosity, materialism

Mohammadali Zolfagharian, University of TexasPan American, USA
Hedie Azarpajooh, University of North Texas, USA
Yasemin Tenger-Soydemir, University of TexasPan American, USA
lii
611
Sensory Marketing through Scent, Taste, and Neuroscience

Fashionable food: when the sleeper effect turns negative information
612
into positive attitudes

Adrienne Foos, University of Manchester, United Kingdom
Kathy Keeling, University of Manchester, United Kingdom
Debbie Keeling, University of Manchester, United Kingdom
Investigating the use of scent in a medical service environment
615
Maya Naja, University of Caen Lower Normandy, IAE, NIMEC (EA969),

France and Lebanese French University, Lebanon
Judith Lynne Zaichkowsky, Simon Fraser University, Canada
Art Dykstra, St Petersburg, U.S.A.
Jol Bre, University of Caen Lower Normandy, IAE, NIMEC (EA969),
and Normandy Business School, France
Olfactory imagery and emotions: neuroscientific evidence
617
Meng-Hsien (Jenny) Lin, Iowa State University, USA

Samantha N. N. Cross, Iowa State University, USA
Terry L. Childers, Iowa State University, USA
The effect of spicy versus bland gustatory sensations on variety-seeking
621
Sayantani Mukherjee, California State University, Long Beach, USA

Thomas Kramer, University of South Carolina, USA
Katina Kulow, University of South Carolina, USA
Semantic congruence effects across two sensory modalities:
622
an implicit association perspective

Nathalie Nibbe, Odournet GmbH Kiel, Germany
Ulrich R. Orth, Christian-Albrechts-University Kiel, Germany
Doctoral Colloquium Session 5: Sex, Social Media, and

Identity-Signaling
623
Revisiting the myths: sex sells!

Obinna Obilo, Louisiana Tech University, USA
liii
Social media review: the impact of social on brand-consumer relationships
624
Yueming Zou, Old Dominion University, USA
Technology and Sales

Barriers to the use of mobile sales force automation systems.
625
a salespersons perspective
Jaakko Sinisalo, Oulu University of Applied Sciences, Finland
Saila Saraniemi, University of Oulu, Finland
Exploring the deliberate and creative problem solving routines of business-tobusiness salespeople in the context of solution selling: a conceptual framework
635
Sreedhar Madhavaram, Cleveland State University, USA

Vishag Badrinarayanan, Texas State University, USA
CRM/social media technology: impact on customer orientation process

636
and organizational sales performance

Michael Rodriguez, Elon University, USA
Robert M. Peterson, Northern Illinois University, USA
Haya Ajjan, Elon University, USA
A two-stage model of sales opportunity outcomes
639
Dimitri Kapelianis, University of New Mexico, U.S.A.

Rodrigo Guesalaga, Pontificia Universidad Catlica de Chile, Chile
A Town Hall Meeting with Editorial Reviewers

A town hall meeting with editorial reviewers: interactive discussion
on the issues that create a rejection assessment in the journal review process
David J. Ortinau, University of South Florida, USA
Charles Ingene, University of Mississippi, USA
Jeannette A. Mena, University of South Florida, USA
James S. Boles, Georgia State University, USA
Mitch Griffin, Bradley University, USA
liv
643
Value Creation and the Role of Community in Customer

Interactions
The essential role of sense of community in a high customer-to-customer
644
interaction service setting

Matthew P. Bunker, University of Northern Iowa, USA
Stressful life events and inter-customer social support
648
Vassiliki Grougiou, International Hellenic University, Greece
Measurement of value co-creation: a formative approach
651
Kumar Rakesh Ranjan, Indian Institute of Management, India
Saving time, money, or the environment? consumers motives of access-based

652
service use
Innovation in Wine Marketing Research

Tasting & evaluating aroma of wine: frontal lobe measurement using
653
near infrared
Shannon B. Rinaldo, Texas Tech University Rawls College of Business, USA
Dale F. Duhan, Texas Tech University Rawls College of Business, USA
Kathryn King, Texas Tech University Rawls College of Business, USA
Brent C. Trela, Texas Tech University Department of Plant and Soil Science, USA
Tim H. Dodd, Texas Wine Marketing Research Institute, Texas Tech University, USA
Positive influence of M-commerce on the group purchase of wine

654
for Y-generation
Jean-Eric Pelet, IDRAC, LEMNA, IAE-IEMN Nantes University, France
Benoit Lecat, Burgundy School of Business, Dijon, France
Unveiling the influence of the consumer wine appreciation dimension

663
on purchasing behavior
Pinar Kekec, Brock University, Canada
Narongsak (Tek) Thongpapanl, Brock University, Canada
Seigyoung Auh, Thunderbird School of Global Management, USA
lv
Fostering brand community through social media: a new relational framework

664
for targeting connected consumers

William F. Humphrey, Jr., Texas Tech University
Debra A. Laverie, Texas Tech University
Shannon B. Rinaldo, Texas Tech University
Emerging markets: Why African markets offer more than You

Think!
One size does not fit all: a closer look at brands in the high net worth market
665
of the south african emerging economy

Elsamari Botha, University of Cape Town, South Africa
Mignon Reyneke, University of Cape Town, South Africa
The marketing of start-up capital to women entrepreneurs in South Africa
671
Evelyn Derera, University of KwaZulu Natal, South Africa.

Charles ONeill, University of KwaZulu-Natal, South Africa.
Amandeep Takhar, University of Bedfordshire, United Kingdom.
Pepukayi Chitakunye, University of KwaZulu-Natal, South Africa.
Brand alignment: developing a model for competitive advantage
675
Sean McCoy, University of South Africa, South Africa

Peet Venter, University of South Africa, South Africa
Appropriation of traditional knowledge in the base of the pyramid
679
Stefanie Beninger, Simon Fraser University, Canada
Social Responsibility in Marketing Education

Differentiation between business school responsibility efforts across regions:
a content analysis of prme sharing information on progress reports
Olga Veligurska, KTH Royal Institute of Technology, Sweden
lvi
680
Social responsibility in higher education: students perceptions
684

Moritz von Schwedler, Universidade Lusada, Portugal
Elizabeth Real de Oliveira, Universidade Lusada, Portugal
If students are customers, then which ones can be let go? reactions
to a proposal for breaking up with underperforming students
690
The Influence of Brands: Perceived Value and Persuasiveness

691
Message framing in healthcare marketing

Miwa Y. Merz, San Jos State University, United States
Financial services advertising: comparing business-to-business

692
and business-to-consumer contexts

Kunal Swani, University of Massachusetts Amherst, USA
Easwar S. Iyer, University of Massachusetts Amherst, USA
Brand reputation: does it help customers cope with service failure?
693
Aditi Sarkar, University of Memphis, United States

Balaji C. Krishnan, University of Memphis, United States
Makam S. Balaji, IFHE University, India
How service bundling moderates the formation of attitudes towards

697
service providers?
Chatura Ranaweera, Wilfrid Laurier University, Canada
Ville Fredrikson, University of Jyvskyl, Finland
lvii
Who Needs a Sales Manager?

Enhancing sales force performance the impact of learning and leadership
698

Managerial power-base effects on sales person intrinsic motivation

and performance: a conservation of resources view
699
Michael L. Mallin, University of Toledo, USA

Leading sales in the 21st century: the ambidextrous sales organization
700

Lynette J. Ryals, School of Management, Cranfield University, UK
Daniel M. Ladik, Stillman School of Business, Seton Hall University USA
Who drives sales and service persons job performance-a leader or a role model?
701
Gen Fukutomi, Kyoto Sangyo University, Japan
ART AND EMOTION

The impact of consumer innovativeness, prestige price sensitivity
and need for emotion on impulse buying and satisfaction
702

Tie-in promotions in the motion picture industry: an empirical study
705
Salma Karray, University of Ontario Institute of Technology, Canada

Kamal Smimou, University of Ontario Institute of Technology, Canada
Bharat L. Sud, University of Guelph, Canada
Negative affect intimacy: the role of negative affect tags in the fine art market
Darren Dahl, University of British Columbia, Canada
Juliet Zhu, University of British Columbia, Canada
lviii
709
The effects of source credibility and salience on sales performance:

710
a study of corporate art collectors

Monika Kackovic , University of Amsterdam
Joris J. Ebbers, University of Amsterdam
Nachoem M. Wijnberg, University of Amsterdam
Knowledge is Power
Coping with information requests in marketing exchanges: an examination
of prepost affective control and the mediating impact of behavior based coping
714
Patricia A. Norberg, Quinnipiac University, USA

Daniel R. Horne, Providence College, USA
More money, more problems: the role of budget flexibility in debt

715
repayment default
Russel Nelson, University of California, Irvine, USA
Mary Celsi, California State University, Long Beach, USA
Stephanie Dellande, Menlo College, USA
Mary C. Gilly, University of California, Irvine, USA
Assuring me that it is as good as new just makes me think about how

someone else used it. consumer reaction toward secondhand goods from
716
an information processing perspective

David Ackerman, California State University, Northridge
Jing Hu, California State Polytechnic University, Pomona
Transfer and classification of knowledge structures of digital consumers
720
Kristen Schiele, Woodbury University

Mine ok Hughes, Woodbury University
Till Some New Player Us Do Part

Quantity or quality? how the firm-customer dialog influences customer
721
relationships
H. Dieter Dahlhoff, University of Kassel, Germany
Natalia Sowik, EBS Business School, Germany
lix
The key role of hr policies and practices in implementing a relationship

722
marketing orientation
Oriol Iglesias, ESADE Universitat Ramon Llull, Spain
Fathima Z. Saleem, ESADE Universitat Ramon Llull, Spain
Interorganizational network management model
726
Kolesnik Nadezda, National Research University Higher School of Economics, Russia
Enhancing customer perceived value measurement: a multi-dimensional

735
index for television consumption

Helen L. Bruce, Cranfield School of Management, UK
Hugh Wilson, Cranfield School of Management, UK
Emma Macdonald, Cranfield School of Management, UK
International Marketing Communications

Unveiling unsophistication the use of theory in international advertising
research in the top three advertising journals 2002-2012
736
Fernando Fastoso, Bradford University School of Management, UK
Bond or brand: presenting a typology of online brand communities

739
in a collectivistic culture
Jungmin Han, University of Manchester, UK
Stuart Roper, University of Manchester, UK
What you see is not always what you get: exploring chinese word of mouth
743

Jordan Gunderson, University of Nevada Las Vegas, USA
David Mikowski, University of Nevada Las Vegas, USA
744
When do logos talk to their audience?

Tore Kristensen, Copenhagen Business School, Denmark
Gorm Gabrielsen, Copenhagen Business School, Denmark
lx
Sensory Marketing in the Digital Age

Does 3D make sense? the economic implications of adding a third dimension
747
to entertainment products
Ann-Kristin Knapp, University of Muenster, Germany
How digital signage affects shoppers in-store behavior: the role of the evoked
748
experience
Eleftherios Alamanos, University of Lincoln, UK
Charles Dennis, University of Lincoln, UK
A multidisciplinary examination of 3D virtual shopping environments:

effects on consumer perceptual and physiological responses
752
Manveer Kaur Mann, Old Dominion University, USA

Yuping Liu-Thompkins, Old Dominion University, USA
Ginger S. Watson, Old Dominion University, USA
Yiannis E. Papelis, Old Dominion University, USA
Hey dee-jay lets play that song and keep me shopping all day long.
the effect of famous background music on consumer shopping behavior.
756
Luca Petruzzellis, University of Bari Aldo Moro, Italy

Jean-Charles Chebat, HEC Montreal, Canada
Ada Palumbo, University of Bari Aldo Moro, Italy
To Possess or not to Possess

You know youre working class when your TV is bigger than your bookcase:
766
enduring household identity conflict

lxi
Rethinking identity and ownership in the digital consumption era:

a qualitative study of consumer relations with digital possessions
767
Victoria Ligon, University of Arizona, United States

Tony Stovall, University of Arizona, United States
Silvia Van Riper, University of Arizona, United States
Shaping customer service & store atmosphere: an exploratory ethnography

771
of retail environments
Stephanie M. Mangus, Louisiana State University, United States
European Perspectives on Marketing

Attitudes toward green computing in transition economies:
772
a romanian perspective
Olesia Mihai, Alexandru I. Cuza University, Romania
Victoria Seitz, California State University San Bernardino, USA
Elias Rizkallah, La Sierra University, USA
Ehab Khamas, California State University San Bernardino, USA
Counterproductive environmental performance displays: lessons

779
from the automotive sector

Batrice Parguel, Universit Paris-Dauphine, France
Florence Benot-Moreau, Universit Paris-Dauphine, France
Cooperating in business relationships: the emergence and collapse of power

788
symmetry, trust and common goals

Saara Julkunen, Department of Business, University of Eastern Finland, Finland
Mika Gabrielsson, Department of Business, University of Eastern Finland, Finland
Born to survive: small and medium business in russia needs marketing

Olga Saginova, Plekhanov Russian University of Economics, Russian Federation
Nadezhda Zavyalova, Plekhanov Russian University of Economics, Russian Federation
Irina Skorobogatykh, Plekhanov Russian University of Economics, Russian Federation
Zhanna Musatova, Plekhanov Russian University of Economics, Russian Federation
lxii
789
Social Media and Trust, Diffusion, and User Experience

Evaluating user experience with social networking sites: a mediated
793
moderation relationship
Weiling Zhuang, Eastern Kentucky University, USA
Qian Xiao, Eastern Kentucky University, USA
Maxwell K. Hsu, University of Wisconsin-Whitewater, USA
Comparing australian and malaysian destinations internet diffusion
794
Daniel Bruce Budd, Murdoch University, Australia

Ahmad Fareed Ismail, Putra University, Malaysia
Jamie Murphy, Australian School of Management & Curtin Graduate School of Business,
Australia
Modeling customer equity: the roles of social networking sites, trust,

798
and brand equity

Chawanuan Kananukul, University of North Carolina at Greensboro, USA
Sojin Jung, University of North Carolina at Greensboro, USA
Kittichai Watchravesringkan, University of North Carolina at Greensboro, USA
The influence of social media on consumption practices
802

Chiraz Aouina Mejri, ESG Management School, France
Wanting That Object

803
Consumption desire construct

Wei Hua, Old Dominion University, U.S.
Do you still love your favorite luxury brand? the impact of consumer
characteristics and purchase type on luxury divergence
Wan Yang, University of South Florida, USA
Anna S. Mattila, Pennsylvania State University, USA
lxiii
804
Feeling a little guilt but ruminating a lot: how indulgence impacts guilt
805
and its consequences

Renaud Lunardo, Bordeaux School of Management KEDGE Business School, France
Camille Saintives, Groupe ESC La Rochelle, France
Consumer-based fashion equity: proposition of a new concept and theory to

understand and explain loyalty toward fashion products
814
Caroline Le Bon, University Paul Czanne Aix Marseille, Aix Graduate School
of Management (CERGAM), France.
Dwight Merunka, University Paul Czanne Aix Marseille, Aix Graduate School
of Management (CERGAM) and EUROMED Management, France.
Emerging Thoughts in Social Media: Insights from Doctoral

Students
Measurement of digital content marketing effectiveness through social media
815
KyungOk Kacy Kim, University of Texas at Austin, U.S.
The relationships among self-brand congruence, brand attachment, customer

816
engagement, and brand loyalty

Yana Andonova, University of Massachusetts Amherst, USA
Elizabeth Gelfand Miller, University of Massachusetts Amherst, USA
William D. Diamond, University of Massachusetts Amherst, USA
Negative product reviews in social media: linking interpersonal

and socialpsychological factors to ewom intentions
817
Jiyoon Karen Han, University of Texas at Austin, United States

LeeAnn Kahlor, University of Texas at Austin, United States
Understanding etsy: social media and marketing within a community of sellers

Tiffany Machado Blanchflower, University of North Carolina at Greensboro, USA
Nancy Nelson Hodges, University of North Carolina at Greensboro, USA
lxiv
818
Sensory Marketing through Touch

Feeling blue: the effects of visual cues on temperature perceptions
822
Courtney Szocs, University of South Florida, USA
Ive got you under my skin: tactile stimulation of clothing
823
Mya Pronschinske, University of Wyoming, USA

Kent Drummond, University of Wyoming, USA
Consumer imagination: an empirical examination of the impact of need

824
for haptic information

Nancy Spears, University of North Texas
Atefeh Yazdanparast, University of Evansville
The effects of ambient light on consumer product choices
825
Dipayan Biswas, University of South Florida, USA

Donald Lehmann, Columbia University, USA
To Adopt or Not to Adopt New Market and Technological

Offerings
Adoption of online shopping: a technology acceptance perspective
826
Abdul Rehman Ashraf, University of New South Wales, Australia

Narongsak Thongpapanl, Brock University, Canada
Mohammed Razzaque, University of New South Wales, Australia
The influence of technology addiction on technology acceptance and use:

an exploration of mobile communications technology
827
Kenneth W. Graham, Mississippi State University, USA
The dark side of buyer-supplier relationships in the adopton of disruptive

831
technologies
Michael Obal, Temple University, United States of America
Investigating the role of trust in mobile banking acceptance

Rania Mostafa, Damanhour University, Egypt
lxv
834
CUSTOMER RELATIONSHIPS ACROSS SEARCH, EXPERIENCE AND CREDENCE SERVICES

Anastasia Stathopoulou, Birkbeck College, University of London, UK
George Balabanis, Cass Business School, City University, UK
INTRODUCTION
There is no doubt that the service sector has become a dominant factor in national economies the last decade. Within the
service sector thought, there are different service contexts in which distinct types of relationships emerge, varying in
magnitude, strength and attributes (Veloutsou et al., 2002). As Paolo and Laurent (2010, p. 133) state cross-validation across
different service industries (e.g. search, experience and credence services) is required. However, to date the majority of the
empirical studies in service relationships is based on one service industry (e.g. banks or mobiles) which limits tremendously
the generalisability of the results. From the early stages of this research it became apparent that the nature of the service alters
the consumer calculus and motivations (to enter and remain) in a relationship as benefits, costs and risks vary across different
types of services. One of the fundamental distinctions of services is the search-experience-credence classification of services
by Nelson (1974) and Darby & Karni (1973). This classification is based on the level of information that someone has in
order to be able to evaluate the outcome prior to the purchase (Hsieh & Hiang, 2004). Search services are those services that
the customer can obtain full information and asses the utility outcome prior to purchase (Hsieh et al., 2005). Experience
services are those services that the customers can asses and measure the outcome only during or after the consumption and
credence services are those services that it is difficult to measure or asses the outcome even after the consumption (Hsieh et
al., 2005). This classification is mainly used by researchers in order to examine how to minimize risk and maximize certainty,
information quality and customer loyalty (e.g. Mitra et al., 1999). Yet, the moderating effect of these types of services has not
been fully explored, particularly in the customer relationship field. To the authors knowledge there is only one group of
researchers (Hsieh, Chiu, Chiang and Hiang) that have directed their research efforts towards identifying the differences
across search, experience and credence service types, but their focus was both on goods and services on the online
environment. Thus, this paper is focused on the variations of customer relationships across the different service types. To
explore those variations there was a need to identify the main drivers that influence customers to stay with a service provider.
Reviewing the literature it was found that despite the large number of research on customer loyalty drivers, existing
knowledge on this topic is highly fragmented and results are mixed (Verhoef et al., 2007). In relation to loyalty, much focus
has been given on emotional responses, such as satisfaction, trust and commitment (e.g. Bansal et al., 2004), whereas other
emotional responses, such as relational bonds or ties, which relate to customer loyalty in the services context, have not been
fully explored (Spake et al., 2003; Bagozzi et al. 1999). This led to the conclusion that there is not a universal framework
with a complete set of drivers that could explain how customers can reach certain levels of loyalty. For these reasons, an
initial qualitative study was employed in order to identify the relational drivers that can influence customer relationships
under different service contexts.
CONCEPTUAL MODEL
Based on the preliminary results, it was found that customer relationships are strongly affected by different types of bonds
which can either positively influence or lock-in the customer with a service provider. However, customer bonds in the
literature have been mainly examined either conceptually (e.g. Arantola, 2002; Berry, 1995) or empirically in a Business-toBusiness context (e.g. Buttle et al., 2002). Business to Customer (B2C) relational bonding has not been extensively
researched to date (Arantola, 2002). Relational benefits are the only relevant concepts that have been empirically studied in
the B2C setting (Gwinner et al., 1998). Yet, relational benefits relate only to the positive nature of bonds and in order to
understand customer relationships it is vital to examine bonds more holistically, both as benefits and exit barriers (Bendapudi
& Berry, 1997; Arantola, 2002). Based on 60 in-depth and follow up interviews, it was found that there are seven relational
bonds that can influence respondents loyalty towards a service provider. These are: switching cost, economic, social,
confidence, convenience, emotional and habitual bonds. As a result a new conceptual model (figure 1) in services context is
introduced that highlights the differences between search, experience and credence services. As a general rule, the figure 1
shows that relational bonds can influence the level of loyalty. Customer loyalty in this context is focuses on the attitudinal
side of loyalty and reflects the positive feelings and affect customers have towards the continuance of a relationship with a
service provider (Teerling et al., 2004). Across all services, higher levels of the positive side of relational bonds (emotional,
social, convenience, confidence, habitual) will increase loyalty. On the other hand, it is expected that switching cost and
economic bonds are going to negatively influence customer loyalty. The strength and significance of these relationships is
expected to vary across the different service types as assets, methods, and other service or market characteristics vary
(Burnham et al., 2003).
Bonds can act both as exit barriers or benefits (Arantola, 2002). Switching costs in the current research examines only their
procedural side which involves the expenditure of time and effort arising from a lack of information about the new service
provider (Burnham et al., 2003). Thus, when customers are under high switching costs they feel locked-in into a relationship
which creates barriers towards promoting higher levels of attitudinal loyalty (H1). Additionally, economic bonds, which refer
to the monetary perceived benefits or losses that customer receives from a service provider, are also expected to influence
negatively customer loyalty (H2). These bonds are perceived to be the weakest bonds on retaining customer relationships as
they can lead only to spurious relations which are based on very low loyalty levels (Gwinner et al., 1998). Social bonds
refer to personal ties which include perceived feelings of familiarity, personal recognition, friendship, rapport and social
support (Gwinner et al., 1998, p.102). Thus it is expected that the higher social bonds, the better the interpersonal relations
will be between the customer and the provider which can result to higher levels of loyalty (H3). Confidence bonds are
defined by Hennig-Thurau at al. (2002, p. 234) as perceptions of reduced anxiety and comfort in knowing what to expect in
the service encounter. Reducing the risk in services can act as a safeguard for the relationships and provide feelings of
assurance to customers (Berry, 1995). These bonds are perceived to be the most important ones in retaining relationships, and
are expected to influence positively loyalty (H4). Convenience bonds, which refer to customers benefits because they lessen
their efforts, are expected to be positively associated with customer loyalty (H5). This is because the relationship between the
customer and the service provider becomes easier, simpler and more effective, under increased convenience bonds
(Dimitriadis, 2010). The last two relational bonds depicted in figure 1, emotional and habitual bonds are also expected to
positively influence customer loyalty. Emotional bonds reflect the emotional attachment which can initiate strong positive
feelings toward a service provider that can consequently lead to higher levels of loyalty (H6). Finally, habitual bonds are
defined as a mental process that triggers automatic responses to certain cues without the need for any conscious decisionmaking (Verplanken, & Orbell, 2003). The importance of this type of bonds is acknowledged in services marketing literature.
However, it is expected that habitual bonds will contribute significantly in promoting loyalty (H7), as higher levels of
automatic responses indicate higher levels of preference towards a service provider and consequently higher levels of loyalty.
Unfortunately, given the scarcity of previous research, it makes it very difficult to make specific predictions of the
moderating effect of search, experience and credence services. The natures of those hypotheses are mainly exploratory and
further estimation is presented in a longer version of this paper, because of space constrains.
METHOD
One of the key points of this study was to identify services with prominent values across the three services. To do that first a
pool of 27 services representing sufficient variance on the search, experience and credence dimensions was created, based on
services literature and six preliminary interviews with experts. Second, using a survey 17 raters further assessed the qualities
of the three service types. With the help of inter-rater agreement analysis (.96) and ANOVA test, five services that
represented significantly each service type were selected. Those are dry cleaners and movie theatres representing search
services, hairdresser and restaurants representing experience services and dentists representing credence services.
Study 1: At the preliminary stage, data were collected from 60 consumers using face-to-face semi-structured in-depth
interviews. In a period over three months there were follow-up interviews. All interviews were transcribed and content
analysed. Without having a priori themes (avoiding post-rationalisation bias) a codebook was developed with codes emerged
from the interviews which were then conceptualised based on existing theoretical concepts.
Study 2: At the primary stage, data were collected from a sample of 548 consumers using a structured questionnaire. The
data were collected from six clusters (postcodes) in London which were selected with a multi-stage random cluster sampling
design using door-to-door drop-and-collect survey technique. All constructs were measured based on multi-item scales
established in previous research, and assessed in a 7-point Likert scale. To test the reliability and validity of the multi-item
constructs Confirmatory Factor Analysis and Structural Equation Modelling were used (reaching all accepted levels for x2,
df, CFI, NFI and RMSEA). Construct reliability was more than .70, Cronbach's alpha was more than .75 for all constructs
and Variance Extracted (AVE) measures were much higher than .05. Finally, using a marker variable technique and
Harmans single factor analysis, it was found that Common Method Variance was not a problem. GLM repeated measures,
multiple regression and Chow test were used to test the hypotheses and the moderating effect.
RESULTS AND DISCUSSION
Repeated measures ANOVA design was used to estimate the significance of relational bonds within and between the three
service types. Across all service types the most important bonds appear to be the convenience bonds, followed by the habitual
bonds and confidence bonds, with economic bonds being the weakest of all bonds. The latter result is also in line with
Gwinner, Gremler and Bitner (1998) result who found that economic are the least important of all links in a relationship. The
within-subject effect of relational bonds is significant (Huynh-Feldt: F = 137.500, p < .001, effect size = .202) and relational
bonds can significantly explain 9% of the differences between each service category (effect size=.09, F=17.896, p<.001).
Based on ANOVA results, relational bonds are significantly more important in credence services (M=4.53), followed by
experience services (M=4.14), and search services (M=3.92). As shown in figure 2 the highest mean values of bonds are
habitual (M=4.77) and convenience (M=4.75) bonds for search services, confidence (M=4.76) and habitual (M=4.56) bonds
for experience services and confidence (M=5.19), convenience (M=5.18) and social (M=5.06) bonds for credence services.
In order to test the stated hypotheses, multiple regressions and Chow test were performed. The result are presented in table 2.
Overall, results show that relational bonds explain 42.6% of customer loyalty variance. Across all service types, confidence
bonds (=.319, p<.001) had the higher predictive power over customer loaylty, followed by emotional bonds (=.243,
p<.001), habitual bonds (=.197, p<.001) and social bonds (=.099, p<.05). Nevertheless, switching bonds, economic bonds
and convenience bonds were not found to have a significant influence on customer loaylty. Despite the fact that switching
costs and economic bonds had the expected negative effect to loaylty they were not found to have a significant effect in any
of the service types. It is likely that the power of the other relational bonds cancels out the influence of those bonds on
enhancing loaylty. Jones et al. (2000) may provide justification to this finding as they also suggested that the role of
switching costs in customer relationships is so complex that a direct effect cannot sufficiently capture that. Additionally,
Kinard and Capella (2006, p.364) explain why economic bonds might not have an impact on loyalty as bargain hunting
customers constantly check for the best deals in the market and this attitude yield a temporary state of loyalty [which] fails
to contribute to the development of true relationships between the customer and provider.
Based on Chow test results in table 2, three relational bonds were found to be moderated by the service type in relation to
loyalty, and these are social, convenience and habitual bonds (shown in highlighted cells). Although across all services it was
found that convenience bonds do not significantly influence loyalty, this relationship was found to be significant mainly in
search services (=.170, p<.01) and then in experience services (=.178, p<.05) but not in credence services. This is
reasonable, in that search services involve less risk and customers can evaluate the outcome prior to purchase, thus issues like
time and effort are more important, and consequently convenience is a key determinant in customers loyalty. Habitual
bonds, on the other hand, were found to be more important in relation to loyalty for experience services (=.303, p<.001)
followed by search services (=.204, p<.001), but this relationship was not found to be important for credence services. It
appears that experience and search services, where the customer can evaluate the outcome of the purchase, can trigger more
easily cues that can increase automatic responses and consequently loyalty. However, in credence services that the outcome
of the purchase cannot easily be evaluated even after the consumption, and the level of risk involved in high, habitual bonds
might not influence loyalty. In credence services though, social bonds (=.335, p<.001) can highly influence and promote
loyalty compared to experience services (=.201, p<.05) and search services (where there is no influence). Credence services
involve more opportunities for personal interactions because in order for the customer to estimate the outcome of the
purchase, the service provider has to exchange more information (Kinard & Capella, 2006). Evidently, there are more
opportunities for social bonds to be enhanced and influence customer loyalty in such services rather than in search services
where the customer does not have to interact a lot with the provider in order to evaluate the outcome of the transaction.
Finally, it is not surprising that confidence and emotional bonds can strongly influence all service types without any
significant differences between the service types. Confidence bonds are closely related to stress and anxiety involved in
consumption, and thus reducing stress and anxiety involved in any kind of service context can help promote loyalty. The
same applies to emotional bonds, which can increase loyalty under all service contexts.
CONCLUSIONS AND IMPLICATIONS FOR THEORY AND PRACTICE
Overall the study incorporates the differences between search, experience and credence services regarding the effect of
relational bonds on customer loyalty. Based on the results, relational bonds can be classified into three categories: 1)
universal relational bonds that transcend service categories (confidence and emotional bonds) 2) service specific relational
bonds (social, convenience and habitual bonds) and 3) inconsequential relational bonds (switching cost and economic
bonds). Explanations of these differences lie in the nature and the value customers derive for the three types of services.
Initial findings suggest that many of the generally accepted theoretical relations in this field are service context specific. This
is the first attempt to get a relational bonding footprint of different types of services in an effort to develop finer grained
theories that take into account the nature and context of service typologies. From a managerial perspective it will make
general theories of customer relationship management more usable for the specific contexts of services.
TABLES
Table 1: Overall Pattern of Means
Across All Services
Relational Bonds
3.7905
1. Switching Bonds
3.3710
2. Economic Bonds
3.9129
3. Social Bonds
4.5681
4. Confidence Bonds
4.7226
5. Convenience Bonds
3.4760
6. Emotional Bonds
4.7044
7. Habitual Bonds
Table 2: Hypotheses Testing: Multiple Regression and Chow Test results
Dependent Variable: Customer Loyalty
Across All
Search
Experience
Credence
Independent Variables
Services
Services
Services
Services
-.034
-.013
-.089
.004
1. Switching Bonds
-.039
-.054
-.177(+)
-.068 (+)
2. Economic Bonds
-.037
.201*
.335**
.099*
3. Social Bonds
.319***
.333***
.324**
4. Confidence Bonds
.266***
.170**
.178*
.104
.047
5. Convenience Bonds
.243***
.173*
.263*
6. Emotional Bonds
.282***
.303***
-.114
.197***
7. Habitual Bonds
.204***
.426***
R Square
.377***
.446***
.511***
Chow Test
F
.344
.672
5.024**
.588
7.489***
1.017
4.768**
.451***
Values in the first part of the table represent Beta St. Coefficients, *** represents p<.001, ** represents p<.01, * represents p<.05, (+)represents p<.10
FIGURES
Figure 1: Conceptual Model
Figure 2: Service Type by Relational Bond Factor
RelationalBonds
SwitchingCost
H1
Economic
H2
Social
H3
Confidence
Convenience
Emotional
Habitual
Customer
Loyalty
H4
H5
H6
H7
ModeratingEffect
Search/Experience/Credence
Services
REFERENCES
References available upon request.
TYPOLOGY OF MODERATORS OF THE CUSTOMER SATISFACTIONREPURCHASE INTENTION

RELATIONSHIP: ESCAPE ASSISTANTS AND CAPTURE ASSISTANTS
Birgit Leisen Pollack, University of Wisconsin Oshkosh, USA
ABSTRACT
Over the past several decades, the relationship between customer satisfaction and repurchase intentions has received substantial
attention in the services marketing literature. Addressing the complexity of this relationship, a stream of research into moderator
variables is accumulating (Homburg and Giering, 2001; Mittal and Kamakura, 2001; Arkes and Ayton, 1999; Homburg and
Giering, 2001; Jones et al, 2002; von Wangenheim, 2003; Homburg et al, 2003). The present research proposes a classification
of moderators into two managerially meaningful groups. The proposed typology is inspired by frameworks provided by Dick
and Basu (1994), Jones and Sasser (1995), and Schnaars (1998) for thinking about the relationship between satisfaction and
repeat purchase behavior. The first group of moderators induces / helps customers leave a relationship and is, therefore, termed
Escape Assistants. Here the customer is satisfied but, due to the presence of Escape Assistants, does not plan a re-purchase.
This type of moderating effect is more present at high satisfaction levels. The second group of moderators forces customers to
stay in the relationship and is, therefore, termed Capture Assistants. Here the customer is not satisfied yet, due to the presence
of Capture Assistants, plans a repurchase. This type of moderating effect is more present at low satisfaction levels.
The present research, as an initial step towards validating the proposed typology of moderators, seeks to empirically classify
variables as Escape Assistant and Capture Assistant, respectively. It speculates that variety seeking tendencies (i.e., consumers
desire to satisfy a need with multiple brands of a product or service) is an example of an Escape Assistant. It further speculates
that switching cost (i.e., economic and non-economic costs associated with moving from one provider to another) is an example
of a Capture Assistant. Both, switching cost and variety seeking tendencies, are therefore said to impact the strength of the
relationship. Two associated hypotheses were formulated. It is further speculated that these impacts are likely contingent on
the service category (Mgi, 2003). Hence, this possibility is evaluated in a post-hoc manner.
The data for empirically addressing the research hypotheses were collected from about 180 customers of each; cell phone
services, restaurant services, banking services, and grocery stores. The participants were asked to complete self-administered
questionnaires. Existing scales were used to measure the various constructs. Following customary procedures for assessing
moderating effects (Aiken and West 1991, Sharma, Durand, Gur-Arie 1981), the hypothesized relationships were tested by
formulating a series of hierarchical multiple regression equations. The analysis was performed with standardized independent
and moderator variables. The results reveal three significant moderating effects. Confirming the existence of Capture
Assistants, for banking and phone services, switching costs significantly moderate the satisfaction-repurchase intention
relationship. Confirming the existence of Escape Assistants, for restaurant services, variety seeking significantly moderates the
satisfaction-repurchase intention relationship.
The three significant findings were followed up with post-hoc probing. Per Sharma, Durand and Gur-Aries (1981)
recommendation of splitting the sample in half, the respondents were grouped into high and low segments based upon their
respective values on the moderator variables. The median responses on the significant moderator variables were used as the cut
offs for forming the low and high segments. The relationship between satisfaction and retention was than analyzed by segment.
Further confirming the existence of Capture Assistants for the phone services, as satisfaction increases the effect of switching
costs decreases. Despite low satisfaction levels, customers with high perceived switching costs have higher repurchase
intentions when compared to customers with low switching costs. A similar pattern was found for the banking services. Further
confirmation of the existence of Escape Assistants for the restaurant industry, the findings suggest that when satisfaction
increases above a certain level, customers begin to be affected by variety seeking. At higher satisfaction levels, low variety
seekers seem to have higher repurchase intentions when compared with high variety seekers.
The managerial implications for Capture and Escape Assistants are vastly different. Capture assistants to include switching
costs may be viewed as erected barriers for detaining customers in a relationship without the need to satisfy them (Jones,
Reynolds, Mothersbaugh, and Beatty, 2007). It seems that investments in customer satisfaction can be substituted with
investments into barriers. For Escape Assistants, striving for customer delight (very high satisfaction levels) may not be the
best strategy as these investments may not always be strong enough to offset the countervailing effects of Escape Assistants.
References available upon request
PERSONALITY, SATISFACTION, AND CUSTOMER CITIZENSHIP BEHAVIORS IN AN ONLINE

SHOPPING CONTEXT
Nwamaka A. Anaza, Francis Marion University, USA
ABSTRACT
This study investigates the relationship between personality traits, shopper satisfaction and customer citizenship behaviors in
an online shopping environment. Results suggest that e-shoppers with the personality trait of agreeableness are more likely to
respond positively to an e-shopping experience. E-shopper extraversion was also found to contribute to explained variance in
all three dimensions of e-customer citizenship behaviors recommendation, helping, and service firm facilitation.
INTRODUCTION
Customer citizenship behaviors (CCBs) have been found to play a significant role in predicting crucial marketing outcomes
(Hansong et al., 2012; Gruen, 1995). Recently, Anaza and Zhao (in press) expanded the concept of CCBs to an online shopping
context by delineating CCBs into three online dimensions of recommendation, helping behaviors, and service firm facilitation.
Historically, researchers have often linked customer satisfaction to CCB dimensions noting that satisfied buyers were more
willing to provide feedback to the firm, recommend the companys services to outsiders, and help prospective shoppers navigate
the store environment (Anaza and Zhao, in press; Chen et al. 2010; Groth, 2005). Other scholars contend that sources of both
customer satisfaction and citizenship behaviors were influenced by enduring personality characteristics that shaped shoppers
temporal dispositions (Gountas and Gountas, 2007; Hurley, 1998; Matzler et al., 2005; Mowen and Spears, 1999). Surprisingly,
with the growing body of studies focusing on CCBs within offline environments, little research has been done in an online
retail setting. Furthermore, little is known about how a shoppers personality traits and satisfaction level influence CCBs in an
online retail environment.
RESEARCH OBJECTIVE
In order to shed more light on this topic, the current study investigates the relationship between personality traits, shopper
satisfaction, and CCBs in an e-shopping context. Specifically, this study seeks to address whether the Big Five personality
traits account for variance in e-shopper satisfaction and e-CCBs, and if e-shopper satisfaction significantly influences e-CCBs
after taking into account the Big Five traits. Given the constant interest in personality research, findings from this study will
show how individual attributes, disguised in the form of personality traits, can influence consumption outcomes. In addition,
by studying the influences of personality traits on e-shopper satisfaction and e-CCBs, researchers will be better able to
discern whether antecedents of e-CCBs can also be intrinsically motivated by dispositional sources rather than solely by
external forces like store attributes.
SAMPLE
Online shoppers were asked to participate in this study. The questionnaire was available for respondents online via Qualtrics.
Two hundred and thirty five respondents completed the questionnaire and after listwise deletion, one hundred and sixty six
respondents remained.
METHOD
Hierarchical regression analysis was used to measure the incremental effects of the personality traits on e-shopper satisfaction.
Next, a similar multiple step hierarchical approach was employed to test whether satisfaction contributed significant portions
of variance when explaining for e-CCBs after controlling for personality effects.
REFERENCES
References available on request.
EMBARRASSMENT DURING SOCIAL COUPON-REDEMPTION IN SIT-DOWN DINING RESTAURANTS:

ANTECEDENTS AND CONSEQUENCES
Chinintorn Nakhata, University of South Florida, USA
ABSTRACT
This paper proposes the conceptual framework of the antecedents and consequences of embarrassment during social couponredemption in sit-down dining restaurants. I specifically propose that perceived discrimination from the waiter or waitress will
trigger the elicitation of embarrassment during social coupon-redemption. Furthermore, by applying halo and domino effects
of service failures in a multiple-service encounter context, I further propose that embarrassment occurred during stage 2
(ordering taking and delivery stage) will negatively influence dining experiences during stage 3 (meal consumption), dinging
experience during stage 4 (checkout), and overall dining experience satisfaction. Consistent with service satisfaction effect, I
propose that low-level of overall dining experience satisfaction will negatively influence tip amount, negatively influence repatronage, and positively influence negative word-of-mount likelihood. Finally, I propose that the two moderators that will
attenuate this embarrassment effect including social coupon-redemption familiarity in sit-down dining restaurant and a number
of other social coupon consumers in the same sit-down dining restaurants. Finally, I discuss some theoretical contributions for
services researchers and some managerial contributions for sit-down dining restaurant managers.
References Available Upon Request
SALESPERSON PROFITABILITY IN RELATIONSHIP MARKETING

Sad Echchakoui, University of Quebec in Abitibi-Tmiscamingue, Canada
INTRODUCTION
Unfortunately, though several authors have underscored the importance of the salespersons role in the creation of purchasersalesperson relationships (Weitz and Bradford 1999), few studies have focused on the relationship between customer value and
salespersons profitability in relationship approach. For example, consider the scenario of a manager who wishes to recruit a
salesperson to maintain and develop a portfolio customer relationship. An important issue for the manager to consider is the
following: Under which condition is this decision profitable for the firm? This in turn gives rise three keys questions: How
does the salespersons profitability vary as a function of customer value? How should compensation be structured in response
to such changes? And is it profitable that salespersons compensation should be equal across customer when the firm has a
customer portfolio?
The purpose of this study is to show how a simple analytical model can be used to help sales managers to assess the dynamic
long-run profitability impact of salesperson hiring in relationship marketing. Through this model, we try to give answers to the
above importance questions.
MODEL DESIGN
For the purposes of this article, we are concerned only with the nancial value that has a direct relationship with the
salespersons tangible compensation. To assess salesperson profitability in relationship, we use two steps. The first step consists
to establish the firm financial value with respect to time since the salesperson is recruited. Next, conditions of salesperson
profitability are derived. The "rm-salesperson-customer" system (see Figure 1) is based on the principle of conservation which
postulates at a specific time, the rate of change within the system is equal to the rate of creation in the system less the rate of
destruction.
Step 1: firm financial value
For each customer, we consider the Basis as the baseline against which we can measure salespersons profitability progress.
The simple average of margins that firm made with this customer before salesperson is recruited is taken as Baseline formula.
We call this value h, that become the firm financial value at t=0 (time that salesperson recruited), in other words, without
the intervention of the salesperson, the firm realizes with this customer an average margin equal to h. The creation of firm value
is dependent upon the representation of the organization in terms of an exchange of values between the various players
(customers, firm, and salesperson). This value is determined based on an identification of the inputs and outputs of the "firm
value" system. The rate of input of the "firm value" system is simply the customer lifetime value at time t (CLVt) which is due
to the effort expended by the salesperson. Several formulas are available for calculating CLV, but the formula proposed by
Calciu and Salerno (2002) is the most common. According to this formula, CLV is equal to the present value of the anticipated
revenue from a relationship with a customer over a number of periods, from which are subtracted the expected costs of
maintaining the relationship with this customer.
Therefore, firm financial value and its variation with respect to time can be expressed as:
E
Vt: Firm financial value at time t.

t: Rate of transfer of firm value to salespeople at time t. It expresses the compensation paid at time t to the salesperson as a
ratio of Vt (st = t Vt).
Mk: Firms gross margin resulting from a customer.
t: Projection period.
: Index of defection. Reversely, Gupta et al. (2004) have used the index of retention (E= r: Customer retention probability.
d: Discount rate appropriate for marketing investment.
The values of Mt, t, and t are dependent upon several factors that may vary as a function of time, such as the firms production
costs, the communications expenditures, the intensity of the competition, and the effectiveness of the distribution network, all
of which render the solution complex. For this reason, we examine the solution of the equation over a compensation period
(e.g., quarter, year) and consider M, (i.e.: r), and as the respective means of Mt, t and t over this period. Considering at

E
t=0, Vt=0 = h, the solution of the above equation is:
Step 2: conditions of salesperson profitability

We can deduce from the above that the salesperson profitability in a relationship orientation is dependent of three parameters:
1) the position of the retention probability with respect to the value of the critical coefficient rc 2) the salary rate with respect
to the value of the critical rate c, and 3) the duration of the relationship with the customer with respect to the value of the
critical duration th. ( ; E).

More specically, in two cases the salesperson can be profitable: 1) the retention coecient salesperson-customer (r) is less
than rc (r < rc ), in this case (see case III, gure 2), the salespersons commission rate must be below c and the firm must
encourage salesperson to develop or maintain relationships with the customers for at least a length of time t that is greater than
th; 2) the retention coecient salesperson-customer (r) is greater than or equal to rc (r rc ), in this case c doesnt exist, exist.
Salesperson's rate has no constraint except the minimization of duration of his return at Baseline, and the firm must encourage
salesperson to develop or maintain relationships with the customers for at least a length of time t that is greater than th. In the
other cases (see case I and case II, figure 2), salesperson is not profitable (

).
The value of th is dependent upon the value of tc: the lower the tc, the lower the th. The value of tc is dependent upon the financial
value generated by the firm (h), the margin generated by the salesperson (M), the customer retention probability (r), and the
compensation paid to the salesperson (
).
DISCUSSION AND MANAGERIAL IMPLICATIONS

Despite the importance of relationship marketing and customer lifetime value (CLV), there has been no research on the
quantitative utility of the salesperson from this perspective and his/her assignment to a customer portfolio. In this article, we
have explored the impact of customer lifetime value and compensation on the salespersons profitability from a relationship
perspective. The model developed at the level of the "firm-salesperson-customer" system has allowed us to isolate the
salespersons contribution and to assess his/her profitability in a relationship approach as of function of customer value. This
process has given rise to four significant results. First, the effectiveness of a firms strategy to use a salesperson for developing
a customer relationship is not automatic: it depends on the customer value, and the compensation paid to the salesperson. This
result is not only consistent with Palmatier (2008) propositions, but further develops it as well by specifying that salespersons
profitability as a function of the retention probability and compensation paid to the salesperson. In addition, our study has
determined the critical duration of the salesperson-customer relationship for the profitability of the salesperson in a relationship
perspective. Specifically, the results of our study indicate that in case I and case II (see Figure 1), it is not appropriate for a firm
to go through a salesperson. In contrast, in case III, the salespersons profitability and therefore, his/her utility is dependent
upon the compensation parameters in place, the firms financial value in the absence of the salesperson, certain characteristics
of the customer, the effort expended by the salesperson to generate a margin and/or increase customer retention, and the duration
of the relationship with the customer. Second, our results demonstrate how the salespersons compensation should be structured
as a function of customer value, and in particular, the retention probability, margin, and the duration of the salesperson-customer
relationship. This result is important because it has the potential to open up promising avenues of research regarding the
development of compensation plans. To our knowledge, our knowledge, only Kalra et al. (2003) study has considered
satisfaction in the conception of the sales force compensation plan. Other studies have made reference solely to the sales or to
the profits resulting from the sales effort expended with respect to customers. Consequently, customer lifetime value has been
neglected despite the importance of the concept as underscored by several authors (e.g., Blattberg and Deighton 1996; Berger
and Nasr 1998). Lastly, the model developed in our study allows for an operationalization of the relationship stages or retention
probability. Through such operationalization the firm can choose the appropriate type of salesperson and determine his/her
compensation as a function of the various relationship stages with the customers.
Our study has at least three implications for managers who wish to focus on long-term relationships with customers. First,
our simplified categorization of the cases (I, II and III) is an initial step so that firms can appreciate that a return on investment
following the recruitment of a salesperson is not guaranteed but is dependent on certain parameters, such as customer value,
salesperson compensation, and the duration of the salesperson-customer relationship. In this respect, research results specify
the critical duration th of the salesperson-customer relationship, which may be used as a basis for determining the probation
period for a new salesperson. Second, depending on the nature of the customer portfolio, we also explicitly link retention
probability with salesperson compensation. This integration is very important for two reasons. Firstly, customer retention is
one of the key drivers of CLV and firm profitability (Gupta and Zeithaml 2006). Reichhled and Sasser (1990) show that a 5%
improvement in customer retention for a variety of service companies could make better overall profitability by anywhere from
25% to 85%. Third, relationship orientation requires the tailoring of services to the level of each potential customer.
Consequently, the success of such an action requires customized compensation to motivate salespersons to follow their firms
strategy. Customized compensation can be used to encourage salespersons to further develop their skills and build upon their
relationships with the customers. In fact, the more a salesperson develops his/her relationships with customers, the higher
his/her compensation rate will be.
FIGURES
Figure 1: Firm value system when salesperson is recruited
Figure 2: Salesperson profitability conditions
10
REFERENCES
Calciu, M., & Salerno, F. (2002). Customer value modelling: synthesis and extension proposals. Journal of Targeting,
Measurement and Analysis for Marketing, 11, 124-147.
Berger, P.D., & Nasr, N.I. (1998). Customer lifetime value: Marketing models and applications. Journal of Interactive
Marketing, 12, 17-29.
Blattberg, R., & Deighton, J. (1996). Manage marketing by the customer equity test. Harvard Business Review, July-August,
136-144.
Gupta, S., Lehmann, D.R., & Stuart, J.A. (2004). Valuing customers. Journal of Marketing Research, 41, 718.
Gupta, S., & Zeithaml, V. (2006). Customer metrics and their impact on financial performance. Marketing Science, 25, 718765.
Kalra, A., Shi, M., & Srinivasan, K. (2003). Salesforce compensation scheme and consumer inferences. Management Science,
49, 655-672.
Palmatier, R.W. (2008). Interfirm relational drivers of customer value. Journal of Marketing, 72, 7689.
Reichhled, F.F., & Sasser, E. (1990). Zero defections: Quality comes to service. Harvard Business Review, September-October,
105111.
Weitz, B. A., & Bradford, K.D. (1999). Personal selling and sales management: A relationship marketing perspective. Journal
of the Academy of Marketing Science, 27, 24154.
11
THE EFFECT OF SALES PEOPLE, PROCESSES, AND PROVISIONS ON PERFORMANCE:

THE 4P-SALES MANAGEMENT MODEL
Vijaykumar Krishnan, Northern Illinois University, USA
Robert Peterson, Northern Illinois University, USA
ABSTRACT
In this paper the authors develop and empirically test a comprehensive 4-P Sales Management Model. The model
simultaneously considers the affect sales People, sales Processes and sales Provisions (how the firm equips sales
representatives, in this case technology support, specifically CRM) have on firm Performance. By simultaneously examining
the relative effect these various characteristics have on firm performance this research presents a holistic approach to
understanding the antecedents of sales performance. The development of the 4-P Sales Management Model offers important
theoretical and substantive contributions. A brief overview of the model is outlined here.
Salespeople play a pivotal role in shaping the ongoing relationships between firms. The sales force creates relational benefits
that transcend the exchange content of a single transaction by providing solutions that save time and create greater
convenience to the customer. Salespeople also share their expertise and knowledge which increases the competency of
customer decision-making. A salesperson needs to be competent across a variety of tasks and situations. They must work as
the customers agent in the selling firm, find workarounds, solve problems, and create smooth exchange pathways between
firms (Doney and Canon 1997; Peterson and Lucas 2001). Through these value-added activities, salespeople create customer
loyalty for the firm (Palmatier, Scheer, and Steenkamp 2007; Reichheld and Teal 1997). It is proposed here that firms will
experience greater performance when management engages and works to develop its sales force.
Process-oriented approaches advocate a conscious management of the relationship development by establishing processdependent measures and criteria. This view calls for deployment of defined processes for creation and maintenance of
relationships with the buying firm that transcend the individual salesperson. Relationship creation processes is defined here
as the institutionalized mechanisms firm deploy to develop relationships with new prospects. Relationship management
processes is defined here as the mechanisms firms deploy to nurture the relationships they have with existing customers. A
systematic, process-based approach to the creation and management of relationships should translate the efforts by competent
salespersons into selling-firm performance.
In a fast-paced, changing market place, access to timely and accurate information can make the difference between a
converted and a missed opportunity for a competent salesperson. Insightful, specific, and credible information on customers
is the best support for sustained firm performance when one considers that processes can be easily replicated and competent
salespersons easily poached by the competition. This suggests that the technological provisions provided to the sales force
likely plays a key role in the people-performance relationship. Thus, it is proposed here that technological provisions will
positively moderate the effect people have on performance such that people will influence performance to a greater extent in
firms with high (versus low) levels of technological provisions.
The model is tested by conducting regression analysis of a cross-industry data set collected from 1,227 managers. Results
indicate firms that spend substantial effort developing their sales people experience greater firm performance compared to
firms that spend less effort developing their sales people. The analysis indicates this effect can be partially explained by the
relationship building processes institutionalized by firms. Further, the results suggest the positive effect people have on
performance can be amplified by providing the sales force technological provisions.
These findings support prior research examining the important and dynamic relationship-building role of the sales force (e.g.,
Morgan and Hunt 1994; Palmatier et al. 2007). Salespeople are the boundary spanning agents of the firm responsible for
building relationships with customers which ultimately enhances firm revenues. By carefully developing the people
responsible for generating revenues and institutionalizing relationship building processes management can systematically
enhance the firms performance. Additionally, the model indicates that technological provisions can magnify the positive
effect salespeople development has on firm performance. Firms can maximize the positive effect of developing and engaging
their salespeople by offering the sales force technological provisions that can aid them in their work.
References available on request
12
EFFECTS OF JOB EMBEDDEDNESS ON SALESPERSON CUSTOMER ORIENTATION:

THE ROLES OF ORGANIZATION-BASED SELF-ESTEEM AND COLLECTIVISM
Frederick Yim, Hong Kong Baptist University, Hong Kong
Henry Fock, Hong Kong Baptist University, Hong Kong
ABSTRACT
In todays age of relational selling, customer orientation (CO) takes on augmented importance for salespeople who strive to
perform better and nurture long-term customer relationships.
While previous research has revealed many interesting
antecedent variables to salesperson CO, relatively less is known about the influence of personal variables on the salesperson
CO. In this study, we endeavor to examine an important, yet under-researched, personal-level variable, job embeddedness,
and understand its effects on the salespeoples CO. Data were collected from business-to-business salespeople, and a
moderated mediation analysis revealed that job embeddedness and collectivism interacted to affect organization-based
self-esteem, which in turn was related to CO. Results were discussed.
13
SAYING THE RIGHT THING AT THE RIGHT TIME: THE MODERATING ROLE OF CAREER STAGE ON
THE SALES MANAGER FEEDBACK SALES PERFORMANCE LINK
Edward Nowlin, Southern Illinois University, USA
Todd McClure, Southern Illinois University, USA
ABSTRACT
Sales managers regularly use feedback as a mechanism for evaluating and shaping salesperson performance. However, the
success of feedback depends on the sales managers ability to identify the salespersons needs and deficiencies in order to
provide feedback that accurately reflects those needs. Career stage theory suggests that individuals needs, capabilities, and
motivations changes as they progress through distinct stages of their career. To meet these evolving needs, sales managers
must also adapt the type of feedback delivered.
This research investigates if different types of feedback based on its locus (i.e. output vs. vs. behavioral) and valence (i.e.
positive vs. negative) are more effective depending on the salespersons specific career stage. Research suggests that different
types of feedback have different effects on performance. Career stage research suggests that as people evolve through
different stages (exploration, establishment, maintenance, and disengagement), they develop different motivations. Additional
research suggests ones career stage also affects their attitudes toward their job. The rationale of this study lies in sales
managers need to know how the effectiveness of their feedback may also evolve. The intended contribution of this research
is to explore the interaction between feedback and career stage in order to offer insight to sales managers about delivering
effective feedback.
14
EMBEDDING CONSUMERS MEDIATION OF SOCIAL MEDIA ENGAGEMENT EFFECTS ON

CONSUMERBRAND RELATIONSHIPS
Julia Schamari, EBS Business School, Oestrich-Winkel, Germany
Tobias Schaefers, EBS Business School, Oestrich-Winkel, Germany
ABSTRACT
Communication via social media offers consumers more opportunities to engage with brands. This expanded consumer
engagement is regarded as an opportunity for brands to build and shape customer relationships. However, little is known about
how engagement actually influences consumer-brand relationships. Based on social construction theories we introduce
consumer embeddednessdefined as non-financial interactions of consumers with a brand or with other consumers in a brand
contextas a mediator of consumer engagements brand effects.
Specifically, we propose that in addition to merely engaging consumers, firms need to ensure consumer embeddedness to
achieve positive brand-related outcomes. This is based on the idea that meaning is dependent on how humans make sense of
social interaction (Edvardsson et al. (2011, p. 329). Consumer embeddedness is therefore conceptualized by drawing from
social construction theories. We propose that the relationship between consumer engagement and consumers brand-related
attitudes and behavior is fully mediated by this new latent construct.
Several steps to develop and validate a scale that measures consumer embeddedness are reported. The results of an online
survey combined with respondents actual engagement data from a car brands facebook page support the hypothesized
mediation and thus suggest that consumer embeddedness is in fact necessary for consumer engagement to enhance brand
relationships and drive purchase intentions. Our paper supports the idea of value-in-social-context and contributes to an
enhanced understanding of marketing communication via social media.
15
KOREAN CONSUMER PERSPECTIVES TOWARD SOICL MEDIA ADVERTISING

AND INTENTION TO JOIN BRAND PAGES
Alexander Muk, Texas State University- San Marcos, U. S. A.
Christina Chung, Ramapo College of New Jersey, U. S. A.
Jonghoon Kim, University of Incheon, South Korea
* Three authors contributed equally to the paper
ABSTRACT
Social media offer consumers a new social space to freely discuss their liking for certain brands and their experiences with
products and services in which advertisers have limited control over the content and dissemination of brand information.
This study examines the effects of social media advertising and the relational variables that might affect intentions to join
brand pages among young Korean consumers. The theoretical underpinning of this study is the combination of Uses and
Gratifications theory and Theory of Reasoned Action. The following hypotheses are developed.
H1a: Hedonic values of social media advertising are positively related to attitudes toward social media advertising.
H1b: Utilitarian values of social media advertising are positively related to attitudes toward social media advertising.
H2: Attitudes toward social media advertising will positively affect intentions to join a brand page.
H3a: Hedonic values of social media advertising are positively related to intention to join brand page.
H3b: Utilitarian values of social media advertising are positively related to intention to join brand page.
H4: Need to belong is positively related to social influence.
H5: Social influence positively affects intentions to join brand pages.
Data were collected from a Korean University using convenience sampling techniques. The sampling frame is appropriate
since college students are heavy users of social media and they embrace social media platforms as their communication
channel with friends and peers. The samples consisted of 249 college students with 54 % females and 46 % males. The
overall validity of the measurement model was tested using confirmatory factor analysis (CFA). The CFA results indicate an
acceptable fit for the data with 2 = 425.17, df = 194, p-value =.000, CFI= .94, RMSEA = .07, and TLI= .93. Further,
construct validity is also established. Structural equation modeling (SEM) was run to examine the overall theoretical model
specification and the hypotheses. The SEM results indicate a satisfactory fit of data with 2 = 502.23, df = 201, p-value=.000,
CFI = .92, RMSEA= .078, and TLI = .91. The SEM structural path results reveal that all hypotheses are supported except H2
and H3a.
This study provides a conceptual framework to explain consumers intentions to become fans of brand pages among Korean
young consumers. The initial evidence reveals that utilitarian values and social influence variables are significant predictors
of the consumers intentions to become fans of brand pages. As the U&G theory suggests, both the informational (utilitarian)
and pleasurable (hedonic) aspects of accessing social media advertising enhance users positive attitudes toward the media.
Consumers positive attitudes toward social media advertising, however, are not strongly related to intention to join brand
pages. However, utilitarian values of social media advertising are strongly related to intention to join brand pages. The
findings also suggest that young Korean consumers intentions to join brand pages are positively related to the social
influence exerted on them by their important referents. The social influence effects can be explained by its positive
relationship with belongingness. The influence comes from social media friends invitations to join brand pages. The study
results also suggest that social influence seems to be a much stronger predictor of intentions to join than utilitarian values of
social media advertising. The standardized coefficient of the path through social influence (=.32) is higher than that through
utilitarian values (=.20).
Social influence is a strong predictor of intention to join. Therefore marketers can implement group oriented activities to get
brand-page fans inviting their social media friends to join. Also, giving loyal fans a space to share their brand experiences
with their social media friends is more likely to elicit positive attitudes toward brand pages from them. The success of an
online community is based on interactions and open dialogs. The findings also illustrate the relative importance of advertising
values in affecting consumers perceptions of brand pages. Social media advertising fulfills consumers information need
more than entertainment need. One interesting question arises from this study is whether or not the findings are unique to
collectivist Korean consumers. Future research might look into the influence of cultural values on accepting brands pages on
social media.
16
IF CELEBRITIES CAN DO IT, SO CAN I: ME, MY CELEBRITY AND MY BRAND

AN EXPLORATORY INVESTIGATION OF CELEBRITY INFLUENCE ON ONLINE PERSONAL BRANDING
Arne Baruca, Sacred Heart University, USA
Ebru Ulusoy, University of Maine, USA
Michael Minor, University of Texas Pan American, USA
ABSTRACT
This study explores the effect of celebrities on consumers online behavior. The increased presence of online consumers has
led to a need to self-present, and to develop oneself as a personal brand because online social media require members to
create a personal profile. Online users developed their image(s), created and shared stories, and gradually built a presence in
the online world.
According to the media and communication literature society has reached a point at which consumers are obsessed with
celebritys lives as never before. Online social media has fuelled the exposure of consumers to celebrities at a level
previously unheard of. It is suggested that intense celebrity exposure, along with the increased usage of such sites by the
general population results in an entirely new phenomenon that for the purpose of this study is labeled Online Self Branding.
To explore the constructs explaining the relationship between celebrity consumption and online consumer behavior, a set of
qualitative studies was designed and implemented. Data analysis suggests that there is a wide range of reasons why
consumers construct online profiles. On one extreme are obsessed and addicted consumers who consider this a must, whilst at
the opposite extreme are consumers who believe this is a good communication tool for networking and business.
Respondents exhibited substantial awareness of the breadth of communication possibilities offered by online social media
sites. They seem to understand the power of self-presentation and how online social sites can help build their identities and
communicate to their networks their preferred image. The image may be similar or dissimilar to their offline persona, or they
may develop more than one online persona. . Interestingly, some respondents differentiate their behavior between different
social networks, suggesting they re-brand themselves. They seek for influencers, for somebody they can relate to, and
amongst the influencers are the celebrities
Additionally, data suggest that there is a level of connection between consumers and their celebrity of choice that goes
beyond the consumption of celebrities as products. Consumers dont stop at enjoying the celebrity at what he or she does
best, but attempt to emulate the celebritys lifestyle. An extension of these relationships is for the consumers to consider
being a celebrity within their circle of friends. Respondents enjoy influencing their own social network. The general
consensus is that the number of friends is proportional to ones influence, such that the more online friends they have, the
more they can potentially influence others. They also equate the number of friends as a potential asset.
The preliminary results of these studies suggest there is a link between the consumption of celebrities and consumers
behavior online. Celebrity consumption has an effect on celebrity consumers behavior in the online world, by not only
affecting their consumption patterns, but also by creating a value system that affects the celebrity consumers daily lives, by
emulating celebrities and brand themselves as celebrities in their online social network.
References Available on Request.
17
ONLINE PERSONAL BRANDING IN THE MIDDLE EAST AND NORTH AMERICA: A COMPARISON OF
SOCIAL CAPITAL ACCUMULATION AND COMMUNITY RESPONSE
Fathima Z Saleem, ESADE Business School, Universitat Ramon Llull, Spain
Oriol Iglesias, ESADE Business School, Universitat Ramon Llull, Spain
INTRODUCTION
Individuals are becoming reflexively aware and actively constructing their identities as they rely less on traditional sources
such as socioeconomic status in a postmodern society (Hearn 2008; Wee and Brooke 2010). The ease and accessibility of
improving technology and social media platforms facilitates identity creation to an unprecedented level (Labrecque, Markos,
and Milne 2011). Online media is used to build individual identity using cultural indicators to develop the individuality of
people (Featherstone 2007), as personal webpages are becoming controllable spaces of strategic self-presentation (Vazire and
Gosling 2004).
The rise in popularity of personal branding is especially evident in image consultancy, self-management, and self-promotion
books (Wee and Brooke 2010), and has just recently entered the marketing sphere (Shepherd 2005). The practice is receiving
a lot of attention as a crucial strategy to succeed in a complex corporate world (Hearn 2008). However, despite the relevance
of personal branding, it has received scant attention (Labrecque, Markos, and Milne 2011), especially in the social media
marketing, branding and consumption literature. Moreover, extant research has not given much attention to studying personal
branders and their respective communities in a naturalistic context (Labrecque, Markos, and Milne 2011). Lastly, we have not
encountered studies that study personal branding in different cultures.
To address these shortcomings in the literature, this research aims to study online personal branders and their respective
communities in a naturalistic context. Firstly, this study explores and compares efforts by personal branders in North America
(postmodern) and the Middle East (modern) to accumulate social capital. Secondly, as community members are crucial in
personal brand networks, we also compare community member narratives towards such personal branding efforts, using
netnographic research and in depth interviews. This research furthers the work on online personal branding, and introduces an
insightful cross-cultural comparison, that has been lacking in social media consumption studies.
LITERATURE REVIEW
The traditional role of a brand as a marker of ownership has progressed to other functions, such as being a site for consuming
pleasurable experiences (Balmer and Gray 2003), a set of promises or covenant (Brodie, Glynn, and Little 2006), and a
relationship builder (Christodouliedes 2007). Typically in the literature, branding has been applied to products, services,
firms and corporations (Handelman 2006; Stern 2006). However, more recent progresses in branding have begun to brand
individuals as that is becoming crucial in todays enterprise culture (Hearn 2008). This importance is fueled by the current
lack of social structure, resulting in an individualized society (Wee and Brooke 2010). Thus the branded person signifies the
individual as a commodity, who works and attempts to embody the values in prevalent in the working environment (Hearn
2008). The following paragraphs briefly summarize some extant research on (1) social media usage in personal branding, (2)
bloggers and human brands, and (3) reflexivity.
Social media platforms not only allow individuals to connect into networks, but also offer spaces to present individual selves
online (Hearn 2008). Recent research on social media platforms has primarily focused on Facebook (e.g. Gosling, Gaddis,
and Vazire 2007; Labrecque, Markos, and Milne 2011), as Facebook provides a rich site for data collection due to its high
usage patterns by consumers (Ellison, Steinfield, and Lampe 2007). Other forms of online self-presentation exist on static
sites too (Schau and Gilly 2003). However an emerging space that is garnering more attention are personal blogs, that are
dynamic, vary in content, and motivations for usage.
A rise in blogging activity has lead to the creation of successful bloggers who in their own consumption spheres become a
human brand (Kretz and de Valck 2010; Paramentier and Fischer 2010; Thomson 2006). Blogs are a multi-layered and
dynamic site for expressing identity through consumption experiences, and are different from personal webpages, which are a
static site for self-presentation (Schau and Gilly 2003). Blogs allow their authors, or bloggers to partake in identity goals
(Kretz and de Valck 2010) and transform into ordinary celebrities, who are present in other social media platforms such as
Youtube. Bloggers become a distinct personal brand through their role as opinion leaders in particular consumption circles,
which provides them with greater social and symbolic capital (Bourdieu 1977; Holt 2002). Additionally, the identity and
18
personality presented on personal web pages is as valid as drawing on individual identity from a tangible part of someones
life (Vazire and Gosling 2004), thus making personal web pages and online self-presentation a rich site for study.
Personal branding not only draws from the human brand and social media consumption literature, but also from existing
research on reflexivity. The literature on sociology indicates two mainstream views of reflexivity. The first one is selfreflexivity with proponents such as Anthony Giddens (1991) and Ulrich Beck (1992), who support extended reflexivity due
to the social and communication technology changes that allow identities to be built. The second view is Bourdieus
habitus, in which individuals are not the masters of their complete identity (Bourdieu 1977). More recent theorists have
attempted to hybridize the two due to changing social structures and institutions (Adams 2006). The literature indicates that
reflexivity in identity increases with postmodernity, and as such, this study looks at two different cultures, one that could be
classified as modern, and the other as postmodern, to allow for a comparison.
CONTEXT
In order to compare personal branding efforts in both a postmodern and modern society, this study compares North American
personal branders who represent postmodern society (Firat and Venkatesh 1996), and modern personal branders, defined by
the lower emphasis on individuality, which is evident in Middle Eastern culture. The Middle Eastern culture in this study is
limited to the Arab Gulf States, such as United Arab Emirates, Kuwait, Bahrain, and Qatar.
Specifically, we look at personal brands that display characteristics of a mob community (Kozinets, Hemetsberger, and Schau
2008), in which a community forms around an influential person. As such, the subject of this study is bloggers who present
themselves as experts on a particular consumption activity online (i.e. make-up, beauty, healthy, photography), and have a
community following. None of the selected bloggers are paid advocates or representatives of a specific brand, but rather show
favoritism towards certain brands, with varying community response.
The bloggers were identified from initial telephone interviews with experts in the fields of make up, health and beauty. The
identified bloggers are the most prominent ones that are selected by a majority of the experts. We weeded out bloggers from
the selection that were paid brand representatives, such as Michelle Phan, who became a representative of Lancme.
So far it is clear in the literature that bloggers are capable of creating a community following surrounding a particular
consumption activity, and also brand themselves through that consumption activity. Additionally, through the community
they gain social capital. However, the process of gaining social capital is not clear in the literature, and neither are the
differences evident between different regions that have strong social media presence.
METHODOLOGY
The authors conducted retrospective Netnograhpy (Kozinets 2010) of four personal brands in North America, and four
personal brands in the Middle East. Netnography is a research technique for studying online communities using a marketing
perspective. Each personal brand has a following community of at least ten thousand individuals, and is seen as successful by
its own communities and local media. As the area of community research and personal branding is still in its early phase, we
conduct qualitative research to allow for greater understanding, depth and detail of this growing field (e.g. Kozinets et al.
2010).
Within negnographic research, this study consists of two different phases. The primary phase includes the collection of field
notes, and hermeneutic analysis of the personal brander blogs, integrated social media platforms, and community interaction.
The primary phase highlights the dynamics of the blog, and allows an exploration of social capital accumulation through the
interaction between community and personal brander, and detailed community response. The second phase comprises semistructured in-depth interviews with the personal branders to elicit further details that would elaborate on the difference
between personal brander efforts in the Middle East and North America. Because blogs are often moderated, and what is
presented is a final version that is cleaned up, the interviews with personal brander elicits details of what happens behind
the scenes, which is not clearly garnered from the blogs. The collected data was analyzed iteratively, until theoretical
saturation was reached (Glaser and Strauss, 1967; Strauss and Corbin, 2007).
19
PRELIMINARY FINDINGS
The preliminary results obtained thus far have been divided into two brief sections for simplicity. The first part looks at the
comparisons that have emerged from the data between North American and Middle Easter personal branders. The second sub
section looks at the comparisons that have emerged regarding the communitys response towards personal brander efforts to
accumulate social capital.
Personal Brander
Between the North American and Middle Eastern personal branders, several differences that have emerged. Firstly, personal
branders in the Middle East have a greater distinction between their private and public spaces. This distinction is evident in
Middle Eastern culture, and carries onto the online sphere. Whereas with North American personal branders it appears that
most private and personal spaces are also within the public sphere, and there is less of a clear boundary between the two. For
example, North American personal branders show more pictures of spaces such as bedrooms, and parts of their personal
lives. In contrast, Middle Eastern personal branders tend to focus on the consumption activity and self-promotion, and images
related to personal spaces are absent. North American personal branders gain social capital by introducing aspects from their
personal lives into the blogs, whereas a few comments on the Middle Eastern blogger sites show curiosity from the followers
regarding the bloggers personal life, but there is little response towards that from the Middle Eastern bloggers.
The second difference is regarding the ownership of the personal brand. North American personal branders are more
conscious of the communitys role in the personal branders accumulation of social capital, and thus there is less sense of
entitlement towards the brand. However, Middle Eastern personal branders display greater ownership of the brand, and
attribute greater success to themselves compared to North American personal branders. For example, with regard to
moderating community interaction, analysis of the interview data indicates that negative comments by community members
were highly moderated in the Middle Eastern blogs, however the same was not a prevalent issue in North American blogs.
Moreover, the narratives in Middle Eastern personal branders indicate greater use of terms such as my blog, my team,
we kept it a secret (Source: HBs blog, MFDs blog), indicating a greater distinction between the owner and the fans.
Third, Middle Eastern personal branders show less inclination to invite community members to replicate certain actions and
upload them for others to see. For example, CB, a North American video blogger, requests her viewers to upload videos and
pictures of how they would copy certain consumption activities. On the other hand, there is little to no emphasis on this from
Middle Eastern bloggers, with whom the communication is far more one sided (towards the blogger), rather than interactive.
Community Response
From the field notes and netnographic data collection of the community responses in the eight personal brand communities,
two major differences have emerged thus far between the two different cultures. Firstly, the Middle Eastern communities
were more praiseworthy, accepting, and less critical of the personal brander efforts at self-promotion and increasing social
capital, whereas in the North American personal brander communities, individuals were more discerning and skeptical of
personal brander efforts at increasing social capital by acts such as promoting a particular product positively (Kozinets et al.
2010). This difference could also be attributed to the greater moderation activity present among Middle Eastern personal
branders.
This difference was particularly evident when personal branders pay more attention to specific brands in North American
blogs. Skepticism from the community members includes calling the blogger a sell-out or an attention-seeker when the
narrative becomes far too focused on particular brands, especially high end ones. This view of North American blogs is
evident in prior research, such as the study conducted by Kozinets and colleagues (2010) on online word of mouth narratives.
However, we see that in Middle Eastern blogs, the community members are less critical as to whether the bloggers are being
paid by the brands to promote their products, despite heavy emphasis on particular high-end brands, as was the case in the
HB blog.
A second characteristic of communities between the two different cultures is the concept of sharing. The Middle Eastern
communities were more active in praising the personal brander and her or his efforts, rather than sharing of knowledge in the
communities. On the other hand in the North American communities, relatively less praise was present, however there was
more emphasis from community members on sharing knowledge and active participation in the community to contribute to
the overall knowledge of the community, and the blog behaves as more of a community site for sharing consumption related
knowledge.
20
CONCLUSION AND IMPLICATIONS

As the preliminary findings are not sufficient to draw a conclusion that addresses the research concerns of this study, we offer
areas where this study can have research and managerial implications. Firstly, this research contributes to the field of career
progression and personal branding of executive level employees, as gaining preference and support from their employees is
of importance, and the study can highlight on narrative styles that facilitate community acceptance. Executive employees
could apply strategies to gain acceptance and enhance community feelings with employees from personal branding research.
Secondly, this research has various practical implications for personal branders who are experts in certain fields and are
required to differentiate themselves from other experts in a similar consumption activity. Thirdly, the comparison of the
community responses in both Middle Eastern and North American cultures draws insight into the differences of word of
mouth in both cultures from key influencers such as online personal branders, and enhances existing research on online word
of mouth, such as the research by Kozinets and colleagues (2010). Lastly, this study extends the research done on different
types of social media, as we mainly study blogs, but also consider the integrated social media communications on other
platforms. Lastly, the cross-cultural view enhances the predominantly North American research, and broadens the view of
personal branding from different cultures.
REFERENCES
21
OVERCONFIDENCE AND UNDERCONFIDENCE IN USAGE EXPERIENCE

Kamran Razmdoost, Cranfield School of Management, UK
Radu Dimitriu, Cranfield School of Management, UK
ABSTRACT
Consumers subjective assessment of their knowledge (i.e., knowledge confidence) often does not match their actual
knowledge (Alba and Hutchinson 2000). This phenomenon is called knowledge miscalibration. Although previous research
investigated the effect of knowledge miscalibration on purchasing decisions (e.g., Alba and Hutchinson 2000; Burson 2007;
Kidwell et al. 2008), its role in the usage stage of consumption is little understood. Consumer value as an interactive,
relativistic preference experience (Holbrook 1996 p.138) reflects consumers evaluation of usage. Our aim is to investigate
how knowledge miscalibration relates to the dimensions of consumer value. We focused on the four self-oriented dimensions
of consumer value in Holbrooks (1994) framework. Specifically, consumer value is hereby decomposed in efficiency,
excellence, play and aesthetics. Furthermore, we conceptualise the relationship between knowledge miscalibration and
consumer value separately for overconfidence (i.e., positive knowledge miscalibration) and underconfidence (i.e., negative
knowledge miscalibration), as each of these two dimensions of knowledge miscalibration stimulate different behavioural
mechanisms.
Through a critical review of the psychology and consumer psychology literature, we hypothesise that:
H1: The stronger the underconfidence, the higher the perception of efficiency.
H2: The stronger the overconfidence, the higher the perception of excellence.
H3: The stronger the overconfidence, the higher the perception of play.
H4: The stronger the underconfidence, the higher the perception of aesthetics.
H5-8: Perceived efficiency (H5), excellence (H6), play (H7) and aesthetics (H8) are positively related to satisfaction.
H9: Satisfaction is positively related to post-usage intention.
We conducted a study in the context of Amazon online shopping. 184 postgraduate students took part in the survey, with 167
completing it. The survey took around ten minutes and included measures of consumer value, satisfaction, post-usage
intention, consumers actual knowledge of shopping on Amazon and their knowledge confidence. We measured the
dimensions of consumer value with a scale developed by Mathwick et al. (2001) for online shopping experience. Satisfaction
was measured by two items adapted from Oliver (1997) and post-usage intention by two items developed by Yi and Gong
(2008). Consumers actual knowledge, knowledge confidence and knowledge miscalibration were measured by subjective
probability method where consumers were provided with True/False questions and then asked to express their confidence in
their answers (Alba and Hutchinson, 2000).
We tested the hypotheses through structural equation modelling. For overconfident consumers, the model fits the data well
(CMIN = 238.7, DF = 172, p = .00; CFI = .943; RMSEA = .067). Perceived aesthetics and excellence are not significantly
related to satisfaction, so we fail to corroborate H6 and H8. All other hypotheses are supported (p < .05). Surprisingly,
perceived play has a significant negative relationship with satisfaction. For underconfident consumers, the model also fits the
data well (CMIN = 236.3, DF=174, p = .00; CFI = .941; RMSEA = .067). Similar to the model for overconfident consumers,
except for H6 and H8, all other hypotheses are supported (p < .05).
Our findings suggest that knowledge miscalibration has a relationship with different dimensions of consumer value (H1, H2,
H3 and H4). Moreover, we document that knowledge miscalibration impacts consumer value dimensions differently
depending on consumers being either overconfident or underconfident. Whereas previous research documents the importance
of knowledge (mis)calibration in purchasing decisions, our study sheds light on how knowledge miscalibration impacts the
actual usage. These findings can inform the usage of advertising and other communication tools that are likely to influence
consumers degree of knowledge miscalibration. It specifies how consumers can benefit from knowledge calibration, in the
usage stage of consumption. Interestingly, in the Amazon online shopping context, perceived play has a negative relationship
with satisfaction, which is in contrast with the hypothesised relationship. Lien, Kao, and Hsai (2008) suggest that, for
utilitarian services like Amazon, consumers are more concerned with outcomes than processes. This fact suggests that
perceived play reflecting engagement in consumption might have a negative impact on the general evaluation of outcomes,
leading to a lower satisfaction. However, this finding should be investigated in future research.
22
THE SCORE IS NOT THE MUSIC: PRACTICES AND VALUE IN COLLABORATIVE CONSUMPTION
CONTEXTS
Carol Kelleher, University College Cork, Ireland and Cranfield School of Management, United Kingdom
Hugh Wilson, Cranfield School of Management, United Kingdom
Joe Peppard, Cranfield School of Management, United Kingdom
ABSTRACT
Traditionally, marketing scholars and organisations have tacitly conceptualised value co-creation as a set of processes or
activities where participants know how to act, or know the score however, this is not always the case. In this paper, we
argue for a deeper appreciation of the symbiotic relationship between value experiences and value co-creation practices,
particularly in collaborative consumption contexts in which meanings may be shared as much as behaviours. Practices,
comprising shared understandings of what to do and say, procedures and engagements in situated contexts, embed individuals
in the social world, tie us to each other, and, as a result, frame individuals lived, embodied experiences of value. While
practices are not possessions or characteristics of individuals, individuals are carriers of various value co-creation practices,
which need not be coordinated with each other. As a result, individuals represent unique embodiments of diverse levels of
participation in multiple practices within a cultural or social group. We also suggest that individual sensemaking of the value
experiences which emerge from value co-creation practices, while socially constructed, is intersubjectively and
phenomenologically determined. Therefore, rather than solely adopting either a phenomenological or a practice based
perspective to explore the contours of value co-creation, we seek to entwine them, by examining individual value experiences
which emerge from individuals concurrent participation in multiple value co-creation practices in collaborative consumption
contexts.
The aims of the paper are to examine participants experiences of practices in a collective consumption context in order to
illuminate how value is co-created through participation in such practices; and to explore specifically the role of meaning cocreation in the individual value experiences which emerge. Framed by a relational constructionist approach, this study
explores how multiple participants musicians, conductors, audience members, and staff experience value co-creation in
the context of their participation in 47 orchestral, educational and outreach events facilitated by the London Symphony
Orchestra, one of the worlds leading orchestras. Participant narratives were collected using 47 depth interviews, 375 short
interviews, and non participant netnography over a six month period. Using Interpretive Phenomenological Analysis, 20
value co-creation practices and 13 value experiences were induced from the data. The findings and discussion illustrate how
the LSO has sought to broaden participation in orchestral consumption practices by co-creating meaning for novice, amateur
and expert participants through a variety of co-creation practices. We also develop nine propositions relating to the
individual experience of value co-creation practices in collaborative contexts.
In conclusion, this paper integrates experiential and practice based perspectives of value by illustrating that value emerges
from the shared understandings between conductors (service organisation managers) and participants (regular, novice and
potential service consumers, front and back office service personnel and other service providers within a service value
network) participating in a multiplicity of value co-creation practices. Value co-creation practices maintain, sustain and
reinforce the sacred on behalf of participants and frame their experiences. Co-creating value therefore requires service
organisations to deconsecrate or open up the score for novice participants; specifically, to share the understandings,
engagements, and procedures embedded in such practices. These concern not just how-to-act but also how-to-interpret, which
in turn may be negatively experienced by expert participants.
23
CREATIVE CONSUMERS COOK UP VALUE IN CONVERSATIONS

Marie Taillard, ESCP Europe Business School, UK
Alkmini Gritzali, ESCP Europe Business School, UK
INTRODUCTION
Ramaswamy (2011;195) argues that the core principle of co-creation is engaging people to create valuable experiences
together, while enhancing network economics. He goes on to suggest that this engagement should take place on platforms
created by firms. Arguments such as this have become prevalent in the Service Dominant and Co-creation literatures (Vargo
& Lusch, 2004; Prahalad & Ramaswamy, 2004), but little research has been conducted to date to show how engagement can
result in value creation, or how by coming together and conversing on these platforms, individuals can create something more
valuable than they might when acting separately or communicating only with firms (one exception being the study of
community practices by Schau et al. (2009)). We focus on how consumers generate novel ideas in online conversations, and
search for evidence of a collective form of creativity. Our goal is to answer the questions of how online consumer
conversations generate creativity, and how it results in value co-creation.
Service Dominant Logic (SDL) (Vargo & Lusch, 2004) argues that value for the company is not just embedded in the product
or service, but created by consumers as part of their consumption experience. The general mechanism of value creation is
now seen as an interactive process among networks of stakeholders, enabled by different platforms, allowing resources to be
exchanged and internalised, or integrated (Kleinaltenkamp et al., 2012). The engagement platforms, online or offline, allow
for the generation and diffusion of new ideas, the development of new experiences and in general a much more active and
interactive role for all stakeholders (Ramaswamy, 2011). In their study of brand communities, Schau et al. (2009), bring to
light 12 consumer practices, which they link to value creation. In this paper, we propose to broaden the focus beyond brand
communities, to show that consumers engaging in casual conversations in online forums also create value, thus suggesting
that value creation can take place among a broader range of consumers thanks to the very nature and structure of
conversations hosted on engagement platforms. Specifically, we explore conversations in an active consumer forum and
argue that these constitute collective creative processes that are enabled by the platform itself, and furthermore, that these
creative processes create value. We use conversation analysis, a widely accepted methodology in anthropology and
sociology, which permits the exploration of full conversations and the interaction patterns, which support them.
METHOD
Conversation Analysis (CA) is a data-driven research approach to studying social interaction, whose core assumption is that
individuals rely on the same shared procedures in producing and interpreting meaningful conversation contributions
(Liddicoat, 2011). CA analysts work on live casual conversations, at the interface between cognition and action (interaction).
They focus on identifying and explaining the patterns that emerge in intelligible socially organised interaction, and that
reflect shared procedures among participants (Heritage, 2008). In this study, we focus on these emergent patterns, and show
how they enable casual participants to act collectively and creatively. We use the standard CA procedure of moving from a
particular initial conversation in which patterns are identified, to a wider analysis of a collection of conversations, to establish
robustness and validity. One clear difference between our study and traditional CA is that we analyse written asynchronous
conversations: participants do not benefit from non-linguistic cues such as gestures and facial expressions, and by far the
largest part of the audience is anonymous and does not participate. Hence there are significant differences between standard
CA procedures and the way we apply it. Very little work has been performed online using CA, but several researchers have
shown that the method is productively applicable to this medium (Antaki et al., 2006). One of our aims in this paper is to
establish a precedent for the use of CA in online consumer behaviour and social media research.
Our data consists in a collection of eight conversation threads (with an average of 52 contributions each) from the forums
hosted on Epicurious.com, an amateur cooking website, owned by Cond Nast. These forums are freely accessible to the
public, requiring contributors to go through a simple sign-in procedure. Our initial analysis of the Thanksgiving... not too
soon to start thinking thread yielded several important patterns. We identified 31 specific categories of actions ranging from
sharing a problem to endorsing a solution, which we organized into 3 broader categories of soliciting, sharing and
acknowledging. More generally, the contributions revolved around problem-solving and the introduction of creative ideas
in the form of experiences, ideas, knowledge, opinions and emotions, which were in turn solicited, shared and acknowledged.
These initial findings suggest that collective creativity plays a role in this problem-solving conversation.
24

While creativity is a notoriously fragmented research topic, most definitions include two dimensions: novelty and
appropriateness/value (Hennessey & Amabile, 2011). Creativity produces more than novel ideas, it produces outcomes that
are appropriate to the context and therefore, valuable. Recent work on creativity has reemphasised its social and cultural
aspects. In their review of Lev Vygotskys work, Moran and John-Steiner (2001) highlight his strong cultural and dialectical
views: Internalisation and externalisation are the dialectical mechanisms that allow an individual to construct higher
psychological structures (such as creativity). Glaveanu (2010) proposes a tripartite model encompassing creators, audiences
and new artefacts. Creators externalise their novel ideas (gleaned from previously internalised experiences in other contexts,
repurposing them in a new context), thereby producing new creative outcomes, which are, in turn, internalised by
audiences. As audiences and creators trade roles throughout a conversation, externalised new ideas are internalised and so on.
In other words, creativity results from the cyclical internalisation and externalisation of novel ideas (novelty), which are then
acknowledged, recognised, valued and used (appropriate and valuable) (Glaveanu, 2010:54). This socio-cultural approach
is also reflected in Sawyers (2003) perspective on conversations as acts of collaborative creativity.
Following our initial conversation analysis and based on the socio-cultural view of conversations as locus of collective
creativity, we posited three hypotheses and gathered seven more conversation threads against which to test them:
Hypothesis 1a: By engaging in online conversations, consumers externalise their experiences, ideas, knowledge, opinions and
emotions, and as a result, contribute to creativity.
Hypotheses 1b: By engaging in online conversations, consumers internalise others experiences, ideas, knowledge, opinions
and emotions, and as a result, contribute to creativity.
In our first analysed thread, one participant (GLG1) solicits tips on how to roast two turkeys for Thanksgiving. Later, MK lets
us in on her friends secret: She usually has between 16 to 20 people for thanksgiving... And she let me in on her secret.
She roasts 1 whole bird...for "display" and the night before will roast turkey breasts, and some thighs and drumsticks... At
serving time - she displays the bird, and take it back to the kitchen for carving - where she pads the platter out with... (sic) .
We analyse MKs novel contribution as resulting from an internalisation of her friends practice. She characterises it as the
way out of this dilemma, showing that she has adopted a metacognitive attitude to this information, a transformation or
reorganisation of incoming information and mental structures (Moran & John-Steiner, 2003). She externalises the
information, by commenting on the strategic aspect of her friends practices.
The next turn is by C, in direct response to MK: That's a great way to do it for "show" but we got over the "presentation" a
long time ago, unless we are carving at the table 70 years ago... I know everyone has their own traditions... BUT I do love the
idea of the additions if and when I need to serve more than 16-18. (sic) Here we see that C acknowledges MKs solution,
internalising it, herself, by adopting the same characterisation of show (previously, display) and actually challenging the
validity of this concern for presentation. Again, here we see a second internalisation/externalisation cycle, in which a new,
shared practice is acknowledged, critiqued and adopted (I do love the idea...if and when...). We claim that it is the very
nature and structure of the conversation that enables the internalisation/ externalisation cycle to develop. In other words, it is
because participants are engaging in these conversations that they go through the creative process of internalising and
externalising their ideas.
Hypothesis 2: Consumers actively build conversation structures that support the emergence of creativity through the
internalisation and externalisation of experiences, ideas, knowledge, opinions and emotions.
As discussed above, conversation analysis allows us to uncover the methods and competences deployed by participants to
conduct successful conversations, which we claim turn them into acts of collective creativity. Sawyer (2001) argues that
conversations themselves are creative social acts, similar to improvisational theatre in that they are neither scripted nor
directed. Not only do participants have free range to be creative, but they must also build coherent contributions to allow
other participants and, possibly an external audience, to understand the conversation successfully (so as to be appropriate and
produce value). It has long been noted as a principle of communication that humans tailor their communications to enable
their audiences to understand them given a mutually accessible context (Sperber & Wilson, 1986). The internalisation/
externalisation process here contributes to creativity in both the form and the content of the conversation.
In face-to-face conversations, participants (who also constitute part of each others audience) rely on non-linguistic cues to
signal who they are addressing, when they want to take the floor, when they disagree etc. As the number of participants and
reach of the audience increases (online), more cues are needed to make the conversation flow more naturally and easier for
25
the audience to follow. Whose turn it is to speak, whom a speaker is addressing, whether a point is in response to a previous
comment or comes as a new contribution, are all instances of directions to help participants and audiences follow or
contribute to the conversation. In an open-platform online conversation, in which participants do not know each other and the
audience is the general public, there is an even greater need to provide directions. Our conversation analysis reveals
interesting patterns that suggest that in the absence of a script or director, participants provide their own creative stage
directions to enable both each other and the broader audience to interpret their contributions in their fuller social context.
In several of the analysed threads, participants begin their turns by establishing expertise, e.g., I have read a ll the
studies...to know that it s not an acceptable way to do things. By deliberately stating their relevant experience, participants
legitimise their contribution and argue for the audiences attention and trust. Most contributions in the analysed threads
contain meta-talk (Schiffrin, 1980), specific reference to the conversation process itself. These references can be to a
previous contribution: Sounds more like a Blender youre talking about or to the participants own contribution: Heres
my bad memory... These instances of meta-talk are used as labels signalling the meaning, which the meta-talk author
assigns to a contribution (clarification of previous post, excuse for forgetfulness). The use of meta-talk highlights the fact that
a contributions meaning is more naturally the audiences interpretation, than the authors intention, and therefore benefits
from labelling.
There are frequent contributions in which the participant starts out by acknowledging a previous one (e.g, by asking for
clarification or reinforcing a proposed solution), and then solicits the next contribution (e.g., by asking a question, or
introducing a new consideration or solution). Yea, you have to describe what your final product is...If you have all your
items already minced as small as you want, cant you mix them with a spoon? These patterns facilitate continuity, coherence
and the overall conversation flow. Another observed stage direction is addressing other participants by their name: You
try it, Nikki. Honest. The function of name-addressing is clearly both to actively engage with another participant and again
to provide a stage direction indicating whom is being addressed in the absence of non-linguistic cues. The result here is
continuity and coherence, as well as clarity.
Hypothesis 3: Value is co-created by/for both the brand and consumers as the creative outcomes of internalisation and
externalisation, characteristic of conversations, are validated and applied to consumption/production.
Throughout the analysed threads, participants acknowledge a proposed idea or solution (thus validating it), and refer to their
intention to put it to use. My brother-in-law has jis birthday on the 26th and we usually have a beef tenderloin - we will
have to give this a try. (sic) A couple of posts later, another contributor posts: Okay...I will try again- I will be cooking one
just like it today and will definitely use your way. Mine turned out okay, but it could have been better, I think. Instances such
as these are clear indications of value creation by and for the participants. We began our discussion of creativity by
highlighting two defining features, novelty and appropriateness/value. The validating contributions discussed here clearly
illustrate the fact that a novel solution in the appropriate context provides value for all involved. Beyond the participants, the
larger audience can benefit from knowing that the solution has been validated and tested by several cooks. More generally,
this validation process also creates value for users and the site owner, as the entire forum gains in novelty and
appropriateness. By providing new reliable content, these conversations increase the legitimacy, the usefulness and, as a
result, the size and engagement of the platforms audience, thus affording clear economic value in the form of advertising
opportunities and brand equity.
We have shown how consumers conversations on an online forum promote creativity, which in turn contributes to value
creation. In contributing to conversation, consumers internalise and externalise ideas in creative ways, resulting in value for
all involved. This study provides useful insights for marketers, both academic and practicing. It proposes a new framework
for the exploration of value creation by consumers, based on the creativity inherent in conversations. The micro-dynamics of
creativity are supported here by the micro-dynamics of conversation, themselves fuelled by the psychological processes of
internalisation and externalisation. In so doing, we answer Ramaswamys call (2011;196) for a fresh frame of reference of
value (human experience) and its creation (co- creation), one that is based on collaborative, dynamic, contextual and
generative human interactions at the core-supported by engagement platforms that facilitate such interactions in multi-sided
fashion-to generate mutual value through productive and meaningful experiences. In addition, we create a precedent for the
use of conversation analysis in consumer research and social media. Finally, we contribute to research on consumer creativity
(Burroughs et al., 2008) by suggesting that consumers act creatively through more mundane consumption than the often
highlighted examples of creative consumers (e.g., lead users) or creative product uses (e.g., creative gift-giving).
26
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Online Forum Messages. Journal of Computer Mediated Communication, 11, 114- 132.
Burroughs, J., Moreau, C.P. & Mick D.G. (2008). Toward a Psychology of Consumer Creativity. in Handbook of Consumer
Psychology, ed. Haugtvedt, C.P, Herr P. and Kardes, F.I., New York: Psychology Press, 1011-38.
Glaveanu, V.P. (2010). Creativity as Cultural Participation. Journal for the Theory of Social Behaviour, 41:1.
Hennessey B.A. & Amabile T.M. (2010). Creativity. Annual Review of Psychology, 61, 569-598. Heritage, J. (2008).
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Theory, 12 (1), 201-205. Liddicoat, A.J. (2011). An Introduction to Co nversation Analysis. New York: Continuum
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Moran, S. & John-Steiner, V. (2003). Creativity in the Making: Vygotskys Contemporary Contribution to the Dialectic of
Creativity & Development. In Creativity and Development, ed. Sawyer R.K., John- Steiner V., Moran S., Feldman H.D.,
Nakamura J. & Csikszentmihalyi, M. New York: Oxford University Press.
Ramaswamy, V. (2011). Its about human experiences... and beyond, to co-creation. Industrial Marketing Management,
40:195-196.
Sawyer, R.K. (2001). Creating conversations: Improvisation in everyday discourse. New York: Hampton Press.
Schau, H., Muniz, A. & Arnould, E. (2009). How Brand Community Practices Create Value. Journal of Marketing, 73
(September): 30-51.
Schiffrin, D. (1980). Meta-Talk: Organizational and Evaluative Brackets in Discourse. Sociological Inquiry, 50(July), 199
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Vargo, S. & Lusch, R. (2004). Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68 (January), 1-17.
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THE ROLE OF ALTRUISTIC AND EGOISTIC MOTIVATIONS IN PAY WHAT YOU WANT SITUATIONS
Frank Huber, Johannes Gutenberg-University Mainz, Germany
Michael Lenzen, Johannes Gutenberg-University Mainz, Germany
Frederik Meyer, Johannes Gutenberg-University Mainz, Germany
Eva Appelmann, Johannes Gutenberg-University Mainz, Germany
INTRODUCTION
Recent literature in marketing has identified participative pricing concepts as a profitable strategy for service oriented business
areas (Spann et al. 2004; Spann and Tellis 2006; Kim et al. 2009; Kim et al. 2010a and Kim et al. 2010b). Shifting the control
from sellers to buyers, these participative pricing concepts have been demonstrated to enhance consumers purchase intention.
At the same time, participative pricing attracts new customers and even increases sales revenues (Kim et al. 2009).
Among these participative pricing strategies pay what you want (PWYW) is the most consumer-oriented concept. In PWYW
buyers can set any price greater than or equal to zero, and the seller has to accept this price (Kim et al. 2009). The absence of
price floors allows for opportunistic buyer behavior including zero-payments. However, research investigating PWYW does
not support the prevalence of zero-payments and identifies consumers altruism as an important antecedent of their willingness
to pay reasonable prices (Kim et al. 2010a). Consequently, PWYW can trigger altruistic helping behavior resulting in payments
greater than zero. Nevertheless, literature lacks closer investigation of the mental processes underlying this phenomenon,
calling for more research in this specific field (Kim et al. 2009).
Using Batson (1991) framework of altruistic and egoistic helping behavior, we conceptualize and analyze the influence of
altruistic and egoistic motivations on the price paid in a PWYW situation. This theoretical model provides implications for
researchers investigating, as well as vendors implementing participative pricing strategies to understand the customers
perspective and to forecast the potential success of these strategies. As altruistic and egoistic motivations are stimulated by
personal contact with a person in need, PWYW might work differently in an online context than in an offline setting (Spann
and Tellis 2006). To deduce implications for both offline business and electronic commerce, we compare the role of these
motivations in online and offline environments.
CONCEPTUAL DEVELOPMENT AND HYPOTHESES
The concept of altruism has been defined repeatedly in the last decades but lacks a common definition. However, most
publications agree that altruism implies a voluntary help for another person without the expectation of personal benefit (BarTal 1986). Egoism, in contrast, can be defined as a motivational state targeting personal benefit as the ultimate goal (Batson et
al. 1987). In the context of PWYW helping behavior becomes manifest in the willingness to pay reasonable prices. Hence,
altruistic and egoistic motivations can be understood as two distinct triggers of voluntarily payments in PWYW settings.
To explain helping behavior, Batson (1991) developed a model which includes the concepts of altruism and egoism. The
development of both motivational states is based on empathy. On the one hand, empathy can lead to the altruistic motivation
of helping another person, a relation Batson et al. (1983) describe as empathy-altruism hypothesis. On the other hand, empathy
can also result in an egoistic motivation to perform the same kind of help. This egoistic motivation results from the goals of
achieving self-reward, avoiding self-punishment, and reducing unpleasant aversive emotions (Batson 1991; Batson et al. 1988).
In the context of PWYW, this framework provides two alternative reasons for the absence of zero-payments: first, the altruistic
motivation to reduce the others needs, and second, the egoistic motivation to achieve self-reward, avoid self-punishment or
reduce aversive emotions. Therefore, a positive influence of altruistic and egoistic motivation on the price paid is postulated.
In Batsons research (1991) altruism and egoism affect the helping behavior of a person that feels empathy with another person.
In the context of PWYW, helping intention is represented by the price customers are willing to pay to the vendor. The higher
the altruistic motivation to reduce the vendors needs, the higher the price paid will be (H1) and the higher the egoistic
motivation to avoid negative feelings, the higher the price paid will be (H2).
Following Batsons (1995) empathy-altruism hypothesis, empathy should exert a positive influence on the altruistic motivation
to help. Empathy with a vendor expresses a concern about his/her situation. This leads to the desire to reduce the other persons
needs. The more empathy is felt, the more appreciated the well-being of the other person will be. Hence, the higher the empathy
for a vendor, the higher the altruistic motivation to help a vendor through paying a reasonable price (H3).
28
However, empathy can also lead to negative aversive emotions experienced by the observing person. As a result, the individual
is motivated to eliminate the source of his negative emotions (aversive-arousal reduction hypothesis) and therefore will have
the intention to help (Batson 1991). Furthermore, egoistic motivations to help can emerge from the desire to maintain a positive
self-image as well a positive image towards society. On the one hand, individuals know that they will feel ashamed, guilty and
blamed if they refuse to help. On the other hand, they will feel appraisable, proud and honorable if they do help. Furthermore,
people learned through socialization that punishments and rewards are stronger when they are feeling empathy for the person
in need (Batson et al. 1988). Thus, the higher the empathy for the vendor, the more customers have egoistic motivations to
avoid negative feelings and try to gain rewards (H4).
From Batsons theories, empathy can be understood from a cognitive and an affective perspective. The pure term empathy
usually refers to affective empathy, which is defined as the emotional response to the other persons state (Eisenberg and Strayer
1987; Hoffman 2000). Cognitive empathy represents an antecedent of these emotional responses and is defined as the
perception of another persons inner state, also called perspective-taking (Eisenberg 1991; Oswald 1996; Batson et al. 1997).
The perception-action model by Preston and de Wall (2002) provides an explication for this causal connection. In accordance
with the model, taking the perspective of an object activates brain regions that are congruent with the objects perceived
situation and evokes feelings that are similar to the objects feelings. As the authors stress that the object can be a person,
animal or an organization we can conclude that the stronger a customer is taking the perspective of a vendor the higher his/her
empathy will be (H5).
In general, we expect support for all hypotheses in both offline and online environments. However, negative feelings and
personal rewards are perceived stronger when another person is present during the helping process. Emotions like pride or
shame are related to the self-image and should therefore increase in the presence of others (Batson et al. 1988). Altruistic
motivations, on the other hand, do not depend on the presence of a third person, as they do not address personal benefits.
Consequently, egoistic motivations should exert a stronger influence on the price paid in offline environments than in online
environments (H6).
METHOD AND RESULTS
To test the postulated hypotheses, we conducted two studies, investigating PWYW settings in an offline environment and an
online environment. Two online surveys based on a virtual PWYW situation resulted in 268 and 272 completed questionnaires.
Survey A asked respondents to indicate a price they were willing to pay in a classical offline situation with personal contact to
the vendor (restaurant visit). Survey B asked respondents to indicate a price they were willing to pay in an online shopping
situation without personal contact (flight booking). In order to control for undesired variance, all participants were told to
imagine that food and service (the booking process) were satisfactory and that they were no regular customer of this restaurant
(webpage). After the presentation of this virtual scenario, the participants answered all relevant measures and named the price
they were willing to pay.
As expected, the price paid was mostly greater than zero, varying between 5 and 20 Euro in the offline setting with an average
of 11.10 Euro (for dinner), and between 0 and 150 Euro in the online setting with an average of 34.67 Euro (for a flight). The
participants average age was 31.2 in the offline setting (48.9% female), and 29.6 in the online setting (59.6% female). Income
levels were similar in both samples and did not have a significant effect on the price paid. Results of the measurement model
indicate highly reliable scales for perspective taking (Davis 1980, A = 0.863, B = 0.864), empathy (Batson et al. 1983, A =
0.892, B = 0.850), and altruistic motivation (Price et al. 1995), A = 0.690, B = 0.891). Three items of egoistic motivation
were eliminated to ensure internal consistency (on the basis of Batson et al. 1988), A = 0.820, B = 0.880) and significant item
loadings.
The structural model was estimated with LISREL 8.80 and revealed a good model fit for both, offline setting (2 = 581.62, df
= 205, CFI = 0.93, RMSEA = 0.067) and online setting (2 = 418.38, df = 205, CFI = 0.95, RMSEA = 0.082). Significant path
coefficients are highlighted with an asterisk in Figure 1, implying support for H1, H4 and H5 in both settings. The path
representing H3, however, was not significant in the offline setting. As the path depicting H2 was not significant in the online
setting, we find support for H6, which postulates a stronger effect for H5 in offline environments than in online environments.
The results of our research suggest that Batsons framework of altruism and egoism is adaptable to the context of participative
pricing. Empathy as a predictor of egoistic and altruistic motivation is supported for PWYW situations. Hence, empathy for
29
the seller strongly influences the potential success and profit of PWYW practice. An important antecedent of empathy is
perspective-taking, which exerts a strong influence on empathy in both, offline setting and online settings. However, other
potential triggers of consumers empathy should be identified, implying potential for future research on participative pricing.
Both altruistic and egoistic motivations influence the customers price paid in offline environments like a restaurant.
Accordingly, customers pay prices different from zero for two reasons: On the one hand, they want to help the vendor and
reduce the vendors needs by paying an acceptable amount of money, and on the other hand, they want to feel proud and avoid
feeling ashamed, therefore paying a reasonable price. However, in an online environment without personal contact to the
vendor, like a flight purchase, only altruistic motivations seem to influence the price paid. Thus, the motivation to help the
vendor and reduce the vendors needs affect the customers willingness to pay for a certain product or service in online settings
in the same way as in offline settings. Egoistic motivations on the other hand, like the wish to feel proud or the avoidance of
shame do not influence the price paid in an online environment. As online purchases are usually made alone and without the
judging observation of third parties, egoistic motivations to preserve a positive self-image are not addressed in online
environments. Thus, the desire not to feel ashamed is not addressed by the amount of money paid to an online vendor and
therefore does not determine customers willingness to pay.
With these results in mind, companies implementing participative pricing strategies should ensure a certain level of empathy
of their customers as a basis for altruistic and egoistic motivations. In online environments like electronic commerce, vendors
should further assure that altruistic motivations are triggered in the shopping process as egoistic motivations do not influence
the willingness to pay a reasonable price. In classical offline shopping situations, egoistic motivations, like the avoidance of
shame, are equally important and could be fostered by the combination of PWYW with group oriented marketing activities.
Furthermore, due to the growing popularity of multichannel retailing, many service-oriented businesses are offering their
products and services both offline and online. For instance, you can have dinner at a restaurant or order food delivery online or
by telephone. These different channels lead to different levels of personal contact between customers and vendors and are
influenced by differing altruistic and egoistic motivations to pay reasonable prices. Separate pricing strategies for multiple
channels should therefore be considered in PWYW practice.
As, to the best of our knowledge, the adaption of Batsons framework on participative pricing mechanisms has not been
considered before, this research can be understood as a first step to investigating the psychological triggers of the consumers
willingness to pay reasonable prices. Future studies should expand this basic model by incorporating other antecedents of the
altruistic and egoistic motivations. Real PWYW data and other participative pricing concepts should be used to verify our
findings and further analyze the mental processes behind the presence of payments greater than zero.
FIGURES
Figure 1: Results of the structural model
30
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Bar-Tal, D. (1986). Altruistic Motivation to Help: Definition, Utility and Operationalization. Humboldt Journal of Social
Relations, 13(1-2), 3-14.
Batson, C. D. (1991). The Altruism Question: Toward a Social-Psychological Answer. Hillsdale.
Batson, C. D., Dyck, J. L., Brandt, R., Batson, J. G., Powell, A. L., McMaster, M., & Rosalie Griffitt, C. (1988). Five Studies
Testing Two New Egoistic Alternatives to the Empathy-Altruism Hypothesis. Journal of Personality and Social Psychology,
55(1), 52-77.
Batson, C. D., Early, S., & Salvarani, G. (1997). Perspective Taking: Imagining How Another Feels Versus Imaging How You
Would Feel. Personality and Social Psychology Bulletin, 23(7), 751-758.
Batson, C. D., Fultz, J., & Schoenrade, P. A. (1987). Distress and Empathy: Two Qualitatively Distinct Vicarious Emotions
with Different Motivational Consequences. Journal of Personality, 55(1), 19-39.
Batson, C. D., Turk, C. L., Shaw, L. L., & Klein, T. R. (1995). Information Function of Empathic Emotion: Learning That We
Value the Others Welfare. Journal of Personality and Social Psychology, 68(2), 300-313.
Batson, C. D., OQuin, K., Fultz, J., Vanderplas, M., & Isen, A. M. (1983). Influence of Self-Reported Distress and Empathy
on Egoistic Versus Altruistic Motivation to help. Journal of Personality and Social Psychology, 45(3), 706-718.
Eisenberg, N. (1991). Meta-Analytic Contributions to the Literature on Prosocial Behavior. Personality and Social Psychology
Bulletin, 17(3), 273-282.
Eisenberg, N., & Strayer, J. (1987). Critical Issues in the Study of Empathy, in: Eisenberg, Nancy; Strayer, Janet (Eds.).
Empathy and Its Development (pp. 3-13). Cambridge.
Kim, J. Y., Natter, M., & Spann, M. (2009). Pay What You Want: A New Participative Pricing Mechanism, Journal of
Marketing, 73(1), 44-58.
Kim, J. Y., Natter, M., & Spann, M. (2010a). Pay-What-You-Want Praxisrelevanz und Konsumentenverhalten. Zeitschrift
fr Betriebswirtschaft, 80(2), 147-169.
Kim, J. Y., Natter, M., & Spann, M. (2010b). Kish: Where Customers Pay As They Wish. Review of Marketing Science, 8(3),
1-12.
Hoffman, M. L. (2000). Empathy and Moral Development: Implications for Caring and Justice. Cambridge.
Oswald, P. A. (1996). The Effects of Cognitive and Affective Perspective Taking on Empathic Concern and Altruistic Helping.
The Journal of Social Psychology, 136(5), 613-623.
Preston, S. D., & de Waal, F. B. M. (2002). Empathy: Its Ultimate and Proximate Bases, Behavioral and Brain Sciences, 25(1),
1-72.
Price, L. L., Feick, L. F., & Guskey, A. (1995). Everyday Market Helping Behavior. Journal of Public Policy and Marketing,
14(22), 255-266.
Spann, M., Skiera, B., & Schaefers, B. (2004). Measuring Individual Frictional Costs and Willingness-to-Pay via Name-YourOwn-Price Mechanisms. Journal of Interactive Marketing, 18(4), 22-36.
Spann, M., & Tellis, G. J. (2006). Does the Internet Promote Better Consumer Decisions? The Case of Name-Your-Own-Price
Auctions. Journal of Marketing, 70(1), 65-78.
31
THE EFFECTS OF PRICE PROMOTIONS ON NEW AND MATURE PRODUCTS

Sunhee Choi, Shippensburg University, U.S.A.
Sangno Lee, Chonbuk National University, South Korea
James Wilcox, Texas Tech University, U.S.A.
ABSTRACT
Although the effects of price promotion depth on mature product sales volume and sales revenue are well known, empirical
studies on the long-term effects of price promotions are relatively scarce. This study examines the impact of promotion depth
on units sold and dollar sales for a 106-weeks period. Using learning theory as a framework, the study also examines the effects
of price promotions on new and mature products. Our results indicate that promotion depth is negatively associated with brand
extension sales. We address the theoretical and managerial implications of this surprising finding in the final sections of the
paper.
32
THE ROLE OF PRODUCT AND EMOTIONAL DISSONANCE IN RETAIL RETURNS

Eric P. Jack, University of Alabama at Birmingham, USA
ABSTRACT
Cognitive dissonance is thought to relate to the return of retail products by consumers (Egan et al. 2007; Keaveney et al. 2007;
Sweeney et al. 2000). Customers that experience dissonance may seek to reverse the effects of their purchase decision by
returning the product (Gilovich and Medvec 1995; Zeelenberg et al. 1996). Cognitive dissonance may have an immediate
influence on product returns, however, it is also important to consider antecedents that may affect the level of that cognitive
dissonance (Inman and Zeelenberg 2002; Solvang 2007). In the research presented in this paper the relationship between the
awareness of return policies, customer opportunism, and switching barriers on two forms of cognitive dissonance (product and
emotional) is reported. In addition, the moderating role of gender on these relationships is identified. Structural equation
models were tested for the sample in total and used to assess the role that gender has as a moderator .
The role that cognitive dissonance plays in product returns is based on a post purchase comparison of what was purchased
versus other alternatives that were available. Cognitive dissonance is reported in the literature to consist of two dimensions,
product dissonance and emotional dissonance. Product dissonance represents an aspect of dissonance related to the product
purchased that in turn results in emotional dissonance that is closely tied to, but separate from product dissonance (Sweeney et
al. 2000). Customer awareness of return policies represents the level of customer awareness of the return policies that the
retailer has put in place. Customer opportunism is based on the notion of an individual or organization acting in its own selfinterest (Williamson 1975). The present research suggests that the same concept may apply to retail consumers where they
may act in their own self interests if given the chance (Harris 2010). Switching barriers are related to the cost and effort to the
customer of switching products or switching retailers. This is important to consider as customers experiencing cognitive
dissonance may search for information and find other retailers or substitute products (Gbadamosi 2009).
A bootstrapping procedure was used to determine the significance of the path coefficient by evaluating 5,000 random samples
of 308 Target and Wal-Mart customers who had made product returns. H1.1 was supported, indicating a negative relationship
between customer awareness and emotional dissonance. H1.2 was supported indicating a negative relationship between
customer awareness and product dissonance. H2.1 was supported showing a positive linkage between customer opportunism
and emotional dissonance. H2.2 was supported with a positive linkage between customer opportunism and product dissonance.
H3.1 was supported where switching barriers was positively associated with the emotional dissonance. H3.2 was also supported
with switching barriers positively associated with product dissonance. H4.0 was supported indicating a positive association
between product dissonance and emotional dissonance.
The model was also evaluated by comparing subgroups for male and female customers separately along with the bootstrapping
procedure. Group comparisons were made using a parametric t-test to detect significant differences between the path
coefficients for each subgroup (Henseler et al. 2009; Keil et al. 2000). By examining the path coefficients for the male subgroup
the previous hypotheses were supported with the only exception being H3.2. For females, when the direct effects of the path
coefficients were considered, only one of the hypothesized linkages (H3.1) was not supported. Using the Keil et al. (2000)
method parametric t-tests were calculated for the difference between the direct effects of the path coefficients for male and
female subgroups. These results showed a significant difference between customer awareness and the two dimensions of
cognitive dissonance (H1.1 and H1.2). Since the path coefficient is negative these linkages were less for male customers than
they were for female customers. Based on the significant differences between the subgroups, the direct effects for H4.0 were
significantly stronger for male customers, indicating they were more likely to have product dissonance impact emotional
dissonance.
The research reported here has addressed the product and emotional dimensions of cognitive dissonance related to returns.
However, a major limitation exists in that it did not measure the impact of the variables under study on the actual levels of
product returns. Future research is suggested to address this issue.
References are available upon request.
33
MAN, I SHOP LIKE A WOMAN! EFFECTS OF GENDER AND EMOTIONS ON CONSUMER SHOPPING
OUTCOMES AND PERCEPTIONS OF RETAIL ENVIRONMENTS
ABSTRACT
Previous studies in retailing have suggested that gender influences the way people shop. Women are more affected by store
environment elements and more likely to enjoy shopping than men. However, is it possible to reduce these gender effects and
to enhance mens shopping outcomes? Drawing on gender and emotions literature, the authors suggest that emotions moderate
gender effects on shopping outcomes (i.e. satisfaction, recommendation to others, and return intentions). This study tests the
effects of emotions in two conditions: positive emotions (triggered by background music) and neutral emotions (control group,
no music). Results demonstrate that positive (vs. neutral) emotions increase shopping satisfaction, recommendations, and return
intentions for male consumers, in the same level as female consumers. In addition, the findings indicate that store environment
perception mediates the effects of gender and emotions on shopping outcomes.
34

INVESTIGATING CONSUMER ATTITUDES TOWARD CUSTOMIZED APPAREL:
A LOOK AT UNIQUENESS, INVOLVEMENT, APPAREL FIT, AND BODY SIZE
Gina A. Tran, University of North Texas, United States of America
INTRODUCTION
In Future Perfect, Davis (1987) coined the phrase, mass customization, marrying mass production and customization.
Although the phrase is an oxymoron, Davis believed that firms could gain a competitive advantage by producing
personalized goods for the masses. Mass customization aims to provide each customer with products tailored to their
particular desires and needs. Furthermore, these goods are produced in a mass-production method, which enables
manufacturers to sell them at reasonable prices, reflective of the economies of scale advantage. Anderson-Connell, Ulrich,
and Brannon further refined Davis definition of mass customization by identifying the consumers role in product
development, placing them at the beginning of the value chain that will bring each customer what he or she wants (2002, p.
241). Instead of the traditional production-push theory, mass customization utilizes the demand-pull theory to supply
consumers with made-to-order products. The main objective of this research study is to develop a better understanding of
consumers attitudes toward mass customization. More specifically, the constructs include need for uniqueness, level of
apparel involvement, fit satisfaction with ready-to-wear apparel, and attitudes toward customized apparel. What factors
facilitate positive consumer attitudes toward customized apparel? What is the relative importance of these factors? What
factors inhibit positive consumer attitudes toward customized apparel? What is the relative importance of these factors?
LITERATURE REVIEW AND THEORETICAL FRAMEWORK
Mass Customization
As consumers are faced with more choices in products and retail formats, competition for patronage increases. With retail
competition on the rise, businesses must implement marketing strategies to effectively attract and retain consumers.
Companies must create more specific products to meet consumers needs and wants. Offering consumers customized goods
and services is a potential strategy for retailers to both differentiate their products and employ market segmentation to meet
consumers needs and wants. When compared to the plethora of mass-produced goods, customized creations could better
satisfy consumers needs and wants (Duray and Milligan 1999).
In mass customization, consumers information is used to provide a targeted solution for the consumer (Peppers and Rogers
1997). To satisfy the consumers individual needs and wants, the features of the product and/or service are customized
(Peppers and Rogers 1993). Consumers need for uniqueness, preferences for design, and need for fit may be addressed
through the customization of apparel (Goldsmith 1999). Consumers have desires to make statements about their own selves
and create their own identities, through their appearance, home, and car (Moynagh and Worsley 2002). A major part of
consumers appearance is their apparel.
There are four main approaches to mass customization (Gilmore and Pine 1997), which may all be applied to apparel.
Adaptive customization entails offering garments that consumers can modify to meet their needs. This type of customization
is suitable for firms whose customers want the clothing to perform in varying ways, depending on the usage situation.
Collaborative customization involves creating a dialogue with each customer to help them express their needs, to identify the
exact product that meets those needs, and to produce the customized good that meets those needs. This is the approach most
often linked to mass customization. Collaborative customization is best for firms whose clients cannot easily express their
desires and needs. Cosmetic customization is the use of one stock product represented differently for each consumer. The
standard product is packaged differently for each customer, which is preferred by some consumers. Although the actual
product is identical, the different packaging, display effects, advertising, and promotions appeal to diverse customers.
Transparent customization involves observing customer use and offering distinct products to customers without letting the
customer know that they are receiving individualized goods. This type of mass customization is best for businesses with
predictable customer needs. The advantages of transparent customization include convenience and serves as a time saver for
consumers.
35
Theory of Uniqueness

A persons need to be different and have a separate, distinct identity from others is uniqueness (Fromkin 1970). The theory of
uniqueness states that while people endeavor to maintain a moderate level of similarity relative to others, individuals also
differ in their need for self-uniqueness (Snyder and Fromkin 1980). One common approach to exhibit uniqueness is to wear
clothing that displays a unique personal identity or by acquiring elite, specialized consumer products (Fromkin 1970; Snyder
1992; Tepper and Hoyle 1996; Tian et al. 2001). Apparel is a human attribute to create uniqueness in society. Clothing is an
expression of individuality and a reflection of the unique self to others (Snyder and Fromkin 1980). Mass customization
allows consumers to show individual traits and exhibit their unique preferences and lifestyles. In addition, it provides
consumers with the opportunity to create the product to satisfy their personal needs and wants (Fiore et al. 2004). People with
higher need for self-uniqueness tend to want new, innovative, and unique consumer goods (Lynn and Harris 1997).
Personality attributes, including uniqueness, positively affect attitude during the consumer decision-making process
(Simonson and Nowlis 2000). It follows that people with a stronger need for self-uniqueness will have a positive attitude
toward customized apparel. Mass customization allows consumers to be innovative and create original apparel. Based on this
rationale, the following is hypothesized.
H1: The need for uniqueness is positively associated with attitude toward customized apparel.
Involvement
Involvement is characterized by an individuals interest, enthusiasm, and excitement in a product (Zaichkowsky 1985). A
consumers involvement is connected with their personal values, which in turn is associated with consumption of particular
products. Consumers with a high degree of apparel involvement will likely place more importance on their personal
appearance and express more concern about their garment choices (Blackwell et al. 2005; Laurent and Kapferer 1985;
Schneider and Rodgers 1996). Consumers with a greater need for uniqueness tend to be more fashion conscious, and likely to
have a higher degree of apparel involvement. When consumers are more involved with apparel, they are more concerned with
the final product than the convenience of the shopping process (Fiore et al. 2004). Consumer product involvement directly
impacts changes in attitude toward the product (Andrews and Shimp 1990; Petty et al. 1983). Increased involvement leads to
a more positive change in consumer attitude toward a product (Swinyard 1993). Consumers with a higher degree of product
involvement are more interested in final products meeting their needs and wants. Customization may be the way for them to
satisfy their consumption goals. It follows that consumers with high apparel involvement are likely to have a more positive
attitude toward mass customization. The following hypothesis is posited.
H2: The level of involvement with apparel is positively associated with attitude toward customized apparel.
Satisfaction with Fit of Ready-to-Wear Apparel
A garments fit is an important determinant that affects both the physical comfort and emotional confidence levels of the
wearer. Apparel that fits well is essential for a persons psychological and social well-being (Smathers and Horridge 197879). Many consumers are dissatisfied with the fit of garment purchases. Kurt Salmon Associates (2000) found that half of
female consumers in the U.S. cannot find apparel that fits, and 62% of men cannot find apparel with a good fit. Pisut and
Connell (2007) found that 80% of female consumers had fit problems in two or more areas of the body. Ready-to-wear
(RTW) apparel is defined as clothing that is marketed in finished conditions in standard sizes. The sizes are often limited,
which poses problems for consumers. Even within the same size, consumers have different body types, which affect the
overall fit. Aside from this issue, there is also the lack of standardization across sizing systems. Depending on the brand,
manufacturer, and retailer, RTW sizes vary greatly. Some firms purposely alter the industrys standard sizes in an attempt to
stand out from the competition (Kinley 2005; Loker et al. 2005). Almost 64% of female consumers regularly altered RTW
apparel, and 54% of female consumers are only somewhat satisfied to mostly unsatisfied with the fit of RTW apparel
(Alexander et al. 2005). With this level of dissatisfaction with the fit of RTW, perhaps mass customization retailers should
highlight this benefit of their offering and cater to these potential customers. Higher levels of satisfaction with the fit of RTW
apparel will likely be related to more negative attitudes toward customized apparel. Based on this rationale, the following
hypotheses are posited:
H3: Fit satisfaction with upper body areas of ready-to-wear apparel is negatively associated with attitude toward
customized apparel.
H4: Fit satisfaction with upper body areas of ready-to-wear apparel is negatively associated with attitude toward
customized apparel.
36
Body Size
Since 1960, the average size of American consumers has increased, both in average weight and average body mass index
(Ogden et al. 2004). Apparel manufacturers and retailers are responding to the larger body sizes by carrying more sizes and
appealing to this market segment (Clifford 2010; Odell 2011). Plus-sized female consumers are willing to spend more for
ready-to-wear apparel (Chowdhary and Beale 1988). However, product development is challenging due to the variety of body
shapes in the larger sizes. Also, it is difficult for retailers to carry such a large assortment of stock. It follows that consumers
with larger body sizes would have more positive attitudes toward customized apparel. Based on this rationale, the following
is hypothesized.
H5: Body size is positively associated with attitude toward customized apparel.
METHODOLOGY
A 46-item instrument was distributed online to collect data from multiple sources, including social networking sites, email
distribution, and university students. Items were adopted or adapted from previously established scales (LaBat and DeLong
1990; Lynn and Harris 1997; Stayman and Batra 1991; Zaichkowsky 1985). Information about body size was based on body
mass index. Respondents were asked to enter their height and weight and the formula from the Centers for Disease Control
and Prevention was used to calculate body mass index. Respondents were limited to those 18 years old or older, leading to a
final sample size of 706. Potential nonresponse bias was assessed by comparing: 1) early and late respondents and 2) students
and non-students. No statistically significant differences were found, which indicates nonresponse bias is not a concern for
this study.
All construct-related items were included in an exploratory factor analysis with principal components analysis and Varimax
rotation; the factors aligned well with the expected constructs of interest, yielding five dominant factors (need for uniqueness,
involvement, body size, fit satisfaction with upper body areas of RTW apparel, and fit satisfaction with lower body areas of
RTW apparel). The reliability of each factor was then examined by calculating the Cronbachs alpha statistic; the Cronbachs
alpha values ranged from .79 to .93, suggesting acceptable levels of internal consistency (Nunnally 1978). Discriminant
validity was assessed using the intertrait correlations. The Cronbachs alpha of each construct was compared with the squared
intertrait correlations of that construct and other constructs. The Cronbachs alphas exceeded the squared values of all
intertrait correlations, indicating discriminant validity.
DATA ANALYSIS AND RESULTS
Regression analysis was performed for attitude toward customized apparel (dependent variable) and need for uniqueness,
apparel involvement, fit satisfaction with upper body areas of RTW apparel, fit satisfaction with lower body areas of RTW
apparel, and body size (independent variables). Hypothesis H1 posited that consumers need for uniqueness is positively
associated with attitude towards customized apparel. The results support H1, standardized beta coefficient = .272, t-value =
7.516, p value < .001. Hypothesis H2 predicted that apparel involvement is positively associated with attitude towards
customized apparel. The results support H2, standardized beta coefficient = .295, t-value = 7.938, p value < .001.
Hypothesis H3 posited that consumers fit satisfaction with upper body areas of RTW apparel would be negatively associated
with attitude towards customized apparel. The results do not support H3, standardized beta coefficient = -.028, t-value = .732, p value > .05. Hypothesis H4 predicted that consumers fit satisfaction with lower body areas of RTW apparel would be
negatively associated with attitude towards customized apparel. The results do not support H4, standardized beta coefficient
= -.007, t-value = -.189, p value > .05. Finally, hypothesis H5 posited that body size is positively associated with attitudes
toward customized apparel. The results support H5, standardized beta coefficient = .074, t-value = 2.184, p value < .05. The
results of the regression are shown in Figure 1. The adjusted R2 for attitude toward customized apparel was 0.248 (p value <
0.001). This indicates approximately 24.8% of the variance in attitude toward customized apparel is explained by the
independent variables of this study. This low adjusted R2 value indicates that there are other factors which influence attitude
toward customized apparel.
DISCUSSION
This study provides additional insights on customized apparel and how consumers attitudes toward customized apparel are
related to need for uniqueness, apparel involvement, and fit satisfaction with RTW apparel. More specifically, this study
provides empirical evidence for the link between need for uniqueness and attitude toward customized apparel. The higher the
need for uniqueness and apparel involvement level, the more likely the consumer will have a favorable attitude toward
37

customized apparel. The results suggest that firms should offer customization options that appeal to consumers desire for
different products, which helps fulfill their need for uniqueness. In addition, apparel retailers should consider positioning
their products based on the novel qualities.
Firms should consider offering adaptive customization to consumers, especially those with high need for uniqueness. The
adaptive features of a garment may appeal to customers who prefer original clothing. Apparel retailers should market these
types of garments to specifically highlight the unusual and special attributes. Furthermore, collaborative customization would
also appeal to consumers with high need for uniqueness. Companies should emphasize the opportunity to create one-of-akind garments to attract individuals wanting unique products.
Aside from uniqueness, companies should also consider consumers level of involvement with apparel. The results indicate
that consumers with higher levels of apparel involvement will have more favorable attitudes toward customized apparel.
Collaborative customization not only fulfills the need for uniqueness, it also offers high-involvement consumers the chance to
be part of the design process. It is likely that these individuals would enjoy the experience of co-creation, which adds
additional value to the final product (Vargo and Lusch 2004). Perhaps consumers would also feel more of a sense of
ownership when it comes to co-created garments, which further appeals to consumers with a high level of apparel
involvement. Mass customization apparel retailers should emphasize the collaborative nature of the process to attract highinvolvement consumers.
With an increase in body size, consumers must deal with apparel fit issues and selection. The results indicate that consumers
with larger body sizes are likely to have more positive attitudes toward customized apparel. If companies were to offer masscustomized apparel, plus-sized consumers would likely be interested in ordering and purchasing made-to-order garments.
Marketers should direct promotional materials of mass customization offerings toward these particular segments, namely
consumers with larger body sizes and uncommon figure types. Mass customized apparel would help consumers attain better
fit, which leads to lower return rates. An advantage for apparel manufacturers and retailers would be less selected sizes to
carry and more satisfied customers.
FIGURES
Figure 1. Results of Regression Analysis
Need for uniqueness
H1 (+): = .272**
Apparel involvement
H2 (+): = .295**
Fit satisfaction with

upper body areas of
ready-to-wear apparel
H3 (-): = -.028
Fit satisfaction with

lower body areas of
ready-to-wear apparel
H4 (-): = -.007
H5 (+): = .074*
Body size
(Body mass index)
Attitude toward
customized
apparel
*p < .05
**p < .001
REFERENCES
38
THE IMPACT OF HASSLES AND UPLIFTS ON

STRESS, EXCITEMENT AND SATISFACTION IN A RETAIL SETTING
Marion Brandstaetter, Karl-Franzens-University Graz, Austria
Thomas Foscht, Karl-Franzens-University Graz, Austria
Florian Dorner, Karl-Franzens-University Graz, Austria
Cesar Maloles, California State University East Bay, USA
ABSTRACT
Despite the insight of consumer behavior research in the early 1990s, that stress can negatively influence consumer behavior
in diverse ways, e.g., decrease the levels of planned and unplanned purchases (Park et al. 1989), stress, its determining
factors and its impact on consumer behavior has rarely been addressed. This especially holds true for so-called hassles and
uplifts that have not yet been linked to the concept of stress or to other variables in consumer behavior or retail research.
Against this background and due to the fact that previous studies were predominantly conducted on the store level (e.g.,
Machleit et al. 2005), the objectives of this research are fourfold: First, we examine the frequency, intensity and severity of
various hassles and uplifts consumers are confronted with when visiting a shopping center. Second, we analyze the impact of
these hassles and uplifts on the stress experienced in a center. Third, we investigate if the level of stress in turn affects
consumers excitement and their satisfaction with the shopping center. Fourth, we examine a potential direct effect of the
hassles and uplifts on consumers excitement and their satisfaction.
The results show that stress negatively influences consumers excitement and their satisfaction with a shopping center.
Further, the findings reveal that uplifts lower the level of stress and positively influence excitement, as well as satisfaction,
whereas hassles do not exert an impact on these variables. Therefore, future research is needed in identifying potential
hassling events and clarifying their effects.
39
INTERNATIONAL RESEARCH ON BUSINESS SUSTAINABILITY IN BUSINESS NETWORKS: CURRENT

STATUS AND FUTURE STUDIES
Carmen Padin, Vigo University, Spain
Beverly Wagner, Strathclyde University, UK
Daniel J. Petzer, North-West University, South Africa
HB Klopper, Monash University, South Africa
Nils M. Hgevold, Oslo School of Management, Norway
ABSTRACT
The aim is to describe an ongoing international research project and its research networks efforts to develop a business
sustainability index.
Business sustainability is defined as a companys or an organizations efforts to manage its impact on Earths life- and ecosystems and its whole business network.
Cases studies across countries form the basis for a grounded approach to data gathering within the research project.
Elements of business sustainability have been categorized in terms of stakeholders and sources as well as based upon the
triple bottom line approach.
Subsequently, common denominators have been extracted to provide dimensions of business sustainability.
The main contribution is to show a breakdown of economic, social and ecological categories, based upon empirical
observation. It is about companies efforts to go beyond only focusing on profitability, but to also manage its environmental,
social and broader economic impact on the marketplace and society as a whole.
Further outcomes include research propositions, derived from the empirical findings that enable future research on business
sustainability to be measured.
The findings indicate the extensiveness required to operationalise a business sustainability index.
40
SUSTAINABLE INITIATIVES: THE ANTECEDENTS OF ORGANIZATIONAL LEARNING AND

UNLEARNING
Kelly L. Weidner, Dominican University of California, USA
Cheryl C. Nakata, University of Illinois at Chicago, USA
ABSTRACT
This article examines the antecedents and drivers of organizational learning and unlearning for firms addressing initiatives
related to sustainability. This conceptual paper examines this topic through the lens of the dynamic capabilities theory, which
suggests that a firms competitive advantage resides in its resources and how the firm leverages such resources in rapidly
evolving marketplaces. The authors hypothesize that organizational learning and unlearning are separate activities with
unique internal and external drivers.
41
ETHICAL ASPECTS OF INTERNATIONAL PRODUCT SOURCING

Peter McGoldrick, Manchester Business School, United Kingdom
Verena Gruber, WU Vienna, Austria
Bodo B. Schlegelmilch, WU Vienna, Austria
Terry Newholm, Manchester Business School, United Kingdom
ABSTRACT
Country-of-origin (CoO) is a central construct in international marketing. It impacts a host of key variables, including
product preferences, willingness-to-buy as well as store preferences. However, in capturing CoO-image, extant research
has largely neglected environmental and social aspects. An increasing interest in them calls for a new conceptualization of
CoO-image. Our paper addresses this research issue by assessing the impact of environmental and social aspects on above
mentioned outcome variables based on representative US/GB samples. We capture these important and hitherto neglected
dimensions and provide academics and practitioners with a more comprehensive view of consumers responses to imported
products.
Given the increasing public awareness concerning sustainability issues, it is surprising that the well developed body of
research that focuses on CoO, has largely neglected social and environmental aspects in conceptualizing the CoO construct.
The aim of this paper is therefore to provide a new conceptualization of CoO-image. Our empirical analysis investigates the
role that social and environmental aspects, as well as development support, play in shaping CoO image and their influence
on attitudinal outcomes such as product- or store preferences and willingness to buy. The sampling frame consists of a
representative set of respondents from both the US and Great Britain. We ran a series of hierarchical multiple regressions to
evaluate the impact of the two different CoO conceptualizations on three different outcome variables: product preferences
(PP), store preferences (SP) and willingness-to-buy (WTB).
We empirically demonstrate that these dimensions do influence CoO image and subsequently consumers responses to
imported products. Thus they need to be taken into account by MNCs when positioning foreign-made products and by
academics in the field of CoO when conceptualizing this construct. Furthermore, the development and testing of a
development support construct draws attention to the fact that consumer attitudes towards foreign countries are not always
negative, as implied by concepts such as ethnocentrism and animosity.

42
THE INFLEUNCE OF BRAND VALUE, BRAND TRUST AND BRAND ATTITUDE ON BRAND ATTACHMENT
Nthabeleng Rammile, University of the Free State, South Africa
INTRODUCTION
Being able to build a relationship with a customer through the brand is a vital necessity for marketing. Established relationships
with customers carry benefits for companies such as increased profitability. Previous studies have acknowledged the role brand
attachment, brand trust and brand attitude play in the formation of committed behaviour, without observing how brand value,
brand trust and brand attitude impact the formation of brand attachment. A further challenge is that the few studies which have
attempted to observe the formation of brand attachment have focused on products and omitted the service industry (Grisaffe
and Nguyen 2010). The studies which observed the formation of brand attachment focused on aspects such as trust and
satisfaction (Esch et al. 2006; Tsai 2011) without a deeper theoretical clarification of how such aspects influence brand
attachment. To date, the influence of brand value, brand trust and brand attitude on the formation of brand attachment in the
service industry is limited. This paper argues that the observation of the formation of brand attachment is critical firstly because
of the role brand attachment plays in the formation of the relationship with the brand and secondly because this study adds to
the understanding of the determinants of the brand attachment construct. The objective of this study is therefore to analyse the
influence of brand value, brand trust and brand attitude on brand attachment.
MODEL DEVELOPMENT
Brand attachment originates from the interpersonal attachment theory (Bowlby 1982). According to the attachment theory
human beings have an innate psychobiological system (the attachment behavioural system which enables them to form bonded
relationships with significant others). According to the attachment theory, human beings have a strong emotional need to attach
to significant others from infancy. Researchers have demonstrated that human beings can also be emotionally attached to
brands. Although brand attachment is still a new concept there is evidence which indicate that just as people attach more to
individuals they love and respect, consumers attach more to brands they love and respect (Park et al. 2010). Love and respect
for the brand, tend to be informed by the brands ability to deliver on the promise and enabling consumers to express their
emotions (such as affection and excitement) and how they feel about themselves. Such brands become symbolic attachment
figures. From the review of literature it is clear that preferred and meaningful relationships are those which have the element
of attachment (Park et al. 2006). Given the role of brand attachment in the formation of the relationship with a brand, it is
critical to observe its determinants so that its formation can be actualised. Thus it is argued that value, trust and attitude are
one of the role players in the development of attachment to the brand, without which the brand cannot be loved nor respected.
Brand Attitude
Attitudes are learned predispositions which guide favourable or unfavourable responses towards brands (Wilkie 1994). Since
attitudes are learned, attitudes are informed by information and experience (Wilkie 1994). Attitudes resulting from exposure to
information and experience with the brand, also influence consumers judgments towards brands (Meyer 2008). It can therefore
be expected that as consumers gain positive information and good experience with the brand, theyll develop positive attitudes
towards the brand and hence judge the brand fovourably. Consumer judgments are thus critical in brand attitude formation.
According to Park et al. (2010) a brand is further judged on the bases of how it reflects self or how instrumental the brand is to
the consumer. In other words, consumers attach more to brands which represent who they are or those which are meaningful
(brands enabling consumers to reach their goals or enabling consumers to express their personal concerns). Since attitudes
govern judgments, it can be expected that consumers will have a positive attitude towards a brand they judge to be representing
who they are or is meaningful. Since consumers attach more to brands they feel represent who they are or are meaningful, it
can be assumed that attitude has a positive relationship with attachment.
H1: Brand attitude has a positive influence on brand attachment
Brand Trust
Trust occurs when consumers are confident that their desires will be met by another (brand in this instance), instead of fearing
that the opposite will happen (Delgado-Ballester and Munuere-Aleman 2005). When consumers trust a brand, it means that
they have a high expectation and belief that a brand will yield positive outcomes (Kim et al. 2008). It has also been noted that
trust develops over time as the consumer experiences the brand through interacting with the brand. Trust is therefore the result
43
of what the consumer has experienced with the brand over time. Further on, trust empowers the brand to be a relational partner
(Delgado-Ballester and Munuere-Aleman 2005) with ability, benevolence and integrity (Suh and Han 2002). Trust thus adds
value to the exchange relationships. Since attachment is a relationship component, it can be argued that consumers will be more
attached to brands they trust.
H2: Brand trust has a positive influence on brand attachment
Researchers have noted that when consumers have a belief that an object (in this case the object being the brand) will fulfill
promises made, act ethically and do good to the consumer, the relationship between the two parties will be based on trust. It
can therefore be expected that consumers will judge such an object positively and hence develop positive attitudes towards
such an object (Suh and Han 2002). Since beliefs are one of the key characteristics of trust, it can be anticipated that trust in a
brand will influence attitude towards the brand positively.
H3: Brand trust has a positive influence on brand attitude
Brand Value
Brand value occurs when a consumer perceives that the benefits obtained from a brand are higher than the costs of acquiring
such a brand. The experience gained from consuming the benefits of a brand will impact perceived costs of the brand (Chen
and Tsai 2008). If customers perceive that such an experience provided them with good value, they can be expected to judge
such a brand positively and hence develop a positive attitude towards the brand in concern.
H4: Brand value has a positive influence on brand attitude
If customers judge a service encounter positively because it gave them good value, it would mean that a trust requirement of
fulfilling expectations and having good intentions for the other partner has been met. It can therefore be expected that brand
value will have a positive influence on brand trust.
H5: Brand value has a positive influence on brand trust
Perceived value has been found to positively influence customers willingness to continue a relationship with the seller (Hyun
2009). This observation can be linked to the principle of attachment, in that in human attachment relationships, people gravitate
towards those who value them. For example, in psychology it has been demonstrated that a baby will gravitate towards attaching
with the mother because the mother cares for and values the baby (Bowlby 1982). Because of the similarities between
interpersonal attachment and brand attachment, it can be expected that consumers will gravitate towards brands which value
them. It is thus reasoned that when consumers are valued they will be more willing to attach to the brand.
H6: Brand value has a positive influence on brand attachment
METHOD
Data Collection
The target population consisted of 560 students from the University of the Free State who use cellphones and non-probability
sampling was used. The first section of the questionnaire measured the demographic information, and the second section
measured the constructs of brand value, brand trust, brand attitude and brand attachment as discussed in literature. A five-point
Likert-type scale was used, where 1 = strongly disagree, 2 = disagree, 3 = undecided, 4 = agree and 5 = strongly agree. The
scales used to measure the constructs were adopted from previous studies. The females comprised 59.7% of the sample while
the males comprised 40.3% of the sample.
Data Analysis and Results
A confirmatory factor analysis (CFA) (using AMOS 17.0) based on the measurement scales showed acceptable fit. The values
for fit indices for the CFA were: 2/df = 2,215 CFI = 0.987 and RMSEA = 0.047 which are below the recommended cut-off
values for acceptable fit (Hair et al. (2006). The indicator variables loaded significantly onto the intended constructs and were
above the recommended 0.7 (the ideal). The construct reliability value for every construct was well above 0.7 and the average
extracted variances of all constructs were above 0.5, which suggests adequate convergence (Hair et al., 2006). Thus, the
44
criterion for discriminant validity in the measurement model was met since the variance-extracted estimate for each construct
was greater than the squared correlations associated with the construct. The statistics suggest that the component measures are
reliable and have convergent and discriminant validity. The values for the structural model were S-B2/df = 2.297; CFI = 0.983
and RMSEA = 0.057. which are also below the recommended cut-off values for acceptable fit (Hair et al., 2006). The
standardized path coefficients of the proposed research model are shown in Table 1.
DISCUSSION
The results show the six hypotheses of the study are supported (see table 1). Brand value has the strongest positive influence
on brand attachment, followed by brand attitude and brand trust which has the least positive influence on brand attachment.
This suggests that managers in companies need to put a strong emphasis on value added to consumers. Advertising strategy
should put more emphasis on whats in the deal for the consumer. As this is achieved the company brand will earn trust from
the clients and emulate positive attitude towards the brand which will all strengthen the emotional relationship with the company
in the form of brand attachment. As consumers become more attached to the brand, a company has more opportunity to reap
financial rewards (Grisaffe and Nguyen 2010). Both brand value and brand trust had a positive significant influence on brand
attitude with brand value having a stronger positive influence. It means that the more consumers trust and feel valued by the
brand is the more they will be positive about the brand. Finally brand value had a positive significant influence on brand trust.
The presence of trust in the exchange relationship will ensure that consumers have a personal connection with the brand and
that they continue to rely on the brand because they know that the rand will deliver on its promises.
LIMITATIONS OF THE STUDY
Emotional memory and socialisation which play a critical role in influencing attachment behaviours were not observed. It is
suggested that these should be considered for future research. It is also suggested that future studies should focus on crosscultural comparison. This study was done in a developing world; it would be useful if such findings can be compared to a
developed world.
CONCLUSION
Brand value is a key driver of brand attachment. It was also confirmed that brand value is also a strong driver of brand attitude
and brand trust. Previous studies have acknowledged the positive influence of brand value, brand trust, brand attitude and brand
attachment on purchase intentions, commitment and loyalty. The unique contribution of this study is that it observes how
attachment towards the brand is influenced by brand value, brand trust and brand attitude. The results are useful for mangers
who need to strengthen the position of their brands in the market place.
TABLES
Table 1: Analysis Results of the Research Model
Determinant
Hypothesis
Brand attachment
H1: BAt BA
H2: BT BA
H6: BV BA
H3: BT BAt
H4: BV BAt
H5: BV BT
Brand attitude
Brand trust
***P< 0.001, **P< 0.05
Standardized path
coefficient
.358
.193
.369
.225
.346
.607
***
**
***
***
***
***
REFERENCES
Bowlby, J. (1982). Attachment and loss: vol. 3. New York: Basic Books.
45
Variance explained of
dependent variable
.458
.479
.388
Chen, C-F and Tsai, M-H. (2008). Perceived value, satisfaction, and loyalty of TV travel product shopping: involvement as a
moderator, Tourism Management, 29, 1166-1171.
Delgado-Ballester, E. and Munuere-Aleman, F. (2005). Does brand trust matter to brand equity. Journal of Product and Brand
Management, 14 (3), 187-196.
Esch, F-R., Langner, T., Schmitt.B., and Geus Patrick, G. (2006). Are brands forever? How brand knowledge and relationships
affect current and future purchases. Journal of Product and Brand Management, 15 (2), 98-105.
Grisaffe, D. and Nguyen, J. (2010). Antecedents of emotional attachment to brands. Journal of Business Research, 64, 10521059.
Hair, J.F., Black, W.C., Babin, B.J., Anderson, R.E. and Tatham, R.L. (2006). Multivariate data analysis, Pearson PrenticeHall, New Jersey.
Hyun, S. (2009). Creating a model of customer equity for chain restaurant brand formation. Hospitality Management, 28, 529539.
Kim, K-H., Kim K-S., Kim D-Y., Kim J-H. and Kang S-H. (2008). Brand Equity in hospital marketing. Journal of Business
Research, 61, 75-82.
Meyer, T. (2008). Experience-based aspects of shopping attitudes: the roles of norms and loyalty. Journal of Retailing and
Consumer services, 15, 324-333.
Park, C. MacInnis, D., Priester, J., Eisingerich, A. and Iacobucci, D. (2010). Brand Attachment and Brand Attitude strength:
Conceptual and Empirical differentiation of two critical brand equity drivers. Journal of Marketing, 74, 1-17.
Park, C. MacInnis, D. and Priester, J. (2006). Beyond Attitudes: Attachment and Consumer Behaviour. Seoul Journal of
Busniess, 12 (2), 3-35.
Suh, B. and Han, I. (2002). Effect of trust on customer acceptance of internet banking. Electronic Commecrce Research and
Applications, 1, 247-263.
Tsai, S. (2011). Fostering international brand loyalty through committed and attached relationships. International Business
Review, 20, 521-534.
Wilkie, W. 1994. Consumer Behaviour, third ed. Wiley, NY.
46
CONTROVERSIAL USE OF RELIGIOUS SYMBOLS IN ADVERTISING

Justina Gineikien, Vilnius University, Lithuania
Ignas Zimaitis, Vilnius University, Lithuania
Sigitas Urbonaviius, Vilnius University, Lithuania
INTRODUCTION
In the field of consumer research, religiosity is found to result in significant consumer behavior differences between those of
different religious affiliations or levels of religiosity (e.g. Hirschman 1981, 1982, 1983; LaBarbera and Gurhan 1997; Essoo
and Dibb 2004). While where there is a number of definitions of religiosity (for measurement issues see McDaniel and
Burnett 1990; Clarke and Byrne 1993; Holdcroft 2006; Mohklis 2009), the current study refers to the definition provided by
McDaniel and Burnett (1990), who see religiosity as a belief in God accompanied by a commitment to follow principles
believed to be set forth by God (p. 103). We follow the theoretical approach proposed by Allport and Ross (1967, p. 434)
who identified two basic dimensions of religiosity: extrinsic (utilitarian outlook) and intrinsic (internalization of faith).
Current research focuses the attention on the religious symbols' effects that are used as cues in marketing communication.
Findings from this research field are mixed, and there is no firm agreement in what cases religiosity has a positive versus
negative impact. For example, religiosity is found to be related to the evaluation of controversial products advertising such as
gender/sex-related, health care and addictive products (Kim et al. 2004; Fam, Waller and Erdogan 2004). Several authors
proposed that evangelicals are relatively more positive toward advertising compared to the general public (LaBarbera 1987;
McDaniel and Burnett 1991). Whereas Dotson, Hyatt (2000) found that low-involvement and highly dogmatic consumers
have a less favorable attitude towards brands and lower purchase intention when exposed to an advertisement with the cross.
The study results were supported by Taylor et. al (2010): despite the author's suggestion that the Christian fish symbol usage
in advertising increases the purchase intention in highly religious evangelists, the second experiment showed a backlash
effect on purchase intentions. At the same point Henley et al. (2009) found that relevant Christian cross and product linkage
generates a positive attitude towards the advertisements and irrelevance causes a negative effect.
Notwithstanding the contradictory findings of the above mentioned studies, the religiosity effects have not been examined
when advertising uses religious symbols in a controversial way. Religious symbols in advertising may be targeted not only
towards religious consumers, but also towards people who exhibit materialism (defined by Belk (1984) as "the importance a
consumer attaches to worldly possessions" (p. 291)) in order to evoke positive brand associations. Thus, practitioners result in
advertising that uses religious symbols under controversy. For example, beer advertisement in Lithuania featured wooden
sculpture of Jesus scratching a vinyl record. Exposure to such controversial religious cues may have effects on the attitude
towards advertising, brand evaluation and willingness to buy. Such advertising may evoke positive emotions among nonreligious and materialistic consumers, but at the same time generate negative public resonance and offend feelings of
religious consumers. Moreover, we assume that among different brands these effects will be expressed differently. Brands
that share moral values will be affected less than brands from such sectors as gambling, tobacco or alcohol. To our
knowledge none of the research until now has tried to explore the effects of controversial religious cues in advertising. This
leads us to the assumption that there might be a gap both in theory and in practice. Understanding of controversial religious
advertising effects may shed additional light on mixed findings from previous advertising research; as well provide some
guidance for marketers on the relevance of controversial religiosity cues in advertising. The purpose of this paper is to
examine how religiosity influences advertising, brand evaluation and purchase intent in the case of when consumers are
exposed to controversial religious communication. For this, we compare attitudes toward controversial religious
advertisements and the relationship with a consumers' religiosity and acquisition centrality (materialism) in the case of two
brand categories: brands that share moral standards and brands that do not share moral standards.
The religious consumers see faith in their life as integrated, and directed by the master value of religion (Allport 1967).
Despite that no study until now has researched controversial religious symbols in advertising; in line with the findings of
Dotson, Hyatt (2000), Henley et al. (2009), Taylor et. al (2010), it can be argued that level of religiosity can have a negative
relation to the attitude towards the advertisements with controversial religious symbols. However, it should be included that
the negative relationship will be weaker with brands that expose the values that are related to high moral standards.
H1: Religiosity will be negatively related to controversial religious advertising evaluation
Richins (1987) describes materialism as the idea that goods are a means to happiness; that satisfaction in life is not achieved
by religious contemplation or social interaction, or a simple life, but by possession and interaction with goods (p. 352).
47
Materialism conflicts with collective-oriented values, such as family values and religious values (Burroughs and Rindfleisch
2002) and this characteristic should be positively related to religious controversy. Thus we propose that:
H2: Materialism will be positively related to controversial religious advertising evaluation
Literature review has revealed that religiosity and the attitudes towards the brands depend on the specific characteristics of
the products. Researchers claim the religiosity to be, in general, negatively related to the attitudes towards the brand
(Hirschman 1981; Belk, Wallendorf and Sherry 1989). More specifically, religious consumers tend to evaluate the brands in
terms of their moral aspects. To the contrary, materialism relates to acquisition centrality. Belk (1988) asserted that a higher
level of materialism with an inevitable loss of a sense of community might make individuals less sensitive to behaviors that
might affect others negatively. However, Vitell et al. (2001) found that materialism was not related to ethical judgment
among consumers in the United States. Thus we posit the following:
H3: Religiosity will be negatively related to brand social appropriateness evaluation
H4: Materialism will be unrelated to brand social appropriateness evaluation
Stillman et al. (2012) undertook the study which results showed that more religious consumers tend to consume
conspicuously and spirituality also has a negative impact on seeking for products. LaBarbera and Gurhan (1997) concluded
that income and material wealth are valued less highly by more-religious consumers than by less-religious consumers. Under
these circumstances it is presumed that religiosity in general has a negative effect on the intention to buy any products.
Alternatively, materialism is highly related to the acquisition of possessions (Wong and Ahuvia 1995). Thus, materialism can
better explain the intention to buy products in general and, more specifically, these types of products that are not supported
by high moral characteristics. Therefore, our study will test the following hypotheses:
H5: Religiosity will be negatively related to willingness to buy brands
H6: Materialism will be positively related to willingness to buy brands
METHODOLOGY
The data for this study was collected in Lithuania, by non-random convenience sampling through an Internet questionnaire.
227 respondents participated in the survey. The sample consisted of 67% of women and 33% of men. The biggest portion of
the respondents belongs to the 18-29 age group (68.3%). 13.2% of respondents who participated in the study were aged from
42 to 53. Almost the same number of consumers (11.9%) belongs to the 30-41 year age group. The smallest age groups in the
sample were 65 years and older (3.1%) and 54-65 age group (2.6%). The respondents of this study mostly claimed that they
belonged to the Roman Catholic Church (74.4%). According to the results of the population census, undertaken in Lithuania
in 2011, 77.3% of the population see themselves as belonging to the Roman Catholic Church (Department of Statistics of the
Republic of Lithuania 2011).
The questionnaire was developed mainly by using scales that had been tested in some earlier research: religiosity (Hoge
1972), materialism (Richins 1987), modified attitude towards the brand and intention to buy scales (Dotson and Hyatt 2000),
and modified attitudes towards the advertisement scale, where the moral, objectionable and manipulative aspects were
implemented in the study (Widing, Hoverstad, Coulter, and Brown 1991). Two actual print advertisements were used as the
examples of the advertisements with controversial religious symbols. The unifying factor of these advertisements was the fact
that during their appearance in public, they attracted the negative attention of media and society and were widely discussed in
the sense of the breaking of moral standards because of the religious symbols used in the advertising. One advertisement
featured beer and demonstrated a wooden sculpture of Jesus scratching a vinyl record. Another advertisement for a charitable
organization depicted Jesus wearing skates and saying, Its time for do-gooders to rest.
The hypotheses were tested using structural equation modeling (LISREL) (Jreskog and Srbom 2007). The convergent
validity of all constructs was established by examining the t-values. Discriminant validity was tested in evaluating measures
against other constructs of interest. As suggested by Jreskog and Srbom (1988), several items that had large standardized
residuals with other construct items were eliminated from further analysis. Composite reliabilities of measurement models
ranged from .82 to .94, and were above the .70 level suggested by Kline (2011). Average variance extracted (AVE) scores
ranged from .53 to .80, all above the .50 level suggested by Kline (2011). Structural models achieved a satisfactory fit:
48
1.
2.
Model 1 (unmoral brand). ( = 212, df = 94, RMSEA = 0.075, NNFI = 0.95, CFI = 0.96, SRMR = 0.057)
Model 2 (moral brand). ( = 219, df = 109, RMSEA = 0.067, NNFI = 0.95, CFI = 0.96, SRMR = 0.053).
The results of the structural equation modeling analysis and the significant standardized path coefficients are shown in bold
in Figure 1 (case with brand that does not share moral standards) and Figure 2 (case with brand that shares moral standards).
Using structural equation analysis, evidence has been provided that religiosity is an important predictor for the evaluation of
controversial religious advertising. Religiosity is negatively related to such an advertising evaluation. Thus hypothesis 1 is
confirmed. This is in line with previous study findings undertaken by Henley et al. (2009), who claimed that irrelevant usage
of religious symbols in advertising causes a negative effect on evaluating the advertisements. Materialism has no effect under
these circumstances and hypothesis 2 is rejected. Further analysis revealed the negative relationship between religiosity and
the brand social appropriateness evaluation, and hypothesis 3 was confirmed, also supporting the findings made by
Hirschman (1981); Belk, Wallendorf and Sherry (1989). In the case of materialism, the relationship was statistically
insignificant and materialism does not overlap with the brand social appropriateness evaluation, thus hypothesis 4 was
confirmed.
The findings indicate that religiosity has no significant relationship with the intention to buy both types of brands, and
hypothesis 5 is rejected. On the contrary, materialism is an important variable that influences purchasing behavior. A strong
positive relationship among the intention to buy brands that do not share moral standards is observed. However no
relationship among the willingness to buy a service of the brands that share moral standards was found. Thus, hypothesis 6 is
partly confirmed. The reasons for such results may lie in the characteristics of materialistic consumers: envy, non-generosity,
and possessiveness (Belk 1985). According to Belk (1984), materialistic consumers have a negative attitude towards charity
and are unwilling to share possessions with others.
This study showed that religiosity better than materialism explains and predicts the attitude towards advertisements with
controversial religious symbols. Religious consumers are also more critical against the brands, despite a brands level of
morality.
Little is known about the effects of controversial religious cues in advertising. Our research fills in an important gap in our
knowledge and makes a contribution extending previous research findings by exploring negative effects of the use of
controversial religious cues in advertising. The paper contributes to a better understanding of the literature on advertising
theory. First, the theory is broadened in the sense of exploring the effects of the controversial use of religious symbols in
advertising theory. The paper extends the theory by demonstrating the relationship and importance of new antecedents in
advertising research. Second, managerial implications are provided for practitioners that religious cues in advertising must be
used with caution. The implementation of controversial religious symbols in advertising should be considered on the profiles
of the consumers who are the target group of the company and its products. More specifically, companies should be aware of
their customer's profile in case of their religiosity level. Controversial religious symbols should not be implemented in the
advertising campaigns if the consumers are more religious or the majority of population is religious.
Several limitations of our paper must be outlined. First, we had no possibility to explore the direct effect of negative publicity
of researched controversial advertisements on consumers' attitudes, as those advertisements were aired in 2006 and 2010, and
our survey conducted after respectively 5 and 1 years. This limitation can be overcome by conducting experimental studies
with the same advertisements. Second, despite the fact that we had adults sample, our sample more thoroughly represents
younger consumers, and this may bias the study results. Third, we researched only one religiously homogeneous country and
cannot be sure if these findings will generalize under different conditions.
Future studies should explore the other related antecedents of the evaluation of advertising with religious symbols, e.g.
individualism or atheism. Cross-cultural studies may ensure the validation of present study results across different contexts,
countries, and religions. New insights may be brought by using longitudinal and experimental design studies.
49
FIGURES
Figure 1
Figure 2
Note: standardized estimates shown, t-values in brackets.

REFERENCES
50
ROLE OF ANTI-BRAND WEBSITES ON BRAND IMAGE

Mana Farshid, Lulea University of Technology, Sweden
Leila Ashrafi, Lulea University of Technology, Sweden
ABSTRACT
Since customers are facilitated through the internet and many-to-many communication, they can easily and conveniently share
their opinions with others. Anti-brand websites operate as forums for high-level empowered electronic word-of-mouth
exchanges. This study has investigated the role of anti-brand websites on brand image. The scripted data of focus group
discussions have been analyzed using Leximancer, a textual analysis tool, because it can recognize themes and concepts that
show customers perspectives and determine the core concepts that are most highlighted or criticized by complainers and
activists.
INTODUCTION
The internet has altered the balance of power between customers and companies, as well as the methods of corporate branding,
and precipitated radical marketing-driven changes to the structures and cultures of successful businesses (Pitta & Fowler, 2005;
Travis, 2001). Customers are using the internet as a tool to achieve a louder voice. Pitt et al. (2002) has argued that the easy
access of consumers to accurate, updated, and unbiased information on the internet gives them the ability to communicate with
other consumers and other firms in the public domain. They can demonstrate their dissatisfaction or anger and reach larger
numbers of people to express themselves (Pitt et al., 2002).
The volume of customers ideas and the information they provide about their experiences with a brand are increasing, which
makes it possible for other customers to base decisions on this information (Karakaya & Barnes, 2010). Consumers can spread
their message and share it with other consumers, at both individual and community levels, and they have begun to use antibrand websites as weapons of empowerment (Kuchuk, 2008) People with shared ideas and bad experiences or feelings
regarding a brand can gather on an anti-brand website and talk about what has happened to them; dissatisfied customers can
complain and discuss their bad experience with a brand. If customers complain and show their dissatisfaction with products,
the resulting negative word-of-mouth can affects companies reputation or sales if the issue in question remains unsolved
(Breitsohl et al., 2010).
Brands and companies can be negatively affected by such complaints in different ways, from losing their positive image or
reputation among customers to decreased sales and loss of market share. Brands can be targeted by anti-brand websites that
threaten their image and reputation. This obviously can be a serious issue for managers who may not be well prepared to
respond (Kay, 2006). The aim of this research is to investigate the role of anti-brand websites on brand image from customers
points of view, determine how the role of anti-brand websites can be characterized, and examine how brand image can be
deeply disposed by these websites.
ANTI-BRAND WEBSITE
The internet has accelerated and developed the means of communication among people; one of the primary vehicles that the
internet provides is forums. According to Bailey (2004), these forums provide opportunities for customers to express their
anger and complaints through the website and facilitate customer-to-customer communication. For example, activists can build
stronger movements if they use the internet as a tool to broadcast their message and communicate/interact with large numbers
of people with the same idea. Anti-brand sites constitute a higher level source of empowerment for consumers (Kucuk &
Krishnamurthy, 2007).
Online activities in terms of protest and boycott take different forms, such as cyber-attacks or large email campaigns, and antibrand sites are one of the most improved and biggest sources of online protests that consumers have built using higher level
sources of empowerment (Vegh, 2003; Kucuk, 2008; Kucuk & Krishnamurthy, 2007). The fundamental goal of anti-brand sites
is to criticize the market and social position of a particular targeted brand and to introduce a negative online identity and brand
value through negative language and easy-to-remember domains (Kucuk & Krishnamurthy, 2007; Krishnamurthy & Kucuk,
2009; Kay, 2006; Baily, 2004).
51
Complaint forums provide a platform through which customers can express their experiences and comments, either privately
or publicly, to share information with other customers. Customers also use these forums to find a solution for what has happened
to them. Anti-brand websites are intended to create a negative identity for a brand; customers not only share their purchasing
failures, but also their concerns about extended issues, such as environmental, cultural, legal, and political issues
(Krishnamurthy & Kucuk, 2009).
The speech and communication forms used on anti-brand websites can be categorized into market, ideological, and transactional
speech. Market speech attacks the brand by using a specialist in marketing, and ideological attacks criticize personal or national
issues. Transactional speech targets those who did not succeed in transactions. Among these three forms of speech, market
speech has the biggest effect on brand value (Krishnamurthy & Kucuk, 2009).
From the perspective of those who are engaging with these websites and their main purpose, Kucuk (2008) categorized the
anti-brand sites into four types: experts, symbolic haters, complainers, and opportunists. Expert anti-brand sites main focus is
on market information and analyses. They generally take stands against consumerism and the companies that market around
this culture. For example, McCruelty discusses McDonalds damaging operations in rainforests and issues related to the
ethical treatment of animals, and Walmart-blows.com discusses employment discrimination (Kay, 2006; Kucuk, 2008).
Brands with high brand awareness are targeted by symbolic haters who use negative word-of-mouth to sully a brands
achievements. For example, people who hate Starbucks offer comments that are not as reliable as those of experts because the
haters comments are based mainly on personal tastes (Kucuk, 2008). These complainers express anger and opposition mainly
relevant to the brands products and services. Opportunists use media activities and information to find fake news or rumors
about a brand to call attention to specific websites (Kucuk, 2008).
Many researchers have investigated customer complaints and customer activities such as boycotts and protests (Sen et al.,
2001). In addition, negative word-of-mouth (WOM) and its effects on consumers opinions and their behavior have been the
topic of several studies (Bickart & Schindler, 2001). OReilly and Marx (2011) showed that in the online world strangers
reviews and comments are much more acceptable among people who would pay less attention to them in real-world
circumstances.
BRAND IMAGE
Kucuk (2008) suggested that anti-brand websites, as a type of online WOM, have significant influence on brand identity and
image; they can affect customer buying behavior and buying decisions directly or indirectly and they can change the market
share of a brand. Consequently, these websites play a noticeable and undeniable role with regard to different aspects of a brand.
Brand image is one of these aspects; it describes customers perceptions, thoughts, and feelings about a brand, which reflects
brand associations and creates uniqueness in customers memory (Keller, 1993, Webster & Keller, 2004).
Brand image is an influential factor in profits and long-term cash flow of a company. It affects how ready customers will be to
pay first prices, their buying decisions, and the companys ability to maintain competitiveness (Yoo & Donthu, 2001).
Therefore, analyzing and investigating the effect of anti-brand websites and brand image are interesting areas of research that
result in managerial suggestions for the brands.
RESEARCH METHODOLOGY
To investigate the role of anti-brand websites on brand image, researchers should gather as much detail as possible to develop
a clear understanding of the problem; in this case, a qualitative research approach has been chosen (Saunders & Lewis, 2007).
To determine respondents interests, focus group interviews are preferred as the research strategy. The advantage of this strategy
is the opportunity to interact with respondents, which yields a better understanding of their answers and deeper insight into the
concepts via respondent gestures and body language. Two focus groups with a total of 14 participants were conducted in
Sweden. The first group included 6 active soft drink consumers and the other contained 8 electronic device users (e.g., personal
computer, smart phone, music player).
For the purpose of this research, the two strong brands of Coca-Cola and Apple were chosen based on the pilot study because
strong brands can increase the possibility of becoming a target of attack. If strong brands face difficulties, they can become a
subject of criticism, customer attacks, or anti-brand campaigns (Kay, 2006; Kuchuk, 2008).
52
Moreover, anti-brand websites like killercoke.org and ihateapple.net have the characteristics of using visual expression,
memorable domain names, and critical language to create a negative online identity for the targeted brand (Krishnamurthy &
Kucuk, 2009).
Participants were invited to take part in groups and asked to express their general views and ideas about the brand. This allows
for in-depth discussion of brand image, products, and activities (Steward et al., 2007). After an illustration of anti-brand
websites, the discussion continued based on participants perceptions and views about these websites. Finally, participants were
free to describe their impressions from the anti-brand sites and whether they believe these sites can affect customers
perceptions of brands. To determine the role of the anti-brand website on brand image, we used computer-aided content analysis
to study attributes of scripted focus group discussions. As Kassarjian (1977) mentioned, not surprisingly the exchange of
communication and values in the marketplace takes the form of the written or spoken word or images and symbols. Content
analysis is a research technique used to describe and quantify elements of communication in a systematic and objective manner
(Kassarjian, 1977).
Leximancer is a data-mining tool modeled on content analysis that provides a platform for the qualitative interpretation of
concepts (Smith, 2003; Smith & Humphreys, 2006). This software uses a new method to transform lexical co-occurrence data
that emerge from the text into semantic patterns or relational analysis of themes and concepts (Smith & Humphreys, 2006;
Martin & Rice, 2007; Rooney, 2005). Based on Smith and Humphreys (2006) discussion, Leximancer has stability from its
coder reliability and reproducibility given the same system settings (Rooney et al., 2011; Smith & Humphreys, 2006).
Results
By entering all the textual data we drew from the discussions with participants in the two focus groups, we aimed to identify
specific themes and concepts that emerged from these conversations to explain influential attributes of anti-brand websites on
brand image. The resulting concept maps from the Leximancer analysis are provided in Figures 1 and 2 for each focus group.
In the first focus group discussing Coca-Cola and the anti-brand website killercoke.org, participants mostly mentioned concepts
such as people and company. Regarding this dominant concept, participants said that people around the world buy this
product every day so they will suggest this anti-brand website to their friends to make them aware that they might be able to
trust the website. The group had varying ambiguous reactions to reading the article on the site that talked negatively about
Coca-Cola. They said they might read the article if it is grounded scientifically, and they will share the article to make their
friends aware of it. Some mentioned that they would actively participate in an online boycott if it were organized well.
Participants believed that Coca-Cola is a multinational company with a monopolistic and imperialistic strategy; specifically,
they believed the dominant sponsorship of Coca-Cola is embarrassing, saying everywhere you look you see Coca-Cola! They
said this brand should use its money to make changes regarding its previous bad reputation and image. The conversation also
touched on the amount of sugar people take in from this drink and how bad such sugar consumption can be for health. Indeed,
health was one of the important issues that participants seemed to mention based on the concept map. Many conversations
addressed environmental issues created by Coca-Cola and raised in the website, which made participants think about these
issues. They continued conversation around the plastic bottles used by this brand and its consumers. The most important
concept was taste; some participants supposed that the popularity of Coca-Cola, particularly for children, derives from its
taste and people consume it because they dont have so many choices when they eat outside!
The second focus group discussion was about Apple and the anti-brand website of ihateapple.net. The term product was the
prominent concept and participants had discussions around Apples different products. They believed that the quality of
products is high but also that they are expensive and high priced. They also mentioned that the company and the brand
are different from the product, which means Apples marketing strategy entices people to buy its products increasingly.
Participants talked about the computer and compared Apple with other brands. They said they did not get that much time
to learn how to work the computer or iPhone. Some discussions involved whether participants would recommend Apple
products to their friends.
Participants mentioned their ambiguity about the content of the website and also their belief that it is natural for such a big
brand to be criticized: It is normal to have people against the product! Furthermore, it was important for the participants to
identify the people engaging with the anti-brand website, and they criticized the arguments for not having logical and technical
bases. Although people look to solve their problems by reviewing blogs, videos, and news about the brand, participants thought
the website looked awkward and useless.
53
The resulting maps in Figures 1 and 2 indicate that quite different conversations emerged for each brand and the anti-brand
website; however, common themes were present. In the two analysis maps shown in Figures 1 and 2, a common theme and
concept emerged regarding the ambiguity of participants toward the anti-brand website. This indicates that it is important for
participants to trust the website before they follow or share the content with their friends. Assuming that consumers trust the
anti-brand websites, it is crucial for managers to be aware that their brand image can be affected in this regard. Managers can
engage, collect, and follow the opinion of people who are not invested in their brand. This can help them find a way to satisfy
current customers and attract new ones by revising their product and brand strategy. Based on the discussions and concept
maps, some issues were not familiar to some participants, but the anti-brand website made them aware of these issues. They
thought about their previous experiences and future purchases and some were even motivated to engage with the negative wordof-mouth. Managers should consider that people are able to share content with their friends, which will inevitably result in
some negative brand image.
CONCLUSION
To understand the role of anti-brand websites and their effect on brand image, this research has analyzed focus group
discussions using content analysis. Accordingly, through in-depth analysis of anti-brand websites and peoples perceptions and
by determining the core concepts that are more frequently highlighted or criticized by complainers and activists, marketers can
develop different strategies for saving the brand image. Due to the exploratory nature of this research, this study is not without
limitations. Only two anti-brand websites were analyzed in this case, which does not allow for appropriate reliability and
validity testing for this study. This may lead to choosing other anti-brand websites for the purpose of analyzing the concepts of
other brands.
Because of the qualitative nature of this research, the interpretation of concept maps is largely subjective, which introduces the
possibility of finding different interpretations and implications in analyzing the Leximancer maps. Since this study was crosssectional in nature and provided a snapshot in time, it is likely that different maps would have resulted if the focus groups had
been conducted at a different time. This gives rise to the opportunity for a longitudinal study to compare results over time.
Another further avenue for research would be designing and preparing strategic plans for managers to suggest appropriate
actions to counter the activities of anti-brand websites.
FIGURES
Figure 1: Leximancer map of Coca-Cola
Figure 2: Leximancer map of Apple
54
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56
A RHETORICAL PERSPECTVE ON QUELLING NEGATIVE WORD-OF-MOUTH

Gavin L. Fox, Texas Tech University, USA
Yulan Bai, Texas Tech University, USA
Kyung Ah Byun, Texas Tech University, USA
INTRODUCTION
Negative word-of-mouth (NWOM) is recognized as a powerful and pervasive problem for many businesses (Luo 2009). Indeed,
numerous studies link NWOM to large-scale detrimental outcomes (e.g., Luo 2009; Voorhees, Brady, and Horowitz 2006;
Wangenheim 2005), but limited to the intentions of directly dissatisfied consumers to commit NWOM. In addition, original
complaints, often referred to as the "tip of the iceberg" (Andreasen and Best 1977), are not nearly as devastating as subsequent
exaggerations made during message retransmissions by cynical consumers who are prepared to believe the worst about
businesses (Marketing Week, 2007). Unfortunately, these potentially larger and more detrimental impacts of NWOM through
viral spread are typically ignored in research.
It is through consumer adaptations that this research examines the power of NWOM to persist and persuade. Following calls
to increase work in marketing rhetoric and communication effectiveness (Areni 2002; McQuarrie and Mick 1996), this research
specifically investigates what rhetorical modifications (i.e., changes in message phrasing) consumers make when adapting and
transmitting negative messages to other consumers. Drawing from memetic theory, this research suggests that viral
communications, such as NWOM, may become more effective as they are adapted and transferred from person to person
(Dawkins 1989; McQuarrie and Mick 1996). In addition, studies support the notion that NWOM is perceived as more
trustworthy than marketing messages generated by firms (e.g., Murray, Keith B. 1991-JM).
CONCEPTUAL FRAMEWORK
This study builds primarily from the work of Richard Dawkins (1989) on cultural evolution and memetic transmission. The
memetic theory primarily identifies how cultural meaning is generated and transferred among a population. Grounded in a NeoDarwinian evolutionary approach, it emphasizes the importance of characteristics that generate staying power for cultural
traditions, religion, and other normative behaviors (Dawkins 1989). Dawkins (1989) coined the term "meme" more generally
to refer to cultural replicators in order to be both phonetically consistent with the term "gene" and to follow the Greek word for
imitation, "mimema." Like genes, memes are conceptualized as replicating devices that perpetuate themselves by leaping from
one body to another, or rather from one mind to another (Dawkins 1989, p. 192). Just as stronger more dominant genes enhance
survival and increase the chances of replication in the gene pool, so too does stronger more powerful rhetoric increase the
probability of meme replication in the meme pool. In other words, memes are the root negative ideas consumers wish to express
(e.g., poor quality) and have retransmitted through NWOM. Thus, consistent with Dawkins's view, we propose that negative
word-of-mouth transmissions behave like memes and in essence fight for survival in a process of natural selection.
As a function of language, memes are often expressed via rhetorical devices (McQuarrie and Mick 1999; Tom and Eves 1999).
Rhetorical devices are mapped along a continuum from non-figurative language to destabilization functions (e.g., messages
that require deep processing and comprehension). For figurative rhetoric devices, McQuarrie and Mick (1996), according to
the complexity and function, offer two figurative modes, scheme (i.e., excess regularity) or trope (i.e., irregularity) as well as
rhetoric operations for each mode such as repetition and reversal for scheme , and substitution and destabilization for trope.
They suggest that moving toward destabilization enhances the appeal of messages and thus the potential for replication.
The purpose of these devices is to add not only interest and complexity to messages, but also to enhance message persuasiveness
by creating meaningfulness or altering mood states (McGuire 2000; McQuarrie and Mick 1999; Tom and Eves 1999).
Rhetorical modifications that make messages more attractive for replication are likely to exacerbate NWOM problems, in that,
they are more likely to spread to a wider audience, have greater impact, and endure longer (McQuarrie and Mick 1996, 2003;
Mick 1992). There is a high probability of NWOM communications losing their intended rate of retransmission (known as
fecundity) or consistency with the original message (known as copy-fidelity) during retransmission. As a result, the ability to
retain both fecundity and copy-fidelity is diminished (Ha and Hoch 1989; Mick 1992; Ward and Gaidis 1990). In other words,
taking both fecundity and copy-fidelity into consideration, the manner in which a message is repeated or the rhetoric behind it
is paramount to its effectiveness.
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As a result of consumer involvement in NWOM perpetuation, the rhetorical content, and perhaps the meme itself, may change
as messages pass among consumers (Villanueva et al. 2008). Specifically, different consumers are likely to rephrase messages
in different ways, subjecting the memes to potentially new perceptions (desirable or undesirable). Previous research indicates
that figurative language requires more in-depth processing than nonfigurative language and tropes require more processing
than schemes (Mothersbaugh et al. 2002). Further, tropes are considered to be more complex and clever than schemes, leading
to the notion that differences in required processing of different rhetorical devices affect consumer judgments and outcomes
(McQuarrie and Mick 1996). According to the original framework developed by McQuarrie and Mick (1996), schemes include
repetition (low complexity) and reversal (high complexity), while tropes include substitution (low complexity) and
destabilization (high complexity).
First, repetition is a type of rhetoric that includes devices such as alliteration (repetition of consonant sounds), climax (building
successive phrases in order of importance), assonance (repetition of vowel sounds), hypotaxis (subordinating one clause to
another clause), pleonasm (being redundant), enumeration (detailing points to make them more forceful), parallelism (a
recurring syntactical similarity), and epistrophe (repetition of a word or phrase at the end of successive sentences). It is shown
to generate greater confidence and comprehension among receivers, leading to positive perceptions of messages (Ha and Hoch
1989). Second, reversal is similar to repetition, in that, it relies on a consistent structure, but owes to the mirror image for
repeating the structural elements. Reversal reorders the structural components so that the message is not simply redundant, but
rather involves an interesting twist. Third, substitution is also common and includes devices such as anacoluthon (finishing
sentences with different grammatical structures than that of the beginning of the sentence), expletive (a word or phrase used to
lend emphasis, often interrupting a phrase), parataxis (writing successive independent clauses with or without conjunctions),
and zeugma (a grammatically correct linking of two or more parts of speech by another part of speech). Substitution forces
consumers to fill in blanks or switch words in order to correctly comprehend a message. Such alterations create intrigue and
cause greater message processing. Simplifying removes unnecessary clutter from arguments so that listeners can focus on key
details of an argument. Finally, destabilization is the case when consumers often must translate messages beyond a literal or
impossible state in order to comprehend them. More complex messages typically generate greater pleasure in reading and
comprehending of text (Alba and Hutchinson; Anand and Sternthal 1990; McQuarrie and Mick 1999). As with more complex
schemes, complex tropes such as destabilization are less likely found in common speech than less complex rhetorical devices.
In line with the original McQuarrie and Mick (1996) work, we assert that more complex messages are more engaging, require
deeper processing, and ultimately perpetuate more negative behavioral intentions. As a result, we hypothesize that tropes are
more effective than schemes in generating negative behavioral intentions toward brands (H1) and that more complex messages
are more effective than simple messages in generating negative behavioral intentions toward brands (H2)
While NWOM is being transmitted, consumers can be inoculated against NWOM. Inoculation theory pertains to the influence
of information on perceptions of future inconsistent messages (McGuire 1964). The intent is to make consumers feel more
knowledgeable about the subject, thus causing them to view new information as redundant or irrelevant. Ideally, the new
information is then simply ignored and the NWOM campaign fails to take root. Inoculation theory suggests that future negative
information can be thwarted by anchoring consumers with positive beliefs. For example, Wagner, Lutz, and Weitz (2009) show
that introducing corporate social responsibility information prior to the release of information regarding socially irresponsible
behavior effectively reduces perceptions of corporate hypocrisy. Most firms, however, are constantly attempting to bolster
brand perceptions, which may have the added effect of inoculating consumers by anchoring them to positive beliefs. However,
such efforts do not always appear to effectively inoculate consumers (e.g., Failure of the Toyota Prius braking system or the BP
oil spill).
Like biological definitions, the current marketing views the inoculation in that a weak strain of a virus is first introduced to
allow an immune system to adjust and overcome a stronger strain (Foulkes and De Gruttola 2003). This is akin to introducing
weak negative information prior to reception of strong negative information. Extending from the work of Wagner, Lutz, and
Weitz (2009), several theories support inoculation through the introduction of weak negative information. For example, research
on categorization suggests that consumers conserve cognitive effort by reapplying existing knowledge to new instances (Fiske
and Pavalchak 1986; Sujan 1985). In a similar vein, assimilation theory suggests that consumers use existing information as a
benchmark for evaluating new information (Martin, Seta, and Crelia 1990; Myers-Levy and Sternthal 1993; Myers-Levy and
Tybout 1997). Thus, new perceptions gravitate toward existing ones because of the creation of and desire for stable memes in
the consumer's mind (Dawkins 1989, p 199). This suggests that the strength of harsher new information may be halved by the
presence of much weaker negative information. In essence, such exposure may inoculate consumers by preempting NWOM
with information that reduces attention to or concern for new messages.
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As discussed, rhetorical devices differ in their intensity and potential for effective retransmission of NWOM. Given the potential
for such differences, inoculation may also differ in its effectiveness. For example, a weak biological virus such as chicken pox
is rather easy to inoculate against, while stronger viruses such as HIV are much more difficult. Hence, we expect that inoculation
is less effective in curbing negative behaviors and enhancing positive behaviors when stronger rhetoric (e.g., expletives) is
employed. As a result, we hypothesized that, given inoculation, schemes result in less negative word-of-mouth than do tropes
(H3a), greater search behaviors than do tropes (H3b), and greater purchase intentions than do tropes (H3c).
METHOD
To accomplish the research goals, three studies were conducted focusing on the use of rhetoric in the text-based negative wordof-mouth (e.g., texting, email, and blogging). Study 1 adapts the methods used by McQuarrie and Mick (1996) to examine the
frequency of rhetorical devices in text-based NWOM communications. Study 2 further investigates the effectiveness of the
rhetorical devices identified in Study 1. Specifically, Study 2 assesses the behavioral intentions of consumers following
exposure to specific types of rhetorical devices. In Study 3, the effectiveness of rhetorical devices under conditions of
inoculation or no inoculation is examined.
Study 1
Study 1 examines which types of rhetoric are used in the context of text-based WOM, following the procedures adapted from
McQuarrie and Mick (1996). For the robustness of the taxonomy, it is completed with two separate methods. Two forms of
text-based WOM were collected from negative consumer comments posted to a political video on YouTube (n=1,276) and on
a news story about device in a down economy (n=49) consistent with Phelps, Lewis, Mobilio, Perry, and Raman (2004). The
rhetoric pattern for the video comments were analyzed with PHP, a language searching algorithm program, while we used 60
rhetoric devices developed by Harris (2002) to categorize rhetoric devices in the e-mail comments.
Extending the original advertising context of McQuarrie and Mick's (1996) work to text-based NWOM combined with Harris
(2002), a taxonomy of rhetorical devices is generated and followed by a pretest. With the taxonomy, this study results found
that the most frequently used device classified as a repetition scheme was hypotaxis (ncomments = 470; nemail = 22), while the most
frequently used tropes were expletives (ncomments = 732; nemail = 25) and personification (ncomments = 235; nemail = 15).
The results of Study 1 highlight rhetorical devices commonly used by consumers when committing NWOM behaviors.
Traditional definitions of advertising effectiveness are composed of two characteristics, reach and power (Silverman 2001). A
strong message will be ineffective if a desirable number of target audience members are not reached. A weak message that
reaches many people will be just as ineffective. Therefore, effective messages are those that possess both reach and power. This
suggests that a necessary but insufficient condition for rhetorical device effectiveness is the frequency of use. For instance, a
rarely employed device may be very effective with its audience, but rendered ineffective by its lack of frequency in the NWOM
chain.
Study 2
Study 2 examines the effectiveness of each of these functions with respect to a non-figurative control, because each of the
functions is expected to contribute to message effectiveness in a different way. For the study, a four-group between-subjects
experiment was conducted with paid consumer panels (n= 124). Each of them were asked to read a negative WOM email
statement about a new brand of cell phone and accompanying service and then answered questions about the email (7-point
Likert). The degree of effectiveness was manipulated and resulted in four email conditions: expletive, hypotaxis,
personification, and a control (Repetition = Hypotaxis (n = 492); Substitution = Expletive (n = 757); Destabilization =
Personification (n = 250)). A pretest with 16 professors of English supported the adequacy of the rhetorical manipulations.
The MANOVA was significant ( = .77, F(9, 299.50) = 3.82, p < .001). Subsequent univarite tests showed that NWOM (F(3,
124) = 5.99, p < .001) offered significant differences, while search (F(3, 124) = .437, p > .72) and purchase (F(3, 124) = .643,
p > .58) intentions failed to exhibit significance differences. To assess the order of effectiveness among the devices individual
t-tests were conducted on NWOM. The results highlight the importance of rhetorical device and function in generating
intentions to retransmit negative WOM messages. Specifically, the findings indicate that consumers are more likely to
retransmit negative messages when they contain a substitution function device such as expletive. Having identified rhetorical
devices tied to effective NWOM, we now turn our attention to reducing its spread and impact.
59
Study 3
Study 3 examines the impact of inoculation efforts on effective and ineffective rhetorical devices to determine if inoculation
attempts are likely to diminish NWOM retransmission or likely to exacerbates such problems. For the purpose of the study,
Study 3 utilizes a 2 (expletive v. hypotaxis) x 2 (inoculated v. not inoculated) full factorial between-subjects design (n=120).
Inoculation was manipulated by altering the headline story, while a pretest supported the appropriateness of the manipulation
(n=46, p > .15). In the main study, each participant was asked to imagine that they received one of the two NWOM messages
on their own social media homepage (hypotaxis x expletive).
The results of the MANOVA were significant for the main effect of device type ( = .92, p < .02), the main effect of inoculation
condition ( = .90, p < .007), and the interaction between device type and inoculation condition ( = .94, p < .09). A main effect
of device type is shown for NWOM (F(1,120) = 3.79, p < .06), search (F(1,120) = 10.41, p < .002), and purchase (F(1,120) =
4.10, p < .05) intentions. A main effect for inoculation condition is also shown for NWOM (F(1,120) = 12.44, p < .001), search
(F(1,120) = 6.95, p < .01), and purchase (F(1,120) = 5.56, p < .02) intentions. Consistent with H3, there is a significant
interactive effect of device type and inoculation condition on NWOM (F(1,120) = 3.11, p < .08), search (F(1,120) = 6.54, p
< .02), and purchase (F(1,120) = 5.05, p < .03) intentions.
Study 3 demonstrates that inoculation is capable of limiting some of the ill effects of NWOM given the use of repetitious rather
than substitutive rhetorical devices. This suggests that the form of the NWOM message is not only important in creating and
spreading NWOM (Study 2 findings), but also that it is important in limiting it. Specifically, inoculation is shown to reduce the
likelihood of negative behaviors (i.e., intent to commit NWOM) and increases the likelihood of positive behaviors (i.e., search
and purchase intentions) when NWOM is constructed as a scheme rather than as a trope.
The findings from the three studies highlight the effectiveness of different types of rhetorical devices in the spread of NWOM
messages and the ability to inoculate consumers against them. The results suggest that repetition devices such as hypotaxis are
generally less effective and easier to inoculate against than are substitution devices such as expletives. Across the second two
studies, the results are relatively consistent among behavioral intentions, suggesting not only intent to retransmit NWOM, but
also to commit other detrimental behaviors when not inoculated. Taken in aggregate, the results suggest converging evidence
across multiple methods regarding the importance of rhetoric in the effectiveness and elimination of NWOM communications.
More ironically and importantly, the results suggest that the ability of negative information to inoculate consumers against
future reception of NWOM. Specifically, this finding suggests that firms may be well advised to propagate weak negative
information in the marketplace prior to the introduction of strong and widespread negative information. For example, rather
than simply coming clean about quality control problems with the Prius braking system after the fact, Toyota might have
preempted the mainstream media and social media barrage that ensued by leaking minor concerns about quality control. Such
actions offer firms the chance to appear proactive and trustworthy rather than reactive and concealing in addition to their
inoculation benefits.
This research contributes to the growing literature on complaining in three primary ways. First, it identifies the rhetoric
surrounding consumer retransmissions of NWOM. In doing so, the research details how consumers phrase negative messages.
Second, this research examines the effectiveness of different rhetorical devices to spread NWOM and generate negative
attitudes and behaviors toward firms. As a result, the findings of researchers such as Mothersbaubg et al. (2002) are extended
into a new context. Third, the research investigates how firms can use inoculation to thwart NWOM by consumers. Specifically,
the viral spread of negative messages is viewed from a biological stance whereby small doses of negative information should
limit damage done by NWOM, just as weak strains of biological viruses are used to prevent physical infections in people
(Cooper 2010). For managerial implications, this study also helps companies to understand what types of rhetorical devices to
use when interacting with consumers online in addition to those employed by consumers. Many firms social media strategy
may result in only limited gains or even further negative outcomes if personnel do not employ effective rhetorical devices in
their attempts to inoculate consumers.
REFERENCES
References Available Upon Requests
60
MARKETING STRATEGY IN SOCIAL ENTERPRISE ORGANIZATIONS IN CANADA: A STRUCTURED

ABSTRACT
Alex Mitchell, Queens University, Canada
Judith J. Madill, University of Ottawa, Canada
Samia Chreim, University of Ottawa, Canada
INTRODUCTION
Traditionally, the non-profit and charitable sector has fulfilled the role of addressing inadequacies in markets with respect to
social needs. While the number of organizations in this sector has increased in recent decades (Austin, Stevenson, & WeiSkillern 2006), in the face of reduced funding from government, many of these organizations have changed significantly and
are attempting to generate large proportions of their revenues through the sale of products and services using for-profit business
models. At the same time, for-profit firms with direct social missions for-profit social ventures are also emerging (Dees &
Anderson 2003). These new breeds of organizations, often termed social enterprises (SEs) utilize for-profit models, compete
directly with other organizations to generate revenues and profits, but work equally hard at delivering social value. As such,
SEs are dedicated to mitigating or eliminating social problems while deploying innovative change strategies (Bloom 2010).
While there exists a plurality of views concerning the definition of SEs, this study adopts the Thompson and Doherty (2006)
conception and focuses on the subset of such organizations that have a social purpose, and pursue this purpose at least in part
through significant trade in a market place (p. 362). In Canada, social enterprises do not have a specific legal form rather
they may take a variety of legal forms. Many social enterprises are legally incorporated as non-profits and charities, while
others are legally structured as for-profit ventures. In fact, many social enterprises in Canada might most appropriately be
viewed as special cases of both non-profit and for profit organizations. Those SEs structured as not-for-profit enterprises are
different from the typical non-profit organization in that they are more focused than traditional non-profits on earning revenues
in order to be more financially self-sufficient in achieving their social missions. Those SEs structured as for profit enterprises
are special cases in that they are considerably more devoted to achieving a social mission than is the typical for- profit
organization ( Madill, Brouard, & Hebb 2010; Quarter, Mook, & Armstrong, 2009, pp. 107-108; Smith, Knapp, Barr, Stevens,
& Cannatelli, 2010; www.enterprisingnonprofits.ca).
In spite of its importance, there currently exists a lack of published research into marketing strategy in SE organizations that
focus both on economic and social value creation. Because of the growing importance and role of SEs as mechanisms for
achieving social change, and the lack of research concerning marketing practices and strategy in such organizations, the purpose
of this paper is to develop a deeper understanding of how marketing is perceived in SEs, as well as which marketing strategies
SEs employ and how they employ them.
LITERATURE REVIEW
While the role of marketing in traditional businesses is well understood, the same cannot be said about marketing in SEs. A
search of academic journals done in an attempt to review the literature regarding marketing strategy in SEs yielded surprisingly
few results. In the words of Bloom (2009, p.133): Unfortunately, business and marketing scholars have yet to turn much
attention to how to improve the effectiveness and impact of social entrepreneurs.
Boschee (2006), in discussing the perils faced by SEs, cites a number of key strategic marketing questions that these
organizations must answer. These questions revolve around defining who the customers are, what they value, whether the
organization can and should provide what the customers are looking for, and how the SE should position itself. The literature
has also begun to give attention to the notion of marketing in achieving financial self-sufficiency in SEs (Madill, Brouard, &
Hebb 2010). Financial self-sufficiency refers to the ability of a SE to gain financial autonomy through income generating
activities. Madill, Brouard, & Hebb (2010) argue that adoption of commercial marketing strategies in SEs is necessary in
achieving financial self-sufficiency.
The marketing literature has long emphasized the importance of firms maintaining a market orientation (Kohli & Jaworski,
1990; Kohli, Jaworski, & Kumar, 1993; Narver & Slater, 1990), but in the case of SEs, what is the market, and who are the
customers? Stakeholder marketing (Bhattacharya & Korshun, 2008; Chakravorti, 2010) offers, arguably, a more complete
61
organizational orientation, but it is still not clear how SEs will resolve tensions related to the various stakeholders. For example,
how do SEs choose between the need to be profitable and the desire to execute their social mission?
The concept of utilizing marketing in not-for-profit organizations has a long history (Kotler & Levy 1969). Current research
into marketing in not-for-profit organizations suggests that while marketing is viewed in a positive light in many not-for-profits
(Pope, Isely, and Asamoa-Tutu 2009), it may still be considered undesirable by some members of that sector. Supporting
earlier work in the field of marketing in not-for-profit organizations, such as Andreasen and Kotler (2003), a recent paper by
Dolnicar and Lazareski (2009) comparing non-profit organizations in the U.K., the U.S.A. and Australia found that not-forprofit managers have not yet developed strong knowledge and skills concerning the marketing approach. The results of their
research reveal that not-for-profit managers view the most important marketing activities as being promotional in nature. Very
few of the managers acknowledged the importance of activities such as market research and strategic marketing. Dolnicar and
Lazareski (2009) also report that non-profit organizations typically still have an organization rather than a customer centric
mindset. Recently, Pope, Isely and Asomoa-Totu (2009) showed that growth in the nonprofit sector has been accompanied by
greater support and interest from that sector concerning the importance of marketing. However, they also show (in support of
others such as Andreasen & Kotler 2003; Dolnicar & Lazareski 2009), that while nonprofit managers see marketing as
important, they do not use key marketing approaches to a great degree (for example, while a majority the managers in the study
viewed marketing as important, more than eighty percent failed to define target markets).
METHODOLOGY
We use an inductive, grounded theory methodology inspired by the works of Charmaz (2006) and Glaser & Strauss (1967).
Because there is a dearth of research with respect to marketing in SEs, it is both appropriate and necessary to undertake
qualitative research in order to build understanding of this phenomenon and to begin to develop theory in the area. Grounded
theory consists of systematic guidelines for collecting and analyzing qualitative data to construct theories grounded in the
data themselves (Charmaz 2006, p. 2). We conducted a comparative study of fifteen cases of SEs.
The cases we studied are located in Canada. No formal legal designation and no comprehensive sampling frames exist for SEs
in Canada. In order to draw a sample for study, the research team created a database consisting of 46 SEs in the geographical
proximity of the teams home university. This database was constructed by amalgamating existing databases known to the
researchers and by searching the Internet for enterprises that met the definitional criteria. To be included in the database, an
enterprise had to (a) demonstrate an underlying drive to create social value rather than just personal of shareholder value, and
(b) utilize private sector business practices to achieve organizational goals. The team then utilized purposeful sampling (Miles
& Huberman 1994) in selecting 15 cases, which represented the variety of SEs, for in depth study. Consistent with qualitative
research, and grounded theory approaches (Charmaz 2006; Creswell 2007, Miles & Huberman 1994), we sought rich sources
of data consisting of interviews, field notes and information in reports and websites. The key source of data for our study
consists of interviews with participants.
FINDINGS
Due to space limitations, overall findings are summarized below the paper presentation will present qualitative quotes and
other qualitative data in support for the findings reported.
Marketing Perceptions and Background
Participants in 14 of the 15 SEs in this research view marketing as a positive endeavor, even if there were lingering doubts
stemming from more negative perceptions of using marketing approaches. In support of findings concerning marketing in notfor profit organizations, 10 of the 15 participants equated marketing foremost with its promotional aspects, and with raising
awareness. The participants in the study reported that the number one constraint in terms of their marketing activities is lack of
financial resources. This tended to refer to the costs associated with promotional activities, such as advertising and events, but
overall the data suggests that SEs simply do not have money for marketing.
Marketing Strategy Approaches Utilized
With regard to market research, SEs mentioned the use of customer feedback mechanisms, formal and informal, to access
information. Formal feedback included information solicitation directly by the SE, while only one SE reported using a private
sector market research firm to conduct consumer investigations. In terms of developing and pricing products and services, a
62
wide range of approaches were used. At one end of the spectrum, many SEs in this study emphasized the need to create
offerings of superior quality in order to establish SEs as businesses and not social services, and also to impact perceptions with
respect to pricing. For others, who target lower income consumers, lower prices are selected deliberately in order to meet the
needs of their target market.
A sentiment of austerity with respect to promotional activities was expressed consistently across all of the organizations in this
sample. In keeping with this austerity theme, the majority of SEs selected and utilized promotional approaches that attempted
to minimize spending. Accordingly the majority of promotional tools utilized: social media and SE website, free media clips,
and word-of-mouth. The promotional activity that spanned all organizations in this study involved use of an organizational
website. All organizations had a public-facing website of some kind, although there were significant differences in terms of the
range of technologies and features present. The majority of participants reported that the website was primarily used as a static,
unidirectional information broadcasting medium designed primarily to provide visitors with information about the organization
and its programs. It is clear there is a trend amongst participants towards greater adoption of social media. Nine of the 15 SEs
were currently using social media (Facbook or Twitter) while 12 of them had plans for future use of these tools in their
enterprises. When probed about what they hoped to achieve with social media specifically, participants generally discussed the
desire to use the technology as a way to keep interested stakeholders, such as customers, volunteers (if applicable), and broader
community members, apprised of organization activities. Another approach that cut across technologies and mediums was
word-of-mouth. Ten of the 15 participants involved in this study directly mentioned word-of-mouth as a currently used,
successful marketing activity utilized in their enterprises. The importance of this approach was not only limited to driving sales
or developing new customers, but was also linked to relationships with other stakeholders such as employees, partner
organizations, and volunteers.
The participants from virtually all of the organizations in the sample appeared to be familiar with and comfortable with using
the term branding in various ways for various purposes from gaining funding to building stakeholder support within the
organization. Participants also appear to understand the risks of failure of a commercial product or service on the social mission:
[Y]ou need to be careful how youre presenting yourself and how youre representing yourself because if
something happened at [one of our for-profit parts of the organizations] it could ultimately cost a lot of other
programs. (Respondent Organization 1).
Within SEs whose organizational structure includes a Board of Directors, the data suggest that the Board directly influences
marketing decisions. This influence includes a range of activities, from higher level strategic planning, down to specific
implementations of marketing-related activities, such as web site development. As well, Board members promote the
organization through their interactions with their own individual network of peers. In general, the Boards of SEs provide
critical skills that may not otherwise be accessible to the staff of the SE, including marketing-related skill sets.
Marketing Strategy Outcomes
It is clear that for SEs in the sample, the key measures of success involve an intertwining of the financial and social missions
of the enterprises. However, participants often commented that measuring the financials is often easier than measuring the
social outcomes.
DISCUSSION AND CONCLUSIONS
In summary the research described in this paper has developed a deeper understanding of how marketing is perceived in SEs,
as well as how and which marketing strategies are employed in SEs. Consistent with literature on marketing being viewed in
a strong light in not-for-profit organizations (Pope, Isely, & Asamoa-Tutu 2009), overall, marketing is seen positively in SEs
as a way to help achieve financial self-sufficiency. This was a goal common across the SEs in the study, and has been found
in other studies of SEs such as Austin, Stevenson, & Wei-Skillern (2006) and Madill, Hebb, & Brouard (2010).
The research suggests that SEs employ marketing strategies within the context of trying to manage a number of tensions or
dualities. The dualities that SEs face pull the organization in two directions at once the direction toward economic selfsufficiency as well as the oft-competing direction of achieving the social mission of the organization. This context appears to
have implications for development and implementation of marketing strategy. For example, while there is recognition that
engaging in promotional activities and pursuing economic goals is advantageous in the sense that additional revenues improve
the ability of the SE to achieve its social goals, pursuit of such goals may be constrained by expectations of utilizing funding
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to directly support the social mission of the organization. Similarly, SEs face competition from other enterprises with whom
they may wish, or be expected to, cooperate with and face the pushes and pulls from such tensions.
The research presented here is suggestive of several implications for policy makers. First, it suggests that there is a need for
governments at all levels to build organizational expertise concerning SEs. Given the important and growing role that SEs are
playing in the economies of many nations, it is important that more attention be given to gathering data concerning the numbers
and sizes of such organizations so that better understanding of the role that they play within the economies of nations will be
possible. As well, there is an important role for governments to create formal designations of such enterprises this has
happened in countries such as the United States and Britain, but has not happened in countries such as Canada (and others)
where this research was conducted. Such designations would arguably allow and foster the freedom for such enterprises to
pursue financial self-sufficiency without the current constraints that limit revenue generating abilities in SEs that take the
organizational form of charities and not-for profit organizations in countries such as Canada.
The research reveals an acceptance of marketing and an appetite for its application by SEs that might be limited by their
knowledge and skills in developing effective marketing strategies. It would also be useful if social entrepreneurship centres
were established with the goal of building marketing knowledge within this sector.
Due to the inductive nature of the study, and the small regional sample size, future research could look to survey an expanded
sample. This research is situated in Canada and it will be important to expand research on marketing in SEs to other countries
where these enterprises are also a growing phenomenon for dealing with social problems in both the developed and developing
worlds. Lastly, theoretical development is needed in this field and this is the next step that the authors intend to take based on
this research we encourage others to undertake such theoretical development also.
REFERENCES
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LESS BUZZ MORE ACTION!

PATIENT EMPOWERMENT = RESPONSIBILITY + ADOPTION + INVOLVEMENT.
Marzena Nieroda, University of Manchester, UK
Kathleen Keeling, University of Manchester, UK
ABSTRACT
This paper addresses limitations of contemporary patient empowerment theory, particularly, poor translation of
empowerment policies into practice. It is of special interest how we can encourage empowerment, that is patient participation
in own health management, and improve patients quality of life. An alternative approach to contemporary patient
empowerment theory is proposed and initially tested. Experimental design is adopted for the data collection.
First, it is indentified that existing empowerment theories take an outcome oriented approach to empowerment, where
perceived control or mastery over certain actions are the desired outcomes. This approach lacks focus on understanding
empowerment processes, e.g., the role of motivational orientation and associated goals that might affect participation in
healthcare management at different stages of empowerment process. On the other hand, existing process approaches to
empowerment lack clear distinction of important factors facilitating participation, and more importantly, lack empirical
support for the role of those factors. Thus, this research aims at filling this research gap and at providing more precise
explanation of empowerment processes.
Then, building on concepts of health responsibility perceptions, goal proximity and motivational goal orientations, new
patient empowerment framework is proposed and supported with the initial data collected. In line with this new framework,
two distinct pathways to empowerment are defined, each specific for individuals with either promotion or prevention goal
orientation, and each showing a different strategy for adoption of empowering health management tools. It is believed that
this proposed framework of how patient empowerment could materialize within everyday life can provide guidance for
meeting diverse needs of involved stakeholders.
65
HOW TO ADOPT SOCIAL BEHAVIOR TO ACHIEVE EFFICIENT SOCIAL MARKETING

ABSTRACT
This study surveyed related literatures regarding social marketing, prosocial behavior, and helping behavior to classify four
types of social behavior (altruism, compensatory, reciprocity, and egoism) by two dimensions: (1) who are the welfare appealed,
(2) the level of restitution intention. Furthermore, this study constructed a social behavior model for social marketing and
utilized two social issuesBag-Taking and Blood Donation to test the social behavior model. The empirical conclusions
are as follow: social behavior could be directed and positively affected by actual control factors (external objective factor) and
social behavior intention (personal subjective tendency); social behavior intention could be directed and positively affected by
actual control factors and social behavior motivations (including relieving personal distress and evoking empathy); the social
behavior motivations (internal emotion response) could be directed and positively affected by social norms (external pressure)
and personal norms (individual perception of norms); the personal norms and economic evaluation could be directed and
positively affected by social norms (external pressure). Finally, this study submits marketing implications to academic
professionals and industrial practitioners.
66

THE INFLUENCE OF TIME ORIENTATION ON PERSONAL FINANCE BEHAVIOURS
Daniel Rutledge, University of Lethbridge, Canada
Sameer Deshpande, University of Lethbridge, Canada
ABSTRACT
Promoting responsible personal finance behaviours is an under-researched area in social marketing. Past literature has found
that those who have a future-oriented mindset tend to make more positive financial decisions. The current study fills a
conceptual gap in research by attempting to positively influence the future orientation levels of participants by exposing them
to a brief priming stimulus. Although this attempt was not successful other results are encouraging. Low future orientation
was associated with increased levels of debt; low present orientation was related to increased amounts of personal savings;
and younger people tended to be more present-oriented. Also, predictors of savings satisfaction were found to include job
security, financial knowledge, access to credit, family income, and total non-mortgage debt. Social marketers can use these
personality and demographic indicators to segment populations into homogeneous segments and tailor marketing campaigns
to motivate responsible borrowing and saving decisions.
INTRODUCTION
Personal finance issues have become important topics of discussion as a result of the recent world economic crisis. Many
American families lost their homes due to unmanageable mortgage payments and decreasing home prices. This economic
downturn was responsible for millions of job losses in the United States resulting in the unemployment rate jumping from
5.8% in 2008 to 8.9% in 2011 (Bureau of Labor Statistics, 2012). During the financial crisis period, personal investments and
pension fund values around the world dropped rapidly, which led to questions about how financially prepared societies are
for the future. Increasingly, individuals in the U.S. and other OECD countries are saving less and borrowing more (Girouard,
Kennedy, & Andr, 2007; OECD, 2009). This study investigates whether a personality trait, time orientation, can be primed
in individuals in order to encourage responsible financial decision making.
Past literature regarding time orientation has shown that those who are more likely to think about the future consequences of
their action tend to have more personal savings (Rabinovich & Webley, 2007) and have a greater likelihood to participate in
savings programs (Howlett, Kees, & Kemp, 2008), while those who are less likely to think about the future consequences of
their actions are more likely to borrow money (Webley & Nyhus, 2001) and have debt (Lea, Webley, & Walker, 1995). It has
also been suggested that attitudes about the future may change over time (Strathman, Gleicher, Boninger, & Edwards, 1994;
Toepoel, 2010).
This is the first study that tests whether it is possible to influence future orientation during a brief experimental manipulation.
Also, this study tests whether peoples intention to save and borrow, can be influenced as a result of future orientation being
manipulated. If successful, this study would have implications as to how to encourage positive personal finance behaviours
which could be implemented by financial institutions or company pension plans. Such a behaviour change attempt qualifies
as social marketing because although it would potentially lead to higher profits for the institutions, it would benefit
individuals and society who would be better financially prepared for the future.
Personal finance is an area that is under-researched from a social marketing perspective, but some attempts to show how
better financial savings can be encouraged do exist. Lusardi, Keller, and Keller (2009) uncovered three different barriers to
saving (a lack of information on how to save, a lack of income with which to save, and a lack of self-control), and created a
planning tool for new employees of a company to help overcome these barriers. Thaler and Benartzi (2004) introduced a
program that uses behavioural economic principles to encourage saving behaviours. Other studies have looked at the
psychological differences among individuals in relation to their financial decisions. As a potential area of future research,
Howlett et al. (2008) wonder whether a more future-oriented mindset can be primed. Our study fills this gap.
LITERATURE REVIEW AND HYPOTHESES
Time orientation has been conceptualized in several ways. One of them was proposed by Strathman et al. (1994), the
construct of consideration of future consequences (CFC), which measures the degree to which individuals consider the
distant outcomes of their actions. Those who score high on CFC are expected to consider the future implications of their
67
behavior [sic] and to use their distant goals as guides for their current actions (Strathman et al., 1994, p. 743). On the other
hand, those who score low on CFC are expected to focus more on their immediate, versus distant, needs and concerns, and
are thus expected to act to satisfy these immediate needs (Strathman et al., 1994, p. 743). In another article, Zimbardo et al.
(1997) differentiate between future time perspective and present time perspective by using a different scale to conceptualize
each. As a measure to compare time orientation between cultures, Hofstede (2001) proposes the terms long-term orientation
and short-term orientation.
Time orientation is associated with self-control and risky behaviours. Those who are more present-oriented have a lesser
degree of self-control and are less likely to defer gratification (Webley & Nyhus, 2001). Those with a higher degree of
present time orientation have been associated with riskier driving behaviours (Zimbardo, Keough, & Boyd, 1997), as well as
a higher likelihood to use substances such as alcohol, drugs, and tobacco (Keough, Zimbardo, & Boyd, 1999).
Time orientation has also been associated with different health and environmental behaviours. Past research has shown that
those with a high degree of future orientation tend to have a greater concern for personal health, tend to smoke less, and tend
to perform more positive environmental behaviours (Strathman et al., 1994). Those who are future-oriented are more likely
to delay the onset of sexual activity and, once sexually active, are also likely to have relatively few sexual partners when
compared to those who are present-oriented (Rothspan & Read, 1996, p. 133).
Time orientation has also been associated with attitudes towards personal finances. In this context time horizon refers to the
length of time period that is taken into account in the process of planning expenditures and savings (Rabinovich & Webley,
2007, p. 448). In regards to saving behaviours, high future orientation results in not only a greater intention to save money,
but also a greater amount of actual savings behaviour (Rabinovich & Webley, 2007), as well as a greater likelihood to
participate in a retirement savings plan (Howlett et al., 2008).
Debt and borrowing also corresponds with time orientation. Lea et al. (1995) found that those with debt tend to desire larger
incentives in the present than those without debt, thus implying that they are more present-oriented. Webley and Nyhus
(2001) claim that those who are present-oriented are more likely to borrow money to buy larger items rather than save for
them.
As a result, it is expected that participants with a greater amount of personal debt will report lower future orientation (H1)
and higher present orientation (H2). In terms of personal debt, credit card debt is unique in its ability to be available at the
point-of-sale and thus its use satisfies immediate desires, which is why higher credit card debt is predicted to be associated
with a lower future orientation (H3), and a higher present time orientation (H4). Additionally, those with a greater amount of
personal savings are predicted to have a higher future orientation (H5) and lower present orientation (H6).
One type of debt that will be looked at separately is mortgage debt. Buying a home for the first time often requires the buyer
to patiently save for a down payment a process that may take many years. Furthermore, a house is generally an appreciating
asset and may be viewed as an investment rather than a liability. For these reasons, those with a high degree of future
orientation may be more likely to own homes rather than rent, in which case including mortgage debt in an analysis of overall
debt would not present a fair representation of overall financial health. Instead, it is predicted that likelihood to own a home
will be associated with a high future orientation (H7) and a low present orientation (H8).
Past research has shown that time orientation is related to age in that older individuals tend to place a higher value on future
utility (Bishai, 2004). This was shown to be true among a young sample of 10 to 30 year olds (Steinberg et al., 2009), an
undergraduate student sample (Horstmanshof & Zimitat, 2007) as well as an adult population (Toepoel, 2010). In light of
this, older consumers are predicted to be more future-oriented (H9), while younger consumers are predicted to be more
present-oriented (H10).
Employing an experimental design, this study primes a higher future orientation personality trait to promote financial
behaviours. Priming different personality traits is effective because of what Tversky and Kahneman (1973, 1974) call the
availability bias. According to the authors, judgements are often made based on whatever cognition is most available at the
time. Thus, when participants were subtly exposed to words associated with rudeness or politeness as in the Bargh, Chen, and
Burrows (1996) study, the words affected the immediate judgements of the participants. Based on these findings it is believed
that participants level of future orientation can be increased by making that particular cognition more accessible at the time
68
of measurement. It is thus predicted that those who are exposed to the priming stimulus will be more future-oriented (H11)
and less present-oriented (H12) than those who are not.
This research will also measure future intentions towards saving and attitudes towards borrowing. Intentions to save are
predicted to be higher among those who receive the priming stimulus designed to prime future orientation (H13). At the same
time, it is expected that those who receive the future orientation priming stimulus will have a less favourable attitude towards
borrowing/debt (H14).
Ethical Considerations
Some readers may consider subliminal priming of future orientation as unethical, as it could potentially influence decisions of
consumers without their knowledge. In reality, subliminal priming already takes place in everyday life; in retail stores, this
may manifest itself through scent and music stimuli that are designed to give consumers a more favourable impression of a
store and motivate them to buy (see Spangenberg, Grohmann, & Sprott, 2005; Spangenberg, Sprott, Grohmann, & Tracy,
2006). If such methods are being used in retail stores to promote hedonistic behaviours, then a similar stimulus designed to
encourage more responsible financial decision making should be considered acceptable.
METHOD
The study uses the Solomon four-group design (Campbell, 1957; Divett, Crittenden, & Henderson, 2003; Solomon, 1949) in
order to control for a testing threat to internal validity (see Figure 1 for design notation). This threat results from sensitizing
respondents to the nature of questions as they respond to the same scales more than once within a short period of time.
Respondents were exposed to the stimulus of a scrambled-sentence test (Bargh et al., 1996; Srull & Wyer, 1979) in which
they were asked to make grammatically correct four-word sentences out of a series of five words without being told the true
nature of the test until the end of the study. Following the example of Bargh et al.s study (1996), two-thirds of the sentences
that the experimental groups (X) were exposed to contained one word that was associated with the primed trait in this case,
high future orientation. Words used to prime high future orientation were generated based on ratings by a panel of 16 people
who were 25 years and older. Panelists were also invited to add words that they felt were missing from the list of possible
future-oriented words. The words that were rated the highest included planning, goals and lifelong.
The measurements (O) in the study include the consideration of future consequences (CFC) scale (Strathman et al., 1994) and
two sub-scales (Present-Hedonistic and Present-Fatalistic) from the Zimbardo time perspective inventory (ZTPI) (Zimbardo
& Boyd, 1999), the results of which were combined for analysis. Measures of both future orientation and present orientation
were analyzed separately because future orientation is not necessarily the polar opposite of present orientation (Zimbardo et
al., 1997), and both constructs have been measured separately in consumer finance (Ellen, Wiener, & Fitzgerald, 2012).
Specific types of debt and savings were measured. The non-mortgage debt measure included all types of personal debt such
as credit cards, lines of credit, personal loans, and vehicle loans, but excluded student loans. For the purpose of this research,
savings was measured by asking participants the total amount of funds that they currently have in any bank account,
investment account, retirement account, and pension account.
In preparation of the main study, a pilot study was conducted with 26 American participants between the ages of 25 and 30
who were working full-time, and who had completed a college degree. The pilot study revealed that several changes were
necessary for the main study.
PART ONE OF THE STUDY
An online Zoomerang panel of American respondents was recruited for the main study. The study was conducted in two
parts. In the first part, participants were divided into four groups based on their month of birth (January 1, February 2,
March 3, April 4, May 1, and so on). Consistent with the Solomon four-group design, the pre-post groups 1 and 2
performed a pre-test made up of CFC and ZTPI scales. After this, a series of demographic and financial questions were
asked. For groups 3 and 4 (post-test only), only the demographic and financial questions were asked. Financial questions
captured participants current amounts of savings and debt, homeownership status, as well as savings satisfaction (Davis &
Schumm, 1987) and level of financial knowledge.
69
Results
Survey one produced 285 usable responses from across all four Solomon groups. This sample was 57.4 percent female, 83.9
percent white, had a mean age of 43, a mean education of 15.5 years, and a mean annual gross family income of $80,361.
Only data from groups 1 and 2 who had completed the pre-test CFC and ZTPI scales were used to analyze debt, savings,
homeownership, and age indicators, and those who claimed to work less than full-time hours were removed from analysis for
a total part one sample of 112 respondents.
Respondents were asked whether they had access to any type of credit so that those who do not have access could be removed
from the analysis of debt variables; 23 responses were removed. When analyzing overall levels of non-mortgage debt and
controlling for household income, there was a significant negative relationship with CFC scores (r = -.28, p < .05), but no
significant relationship with ZTPI scores (r = .00, n.s.). These results provide support for H1, but not H2. Similarly, results
revealed a significant relationship between CFC scores and amounts of credit card debt (r = -.26, p < .05) but no significant
relationship between ZTPI scores and amounts of credit card debt (r = .05, p > n.s.), which provides support for H3 but not
H4.
While controlling for both household income and personal income, the CFC scores were not significantly related to the total
savings variable (r = .05, p > n.s.), but the negative correlation between ZTPI scores and the total savings variable was
significant (r = -.22, p < .05). Thus, H5 is unsupported, but H6 is supported.
Participants were asked whether they were homeowners or renters. Contrary to what was hypothesized, the result of an
ANOVA showed that there was no relationship between homeownership status and CFC scales (F [1, 110] = .03, n.s.) and
ZTPI scores (F [1, 110] = .02, n.s.), so neither H7 nor H8 are supported.
In order to test whether time orientation is influenced by age, participants were divided into two groups: young (40 years old
or younger, N = 36), and old (41 years old or older, N = 76). An analysis of the CFC scores found no significant difference
between the two groups (t [110] = -.48, n.s.). However, an analysis of the ZTPI scores found a significant difference between
the younger (M = 96.31) and the older group (M = 89.72), implying that the younger group is more present-oriented (t [110] =
2.09, p < .05). Thus, H9 is not supported, but H10 is supported.
PART TWO OF THE STUDY
One week after the closure of the first part of the study, the same online respondents were invited to complete part two of the
study. The second part resulted in usable data from 111 respondents out of the 285 who had completed the first one, resulting
in a conversion rate of 39 percent. Participants were assigned to the same Solomon groups as the first survey which depended
on their month of birth, however this time data from all four groups were used in the analysis. Groups 1 (N = 20) and 3 (N =
28) completed the experimental scrambled-sentence test treatment designed to influence a future-oriented mindset, while
groups 2 (N = 29) and 4 (N = 34) completed a scrambled-sentence test which was designed not to influence any particular
mindset. Later, each group answered the post-test scales (CFC, ZTPI), followed by questions about intentions to save in the
future and attitudes toward borrowing.
Manipulation Check
Manipulation checks were performed by measuring participants interest in the scrambled-sentence task, and the effort they
exerted (Fishbach & Labroo, 2007). Analysis showed that the interest levels of the two experimental groups 1 and 3 (N = 47,
M = 4.72) were not significantly different from the two control groups 2 and 4 [(N = 64, M = 5.33), t (109) = 1.83, n.s.].
Similarly, experimental (M = 4.91) and control (M = 4.66) groups were not statistically different in the amount of effort they
reported [t (109) = -.87, n.s.]. As an additional manipulation check, participants were asked what they believed the nature of
the study was (see next section), a method suggested by Goodwin (2005).
Suspicion Check
In order to ensure that the participants did not recognize that a future-oriented mindset was being primed during the
experiment, the participants were asked a series of debriefing questions (Bargh & Chartrand, 2000). Three responses were
70
removed since they correctly guessed the nature of the study and the final number of participants for this part of the study was
111.
Results
A series of tests were run on the CFC and ZTPI results to test the effect of the intervention on influencing time orientation.
Using the Walton Braver and Braver (1988) method of analysis, results of a 2 x 2 ANOVA (treatment vs. non-treatment and
pre-test vs. no pre-test) on the future orientation (CFC) post-test scores of the four Solomon groups revealed that no pre-test
sensitization existed. However, using both between- and within-data analysis methods, the experimental manipulation did not
produce any differences in participants levels of future orientation, meaning H11 is not supported.
The same pre-test sensitization analysis was performed as above using the present orientation (ZTPI) scores. This time, an
analysis of the results suggested that a pre-test sensitization was present. In this case, scores from pre-tested groups 1 (M =
94.90) and 2 (M = 88.79) should therefore not be trusted. However, scores from the post-test only groups should still be valid.
ZTPI scores between group 3 (M = 84.93) and group 4 (M = 93.06) were in the hypothesized direction but not significant [t
(60) = -1.89, p = .06]. Thus, H12 is not supported.
Although the experimental stimulus was shown to have little effect, data were analyzed to see whether there were any
differences related to intentions to save and attitudes toward borrowing that could be attributed to the treatment. Participants
were asked How likely are you to start increasing your regular savings (or start saving regularly if you are not currently
doing so) within the next 12 months? and were asked to respond using a seven-point scale with extremely unlikely and
extremely likely as anchors. An analysis of the treatment groups 1 and 3 (M = 4.06) and the control groups 2 and 4 (M =
4.73) were not found to be statistically different [t (82) = 1.90, n.s.], thus, H13 is not supported.
To measure attitudes towards debt, participants were asked To what degree would you approve (or disapprove) of someone
like yourself borrowing money for the following purposes? (adapted from Lynch, Netemeyer, Spiller, & Zammit, 2010).
These purposes included a vacation trip, living expenses, and others. Participants used a seven-point scale to rate each
item (7 high, 1 low) and the scores from all of the items were added together to come up with an attitude towards debt
variable. Analysis of this variable between the treatment groups 1 and 3 (M = 23.48) and the control groups 2 and 4 (M =
22.68) was not found to be statistically different [t (109) = -.69, n.s.], thus, H14 is not supported.
POST-HOC ANALYSIS
Analyzing amounts of savings or debt may not be the best method for understanding financial health; for example, consumers
who have a lot of debt may also have large incomes with which they could repay. Also, having more debt at a younger age
compared to an older age is generally accepted as normal as people are in an asset-building stage of life. For this reason, a
post-hoc analysis was performed to see what variables best predict savings satisfaction.
Participants were asked to rate on a 7-point scale (1 = extremely dissatisfied, 7 = extremely satisfied) how satisfied or
dissatisfied are you with your current savings?. Similar to the Davis and Schumm (1987) study, on average respondents
were dissatisfied with their savings (M = 3.32, SD = 1.76).
A regression analysis was performed on the variables that were significantly correlated with savings satisfaction. Variables
that measured total savings and monthly savings were removed from the analysis because it is only logical that those with
more saving would be more satisfied than those with less. Results produced a significant model for predicting savings
satisfaction [R2 = 32%, F (8, 204) = 12.18, p < .01]. Significant variables included whether or not the individual had access to
any credit, total amount of debt not including mortgage balances, financial knowledge, job security, and total family income.
Although they were correlated with savings satisfaction, home ownership, gender, and education, failed to influence savings
satisfaction in the regression model (see Table 1 for further details).
DISCUSSION
The results of this study reveal that having a low future-oriented mindset is associated with higher levels of non-mortgage
debt and credit card debt, but surprisingly, these associations were not found with a high present-oriented mindset. Also,
having a low present-oriented mindset is associated with higher amounts of personal savings, but this association was not
71
found to be true for a high future-oriented mindset. Those who are younger tend to be more present-oriented, but those who
are older do not tend to be more future-oriented. These results partially corroborate past research on time orientation, but it is
interesting to note that when measuring one debt or savings indicator, or when comparing the effects of age, finding
significant results related to the future orientation construct (CFC) did not necessarily produce significant results related to
the present orientation construct (ZTPI).
Also surprising was the finding that homeownership was not found to be associated with either a high future-oriented or a
low present-oriented mindset. This can perhaps be explained by the finding that future orientation is associated with higher
levels of education. So while high future-oriented individuals are pursuing further education, low future-oriented individuals
are working and have an earlier opportunity to purchase a house.
The experimental treatment did not produce an effect on future orientation, present orientation, intention to save, or attitude
toward borrowing. This may imply that time orientation is indeed an enduring disposition (Webley & Nyhus, 2001, p. 426)
and therefore not easily changed. However, this should not suggest that further research on whether time orientation can be
primed is unwarranted.
When the CFC results from this study are compared with past research, evidence suggests that our sample had a relatively
high pre-existing future orientation. With a sample of 302 non-student adults between the ages of 20 and 70, Nenkov, Inman,
and Hulland (2008) found that the average response to the CFC scale was 4.4 on a seven-point scale. Our sample of a similar
demographic reported an average pre-test response to the CFC scale of 4.61 on a seven-point scale (N = 112). Although no
statistical test was performed to compare the CFC scores between these two studies, the fact that the CFC scores were already
high in the present study compared to past research could be a reason why the experimental treatment failed to increase future
orientation. In addition, the sample reported having a higher savings rate (M = 10.0%, SD = 18.0%) compared to the national
rate of 4.0% (U.S Department of Commerce: Bureau of Economic Analysis, 2012) for the quarter in which the data was
collected (Q2 of 2012).
As it was the case in the Davis and Schumm (1987) study, respondents were found to be dissatisfied with their savings,
although the David and Schumm study and ours took place 25 years apart. The predictive variables used in the current study
were different than those in the Davis and Schumm (1987) article, and additionally included whether or not the individuals
have access to any credit, the total amount of debt not including mortgage balances, self-reported financial knowledge, selfreported job security, and total family income.
Implications
The results of this study imply that an analysis of time orientation can help to explain some differences in the debt and
savings behaviours among individuals. The results also indicate that there are other factors that must be considered to fully
understand borrowing and saving decisions; these include traits (such as risk proneness), life cycle, and education.
As results reveal, time orientation cannot be easily influenced. Even if that is the case, understanding that differences in
personality and demographic indicators are associated with different financial outcomes can help marketers if they segment
populations into homogeneous segments and tailor marketing campaigns in order to motivate positive borrowing and saving
decisions. Potential personality and demographic indicators include those that were identified in this study.
Webley and Nyhus (2001) found that difficulties with debt were associated with low incomes and present-oriented mindsets.
Applying these findings, a marketing campaign could target people in low-income groups and highlight immediate benefits
of good financial management (such as less money-related stress among family members and better sleep at night knowing
that they are financially prepared for the future). Social marketers have reported that bringing benefits into the present
encourages positive behaviour change (Lee & Kotler, 2011), and thus emphasising the present benefits of responsible
financial decision making could be a worthwhile approach.
Financial institutions could apply strategies recommended in this study to attract investors. Such efforts would benefit society
by making individuals more financially prepared, while also benefiting the financial institutions through increased profits.
Examples of such social marketing efforts include a partnership between Fidelity Investments and the American Savings
Education Council (Davidson & Novelli, 2001).
72
Limitations
This study had several notable limitations. First, the financial data that were used within the study were self-reported by the
participants. An attempt to collect accurate data was made; at the beginning of the survey respondents were told that the
survey will ask you details about your financial situation (income, savings, debt) and that they may want to take a
moment to gather this information. Unfortunately, there was no way to verify whether respondents actually took the time to
collect their financial records, or whether they simply estimated these figures. If they were only estimating, it is possible that
a social desirability factor would have come into play. This may have caused participants to understate their debt or overstate
their savings and other assets. Second, only future orientation and not present orientation was primed during this study.
Priming a group of participants with a present-oriented mindset may have produced larger differences between groups.
Future Research
First, studies could replicate priming a future-oriented personality trait, because there is at least one way in which the current
study could be improved. Our study required high degree of concentration. In hindsight, having participants complete this
survey online may not have lent itself well to this type of study. In an online setting, the researcher cannot control
environmental distractions such as whether the participant is listening to music or watching television while completing the
survey, nor is it possible to control whether the survey is completed in one sitting. Alternatively, this study should be
conducted in an in-person format, where the researcher can control environmental factors. Additionally, collecting data inperson would make the study more similar to real life financial decision making situations because such decisions are not
normally made online, but rather in-person.
Another possible area of future research is to understand the relationship between time orientation and education and how it
affects first-time home buying. The current research found years of education to be positively related to future orientation.
This could allow low future-oriented individuals to have the opportunity to buy a home earlier than their high future-oriented
counterparts, who are more likely to pursue higher education than to be established in a career at a younger age. However, a
study as to whether low future-oriented individuals buy homes earlier than high future-oriented individuals is necessary to
confirm this conjecture.
Third, this research found that those who are more future-oriented tend to have higher mortgage balances; future research
should attempt to understand this relationship. Similarly, the current study found that future orientation was positively related
to both household and personal incomes. It could be that future-oriented individuals simply have higher mortgages because
they have higher incomes and therefore choose to buy more expensive homes, but several different motivations could explain
this choice. One possible reason is that homes are viewed as investments, rather than liabilities, which are likely to appreciate
over time. On the other hand, it could be that future-oriented individuals have higher mortgage balances because they use
their homes to leverage borrowing for other purposes.
Lastly, future research could look at the role of others in influencing positive financial behaviours. Perceived peer influences
determine positive and negative adolescent health behaviours, such as smoking (Hoffman, Monge, Chou, & Valente, 2007),
physical activity (Anderssen & Wold, 1992), and condom use (DiClemente, 1991). In the same way that modifying the
perceived norm of using condoms could affect overall condom use (see DiClemente, 1991), social change managers can
communicate norms of positive financial behaviours, particularly in younger demographics.
TABLES
Table 1: Regression analysis: Predictors of savings satisfaction a,b
Independent Variables
Gender
Education (Years)
Job Security
Financial Knowledge
Own Home (Yes or No)
Standardized
Coefficients
Beta
Mean
-.10+
.07
.18**
.22**
.01
Standard
Deviation
Frequency
Distribution
57% Female
15.53
4.93
4.45
2.94
1.42
1.20
74% Yes
73

Access to Credit (Yes or No)
Family Income ($)
Total Non-Mortgage Debt ($)
Total R Square
-.16*
.22**
-.22**
32%
80% Yes
80,360.51
23,509.23
72,577.38
38,518.40
a. Dependent Variable: Savings Satisfaction (M = 3.32, SD = 1.76)

b. * denotes significance at the .05 level, ** denotes significance at the .01 level, + denotes p < .10
FIGURES
Figure 1: Solomon four-group design notation
Group 1:R
Group 2:R
Group 3:R
Group 4:R
O
O
X
X
O
O
O
O
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76
ASYMMETRIC POLITICAL IMAGE EFFECTS AND THE LOGIC OF NEGATIVE CAMPAIGNING

Roger Mortimore, Ipsos MORI, UK
Paul Baines, Cranfield School of Management, UK
Rober Worcester, Ipsos MORI, UK
Clifford Young, Ipsos USA
Julia Clark, Ipsos USA
INTRODUCTION
Political marketing campaigns frequently use negative campaigning approaches, in which a candidates advertising criticizes
an opponent, but the practice is controversial. Negative advertising in the 2012 US Presidential election was widely chastised
in the media (Gabbatt 2012; Gye 2012), for being even more negative than its predecessor (Cordes 2012; Slack 2012).
Despite considerable investigation by academics, there is little consensus on the effectiveness of negative campaigning
(Merritt 1984; Lau et al. 1999; Lau et al. 2007; Chou and Lien 2010). Fewer scholars have discussed whether it may be more
effective for some candidates than for others, but their suggestions include its: being more effective on issues where the
campaigner is strongest (Damore 2002); being most effective for challengers against incumbents (Lau and Pomper 2002);
having more usage appeal for trailing candidates than leaders (Skaperdas and Grofman 1995); and being most used by
candidates who are perceived as weak on personal attributes (Harrington and Hess 1996). None of these papers explores how
the tactical circumstances might dictate prescriptively which issues a political marketer ought to choose to suit a positive
focus for a given candidate nor which issue focii might repay a negative approach.
This research outlines a structural framework for viewing the issues in an election and how they relate to each candidate and
the publics voting behavior, in order to understand whether positive or negative campaigning on each issue is worthwhile.
We hypothesize that how the public sees issues in the political debate is not symmetrical in its effects on candidates, so that in
practice this framework presents different imperatives to different candidates, and also that, under certain circumstances, this
creates a scenario where a negative campaign on a particular issue is the rational choice for at least one of the candidates.
Using polling data from the 2012 US Presidential election campaign, we outline on which issues a given candidate has most
to gain from a positive campaign and which from a negative campaign.
METHOD
To understand the tactical considerations facing candidates in elections, it is necessary to take into account three inter-related
factors: i) which issues are strong/weak for the candidate (a candidate is most incentivized to raise issues where her position
is strong, but she may need to rebut issues her opponent raises where she is weaker); ii) which issues are most powerfully
related to voting intention; and iii) which issues affect public attitudes toward each candidate. If there are issues important to
voting which do not affect the image of the candidate herself but which do affect the image of her opponent, the only
effective way to raise the issue is to discuss her opponents stance or competence i.e. via negative campaigning. We
illustrate by analyzing data from a series of daily Ipsos polls taken at a point in the Obama-Romney election when the vast
majority of likely voters had formed some opinion of both the candidates (the period around the two parties national
conventions). A nationally representative sample of 6,971 US adults of voting age drawn from an online panel was
interviewed between 28 August and 17 September 2012. As well as voting intentions, the polls measured, among other
things, favorability towards the two Presidential candidates on a six-point scale and a head-to-head comparison of them on 13
significant issues of personality, ability and capacity.
From this sample, we concentrate on potential swing voters, who are of most interest to a campaign manager since their
vote might still be swayed. We use a simple definition of likely voters (those of the sample who say they are registered to
vote and rate their likelihood of voting at 10 on a 1-to-10 scale, where 10 is certain to vote), and class as potential swing
voters those likely voters who do not overwhelmingly favor either Barack Obama or Mitt Romney in the 13 head-to-head
image tests and so might be more persuadable towards a different candidate than the majority of voters. On these definitions,
10% of Americans (18% of likely voters) were classified as potential swing voters, of whom there are 752 in the sample. To
assess the relative importance of the 13 issues to the voting intention of the potential swing voters, we used a binary logistic
regression analysis to identify the opinions that most effectively distinguish those who intended to vote for Obama from those
who intended to vote for Romney. To measure the impact of each issue on each candidates image, we derive ordinary least
squares linear regression models that relate the same list of attributes to the voters favorability towards Obama and towards
Romney. Candidate strength on each issue is indicated by which candidate has an advantage on the topline score, and by how
much. Drawing all three analyses together, the differential impact of each issue points towards what her optimal tactics on the
issue might be.
77

The impact of the issues on voting intentions is shown in Table 1. (The image variables were set up with a preference for
Romney coded as -0.5, a non-committal answer as 0 and a preference for Obama as +0.5, to give the difference between a
preference for the two candidates a unit value in the model). Eight of the 13 image attributes had a significant independent
explanatory effect, but some were stronger than others. Which of the two candidates scores highest on the item Can be
effective in Washington is the most powerful discriminator, with around three times as strong a relationship as any other
variable in the model, the odds ratio being 49.7 (meaning when you compare two otherwise identical voters, who differ only
on which candidate would be more effective in Washington, the odds against the one who prefers Romney on this issue being
an Obama voter are almost fifty times as high as for the one who picks Obama). At the second level of importance to the
voting decision are two variables, which candidate is most Presidential and which Has the right values. On the third
level, around half as powerful as these, is Understands people like me. Less powerful, in order of importance, are
Likeable, Would be fun to meet in person, Smart enough for the job and Will protect American jobs. The remaining
five image attributes have no extra explanatory effect on voting intention.
Table 2 shows how strongly the same list of attributes relates to the voters favorability towards Obama and Romney,
deriving a separate linear regression model for each. (Coefficients for Romney are negative since a negative score on each of
the independent variables indicates a preference for Romney.) Of the 13 attributes, eight are significantly related to the
voters opinions of Obama and five to Romney, with three common to both models and three finding no place in either.
Which of the two candidates is seen as most Presidential is a powerful predictor of their views of both (it is the single best
predictor of favorability/unfavorability towards Obama). Which of them best Represents America and which can best be
described as A man of faith is also related to opinions of both candidates, although the former is more influential for
Obama and the latter for Romney. Six other issues are tied to views of Obama, while having no significant relationship with
views of Romney, and a further two are relevant to views of Romney but not of Obama, including Will protect American
jobs which is the best single predictor of overall attitudes to Romney.
Finally, we consider which candidate had a lead (and how large) among the potential swing voters on each of the 13 image
attributes. These are shown in Table 3 with a summary of the findings from the two previous tables, giving an overview of
the tactical situation for each candidate on each of the 13 issues.
Table 3 illustrates that the campaigning situation creates some very clear incentives for negative campaigning. For Romney,
the issues of effectiveness in Washington and having the right values look as if they could have been important vote winners,
being issues with a powerful effect and where his standing was strong, but only if he concentrated on Obamas failings rather
than his own strengths. Similarly, Obama might have campaigned negatively on whether Romney understands people like
me, although he might have preferred instead a positive campaign based around being fun to meet in person, on which his
advantage over Romney was larger (though with less effect on swing voters). Of the issues from our list that matter, only
being most Presidential offers both candidates some hope of benefit from positive campaigning. And, even then, purely
negative or comparative campaigning might fit the bill just as well.
Our presentation sets out a structural framework for understanding the tactical possibilities in a given electoral situation than
has hitherto been proposed. By tabulating image dimensions against favorability towards candidates and determining each
image dimensions impact on voting intention, and the candidates relative standing vis--vis one another, campaign teams
can identify issues on which they should campaign. This framework shows how some issues are better suited than others to
negative campaigning for a particular candidate. Our polling example applies this in a real situation, offering a simplified
view of the Obama-Romney campaign. It considers a limited number of issues, with a target group of voters more crudely
defined than would satisfy a real campaign manager.
Nevertheless, it demonstrates that certain situations create an incentive for negative campaigning, and not purely those issues
where this can only mean character assassination. Of course, this framework does not amount to a comprehensive
campaigning recipe. At most, it rules out certain possibilities. Having chosen a particular issue on which to campaign and a
particular tactic, the candidates and their teams still need to identify appropriate messages to implement that decision. It is at
this stage that they will have to weigh up the advantageous impact of each chosen message against any possible deleterious
effects of a backlash against being seen to campaign negatively. Nevertheless, our data establishes the possibility that
political marketers ought to approach and position their candidates differently on different issues. It provides a framework
they can use in determining how to do so and that observers can use in analyzing how they made their decisions. Candidates
and campaign managers already, frequently, make the decision to go negative without resorting to any formal framework,
relying on instead on instinct and experience to interpret the implications of what they know about voter opinion. The next
step for researchers is to explore how closely empirical campaigning practice fits this theoretical structure of optimal choices.
78
TABLES
Table 1: Predictors of voting intention for potential swing voters (binary logistic regression)
Can be effective in Washington

Presidential
Has the right values
Understands people like me
Likeable
Would be fun to meet in person
Smart enough for the job
Will protect American jobs
Constant
B
3.905
2.872
2.643
2.170
1.787
1.533
1.428
1.391
1.359
Odds ratio
(Obama
v
Romney)
49.673
***
17.681
***
14.049
***
8.757
***
5.974
***
4.633
**
4.171
**
4.017
*
3.891
***
S.E.
.682
.494
.528
.614
.508
.538
.449
.572
.185
Table 2: Predictors of favorability for potential swing voters (OLS regressions)
(Constant)
Presidential
Would be fun to meet in person
Represents America
Is a good person
Can be effective in Washington
A man of faith
Barack Obama
B
S.E.
4.022 .066 ***
1.076 .177 ***
1.023 .195 ***
1.242 .203 ***
.770
.176 ***
.713
.184 ***
.787
.188 ***
.530
.219 *
-.437 .197 *
Mitt Romney
B
S.E.
3.645 .055
-.923
.150
***
***
-.373
.157
-.790
-1.554
-.558
.164
.177
.193
***
***
**
Table 3: Summary of tactical situation on 13 attributes
Can
be
effective
in
Washington
Presidential
Would be fun to meet in
person
Likeable
Eloquent
Link with
voting intention
Link
with
favorability
towards Obama
Link
with
favorability
towards Romney
Very strong
Strong
Strong
Middling
Yes
Yes
Yes
No
No
Yes
No
Yes
Weak
Weak
Weak
Middling
Insignificant
Yes
Yes
No
No
No
No
No
Yes
No
No
Candidates
standing
Romney +12
79
Romney +8
Romney +9
Obama +4
Obama +25
Romney +2
Romney +15
Obama +27
Obama +26
Is a good person
Represents America
Tough enough for the job
A man of faith
Insignificant
Insignificant
Insignificant
Insignificant
Yes
Yes
No
Yes
No
Yes
No
Yes
Obama +9
Romney +3
Romney +17
Romney +35
REFERENCES
Chou, H-Y., & Lien, N-H. (2010). How do candidate poll ranking and election status affect the effects of negative political
advertising? International Journal of Advertising, 29, 815-834.

Cordes, N. (2012). Negative presidential campaign ads going to new extremes. CBS News, 10 August. Retrieved 11
December 2012 from: http://www.cbsnews.com/8301-505267_162-57490682/negative-presidential-campaign-ads-going-tonew-extremes/
Damore, D.F. (2002). Candidate strategy and the decision to go negative. Political Research Quarterly, 55, 669-686.

Gabbatt, A. (2012). Democrats and Republicans negative advertising prompts growing backlash. The Guardian, 14
September. Retrieved 11 December 2012 from: http://www.guardian.co.uk/world/2012/sep/14/democrats-republicansnegative-advertising-backlash
Gye, H. (2012). How Obamas hit Mitt strategy backfired after the debates.leading to presidents campaign U-turn as he
releases upbeat plan for second term. Mail Online, 24 October. Retrieved 11 December 2012 from:
http://www.dailymail.co.uk/news/article-2222594/U-S-presidential-election-2012-How-Obamas-negative-strategy-backfireddebates.html
Harrington, J.E., & Hess, G.D. (1996). A spatial theory of positive and negative campaigning. Games and Economic
Behavior, 17, 209-229.

Lau, R.R., & Pomper, G.M. (2002). Effectiveness of negative campaigning in U.S. Senate elections. American Journal of
Political Science, 46, 47-66.

Lau, R.R., Sigelman, L., Heldman, C., & Babbitt, P. (1999). The effects of negative political advertisements: A meta-analytic
assessment. American Political Science Review, 93, 851-875.

Lau, R.R., Sigelman, L., & Rovner, I.B. (2007). The effects of negative political campaigns: A meta-analytic reassessment.
Journal of Politics, 69, 1176-1209.

Merritt, S. (1984). Negative political advertising: Some empirical findings. Journal of Advertising, 13, 27-38.

Skaperdas, S., & Grofman, B. (1995). Modeling negative campaigning. American Political Science Review, 89, 49-61.

Slack, D. (2012). RIP positive ads in 2012 election, Politico, 4 November. Retrieved 11 December 2012 from:
http://www.politico.com/news/stories/1112/83262.html
80
POLITICAL PARTY BRAND IDENTITY AND BRAND IMAGE: AN EMPIRICAL ASSESSMENT

Alessandro Bigi, Royal Institute of Technology - Stockholm, Sweden
Michelle Bonera, Universit degli Studi di Brescia, Italy
ABSTRACT
In this article we explore the concepts of political party brand identity and image. Political leaders should be able to
effectively define the distinctive characteristics of the political brand and subsequently activate the most appropriate
mechanisms of communication to promote an accurate perception of the image in the market. The specific aim of this
research is to explore interrelations between a political partys brand identity and image in two different time periods, in order
to discover possible discrepancies and changes in time. The party blog, containing both the official communication and the
peoples feedbacks represents a perfect place where to observe the concepts and the values on which both the political brand
identity and image are founded.
INTRODUCTION
Kelley (1956), is generally credited with the first use of the term political marketing. The link between politics and
marketing discipline was subsequently reinforced by Rothschilds (1978) study on political advertising effectiveness,
segmentation, social policy, and political policy making. During the past 25 years, political marketing has transformed from a
relatively obscure subject studied by a small group of authors and academic marketers to a significant area of international
research in contemporary marketing. Therefore, a wide range of academic literature has concentrated on the application of
marketing concepts and principles to politics (Andrews, 1996; OCass, 2001). Similarly, the marketing concept, as a general
management philosophy and overarching principle in marketing, has been noted to be a useful philosophy that is relevant to
both profit and nonprofit organizations (Berthon, Opoku, Pitt, & Nel, 2007; Brownlie & Saren, 1991; Kotler & Zaltman,
1971) as well as to a variety of industry contexts (Kotler, 1972; Wensley, 1990).
Over time, short-term marketing campaigns, designed to influence specific and limited targets at particular periods of time
(elections and voters), have been replaced by long-term activities, which aim to increase the brand image of political parties
and influence the viral effect of user-generated content in political communication. Shifting from short-term to long-term
communication aims at the creation of a political brand. One of the first authors on this subject, Kirchheimer (1966),
suggested that viewing parties as brands is an inevitable response to the move from mass-based to catch-all parties. Voters are
less influenced by class affiliation and more likely to act as rational economic actors when voting (Downs, 1967). In the past,
to win an election, the catch-all party must have entered into millions of minds as a familiar object fulfilling in politics a role
analogous to that of a major brand in marketing. (Kirchheimer, 1966, p. 192)
In this article we focus on the concepts of political party brand identity and image. Identity and image can lend insight into
the character and behavior of organizations and their members. Whether those insights concern personal versus
organizational identity (Ashforth & Mael, 1989), threats to identity (Elsbach & Kramer, 1996), organizational image and
identification (Dutton, Dukerich, & Harquail, 1994), organizational image as an end state (Alvesson, 1990), adaptation
(Dutton & Dukerich, 1991), issue interpretation (Gioia & Thomas, 1996), or member commitment (Whetten, Lewis, &
Mischel, 1992), identity and image have acquired the status of key concepts employed to describe and explain individual and
organizational behavior (Whetten & Godfrey, 1998). Aim of this research is to explore interrelations between a political
partys brand identity and image in two different time periods, in order to discover possible discrepancies over time.
CONCEPTUAL BACKGROUND
The concept of brand, understood as a set of distinctive features of a product that can generate unique value for customers
compared to the competitors products, has an element of complexity in the literature, which has given rise to different
models, interpretations, and definitions (Maurya & Mishra, 2012). Brands have been associated with businesses, products,
organizations, and services. Researches (Fournier 2010; Hirschman 1987; Thomson 2006) recognize that brands can also be
human. This is important when we refer to political parties that are represented by single political actors.
According to a customer-based approach, the cognitive components are brand awareness, brand identity, and brand image.
Awareness is linked to the reputation of the brand. It depends on the strength of the brand in terms of recognition and
customers ability to recall the brand. Brand identity is connected to the distinguishing factors that enable the recognition of
81
the brand, and the set of corporate values that guide the selection of choices over the life cycle of the brand (Bertoli &
Busacca, 2002). Brand identity or organizational identity is the combinative construal of firm culture, history, structure,
characteristics, status and reputation with competitors, customers, and society at large, and it is formulated and cemented over
time (Brown, Dacin, Pratt, & Whetten, 2006; Scott & Lane, 2000). Identity involves all that is central, distinctive and
enduring about a firm (Albert & Whetten, 1985), conveyed through mission, vision, actions and association of the firms
values and goals (Brickson, 2005). Indeed, organizational identity theory demonstrates how identity both shapes and drives
organizational goals and strategic objectives (e.g., Brickson, 2007). Put simply, identity involves how both internal and
external constituents and stakeholders see the firm (Gioia, Price, Hamilton, & Thomas, 2010; Sen, Bhattacharya, &
Korschun, 2006; Voss, Cable, & Voss, 2000). In contrast, brand image is the external projection of the identity. Scholars have
seen organizational image as a broader concept, which includes notions involving the ways organizations members believe
others see the organization (Dutton & Dukerich, 1991); fabricated, projected pictures aimed at various constituencies
(Bernstein, 1984); and the publics perception of a given organization (Berg, 1985).
Brand image has been the subject of many different conceptualizations and definitional debates. Dutton and Dukerich (1991)
argued that organizational image is the way members believe others view their organization. Whetten et al. (1992) took some
issue with this definition and argued instead for defining image as the way organizational elites would like outsiders to see
the organization. Such a projected image could be an attempt to represent essential features of organizational identity to
others. It could also take the form of the projection of a desired future image that communicates to insiders and outsiders a
vision to be achieved (Gioia & Thomas, 1996). Projected image, however, might also encompass attempts to convey a
socially desirable, managed impression that emphasizes selected aspects of identity; it could even conceal or misrepresent
identity. In fact, Bernstein (1984) held that image should be defined as a construction of public impressions created to appeal
to an audience (and not necessarily the attempt to represent some ostensible reality). All these views, however, take image to
be essentially an internal conceptionthat is, perceptions held or communicated by insiders. Berg (1985) took a decidedly
more external approach by focusing on perceptions held by outsiders. He defined image as the publics perception or
impression of an organization, usually associated with a given action or event (which we term an external transient
impression).
THE RELATIONSHIP BETWEEN BRAND IDENTITY AND BRAND IMAGE
The central problem lies in the relationship between brand identity and brand image, a problem that has been extensively
documented in marketing literature focused on brand management (at the individual level by Cooley (1902) and James
(1918), at the organizational level by Albert and Whetten (1985), Dutton and Dukerich (1991), Dutton et al. (1994), Reger,
Gustafson, DeMarie, and Mullane (1994), Elsbach and Kramer (1996), Gioia and Thomas (1996), among others). Although
the approach that consumer perspective must be incorporated into brand identity is generally accepted (Kapferer, 1997,
2008), undoubtedly the management of the company identifies and defines the content of the brand. Brand image is linked to
the perception of the public and depends on the set of associationsnamely the elements of information, rational and
emotional, that are in the memory of the consumers and that guide their behaviors by defining their perception of the brand
(Keller, 1998). The intangible nature of the brand of a political party complicates the process of brand building, which
requires a clear separation of the concepts of brand image and brand identity. The management of a political brand meets the
objective of offering a set of tangible (political programs, political activities, etc.) and intangible factors (services, culture,
values, emotions, etc.) to the public. This makes up the supply system that guides peoples perceptions and behaviors.
Therefore, the process should be able to effectively define the distinctive characteristics of the political brand and
subsequently activate the most appropriate mechanisms of communication to promote an accurate perception of the image in
the market in particular and in the more general context.
Organizational identity is typically taken by scholars to be an organizations members collective understanding of the
features presumed to be central and relatively permanent, and that distinguish the organization from other organizations
(Albert & Whetten, 1985). Nevertheless, because of the reciprocal interrelationships between identity and image,
organizational identity is, rather than enduring, better viewed as a relatively fluid and unstable concept. There must be
fluidity to the notion; otherwise, the organization stagnates in the face of an inevitably changing environment.
The instability of identity arises mainly from its ongoing interrelationships with organizational image, which are clearly
characterized by a notable degree of fluidity. Perhaps most importantly, we further argue that the instability of identity is
actually adaptive in facilitating organizational change in response to environmental demands. All of these views of
organizational identity suggest that it is not only a complex phenomenon but also one that can vary with the context for which
it is expressed (Fiol, Hatch, & Golden-Biddle, 1998; Wilkins, 1989).
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Image often acts as a destabilizing force on identity, frequently requiring members to revisit and reconstruct their
organizational sense of self. To examine the processes by which identity becomes interrelated with, and susceptible to, the
influence of image, we begin with the assumption that organization members have developed some sense of who we are as
an organization (Albert & Whetten, 1985) and have communicated that identity to internal and external constituencies. Over
time, organization members receive feedback about their organizational portrayal, or some event occurs that makes identity
concerns salient (cf. Dutton & Dukerich, 1991; Elsbach & Kramer, 1996). Because organization members are also
simultaneously members of external groups and thus sensitized to outsider views of their own organization, the tendency to
compare their views of their organization with others views is heightened further (Hatch & Schultz, 1997).
THE EMPIRICAL CASE
The case under analysis is Beppe Grillos Movimento 5 Stelle. Beppe Grillo is an Italian comedian-turned-political activist
and candidate. His career as a comedian started in the late 1970s; during the early 1980s, rising audience ratings and critical
acclaim transformed him into one of the hottest media figures. Towards the end of the decade and into the 1990s, Beppe
Grillos satire changed: he began to discuss controversial issues, both during his theater shows and on television. He openly
attacked some of the most powerful Italian politicians and their penchant for bribery. As a result, by the early 1990s, Beppe
Grillo was informally but firmly banned from Italian television. Yet this did not stop Beppe Grillos satirizing of politicians
and corporations. His theatre shows were almost always sold out. Even the editors of Time magazine noticed Beppe Grillo
and his political satire: in 2005, they named him among the 37 European heroes of the year .
In January 2005, the web provided Beppe Grillo with a new and powerful communication instrument: a blog at beppegrillo.it.
Through this site (and with the help of the digital marketing company Casaleggio & Associati), his popularity received a
much-needed boost. In December 2005, less than a year after its first post, beppegrillo.it was awarded the WWW 2005 Prize
in the News and Information category by the well-known Il Sole 24 Ore, for interactivity with the public, ample
documentation on the Internet and commitment to tackling topics of use to citizens. In June 2012, beppegrillo.it was the
most popular blog in Italy.
During 2008, several meetings were held that anticipated the foundation of an official political movement. Movimento 5
Stelle was announced and formalized on 4 October 2009, with civic lists at the administrative election of 2009.
Our object of analysis has been both Beppe Grillo posts and the most-voted user comments. The beppegrillo.it posts from
January 2005 to May 2012 have been analyzed. During this period, Beppe Grillo and his staff published 4,935 posts, which
included 2,572,638 words. The data containing the comments for the year 2005-2012 contained around 19,765,000 words.
These posts have been divided into two different segments (before and after the blog switched from personal to political), but
they both have as their central foundation the Movimento 5 Stelle. To get only significant data we decided to analyze only the
comments receiving the most votes from readers.
Than we used Leximancer software a tool for transforming lexical co-occurrence information from natural language into
semantic patterns in a nunsupervised manner. Leximancer is an Australian-developed text-mining or lexicographic tool that
that enables a visual analysis of texts. Leximancer uses a machine-learning technique, to discover the main concepts in a text,
and how they relate to each other (Rooney, 2005).
One of the advantages of Leximancer is its ability to handle several of text, including the short and ungrammatical comments
typical of those posted to beppegrillo.it. The program generates word lists by assessing the contextual collocations of words
through term-occurrence information, such as co-occurrence, positions and frequencies of nouns and verbs in text
(Kamimaeda, Izumi, & Hasida, 2007; Young and Denize, 2008), suggesting clusters of meaning based on word groupings.
ANALYSIS AND RESULTS
We compiled two parallel datasets (party leaders posts vs. comments from the public) in order to identify possible
differences or discrepancies between the official communication (coming from the organization and reflecting the party brand
identity) and the public opinion (expressing what the public thinks of the party brand and depicting the brand identity).
Figure 1 shows the result of Leximancers content analysis of Beppe Grillos post before the foundation of Movimento 5
Stelle. The concepts extracted from the political leaders posts are displayed on a concept map that details the relative
83
importance of concepts, and the strengths between them. Large circles represent key themes from a text, while dots represent
concepts. Brighter (lighter-colored) and larger themed circles and concept dots indicate greater relevance within the text.
When concepts are close together or overlap in the map, it means that they also appear close together in the text. Concepts
that are directly related, but not necessarily strongly semantically linked, will be far apart on the concept map, while concepts
that are strongly semantically linked will be close to each other on the concept map (Rooney, 2005, pp. 410412). Moreover,
concepts that occur in very comparable semantic contexts will form clusters. The researcher can then use the concept map to
guide its interpretation.
The themes represented clearly indicate the predominance of discussions about Silvio Berlusconi, prime minister at the time
of the posts. Analyzing the composition of the two principal themes makes it clear that the message is predominantly negative
and that the leader of Movimento 5 Stelle is creating a brand identity in contraposition to the Prime Minister.
The Berlusconi theme is characterized by the following concepts: Berlusconi, trial, mafia, Deputy Public Prosecutor, cabinet,
trials, judges, sentence, boss, investigation, crimes, intercept, judge, crime. The same negative concept apparently is not
extended to the institution and the government that are represented by the concepts of Government, politic, politicians,
politician, justice, political party, laws, and respect. The third theme, newspapers, has a neutral polarity.
In analyzing the same conceptual map with the data coming from public comments, several differences are identified (fig. 2).
The first aspect is the relative unimportance assigned by the followers to Berlusconi; this is not one of the most important
themes and is less cited than the left wing party (PD, or Partito Democratico). The same concepts correlated to Berlusconi
seem to be less aggressive (Berlusconi and Rome). The followers are showing more nationalism and patriotism in their
comments. The terms Italy and Italian are more relevant, and a huge importance has the theme Country. Making an
analysis of the concepts correlated to the themes reveals a desire of belonging to a Country, as well as the desire to change a
situation and the political assets.
The second element in order of importance is represented by social elements. The social themes are people, house, and
words. The difference between the identity shown by the leader of the Movimento 5 Stelle and the perceived image is quite
clear in this first phase of the analysis.
The tables 1 and 2 show the words that the software related to every theme for this phase.
The second set of analysis is focalized on the second time frame. The difference between the two sets is found in the more
political and electoral implications of the second data elaboration, due to Beppe Grillos decision to create a movement in
order to run for elections. In this phase Beppe Grillo expanded its subjects without in any way changing his personal attack
style. The leaders communication (fig. 3) is still negative and against Silvio Berlusconi, even if several proactive aspects
have appeared and gained importance.
The most representative theme that identifies the difference between the brand identity and the brand image is temporal.
Movimento 5 Stelle and Beppe Grillo are focused on reality, Silvio Berlusconi and other concrete aspects. The followers
posts are differently oriented (fig. 4). The followers are not focused on Silvio Berlusconi; the most important theme is related
to the future, even if correlated to the term problem. Once more, the tables 3 and 4 show the words that the software related to
every theme for this phase.
DISCUSSION AND IMPLICATION
The organization that governs the development of a political brand must work to increase the value of the brand (brand
equity) and gain sustained competitive advantages. The increase in brand equity comes from the positioning decisions and
depends on the ability to develop a brand identity that is correctly perceived by the market (brand image). Such a task
suggests two major options: the first is to change something about the way the organization sees itself (i.e., change aspects of
the identity); the second is to change the way others perceive it (i.e., change others external impression/reputation).
The party blog, containing both the official communication and the peoples feedbacks represents a perfect place where to
observe the concepts and the values on which both the political brand identity and image are founded. At this point, if the
discrepancy is marked and significant, it can suggest the need to reevaluate and change aspects of identity. Because direct
interventions to followers to alter their conceptions of the organization are unlikely to be effective (Reger et al., 1994), a
viable alternative for the political leader is to project an attractive vision in the form of a desired image as a precursor to a
hoped-for future identity.
84
If the political leaders decide, however, that the identity-image discrepancy should be resolved by attempting to change how
outsiders perceive the organization, they can attempt several tactics. First, they can project an image to their outside
constituencies that more strongly conveys their conception of the organizations identity. Such an attempt at strategically
altering images of the organization to better communicate the organizations sense of identity is aimed at influencing
outsiders perceptions to be better aligned with self-definitions.
LIMITATIONS AND FUTURE RESEARCH
There are three main limitations to the present study. The first is that, due to space limitations, the paper cannot report
additional levels of analysis focusing on generic themes rather than single concepts. The huge amount of information
collected (more than 20 million words examined) forced us to work at this level of analysis, leaving more in-depth analysis to
future researchers. The second limitation is linked to the interval of analysis; we confronted just two periods (before and after
the decision to create a political movement). It would be interesting to study the evolution of the single terms and themes
during shorter periods, identifying trends and reaction viscosity. Finally Cameron (2007) notes the limitations of Leximancer
as being less valuable for data sets, which could produce false positives as a result of simplifying complex primary data
through machine analysis. To some extent, the research required some subjective interpretations and codifications. That said,
the counterbalancing arguments for Leximancers objectivity, face validity and reliability outweigh this possible risk in an
exploratory study. However, for an exploratory study we consider these limits to be within acceptable boundaries and a
stimulus to further research.
TABLES
Table 1: Themes related words of the party leaders posts before the foundation of the political party.
Table 2: Themes related words of public comments before the foundation of the political party.
85
Table 3: Themes related words of the party leaders posts after the foundation of the political party.
Table 4: Themes related words of public comments after the foundation of the political party.
FIGURES
Figure 1 Concept map of the party leaders posts before the foundation of the political party.
86
Figure 2: Concept map of public comments before the foundation of the political party.
Figure 3: Concept map of the party leaders posts after the foundation of the political party
87
Figure 4: Concept map of the public comments posted after foundation of the political party.
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UNDERSTANDING CHOICE BEHAVIOR IN POLITICAL MARKETING CONTEXT:

A FAVORABLE VOTER RESPONSES MODEL
Oguzhan Aygoren, Bogazici University, Turkey
Cengiz Yilmaz, Middle East Techncal University, Turkey
INTRODUCTION
Explaining voters political choices, understanding the decision making mechanisms behind and predicting these choices are
unarguably one of the most important subjects of both business and political worlds. An attempt to cover this literature
suggests that voting behavior is shaped by many variables among which sociological environment such as family, friends,
religion (Berelson, Lazarsfeld, and McPhee, 1954); party identification (Campbell, Converse, Miller and Stokes, 1960) and
rational expectations (Downs, 1957; Key, 1966; Fiorina, 1981) are the most important. In addition, there is limited number of
theory building studies (Newman and Sheth, 1985; Rahn et al., 1990). Much research on voting behavior has examined the
antecedents in a way that (1) causal relationships between variables are omitted (2) measures are country and issue-specific,
and (3) voting choice is the focal outcome variable.
However, the authors argue that understanding voting choice behavior is also a viable strategy when (1) the constructs are coemployed in a structural model, (2) measures are redefined for generalization of the model, and (3) outcome variables of
voting intentions, loyalty, confidence, promoting and donating behavior are also made focal possessing important explanatory
power. The authors develop Favorable Voter Responses Model which they posit is useful for explaining voting choice
behavior and for implementing political marketing strategies. The model is further tested in the context of 2011 general
elections in Turkey. As a practical implication to political managers, the results suggest political communication should be
separately crafted depending on the favorable response desired from the electorate.
Identification plays a significant role in voting process (Campbell, et. al; 1960) and is included in almost every voting study.
However, we believe the operationalization of identification and partisanship variables only have an ideology component
lacking an identity component. We suggest identification can best be explained in terms of match-up hypothesis (Till and
Busler, 2000) and congruency model of political preference (Caprara and Zimbardo, 2004). Also, we argue identification
should both have ideology and identity dimensions. Therefore we propose identity fit and ideology fit, constructs not
previously investigated in voting behavior, may possess important characteristics in understanding voting behavior in
particular contexts. We develop our model based on the core assumption that fit constructs mediate the relationship from
economical voting behavior variables of sociotropic and egocentric expectations, and heuristic voting behavior variables of
party and candidate image (Popkin et al., 1994; Rahn et al., 1991; Clarke et al, 2004) to outcome variables of voting
intention, loyalty, confidence, promoting, and donating behavior. The role of fit as a mediator is in line with the view that
party identification can be modeled as a running tally (Fiorina, 1981; Gerber and Green, 1998) and it is more of a
consequence than an antecedent to image perceptions and party evaluations (Garzia, 2012). We test to see to what extent fit
constructs mediate these relationships. We also test the model with involvement as the moderating variable.
This research stands as a modeling study in the field of political marketing to test and understand the causal relationships
between the antecedents of voting behavior and understand the role of fit construct as a mediator in the model. Instead of the
actual voting choice, we give central importance to voting intention, and identify other outcome variables as favorable
responses. Our aim is to develop an integrative model what we label as A Favorable Voter Responses Model which would
be applicable in various countries and specific contexts.
METHODOLOGY
We test and refine our model using data from a CATI survey performed specifically for this study before and after the 2011
general parliamentary elections in Turkey, a major Eastern European country with considerable size and political stability.
Data collection was performed by a research company in two stages during May and July 2011. Sample was selected
randomly among a landline phone database which was provided by the company and claimed to include all the available
landline phone population in Turkey including both home and office numbers which is around more than 15 million phone
numbers. With a 4.7% response rate, 2679 people completed the survey during the first wave. Those 2679 people were
contacted during the second wave with a response rate of 77.7%; leaving us 2085 usable surveys at the end for analysis.
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The initial survey comprised of four sections, namely individual characteristics, economical voting behavior variables as
expectations and evaluations, heuristic voting behavior variables as leader and party image, identification variables as fit
perceptions, and dependent variable as voting intention. Second wave aimed to get the actual vote choice together with
loyalty, confidence, promoting, and donating behavior for the party that respondents actually voted for. The hypothesized
model is investigated by using Structural Equations Modeling in AMOS.
Measures
All measures are content validated and empirically tested on student samples to come up with balanced and reliable scales,
and are used with five-point Likert scales (1 = strongly disagree, 5 = strongly agree).
Sociotropic expectations measure the altruistic and societal benefits that are expected from the party if it is elected to be part
of the government. Scale has four items (e.g. Turkey becomes a more developed and advanced country, Turkey becomes a
country in peace and unity, Turkey becomes a more liveable country, Turkey becomes a safer country). Egocentric
expectations reflect the personal and egoistic perspective of prospective expectations. A four-item scale is used with items
such as I and my close friends and relatives can become richer and more successful, I and my close friends and relatives
can earn many things, New opportunities might emerge for my friends and relatives, My pocketbook income increases.
Party and leader image scale is adopted from Kaid (2004). Image has two dimensions namely responsiveness and
competence. Responsiveness indicates the character based personality traits and includes four-items which are Honest,
Believable, Sincere, and Tolerant asked both for the party and the leader. Competence shows the extent of the
candidate in terms of capability and includes five items which are Expert, Successful, Strong, Hardworking, and
Open to development, again asked both for the party and the leader. (Contrary to our expectations, exploratory factor
analysis did not differentiate on leader and party image. Instead, the sample shows leader and party perceptions together
indicate the two dimensions of responsiveness and competence.)
Fit perception scales are specially formulated for this study and items are adopted and modified from Callero (1985) identity
salience scale. Identity fit is conceptualized as the extent to which one perceives herself as part of the party. It is in fact a
matching process of partys personality in terms of its people. The scale includes three items which are People in this party
are similar to me, This party accounts for an important part of an who I am, I am a part of this party. On the other hand,
assessments of ideology fit concern the world views and ideas in a party. It is a matching process of partys manifest. The
scale includes three-items (e.g., I have the same world view with this party, This partys world view and what it wants to
perform are compatible with mine, I like the ideas of this party).
Voting intention is an observed variable asked in the first wave of the survey before the actual election to learn the
preferences for major political parties.
Loyalty has two implicit dimensions notably of attitudinal commitment and repurchase intention as described by and adopted
from Chaudhuri and Holbrook (2001) as four items.
Involvement is measured with a four-item self-rating measure which is adopted from Ocass (2002). The scale measures how
important politics is in ones life and asked in the first wave. In order to measure its moderating effect on the model, we split
the data based on the median value of 3 for involvement.
Confidence is measured with three items (I am sure that I have made the right choice, I am confident about my decision,
I believe I have had a healthy approach in this decision).
Promoting behavior is measured with three items (I have praised the party I voted to the people I know, In my
conversation with friends and acquaintances, I mentioned the party I voted positively, In work or work-related
environments, I have talked favorably about the party I voted.) Donating behavior is measured with three items (I have
contributed labor to the party I voted, I have allocated my time to work for the party I voted, I have donated money to the
party I voted.)
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The model is investigated only for the voters of three major parties in Turkey (AKP, CHP, and MHP) resulting a sample size
of 1762. CFA results show the model has good fit (CFI=0,967; GFI=0,929; SRMR= 0,051; RMSEA=0,034) although the
model is significant (2(1002) = 3063,31) because of the large sample size. Also, the model has convergent and discriminant
validity for structural model analysis and metric and configural invariance exist for multi-group analysis. In order to eliminate
covariance problems with the outcome variables, the model is run separately for each response variable.
Analysis on the structural model for voting intention reveals that the model has acceptable fit. Fit dimensions partially
mediate the relationship from expectations and image to voting intentions as hypothesized. However, sociotropic expectations
have the highest factor loading on voting intention followed by identity fit, ideology fit, and responsiveness. Interestingly,
egocentric expectations, and competence have negative significant effects on voting intentions. In high involvement case, the
effects of ideology fit and competence on voting intention become insignificant, whereas all effects are significant for low
involvement with the same signs for the effects.
When the model is run for loyalty, identity fit becomes the most significant indicator followed by egocentric expectations,
while the effects of sociotropic expectations, responsiveness, and competence are not significant. For high involvement, the
effect of competence becomes significant in addition to identity fit and egocentric expectations whereas only identity fit is
significant for low involvement.
The analysis for confidence shows sociotropic expectations and ideology fit are only significant effects on confidence. In
high involvement case, ideology fit and responsiveness have significant effects on confidence, however, in low involvement
case, those effects disappear, and only sociotropic expectations become significant on confidence while the rest are
insignificant.
Running the model for promoting behavior indicates the most significant effect as the identity fit, followed by sociotropic
expectations, competence, and egocentric expectations. Effects of ideology fit, and responsiveness are not significant. High
involvement individuals have positive significant effects for identity fit, and competence. However, ideology fit has a
negative significant effect on promoting behavior. On the other hand, for low involvement case, the only significant effect is
for egocentric expectations.
Finally, when donating behavior is investigated, identity fit has the strongest effect, followed by egocentric expectations, and
competence. Contrary to our hypothesis, ideology fit has a negative significant effect on donating. High involvement voters
are affected by positive significant effects of identity fit, egocentric expectations, and competence, while the effects of
ideology fit and competence are significantly negative for donating. On the other hand, for low involvement case, no negative
significant effects are found, and the only significant effects are through identity fit, and egocentric expectations which are
positive on donating.
There are many implications and discussions based on the results for separate response variables. First and foremost, we can
conclude the decision making mechanism follows a different path for the individuals for each of the dependent variables and
the thought processes vary between high and low involvement individuals. Secondly, our results support the significant role
of fit dimensions as mediating the relationship from expectations and image to favorable response variables. Third, identity
fit and ideology fit are confirmed to have separate roles, and identity fit is more positively evaluated for its effect on outcome
variables. Fourth, sociotropic and egocentric expectations have different roles where sociotropic evaluations are more
positively evaluated than egocentric evaluations in more cases, and finally, competence and responsiveness have also distinct
effects on dependent variables, showing responsiveness is a better way for a leader or party in conveying an overall image.
This study provides political marketing and voting behavior scholars a solid model for further empirical testing in different
countries and varying contexts with generalizable items irrespective of issue and party considerations. Besides the study
presents sound practical advice to political managers for developing viable marketing strategies. The study also shows the
strategies should be different for different favorable responses. Therefore, the political manager should first have a clear
target as a desired favorable response for the political marketing activity. Based on the desired favorable response in the
electorate, the marketing campaign should concentrate on crafting different impression management tactics for the partys
prospective voters.
93
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APPEARANCE MANAGEMENT IN POLITICAL MARKETING: EXAMINING PERSPECTIVES OF LOCAL

POLITICIANS AND CAMPAIGN WORKERS
Minita Sanghvi, University of North Carolina Greensboro, USA
Nancy Hodges, University of North Carolina Greensboro, USA
INTRODUCTION
Politicians in the United States are facing increasing levels of voter disengagement with the electoral process at all levels,
including state and local elections (Smith and French 2009). At the same time, it has become increasingly common for voters
to make decisions about a candidate based on more immediate and visual kinds of cues, in that elections have become
increasingly focused on marketing the candidate as a brand (Guzmn and Sierra 2009). Breaking through communication
clutter to achieve voter awareness and recall is now essential to a successful campaign (Aaker 1996; Jackson 2003). Recent
studies on popular national elections suggest that appearance, as a visual cue, is a powerful arbiter of campaign success
(Lawson, Lenz, Baker and Myers 2011; Lenz and Lawson 2011). However, such studies do not consider the topic of
appearance in political marketing when media coverage is less frequent, such as state or local elections, or from the
perspective of the politician and those involved in political campaigns (Hoegg and Lewis 2011). Thus the purpose of this
qualitative study is to address these gaps in knowledge by exploring the role of appearance management in political
marketing from the point of view of local politicians and campaign workers.
Political Marketing
Kotler and Levys (1969) seminal article suggesting that the concept of marketing be broadened initiated the development of
political marketing as a research area within the marketing discipline. Newman (1999) defines political marketing as the
application of marketing principles and procedures in political campaigns by various individuals and organizations (p. xiii).
The significance of marketing in politics has increased as voters become diverse, the market fragmented, and television
viewership has disintegrated (De Landtsheer, De Vries and Vertessen 2008). Political candidates seek to create a unique
brand identity to match their personality, campaign objectives and voter expectations, and to blend this identity seamlessly
through all communication messages (Jackson 2003). Symbols such as Barack Obamas rising sun logo symbolizing hope tie
into Aakers (1996) brand identity model and create an effective and efficient way of getting a complex message across to
voters in a simple format.
Politicians are increasingly being treated as brands and appearances are a part of the packaging that sells the brand (Jackson
2003). Thus, the appearance of a candidate is a critical piece of his or her brand image and could affect voter perceptions of
character, competence and even leadership qualities, which, in turn, could affect the result of an election (Kwon 1994;
Lawson et al. 2010). Research on appearance management in political marketing has recently emerged to illustrate the uses of
appearance in campaigns (e.g., Hoegg and Lewis 2011; Lawson et al. 2010; Lenz and Lawson 2011). However, most studies
have been quantitative in nature, focusing on defining the place of appearance within political marketing rather than on what
appearance means to those who are an integral part of the campaign process.
Appearance Management
Appearance helps to establish the identity of an individual (Roach-Higgins and Eicher 1992). Kaiser (1997) defines
appearance management as a process that starts with planning, thinking about or evaluating the social consequences of ones
appearance. For Kaiser (1997), dress is a term often used interchangeably with appearance management. As a verb, dress
means the act of changing or augmenting appearance (Kaiser 1997). Dress is also a mode of communicating aspects of an
individuals identity, including social class and religious beliefs among other things (Roach-Higgins and Eicher 1992).
Appearance orientation is a concept closely related to appearance management. Appearance orientation is defined as the level
of emphasis one puts on personal appearance and includes how critical ones looks are to a person and the extent of grooming
behavior one engages in to manage his or her appearance (Johnson 2004). This concept is similar to impression management
theory, where individuals alter their behavior based on the impression they wish to create in the minds of others (Leary and
Kowalski 1990). Through appearance, individuals create, maintain, defend and enhance their social identities for an audience,
whether real or imagined (Leary and Kowalski 1990).
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Appearance management is a way of dramatizing ones self and can often be used to define self and redefine the situation
(ONeal 1994). In a political environment, every gesture, speech, hairstyle or accessory is wrought with symbolism, and cued
to reveal something meaningful about the candidate (De Landtsheer et al. 2008). Politicians make conscious efforts to use
props such as ties, hats, hairstyles, and jewelry as non-verbal cues about their message and to accentuate certain aspects of
their identity based on the situation. They do so to demonstrate behaviors that are attuned to social values and expectations to
look good to the public (Leary and Kowalski 1990). From John F. Kennedys choice of shirt color in the televised debates
against Nixon, to Hillary Clintons signature pantsuits, the way a politician looks becomes front and center and, in turn, can
make or break his or her chances in an election (De Landtsheer et al. 2008; Hoegg and Lewis 2011).
METHOD
Because very little research exists on appearance management as part of the marketing of a politician, a qualitative approach
to research was deemed necessary. In-depth interviews were conducted with nine individuals involved in a variety of
positions relative to state and local political campaigns. Participants were involved in politics in the southern region of the
US, including two state representatives: Elizabeth, a veteran office holder and DeShawn who was in his first term. Two first
time contestants for city council positions, one in a large city (Rashida) and the other in a small town (Harold) were also
interviewed. James, the last of the local politicians is mayor of a mid-sized city. Patricia was campaign manager for James
and Miranda helped with fundraising on his campaign, as well as that of other local politicians. Jeffrey is the manager of the
largest PAC in the area and Alice is a former precinct chair and office holder for a political party.
All interviews were audiotaped with participant consent and transcribed verbatim. The process of coding, categorizing, and
iteration as outlined by Spiggle (1994) was followed. To ensure confidentiality each participant was given a pseudonym, as
are any colleagues they have referenced to in the interviews, many of whom are currently in office. A thematic interpretation
of the data resulted in the identification of four major themes: (a) becoming the message, (b) looking the part, (c)
connectability, and (d) a signature look.
Becoming the Message
All of the participants agreed that how a candidate looks impacts how voters perceive the candidates message as well as the
inferences they make about the candidate relative to effectiveness, intelligence, and even morals and values. Participants
talked about structuring a message to suit the constituency, including going door-to-door, speaking at public forums and
sending direct mail to develop personal relationships with voters. Patricia admits that communicating the message in local
campaigns with limited financial means is challenging. What a candidate does not have in airtime, he or she has to make up
in personal contact with constituents. Thus, the candidate must literally embody his or her message. That is, as James
explains, the candidate has to be one with the message, I cant portray a message I dont believe in. As Rashida puts it, the
deliverer of that message is who is showing up at your doorthat is all a part of the message. Similarly, according to
Patricia, the politician and the message are one and the same. Otherwise it is not believable. While messaging is a crucial
aspect within political marketing, how a candidate looks plays a very critical role in whether the message will be heard and
believed. Harold states, The message is not going to be heard if it is delivered in a way that people dont want to receive it.
Hence, how the candidate presents him or herself becomes an essential part of the message.
Looking the Part
According to participants, it is critical that a candidates appearance matches voter expectations of an office-holder. As
Harold says, If you present yourself as a well-dressed professional, then you come across as a serious candidate. He
provided an example of a contender for city council who came to candidate forums wearing a baseball cap sideways and
clothes that showed his tattoos. He lost because people did not take him seriously. According to Harold, people have an
image in their minds about what [a candidate] should look like.
To manage appearances, political candidates often use props such as eyeglasses, sunglasses, hats, and specific types or colors
of clothing. Miranda gives the example of a young local candidate who wore suits and eyeglasses to appear older and more
distinguished to win the race for Registrar of Deeds. However as James points out, looks are not enough, in that though
looking professional is critical, you also have to have that innate ability to connect with the average voter.
96
Connectability
Participants agree that candidates have to be able to connect with voters on some level and appearance can either help or
hinder their attempts. As Jeffrey puts it, While the message is really important, if they dont like hearing you give the
message, they dont listen. Rashida explains that in a working class crowd she often dresses down. She believes it is
because you need to be able to relate to your community. By dressing down or altering ones appearance to suit the
audience, a candidate can better connect with voters. James provides another example, stating that a political candidate would
not want to wear a coat and tie to a barbeque because he would look out of place. You are going to look like you cant
make connectionshow do you connect with people that are likely to support you in the campaign? You touch them with
your appearance.
In contrast, Jeffrey points out that appearance management can go too far, You have to have your own personal style of you
who are. If you are purely acting it does become transparent after a while that you are not being who you are. It is one thing
to care enough about somebody to try to identify with them and it is another to put on an act. Patricia concurs and believes
that if things are done for appearances onlythe voter can smell that and knows it is not sincere. Thus participants point to
the importance of finding the appropriate blend of concern for appearance and emphasis on message to suit each particular
campaign interaction.
A Signature Look
In local races, politicians often do not get significant media coverage. Thus, they must find new ways to create voter
connections and build voter awareness. According to participants, one way to do this is through appearance management.
When used to create a signature look, appearance can become a marketing strategy which, over time, becomes embedded
in the voters psyche, helping to build strong brand image and generate recall. In a similar vein, some candidates use dress as
a device to create a signature style, helping the voter recognize the candidate or differentiate him or her from the crowd.
Miranda and Alice pointed to Edna Mae, a veteran Black state representative who is well known for wearing hats. Miranda
believes that Edna Mae may have started wearing hats as a part of an appearance management strategy. The hats symbolize
her political power while reflecting her religious background. As Elizabeth describes, It is something she believes in and it
goes back to her culture. According to participants, another politician who has a signature look is Julie, a long-standing
member of the general assembly who is known for her liberal, green policies. Participants talked about how Julie is often
seen around town riding a bicycle. As DeShawn explains, Julies brand is that of an environmentalist and a super-duper
progressive. Miranda adds, [The bicycle] suits her message well.
These politicians have created and built on a specific brand image and identity over several years. According to Aaker (1996)
a strong brand symbol provides cohesion and structure to a brand identity, thereby allowing quick recall and recognition of
the brand among consumers. Consistent messaging of the symbol and brand is a key ingredient to successful brand
development (Aaker 1996). Whether voters see Julie riding her bicycle around town or Edna Mae in her signature hats, they
clearly associate the symbol with the politician. Ultimately, a signature look can be used to tie the candidate to the message
and to symbolize a level of commitment to the office and its constituents.
Consumers often buy brands that are coherent and congruent with their self-image in an attempt to reaffirm perceptions of
self (Aaker 2008). Similarly, voters will choose a political candidate with whom they identify. As participant responses
reveal, when candidates create a brand identity through appearance management, it can communicate a message that voters
will recognize. Moreover, this study points to how this process is particularly important for the local politician who receives
little media coverage and thus must rely on personal interaction with constituents. Dress and appearance reflect a candidates
personality and style while creating impressions that contribute to the formation of public opinion (Hoegg and Lewis 2011).
When a politician wears specific clothes, accessories, or colors, it links his or her political identity to the campaign message.
In todays fast paced, visual culture where images and sound bites regularly convey a candidates brand identity to voters (De
Landtsheer et al. 2008), it is critically important to continue to position appearance management as integral to political
marketing and to investigate its uses and applications at all campaign levels, from the local to the national, as well as from a
variety of perspectives, including candidates and voters.
97
REFERENCES
Aaker, D. A. (1996). Building Strong Brands. New York: The Free Press.
De Landtsheer, C., De Vries, P. & Vertessen D. (2008). Political impression management: How metaphors, sound bites,
appearance effectiveness and personality traits can win elections. Journal of Political Marketing, 70, 217-238.
Guzmn, F., & Sierra, V. (2009). A political candidate's brand image scale: Are political candidates brands? Brand
Management, 17, 207-217.
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of Marketing Research, 48, 895-909.
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in new democracies. World Politics, 62, 561-593.
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Psychological Bulletin, 107, 34-47.
Lenz, G. & Lawson, C. (2011). Looking the part: Television leads less informed citizens to vote based on candidate's
appearance. American Journal of Political Science, 55, 574-589.
Newman, B. I. (1999). Handbook of Political Marketing. Thousand Oaks: Sage.
ONeal, G. (1999). The power of style: On rejection of the accepted. In K. P. Johnson, S. J. Lennon (Eds.), Appearance and
Power (pp. 127-139). New York: Berg.
Roach-Higgins, M. E., & Eicher, J. B. (1992). Dress and identity. Clothing and Textiles
Research Journal, 10, 1-8.
Smith, G. & French, A. (2009). The political brand: A consumer perspective. Marketing Theory, 9, 209-226.
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491-503.
98

HISPANICS AND GREEN CONSUMPTION: EXPLORING THE GREEN ATTITUDE-BEHAVIOR GAP
Sigal Segev, Florida International University
Maria Elena Villar, Florida International University
Yu Liu, Florida International University
ABSTRACT
Public concern for the environment has increased in the past four decades (Kim and Choi 2005), leading to consumer demand
for pro-environmental products and services. Research on the drivers of green consumption among Hispanic and other
minorities is scarce (Lee 2008), focusing mainly on comparing Hispanics to other demographic groups in terms of
environmental worldviews, knowledge or attitudes (e.g., Lynch, 1993; Noe and Snow, 1990; Whittaker et al. 2005). Little is
known about whether these attitudes or concerns are translated into actual green consumption; this study intends to bridge
that gap. Peoples pro-environmental behaviors are often determined by what they know about the environment, how they
feel about it, and what commitment they are willing to make (Maloney and Ward 1973). This notion is rooted in the
cognition-affect-behavior (CAB) paradigm that has long been central to flow models of consumer behavior. In line with this
paradigm, we propose a model that portrays a flow from environmental knowledge, green attitudes, and ecological affect, to
green behavioral intent and actual green purchase behavior (Fishbein and Azjen 1975).
The literature views increased environmental knowledge as an antecedent to more positive environmental attitudes (Chan
2001), but not necessarily to behavior. Conceptualized as beliefs about the environment (Banerjee and McKeage 1994) and
environmental concern (e.g., Alwitt and Pitts 1996; Stone et al. 1995), pro-environmental attitudes were found to be
associated with green consumers (Banerjee and McKeage 1994). In line with the CAB paradigm, which views attitudes as
predicting affect and, in turn, actual behavior, the proposed model portrays positive relationship between environmental
affect and behavior (e.g., Maloney & Ward, 1973; Chan and Lau, 2000). The literature indicates that the attitude-behavior
relationship is stronger when the attitude considered is favorability toward performing a specific green behavior as opposed
to attitudes toward general environmental issues (e.g., Hines et al. 1987). Additionally, previous studies showed significant
positive relationship between ecological behavioral intention and actual behavior (e.g., Li, 1997; Maloney and Ward 1973;
Schahn and Holzer, 1990).
Survey data were collected from a convenience sample of 425 students of Hispanic ethnicity from a large Southeastern
university. The survey included previously validated scales to measure environmental knowledge (Mohr, Eroglu and Ellens
1998), environmental attitude (Banerjee and McKeages 1994); Kim and Chois 2005), environmental affect (Maloney and
Ward 1973), attitude toward green purchase (Taylor and Todd 1995), green purchase intention (Li 1997), and green purchase
behavior (Kim and Choi 2005). Demographic data were also obtained.
A structural equation modeling analysis was performed with modeling results indicating a satisfactory fit (x2 (933) = 1907.66,
p < .001, CFI = .90, TLI = .90, RMSEA = .05, SRMR = .068). The values of CFI, TLI, RMSEA, and SRMR indicated that
the proposed model adequately fitted the data. Results revealed that environmental knowledge was positively associated with
environmental attitudes ( =.63), which in turn, was positively associated with attitude toward green purchase ( =.83), green
purchase intention ( =.29) and green purchase behavior ( =.48). Additionally, environmental attitude was associated with
environmental affect ( =.84), that was associated with green purchase intention ( =.44) and green purchase behavior (
=.48).
Results confirm that the path between knowledge about the environment and green purchase behavior among young
Hispanics is moderated by attitudes and emotional involvement with the issue. It confirms that behavioral intent is an
antecedent to actual behavior. This study contributes to the literature on green consumption by examining the moderating
effect of emotional involvement and attitude toward purchasing green. The model suggests that environmentally-friendly
attitudes lead to green purchase behaviors via two possible paths. One is by activating eco-affect or the emotional
involvement with environmental issues; the second path is through attitude towards purchasing green products. Although
both paths were significant, the path that includes affect was found to be stronger. Results from this study have useful
implications for marketers in terms of the type of message appeal that might resonate with the audience. Selecting between
emotional appeal and the favorability of purchasing green products would activate different attitude-behavior mechanisms
and should not be considered interchangeable.
99

CONSUMERS AND COMPANIES ON FACEBOOK FAN PAGES: AN ANALYSIS OF ONLINE
COMMUNICATION STRATEGIES FOR SMALL COMPANIES
Maria Carolina Zanette, Fundao Getlio Vargas, Brazil
Benjamin Rosenthal, Fundao Getlio Vargas, Brazil
Carla Abdalla, Fundao Getlio Vargas, Brazil
Mateus Ferreira, Fundao Getlio Vargas, Brazil
Eliane Pereira Zamith Brito, Fundao Getlio Vargas, Brazil
INTRODUCTION
Online social media has created new opportunities for communication strategies (Mangold and Faulds, 2009). In virtual
community environments, consumers express themselves and interact, both with each other and with companies (Fuller,
Jawecki and Muhllbacher 2007; Kozinets, De Valck, Wojnicki and Wilner 2010; Schau, Muiz and Arnould 2009). The
collaborative environment of online social networks (Kozinets, Hemetsberger and Schau 2008) has led companies to invest in
online brand communities (Muniz and OGuinn 2001). Facebook, particularly, is serving as a fruitful place for the emergence
of brand-related spaces, despite the different degrees of communal characteristics on many fan pages. However, many
companies have failed the task of engaging consumers in these online spaces (Fournier and Lee, 2009).
This research explores how small Brazilian companies can create value on Facebook fan pages through practices that lead to
consumer engagement (Vivek 2009), social capital (Adler and Kwon 2002; Mathwick, Wiertz and De Ruyter 2008) and
consumer trust in the brand (Rutter 2001; Ridings, Gefen and Arinze 2002). According to ComScore (2011), Brazil is the
seventh-biggest Internet market in the world, with 46.3 million internet users who spend a monthly average of 26.7 hours
online, 23% of which are spent on online social networks, and 4.8% on Facebook only.
Specifically, this research project contributes to the literature by analyzing the relationship of engagement, trust and social
capital that emerges from consumer-company interactions. We analyzed five Facebook fan pages (for a pub, a microbrewery,
a beauty salon, a hostel and a health services company) and conducted in-depth interviews with the marketing managers of
these companies.
METHOD
The companies were selected among small or medium-sized companies that have an active fan page on Facebook. We
intentionally chose companies from different industries in order to obtain a diverse sample and to verify common traits
among them, regardless of sector. Many fan pages were visited during the selection process, and we chose those that had a
large number of posts and a reasonable number of interactions with their members, wherein it was possible to identify the
constructs considered in this research.
We collected and analyzed data from fan pages for a period of three to four months, from July to October 2012, choosing one
week per month as a representative period. The total data collected and analyzed amounted to 53,740 words. Two researchers
analyzed each fan page in an iterative (Corbin and Strauss, 2008) fashion in order to obtain an acceptable intercoding
reliability level, which stayed between 90.2% and 96.9% for the five fan pages. Differences of opinion in the categorization
process were solved between the two authors by frequently exchanging opinions, solving differences and questioning each
others motives when in doubt, thereby coming to a consensus. The authors also interviewed at least one manager in four out
of five of the companies studied (the pub, the microbrewery, the beauty salon, the hostel and the health services company), in
order to understand how they managed the fan page, how they analyzed the results of their actions, and what they thought
about the construction of their relationships and trust levels with their fans.
We analyzed the content posted by the companies, and consumers responses to this content. Many consumers responses
were manifestations of more than one concept. The codes used were derived from the literature, based on the suitability of the
action in relation to the concept and the context in which the action took place.
For engagement we used two codes: (1) conscious participation, which relates to awareness of participation in activities
within the fan page (Vivek 2009); and (2) enthusiasm, which encompasses feelings of enthusiasm or strong animation among
100

the fan page participants (Vivek 2009). For social capital we used four codes relating to the dimensions of the concept: (1)
reciprocity, which means fostering ties and creating reciprocal obligations, i.e. doing something for someone with the
expectation that this person will pay the favor back (Nahaphiet and Ghoshal 1998); (2) opportunity, which is related to
conditions that enable tie creation or strengthening (Adler and Kwon 2002); (3) voluntarism, which is the action of offering
help to other consumers on the fan page (Mathwick et al. 2008) or sharing content with friends with benevolent intentions;
and (4) cognitive capital, or shared interests and narratives that strengthen bonding activity (Nahaphiet and Ghoshal 2008).
Finally, for trust we coded actions as: (1) ability, which refers to skills the company shows in interacting with consumers
(Mayer, Davis and Schoorman 1995; Ridings et al. 2002); and (2) benevolence, which relates to how responsive and
trustworthy the company presents itself as on the fan page (Mayer et al. 1995; Ridings et al. 2002).
Our data analysis shows that there is a flow that results in value creation for the company through consumers comments on
fan pages when responding to the companys posts. This flow begins with engagement: consumers may be engaged with the
brand before they like the fan page, or simply feel enthusiastic about a post of the company that was shared with them. After
liking the page, interaction with the brand through Facebook begins. At this stage, consumers demonstrate engagement by
liking posts (enthusiasm), posting doubts on the fan page (conscious participation) and complimenting the company
(conscious participation). Enthusiasm also leads to sharing content and inviting friends to the fan page or the external events
promoted by the brand. This may be a manifestation of voluntarism (when consumers altruistically share content with their
friends) or an opportunity to foster weak ties, thereby creating reciprocity obligations among the consumers friends. Social
capital is basically fostered in the community when consumers show their interest in brand-related issues; in this way, the
company fosters cognitive capital, and creates emotional bonds among consumers, though these do not transpose the limits of
the brand environment the fan page. Our analysis also suggests that consumers do not engage in helping each other in the
fan page environment or even interacting with each other in any significant way. Finally, the company has to show ability
and a level of benevolence with respect to gaining consumers trust. Companies do this via communication strategies that
focus on their ability to achieve (or surpass) consumers expectations and by helping them with their questions, thereby
manifesting their benevolence.
In terms of contributions to present research, the results empirically demonstrate that engagement, social capital and trust are
constructs that are manifested in a sequential but intertwined manner on Facebook fan pages. Also, this study documents that
their existence depends upon companies and consumers communication on the fan page, and that this communication must
be bilateral for building trust. We found that being an enthusiastic consumer (Vivek 2009) brings social capital outcomes to
consumers that foster their social ties (Granovetter 1973). It also benefits the company, since some of these consumers are
hubs (Goldenberg, Han, Lehmann and Hong 2009), which foster participation in the fan page.
Finally, interactions on fan pages should not be undervalued. Not only does conscious participation provide useful
information for small companies, as a form of direct feedback from consumers, but corporate brand image (Balmer and Gray
2003) also seems to be strengthened by manifestations of ability and benevolence from the company.
This study contributes to the literature and practice by proposing a flow of events that happen during the consumer interaction
with the brand on Facebook. These results provide interesting insights for small companies under conditions of small budget
for communication strategies. It shows that posting content on fan pages can connect consumers to the brand, in a spiral
process of brand knowledge, brand engagement, social capital and trust. Our data suggests that these brand managers in the
small companies in our study do not understand fully the possibilities of fan pages. They manifest that their main interest
with fan pages is to communicate to consumers, and to make their brands more known. Our data also suggests that this is
only part of the value created. Social capital for consumers and trust in the brand are very important for these consumers to
decide to use these companies services or products.
Also, fan pages are a part of the marketing strategies of theses companies. How the online relations established with
consumers in fan pages derive into behaviors on the offline world is something that was out of our initial scope. But it
became evident that this if a future stream of research that is necessary to understand value creation in the fan page
environment. Finally, this project is under development, with perhaps more cases in more segments needed and still one
interview to be performed. For future research, we also suggest quantitatively testing the exploratory relations among the
constructs described in the study.
101

REFERENCES
Adler, P. S., & Kwon, S. (2009). Social capital: prospects for a new concept. The Academy of Management Review, 27(1),
17-40.
Balmer, J. M. T., & Gray, E.R., (2003). Corporate brands, what of they? What of them? European Journal of Marketing.
37(7/8), 972-997.
Comscore (2012). Atividade nas Redes Sociais Aumentou no Brasil Ano Passado Impulsionada pelo Crescimento do
Facebook.
Retrieved
from:
http://www.comscore.com/por/Insights/Press_Releases/2012/3/Brazil_s_Social_Networking_Activity_Accelerates_in_the_P
ast_Year.
Corbin, J., & Strauss, A. (2008) Basics of Qualitative Research: Techniques and Procedures for Developing Grounded
Theory. (3rd ed.) Thousand Oaks: Sage Publications, 336.
Fournier, S., & Lee, L. (2009). Getting brand communities right. Harvard Business Review, 87(4), 105-111.
Fuller, J., Jawecki, G., & Muhlbacher, H. (2007). Innovation creation by online basketball communities. Journal of Business
Research, 60(1), 60-71.
Goldenberg, J., Han, S., Lehmann, DR., & Hong, JW. (2009). The role of hubs in the adoption process. Journal of Marketing,
73(2), 113.
Granovetter, M. 1973. The strength of weak ties. American Journal of Sociology, 778(6), 13601380.
Kozinets, R. V., De Valck, K., Wojnicki, A. C., & Wilner, S. J. S. (2010). Networked narratives: understanding word of
mouth marketing in online communities. Journal of Marketing, 74(2), 7189.
Kozinets, R. V., Hemetsberger, A., & Schau, H. J. (2008). The wisdom of consumer crowds: collective innovation in the age
of networked marketing. Journal of Macromarketing, 28(4), 339354.
Mangold, W. G., & Faulds, D. J. (2009) Social media: The new hybrid element of the promotion mix, Business Horizons,
52(4), 357-365.
Mathwick, C., Wiertz, C., & De Ruyter, K. (2008). Social capital production in a virtual P3 community. Journal of Consumer
Research, 34(6), 832849.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. Academy of
Management Review, 20(3), 70934.
Muniz, A. M., & OGuinn, T. C. (2001). Brand community. Journal of Consumer Research, 27, 412-432.
Nahaphiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. The Academy of
Management Review, 23(2), 242-266.
Ridings, C. M., Gefen, D., & Arinze, B. (2002). Some antecedents and effects of trust in virtual communities. Journal of
Strategic Information Systems, 11(3/4), 271295.
Rutter, J. (2001). From the sociology of trust towards a sociology of 'e-trust'. International Journal of New Product
Development & Innovation Management, 2(4), 371385.
Schau, H. J., Muiz, A. M., & Arnould, E. J. (2009). How Brand Community Practices Create Value. Journal of Marketing,
73(3), p.30-51.
Vivek, S. D. (2009). A Scale of Consumer Engagement (Doctoral dissertation, The University of Alabama TUSCALOOSA).
102
THE RELATIONSHIP BETWEEN TRUST, VALUE AND LOYALTY IN THE INTERNET ERA: A STUDY IN
THE TOURISM MARKET
ABSTRACT
This study aimed to examine the relationships between trust, perceived value and loyalty in tourist services. As the ecommerce has been increasing, its important to evaluate if trust in front line employees and trust in management policies and
practices are central determinants of loyalty. From the standpoint of the consumer, the Internet is a tool for decision making
and used to establish comparisons to help their buying decision. The literature review sought to contextualize commerce,
trust, perceived value and loyalty in tourism, services marketing and relationship marketing. We conducted a quantitative and
descriptive research, with 201 valid interviews, through an electronic survey. The collected data was analyzed using the
Partial Least Squares method, allowing working with a small sample size. As results, we concluded that trust in frontline
employees influences positively perceived value and loyalty, management policies and practices drive directly only perceived
value, and perceived value influences loyalty.
INTRODUCTION
Several transformations have been currently taken place in the economical, political, social and cultural processes affecting
many countries and their populations. One main change is the access to information through the Internet. Advances in
technology, especially information technology, have changed consumers profile who have now important tools to make
comparisons and research. The influences of these transformations in organizations lead them to revise their operating
structures, action strategies and the method they interact with customers. From the consumers standpoint, Internet is a
relevant decision making tool and it is used to compare and help their buying decision.
Since its diffusion in the nineties, the Internet growth has created an information-intensive environment: more people use
their tools and interact in a virtual form (Suri; Long; Monroe, 2003; Limeira, 2003). Internet has been changing habits and
behaviors, due to its development, with a higher speed than any other innovation (Novaes, 2007). Nowadays it also has been
working as an important mediator concerning human interactions.
All transformations caused by the Internet have direct impacts on organizations that had and needed to adapt themselves to
new technologies (Suri; Long; Monroe, 2003; Limeira, 2003; Novaes, 2007). This leads the organizations to question
themselves about better strategies to go through the changes they had to accept: along the traditional forms of commerce, new
forms of electronic commerce or e-commerce (Sheth et al., 2002).
Several sectors of the economy were supported by the facilities provided by e-commerce, especially those that are able to
provide more complete information to customers, such as tourism. According to 2012 IBOPE survey, the leading sectors of
growth in one year were hospitality, cuisine, events, finances and lifestyle. Hotel sites and sites offering online hotels and
services had a collective buying increased of 198% in one year.
Another interesting fact of this survey is the consumer behavior in relation to his or her sources of information for the trip.
Most clients seek traveling information together with their relatives, friends and reference groups. The second most searched
source is the internet. The third source of research is the travel agency, but with less than 10% for both current and prospects
customers. Analyzing the reason for these differences, there are very simple answers: information in a tour agency is not
immediate, but in the Internet; there are numerous information and available prices.
Purchasing a trip is an emotional experience and not just business. We imagine that when consumers call an agency they have
already searched on several sites, specialized blogs and sought information with their relationship network. Regarding
clients travel agency, the existence of trust in a business partner is extremely important, since there is a high degree of
involvement in this kind of purchase; they see more value in the relationship itself. We conclude that the customer contact
becomes essential and should be practiced with utmost professionalism.
Crescitelli and Lutch (2008) state that the use of internet jobs, corresponding tools and related information technology (IT)
through tourism enterprises, means overcoming a strategic paradigm and an increasing in their competitive advantage.
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According to the authors, many travel agencies are becoming more efficient, productive and profitable after using the
strategic IT resources; saving resources with the creation of technology standards.
Considering the changes wrought by the Internet, whether in a sense of customer behavior, or in a business strategy, with
both measured by massive use of IT resources, we must emphasize the need of trust, value and loyalty between companies
and customers. It is in this globalized environment, cyber and highly competitive, that constructs such as trust, loyalty and
value will be studied as a differential in the tourism market. So it is from this that puts the following research question: what
is the importance of trust and perceived value on customer loyalty in the acquisition of tourist services?
LITERATURE REVIEW
According to Di Serio, Maia and Pereira (2004), tourism businesses have realized the importance of the use of information
technology (IT) as a catalyst element for integration among suppliers, distributors and customers, providing with information
that is more complete, faster and updated. According to the authors, e-commerce will add value and bring competitive
advantage to the tourism sector. The use of IT causes the sector to acquire tools to meet the increased demand revealed by the
growing number of people with Internet access, who become potential clients.
Because of internet and constant search for low prices, consumers have become more price-sensitive variable. The
competition generates low pricing practices in virtual trade. Internet purchasing variables are: price, reliability and brand. It
appears that the variable 'trust' is essential when buying through web: consumers buy in online companies that inspire trust.
Therefore, selling through the internet only occurs if the site provides security and credibility. The third variable is brand:
customer is willing to pay more if one knows where one is buying and if the brand (company) has a good reputation in the
market (Clay et al., 2001). In cases where there is great involvement, it is thought, therefore, that trust in the service provider
is highlighted.
In the definition of trust, although with differences between disciplines, there are variables in common, such as risk - in a
trust relationship, the uncertainty of future consequences tends to decrease, and interdependence - a relationship in the
interests may be achieved through collaboration among the others involved (Rousseau et al., 1998). Due to various
differences in the definition of the construct named trust, Rousseau et al. proposed a definition: "Trust is a psychological
study comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of
another" (Rousseau et al., 1998, p. 395). According to Morgan and Hunt (1994), trust leads to a compromised reliability, in
other words, the higher levels of fairness. Santos (2001) defines trust as a psychological state comprising the intention to
accept vulnerability based upon positive expectations of the intentions and behaviors of the customers.
Yang and Jun (2002), in his research with groups of consumers who buy services or products through the Internet, found six
dimensions for service quality: reliability, access to the company, ease to use, personalization, security and credibility.
According to the authors, customers evaluate the companys reliability performance by charging the correct values and on
time delivery of orders previously promised, plus product and the quantity purchased without any damage.
For Urban, Sultan and Qualls (2000), consumers conduct their research online and make buying decisions based on trust. In
exchange relationships with the consumer, it is necessary that the company has a website that conveys assurance to your
customer and have a safe "navigation" (so the customer may fill out their personal information). This becomes a differentiator
compared with the market, as these characteristics may determine the success or failure of the company on the web. In recent
years, e-commerce has been growing and establishing a new way of purchasing and marketing. According to Urban, Sultan
and Qualls (2000, p. 40), trust is the foundation for success in transactions on the Internet, in other words, "The trust-based
marketing as the key to success on the Internet." To Gabarino and Johnson (1999), trust mediates the effect of satisfaction on
loyalty intentions.
Trust is essential when purchasing online. According to Urban, Sultan and Qualls (2000, p. 40), trust in e-commerce has three
stages: 1 - trust in the organization and on its website; 2 - reliance on the information contained in the site; 3 - trust in services
and delivery. Understanding Internet marketing and consequence of trust of users of e-commerce becomes a differentiator
and key to success in the Internet.
In shopping relations via web, the transfer of brand value may increase trust in the site. From the moment the brand ensures
that its website is safe, it shows credibility to its consumers. Another way to create website trust is through the formation of
104
customer communities in which they feedback services. Thus, it decreases the risk perception for the client (Urban; Sultan;
Qualls, 2000).
In addition, the relationship between company and customer is also based on value: the customer will begin to build a
relationship with the company when they perceive value in what the organization offers, in other words, strategies and brand
retention is not sufficient to customer retention (Rust , Zeithaml, Lemon, 2001). The value is for the customer, a competitive
advantage (Woodruff, 1997). According to Rust, Zeithaml and Lemon (2001, p. 64), value is an "objective assessment made
by the customer, for the utility of a brand, based on perceptions of what is given in return for what is received."
In consumers perception, value is related to the benefits of a particular product / service, minus the costs of maintaining the
relationship with the provider. Therefore, from the point of view of a customer, in this exchange relationship, vendor x
consumer, trust transmits the effect on loyalty (Sirdeshmukh; Singh; Sabol, 2002). The value to the consumer is comparative,
personal and situational, being linked to the consumption experience that encompasses previous experiences and preferences
(Holbrook, 1999). To Woodruff (1997), by combining existing concepts in literature, the proposed definition of value is
perceived by the consumer as from the evaluation of the product in its aspects as an attribute, use situation and performance.
The word value is several times associated with perception, hence the origin of the term "perceived value", which is
interpreted in different ways by several authors, for example, Goldstein and Toledo (2001, p. 2), to them customer perceived
value is the overall evaluation of the product or service and its perceptions.
In this context, there is the definition of Relational Value according to Agustin and Singh (2005), as perceptions of the
benefits enjoyed versus the cost incurred in maintaining an exchange relationship: "[...] the trust increases the intentions of
loyalty measure that contributes to the relational value ".
According to Gremler and Brown (1999), loyalty occurs when the client has a preferential attitude of repurchase, in other
words, evaluates whether to buy from the same supplier or service provider when needed. According to Assael (1992), to be
fair, the consumer must have a commitment to the brand or supplier and not just a repurchase behavior and continuity in
relational exchanges. Loyalty brings feeling of affection in the relationship with the seller or service provider, providing a
favorable attitude to repurchase.
As for Spartel (2005), when there is customer loyalty, a commitment is created with the brand even in situations when other
brand offers are attractive. This view is corroborated by Yoo, Donthu and Lee (2001) to consider that brand loyalty exists
when customers show preference to one brand, which is the first option in the choice of purchase, resisting other offers. In the
field of consumer behavior to researchers "repurchase is not sufficient evidence of brand loyalty" (Newman; Werbel, 1973,
p.404).
According to Agustin and Singh (2005), there are three factors that affect the intention of loyalty: a transactional satisfaction,
trust and value. For Neal (1999), satisfaction is a necessary component, but not enough for loyalty. Meanwhile, Hart and
Johnson (1999, p. 10-11) argue that "a strategy of trust is the last test of consumer loyalty."
In the service sector, loyalty is related to the consumer's desire and intention to continue a relationship with the company,
recommending it and choosing it from the market (Gremler; Brown, 1996; Lovelock; Wirtz, 1996), however situational
factors should be considered as a lack of resources for the intention of loyalty (Santos, 2001).
The customer loyalty is also related to the behavioral intention to maintain a relationship with the service provider
(Sirdeshmukh; Singh; Sabol, 2002), behaviors such as recommending the services of a company ratify important indicators of
repurchase (Zeithaml, Berry; Parasuraman, 1996). The repurchase intention and word of mouth recommendation are given
special attention in recent studies of loyalty (Sirdeshmukh; Singh; Sabol, 2002).
Macintosh and Lockshin (1997) believe that the loyal customer who has an interpersonal relationship with a
shop/organization is more influenced by trust in the seller compared to confidence in the company. However, for consumers
who lack interpersonal relationship with the store / organization, trust in the company shall be a determining factor in the
time of purchase.
As suggested by Sirdeshmukh, Singh and Sabol (2002), this paper proposes to study of how the value a consumer observes
acts being a mediator of the effect of trust on loyalty, verifying also that trust acts directly on loyalty through the consumer's
perception of value in relation to the service provider. Due to the asymmetric effect during relational exchanges (supplier
105
holds power), increased trust impacts loyalty by changing consumer perceptions, increasing the similarity of values and hence
the relationship between consumer and service provider.
In this study, we sought to examine the loyalty construct as a customer's behavioral intention to maintain a relationship with
the service provider. We chose to analyze only the trust and value as antecedents of loyalty in purchasing tourism services.
It is noteworthy that the trust construct in e-commerce relations receives less attention in the literature (Sirdeshmukh; Singh;
Sabol, 2002). It is expected that the trust and value constructs positively influence loyalty.
Therefore, Sirdeshmukh, Singh and Sabol (2002) propose that the customer feedback regarding the operational competence is
an important factor to trust and its influenced by the competence of frontline employees and the organizational management
policies and practices.
Thus, it is proposed:
H1: Customer loyalty is positively and significantly influenced by trust in frontline employees;
H2: Customer loyalty is positively and significantly influenced by trust in management policies and practices of travel
agency;
H3: The perceived value is positively and significantly influenced by trust in frontline employees;
H4: The perceived value is positively and significantly influenced by trust in managing policies and practices of travel
agency;
H5: The consumer loyalty is positively and significantly influenced by perceived value.
Based on the theoretical foundation and construction of hypotheses established, it then presents the model that summarizes
these propositions in FIG.1.
METHODOLOGY
Considering the objectives and purposes of this study, we chose to conduct a descriptive and quantitative research. Data were
collected from customers who buy tourist services, directly on the web or through travel agencies. The questionnaire, showed
in appendix, was sent via the web (Google Docs).
The questionnaire was based on Sirdeshmukh, Singh and Sabol (2002) research, assessing the constructs trust, perceived
value and loyalty. The instrument for data collection presented 28 questions distributed to trust construct in frontline
employees (8 items), trust in the company's management policies and practices (8 items), value (4 items), loyalty (4 items)
and socio demographic questions (4 items). It was used a seven-point interval scale, ranging from strongly disagree (1) to
strongly agree (7).
We collected 201 questionnaires. The data for this survey research were treated by means of statistical procedures through
structural equation modeling. For data analysis it was used Partial Least Squares (PLS), enabling work with a reduced
sample. The software used was Smart PLS 2.0 M3.
RESULTS
Initially, we present data relating to socio-demographic profile of the sample. More than half of respondents (62.7%) are
female. Regarding age, the highest frequency is observed in relation to age over 35 years (46.8%). Concerning educational
level, the higher frequency is related to individuals with an incomplete graduate education or in progress (51.7%). The
individual monthly average income is over R$ 5.0000 (US$ 2,372.00 on December 05, 2012).
Model validation was done through a structural equation modeling. For this purpose the method used was Partial Least
Squares (PLS), which does not require multivariate normality of the variables and may work with a smaller sample size, and
it better fits for exploratory studies than the method used by LISREL (Chin, 1998 ).
The model was inserted in SmartPLS as it was conceived in the theoretical argument. It was found that the path that connects
trust in the management, policies and practices of the company's and loyalty had a very low coefficient (-0.037) and that
proved not significant (t-value = 0.927). The resulting model is shown in FIG. 2.
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Then we proceeded to review the convergent validity of the model. This evaluation is performed based on Average Variance
Extracted (AVE), Composite Reliability and Cronbach's Alpha. These values, according to Chin (1998) must have a
minimum value of 0.5 (AVE) and 0,7 (Composite Reliability and Cronbach's Alpha). The TAB. 1 indicates that for all
constructs such validity was confirmed.
Regarding the assessment of the reliability of the construct, Chin (1998) indicates that it must be evaluated primarily
according to composite reliability and that this value must be greater than 0.7. As shown in Tab. 1, all constructs exceeded
this level.
The authors Fornell and Larcker (1981) suggest a way to assess the discriminant validity for the latent variables. In this
method, one obtains the square roots of AVEs and their values are compared with the correlations among different constructs.
When this value is greater than the correlations, it may be stated that there is discriminant validity. The results obtained from
the square root of AVE were placed on the main diagonal of the correlation matrix (indicated in bold). The verification to be
performed, then, is between the AVE and the correlations in the same row and same column. The results of Tab. 2 prove the
existence of discriminant validity for all constructs.
Based on the results shown in Tab. 3, it appears that all hypotheses were validated with the exception of the relationship
between trust in management policy and practices and loyalty; hypothesis H2 appeared weak and not significant when it was
analyzed. Such a relationship was not significant, so the H2, was not confirmed.
The hypothesis H1, customer loyalty is positively influenced by trust in frontline employees of the travel agency, showed a
positive relationship strength, therefore H1 was confirmed. The hypothesis H3 and H4, The perceived value is positively and
significantly influenced by trust in frontline employees and the perceived value is positively and significantly influenced by
trust in managing policies and practices of travel agency were both confirmed. In hypothesis H5, consumer loyalty is
positively influenced by perceived value and was confirmed as the strength of the relationship was positive. It should also be
noted that the hypotheses H5 had the highest amount reported in research with the greatest impact on loyalty.
Analyzed together, perceived value, trust in management policies and practices and frontline employees explained 72.5% of
customer loyalty and perceived value has 49.9% of its variance explained by trust in management policies and practices and
frontline employees, as evidenced by the value found in the Tab. 1.
These results were expected and confirm the results of Sirdeshmukh, Singh and Sabol (2002). Regarding the non confirmed
H2, maybe this result could be explained by the characteristics of the tourism service. As stated before, purchasing a trip is
an emotional experience, since there is a high degree of involvement in this kind of purchase. So trust in a business partner is
extremely important and trust in front line employee is highlighted. Furthermore, maybe all the travel agencies offer the
same service quality, so the policies and practices become quite similar and customer give it low importance.
CONCLUSION
In this study, we tested an adaptation of the Sirdeshmukh, Singh and Sabol (2002) research, examining the relationship
among trust, perceived value and customer loyalty.
In general, all the hypotheses were supported when comparing the results with the dimensions forming consumer trust in the
Sirdeshmukh, Singh and Sabol (2002) study, except for H2, customer loyalty is positively influenced by trust in management
policies and practices of the travel agency.
It is thought that the relative value of little significance due to the fact that customers feel that the service providers should
possess standard of excellence of practice and management. We believe that market itself makes the customers more
demanding, since most of the companies of the current century, due to high competition, work with a high standard of quality
and they have adapted to technological changes (Suri; Long; Monroe , 2003; Limeira, 2003; Novaes, 2007), acting
strategically, analyzing their skills and their competitors (Schoemaker, 1992).
Moreover, according to Macintosh and Lockshin (1997) for the consumer with strong relational ties with the seller, loyalty is
more strongly impacted by trust in the frontline employee than trust in the store. As for customers who did not have relational
ties with the seller, trust in the company was the prominent drive of loyalty in the organization. Under this view, we thought
that customers of travel agencies, with high degree of involvement in the purchase, devote much of their time on the trip and
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seek alternatives information for decision making (Reid; Crompton, 1993; Warrington, Shim, 2000, apud Richard; Zhang,
2012), therefore, they seek further service quality as a differentiator for the company's choice (Grnroos, 1995).
Concerning tourism industry, we believe customers, when seeking a travel agency, they also look for quality service. The
way the service is delivered and transferred to the consumer is a decisive factor in the choice of service provider. Thus, the
image of the service provider influences the evaluation (Grnroos, 1995).
In theoretical terms, the implications appear to be consonant with those presented in the study of Sirdeshmukh, Singh and
Sabol (2002), which confirms the impact of trust on consumer loyalty, even if trust in management and policies and practices
has not obtained statistically significant and direct influence on consumer loyalty. However, trust in frontline employees
showed up with a positive impact on loyalty, confirming the hypothesis H1, customer loyalty is positively influenced by trust
in travel agency frontline employees.
According Sirdeshmukh, Singh and Sabol (2002), trust creates perceived value, which is developed in positive relationship
with the service provider, reducing uncertainty in relation to the supplier. It is important to highlight that, just as identified by
Sirdeshmukh, Singh and Sabol (2002), the perceived value is positively influenced by customers trust in frontline staff of
travel agency and management policies and practices. This fact is consolidated since consumers perceive the cost/benefit
relation, maintaining the relationship as it is positive. Therefore, the hypothesis H3, the perceived value is positively
influenced by customer trust in frontline employees of travel agency and hypothesis H4, the perceived value is positively
influenced by customer trust in management policies and practices of travel agency were confirmed.
For consumers, value is related to the benefits of a particular product /service minus the costs of maintaining the relationship
with the provider. Therefore, from the customer point of view, this exchange relationship, seller x consumer, sends trust
effect on loyalty (Sirdeshmukh; Singh; Sabol, 2002).
The results obtained by Sirdeshmukh, Singh and Sabol (2002), the relationship of perceived value positively influencing
loyalty was significant in sectors surveyed, clothing and airline. Similar to the original study customers' perceived value in
the relationship with the tourism agency was significant. Thus the hypothesis H5, consumer loyalty over the service provider
is positively influenced by perceived value, was also accepted.
Therefore, as a final observation, it was found that the model adopted for research with similar characteristics to the
Sirdeshmukh, Singh and Sabol (2002), was well succeeded, it has being applied in other countries with different cultures. We
have found statistical results similar to confirm the validity of the theory discussed.
Even though it has been found statistical support for this work, it has some limitations. The first limitation refers to the crosssection method for data collection, when a longitudinal study would be more appropriate. Another aspect that affected the
analysis was related to the sample of 201 respondents, restricted to a particular market, the city of Belo Horizonte-Brazil,
restricting the generalization power, as data and characteristics may be specific to a particular culture.
TABLES
Table 1 - Description of the model adjusted 2
AVE
Composite
Reliability
R2
Trust on MPP
0.509
0.891
0.86
Trust on front line employees
0.656
0.93
0.911
Loyalty
0.865
0.962
0.725
0.948
Value
0.762
0.927
0.499
0.895
Source: Elaborated by the Author
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Cronbach's
Alpha
Table 2 - Loads crossed the latent variables

Trust on
MPP
Trust on FLE
Loyalty
Value
Trust on MPP
0.714
Trust on front line employees
0.579
0.81
Loyalty
0.526
0.724
0.93
Value
0.598
0.653
0.812
0.873
Source: Elaborated by the Author

Table 3 - Relationship between Constructs Assessed
Relation Type
Coefficient
Positive
0.339
Not Confirmed
-0.037
Trust on front line employees > Value
Positive
0.461
Trust on MPP> Value
Positive
0.332
Value > Loyalty
Positive
0.591
Trust on front line employees > Loyalty

Trust on MPP> Loyalty
Source: Research Analysis of the construct trust, perceived value and loyalty in tourism.
FIGURES
FIGURE1. Theoretical Model of Relationship Trust, Value and Loyalty. (Source: Sirdeshmukh; Singh; Sabol, 2002.)
Trust in the front
line employees
H1
H3,
Perceived
Value
H4
Trust in
management
policies and
H2
109
Loyalty
H5
FIGURE 2 Theoretical Model.
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APPENDIX
What is your opinion about the attendance of the tourism agency employees (strongly disagree / strongly agree)
i1.1 They work efficiently
i1.2 They have competence to handle most customer orders
i1.3 Travel agents give you freedom for call and ask about your trip
i1.4 They act valuing you as a customer regardless of the service being queried / acquired
i1.5 Employees may be asked to provide suggestions and travel tips, even without sale
i1.6 They respect the deadline, transmitting security
i1.7 They strive to take you to your final destination when there are cancellations, delays in flights or overbooking the hotel
i1.8 They answer with agility
What is your opinion regarding the operating system's online travel agency (strongly disagree / strongly agree)
i2.1 It has a secure site, with protection for the purchase
i2.2 It has an effective service in case of problems that may occur
i2.3 It features an easy to navigate site
i2.4 It respects the deadline, transmitting security
i2.5 Provides its own channel of communication (telephone) for troubleshooting
i2.6 It strives to take you to your final destination when there are cancellations, delays in flights or overbooking the hotel
i2.7 The service agility is a differentiator for purchase
i2.8 The reputation of the agency transmits security
Perceived Value
i3.1 In relation to the amount you pay for traveling with this tourism agency, you'd say its a: good business / bad business
i3.2 The time you spend to buy this tourism agency is: appropriate / inappropriate
i3.3 The effort involved in purchasing with this tourism agency is: appropriate / inappropriate
i3.4 How would you rate your experience with this tourism agency: terrible / great
Regarding your shopping experience at this tourism agency, how likely are you to: (strongly disagree / strongly agree)
i4.1 Make the most of your travels through this tourism agency
i4.2 Suggest this travel agency to friends, neighbors and relatives
i4.3 Purchase this tourism agency next trip
i4.4 Only use the services of this tourism agency
112
BRANDED FLASH MOBS: WHY THEY FAIL

Philip Grant, KTH Royal Institute of Technology, Sweden
INTRODUCTION
Flash mobs are semi-spontaneous, temporary and publically congregated communities that are formed to perform (Goldstein
2003; Grant, Bal and Parent 2012). This performance can range from a dance routine to a large-scale pillow fight. Typically,
performance details are communicated from organizers to participants, who may or may not know each other, through social
media, e-mail, or specialized websites. Although some flash mobs are organized to raise awareness for a cause, many are
organized just for fun.
Increasingly, flash mobs are also organized by companies that hope to duplicate the viral effect that many flash mobs videos
have on YouTube. The benefits of these branded flash mobs are, like other forms of viral marketing, that they can develop and
strengthen relationships with customers, increase brand equity, and ultimately may lead to an increase in firm value (Plangger
2012).
This exploratory paper examines why branded flash mobs fail, i.e. why they are not shared by consumers and thus fail to go
viral. Although research has been done recently that looks at the success factors of viral campaigns, the authors of this paper
were unable to identify studies that looked at failure.
We define failure as the inability for a video to go viral, and therefore ignore the effect that the flash mob may have had
locally, i.e. at the location where it was organized. We do not consider negative publicity that a flash mob may have caused.
We define branded flash mob as a flash mob that is organized by a company with the intention to promote a product, brand
or location. It is important to state that reversing the factors that cause a flash mob to fail will not automatically lead to success
factors. Rather, by being aware of the failure factors marketers can avoid major pitfalls, but they still need to create a creative
and engaging campaign to achieve success
.
LITERATURE REVIEW
Since this paper specifically focuses on flash mobs organized by companies, particular focus is on the presence of branding
during the event and in the edited YouTube video. Do consumers distinguish branded from unbranded flash mobs? Do
consumers change their perception when they find out that a flash mob is branded?
Friestad and Wrights Persuasion Knowledge Model (PKM) (1994) was used as a theoretical lens. This model (figure 1)
suggests over time consumers (targets) develop coping behavior that enable them to deal with marketers (agents) persuasion
attempts. Targets develop their persuasion knowledge over time, which means that agents also need to keep developing their
skill.
Friestad & Wright pay particular attention to the moment when targets realize that an agent tries to persuade them. This change
of meaning principle is when coping behavior starts playing a role, and the target starts reevaluating the situation. We suggest
that a similar effect takes place when consumers realize that a flash mob did not gather spontaneously, but that it was organized
for a commercial purpose.
METHODOLOGY
A series of three focus groups were organized to evaluate consumers perceptions and coping behavior toward branded flash
mobs. Focus groups were chosen over interviews to avoid our worry about shallow responses (Fern 1982). Our recruitment
criteria for participants were that they had to be relatively young (20-40), proficient Internet users, and good English speakers.
In each session, after a warm-up discussion about viral marketing, participants were asked to watch and comment on four
carefully selected flash mob videos (three unsuccessful and one successful for contrast). This was followed by a general
discussion about what makes flash mobs succeed and fail, and about the role of the organizing party and visible branding.
Finally, we showed participants which of the shown flash mobs were successful, and asked them for their reaction.
113
After the focus groups had been conducted and transcribed, the researchers separately clustered the comments in themes, which
were then discussed to come to a mutual agreement.
RESULTS
What makes a flash mob fail?
Unoriginal flash mobs are not shared by consumers. One of our strongest findings is that flash mob videos need to be
creative and original. Some participants pointed out that their standards have increased as a result of their past exposure to flash
mobs. This may seem obvious to the reader, but judging by the number of uninspired flash mob videos on YouTube it is worth
emphasizing.
Flash mobs that do not stimulate a positive emotion are not shared. Videos that participants disliked often did not generate
a positive emotion. Participants were looking for excitement, a heart-warming feeling, or a sense of humor.
Videos where no live audience is visible are considered fake. Seeing the publics reaction to the flash mob is important for
video viewers, and videos where there was no audience present were labeled fake by our participants.
Videos with low production/performance quality are not shared. Viewers expect high-quality performance and video
production, and expected even higher quality if the flash mob was organized by a company. Participants were looking for an
arc in the flash mob; a progression in how the flash mob started, built up and finished. They were particularly put off by videos
that were excessively long.
The role or branding and the organizer
There is an aversion toward corporations, and they are held to higher standards. Most focus group participants reacted
negatively to flash mobs organized by large companies, and these videos need to be of higher quality to be shared. Remarkably,
these higher standards do not extend to smaller, local organizations, charities, and brands that the participants liked.
Visible branding has a negative effect, but should be shown up front. Most participants showed a dislike for visible
branding. Several re-categorize the videos as commercials the moment they see a brand name or corporate logo. However,
given the choice they prefer the brand to be shown early, and they do not liked being tricked into watching.
CONCLUSIONS
Our findings provide new, practical insight into what stops people from sharing flash mob videos. Although our methodology
was qualitative and focused on flash mobs, we expect that our findings can be insightful for other types of viral marketing, and
for similar forms of outdoor/event marketing.
The findings are consistent with the Persuasion Knowledge Model. As consumers gain experience with branded flash mobs
(the persuasion attempt), they hold them to higher standards before they share the video (i.e. they change their coping behavior).
The change of meaning principle can be recognized in how participants reacted to visible branding; it immediately made them
reevaluate their perception of the flash mob video.
The studys primary limitation stems from its methodology; as a trade-off to greater depth, focus groups provide less
generalizable conclusions. A second limitation may be the limited scope and uncertain future of flash mobs as a marketing tool.
Although new flash mobs still appear on YouTube every day, they are clearly evolving as marketers come up with new and
creative variants. Nevertheless, we expect that our findings will retain their relevance for these newer types of flash mobs.
114
FIGURES
Figure 1 Persuasion Knowledge Model (Friestad and Wright 1994)
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response quantity and quality.Journal of marketing Research, 1-13.
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115
REFUSAL AND INTERFERENCE OF COMMUNICATIONANALYSIS OF THE EFFECTS OF A NEW

PHENOMENON ON CUSTOMER RELATIONSHIPS
Judith Schloffer, University of Graz, Austria
Thomas Foscht, University of Graz, Austria
Cesar Maloles III, California State University, East Bay, USA
ABSTRACT
Over the years the development from a transaction-based to a relation-based understanding in the field of marketing has been
discussed. In this regard the importance of initiating, remaining and strengthen a two-way dialogue between companies and
customers has been a central topic. Interactivity in the communication between customer and company is the most natural
thing in the worldin particular since the internet. Therefore customers expect to communicate interactively.
Surprisingly more and more companies ask their customers not to reply to their emailsthey even send them explicitly donot-reply emails. Communication, therefore, becomes uni-directional and the pretence to dialogue is abandoned. There is
lots of evidence in literature that satisfaction will decrease when expectations are not met. Consequently, to refuse expected
interactivity will have negative consequences on customer satisfaction. This study analyses this phenomenon and provides
support for the assumptions based on an experimental setting.
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RELATIONSHIP MAINTENANCE THROUGH FIRM-INITIATED SERVICE DEVLIVERY CHANGE: A

PROCESS OF PROACTIVE COMMUNICATION
R. Bret Leary, University of Wyoming, U.S.A.
INTRODUCTION
The marketing literature (Mohr & Nevin 1990) has identified four important facets of communication strategy that are
applicable to the discussion at hand: (1) frequency; (2) direction; (3) modality; and (4) content. Frequency refers to the
amount of communication between partners, where a high degree of frequency means more messages are shared in a shorter
time frame. Direction can either be one-way (unidirectional) or two-way (bi-directional), depending on the structure of the
relationship. Modality is the medium of communication, and there are two categories of informal (personalized, word-ofmouth, etc.) or formal (usually in form of a written mode). Finally, content is the message that is being shared between
parties.
This paper argues that during a change in service delivery - defined by the authors as any instance in which a service provider
alters the method through which their service is offered to customers - the first thing to be considered is the frequency of
communication between provider and customer. Specifically, the frequency of communication is proposed to be most
valuable at three critical points: (1) directly before the change; (2) during the change; and (3) immediately following the
change. The purpose of this paper is to provide a conceptual framework for this process of communication, including what
might be beneficial for the provider to communicate at these points based on the content, directionality, and modality facets
of communication previously discussed.
STAGES IN THE COMMUNICATION PROCESS
Relational Input
Based on previous literature (e.g. Fullerton 2003) regarding the association between relationship duration and
communication, this paper suggests that the prior length of a service relationship is an important antecedent of the
communication process between provider and customer during a change in delivery. Depending on the quality of the
relationship, this influence could be either positive or negative. A high quality relationship will boost subsequent
communication, while a low quality relationship will likely cause problems in future communication. Therefore:
P1: Depending on the nature of the relationship, relationship quality positively influences the
process of
communication.
Before the Change in Delivery
The first critical point of high frequency communication to be considered is directly before the process begins, as it is
imperative that there be communication between the provider and customer before the change takes place. At this point, the
service firm should initiate the communication to inform the customer of the intended change in service delivery before it
actually begins. The content of the message shared with customers should be informational in form, emphasizing the
potential benefits to the individual consumer as well as any inconvenience that might be anticipated by the customer during
both the process of change and also after completion. The direction of the communication at this point is crucial, as there
needs to be the opportunity for the consumer to voice any concerns they might have regarding the change. Such bidirectional communication allows for a healthy dialogue between service provider and customer during the change. The
modality of the communication message is dependent upon the type of service offered and the amount of interaction between
provider and customer. If there is a high degree of interaction, informal modes will be favored (Mohr and Nevin 1990), as
the service employees can take an active role in this process. However, if the customers are removed from the service and
contact with the provider is sparse, more formal modes of communication are needed. Initiating communication with the
customer before a change in the delivery process begins is a signal of assurance to the customer that their business is valued
and, as such, it was necessary to inform them of the pending change. An upfront approach is posited to be vital in this stage
as consumers tend to remember the initial promises communicated by a service organization (Bitner, 1995). Therefore:
P2: The first critical point of high frequency communication during a change in service delivery is
immediately before the change.
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During the Change in Delivery

This stage of the process is dependent upon the length and complexity of the change in service delivery. The longer the
process of change lasts, the more important this stage becomes for the provider. It is essential at this point to maintain
contact with the customer to ensure continued relationship interactivity (Duncan and Moriarty 1998). The message content at
this juncture needs to stress the progress being made regarding the change and inform the customers of any new information
that is pertinent. Bi-directionality is again valuable to offer customers a chance to voice their thoughts or concerns over the
process. Updating the promises made to the consumer before the change is important at this stage as it is necessary to remind
of the potential benefits that will result from the change. Most importantly, communication during the process of service
change will ensure the customer that they are a significant part of this change and that their opinions are valuable input.
While informal mode of contact is preferred at this point, formal modes of communication are more welcome at this point
than the others, as the main purpose is to keep the customer abreast of the progress of change. Contact during the change in
service delivery is necessary to maintain dialogue with the customer to keep them updated. Therefore:
P3: The second critical point of high frequency communication in a change of service delivery is during
the
change.
After the Change in Delivery
The final critical point of high frequency in the process of communication is directly after the change in service delivery has
occurred. The content of the communication at this stage needs to again be informational, as the firm has the obligation to
notify the customer of completion and make sure they understand any intricacies that the change entails. For instance, if the
new method of service delivery is technology-based, it is imperative on part of the service provider that they provide
opportunity for the customer to learn how to use the technology. The bi-directionality of communication at this point is most
important, as it is vital as it gives customers the chance to ask any pressing questions and also allows the organization an
opportunity to clear up any misgivings the customers might have regarding the new method of delivery. Without clear and
effective communication at this point in this process, the service risks losing valuable patrons who might otherwise stay if
their concerns regarding the new system of delivery had been answered. Finally, the preferred mode of communication after
the change is informal, as personalized communication techniques are beneficial when uncertainty might be present (Mohr
and Nevin 1990). The relationship marketing literature has looked at an analogous communication tactic following a
transaction called aftermarketing (Parvatiyar and Sheth 1999) in which there is a need to follow-up with customers after a
sale has been made to aid in customer retention. Similar to this notion of aftermarketing, the paper at hand views the
immediate period after a change in service delivery as a critically important communication point for relationship
maintenance. Therefore:
P4: The third critical point of high frequency communication during a change in service delivery is
directly
following the change.
Relational Outcomes
Satisfaction and Trust. Satisfaction with a service provider is one of the key markers for relationship strength, with higher
levels of customer satisfaction leading to greater likelihood of staying with a service provider. With regards to
communication influencing satisfaction, Mohr and Spekman (1994) find evidence that the quality of communication in
commercial relationships leads to greater levels of satisfaction among partners. Within the service delivery change model, a
customer who is satisfied with the communication offered and the change in delivery will display a greater tendency to stay
with the provider after the change. Next, behavioral trust with a service provider has been empirically shown to manifest
itself through anticipated future interactions with the provider (Johnson and Grayson 2005) and greater levels of commitment
(Morgan and Hunt 1994). This paper views trust as the extent to which a customer feels that the service provider was being
forthright and honest in their communication throughout the process of service delivery change. A higher degree of trust on
the part of the customer after the change in delivery will lead to a higher likelihood of anticipated future dealings with the
provider. Therefore:
P5: Effective communication through the change in service delivery leads to greater
levels of satisfaction and
trust.
Commitment and Intention to Remain. The level of satisfaction and trust on part of the customer is proposed to influence the
long-term relational outcomes of commitment and desire to remain with a service provider. Commitment has long been one
of the most studied relationship variables, and is considered to be foundational for the establishment of long-term
relationships (Gundlach, Achrol, Mentzer 1995). After the process of service delivery change, commitment is considered to
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be the desired outcome that will lead to the customer staying with the provider. Accordingly, the final relational outcome to
be considered for this theoretical model is the customers intention to remain with the provider (cf. Wetzels et al. 1998):
P6: Satisfaction and trust positively influence commitment and intention to stay which will, in
turn,
positively influence relationship quality.
CONTINGENCY FACTORS IN COMMUNICATION PROCESS
Degree of Service Involvement
The degree of customer involvement in the service delivery process can be high or low. High-involvement service processes
are those in which the customer displays a large degree of control (Bloemer and de Ruyter 1999). Conversely, in lowinvolvement processes, the consumer is not actively involved but instead takes less of a central role in the delivery. When a
service delivery process is high-involvement, the customer is likely to be significantly impacted with the change in delivery
as it directly affects how they interact with the service. In such instances, the role of effective communication is proposed to
be even more critical as these highly-involved customers service experience will be greatly altered. In contrast, when the
level of service involvement is low, the customer is not actively participating in the service delivery process. Accordingly,
the role of communication, while still important, is diminished to a certain degree in this low involvement condition.
Consumer Readiness to Change
After the initial communication to the customer that there is going to be a change in the method of service delivery, it is
anticipated that the customer will have a reaction to the news of change. This reaction will be determined in part by the level
of the consumers readiness to change. While a number of different factors can determine a consumers readiness to change,
Cunningham and colleagues (2002) have identified two variables that are particularly relevant, ones perception of the
benefits of change and the perceived risks of failing to change. Both of these perceptions involve conscious judgments made
on part of the customer as to whether the change in service delivery will benefit them and also what repercussions might
befall them if they do not comply with the change.
It is important for the provider, to the extent possible, to assess their customers readiness to change in order to develop
appropriate strategies of communication. If the customer is not ready for a change in the service delivery, then there is a
higher likelihood that the process of communication will not be successful in changing their minds. Conversely, if the
customer is ready and motivated for the change to be enacted, they will be more likely to perceive the communication as
effective throughout the process in anticipation of the change. Accordingly, this paper proposes that the ones readiness to
change will affect their willingness to embrace the modification in service delivery. Therefore:
P7: Degree of Service Involvement and Consumer Readiness to Change influences the role and effectiveness of
the communication process.
Perceived Communication Effectiveness
After the change in service delivery is complete and the provider has communicated with the customer, it is proposed that the
perceived communication effectiveness on part of the customer will be a determining factor of their level of satisfaction and
trust.
This effective communication is necessary in maintaining commercial relationships. Greater levels of trust and commitment
to service providers result from perceived communication effectiveness as does the degree of responsiveness and shared
understanding between exchange partners (Duncan and Moriarty 1998). Within a change in service delivery, there is the
distinct possibility that the customer will have potential misgivings, waiting to see how the change is enacted before making a
long-term decision on whether they will remain with the provider. Over the process of communication identified in this
paper, the customer will make a subjective judgment on the effectiveness of the communications offered by the service
provider. If the communication is deemed effective, the customer will display higher levels of satisfaction and trust.
Conversely, ineffective communication will lead to reduced levels of satisfaction and trust towards the provider. Therefore:
P8: Perceived Communication Effectiveness influences the level of satisfaction and trust towards the
provider
after the change in service delivery.
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Switching Costs
After the service delivery change is complete, one of the greatest determining factors of whether an unsatisfied customer will
be committed to or leave the provider is the perceived switching cost they would have to incur. Referred to as any factor
which makes it more difficult or costly for consumers to change providers (Jones, Mothersbaugh, Beatty 2000), higher
switching costs increase the barriers to exit that one must go through in order to leave the service provider. The costs take a
variety of forms, from monetary amounts the consumer is forced to pay to exit the relationship to the cost of time lost while
searching for and learning about alternatives (Jones, Mothersbaugh, Beatty 2000).
In the context of service delivery change, switching costs will become a factor after the service delivery change has taken
place. The customers that are unhappy with the change in delivery and the communication offered will be likely to want to
switch providers if they can. However, the amount of switching costs involved in leaving the provider will play a role as to
whether the individual will be able to leave. If the switching barriers are low, unhappy customers will be more likely to leave
the provider. Conversely, if the barriers to exit are high the customers will display a greater tendency to remain in the service
relationship.
P9: The switching costs associated with the service influences the customers intention to stay
in the service
relationship.
IMPLICATIONS FOR SERVICE THEORY AND PRACTICE
The paper at hand maintains implications for both service theory and practice. First, the importance of a process of
communication throughout a change in service delivery is emphasized. This paper proposes and offers a conceptual model
showing three specific critical points where there needs to be higher frequency of communication. The role of this
communication is presented as key to preserving valued customer relationships even as the service is undergoing
modifications in the way their offerings are delivered.
REFERENCES
References Available Upon Request.
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INTERACTIVITY AND PSYCHOLOGICAL OWNERSHIP IN CONSUMER VALUE CO-CREATION

ABSTRACT
Product customization can be viewed as a way for consumers to create value for themselves (Vargo and Lusch 2004), and has
been shown to impact consumers appraisal of value beyond simply increased preference fit (Franke, Schreier, and Kaiser
2010; Fuchs, Prandelli, and Schreier 2010). Extending this perspective to new media such as digital books and social media
websites, product interactivity can be thought of as a means of customization as it allows consumers to modify their view and
experience with a facility that is not possible in more static digital environments (Liu and Shrum 2002). Despite its intuitive
appeal, little research has examined the question of whether or when interactivity-as-customization translates into greater
value-in-use and thus greater willingness to pay (WTP).
The present research proposes that psychological ownership (i.e., the feeling that it is mine!; Pierce, Kostova, and Dirks
2003, 86) is a key mediator of the link between perceived interactivity and WTP. That is, perceiving a product as interactive
may only lead to greater willingness to pay to the extent that the perceptions also facilitate feelings of ownership. In so doing,
we build on recent work which finds that psychological ownership enhances product valuation beyond what can be explained
by improved preference fit (Fuchs, et al. 2010; Peck and Shu 2009) and may play an important role in the endowment effect
(Shu and Peck 2011), or the tendency of consumers to value products they own more than identical products they do not
(Morewedge, Shu, Gilbert, and Wilson 2009; Thaler 1980). Perceiving interactivity also requires the expenditure of psychic
energy (Belk, 1988:144) and labor and we propose it leads to an increased sense of accomplishment which in turn drives
psychological ownership.
Additionally, Vargo and Lusch (2004) argue that operand resources (those that require transformation by other resources to
yield benefits; for example, goods and money) are often less important than operant resources (those that act upon other
resources to yield benefits; for example, competence and knowledge) for creating value. A key insight of this perspective is
that consumers, rather than firms, often possess the key operant resources in an exchange and thus should be considered
partners in value creation. Applying this logic, we identify three consumer-based operant resources (technology
innovativeness, enduring involvement, and self-assessed prior knowledge) which may enhance the translation of perceived
interactivity into WTP.
The theoretical model was tested with data from 516 participants in an online survey using a 2 level (low objective
interactivity versus high objective interactivity) between subjects design. Digital books were chosen as new media context for
testing the hypotheses and two versions of a digital book, with pretested content, were created for the study. For the main
study, participants answered questions concerning individual differences and were randomly assigned to either a low or a
high interactivity condition. Respondents were then presented with instructions to read the digital book using a procedure
adapted from Kaltcheva and Weitz (2006:111). After interacting with the book, participants completed measures relevant to
the theoretical model. Published and validated measures were utilized for all constructs.
Measure reliability and validity were assessed using confirmatory factor analysis with maximum likelihood estimation in
AMOS with acceptable model fit (2(459) = 991.50; CFI = .96; RMSEA = .05; NFI = .93) and offering evidence of internal
consistency and discriminant validity. Tests for common method variance (Podsakoff, MacKenzie, Lee, and Podsakoff 2003)
suggested CMV threat was negligible. Fit of the structural model was acceptable (2(524) = 1145.493; CFI = .914; RMSEA =
.067; TLI = .905). For the full model with latent interaction terms, we used Latent Moderated Structural Equations (LMS) in
Mplus 7 (Muthn and Muthn 2012). Tests of comparative model fit (Bryant and Satorra 2012) suggest the model that
includes the hypothesized interactions provides a significantly better fit to the data than the baseline model.
Results broadly support our conceptualization. Our findings suggest that consumers can create measurable economic value
for themselves through the enhanced psychological ownership that results from perceived interactivity, offering significant
implications for research and management. Understanding the types of targets that are most likely to engender feelings of
psychological ownership, along with the important roles of investment of self and perceived accomplishment, for example,
and the value consumers may ascribe to the result, may assist managers with product design.
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WHAT IS WASTE? DEFINING THE CONCEPT OF WASTE

Philip Sugai, International University of Japan, JAPAN
ABSTRACT
The effort to eliminate waste from within the production process has long been recognized as critical in optimizing product
and firm competitiveness (c.f. Clark & Fujimoto, 1991; Eisenhardt & Tabrizi, 1995). The emergence and the influence of these
War-on-Waste principles have sparked a revolution in manufacturing processes in companies around the world that generate
a series of prominent terms such as Scientific Management (Taylor 1911), Just-in-time manufacturing and Kaizen (Imai 1986),
Total Quality Management (Flynn et al 1994) and Six Sigma (Linderman et al 2003). Unfortunately, while the production
processes have been steadily optimized, the products produced via such processes have paradoxically evolved to include
incrementally more instances of waste (Brombacher et al 2005; James 2010; WDS Global 2008). Brombacher et al (2005)
found a startling increase over time in the percentage of returned products to a major manufacturer of high-technology, high
volume consumer electronics firm that in fact were functioning perfectly and without error. The rate of such returns had grown
from less than 5% in 1980 to 50% by the year 2000. In the UK, James (2010) showed that of all technology products purchased,
no more than 50% of the inherent capabilities of these devices were used. WDS Global (2008) reported that 80% of the
capabilities of modern mobile phones are not regularly used, and 25% of all capabilities are never even discovered by end
users.
Two reasons might have led to the issue of increasing waste in products not receiving greater research attention within the
product innovation field until now. First, modern consumers consider themselves, rather than the complex technology products
or their developers, to be the ones who are broken (Zaimou et al 2012). Such consumers attribute the cause of their failing to
smoothly operate technology devices to themselves and to their own cognitive limitations rather than on the product designers
and manufacturers. Second, when assessing a products feature set, consumers tend to misjudge their abilities to use the
product, leading to far lower levels of satisfaction after use than before (Thompson et al 2005). When product complexity
grows and consumer learning and expertise fail to follow, arguably we will see a latent growth of wasted features of new
products (Verkasalo, 2007).
This paper aims to draw attention to the fact that such waste may erode the value of the product offered by the manufacturing
firms that they might be viewed not to produce products that serve the real need of consumers. As such, in the product
innovation literature, waste as a construct has never been formally conceptualized. This is probably because waste is neither
easy to identify and handle, nor it is always tangible to measure or declare relative between firms and their customers, and
between business players, consumer society and government.
In response to the above concerns and using consumer perspective, this paper seeks to conceptualize what is called waste,
formulate the model of waste using feature perspective and give an example on how to estimate it.
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AN ANALYSIS OF THE ENVIRONMENTAL CLAIMS MADE IN INTERNATIONAL INDUSTRIAL

ADVERTISEMENTS
Leonidas C. Leonidou, University of Cyprus, Cyprus
Constantinos N. Leonidou, University of Leeds, UK
John S. Hadjimarcou, University of Texas at El Paso, USA
Irina Lytovchenko, Odessa National Economics University, Ukraine
ABSTRACT
Increasing pressures on preserving the bio-physical environment have motivated many firms to use advertising as a means to
communicate an eco-friendly image and/or address specific ecological problems. However, a growing skepticism about green
advertisements calls for a thorough investigation of the environmental claims made. This is particularly crucial in the context
of industrial and international markets, where research on the subject is virtually absent. By employing legitimacy theory, this
paper develops research hypotheses linking various dimensions of environmental claims (i.e., focal points, evaluation areas,
leverage aspects, driving forces) with the level of advertising greenness (i.e., shallow, moderate, deep). It then tests these
hypotheses with data obtained from a content analysis of 383 green magazine advertisements by multinational firms
producing industrial goods.
As predicted by legitimacy theory, the results indicate that all dimensions of environmental claims made by these firms do
indeed differ in accordance with the degree of advertising greenness. Specifically, it appears that the deeper the greenness of
the advertisement, the greater the use of focal points related to product, processes, image, and facts, the stronger, more
specific, substantive, and acceptable the claims made, the higher the employment of rational, emotional, and moral points to
leverage environmental matters, and the sharper the driving forces to the planet and its flora, fauna, and human entities. This
implies that, as opposed to firms using shallow green advertisements, those adopting a deep perspective in their advertising
campaigns convey green messages in a more detailed, authentic, and responsible way.
Given that green advertising is an indispensable part of the multinational firms overall environmental marketing strategy, it
is important to embark on proactive deep green communication strategies, rather than reacting in a shallow way to various
ecological matters. In doing so, it is crucial to adopt an integrative approach that would successfully link together focal
points, evaluation areas, leverage aspects, and driving forces of the firms advertising campaign relating to environmental
claims. The fact that the international business environment is highly volatile, multifarious and complex with regard to green
issues implies that eco-friendly advertising strategies should be constantly re-adjusted to accommodate these issues.
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INFLUENCE OF BUYER ATTITUDES ON THE ORGANIZATIONS GREEN BUYING

Michael Defty, 3M United Kingdom PLC, UK
Sarah Hong Xiao, University of Durham, UK
Gopalkrishnan Iyer, University of Durham, UK
INTRODUCTION
Given that environmentally sustainable strategies are now taking centre-stage in many organizations, increasing attention has
been called to the link between marketing and operations in assuring such sustainability objectives (Sharma et al. 2010).
While prior research has focused on environmental sustainability in terms of more abstract corporate strategy and
performance objectives, less attention has been focused on the managers values in driving the organizations focus and
objectives on sustainability. Thus, even though research has often called attention to the strategic importance of purchasing to
the firms long-term objectives, competitive positioning and performance (Carr and Pearson 2002; Sheth, Sharma and Iyer
2009), managerial influence on green buying has not obtained the attention it deserves. It cannot be denied that green
products are often the result of procurement of green raw materials and components. Therefore, the strategic impacts of
purchasing processes and practices on environmental sustainability need to be acknowledged. In this research, we explore the
influence of the purchasing manager on the organizations green buying policies.
The purchasing managers influence on the organizations buying decisions has long been recognized as primary to the
understanding of organizational buying decisions (Thomas 1982; Webster and Wind 1972). Personal values and needs of
individuals within organization are important non-task factors that affect the purchase decision (Webster and Wind 1972).
Such non-task influences of the individual in the organization may extend to various aspects of purchasing, including
organization of the buying center within ones organization, vendor selection and value analysis. More recently, it has been
suggested that key individuals within the organization are often responsible for shaping the organizations corporate social
responsibility (CSR) policy (Hemingway and Maclagan 2004). In a seminal article, Drumwright (1994) demonstrated that
non-economic buying criteria, such as socially responsible buying, was an important reality of organizational buying.
Drawing on social-cognitive theories, this research investigates whether the purchasing managers attitudes, subjective norms,
perceived behavior control and past green activities can predict organizational policies of green buying.
The guiding theory for the conceptual and empirical models is the theory of theory planned behaviour (TpB, Ajzen 1991) and
the theory of reasoned action (Ajzen and Fishbein 1980). The causal links between managerial attitudes, subjective norms
and perceived control on one hand and behavioural intentions on the other, are justified by these theories (e.g., Elliott, Jobber,
and Sharp 1995). Further, we contend that managerial behavioral intentions shape the organizations decisions. Applied to
the context of green buying, our models posit that purchasing managers are key influencers of the organizations green
buying policies.
METHODOLOGY
Key constructs were operationalized using adaptation of prior scales. TpB scales were adapted following Azjens (2000)
guidelines for TpB-based instrument development. A large companys customer base was used as the sampling frame.
Emails were sent to purchasing managers of 1000 firms in the companys database inviting participation to an online survey.
The chance to win one new Apple Ipad was served as an incentive for participation. A total of 730 responses were obtained
(73% response rate).
Preliminary analysis revealed that all the relationships between the three direct measures of TpB, namely attitudes, subjective
norms, perceived behavior control, and intentions are statistically significant. Individual managers intention of green buying
had the highest correlation with intention of organisational buying (r=.768, p<0.001), followed by organisational dispositions,
organisational perceived control, subject norms and the organisations past green activities (rOrgatt= .543, rOpbc= .498,
rgreenact= .443, p<0.001). Individual managers personal past green activities, personal attitudes and personal perceived control
were found to be statistically significant influences on the organisations intentions of green buying (r= .371, r= .337, r= .210,
p<.001). Further, purchasing managers personal attitudes towards sustainable products were found to be highly correlated
with their organisations overall dispositions towards buying sustainable product (r=. 412, p<.001).
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Stepwise regression analysis shows that purchasing managers intention of sustainable product buying is a significant
predictor of organisation buying intention ( =.782, p<.001), followed by organisational general attitudes ( =.167, p<.001),
organisation perceptive control, personal attitudes, personal green activities, and subject norms. This model explains 69.9%
of the variance. While personal past green activities is the most significant predictor of personal intention of buying
sustainable product, followed by personality attitudes towards environmental sustainability, and subject norms and perceived
control. Firm size had no effect in organisational sustainable buying intention.
Several group comparison analyses have been conducted. One set of key results show that public sector firms show lower
intentions of purchasing sustainable products as compared to private sector firms. Further in-depth analyses are being
conducted.
One key finding has been that the purchasing managers intentions and attitudes are more important in influencing
organizational green buying than as compared to subjective norms and perceived control. This result is also consistent with
most TpB research. The rationale of this finding is that this construct of attitudes taps into one's own attitude toward the act,
while subjective norms deal with the rather more remote concept of a one's perceptions of what significant others think and
do (Vallerand et al. 1992). Accordingly, subjective norms seem to affect organization-buying intentions only to a limited
extent and the addition of the perceived behavioral control improves the predictive power of the model only slightly.
This research demonstrates that individual influence in organizational green buying decisions is quite important. Thus, in
order to shape policy, it may be essential for the organization to hire individuals whose values are consonant with the
organizations environmental objectives. Future research should examine more comprehensive models of organizational
buying that includes, in line with the call made several decades ago by Webster and Wind (1972), individual, social,
organizational and environmental influences on green buying decisions and practice.
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on firms performance. International Journal of Operations & Production Management, 22, 1032-53.
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criterion. Journal of Marketing, 58, 1-19.
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role of belief salience. British Journal of Social Psychology, 34, 161-172
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THE EFFECT OF A COUNTRYS REPUTATION, AND COUNTRY-OF-ORIGIN ON FDI ATTRACTIVENESS
INTRODUTION
The research builds on the country reputation and country of origin to assess the impact of these on FDI. It aims to analyze
the symbolic image of a country that is the target for foreign direct investment. More specifically, the objective is to
determine the extent to which the image of specific activity sectors influences country of origin image, considering cultural
affinities and geographical factors.
It is proposed to assess country of origin image by measuring the extent to which cognitive and affective dimensions of a
country treated as independent variables influence the intention to invest in a certain country by using human personality
traits as measurement instruments.
Portugal has been used as the target country for evaluation by a sample of 180 foreign university students, in Lisbon. The
participants choose three activity sectors from the twenty one main items available in the economic activity code list (CAE
Rev.3) (INE, 2007, pp. 27-31), and then evaluate the country in terms of its personality. It is expected to empirically
demonstrate what image of what sector affects the country of origin image and how it does so.
By using structural equations model it is proposed to express the effect of the image of each activity sector on the country of
origin image. The observable variables are the personality traits that survey participants ascribed, while latent variables are
the six factors: agreeableness, wickedness, snobbery, assiduousness, conformity, and unobtrusiveness (d' Astous & Boujbel,
2007), as well as the country of origin image, and the overall image of the activity sectors.
I propose that the perceived intention to invest in a certain country will increase proportionally with a more positive image of
the same country. Different activity sectors will influence the image of the country of origin accordingly. Willingness to
invest abroad will be positively related to the sharing of language and cultural affinity, and geographic proximity. Similar or
identical assiduity habits are a relevant factor that has a positive impact on countrys evaluation for doing business.
A new conceptual model framework is proposed to analyze the extent to which specific activity sectors contribute to form the
country of origin image in an international business context.
The study intents to demonstrate that the use of human personality instruments to measure the country of origin image is
valid to evaluate product specifics as well as sector activity, and thus it aims to increase knowledge about the investors
behavior. By assessing the country of origin image by employing human personality traits, it is possible to link the image of
activity sectors and investor characteristics accordingly to the congruity theory (Sirgy, 1982). We can thereby explain
investor behavior more effectively considering the specific context.
By understanding how investors choose the activity sectors based on country of origin images that overlap with their selfimage can help managers to make their marketing strategies more effective, hence this study is valuable for practitioners
managing the available opportunities on a specific country.
Target country for foreign direct investment - Portugal
Europe is ranked as the second most attractive investment region in the world, with a score of 35 percent. It comes
immediately after China which scores 38 percent according to the Ernst & Young Europe Attractiveness Survey Report
(2011). However FDI flow into the European Union (26% of global FDI) is similar to its share of world Gross Domestic
Product (GDP). The results showed that infrastructure and stability, as well as the transparency of the political, legal and
regulatory environment are the main factors for choosing a country to invest in. Hence, Europes attractiveness as a business
destination (Kalotay, 2004) remains solid (Ernst & Young, 2011) especially for countries that have a strong historical
presence (Bevan & Estrin, 2004). This may confirm the advantages of cultural affinity (Cechella, 2010) in long-term
economic relationships. The GDP per capita in European peripheral countries increased during the first decade of their
adherence to the European community, and Portugal in particular, increased around twelve points (1986-1996).
Nevertheless, Portugal ranked at the bottom of the convergence ratings in 1995 and was not able to attract FDI despite low
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labor costs. (Maia, 1995, p. 53). Portugal had a negative results in the assessment of foreign direct investments into the
European Union but it had certain similarities with Spain which can be observed in the pattern of the Portuguese and Spanish
relative attractiveness between 1980 and late 1990 (Castro, 2004, p. 5). This suggests that there may be other relevant
external factors. Location advantages (Disdier & Mayer, 2004; John, 2002; UNCTAD, 1998) are associated to structural
environment conditions and are usually stereotyped to country characteristics. These are often referred to as pull-side factors
(Wang, Clegg, & Kafouros, 2009).
From another perspective, country selection for foreign market investment can sometimes be a reaction to external elements
such as ethnicity, cultural similarity, geographic proximity (Murat & Pirotti; 2010; Head, Ries, & Swenson, 1995;
Parameswaran & Pisharodi, 1994) or other elements that are not rational or systematic (Sheridan, 1988). Johanson and
Vahlne (1977) referred that internationalization is a process in which companies consider the psychological distance concept,
which focuses on cross-cultural involvement. There is also some evidence that companies begin their internationalization in
markets where they think they can be easily understood. The roles of a common language and cultural proximity have been
referred as important determinants in the early stages of internationalization by Cechella (2010). I also propose to confirm
this fact. Balabanis, Mueller & Melewar (2002), have suggested including consumer characteristics such as experience of the
country, cultural values, social norms and demographics (Heslop et al., 2004).
Research problem
There is still a lack of research in measurement techniques that could better explain the symbolic aspect of the image of the
country of origin and how it can affect peoples attitudes toward certain countrys offering (Assarut, 2006). The existing
studies focus mainly on peoples attitudes toward products from a particular country (Heslop, Lu, & Cray, 2008) therefore
our approach is slightly different. It is related to an outcome associated to FDI focusing on activity sectors rather than
products.
In this study the FDI attractiveness relates to the investment in specific activity sectors in a chosen country, and its relevance
is reinforced by the fact that Roth & Diamantopoulos (2009b) referred to it as a potential topic of interest for future studies.
(p. 24). The analysis of the country of origin image is still a complex challenge (Roth & Diamantopoulos, 2009b). I propose
to measure its cognitive dimension (dAstous et al., 2008) using personality traits to capture the affective dimension of the
construct by personifying it (Nebenzahl, Jaffe, & Usunier, 2003; Chao & Rajendran, 1993), and measure conative reactions.
This is of particular relevance for the academy as it would demonstrate the ways in which country personality dimensions
(dAstous & Boujbel, 2007) affect individuals.
Research questions
To what extent does country of origin image influence FDI attractiveness?
To what extent do specific activity sectors influence the country of origin image?
To what extent do geographical and cultural factors affect the evaluation of a countrys personality?
To what extent do self-image personality traits overlap countrys personality traits?
LITERATURE REVIEW
Country of origin image
The country of origin image can include country of origin elements (Thomas & Grosse, 2001; DaSilva, Davies, & Naud,
2001) and role effects (Disdier & Mayer, 2004; Loo & Davies, 2006; Bevan & Estrin, 2004; John, 2002; Han & Terpstra,
1988), as well as the country reputation association (Passow, Fehlmann, & Grahlow, 2005; Allee, 2008). Even though Roth
& Diamantopoulos (2009b) argued that the country of origin image is a confused construct, and proposed to divide it into
three groups, focusing on different image object: country image generic and generalized image of the country (p. 3);
country of origin - the effects of the image of the country on its products (pp. 3-4); and made in image of the
products/brands of a country (p. 4).
Although the country of origin image concept has been analyzed by many, few have focused on personality scales (dAstous
et al., 2007; Nebenzahl, et al., 2003; Chao & Rajendran, 1993).
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Country reputation
Country reputation is a mental association created by experience and knowledge, and reflects the credibility of a country's
identity (Kotler & Gertner, 2002; Fan, 2006). Fombrun (1996) defined reputation as the long-term impression based on
different dimensions, which leads the stakeholders to perceive an organization as credible, reliable, trustworthy and
responsible. Passow et al, (2005) extended that definition to the country, defining it as a combination of stakeholders images
of a country over time.
Hence, in a global market, a country with a good reputation (Loo & Davies, 2006) is perceived as a reliable country to do
business, to go on vacation, to invest in or even to live in (Papadopoulos, 1992; Anholt, 2005). Globalization has resulted in
a more interconnected world where the quality of country politics governments, diplomacy, and business leadership can
affect the countrys reputation. When people buy a good product or service from a country they become statistically more
likely to go on holiday to that country, and they are then statistically more likely to invest in and increase cultural relations
with that country (Anholt, 2005), thereby spreading its name sharing positive experiences.
For instance, the UNCTAD World Investment Survey 2009-2011 and the European Community study developed by Ernst
& Young (2011) confirmed Germanys solid reputation as the main factor that makes it the most attractive European business
location. Hence, being a preferred country is a point of differentiation that companies can use to their benefit as well as a
competitive advantage (Loo & Davies, 2006).
However, the specific characteristics of FDI should be considered, and local willingness to attend to the needs of foreign
investors is extremely important. Past experience may have a positive impact on the future of foreign investments in samesector industries. Hence, being a country of choice is a point of differentiation that companies can use to their benefit, and
this can translate into a competitive advantage for both the industry and the nation (Loo & Davies, 2006). We may therefore
conclude that companies may associate country reputation as potential added-value to attract FDI when talking about the
targeted activity sectors.
Country of origin
In the mid-sixties, Robert Schooler (1965) was a pioneer in studying country of origin.
Since then, many other researchers have developed theories and models about the influence of the country of origin influence
on the consumers intention to purchase (Bilkey & Nes, 1982; Liefeld, 1993; Liefeld, 2004; Pharr, 2005; Johansson, Douglas,
& Nonaka, 1985; Josiassen & Harzing, 2008; Kotabe & Helsen, 1998) and multinational markets consumer behavior
(Bearden & Netemeyer, 1999; Levitt, 1983). The country of origin construct encompasses perceptions of a countrys
economic, political and cultural characteristics, as well as product specific image perceptions (Parameswaran & Pisharodi,
1994; Han & Terpstra, 1988; Hinner, 2010).
Popularity and loyalty awareness were developed over the years from successful brands, and from the perceived country of
origin benefits, both of which were seen as an intangible added-value to sell products at higher prices (Papadopoulos, 1992;
Kotabe & Helsen, 1998). Thus, country of origin was confirmed as an extrinsic cue that plays an important role in
influencing consumers in the pre-purchase decision (Laufer, Gillespie, & Silvera, 2006). Hence, in industry there are also
inferences about product quality that consumers, industrial buyers, and foreign investors (Loo & Davies, 2006) tend to
associate to country of origin (Papadopoulos & Heslop, 1993; Laufer, Gillespie, & Silvera, 2006). Global marketplace
extrinsic cues like country of origin are more related, and could be determinant, to product and services differentiation
because of its association to the perceived quality.
The country of origin of the investor affects the relationship between FDI and the economic growth of host country
(Fortanier, 2007). But stereotyping, country of origin effects and country of origin destination effects (Hinner, 2010;
DaSilva, Davies, & Naud, 2001) are also relevant. However, others argued that branding could be applied to places to
increase exports, attract investments (Kotler & Gertner, 2002; Anholt, 2005) and even increase tourism development.
Hence Geographic location may be used as the most important indicator for country of origin construct, even with the
assumption that the geographic indicator could be used to reference a small region inside a country or a specialized area
(Champagne in France, Douro in Portugal) and not necessarily the entire country. Cross country references are more related
to country of origin and use the countrys name as a geographic location construct, although geographic indication prevails
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within a country. In fact the geographic origin presented by the country of origin construct appeared to be more powerful for
cross country consumers (Menapace, Colson, Grebitus, & Facendola, 2009).
The research of Han & Terpstra (1988) identified that the country of origin can be used as a halo or summary construct either
for evaluation of products and services over which consumers have little information, or to summarize conceptualized images
of beliefs about product attributes. The halo effect is useful when consumers are not familiar with the product (Han, 1989;
Nebenzahl, Jaffe & Lampert, 1997) and thereby influences their opinion of the product. Alternatively it can act as a summary
construct for consumers who are familiar with a product. In this case the consumers opinion of the product is affected by
previous information about the country of origin (Nebenzahl et al., 1997; Lampert & Jaffe, 1998), and adjusted.
The following indicators will be used to determine perceived intention to invest in the specified country: willingness to
invest, proud to own, and willing to buy (Heslop et al., 2008, pp. 359-362) - referring to purchase mechanisms or reactions.
Considering the country of origin heuristics it seems to be accepted that some characteristics of the country tend to be
integrated as an extrinsic dimension onto product selection and thus activity sectors in a wider way. The latter attribute
significance and experience to similar products overriding the element of memory (Hinner, 2010).
Thus we may also hypothesize:
H1 - Country of origin stereotypes are positively considered when selecting a country to invest
FDI location and country of origin image
Roth & Diamantopoulos (2009b) suggested analyzing cognition by taking different outcome variables and investigating their
influence on the country of origin image. I propose to use this approach as the objective is to determine the decisions in the
choice of country for business. Roth & Diamantopoulos (2009b) referred regarding the behavioral consequences of country
of origin image, researchers should not limit them to product evaluations and/or preferences. Other consequences could be
visits to [], or personal investments in the country [] (pp. 21-22). I also propose to measure the extent to which each
specific activity sector influences the affective component of the country of origin image construct.
There are generally few reasons to invest abroad other than the search for new markets (Asiedu, 2002; Ali & Guo, 2005),
resources and efficiency. The search for resources, markets, efficiency or strategic assets has been categorized by Dunning
(1988) as well as the relevance of the location variables for firms in terms of FDI. The worldwide decrease of trade barriers
and the host countrys openness to foreign investment have created more opportunities for companies to apply their strategies
and objectives (Alam, 2009). FDI can benefit the development of companies in the host country (Farrell, 2004) as well as
the home countrys economy, although this depends on the industrial sector and regional differences.
Nowadays the role of location in the OLI (Ownership, Location, and Internalization) paradigm (Dunning, 1988) has been
enhanced in terms of resources and capabilities in a globalized market, considering technological advances and competition
growth (Alam, 2009). The right location can bring benefits associated to productivity, aiding innovation processes and
flexibility. But the choice of location goes further than companies specific variables and it should consider country specific
opportunities (Porter, 2006) and risks. Thus location advantages or disadvantages are seen as natural country and firm level
factors that should be part of the FDI decision making process.
The higher the positive differentiation of location
determinants, the better for FDI attractiveness (Alam, 2009). Possessing a single location determinant is not enough
(UNCTAD, 1998).
Characteristics relating to a countrys location such as geographical distance (Christen & Kepler, 2011) may increase bilateral
costs for trade; cultural affinity, language or even being a morning rather than an evening culture (Dacko, Mohsen,
Simes, & Garcia, 2012) may also influence the image of the country of origins and thereby FDI attractiveness. Geographic
location characteristics adapted from the Christen & Kepler (2011) services trade study, as well as cultural affinity (Cechella,
2008) indicators such as heritage, language, or even assiduity will be considered.
FDI seems to be affected by country of origin perceptions (Thomas & Grosse, 2001; DaSilva, et al., 2001) and by the
countrys reputation (Kotler & Gertner, 2002; Fan, 2006; Passow, et al., 2005; Allee, 2008; Papadopoulos, 1992; Anholt,
2005). However, the images investors have may not necessarily match an objective reality and can greatly influence their
decision (Disdier & Mayer, 2004; Loo & Davies, 2006; Bevan & Estrin, 2004; John, 2002).
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Geographical and cultural factor effects on FDI
Geographical distance: Geographic proximity and existing trade agreements positively impact FDI flows (Terpstra & Yu,
1988; Alam, 2009) despite the fact that the Murat & Pirotti studies (2010) have not come up with conclusive findings. Time
zones and distance (Christen & Kepler, 2011) will be used as proxy measures. Low transport costs are positively related to
FDI, and within Europe, the periphery is still perceived as having high logistical costs (Krugman, 1991). Higher tariffs and
transport are associated to the decrease of FDI in relation to trade (Buckley & Casson, 1998). Countrys proximity to the
European Economic Market is an important aspect in the decision to export or to invest (Cechella, 2008). Thus we may
hypothesize:
H2 - FDI is negatively related to the geographic distance to the host country.
Cultural affinity elements Murat & Pirotti (2010) used religion as a proxy and came up with both positive and negative
impacts on FDI flows depending on country specificities. Heritage and cultural similarities also have an impact on bilateral
relationships (Terpstra & Yu, 1988; Hofstede, 1983, pp. 75-89; Christen & Kepler, 2011; Cechella, 2010). I will follow the
Murat & Pirotti (2010) solution and use the common religion as a proxy of measure, and complement it by measuring
language sharing mother language may have a positive impact on investments (Murat & Pirotti, 2010). The official
language and the countrys second language will also be analyzed.
Thus we may hypothesize:
H3 - FDI is positively related with cultural affinity to the host country.
H4 - FDI is positively related to countrys native language.
METHODOLOGY
The research design was based on a collection of mixed data. Data will be statistically treated using the Structural Equations
Models (SEM) in a quantitative approach based process. Objective data will be taken from secondary datasets, and primary
data will be taken from a questionnaire. The sample are pos-graduated foreign students from the international business
school in Lisbon. Portugal is the target country for evaluation. According to Perry (1995), the sample dimension should
include at least 350 people even though d Astous et al. (2008) used 174 people on a similar study. I proposed to achieve a
sample of 180 individuals.
FDI research was carried out by companies (Dunning, 1981; Dunning, 1988) rather than by countries. However as the
current study focuses on the symbolic aspect of the country of origin image construct using human personality traits
(Goldberg, 1992; Costa & McCrae, 1992; d Astous & Boujbel, 2007), the individual is the unit of analysis.
In order to obtain primary data I used a combination of technique firstly by using a qualitative or exploratory approach, which
will be followed by a structured questionnaire. I carried out a pre-test using a semi-structured interview guide (Prebensen,
2007; Ryan & Cave, 2005; Salant & Dillman, 1994; Gould, 2002) using academics and a few international investors to test
the questionnaire. The comprehension of the questions and the use of specific terms and vocabulary have been evaluated and
some small modifications were done as expected, but always in accordance with the rules for conclusive research and using
nominal and ordinal scales as required by its nature (Kinnear, Taylor, & Ahmed, 1974; Kinnear & Taylor, 1996).
Instruments
The questionnaire includes six questions about social demographics in order to obtain data from respondents such as gender,
age, education, annual income, ethnic origin, and language. This data will be useful to access secondary data in order to back
up certain theories, and test the hypotheses.
Then the country personality measurement instrument from d Astous and Boujbel (2007) was employed. It is based on its six
main dimensions (with four items each) agreeableness, wickedness, snobbism, assiduousness, conformity and
unobtrusiveness - seem to be valid in the description of a variety of countries without adaptations (Roth & Diamantopoulos,
2009b, p.20).
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The procedure for the questionnaire was as follows: firstly, in order to determine the activity sector used to represent
Portugal, participants were asked to list three activity sectors from a list of twenty one higher level categories of the economic
activities (CAE Rev.3) defined in Portugal according European Union norms (INE, 2007, pp. 27-31). Next, participants were
asked to rank in a seven point scale where 1= does not describe this country at all, and 7=describes this country perfectly
(d Astous & Boujbel, 2007, p. 24), the 24 personality traits of the country.
The questions used in the questionnaire are (adapted from Assarut, (2006, p.15)):
What sort of personality does a person have that invests in sector X, Y or Z in Portugal?
What sort of personality does a person have who invests in Portugal?
The questionnaire also includes sentences to evaluate country of origin familiarity, mainly taken and adapted from Heslop et
al. (2008) research (willingness to invest in [country] sentence, proud to own [country] products, and willing to buy [country]
products; as well as closed questions about beliefs that will be assessed by using the following indicators: ideal-country, safe,
individual rights, democratic (Heslop et al., 2008, pp. 359-362)).
ANALYTICAL MODEL AND METHOD
The model analyzes cognitive and affective dimensions as independent variables. The intention to invest in certain activity
sectors in a specific country is treated as the dependent variable, which results in the country of origin image construct being
measured as a whole. Instead of conceptualizing country beliefs I used the country personality construct (d Astous &
Boujbel, 2007) and we assumed the construct is stable across countries and product categories (Roth & Diamantopoulos,
2009b, p. 29). It was considered (activity) sectors instead of products. In terms of the outcome or intention variables, it was
used the context of evaluation of a country to invest in (Helop et al., 2004).
In order to empirically show that the image of a country is formed on the basis of the images of the activity sectors of the
country, SEM will be used. By using SEM, both observable and unobservable variables (latent variables) could be included
in the analytical model (Assarut, 2006). The observable variables are the personality traits that survey participants ascribed to
activity sectors and country, while latent variables are the six factors (agreeableness, wickedness, snobbery, assiduousness,
conformity, and unobtrusiveness) as well as the country of origin image, and the overall image of the activity sectors. The
structure of the model will be divided in two parts: the specific activity sector image and the country of origin image. It is
expected that the image of the activity sector will reflect the country of origin image.
That is also expected to confirm that human personality measurement instruments, specifically country personality (d Astous
& Boujbel, 2007) is adequate to measure the country of origin image construct.
EXPECTED RESULTS AND DISCUSSION
It is proposed that the perceived intention to invest in a certain country will increase proportionally with a more positive
image of the same country. Different activity sectors will influence the image of the country of origin accordingly.
Willingness to invest abroad will be positively related to the sharing of language and cultural affinity.
Accordingly to dAstous et al. (2008), and as referred by Roth & Diamantopoulos, (2009a) country personality works as a
profile construct and could be a good predictor of a country of origins image for industrial proposes as well as for tourism.
The consistency of the survey responses as to which sector of activity they perceived to be representative of a country will be
illustrated on a graph. A model with as many sub models as the activity sectors using a substantial number of observations is
expected to be show. I also expect to show two sets of results calculated from the coefficients for each model. The first set
should represent the total effect of the six main factor levels of the activity sectors on the six factor level of the country
image. The second set should represent the total effect of the personality traits of the activity sector on the personality traits of
the country of origin image.
Finally, I expect to represent the total effects of each activity sector on the country of origin image. I aim to show a diagram
with two major parts, one representing the way in which activity sectors shape investors perception of a countrys
personality traits; the other, analyzing the way in which these personality traits make-up the six main elements of a
countrys image.
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I expect the findings to be in line with Passow et al. (2005) and Heslop et al. (2008). They concluded that the image of a
country derives from the image of the countrys products, and therefore from the activity sectors. The latter reinforce the
country of origin image (Lampert & Jaffe, 1998).
According to the trade and investment agency (AICEP) inward foreign investment in Portugal is mainly focused on three
activity sectors (wholesale and retail trade, financial and insurance activities, and manufacturing) which together account for
over 70% of the gross FDI in Portugal in 2011 (AICEP, 2012, p. 8). Using academic knowledge I hope to confirm that trend.
IMPLICATIONS FOR THEORY AND PRATICE
A new conceptual model framework is proposed to analyze the extent to which specific activity sectors contribute to form the
country of origin image in an international business context, and the way in which it helps advisors and policy makers to
better understand the relationship between the country of origin image and FDI attractiveness.
The study aims to demonstrate that the use of human personality instruments to measure the country of origin image is valid
to evaluate product specifics as well as sector activity. It also aims to increase knowledge of investor behavior. By
measuring the country of origin image by employing human personality traits, it is possible to link the image of activity
sectors and investor characteristics. We can thereby explain investor behavior more effectively than would otherwise be
possible with existing country of origin image measures.
The identification of the trends of activity sectors and their application by successful investors in Portugal is likely,
particularly to explain the degree to which geographic and cultural characteristics may influence the success of foreign direct
investment. The confirmation of the hypotheses is expected, therefore time zone will have a positive impact on FDI
attractiveness; willingness to invest abroad will be positively related to the sharing of language, cultural heritage and country
contiguity.
Understanding how investors choose the activity sectors based on country of origin images that overlap with their self-image
can help managers to make their marketing strategies more effective, hence this study is valuable for practitioners managing
the available opportunities on a specific country.
Research limitations
Country size (small), dispersion and sample quality, availability and access to qualified and valid primary data. Future
research on countries sharing the same language as well as considering demographic variations is proposed.
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CUSTOMER EMPOWERMENT AND FIRM PERFORMANCE: BENEFITS AND POTENTIAL HARM

Valentin Chernikov, Graduate School of Management, St. Petersburg State University, Russia
Sergey Kushch, Graduate School of Management, St. Petersburg State University, Russia
Henrikki Tikkanen, Aalto University School of Business, Finland
ABSTRACT
There is an emerging stream of research concerning the role that customers play in todays competitive environment.
Technological advances allow customers to influence the nature of interactions with companies either directly by
communicating with firms or indirectly, through collaborations with other customers and by exchanges of information,
opinions, and ideas about companys products or services. Many organizations are trying to meaningfully connect with
customers using multiple available communication channels and thus empower customers to co-create value with the
company. These activities are believed to bring greater benefits to organizations. Yet, theres no clear understanding of the
mechanism through which customer empowerment influences firm performance. This research is set to try to provide deeper
understanding of this process.
We use market orientation as an underlying construct in this study. Though recent research indicated that with more
companies becoming market oriented it became a cost of competing rather than a source of competitive advantage, market
orientation is still very important for organizations. Moreover, we tend to believe that customer empowerment is closely
related to market orientation and for now could not be considered as a sole predictor of firm performance.
Based on the preliminary analysis of data from 952 Finnish companies, several notable results can be indicated. First,
customer empowerment is positively related with market orientation. More market oriented companies tend to perform
customer empowerment initiatives more than others. Second, customer empowerment is indeed influences several firm
performance indicators such as turnover, ROI, ROA, and relative profit from past accounting year. However, it does it not
directly but through customer related constructs like customer satisfaction, customer value creation and creation of offerings
that match customer needs. Customer empowerment has positive and significant relationships with these constructs which, in
turn, positively affect performance indicators. Importantly, the direct effect of customer empowerment on ROI (with
customer related constructs taken into account) is significant and negative. The direct effects on ROA, market share and
relative profit from past accounting year is also negative, though the results are not statistically significant.
The results of the preliminary analysis lead to several important conclusions. First of all, customer empowerment may lead to
better performance but only through customer related constructs like customer satisfaction or customer value creation. It
means that the performance of customer empowerment initiatives should be aligned with customer related indicators rather
than with direct financial indicators. Next, the negative direct effect of customer empowerment on performance shows that it
might be that many companies have yet to find ways to effectively manage customer empowerment in order to get greater
performance benefits. For now, we advise to take any customer empowerment initiatives with caution. Though they might
lead to certain performance benefits, they might also bring some undesirable effects.
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THE GREEN MACHINE: DOES BEING ENVIRONMENTALLY FRIENDLY PAY OFF?

Amiee Nisius, Old Dominion University, United States
Michael Nisius, University of Maryland University College, United States
ABSTRACT
The concept of corporate sustainability as part of corporate social performance (CSP) has engendered considerable interest
within the international business community for many years. Phrases such as corporate social responsibility, corporate
sustainability and corporate citizenship are recently being absorbed into the broader term corporate social performance.
Previous studies have yielded inconsistent findings and this is thought to be due to differences in the methods by which the
relationship between CSP and corporate financial performance (CFP) were measured (Ullmann, 1985). Academics have tried
to reconcile these different findings by describing CSP as being comprised of three major components: corporate social and
public responsibility (based on legitimacy within society); corporate social responsiveness (based on environmental
assessment, stakeholder management and issues management); and corporate behavior outcomes (based on social impacts,
policies and programs). Further, these same scholars have stated that corporate decision-makers must go beyond standard
practices and consider a range of social and environmental matters addressed by CSP if they are to maximize long-term
financial returns (Wood, 1991a, 1991b). Recently, however, the debate has turned to whether CSP even contributes to the
corporate financial performance (CFP) of an organization at all.
Despite this often-accepted belief that corporate sustainability is important for organizations to meet their stakeholder
obligations, it is evident that unresolved empirical issues exist in the literature, including an incomplete understanding of how
organizations realize their sustainability policies and exactly what is required by such policies. Additionally, without an
established empirical relationship between CSP and CFP, managers cannot know whether sustainability expenses can be
justified to shareholders as compatible with their firms obligations, and therefore be economically beneficial. If the
relationship between sustainability and profit-maximizing interests can be defined, these two related conflicts would be
resolved.
Using secondary data developed for Newsweek, this paper examines the relationship between CSP, as represented by the
adoption of various forms of corporate sustainability and corporate financial performance of companies within various
business sectors. Comparing the financial performance of 500 multinational companies with an assessment of their
environmental impact, environmental management and environmental disclosure ratings as well as their overall Green Score,
as assigned by Newsweek, results demonstrate significant relationships between CSP and CFP. Furthermore, the authors
identify opportunities for additional longitudinal quantitative research in this area. This article contributes to earlier research
concerning the relationship between CSP and CFP by demonstrating correlations between the two, with particular emphasis
on quantifiable green (sustainable) performance.
While previous research has suggested that CSP may provide certain benefits that marketers seek, such as customer
satisfaction, customer loyalty, and positive firm image (Brown and Dacin, 1997; Luo and Bhattacharya, 2006), this study
provides valuable insight into where marketers should focus their efforts in order to receive the highest ROA, ROE and ROI
with regards to sustainability. Additionally, this paper builds on previous research by establishing that CSP does not
universally produce the same performance impact for U.S. versus non-U.S. firms, thus revealing that marketing of green
efforts for international companies must be tailored according to differences in culture, governmental regulation and investor
needs.
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WHICH IS MORE IMPORTANT FOR INNOVATION? WHAT YOU KNOW OR HOW YOU SHARE IT WITHIN
YOUR FIRM?
ABSTRACT
What a firm knows and how it shares its knowledge within the firm are expected to affect innovation which is known to
increase firm performance. Thus finding out the relative effects of these factors is very important. However there are mixed
views about the effects of the knowledge types in the literature. This study resolves this issue by showing that even though
the effect of sharing information on innovation is always positive, the effect of what a firm knows changes according to the
type of knowledge and the type of innovation capabilities. This study indicates that how a firm shares knowledge
(cooperation) within the organization generally has a stronger positive effect on innovation than the effect of what a firm
knows (knowledge dimensions). The findings also suggest that innovation capabilities play an important mediating role by
transforming the knowledge of the firm into actual product innovations.
INTRODUCTION
What a firm knows and how it shares the knowledge within the firm are expected to affect innovation that leads to firm
performance. Thus finding out the relative effects of these factors are very important. However the effects of what a firm
knows depends on the type of knowledge and the findings about the effects of knowledge types there are mixed in the
literature. Galunic and Rodan (1998) focus on the negaitve effect of knowledge specificity on innovation due to routinization
of firm activities whereas Sampler (1998) emphasizes the positive effect of knowledge specificity due to decreased imitation.
A similar conflict exists about tacit knowledge. De Luca and Atuahene-Gima (2007) found that product innovation
performance is not influenced either directly or indirectly by tacit knowledge, whereas Cavusgil, Calantone and Zhao (2003)
suggest that tacit knowledge contributes to the development of new knowledge and innovations. These conflicting results
indicate a need for a more comprehensive examination of these relationships.
The previous studies suggest that both knowledge depth and the knowledge breadth affect innovations (Zahra, Ireland, and
Hitt 2000; Katila and Ahuja 2002) and organizational capabilities (Grant 1996). However the effects of knowledge breadth
and knowledge depth on different innovation types and organizational capabilities are not tested in the literature. Since
knowledge breadth and knowledge depth have different characteristics, their effects on different product innovation types and
organization capabilities are expected to be different. This study shows that knowledge depth and breadth contribute to
different types of product innovations and innovation capabilities. The main goal of this study is to examine the different
effects of market knowledge dimensions on (a) organizational capabilities, (b) product innovations, and (c) product
performance.
THEORETICAL BACKGROUND
Knowledge-based view of the firm indicates knowledge as the most important asset of a firm to achieve superior firm
performance and it indicates that the primary purpose of a firm is to create and apply knowledge (Grant 1996; Nonaka 1994;
Spender 1994). Studying organizational capabilities may help to explain how knowledge is transformed into new products
that lead to increased performance. There are several studies explaining the effect of market knowledge dimensions on
innovations (Galunic and Rodan 1998; Katila and Ahuja 2002, Cavusgil, Calantone and Zhao 2003; Prabhu, Chandy, and
Ellis 2005) and how knowledge is utilized by the help of organizational resources (e.g. Kogut and Zander 1992) however
these studies do not explain the effect of knowledge on different stages of innovation that is crucial for firm performance.
HYPOTHESIS DEVELOPMENT
Knowledge is an important ingredient for developing skills and capabilities. For example, learning how to drive a car requires
taking in considerable amount knowledge and transforming it into the capability to drive. Similarly, a firms resource
allocations to exploit existing capabilities and to develop new ones are substantially affected by its knowledge (AtuaheneGima 2005). Performance differences between firms are a result of their different knowledge bases and differing capabilities
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in developing and deploying knowledge (Bierly and Chakrabarti 1996). Knowledge that is gained from customers,
competitors, and from internal processes (e.g. R&D) has a significant effect on innovation (Atuahene-Gima 1995; AtuaheneGima 2005; Li and Calantone 1998; Olson, Slater, and Hult 2005). Thus there may be a strong relationship between
knowledge and innovation capabilities that in turn affects overall performance of the firm. However every type of knowledge
may not have similar outcomes. Empirical studies indicate that the knowledge dimensions have different effects on
innovation performance (De Luca and Atuahene-Gima 2007; Prabhu, Chandy, and Ellis 2005). Thus the effects of knowledge
dimensions on innovation capabilities need to be studied individually.
Knowledge Breadth is defined as the firms understanding of a wide range of diverse customer and competitor types and
factors that describe them (De Luca and Atuahene-Gima 2007). It represents the range of fields over which the firm has
knowledge (Prabhu, Chandy, and Ellis 2005) and the multiple areas in which a firm has skills and expertise (Zahra, Ireland,
and Hitt 2000). It determines the extent of new knowledge that is explored (Katila and Ahuja 2002). Knowledge breadth
affects new product introduction routines (Katila and Ahuja 2002), and it has a significant effect on product innovations (De
Luca and Atuahene-Gima 2007). It affects product innovation positively through enriching the knowledge pool by adding
distinctive new variations (Katila and Ahuja 2002) and results in increased variety of innovative products (Zahra, Ireland, and
Hitt 2000). Technological innovation capability is defined as the firms ability to develop new technologies that can be used
to develop new products. Firms with a broad knowledge base may be able to develop more extensive products that include
diverse technological features. The diverse knowledge base may also stimulate new and original ideas due to the broad
technological perspective. Thus a broad knowledge base is expected to enhance technological development. Aesthetic
innovation capability is defined as the firms ability to develop non-technological elements, which change the external
appearance of the product. Knowledge breadth increases firms creativity (Kogut and Zander 1992). Aesthetic innovations
are heavily driven by creativity and the aesthetic trends in an industry can influence other industries. The firm can benefit
from a broad perspective it can detect different aesthetic trends in other industries and successfully implement them to their
products. Market-based innovation capability can be defined as a firms ability to develop new products for new or emerging
markets (Zhou, Yim, and Tse 2005). Knowledge breadth increases firms opportunity recognition (Kogut and Zander 1992).
Thus, a broad knowledge base about customer and competitors in different markets may increase the firms chances to detect
new opportunities in new and emerging markets and develop new products for them.
Quality improvement capability can be defined as the firms ability to improve the quality of the end products via process
management practices (Bessant and Francis 1999). Knowledge breadth is expected to have a positive effect also on quality
improvement capability. The reason is that, having a wide-ranging knowledge enables the firm to be aware of new quality
improvement practices in other firms or industries. De Luca and Atuahene-Gima (2007), state that a firm with broad market
knowledge has heterogeneous information and understanding of customers and competitors, enabling it to design products
that match the diverse needs of its customer segments. Their findings also show that knowledge breadth has a positive
significant effect on firm performance. Thus, it is hypothesized that:
H1a: Knowledge breadth has a positive effect on technological innovation capability.
H1b: Knowledge breadth has a positive effect on aesthetic innovation capability.
H1c: Knowledge breadth has a positive effect on market-based innovation capability.
H1d: Knowledge breadth has a positive effect on quality improvement capability.
H1e: Knowledge breadth has a positive effect on technological product innovation.
H1f: Knowledge breadth has a positive effect on aesthetic product innovation.
H1g: Knowledge breadth has a positive effect on market-based product innovation.
H1h: Knowledge breadth has a positive effect on product performance.
Knowledge Depth is defined as the level of sophistication and complexity of a firms knowledge and it captures the vertical
dimension of knowledge (De Luca and Atuahene-Gima 2007). Depth refers to the amount of within-field knowledge
possessed by the acquiring firm (Prabhu, Chandy, and Ellis 2005) and it determines the degree to which search revisits a
firm's prior knowledge (Katila and Ahuja 2002) which results in the mastery of that particular type of knowledge (Zahra,
Ireland, and Hitt 2000). These knowledge areas are crucial for firms performance (Cepeda and Vera 2007).Increase in the
depth of search can positively affect product innovations (Katila and Ahuja 2002; Prabhu, Chandy, and Ellis 2005) and it
enables the firm to produce highly differentiated, high-quality products (Zahra, Ireland, and Hitt 2000).Acquiring
sophisticated and complex in depth knowledge about a subject (e.g. customers, competitors, etc.,), and working on it for a
period of time enables the firm to specialize in a certain type of technology. There is a positive relationship between
knowledge depth and technological innovations (Dewar and Dutton 1986).A sophisticated in-depth knowledge may enable
the firm to acquire a sophisticated knowledge base and understanding about certain aesthetic concepts. This may increase the
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firms ability to develop new product innovations better than its competitors. Having a focus on certain type of knowledge
and gaining in depth understanding about it may trigger new uses for that knowledge in new and/or emerging markets. A firm,
due to its expertise on a certain type of knowledge, can develop innovations that serve the needs of customers in other
markets. Knowledge depth can also enhance the firms ability to improve product quality. More in depth knowledge about a
product can increase the firms understanding about the mechanics and components of that product. Thus, the firm can gain
an understanding about the strengths and weaknesses of the product, and be able to develop strategies to improve its quality.
The deeper a firm's knowledge in certain fields, the greater is its ability to create innovations in these and related fields
(Prabhu, Chandy, and Ellis 2005) and the findings of De Luca and Atuahene-Gima (2007) state that knowledge depth has a
positive effect on product performance. Similar to these findings, it can be hypothesized that:
H2a: Knowledge depth has a positive effect on technological innovation capability.
H2b: Knowledge depth has a positive effect on aesthetic innovation capability.
H2c: Knowledge depth has a positive effect on market-based innovation capability.
H2d: Knowledge depth has a positive effect on quality improvement capability.
H2e: Knowledge depth has a positive effect on technological product innovation.
H2f: Knowledge depth has a positive effect on aesthetic product innovation.
H2g: Knowledge depth has a positive effect on market-based product innovation.
H2h: Knowledge depth has a positive effect on product performance.
Knowledge tacitnesss can be defined as the extent to which the knowledge is difficult to codify and communicate, intuitive,
unarticulated, and unobservable (Godfrey and Hill 1995; Lam 2000; Nonaka 1994). Tacit knowledge is closely related to
higher performance than competitors because it makes the knowledge hard to replicate by the competitors (Teece and Pisano
1994). Another reason is that tacitness decreases the transferability of the knowledge by increasing the costs of transfer and
by decreasing the speed which knowledge is transferred (Grant 1996; Kogut and Zander 2003). Tacit knowledge has an
important role in innovation (Senker 1995). However there is not a consensus about the effects of tacitness on innovation.
Galunic and Rodan (1998) indicate that due to lower detection probability and higher costs of resource exchange, tacit
knowledge diminishes the resource recombinations that may result in a decrease in innovativeness. De Luca and AtuaheneGima (2007) found that product innovation performance is not influenced either directly or indirectly by market knowledge
tacitness. On the other hand other scholars (Cavusgil, Calantone, and Zhao 2003) suggest that tacit knowledge contributes to
the development of new knowledge and innovations. Nonaka and Takeuchi (1995) state that innovation emerges from the
interaction between tacit knowledge and explicit knowledge. They also suggest that tacit operational knowledge about a
product is often socialized; thereby it initiates improvement of an existing product or development of an innovation. Tacit
knowledge is critical for the development of organizational capabilities (Teece, Pisano, and Shuen 1997). Firms that can
harness the tacit knowledge base are more likely to have greater new product development capabilities (Subramaniam and
Venkatraman 2001). Consistent with these studies, tacit knowledge is expected to increase certain innovation capabilities
depending on their characteristics.
Technological knowledge is driven more by the explicit knowledge that can be communicated and built upon. Thus, the
difficult to codify nature of tacit knowledge is not suitable for the communication and does not contribute to the generation of
technological knowledge. For the same reason, tacit knowledge is not expected to contribute to technological innovation
capability and technological innovations. Aesthetic innovations on the other hand are mostly dependent upon tacit knowledge.
For example; the aesthetic features (looks) of a laptop depends more on the artistic tacit knowledge that is difficult to transfer,
while the technological features (performance) depends more upon the explicit knowledge.
Market-based innovation capabilities enable the firm to develop products for new or emerging markets. The explicit
knowledge about these types of products and markets are very limited. In these situations the firm depends more upon the
lifetime experiences and the tacit knowledge of the employees. Similar with the tech product innovation and the tech
innovation capability, quality improvement capability is mostly driven by explicit knowledge due to its well-defined structure.
The quality control and improvement systems are codified in a way that they can be clearly communicated to the people who
operate them. Tacit knowledge is non-transferable and difficult to communicate, thus it is not expected to contribute to
quality improvement capability. The findings of De Luca and Atuahene-Gima (2007) do not suggest a significant relationship
between knowledge tacitness and product performance. However, tacit knowledge makes the knowledge difficult to replicate
by the competitors (Teece and Pisano 1994), which may increase the product performance by decreasing possible
competition. Thus, it can be hypothesized that;
H3a: Knowledge tacitness does not affect technological innovation capability.
H3b: Knowledge tacitness has a positive effect on aesthetic innovation capability.
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H3c: Knowledge tacitness has a positive effect on market-based innovation capability.

H3d: Knowledge tacitness does not affect quality improvement capability.
H3e: Knowledge tacitness does not affect technological product innovation.
H3f: Knowledge tacitness has a positive effect on aesthetic product innovation.
H3g: Knowledge tacitness has a positive effect on market-based product innovation.
H3g: Knowledge tacitness has a positive effect on product performance.
Knowledge specificity can be defined as the heavy customization of knowledge to one particular use with high context
specificity and low transferability to other contexts (Galunic and Rodan 1998). Specific knowledge has the attributes of being
possessed only by a very limited number of individuals and being expensive to transfer (Sampler 1998). The customization of
specific knowledge occurs when organizational resources are applied to understanding patterns and rules particular to a
specific context (Subramani and Venkatraman 2003).Knowledge specificity may lead to routinization of firm activities
(Galunic and Rodan 1998) that may result in a decrease in innovativeness. On the other hand Sampler (1998) indicates that
knowledge specificity decreases the imitation of innovation that may increase the competitive advantage of the innovations. It
can also enable to firm to make an in-depth analysis of its customer and competitors (De Luca and Atuahene-Gima 2007) and
develop custom tailored innovations for specific contexts. These mixed effects can be explained by the differences in
innovation capabilities. Specific knowledge about the customers and competitors in an industry contributes to specialization
in a certain type of technology. This context specific knowledge increases the firms chance to lead the market in developing
cutting edge technologies. Thus, knowledge specificity is expected to increase the development of technological innovation
capability.
Specific market knowledge diminishes knowledge recombination, impairing timely and effective contextual use (Galunic and
Rodan 1998). Due to the relatively short time span of aesthetic trends, timely response is crucial in aesthetic related issues.
Limited focus on a specific area does not contribute to the companys ability to detect aesthetic trends in the industry or in
other industries. For these reasons knowledge specificity is not expected to have an effect on aesthetic innovation capabilities.
Specific market knowledge increases the firms motivation to stick to the existing markets. Due to the high rents and existing
cash flow in the current market, the firm will be reluctant to expand its focus to new or emerging markets (Chandy and Tellis
2000). Market-based innovations on the other hand are about creating products to new and emerging markets (Zhou, Yim,
and Tse 2005). Thus market specificity is not expected to have an effect on market-based innovation capabilities and marketbased innovations. An increase in specific knowledge about a product increases the understating of the firm about the
idiosyncratic nature of that product. Thus a firm, by enhancing its specific knowledge, can find ways to improve the specific
features of that product. It can also enhance the firms ability to design and produce with lower defect rates. De Luca and
Atuahene-Gima (2007) state that specific knowledge enhances innovation performance. The reason is that specific
knowledge it ensures a long-term relationship with specific contexts (e.g., customer segment) that generates highly
idiosyncratic insights for product innovation and protects the new products from imitation. Their finding also support that
knowledge specificity has a positive effect on product performance. Thus, it can be hypothesized that:
H4a: Knowledge specificity has a positive effect on technological innovation capability.
H4b: Knowledge specificity does not affect aesthetic innovation capability.
H4c: Knowledge specificity does not affect market-based innovation capability.
H4d: Knowledge specificity has a positive effect on quality improvement capability
H4e: Knowledge specificity has a positive effect on technological product innovation.
H4f: Knowledge specificity does not affect aesthetic product innovation.
H4g: Knowledge specificity does not affect market-based product innovation.
H4h: Knowledge specificity has a positive effect on product performance.
METHODOLOGY
The data is collected from 304 managers in U.S. firms. A national marketing research firm administered the survey in U.S.
All respondents were informed about the confidentiality of their responses. The purpose of the study was explained before
starting the survey. The respondents received compensation from the marketing research company for their time and effort.
Similar to the previous studies (Hultink et al. 2003) screening questions have been used to ensure the eligibility of the
companies and the managers in those companies. Most of the items used to measure the constructs are adopted from previous
studies. The measures of aesthetics are built according to their technological counterparts in capabilities and innovations in
the literature. Measurement testing was performed using CFA in Lisrel. All of the items in the model are tested
simultaneously. As stated by Fornell and Larcker (1981), convergent validity was established, as the average variance
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extracted for all constructs was greater than 0.50 and discriminant validity was established, as the average variance extracted
was greater than the squared correlation between constructs. Coefficient values and composite reliabilities are also reported
that are all greater than 0.70 that includes the measurement model statistics. Structural equation modeling with the maximum
likelihood estimation method was used to test the hypotheses.
The results indicate that both what the firms knows and how it shares knowledge are important for innovation. However how
a firm shares knowledge usually have more stronger effects on innovation compared to what a firm knows. Market
knowledge dimensions effects depend on the innovation capability types and the product innovation types. The results
extend the literature also by providing a sophisticated picture of the relations surrounding market knowledge dimensions,
cooperation, innovation capabilities, and product innovations.
The findings also reveal the different effects of market knowledge dimensions on innovation capabilities. As hypothesized,
the findings indicate a clear distinction between the effects of knowledge specificity and knowledge tacitness. Knowledge
specificity positively affects only on technological innovation capabilities and quality improvement capabilities whereas
knowledge tacitness has positive significant effects only on aesthetic and market innovation capabilities. The reason of this
distinction lies in the characteristic differences between specific and tacit knowledge. Specific knowledge is highly
customized that loses its value outside a particular context. Technological innovation and quality improvement capabilities
are positively affected by very specialized knowledge that is used in developing next generation microchips or fixing the
defects in a complex computer program. Thus it has positive effects on both technological innovation and quality
improvement capabilities. On the other hand, specific knowledge does not contribute to aesthetic innovation capability since
aesthetic innovations are influenced by trends in several different contexts. Similarly knowledge specificity does not
contribute to aesthetic product innovations. Contrary to the expectations, knowledge specificity does not have an effect on
technological product innovation despite its positive effect on technological innovation capability. These findings indicate
that even though specific knowledge is good for building technological innovation capabilities, they do not directly contribute
to the technological product innovations.
Specific knowledge increases the firms motivation to stick to the existing markets. Similarly knowledge specificity does not
contribute to market-based product innovations. These findings (1) confirm the findings of Chandy and Tellis (2000) stating
that specific intellectual investments of a firm do not contribute to its focus on new or emerging markets, and (2) extend their
findings by suggesting that even though specific knowledge doesnt contribute to market-based innovation capabilities, other
market knowledge dimensions such as knowledge depth, breadth, and tacitness contribute to market-based innovation
capabilities. These diverse findings explain the different views in the literature. The results show that specificity does not
diminish innovations as Galunic and Rodan (1998) argues, but it clearly shows that specificity doesnt contribute to certain
innovation and capabilty types. Findings also partially support Samplers (1998) argument about the positive effects of
specific knowledge however this study makes a clear distinction that these positive effects exist only for technological
innovation and quality improvement capabilties.
Findings about tacitness supports the hypotheses that technological innovation capability and quality improvement capability
are driven by the explicit knowledge that can be communicated, codified and built upon. While developing a new laptop
computer, this type of explicit knowledge suits better to its hardware development (technological innovation), as well as
decreasing defect rates of its hardware production (quality improvement).On the other hand, designing the shape of the laptop
and the graphical designs on its cover (aesthetic innovation) depends more on the artistic capabilities and these capabilities
are mostly driven by non-codifiable tacit knowledge. Capability to create a laptop for a new market (market innovation
capability) requires thinking outside the box where non-codified tacit knowledge can provide substantial benefits. These
results explain the mixed views in the literature about the positive (Senker 1995; Cavusgil, Calantone, and Zhao 2003) and
null effect (De Luca and Atuahene-Gima 2007) of tacitness on innovation by testing its effect on different types of
innovations and innovation capabilities. On the other hand the results refute Galunic and Rodans (1998) the expected
negative effect of tacitness on innovation.
The effects of tacitness on product innovations are similar to its effects on innovation capabilities. An interesting exception is
that the tacit knowledge has a positive effect on technological innovation despite its null effect on technological innovation
capability. This indicates that even tough technological innovations mostly rely on codified knowledge; they also contain a
type of knowledge that cannot be strictly codified and communicated, but can be gained through experience. And this noncodified knowledge is not resulting from the technological product innovation but coming directly from the tacit knowledge
144
itself.The results support the hypothesis that both knowledge depth and knowledge breadth contribute to innovation
capabilities as well as product innovations. The only exception is the null effect of knowledge depth on (1) aesthetic
innovation capability, and on (2) the aesthetic product innovation. The reason could be that having in depth knowledge may
urge the firm to lock into a specific aesthetic trend. However the aesthetic trends change quickly. Thus, acquiring in depth
knowledge about a certain trend may hold the firm back from utilizing upcoming trends effectively. Thus knowledge depth
does not contribute to building aesthetic innovation capability or developing aesthetic product innovation.
This study extend the findings in the literature about the positive effects of knowledge depth on innovation (Katila and Ahuja
2002; Prabhu, Chandy, and Ellis 2005) by showing that its effect changes according to the innovation capability and product
innovation types. Findings also extend the work of Zahra, Ireland, and Hitt (2000) by showing that knowledge depth
contributes to quality improvement capabilities. Findings confirm the positive relationship between breadth and product
innovations in the previous studies (De Luca and Atuahene-Gima 2007; Katila and Ahuja 2002) and extend them by showing
that this positive relationship exists also in the antecedents of product innovations (innovaton capabilities) indicating the
borader effect of knowledge breadth.
The findings about the effects of market knowledge dimensions on innovation capabilities contribute to the marketing,
knowledge based view, and innovation literatures by (1) differentiating the effects of knowledge specificity and knowledge
tacitness on innovation capabilities, (2) demonstrating the necessity of knowledge depth and knowledge breadth on
innovation capabilities, and (3) showing that market knowledge dimensions have different effects on product innovation
types.
The significant positive effects of knowledge specificity and knowledge depth and the null effect of tacitness on product
performance support the findings in the literature (De Luca and Atuahene-Gima 2007), however the non-significant effect of
knowledge breadth on performance contradicts with these results. The reason could be that product innovation types were not
used as independent variables effecting product performance. Thus product innovation types may be suppressing the effect of
knowledge breadth on product performance. These findings contribute to marketing and knowledge based view by testing
market knowledge dimensions (1) direct effects on performance, and (2) their indirect effects on performance through
product innovations.
This study has several limitations. The first one is that the theoretical framework and the results indicate relationships but not
necessarily causality. Even though the discussed model is the best fitting model among several alternative models, for future
research, a time series data can be collected both to test whether the effects of market knowledge dimensions on innovation
capabilities, product innovations and product performance change in time .The second limitation of the study is the
respondents. The survey was conducted solely on managers. This study can be extended to include consumers input about the
products. Especially the aesthetic, technological and market-based newness of the products can be measured both by the
consumers and managers to test whether discrepancies exist. The third limitation is the sample selection process. The filter
questions included firms that produce products that, to some degree, possess both technological and aesthetic features. The
degree of technological or aesthetic features varies however this sample does not contain purely technological or purely
aesthetic products. The importance of knowledge types on innovations and product performance may vary across industries.
For example, specific knowledge may be more important in highly technological industries whereas tacit knowledge may be
more valuable in aesthetic design intense industries. Lastly, two of the knowledge breadth and knowledge depth and one of
the knowledge specificity measures had to be dropped due to the discriminant validity issues. This indicates a need to
develop better measures for market knowledge dimensions.
TABLES
Table 1. Structural equation parameter estimates (organizational capabilities included)
Independent
variables
Tech In.
Capability
Aesthetic
Innovation
Capability
MarketBased In.
Capability
Breadth
.20**
(2.79)
.26**
(3.63)
Depth
.16* (2.29)
.11 (1.60)
.18**
(2.46)
.18**
(2.51)
Quality
Imp.
Capability
Tech
Product
In.
Aesthetic
Product
In.
MarketBased
Product
In.
Product
Performance
.16* (2.20)
.02 (.30)
.09 (1.59)
.02 (.39)
.01 (.15)
.20**
(2.94)
-.02
.37)
.01 (.25)
.06
(1.09)
.15* (2.21)
145
(-
Tacitness
Specificity
Cooperation
.06 (1.36)
.17**
(2.99)
.30**
(6.01)
.09* (2.11)
.14**
(3.17)
.07 (1.19)
.02 (.38)
.38**
(7.90)
.38**
(7.58)
.001 (.012)
.25**
(4.36)
.27**
(5.58)
.04
(1.04)
-.06
(1.19)
.08*
(1.93)
Tech
.45**
Innovation
(6.65)
Capability
Aesthetic
Innovation
.06 (.89)
Capability
Market-Based
.23**
Innovation
(3.25)
Capability
Quality
.12*
Improvement
(1.83)
Capability
Tech Product
Innovation
Aesthetic
Product
Innovation
Market-Based
Product
Innovation
0.5
0.52
0.486
0.518
0.715
R2
Goodness-of-fit:3465 p = .060; GFI = .995; CFI = .998; IFI = .978; RMSEA = .061
*Significant
at
p
<
0.05,
**significant
at
.12**
(3.32)
-.08
(1.63)
.12**
(2.85)
.06*
(1.74)
-.10
(1.99)
.13**
(2.96)
-.11
1.59)
-.13
1.81)
(-
.55**
(7.79)
.32**
(4.43)
.18**
(2.47)
.46**
(6.06)
.07 (1.13)
.08
(1.25)
.05 (1.12)
.24** (4.29)
(-
.29** (4.27)
.13 (1.62)
.05 (.62)
0.693
p
0.678
<
0.52
0.01
two-tailed
FIGURES
Figure 1: Conceptual framework
Market
Knowledge
Dimensions
Breadth
Depth
Tacitness
Specificity
Innovation
Capabilities
Product
Innovation
Technological
Aesthetic
Market-Based
Technological
Aesthetic
Market-Based
Quality
Improvement
Capability
Interfunctional
146
Product
Performance
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148
THE ROLE OF IMPROVISATION IN NEW PRODUCT CREATIVITY

Kyriakos Kyriakopoulos, ALBA Graduate Business School at The American College of Greece, Greece
ABSTRACT
Creativity is a top priority for firms in pursuit of renewal and adaptation to unpredictable and fast-changing markets
(Burroughs et al., 2011). One way firms can use to achieve creative aims, researchers increasingly note, is through
improvisation, i.e., firms plan and execute simultaneously (Moorman & Miner, 2001; Vera & Crossan, 2005). The
spontaneous nature of impromptu actions, where employees craft real-time responses outside the formal planning, raises
expectations of freeing the creative potential of firms. As a result, a growing number of empirical studies has explored the
value of improvisation in innovative activities, such as product innovation (Kyriakopoulos, 2011; Moorman & Miner, 1998b;
Samra, Lynn, & Reilly, 2008), the implementation of IT systems (Magni et al., 2009), firm strategy (Davis, Eisenhardt, &
Bingham, 2009), and in city administration (Vera & Crossan, 2005).
We seek to extend this work by exploring how improvisation affects creativity in new product development (NPD).
Following Moorman & Miner (1998a, b) and Vera & Crossan (2005), we define organizational improvisation as the temporal
and substantive fusion of composition and execution at the organizational level. Akin to jazz and theater improvisation, firms
can compose and execute concurrently in response to unplanned events, just as jazz musicians adjust to each others music
and the audiences reactions in real time. We also note that the inherent creativity involved in improvisation (i.e., departure
from plans and routines) does not foretell its outcome (new product creativity in our case) but instead simply describes
novelty in the process itself consistent with the contingent view of improvisation (Vera and Crossan 2005).
We draw on a key observation across business but also non-business settings that effective improvisation rests on the ability
to utilize stored knowledge known as memory (Kamoche & Cunha, 2001; Moorman & Miner, 1998a, b). We distinguish
procedural (routine knowledge) and declarative (fact knowledge) memory (Moorman & Miner, 1998a) and explore how they
help or hurt the improvisation - creativity relationship in new product development context. We posit that the difference in
articulation and actionability of the two memory types influences the creative outcomes of impromptu action in different
ways. Specifically, we predict that procedural memory weakens while declarative memory strengthens the impact of
improvisation on new product creativity.
We tested our hypotheses in a sample of NPD projects from 132 Dutch food firms. We relied on existing scales to tap
improvisation, memory, and creativity. We also included controls for firm, team, and external factors influences. Our results
show that procedural memory reduces and declarative memory fosters the impact of improvisation on new product creativity.
Overall, improvisation emerges as a conditional competence consistent with prior work.
Though Moorman & Miner (1998a) have conceptualized these contrasting effects of procedural and declarative memory on
the novelty outcome of improvisation in general, we offer (1) theory arguments grounded in the NPD context and (2) an
empirical test of these relationships. We also extend Vera & Crossans (2005) study which failed to find support for the role
of memory in the improvisation - creativity relationship. We contribute as: (1) we disentangle the effect of organizational
memory into procedural and declarative memory finding contrasting effects, (2) we offer a big sample test of 136 food firms
against their sample of 46 teams and (3) we rely on private vs. their public setting.
A more fundamental contribution of our study is a crude outline of a real-time approach to creativity in NPD and marketing
strategy. Although few scholars take a process-oriented approach in marketing strategy (e.g., Moorman & Miner, 1998),
comprehensive pre-planning (planning precedes execution) is the norm in marketing strategy (e.g., Atuahane-Gima &
Murray, 2004; Best, 2013; Kerin & Peterson, 2013; Kotler & Keller, 2012) and NPD field (e.g., Cooper, 2001, 2008; Im,
Montoya, & Workman, 2013). As its role is further entrenched with the advent of process management tools, e.g., the stage
models, ISO (Cooper, 2008) with an aim to reduce waste and increase efficiency, rigid pre-planning can be deleterious for
innovation due to inflexibility and learning failure (Benner & Tushman, 2003; Sethi & Iqbal, 2008). Though we do not
challenge marketing planning as crucial marketing capability (e.g.,Morgan, 2011), improvisation can be a valuable
competence for fast adaptation to unplanned events (Miner et al., 2001). Hence, our work highlights an alternative to
planning when real-time flexibility and learning are crucial to creativity.
149
PARTLY TRUE AND PARTLY RHETORICAL: CONCEPTUALIZING FIRM IMAGES OF AUTHENTICITY

Ian D Parkman, University of Portland, USA
Samuel S Holloway, University of Portland, USA
ABSTRACT
Most research on authenticity has focused on consumer perceptions of the consequences of authenticity (e.g., prestige,
production methods, or provenance), leaving the within-firm factors that contribute to an organizations image of authenticity
poorly understood. Drawing on Beverlands (2005) proposal that authenticity is based on projecting an image that is partly
true and partly rhetorical (p. 1008), our paper proposes a conceptualization of authenticity based the competitive advantage
(CA) that results from alignment between firms innovation capacity (IC) and corporate identity management (CIM). Our
results show that differences between high- and low-levels of IC interact with CIM (i.e., mission and values, corporate
communications and visual identity) to explain differences in CA across firms. Employing data from the architecture context,
our findings suggest that when high-IC firms are able to combine their superior creative capabilities with strong CIM
processes (i.e., employing partly true and partly rhetorical capabilities to convey authenticity) they are able create a
powerful competitive advantage, thereby differentiating themselves from inauthentic competitors, even those who have made
investments in similarly high levels of CIM.
150
AN EMPIRICAL STUDY TO CONSTRUCT A SYSTEMATIC MODEL FOR PRODUCT BUNDLES

ABSTRACT
Following a literature review, product bundles are classified four types by two dimensions: degree of functional integrity and
degree of symbolic increase. Through classification, this study could successfully present a systematic model for manufacturers
and marketers concerning how to bundle products. This model not only utilizes a matrix of product attributes and product
bundles to evaluate the imprecise requirements from customers, but also provides an efficient approach to discuss the marketing
strategy of bundling for improving satisfaction of customers needs and wants.
151
THE INFLUENCE OF MARKET ORIENTATION ON FIRM PERFORMANCE:

COMPANY AND CUSTOMER PERSPECTIVES
Karen N. Kennedy, University of Alabama at Birmingham, USA
Richard, M. Shewchuk, University of Alabama at Birmingham, USA
Haiyan Qu, University of Alabama at Birmingham, USA
ABSTRACT
Market orientation has long been at the center of marketing thought (Deshpande and Farley 1998; Kirca et al. 2005; Lusch and
Laczniak 1987; Narver and Slater 1990). Although there has been extensive research reported on this topic, a review of the
literature indicates that a worthwhile contribution to the discipline can be made by extending this work to include additional
perspectives in assessing a firms market orientation and to evaluate how these viewpoints may relate to firm performance.
The research presented in this paper examines market orientation from three perspectives, that of managers, salespeople and
most importantly, customers. For each respondent group we evaluate the relationship between market orientation and
performance using both perceived/subjective and actual/objective measures of performance. The results of this research
provide a more complete understanding of how market orientation influences firm performance, and how perceptions of various
constituencies may differ.
The participating organization is a Fortune 500 company and an international distributor of MRO products that provided access
to their 389 business units. All of these units were independent branch offices monitored for financial performance on an array
of objective measures. We had a final sample of 111 branches with at least one usable survey in each of the three respondent
categories (salesperson, manager, and customer). This represented a unit response rate of 72.55% for the second phase. In the
third stage of the data collection, the sponsoring organization provided objective measures of performance for all business units
completing our comprehensive data set. Consistent with previous research, we used multiple responses from the business units
employees and customers to reduce individual respondent bias and reduce measurement error (Huber and Power 1985). We
hypothesize that for each group of respondents (i.e., managers, salespeople, and customers), market orientation is associated
with higher levels of perceived firm performance (H1a-c) and with higher levels of objective firm performance (H2a-c). We also
hypothesize that higher levels of perceived firm performance are associated with higher levels of objective firm performance
(H3a-c).
The hypothesized linkages were statistically evaluated as a set of structural equations for each of the three respondent groups.
The manager hypothesis testing results revealed a significant path between manager perceptions of market orientation and
perceived performance ( = 0.22, p < .05) and therefore provided support for H1a. However, the estimates representing the
paths between perceived market orientation and actual performance ( = - 0.01, p > .05) and between actual performance and
perceived performance ( = 0.01, p > .05) were not significant. Therefore H2a and H3a were not supported. The salesperson
hypothesis testing results revealed a significant path between salesperson perceptions of market orientation and perceived
performance ( =.35, p < .05) and therefore provided support for H1b. The path between perceptions of market orientation and
actual performance ( =0.00, p > .05) was not significant, therefore H2b was not supported for salespersons. However, unlike
the results obtained for managers, a significant path between actual performance and perceived performance ( =0.03, p < .05)
was observed. Therefore, H3b was supported for salespeople. There was also a significant direct path between customer
perception of market orientation and perceived performance ( = .66, p <.05). Therefore H1c was supported. The paths between
customer perceptions of a firm market orientation and between actual performance ( = 0.47, p > .05) and subjective appraisal
of firm performance ( = 0.01, p > .05) were not statistically significant. H2c and H3c were therefore not supported.
Our research indicates a significant relationship between market orientation and perceived performance as assessed by each of
the three respondent groups. Managers, salespeople, and customers all indicated a positive relationship between market
orientation and perceived performance. The second two conclusions offer a contrast with the approach and findings of previous
research in the market orientation research stream. Our results indicate that only salespeople were able to significantly relate
perceived firm performance to actual performance. Managers and customers were unable to do so. Given the sample of
managers or top leaders who have often been used in previous research, our research suggests a need to investigate this
relationship from varying perspectives, both within and outside the firm.
152
VALUE CO-DESTRUCTION IN COMPLEX B2B RELATIONS: CONCEPTUALIZATION AND MECHANISMS

Daniel D. Prior, School of Business, University of New South Wales, Australia
Matias G. Enz, School of Management, Cranfield University, UK
ABSTRACT
Over the last decade, value co-creation has attracted a great deal of interest as a joint process of mutual benefits realization.
However, few studies consider close buyer-supplier interactions that either do not affect value creation or, indeed, lead to its
destruction. We contribute to this area by developing the notion of value co-destruction as the obliteration of benefits or the
elimination of opportunities for benefits creation in buyer-supplier exchange. We consider value as an in-use,
phenomenological concept and its destruction or elimination the result of activities of actors in an exchange context. We
develop this notion of value destruction in terms of economic - perceptual, direct - indirect, and individual - organizational
manifestations. We also consider the underlying mechanisms that influence these in terms of managerial economic decisions,
organizational processes and social dynamics within the relational exchange process.
153
A CAPABILITY PERSPECTIVE ON RELATIONSHIP ENDING AND ITS IMPACT ON INNOVATION

AND PERFORMANCE
Ghasem Zaefarian, University of Leeds, UK
Sebastian Forkman, Manchester Business School, UK
Maciej Mitrega, University of Economics in Katowice, Poland
Stephan Henneberg, Manchester Business School, UK
Peter Naude, Manchester Business School, UK
INTRODUCTION
Business relationships are seen as beneficial way of structuring inter-organizational exchanges. For example, transaction cost
economics (TCE) posits that relationships as a governance form are specifically important for recurrent transaction types in
terms of their mix and ideosyncratic nature (Williamson, 1985; 1996). Interdependencies between the relational partners due
to asset specificity are expected, i.e. relationship-specific investments are prevalent in business relationships (Harrison, 2004).
In such situations contracts are often seen to provide the foundation for long-term relationships as duration safeguards
(Williamson, 1985; Weber et al., 2011), for example against opportunism (Stump & Heide, 1996; Wathne & Heide, 2000).
Such business relationships are seen provide specific benefits above and beyond mere transactional exchanges.
Innovation, and the success of innovation activities, is often associated with inter-organizational relationships (Gemunden et
al., 1996; Un et al., 2010). This is related to the issue of resource dependence (Pfeffer and Salancik, 1985), i.e. most
companies depend on specific resources to innovate, such as knowledge, people, or technology which they do not own or
control themselves but which are provided by business partners. In this context, innovation is dependent on a companies
ability to mobilize other actors, such as customers, suppliers, or even competitors (Mouzas and Naude, 2007; Wognum et al.,
2002). Therefore, how a company manages in its business relationships, i.e. what kind of business partner portfolio it has, and
how strong these relationships are, is important for the innovation performance of a focal firm. In this context, the capabilities
to manage in such business relationships become important antecedents of innovation behaviour and success. Such
capabilities have been conceptualized in the context of network competence (Ritter, 1999; Ritter and Gemnden, 2003; 2004)
as well as networking capability (Mitrega et al., 2012). However, while capabilities linked to the initiation and development
of business relationships are well-researched (also in the context of innovation, e.g. Emder et al., 2006), for example the
strengthening of the relationship, or the conflict management as part of a relationship (Bstieler, 2006; Ragatz et al., 1997;
Handfield et al., 1999), aspects of relationship ending have not been covered in the same detail (Ritter and Geersbro, 2011).
In this study, we are interested in the impact of relationship ending capabilities of a focal firm on its innovativeness, and
ultimately on its firm performance. In line with Thtinen and Halinen (2002) we focus specifically on capabilities that are
aimed at relationship endings which refer to the deliberate decisions and actions by a focal actor in a business relationship,
particularly a supplier relationship, to terminate that relationship.
BUSINESS RELATIONSHIP ENDING
Relationship ending is discussed under several names in the literature, such as relationship termination, dissolution, exit. In
the context of our research, relationship ending refers to the intentional decision and implementation of managerial activities
aimed at ending a business relationship which otherwise would have continued. As such, relationship ending relates not to
relationships which have a natural end built into them, for example project relationships, as Halinen and Thtinen (2002)
argue in case of episodic relationships. Relationship ending is often explicitely or implicitely seen as something negative or
counterproductive, which is to be avoided (Vaaland, 2004; Vaaland et al., 2004). Thus, the scarcity of relational strategies to
avoid relationships to end has been lamented (Beverland et al., 2004). Problem-solving strategies as well as passive
aggressive strategies for negotiations have been mentioned as providing positive effects on relationship continution
(Ganesan, 1993), as have managerial activities that increase commitment (Tsiros et al., 2009) or trust (Yang et al., 2012).
However, other scholars have argued that ending relationships can be beneficial and desirable (Alajoutsijrvi et al., 2000;
Havila and Wilkinson, 2002). Some authors relate this to stress or conflict within a relationship (Holmlund-Rytknen &
Strandvik, 2005): Relationship ending arises when the conflict levels in the relationship build to such a high level that the
actor bonds between the parties cannot be recovered (Vaaland & Purchase, 2005, p. 44). Developing goal incongruence, or
unfairness perceptions in busienss relationships are further drivers of dissolution. Other authors, such as Havila and
Wilkinson (2002), show case examples where relationship ending is the result of external circumstances, i.e. not necessarily
related to aspects of the dyad itself. Furthermore, a relationship can become undesirable due to specific internal reasons of
154
one relationship partner. Based on an RBV perspective, the concept of relationship ending is detailed by Mitrega et al. (2012)
who propose a relationship termination capability as part of their conceptualization of networking capabilities. Related to
Reinartz et al.s (2004) argument, they posit that relationship ending relates to two aspects: the capability to select
unfavourable business relationships, and the capability to discontinue these relationships. However, their operationalization is
not exclusively focused on CRM issues, and shows validity with regard to customer as well as supplier relationships. Thus,
for the purpose of our research we use a concept of relationship ending based on Mitrega et al. (2012) and define relationship
ending as a capability made up from the two sub-dimension of selection capability, and process capability. This is in line with
a RBV-oriented perspective in which activities and resources affect directly outcomes, and orientations (i.e. attitudes) are
used as moderating factors.
A RELATIONSHIP ENDING MODEL BASED ON THE CAPABILITY PERSPECTIVE
Relationship ending as a focal firm capability is linked to outcome variables for that firm. Relationship ending as an aspect of
the dynamic management of business relationships is related to a selection capability and to a process capability, i.e. activities
by the focal firm to disengage from a relationship with a supplier. These two capability constructs are linked as antecedents to
certin performance outcomes, in line with a RBV logic, in the case of this study to innovation success. The literature
distinguishes between process innovations and product innovations which are both included in our model. The overall
nomological model as used in our study is depicted here.
RESEARCH METHOD
The proposed model was tested via a sample drawn from the the Iranian automotive industry. We used a multiple-informant
approach to collect data from automotive supplier firms. We designed two questionnaires: a) a purchasing survey to collect
data regarding antecedents, moderators, and dependent constructs from the purchasing managers/general managers of the
supplier company, and b) a R&D survey to collect data regarding mediators (innovation success) from the R&D managers of
that company. This approach is used following the suggestion by Podsakoff et al. (2012) to reduce the potential existence of
common method bias. To collect the data, we followed a key informant approach and phoned purchasing managers and R&D
managers of 500 suppliers of a major Iranian car manufacturer and asked whether they were willing to participate in the
survey. We mailed the purchasing and R&D questionnaires separately to managers of 340 suppliers who indicated a
willingness to participate in our study. We initially received two matched questionnaires back from 143 suppliers, after which
we made a reminder phone call to the remaning companies. We collected further matched questionnaires from 51 more
suppliers, reaching a total of 194 firm responses (i.e. 388 questionnaires) with a response rate of 38.8%. We discarded
responses from suppliers that provided only one of the questionnaires (either purchasing or R&D).
RESEARCH RESULTS
Different measurement models are tested. A CFA shows satisfactory fit results: F2df=174 =303.06, CFI=.96, NFI=.92, and
RMSEA=.069. The adequacy of the reflective multi-item measurement models was assessed; all item loadings are all above
0.7. All construct reliabilities are above 0.776, with scale composite reliabilities all above 0.78. All construct average
variances extracted (AVEs) are above 0.55, and they are greater than the squared correlations of the constructs.
A variance-based Partial Least Squares (PLS) approach is chosen, and SmartPLS 2.0M3 was used to estimate the model.
In a first step we tested the hypotheses for the main model with the whole sample. We used a path weighting procedure with a
maximum of 300 iterations. To compute t-statistics, we applied a bootstrapping procedure with 5000 bootstrap samples; the
bootstrap cases correspond to the number of observations (Hair et al., 2011). Table 1 provides an overview of the results for
the main model. In order to assess the nomological validity of the model, Sarkar et al. (2001) suggest assessing the explained
variances (R) for the focal dependent constructs: product innovation success and process innovation success are explained to
38.3% and 15.9%, respectively, while firm performance is explained to 25.4%. Stone-Geissers Q indicates predictive
validity and should be above 0; we used a blindfolding procedure and cross-validated redundancies with an omission distance
of 9 (to ensure that the number of observations divided by the omissions distance is not an integer). All constructs fulfill this
criterion. Finally, the variance inflation factors (VIF) for the dependent constructs show values below 5 (the highest
recoreded VIF is 1.83), thereby indicating that multi-collinearity is not a problem (Hair et al. 2011).
A comparison of the results of the main model which uses product innovation success and process innovation success as
mediating constructs, with a direct model that also links relationship ending capability directly to firm performance shows
that the path REC to firm performance is insignificant, i.e. the effect of the relationship ending capability on firm success is
fully mediated (see Table 1). In order to test our operationalization of REC as a second-order construct, we contrast our
155
results with an alternative model that links both REC selection and REC process to the two innovation success constructs . In
this alternative model the two paths to product innocation success are becoming insignificant, while both paths to process
innocation success stay significant. Termination acceptance only positively and significantly moderates the relationships
between REC process and product innovation success. R are similar to the main model, as are the Stone-Geisser Q.
CONCLUSION
The study makes several contributions. We first develop a multi-dimensional model of relationship ending capabilities. This
is important as we contribute to the study of business relationship management by clarifying a hitherto somewhat neglected
issue. It has been argued that most studies on relationship ending are focusing on a process-oriented approach, or on
identifying relationship ending types. Furthermore, most studies are either of conceptual or qualitative nature, using case
study methods, thus not enough quantitative knowledge exists about the results of relationship ending management. Second,
this study demonstrates the importance of REC with respect to innovation success and sub sequentially firm performance.
Further, we demonstrate that the preparedness for ending business relationships amplifies the effect of REC on product
innovativeness, which stress the importance of the interplay between a firm capabilities and organizational mindset. In
summary, having a capability perspective based in a resource-based view of the firm provides managers with direct
implications and options of how to unlock value that is linked to dissolving unwanted business relationships.
TABLES
Table 1: PLS Estimation of the Structural Model using REC as Higher-Order Construct
MAIN
MODEL
Main Effects
0.294**
REC Product Innovation Success
(2.131)
0.0586/0.0295
/
0.409***
REC Process Innovation Success
(3.935)
0.1510/0.1146
/
Process Innovation Success Product Innovation
0.402***
Success
(3.021)
0.2188/0.1094
/
Product Innovation Success Performance
0.399***
(3.931)
Process Innovation Success Performance
0.012
(0.130)
REC Performance
Termination Acceptance Product Innovation Success
Termination Acceptance Process Innovation Success
Interaction Effects
Termination Acceptance REC Prod. Innovation
Success
/
Termination Acceptance REC Proc. Innovation
Success
Control Variables
Firm Size Prod. Innovation Success
156
0.020
(0.230)
0.010
(0.098)
DIRECT EFFECT
MODEL
0.294**
(2.165)
0.413***
(3.978)
0.401***
(3.032)
0.382***
(3.755)
-0.006
(0.061)
0.076
(0.707)
0.021
(0.242)
0.009
(0.088)
0.276***
(3.235)
0.1005/0.0692
0.277***
(3.133)
0.055
(0.386)
0.056
(0.403)
0.081**
(1.995)
0.081*
(1.912)
Alternative Supply Chain Partners Performance

R2(Product Innovation Success)
R2(Process Innovation Success)
R2(Performance)
Q2(Product Innovation Success)
Q2(Process Innovation Success)
Q2(Performance)
*** p<0.01, ** p<0.05, * p<0.1
0.242***
(3.543)
0.220***
(2.714)
0.383
0.159
0.254
0.2672
0.1245
0.1393
0.383
0.161
0.258
0.2674
0.1260
0.1371
FIGURES
Termination
Acceptance
Relationship Endin
Capability
Innovation
Relationship
Endin Capability
- Selection
Product
Innovation
Success
Relationship
Endin Capability
- Process
Process
Innovation
Success
REFERENCES
157
Firm
Performance
THE ROLE OF RELATIONSHIP BENEFITS IN BUILDING BRAND EQUITY IN A B2B SERVICES

ENVIRONMENT
Brett Kilpatrick, Gordon Institute of Business Science, University of Pretoria, South Africa
Nicola Kleyn, Gordon Institute of Business Science, University of Pretoria, South Africa
INTRODUCTION
Although some academic authors have lamented the scant focus paid to building brand equity in B2B markets (Juntunen,
Juntunen & Juga, 2011), recent studies have emphasised on the importance of understanding and building brand equity in this
context (Coleman, De Chernatony & Christodoulides 2011; Kim & Hyun, 2011). At the same time that building brand equity
has been gaining traction in the B2B marketing literature, so too has an increased focus on the importance of building strong
relationships with customers. Despite the importance attached to relationships, and the benefits that customers perceive from
these, the contribution of relationship benefits to building brand equity in the B2B environment has not been investigated.
This study investigates the role of relationship benefits in predicting brand equity in a B2B services environment.
LITERATURE
Brand equity has been defined in a number of ways by different authors (Aaker, 1991; Keller, 1993). At the heart of the
notion of brand equity however is the added value received by either an organization or a customer from a brand. Literature
on brand equity has addressed how customers attach equity to a brand through becoming aware of the brand, building strong
positive associations and perceptions of quality, and ultimately becoming loyal to the brand (Aaker, 1991; Alexander, Bick,
Abratt & Bendixen, 2009). For customers to build positive, differentiated associations of the brand, companies need to not
only make a distinctive promise, but to also drive brand equity by delivering a set of differentiated features and benefits.
Previous studies of drivers of brand equity in the B2B context have identified a number of drivers of B2B brand equity
including differentiation, price, trust and credibility (Jensen & Klastrup, 2008), product and service quality (Bendixen,
Bukasa & Abratt, 2004; Van Riel, de Montanges & Streukens, 2005), customer experience (Biedenbach & Marell, 2010),
corporate social responsibility and corporate reputation (Lai, Chiu, Yang & Pai, 2010). In a B2B services context, customeremployee rapport has also been found to play a role in contributing to brand equity (Beidenbach, Bengtsson & Wincent,
2011).
The establishment of a good business relationship must reflect mutual benefits for both a firm and a customer (Dagger,
David, & Ng, 2011). Sweeney and Webb (2007) suggest that functional, psychological and social relationship benefits are all
important criteria for B2B customers. Psychological benefits are associated with feelings of trust or confidence in the other
party that result in great peace of mind (Sweeney & Webb, 2007). Functional benefits refer to the economic and strategic
advantages derived through an interaction with another firm that enhances an organisations competitiveness and drives its
financial position (Sweeney & Webb, 2007). Social benefits are derived when customers interact with people in the service
firm (Dagger et al. 2011
METHOD
The data for this study was collected from corporate buyers of customised management education programmes provided by a
South African business school. The research design consisted of two phases. In the first phase, face-to-face semi-structured
interviews with five HR or Learning & Development directors/managers representing a range of industries (financial
services, manufacturing, telecommunications and retailing) were conducted in order to discuss their perceptions of the
suppliers brand and to identify the variables driving these perceptions. These findings were evaluated in the context of
academic literature and used to develop a framework to predict drivers of brand equity in the B2B services environment. The
following themes were raised during the interviews: price, program quality, service quality and relationship benefits. These
drivers were operationalized in the second, quantitative phase. Scales from extant literature were adapted and enumerated into
a survey using a five point Likert scale (refer to Annexure One). For the purposes of this research we defined brand equity in
line with Aaker (1996) as: A set of brand assets and liabilities linked to the brands name and symbol that add to or subtract
from the value provided by the product or service to a firm or that firms customers.
Three hundred and sixty seven senior HR or Learning & Development employees were sent an e-mail and requested to
participate in the survey by clicking on a URL. One hundred and twenty one complete responses were received resulting in a
response rate of 33%.
158
Following a descriptive analysis, exploratory factor analysis was conducted in order to better understand the underlying
structure of the drivers of brand equity. After selecting an optimal factor structure, the reliability of the items loading onto
each factor was assessed by calculating Cronbachs Alpha for each scale. Thereafter standard multiple regression was
conducted in order to determine the role of relationship benefits in predicting brand equity.
Results of the KMO measure of sampling adequacy and Bartletts test of sphericity were well within acceptable norms.
Analysis of Eigen values indicated that a four factor solution consisting of relationship benefits, program quality, service
quality and price was appropriate. These factors explained a total of 66% of variance with each factor explaining 46%, 9%,
7% and 4% respectively. Before regressing the items loading on each factor, reliability of the scales was assessed by
calculating the Cronbach Alpha. All scales scored above 0.85 indicating an acceptable level of reliability.
The four factors identified were used in a multiple regression analysis to determine the role of relationship benefits in
predicting brand equity. The model was significant and explained 52% of the variance (see Table One below). Analysis of the
betas showed that relationships, programme quality and price were all significant predictors of band equity.
The purpose of this research was to determine the role of relationship benefits in predicting brand equity in a B2B services
context. Results from a survey of corporate customers of a South African business school suggest that relationship benefits
have a moderate effect on predicting brand equity. Although psychological, social and functional relationship benefits were
found to play a role in driving brand equity, results suggest that building brand equity in a B2B services context requires
firms to focus on the quality of their programs and ensuring that their pricing strategy delivers value for money before
investing focusing on building strong relationships and service quality initiatives to strengthen brand equity.
The research contributes to the call to build a deeper understanding of the drivers of brand equity in the B2B context. The
findings also show that although relationship marketing and branding are often considered as two separate streams in the
marketing literature, these constructs are interconnected, particularly in the B2B service context where the benefits derived
from individual and organisational relationships have a role to play in shaping brand preference and purchasing behaviour.
TABLES
Table 1: Regression Outputs
R
R square
Adjusted R Square
0.734
Model
Regression
Residual
Total
Std. Error of the

Estimate
0.538
0.522
0.58516
Sum of Squares
Df
Mean Square
F
Sig.
44.347
4
11.087
32.378
0.000b
38.008
111
.342
82.355
115
Unstandardized
Standardized
Coefficients
Coefficients
Model
T
Sig.
B
Std. Error
Beta
(Constant)
-1.426
.470
-3.036
.003
Factor 1: Relationships
.243
.112
.194
2.170
.032
Factor 2: Service Quality
.253
.145
.174
1.742
.084
Factor 3: Program Quality
.604
.145
.366
4.162
.000
Factor 4: Pricing
.235
.077
.210
3.034
.003
159
REFERENCES
Aaker, D. A. (1991). Managing brand equity. New York: Free Press.
Alexander, N.S Bick, G., Abratt, R. & Bendixen, M. (2009). Impact of branding and product augmentation on decision
making in the B2B market. South African Journal of Business Management, 40(1), 1-20.
Bendixen, M., Bukasa, K.A. & Agratt, R. (2004). Brand equity in the Business-to-business market. Industrial Marketing
Management 33, 731-380.
Biedenbach, G., Bengtsson, M., & Wincent, J. (2011). Brand Equity in the Professional Service Context: Analysing the
impact of employee role behaviour and customer-employee rapport. Industrial Marketing Management, 40, 1093-1102.
Biedenbach, G., & Marell, A. (2009). The impact of customer experience on brand equity in a business-to-business services
setting. Journal of Brand Managment 17(6), 446-458.
Chowdhary, N., & Prakash, M. (2007). Prioritizing service quality dimensions. Managing service quality 17(5), 493-509.
Coleman, D., De Chernatony, L., & Christodoulides, G. (2011). B2B service brand equity: scale and development and
validation. Industrial marketing management, 40, 1063-1071.
Dagger, T. S., David, M. E., & Ng, S. (2011 ). Do relationship benefits and maintanance drive commitment. Journal of
service marketing 25(4), 273-281.
Jensen, M.B. & Klastrup, K. (2011).Towards a B2B customer-based brand equity model. Journal of Targeting, Measurement
and Analysis for Marketing, 16(2), 122-128.
Juntunen, M., Juntunen , J., & Juga , J. (2011). Corporate brand equity and loyalty in B2B markets: A study among logistics
service purchases. Brand Management, 18(4/5), 300-3011.
Keller, K. L. (1993). Conceptualizing, measuring and managing customer based brand equity. Journal of Marketing, 40, 122.
Kim, J.-H., & Hyun, Y. J. (2011). A model to investigate the influence of marketing-mix efforts and corporate image on
brand equity in the IT software sector. Industrial Marketing Management 40, 424-438.
Lai, C., Chiu, C., Yang, C. & Pai, D. (2010). The effects of corporate social responsibility on brand performance: the
mediating effect of brand equity and corporate reputation. Journal of Business Ethics 95(3), 457-469.
Martensen, A., & Gronholdt, L. (2010). Measuring and managing brand equity: A study with focus on quality and service in
banking International Journal of Quality and Service Science, 2(3), 300-316.
Suri, R., Manchanda, R. V., & Kohli, C. S. (2000). Brand evaluations: a comparison of fixed price and discounted price
offers. Journal of product and brand management 9(3), 193-207.
Sweeney, J. C., & Webb, D. A. (2007). How functional, pschological and social relationship benefits influence individual and
firm commitment to the relationship. Journal of Business & Industrial Marketing Vol. 22(7), 474 - 488.
van Riel, A., de Mortanges, P., & Streukens, S. (2005). Marketing antecedents of industrial brand equity: an emperical
investigation in speciality chemicals. Industrial Marketing Management 34(8), 841-847.
160
Construct
Brand
Equity
Price
Program
Quality
Service
Quality
Relationship
benefits
Annexure One: Constructs and Scale Items

Scale
1. Although another service provider has the same features as Brand X*. I
would prefer to use this Brand X.
2. If another service provider is not different from this Brand X, it seems
smarter to use Brand X
3. Although there is another service provider as good as Brand X, I prefer to use
Brand X
4. Even though another service provider would be as good as Brand X, I would
feel better using Brand X
5. Brand X is competitively priced
6. Brand X programmes are reasonably priced
7. I have no problems with the prices Brand X charges
8. When you consider what you get from them, Brand Xs prices are good.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Brand X programs have a good reputation

Brand X design of programs are of high quality
Compared to other service providers, Brand X is one of the best
Compared to other service providers, Brand Xs programs are of high quality
Brand Xs program quality is dependable
Brand Xs program quality consistent
Brand Xs programs are innovative
Employees of Brand X are competent
Employees of Brand X provide us with personal attention
Brand Xs employees are courteous
Brand Xs employees are reliable
Brand Xs employees are responsive to my needs
Psychological benefits
21. We have peace of mind in dealing with Brand X
22. We trust Brand X
23. We know what to expect of/from Brand X
24. If Brand X give us their word, we know that whatever it is, it will be done
25. There is a real sense of understanding between Brand X and our organisation
Functional benefits
26. Having a relationship with Brand X enables us to become more competitive
in the market
27. We are able to capitalize on the value Brand X offers
28. our relationship with Brand X enables us to enhance financial outcomes As a
result of the relationship, we able to enhance financial outcomes
29. As a result of the relationship, we able to maximize financial outcomes
30. Brand X and our organization complement each other in terms of expertise
31. Our relationship with Brand X enables us to proactively identify
opportunities
Social benefits
32. Our relationship with Brand X goes beyond just business
33. We have a real friendship with Brand X
34. We work on things together
35. Our relationship with Brand X enables us to share a lot together
36. We would call on Brand X if we had a problem
*Brand X refers to the Business School supplying management education programmes
161
Sources
(Kim & Hyun,

2011)
(Aaker, 1991)
(Martensen &
Gronholdt, 2010)
(Suri, Manchanda,
& Kohli, 2000)
(Martensen &
Gronholdt, 2010)
(van Riel, de
Mortanges, &
Streukens, 2005)
(Martensen &
Gronholdt, 2010)
(Chowdhary &
Prakash, 2007)
Sweeney & Webb
2007
THE ORGANIZATION OF MARKETING IN B2B ORGANIZATIONS

Geoffrey Bick, University of Cape Town, South Africa
Agit Singh, University of the Witwatersrand, South Africa
INTRODUCTION
The purpose of this research is to determine how marketing is organized in South African business-to-business organizations,
and to determine future directions in the organization of marketing. Much research has been conducted on marketings
impact on business performance (see Homburg et al, 1999; Jaahkola et al, 2010; Nath et al, 2010; Auh & Merlo, 2012;
Morgan, 2012). Verhoef and Leeflang (2009) found that a marketing departments influence is related positively to market
orientation, and hence to firm performance, while Auh and Merlo (2012) confirmed that a powerful marketing function is
associated with improved business performance above and beyond the contribution of a market orientation. However,
research into the marketing structure of organizations, particularly business-to-business organizations, has been relatively
scarce (see Homburg et al, 2000; and Krohmer et al, 2002; Harris & Ogbonna, 2003).
Marketing Structure
The organization of marketing has evolved over the years from being characterized by traditional hierarchical, bureaucratic
marketing structures (Webster, 1992; Ferlie and Pettigrew, 1996; Snow, 1997) to being characterized by decentralization,
devolution and dispersion of the marketing activity (Harris and Ogbonna, 2003). Olson et al (2005) suggest that marketing
managers adopt specific structures that best satisfy the unique business strategy of the firm, and that a decentralized
organization will produce more new ideas and program changes than will a centralized organization.
Marketing thus becomes the responsibility of staff from a range of functional areas (Angus and Lorna, 2000; Harris and
Obgonna, 2003). The marketing function becomes the development of an integrative, cross-functional marketing culture that
embraces the diverse specialist functions within the organization. It must manage the boundaries between individual
departments and hence manage the boundary between the organization and its customers (Angus and Lorna, 2000; Homburg
et al., 2000).
Homburg et al (2000) introduced the concept of a primary marketing coordinator, as being the appropriate
mechanism/individual for driving the marketing process across SBUs in organizations.
This leads us to develop our first Proposition:
P.1: Marketing structure in business-to-business organizations is a decentralized, integrative process that is coordinated by a
marketing manager.
Key Account Managers and Customer-focused Marketing Structures
Homburg et al. (2000) identified an increasing emphasis on key account management (KAM) and the establishment of
customer segment managers within the marketing and sales organization. There is an increasing tendency to have crossfunctional teams to manage accounts, to provide the multifunctional expertise required by the customers. Further, Homburg
et al. (2000) showed that the changes in marketing and sales organization are interrelated and that there is a general
movement toward customer-focused organizational structures, away from a product-focused or geographical-region one.
This leads to our second Proposition:
P.2: Marketing structures in business-to-business organizations are moving towards customer-focus with emphasis on key
account management.
Moving towards a Network Paradigm
Webster (1992) and Snow (1997) both talk about the era of the network organization. Marketing needs to shift away from
the current dyadic paradigm in which a dominant organization has power over a dependent organization toward a network
paradigm in which multiple organizations seek cooperative and mutually beneficial relationships (Achrol, 1997). Conceptual
work indicates that the future of marketing organization is likely to be network-based (Achrol, 1991; Snow, 1997; Webster,
1992; Achrol, 1997; Achrol and Kotler, 1999).
This leads us to develop our third proposition:
P.3: The future marketing organization is likely to be network-based.
162
METHODOLOGY
The method used was a quantitative analysis of data collected through a survey. A self-administered questionnaire was
developed, pilot-tested, and distributed electronically to respondents. The population included technical, marketing and
business professionals, who have formal training or qualifications with a minimum of 5 years experience in the field of
marketing, and are actively involved in marketing. A sample of 120 respondents was chosen on a convenience basis from
organizations in the mining, engineering design and manufacturing, petrochemical, and telecommunications sectors within
South Africa. The data was analyzed statistically using descriptive statistics, the distribution-fitting algorithm (DFA)
rescaling analysis (Stacey, 2005), and Factor Analysis. The DFA technique allows ordinal-level data to be rescaled and
analyzed as interval-level data. Factor analysis was used as a secondary statistical analysis technique, to identify any
underlying dimensions that explained the correlation among research variables. The number of factors was determined by
retaining factors with Eigenvalues greater than unity, or with a significant break in the gradient of the scree plot.
Factor Analysis for Structure of Marketing:
Factor analysis of the data was performed to identify any underlying factors that can be used to describe how marketing is
structured in business to business organizations. Table 1 below shows the Eigen values after Varimax rotation.
The results show a 3-factor solution, based on Eigen value and scree plot criteria. The resulting factors are labeled:
Factor 1: New Age Marketing
Factor 1 has high factor loadings for statements that pertain to all 3 propositions: the importance of Key Account
Management and customer-focused structure (Proposition 2); coordination of marketing activities, decentralization of
marketing and marketing as an integrative process (Proposition 1); and your organization can benefit from marketing
networks (Proposition 3); consequently Factor 1 is termed New Age Marketing.
Factor 2: Marketing coordination and integration
Most of the statements for this factor deal with coordination and marketing as an integrative process. The nine statements
that load on to this factor cover all three propositions; consequently this factor can be described as Marketing Coordination
and Integration.
Factor 3: Decentralization Networks
The last factor contains eight statements from all 3 propositions as well. It has high loadings from statements that deal with
marketing structures, particularly networks and the decentralization of marketing. Hence Factor 3 can be described as
Decentralization Networks.
DFA Results Pertaining to Proposition 1: Structure of the Marketing Function
The Distribution Fitting Algorithm (DFA) method was used to analyze data for each proposition. For Proposition 1, the
following statistically significant statements that are higher than the overall mean of the statements imply that the respondents
agreed that these statements are important to the structure of the marketing function:
x Effective management of marketing requires coordination of managers and service professionals
x Marketing manager is responsible for coordination of marketing activities in an organization
x A marketing manager is required in a centralized marketing structure
x Marketing is the responsibility of all staff.
The coordination of marketing activities by a marketing manager, as indicated by the first three statements, and confirmed by
the factor analysis, is in line with the literature (Angus and Lorna, 2000; Homburg et al, 2000). However the results do not
conclusively indicate the need for a marketing manager in a decentralized marketing structure. Regarding the
decentralization of marketing, the results provide an indication that marketing is the responsibility of all staff. However
there is slight disagreement with the statement that Marketing is a decentralized function. This finding may seem to
indicate reluctance from marketing staff to accept marketing as a decentralized task.
On the attribute of marketing being an integrative process, two of the three statements had significant findings, confirming
that marketing is an integrative process. However there was not 100% agreement to all statements that relate to proposition
1. The proposition Marketing structure in business to business organizations is a decentralized, integrative process that
is coordinated by a marketing manager can only be partially accepted.
163
DFA Results Pertaining to Proposition 2: Customer-focused Marketing structures with Key Account Management
The following statistically significant statements that are higher than the overall mean for Proposition 2:
x Key Account Managers are necessary for the management of important customers
x Key Account Managers are required to develop closer relationship with important customers
x Organizations need customer focused marketing structures.
The most highly ranked attribute is that of Key Account Management, indicating the importance of key account managers,
which is supported by literature (Homburg et al., 2000).
In terms of marketing structures there was a significant finding for the need of customer-focused marketing structures in
organizations. Factors 1 and 2 of the factor analysis also support this proposition. Homburg et al. (2000) also showed that
there was a shift toward a customer perspective with a de-emphasis on the product-focused and geographical-region
structures. Thus it can be concluded that Marketing structures in business to business organizations are moving towards
customer-focus with emphasis on key account management. Therefore proposition 2 can be accepted.
DFA Results Pertaining to Proposition 3: Marketing as a Network Structure
The statistically significant statements that are higher than the overall mean for Proposition 3 are:
x Your organization can benefit from marketing networks
x Marketing networks result in ease of gaining market intelligence
The highest ranked attributes for marketing networks support the proposition, which is also confirmed by Factor 3 of the
factor analysis. There was also agreement that marketing networks are existent in organizations and that marketing needs to
be moved towards a network-based marketing structure. These findings are very comparable to theories of Achrol (1991),
Webster (1992) and Snow (1997), where organizations adopt a network-type structure for their people and resources. Thus
Proposition 3 The future of marketing organization is likely to be network-based can be accepted.
Despite the trend of South African B2B organizations moving to greater decentralization and customer focus, these
organizations still reveal a strong tendency towards a product-focused structure, perhaps reflecting the high technical
requirements of marketing in these typically engineering or high tech companies.
It is recommended that organizations review their marketing structures to move away from the traditional structures
characterized by a high degree of centralization, with marketing being defined as a functional group, towards a marketing
structure decentralized to business units. However, there remains a need for a marketing manager to coordinate and manage
all the marketing activities as part of the marketing process.
It is also recommended that marketing move towards customer-focus and key account management, to focus on building
long-term relationships with customers. A further recommendation is for marketing to move towards establishing and
maintaining marketing networks.
Further research could be conducted into the factors that contribute to the organization of marketing, and how business to
business organizations have adapted their structures to account for these factors. Different structures in different types of
business to business organizations could also be analyzed to understand the rationale for these differences. In addition, the
relative success of changing structures to greater decentralization could also be researched.
TABLES
Table 1: Results of Factor Analysis for Structure of Marketing
Eigenvalues after Varimax Rotation
Factors
Eigenvalue
Individual %
Cumulative %
1
3.940418
40.46
40.46
2
2.988268
30.68
71.14
3
2.498717
25.65
96.79
4
0.812119
8.34
105.13
5
0.799928
8.21
113.34
164
Scree Plot
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REFERENCES
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146-163.
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Homburg, C., Workman, J. P. and Krohmer, H. 1999. "Marketings Influence Within the Organization."
Marketing 63: 1-17.
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Toward a Customer-Focused Organizational Structure." Academy of Marketing Science 28 (4): 459-478.
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performance: A study in three European 'engineering countries'." Industrial Marketing Management 39 (8): 1300-1310.
Krohmer, H., Homburg, C. and Workman, J.P. 2002. "Should marketing be cross-functional? Conceptual development and
international empirical evidence." Journal of Business Research 35: 451-465.
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Management 54: 20-35.
Nath, P., Nachiappan, S. and Ramanathan, R. 2010. "The impact of marketing capability, operations capability and
diversification strategy on performance: A resource-based view." Industrial Marketing Management 39 (2): 317-329.
Olson, E.M., Slater, S.F. and Hult, G.T.M. 2005. "The performance implications of fit among business strategy, marketing
organization structure, and strategic behavior." Journal of Marketing 69 (3): 49-65.
Snow, C. C. 1997. "Twenty-First-Century Organizations: Implications for a New Marketing Paradigm." Academy of
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Stacey, A. G. 2005. The Reliability and Validity of the Item Means and Standard Deviations of Ordinal Level Response
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Verhoef, P.C. and Leeflang, P.S.H. 2009. "Understanding the Marketing Department's Influence within the Firm." Journal of
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165
THE EFFECT OF RECESSION ON B2B LOYALTY

Erzsbet Hetesi, University of Szeged, Hungary
INTRODUCTION
The relations among organizations represent interactions with the goal of utilizing mutual advantages. While exploring the
most important factors of inter organizational relations researches have focused mainly on perceived quality, satisfaction,
trust, commitment (Morgan-Hunt, 1994), and fairness (Ganesan, 1994), but only few have raised the question whether loyalty
exists on the B2B market and if yes, what are its features (Costabile, 2000). Many researchers refuse the existence of loyalty
in the inter organizational contacts saying that the main objectives of an organization operating in the market are profit
making and achieving growth, and since the notion of loyalty includes certain emotional commitment, there is no place of it
here, so there is nothing to research on. In spite of these views both in theoretical and empirical researches there are recently
some clues, which indicate that there is place for researching on loyalty in the B2B context, there is a need for working on its
definition and exploring its indicators. These researches have claimed that loyalty can be interpreted among the actors of the
B2B market, and it is also possible to define it through different dimensions. Some researchers differentiate between
behavioral and attitudinal loyalties and their results show that among the various factors the trust and the commitment (which
can be affective or calculative) are in strong relation with loyalty (Rauyruen et al. 2005, ater ater 2010). According to
others the role of personal relations (Gedeon et al. 2009), and fairness (Jambulingam, 2011) is also very important. If the fact
is accepted that loyalty exists in the organizational market, it is worthwhile to investigate how inter organizational relations
have been altered by the economic recession, how handling of these relations has changed and in summary how the
understanding of loyalty has been modified by the crisis.
The research made in a Central European country used quantitative and qualitative methods to explore whether loyalty exists
in the B2B markets, which are its most important dimensions, and how they have changed due to the recession. Loyalty in the
B2B context can be interpreted as the level of adherence of the partners to each other, as an attitude to maintain contacts.
Before making the field research loyalty was defined by the researchers as follows: a loyal partner is committed to the
company she is striving for long term relations she is staying with the company in spite of smaller dissatisfactions and
smaller price discounts offered by the competitors, besides the loyal partner recommends the company to others. During the
research it was supposed that trust was the most important dimension of loyalty, and trust was the expression of deep
personal relations. It was also supposed that trust and commitment strengthens the endeavor to maintain contacts in spite of
the recession, and the fair attitude during recession would multiply trust and commitment.
METHOD
The field research was made between November 2011 and June 2012 in Hungary, both qualitative and quantitative methods
have been used to explore the issues of loyalty. In the first phase of the research the method of focus group was used. The
participants of the focus group represented big and medium and small enterprises. After the focus group 27 in-depth
interviews were made in three steps. Firstly there were five interviews with the customers of a chemical company which was
not really touched by the recession, after that 16 interviews were made with leading managers in different industries, and at
the end six discussions were carried out with the key account managers of a leasing company suffering deeply from the
recession. The aim of the qualitative research was to understand how these people interpreted loyalty and to find out how
recession had effected the relations. In the next phase of the research an on-line questionnaire was sent out to the contact
persons of 1265 different companies. Although reminding letters were send out in every two weeks the respond rate was
rather low: altogether 130 questionnaires were completed. The sample was representative in terms of the number of
employees and of the revenue, the distribution of the sample according to the industry branches however was only near to
that of the basic pool.
The quantitative research aimed to explore three issues:
1. The opinion of the respondents about their own loyalty to her companys largest supplier (Ulaga Eggerts, 2006).
Loyalty has been measured with statements, like We stick to our partner in spite of the little bit better prices of its
competitors, We used to recommend our partner to others, We stick to our supplier even in case of smaller mistakes
(The value of Cronbach alfa was in this case 0.718.)
166
2. According to the respondents which dimensions influence loyalty both on customer and supplier side? The
dimensions were measured with statements, like: They never disappoint us even if we are in trouble, They always do their
best to keep their promises, We can trust their confidence, They always tell us the truth, etc. (The value of Cronbach
alfa was in this case 0.886.)
3. The third group of questions aimed to explore the changes of loyalty due to recession. The statements were: With a
proven partner it is easier to overcome the difficulties, Pricing is becoming a more and more important issue in the business
partnerships Efficiency is becoming a more and more important issue in the business partnerships, We try to stick to our
old partners, etc. The responses were measured with their agreement with the statements in a lickert scale of 1-6. The
distribution of the responses was analyzed with the Friedman test, the reliability of the scales was measured with Cronbach
alfa. Besides doing principal components analysis the relations among factors were analyzed by a correlation model.
According to all participants of the qualitative research loyalty does exist in inter organizational relations. Interesting result of
the focus group and in depth interviews was that behavioral loyalty (reprchbuying) had not been mentioned. Loyalty in B2B
relation was perceived as an endeavor to maintain relations, and as the main indicator of this trust had been mentioned. The
development of trust is a long process, in which the partners (customers or suppliers) prove their reliability, correctness, and
fair behavior. Keeping personal relations also proved to be an important factor of trust. Beside attitudinal ad affective loyalty
the notion of calculative loyalty has emerged. It means that the partners consider emotional loyalty as an investment. As far
as the recession is concerned, the respondents could be classified into three groups: those who refuse loyalty, those who are
uncertain, and those who are supporting loyal relation also in recession. Refusers argue that profit is the only driving force in
recession, there is no place for emotions. The uncurtains tend to maintain relations but they do not know what will happen in
the future, so they do not trust in the partners or even not in themselves. The loyals in contrary believe that they can survive
together better than alone, so mutual loyalty can benefit both parties. According to them trust and fairness is even more
valued in recession, giving the feeling that they can count with the partners. They think that personal relations intensified in
these times, and even top managers participate in the personal meetings.
By analyzing the data of the 130 questionnaires the following result were obtained. How respondents think about loyalty?
They interpret loyalty as an endeavor for a long term relation. The distribution and the Friedman test showed that the
respondent would stick to their best supplier even in case of smaller mistakes or little bit higher price. In case of higher price
difference only 30% would maintain relation with its main supplier. 41% of the respondents totally agree with the statement
that they used to recommend the supplier to others. What factors influence loyalty? The most important dimension of
loyalty both in customer and supplier position is trust and fairness. On supplier side the share of the mostly agree answers on
the questions of meeting the promises, confidentiality, truthfulness, and fairness is at least 80%; while on the customer side of
these answers on the questions of trust and fairness is at least 75% each. Loyalty showed significant correlation among the
company characteristics only with length of the relation. How recession has influenced B2B loyalty? The distribution and
the Friedman test showed that the respondent shared the view that it was easier to overcome problems together with partners
than alone. Price offers have become more important, price competition has increased, and many tried to make benefit from
the deteriorated position of others. 75% of the sample agreed that co-operation can help to overcome recession problems. The
share of those who fully agreed was 48%, while 31% fully agreed with the statement that it would be incorrect to change
partner just because short time advantages. The distributions also showed the conditions of business relations had become
more severe (31% fully agreed with that statement).
With the help of factor analysis eight factors were identified, three of them are worthwhile to feature: loyalty, uncertainty,
and endeavor to rationalize. The factor loyalty is composed of items like fairness, trust, and co-operation each with high
eigenvalue. The factor of uncertainty is composed of elements like defenselessness, severe conditions, unpredictability;
whereas the factor of rationality can be described with items of efficiency, profit, and price war.
SUMMARY
The results of the qualitative and quantitative research proved that the actors of the B2B market interpret the notion loyalty;
they identify it like the endeavor for durable, long term relations even if the competitors offers are slightly better. They
include in the notion the forgiveness for smaller mistakes and the recommendation of the partner to others. The results
harmonize with the finding of the international researches (Rauyruen et al. 2005, ater-ater, 2010, Jambulingam et al. 2011)
in terms of the most important dimensions of loyalty. These are: trust, commitment and fairness. The focus group, the in
167
depth interviews and the questionnaire survey unanimously proved that the recession has divided the reactions of the
organizations in terms of loyalty.
As far as the personal relations are concerned the results of the research showed certain contradictions: the interview
indicated an increasing importance of the personal relation in the time of recession, this phenomenon was however not totally
supported by the results of the questionnaire survey.
The limitations of the research can be detected in the small size of the sample and in its regional scope.
Further research should be directed to explore how the history of relations affects loyalty and what role personal contacts will
play in the development of loyalty in the future.
References
ater, T. and ater, B. (2010). Product and relationship quality influence on customer commitment and loyalty in B2B
manufacturing relationships, Industrial Marketing Management. Retrieved from: http://www.sciencedirect.com/ on 15 March
2010.
Costabile, M. (2000). A dynamic model of customer loyalty. IMP Conference, Bath, U.K.
Ganesan, S. (1994). Determinants of Long-Term Orientation in Buyer-Seller Relationships. Journal of Marketing, 58, 1-19
Gedeon, I. M., Fearne, A., Poole, N. (2009). The role of inter-personal relationships in the dissolution of business
relationships. The Journal of Business & Industrial Marketing, 218 226
Jambulingam, T., Kathuria, R., Nevin J.R. (2011). FairnessTrustLoyalty Relationship Under Varying Conditions of
SupplierBuyer Interdependence. Journal of Marketing Theory and Practice, 19(1), 3956.
Morgan, R. M., Hunt, S. D. (1994). The Commitment-Trust Theory of Relationship Marketing. Journal of Marketing, 58, 2038
Rauyruen, P., Miller, K. - Barrett, N. (2005). Relationship quality as a predictor of B2B customer loyalty, 21st Annual IMP
Conference, IMP Group, Rotterdam, Netherlands, 1-15.
Ulaga, W., Eggert, A. (2006). Value-based differentiation in business relationships: Gaining and sustaining key supplier
status. Journal of Marketing, 70(1), 119136.
168
DOES ALL CONSUMER RETALIATION HAVE THE SAME REASON? THE GOALS AND EMOTIONS
BEHIND CONSUMER RETALIATION
ABSTRACT
This research examines the influence of consumer's cultural model on retaliatory behavior. We suggest that consumer retaliation
happens after double deviation involving products or services that consumers are highly involved with. We also suggest that
the goals of retaliation and the emotions felt during the retaliation change according to the consumers cultural model.
169
DETERMINING CUSTOMER OUTCOMES BY MANAGING EMPLOYEE EMOTIONAL DISPLAY:

A MULTILEVEL APPROACH
Christin Vo, University of Muenster, Germany
Michael Paul, University of Augsburg, Germany
ABSTRACT
There is extensive evidence that employee emotional display toward customers (EED) is an important determinant of
successful service delivery. Previous research has shown that service with a smile increases a customers service
experience and that emotional display is of avail when it comes to influencing customers and achieving higher performance
goals. Thus, effectively managing their employees emotional display has become a hot topic for both service marketing
and emotions management scholars. The purpose of our study is threefold: First, we intend to add a more detailed perspective
on the emotional display of frontline employees in service organizations, acknowledging its multidimensional structure. We
suggest that, in addition to a quantity dimension (i.e. number of smiles), customers reaction to EED is also influenced by the
employees emotional authenticity and effort, which have been mentioned by emotional labor scholars, but were not assessed
in the context of EED. Second, we introduce a comprehensive model of EED processes that links management and employee
variables with customer and company outcomes; we refer to this model as the emotion value chain. We systematically
identify the management practices through which service organizations can influence organization- and employee-related key
drivers of EED at the level of the individual, the team, and the organization, which in turn will influence EED and customer
and company outcomes (e.g., customer satisfaction). Third, based on the emotion value chain, we offer empirical insights on
the links between management practices, employee variables, EED dimensions, and customer outcomes. To our knowledge,
this study is the first to link drivers of EED, EED itself, and customer outcomes in a common multilevel model.
The data for this study was collected in a two-step approach. To establish a profound understanding of the dimensions of
EED and to identify potential drivers of EED, we first conducted qualitative interviews with customers, employees, and
managers in addition to an extensive literature review. In a second step, we collected quantitative data in a large-scale,
multilevel field study in 51German fast food restaurants involving dyadic data at the customer and employee level. Finally,
215 complete employee surveys could be matched with 2118 customer surveys to create a dyadic data set. For initial
analyses, the customer data were aggregated on the micro level, so that each frontline employee was linked with an average
score of his/her customers. Based on this data first mediation analyses were run. We expected the relationship between the
drivers of EED (as reported by employees) and customer outcomes (as reported by customers) to be mediated by EED
dimensions (as reported by employees). Following the guidelines of Preacher/Hayes and Zhao/Lynch/Chen we applied the
bootstrapping procedure. With regard to customer satisfaction, the analysis showed significant mediating effects for
important employee characteristics and skills (e.g., self-efficacy and service orientation), for team-related drivers (e.g., team
atmosphere), as well as organization-/management-related drivers of EED (e.g., leadership style and training). One aspect to
consider is the nested nature of the data set, such that different customers (level 1) are nested within frontline employees
(level 2). To account for the underlying multilevel data structure, a hierarchical linear modeling approach has to be employed
in a second step of analysis. By using HLM we could explicitly take into account the fact that individuals served by one
employee are more alike than those served by another one, thus accounting for the non-independence of observations. The
intraclass correlations (ICCs) for the dependent variables customer satisfaction with the employee (ICC=0.120), overall
customer satisfaction (ICC=0.057), and word-of-mouth (ICC=0.041) indicate that there is a reasonable proportion of variance
in individual responses that is accounted for by group belonging, namely approximately 12%, 6%, and 4%. While the first
mediation analyses did support the idea that the relations between the drivers of EED and customer outcomes are mediated by
EED, further analyses have to show whether this holds also when accounting for the hierarchical nature of the data.
Our research uses data from multiple sources (frontline employees and customers) to investigate how service companies
should manage their employees emotional display to optimize customer outcomes. Based on a large and unique multilevel
data set, we are able to empirically test the links between drivers of EED, EED dimensions, and customer outcomes. Our
findings will integrate and advance existing studies, putting together fragmented research findings to get an overall picture of
EED. The results are intended to equip service providers with a road map to increase their customers satisfaction and other
outcomes by systematically managing their employees emotional display.
170
RECONCILING THE CUSTOMER SATISFACTION WORD OF MOUTH RELATIONSHIP

Bodo Lang, The University of Auckland Business School, New Zealand
INTRODUCTION
Satisfied customers talk to five others, while dissatisfied customers talk to 15 others. This is a much propagated piece of
marketing folklore. But is it true? WOM is informal communication between consumers about a product or a service
(Anderson 1998; Dichter 1966; Westbrook 1987) that can occur between two or more consumers (Ryu and Han 2009). WOM
has been investigated for more than 60 years (Bauer and Gleicher 1953; Trusov, Bucklin, and Pauwels 2009) and interest
from academics and practitioners in WOM continues to increase. Despite this strong interest, important research gaps in this
area remain. This paper focuses on an important gap regarding the relationship between WOM and satisfaction.
LITERATURE REVIEW
Customer satisfaction has been described an evaluation of an emotion in response to the ownership and/or usage of a product
or service (Hunt 1977, 459-460) and it has emerged as a key antecedent of WOM (Anderson 1998; Babin et al. 2005; File
and Prince 1992; de Matos and Rossi 2008). However, the relationship between customer satisfaction and the amount of
WOM is unclear. Research supports three competing relationships: A positivity bias, where positive experiences result in
greater WOM than negative experiences (Cermak, File, and Prince 1991; Holmes and Lett 1977; Swan and Oliver 1989;
Wirtz and Chew 2002); a negativity bias, where negative experiences result in greater WOM than positive experiences
(Anderson 1998; Harmon and McKenna-Harmon 1994; Silverman 1997; TARP 1981); and lastly a symmetric relationship,
where both positive and negative experiences result in similar amounts of WOM (Anderson 1998; Bowman and Narayandas
2001; Christophe and Rime 1997; Derbaix and Vanhamme 2003; Engel, Kegerreis, and Blackwell 1969; Soderlund 1998;
Wirtz and Chew 2002). Importantly, the shape of the relationship between customer satisfaction and WOM activity has
largely been left unexplored, with only a few authors explicitly considering this issue (Hart, Heskett, and Sasser 1990;
Soderlund 1998). The present study will address this research opportunity.
To resolve these inconsistencies, a taxonomy of service encounters will be used to delineate two extreme types of service
encounters (Price, Arnould, and Tierney 1995). The taxonomy is based on three variables: the duration of a service
encounter; the level of affect (emotional arousal) during the service encounter; and the spatial proximity between staff and the
customer during the service encounter. The two extreme encounters can be described as EAI (i.e. enduring, affectively
charged and intimate distance) and BRD (i.e. brief, rational and public distance) (Price, Arnould, and Tierney 1995).
The present study hypothesizes that the shape of satisfaction WOM relationship (positivity bias, negativity bias or
symmetric) depends on the type of service encounter (i.e. EAI or BRD) as shown in Figure 1.
Satisfactory BRD (brief, rational and public distance) encounters are expected to result in moderate amounts of WOM due to
the tenuous connection between the consumer and the service. In contrast, dissatisfactory BRD encounters are hypothesized
to result in greater amounts of WOM due to the lack of damage to the customers ego, while still helping other consumers to
avoid the service. In contrast, in EAI (i.e. enduring, affectively charged and intimate distance) encounters the opposite effects
are anticipated. Satisfactory encounters are hypothesized to result in greater WOM due to a stronger psychological
connection between the consumer and the service. For the very same reason, dissatisfactory encounters are hypothesized to
result in lesser WOM. This leads to the following hypotheses:
General effects (within encounters)
x
H1: Customers who have a brief, rational and distant (BRD) service encounter will engage in less WOM when satisfied,
compared to when they are dissatisfied.
x
H2: Customers who have an extended, affectively charged, and intimate (EAI) service encounter will engage in more
WOM when satisfied, compared to when they are dissatisfied.
Detailed effects (across encounters)
Customers who have an extended, affectively charged, and intimate (EAI) service encounter
x H3: and are satisfied will engage in more WOM, when compared to customers who have a satisfactory brief, rational
and distant (BRD) service encounter
x H4: and are dissatisfied will engage in less WOM, when compared to customers who have a dissatisfactory brief,
rational and distant (BRD) service encounter
171
METHOD
This study uses two independent variables: type of service (EAI versus BRD) and level of satisfaction (high, moderate, low),
resulting in a 2 x 3 fully factorial design.
Data was collected from undergraduate students at a large university. A pilot study (N = 35) and a pre-test (N= 123) had
confirmed the relevancy of dry cleaning (BRD) and tattooing (EAI) to students. Furthermore, research has shown that the
relationship between satisfaction and WOM is the same regardless of whether student or non-student samples are used (de
Matos and Rossi 2008). In the main study, respondents read one of six scenarios and then completed a questionnaire,
resulting in N = 415.
Measurement
The type of service (EAI versus BRD) consisted of three dimensions (Price, Arnould, and Tierney 1995): emotional arousal
(high versus low), spatial proximity (intimate versus distant) and the duration of the encounter (enduring versus brief).
Emotional arousal was measured using an accepted five-item, bipolar scale (Mehrabian 1974), while both physical distance
and the duration of the encounter were measured using dichotomous measures using the thresholds determined by Price et al
(1995). Lastly, customer satisfaction was measured using a single item 11-point scale which has outperformed a number of
other satisfaction scales in comparative tests (Wirtz and Lee 2003). The scale ranged from Not at all satisfied (0) to
Completely satisfied (10) and is based on earlier work in customer satisfaction (Westbrook and Oliver 1981).
The dependent variable in this study is WOM. The WOM measure used in this study was a modified version of an
established WOM measure (Harrison-Walker 2001) and consisted of three items that captured WOM activity. Responses
were captured on an 11 point scale (0 to 10) similar anchored with two commonly used labels Not at all likely and
Extremely likely (Reichheld 2003). Previous research has shown that the measure of WOM activity has high levels of
reliability and validity (Lang 2009).
RESULTS
Manipulation checks
To check whether the satisfaction manipulation was successful, a one-way ANOVA was conducted. Perceived satisfaction
with the encounter varied significantly (F (2, 415) = 1562.46, p < .001) across the low (M = 1.06, SD = 1.48), moderate (M =
6.82, SD = 1.54), and high satisfaction conditions (M = 9.48, SD = .68) and each of the three manipulations differed
significantly from the other two (ps < .001). These results indicate that the satisfaction manipulation in this study was
successful.
Cross-tabulations and chi-square tests were run to test for differences in duration and distance, while an independent samples
t-test was conducted to check how emotional arousal varied across dry cleaning (BRD) and tattooing (EAI). Results revealed
that tattooing was perceived as enduring (93%, 2 (1, 415) = 314.03, p < .001), intimate (92%, 2 (1, 415) = 162.68, p < .001)
and affectively charged (M = 5.16, SD = .88, t (415) = -20.61, p < .001), whereas dry cleaning was perceived as brief (94%),
distant (69%), and rational (M = 3.42, SD = .84). These results indicate that the type of service manipulation was also
successful.
Hypotheses testing
Hypotheses 1 and 2 compare WOM activity within each service at different levels of satisfaction. Hypothesis 1 states that
consumers who had experienced a dissatisfactory BRD service encounter would be more likely to engage in WOM compared
to those who had experienced a highly satisfying BRD encounter.
As anticipated, a disordinal interaction between the level of satisfaction and the type of service was present for WOM
activity, F (2, 415) = 26.85, p < .001. To test hypothesis 1, we conducted an ANOVA for BRD service encounters. Results
revealed that WOM activity differed across the three satisfaction levels, F (2, 208) = 44.01, p < .001, p2 = .3. A planned
contrast between the low satisfaction and high satisfaction groups revealed highly significant differences (p < .001), thus
supporting hypothesis 1 and the negativity bias for BRD encounters.
172
Hypothesis 2 posits that consumers who had experienced a satisfactory EAI service encounter would be more likely to
engage in WOM compared to those who had experienced a highly dissatisfying EAI encounter. To test hypotheses 2 an
ANOVA for EAI services was conducted. Again, WOM activity clearly differed across the three satisfaction manipulations,
F (2, 207) = 8.59, p < .001, p2 = .08. As expected, a planned contrast showed that WOM activity was significantly higher in
the high satisfaction group compared to the low satisfaction group (p < .001), thus supporting hypothesis 2 and the positivity
bias for EAI encounters.
Hypotheses 3 and 4 provide a between service comparison, that is, they compare EAI and BRD encounters at comparable
levels of satisfaction. Hypothesis 3 was supported as the highly satisfying EAI encounter resulted in greater WOM activity
than the highly satisfying BRD encounter, F (1, 139) = 27.8, p < .001, p2 = .17. As expected, the reverse effects were
observed for the BRD encounter: the highly dissatisfying BRD encounter resulted in greater WOM activity compared to the
highly dissatisfying EAI encounter, F (1, 143) = 6.67, p = .01, p2 = .05, thus supporting hypothesis 4.
DISCUSSION
The results outlined above were as hypothesized and can be explained through the self-serving bias (SSB) (Reifenberg 1986;
Rosenfeld 1990; Sedikides et al. 1998; Urban and Witt 1990). The SSB describes consumers tendency to take credit for
personal success and blame external factors for personal failure.
In the case of a negative outcome, research has confirmed that self-threat is one of the key drivers of the SSB (Campbell and
Sedikides 1999). In other words, the greater the self-threat, the greater the self-serving bias. In the context of this study, selfthreat is likely to occur in the case of a dissatisfying service encounter. The greater duration, closer distance and higher level
of emotional arousal during the EAI encounter present a greater self-threat than a BRD encounter. Therefore consumers are
less likely to engage in WOM activity about a dissatisfying EAI encounter, than a dissatisfying BRD encounter where the
lesser self-threat does not restrict their WOM activity. This explains the negativity bias for BRD encounters. This contention
is further supported by research which has shown that external blame attributions for a product failure are likely to result in
extensive negative WOM, whereas internal blame attributions are likely to result in less negative WOM (Westbrook 1987). In
short, when highly dissatisfied, BRD encounters are likely to result in more WOM compared to EAI encounters.
Conversely, in the case of a positive outcome, past research has shown that consumers show a desire to enhance their selfesteem (Rosenfeld 1990; Campbell and Sedikides 1999) and how others view them, also called impression management or
self-presentation needs (Arkin, Appelman, and Burger 1980; Bradley 1978). That is, when given the chance, consumers will
maximize their ability to improve their self-esteem and self-presentation (Schlenker 1975; Forsyth 1980). Highly positive
service experiences provide an opportunity for consumers to pursue both: enhancement of self-esteem and self-presentation.
Due to the close physical proximity, the long duration and the high emotional arousal, a highly satisfactory EAI encounter
provides greater potential to fulfill both of these goals, thereby resulting in greater WOM than a highly satisfactory BRD
encounter. Thus, a highly satisfactory EAI encounter is likely to result in greater WOM compared to a highly satisfactory
BRD encounter.
CONCLUSION
This study has reconciled conflicting research findings about the shape of the satisfaction - WOM relationship (i.e. positivity,
negativity or symmetric relationship). This study has also put to rest the widely-held misbelief that highly dissatisfied
customers engage in greater WOM than highly satisfied customers. Instead, this study suggests a more subtle relationship: In
some categories (e.g. EAI services) highly satisfied customers will engage in greater WOM than highly dissatisfied
customers, while in other categories (e.g. BRD services) highly dissatisfied customers are likely to engage in greater WOM
compared to highly satisfied customers.
This study highlights that consumers desire to engage in WOM may often not be as selfless as it appears. Instead, this
study suggests that consumers often engage in WOM to benefit themselves, rather than others, particularly in the case of a
dissatisfactory BRD encounter: With a ready scapegoat to look down upon, one never feels quite so inferior, never quite so
guilty for ones own misdeeds (Knapp 1944, p. 33). Results from this study suggest that service providers can act as scapegoats when consumers are dissatisfied and conversely, that consumers may take the credit when things go well.
In summary, this study enhances our understanding of the satisfaction WOM relationship and alleviates inconsistencies that
have accumulated over many decades of WOM research (Holmes and Lett 1977; Nyer and Gopinath 2005).
173
TABLES
Table 1: Hypotheses 1 and 2: WOM activity within services across levels of satisfaction
Measures
H1: BRD encounter
H2: EAI encounter
Level of satisfaction
Level of satisfaction
High
Low
High
Means
4.72 < ***
6.21
6.41
> ***
Standard deviations 2.28
2.3
1.35
n
72
71
67
Note: *** = p < .001
Table 2: Hypotheses 3 and 4: WOM activity within levels of satisfaction across services
Measures
H3: Highly satisfied
H4: Highly dissatisfied
Type of encounter
Type of encounter
BRD
EAI
BRD
Means
4.72
< ***
6.41
6.21
> **
Standard deviations
2.28
1.35
2.3
n
72
67
71
Note: *** = p < .001, ** = p = .01
Low
5.2
2.39
72
EAI
5.2
2.39
72
FIGURES
High
Figure 1: Anticipated shapes of satisfaction and WOM activity across EAI and BRD service encounters
Reflects well on self,
thus maximise
WOM
Help others without

negative repercussions
on self, thus maximise
Does not enhance self

much, thus moderate
Low
Reflects poorly on self,

thus moderate
Low
Customer satisfaction
REFERENCES
174
High
COMPENSATION DISCLOSURE ON PRODUCT REVIEW BLOGS AND PERSUASION WITH UNCERTAINTY

Mehdi Ghazisaeedi, Lule University of Technology, Sweden
Esmail Salehi-Sangari, KTH- Royal Institute of Technology, Sweden
sa Wallstrm, Lule University of Technology, Sweden
INTRODUCTION
Blogs have incredible potential as persuasion tools and their persuasive function is of great importance as they have a great
influence over public opinion (Xifra & Huertas, 2008). Individuals are increasingly referring to online product review blogs
for gaining advice and receiving recommendations concerning the quality of the product of their choice. As a result, some
marketers have made an effort to control or manipulate the online reputation of their products by compensating individuals to
review products favorably in various online forums and product review blogs (Jensen, 2011). In return, as of late 2009, the
Federal Trade Commission (FTC) has mandated product review bloggers to provide disclosures in their reviews when they
receive compensation (payment or free products), or whenever there may be hidden interests or unspoken biases related to
recommendations (FTC, 2009).
Now that the FTC has mandated disclosure of any compensation, the question is how marketers can overcome this obstacle.
The current study investigates conditions under which the product review could gain influence even though the compensation
is disclosed. Expressing certainty in a message generally increases perceived credibility of the source which in turn increases
persuasive effect on its audience (Petty and Wegener 1998; Pornpitakpan 2004); however, Karmarkar and Tormala (2010)
argue that this could not always be true at interpersonal level and in consumer behavior context, which usually calls for
subjective judgments. Karmarkar and Tormala (2010) argue that the unexpectedness may be more important than certainty in
subjective judgments.
A review of the literature reveals a long history of employing incongruity in advertising for better engaging people with the
ad and more likely involving them in a detailed message-related thinking, which would lead to persuasion (Chu and Kamal,
2008; Priester and Petty, 1995; 2003; Smith and Petty 1996). The logic behind incongruity studies can be explained by the
two classic dual-processing attitude change theories, namely the Elaboration Likelihood Model (ELM; Petty & Cacioppo
1986) and the Heuristic-Systematic Model (HSM; Chaiken, Liberman, & Eagly 1989), which provides a general framework
for understanding the basic processes underlying the effectiveness of persuasive communications. Lee and Schumann (2004)
show that by combining the tenets of these theories with the Mandlers Schema Incongruity Theory (1982) we can reach a
better understanding of the incongruity effects in advertising and consumer behavior studies.
This research proposed an incongruity-based interaction hypothesis for the effects of compensation disclosure and source
certainty on persuasion. Based on the incongruity violate expectancy theory, blog readers will experience greater expectancy
violation perceiving a message as more surprising and unexpected when disclosure of compensation and source certainty
for a product review are incongruent (e.g. disclosure of compensation/low certainty) rather than congruent (e.g. disclosure of
compensation/high certainty). The result would likely be that blog readers feel more involved with a product review and
perceive the blogger more credible when the disclosure of compensation and source certainty are incongruent, as opposed to
congruent. Finally, as far as the product review itself contains strong arguments, greater involvement should encourage
greater persuasion due to increased cognitive elaboration.
This study examines how the level of certainty expressed in product review blogs affects blog readers' elaboration of brandrelated messages and brand attitudes when compensation for a product review is disclosed. This experimental study also
explores whether blog readers perceive the blogger more credible when opinions are expressed with uncertainty and
compensation is disclosed.
METHODOLOGY
An experimental study was conducted in an online setting by developing four mock-up blogs to manipulate the different
levels of source certainty and compensation disclosure. The experiments were undertaken on Amazon's Mechanical Turk
(MTurk), which is a crowdsourcing online labor market where workers are willing to complete small or quick tasks that are
posted by requesters (called Human Intelligence Tasks or HITs).
Subjects randomly assigned to one of four conditions in a 2 (compensation disclosure: disclosed versus not disclosed) 2
175
(source certainty: certain versus uncertain) between-participants factorial design. Thus, compensation disclosure and source
certainty served as the two manipulated variables; and level of involvement, extent of message elaboration, favorability
thoughts, attitudes toward the brand, attitudes toward the blog and perceived blogger credibility were the analyzed variables.
Participants were directed to a link to read a favorable review containing strong arguments of a fictitious travel shoe written
by a fictitious blogger. Subjects randomly read one of the four blogs by clicking on the provided link. At the end of the page
a unique link for each blog (condition) directed participants to a questionnaire. The questionnaire measured the dependent
variables and demographic variables including gender, age, highest level of education attained, place of residency and their
English language proficiency.
MTurk users with at least a 95 per cent approval rating were qualified for participating in the study from all over the world. It
was explained that users would be able to participate in the experiment only once. The experiment as a HIT was available for
350 participants. Although Mechanical Turk assigns only one MTurk ID per person and allows worker IDs to accept a HIT
only once, records showed that 56 responses contained the same MTurk ID. Also Qualtrics records showed that 86 responses
contained the same IP address. In order to make sure that respondents did not participate in the study multiple times, all
responses with the same MTurk ID and the same IP addresses were omitted. Finally, a number of 208 valid and completed
surveys were collected.
This experimental research attempts to investigate how the interactions between compensation disclosure and source certainty
affects blog readers involvement with the product review and whether it influences their brand-related elaboration
engagement. Particularly, results indicate that a significant interaction between source certainty and compensation disclosure
were qualified (F (1,204) = 21.14, p = .000). The results of this study suggested when compensation for a product review is
disclosed, blog readers are more involved with the product review when opinions are expressed with uncertainty (M=5.81)
rather than by certainty (M=5.037).
Respectively analysis of the thought-favorability revealed a significant interaction between source certainty and
compensation disclosure (F (1,204) = 20.89, p = .000). This open-ended thought-listing procedure demonstrated that when
compensation for a product review is disclosed, blog readers thoughts were more favorable when opinions were expressed
with uncertainty (M=1.68) than by certainty (M=.150).
In each of our conditions source incongruity boosted greater persuasion, suggesting that when compensation is disclosed,
bloggers can gain interest and influence readers by expressing uncertainty, whereas when compensation is not disclosed,
bloggers can gain interest and influence readers by expressing certainty.
Furthermore, this study attempts to examine how the interaction between compensation disclosure and source certainty
affects blog readers brand attitudes. Results show a significant interaction between source certainty and compensation
disclosure (F (1,204) = 15.73, p = .000). Results indicate that the brand attitudes of participants who read the product review
containing the compensation disclosure statement were more influenced by opinions that were expressed with uncertainty
(M=5.86) rather than by certainty (M=5.34).
Also, the results confirmed that the level of involvement mediated the attitudes towards the brand; similar thought
favorability mediated the persuasion outcome.
Moreover, this study finds the interaction between compensation disclosure and source certainty influences blog readers
attitudes toward the blog itself. In this case there was a significant interaction between source certainty and compensation
disclosure (F (1,204) = 14.40, p = .000). The results confirmed that participants, who read the product review with the
compensation disclosure declaration, were more influenced by opinions that were expressed with uncertainty (M=5.78) than
by certainty (M=5.16).
In addition, this research investigates how the interaction between compensation disclosure and source certainty influences
credibility of the author. Surprisingly a significant interaction between certainty and compensation disclosure were qualified
(F (1,204) = 12.424, p = .001). The results confirmed that, when compensation for a product review is disclosed, blog readers
perceive the blogger more credible when opinions are expressed with uncertainty (M=5.94) rather than by certainty
(M=5.34).
176

An incongruity interaction effect of the compensation disclosure and source certainty on persuasion was hypothetized in this
study. Meaning that, in general it is expected that sponsored bloggers are certain about their opinions, and it is surprising to
hear a blogger disclose compensation for a product review while at the same time expressing doubt in his or her opinions.
Thus according to the incongruity violate expectancy theory, violated expectancies increase the interest in the product review
and, if the message itself is supported by strong arguments, it may boost persuasion. This study shows that the incongruity
between compensation disclosure and source certainty can create an effective message and enhances greater persuasion.
Therefore, the effect of compensation disclosure is not necessarily negative for bloggers and their affiliated companies. By
adding a tone of uncertainty in product reviews, bloggers can change the threats to opportunities for both themselves and their
sponsors. Product review bloggers who are engaged in affiliate marketing operations can declare compensation disclosure
with more confidence and simultaneously write a more realistic review and create credibility for themselves.
Based on the results of this study, they can convince their affiliated companies that the incongruity in their product review
posts can generate more positive evaluations for both their blog and the advertised brand. On the other hand, marketing
executives and brand managers can be more confident that if a review were written about their products, containing strong
arguments in an uncertain voice, the image of their brand would not be damaged. This may give them the capacity to better
distinguish between a commercial ad and a paid product review.
REFERENCES
Chaiken, S., Liberman, A. and A. H. Eagly. 1989. Heuristic and Systematic Processing within and beyond the Persuasion
Context, in Unintended Thought, ed. James S. Uleman and John A. Bargh, New York: Guilford, 212-252.
Chu, S. and S. Kamal. 2008. The effects of perceived blogger credibility and argument quality on message elaboration and
brand attitudes: An exploratory study. Journal of Interactive Advertising, 8(2): article 3.
Federal Trade Commission. 2009. Guides Concerning the Use of Endorsements and Testimonials in Advertising, in 16 CFR
Part 255, 2009.
Jensen, M. L. 2011. The Effects of Compensation Disclosure and Consensus on Perceptions of Online Product Reviews.
Proceedings of the 44th Hawaii International Conference on System Sciences, 4-7 Jan. 2011, pp. 1-10, Kauai, HI.
Karmarkar, U. R. and Z. L. Tormala. 2010. Believe Me, I Have No Idea What Im Talking About: The Effects of Source
Certainty on Consumer Involvement and Persuasion. Journal of Consumer Research 36(6): 1033-1049.
Lee, E. J. and D. W. Schumann. 2004. Explaining the special case of incongruity in advertising: combining classic
theoretical approaches. Marketing Theory 41(1/2): 59-90.
Mandler, G. 1982. The Structure of Value: Accounting for Taste., in H. Margaret, S. Clarke and S.T. Fiske (eds) Affect and
Cognition: The 17th Annual Carnegie Symposium on Cognition, pp. 336. Hillsdale, NJ: Lawrence Erlbaum.
Petty, R. E. and J. T. Cacioppo. 1986. Communication and Persuasion: Central and Peripheral Routes to Persuasion, New
York: Springer.
Petty, R. E. and D. T. Wegener. 1998. Attitude Change: Multiple Roles for Persuasion Variables, in The Handbook of Social
Psychology, 4th ed., ed. Daniel Gilbert, Susan Fiske, and Gardner Lindzey, New York: McGraw-Hill, 323-90.
Pornpitakpan, C. 2004. The Persuasiveness of Source Credibility: A Critical Review of Five Decades Evidence. Journal of
Applied Social Psychology 34 (2): 243-81.
Priester, J. R. and R. E. Petty. 1995. Source Attributions and Persuasion: Perceived Honesty as a Determinant of Message
Scrutiny. Personality and Social Psychology Bulletin 21(6): 637-654.
Priester, J. R. and R. E. Petty. 2003. The Influence of Spokesperson Trustworthiness on Message Elaboration, Attitude
177
Strength, and Advertising Effectiveness. Journal of Consumer Psychology 13: 408-421.

Smith, S. M. and R. E. Petty. 1996 Message Framing and Persuasion: A Message Processing Analysis. Personality and
Social Psychology Bulletin 22 (March): 257-68.
Xifra, J. and A. Huertas. 2008. Blogging PR: An Exploratory Analysis of Public Relations Weblogs. Public Relations
Review 34(3): 269-275.
178
EXTENDING FLOW THEORY TO MOBILE SHOPPING

Esther Swilley, Kansas State University, USA
Kelly O. Cowart, Grand Valley State University, USA
ABSTRACT
The purpose of this paper is to investigate the role of flow theory on mobile shopping on cell phone devices. Specifically, we
examine the relationship between flow and the formation of mobile shopping attitudes. We surmise that the consciousness
state of consumers has a profound effect on their ability to become involved in mobile shopping on their mobile phones. We
also examine skillfulness as an antecedent of flow, as skillfulness determines the ability of consumers to operate mobile devices
accurately. As more firms integrate mobile marketing into their comprehensive plans, retailers need to understand fully the
intrinsic and extrinsic motivators of mobile commerce and its viability as a consumer retail channel. In this vein, we undertake
a study to examine the antecedents of mobile retail shopping with the goal of further explaining consumer behavior in this
arena. We find that skillfulness positively influences the flow experience in this context. Ironically, consumers were less likely
to focus their attention on the shopping activity while on their cell phones. As more firms integrate mobile promotions into
their marketing strategies, a better understanding of consumers experiences will aid in developing mobile applications and
websites that maximize outcomes. Additional antecedents, besides flow, should be considered in order to build a comprehensive
picture of the m-commerce process. Advancing research into the flow theory and mobile commerce with continued
development and refinement of this association should uncover other interesting relationships.
179
THE INTENTION OF THE SALES FORCE TO USE MOBILE CRM: MODEL DEVELOPMENT AND
VALIDATION
ABSTRACT
There is growing interest in the use of mobile devices and services in firm-client relationships, and especially in sales force
management (MSI 2012). Accordingly, we investigate the behavioural intentions of B2B sales managers to use mobile CRM
in the course of their work. A conceptual model of mobile CRM adoption is developed and empirically tested with data from
105 sales managers representing five B2B companies. The results highlight the role of perceived usefulness in determining a
users attitude to mobile CRM and their intention to use it. In addition, perceived reachability and perceived behavioural control
were found to explain intention to use. Contrary to expectations, neither attitude or the users experience of CRM software nor
their experience of mobile devices explains the adoption of mobile CRM.
180
FLOOD TWITTERING: A MARKETING AND PUBLIC POLICY PERSPECTIVE THROUGH THE LENS OF
ACTOR-NETWORK THEORY
Panom Gunawong, Chiang Mai University, Thailand
Theeranuch Pusaksrikit, University of the Thai Chamber of Commerce, Thailand
INTRODUCTION
Twitter could be claimed as part of the critical social network media, which can respond promptly to any event in real time.
Recently, many scholars investigated various aspects of Twitter in disaster management such as the behavior of Twitter users
during an earthquake (Qu et al., 2011; Tanaka, Sakamoto, and Matsuka, 2012). By monitoring tweets from an event in real
time, each Twitter user becomes a sensor (as reporting the situation by tweets) that targets events such as the earthquake in
Japan, which could be identified and observed immediately with details and specific location from beginning to end (Sakaki,
Okazaki, and Matsuo, 2010).
In the case of the disaster at Fukushima Daiichi nuclear power plant in Japan, many Twitter users were willing to share
information from highly trusted sources such as traditional media (print, television, and radio), public institutions and
specialists. With the credibility of these sources, information from Twitter users spreads rapidly (Thomson et al., 2012).
Previous studies found that during a crisis, tweets were related to situation updates, expressed opinion, emotional support,
and calls for action in response to disasters and their aftermath (Qu et al., 2011). However, false information and rumors from
tweets can create confusion and chaos, which could worsen the situation, particularly during a crisis.
To understand the effectiveness of Twitter, many researchers also focus on developing an application to categorize
information and improve the online network from tweeters. For instance, Sakaki, Okazaki, and Matsuo (2010) developed an
algorithm to monitor tweets in the real-time interaction of events. Caragea et al. (2011) developed an application called
Enhanced Messaging for the Emergency Response Sector (EMERSE) to classify tweets for Haiti disaster relief, and select
appropriate messages for relevant audiences such as NGOs, relief workers, and people in Haiti. In addition, Cheong and
Cheong (2011) used social network analysis techniques to generate and analyze the online tweet network that occurred during
the Australian floods. By developing these applications, tweet users who become responsible for an event can be measured
for their effort and effectiveness. However, the notion of how and why a Twitter network is used during a crisis, and its
power of networking, is still limited. Therefore, this study aims to understand the Twitter network of disaster management
through the lens of actor-network theory.
Actor-network theory (ANT) views everything as an actor-network, where elements of every kind hold together such as
humans, technological artifacts, organizations, institutions, and so on. The network does not differentiate between any kind of
elements in both human actors (e.g., designers, producers, and users) and non-human actors (e.g., mobile phones and
electronic devices) (Callon, 1987; Law, 1992; Hassard, Law, and Lee, 1999). Each actor has its own action. Various actions
from different actors produce and are produced by varied actor-networks (Hanseth, Aanestad, and Berg, 2004). Hence, to
explore an actor-network, all of its elements, whether human or not, are studied and analyzed in the same way, i.e., using the
same language to interpret the expression of actors (Law, 1987).
Translation is a core concept of ANT. It is shaped by a set of compromises and continual negotiation in the alignment of
interests in a heterogeneous network between a somewhat different set of both human and non-human actors (Law and
Callon 1992, Sarker, Sarker and Sidorova, 2006). The concept of translation focuses on continuity of displacements and
transformation that happen in any event. For example, in the case of floods, flooding data and the situation can be translated
into messages or tweets, and then actions in the actor-network (Callon, 1986). In building and sustaining the actor-network,
actors need intermediaries, which are anything that passes between actors in the course of relatively stable transactions.
They can be a text, money, or conversation. The stability or achievement of the actor-network also depends on the
intermediary circulating within the actor-network (Bijker and Law, 1992). Tweet massages can be the intermediaries that
hold actors together in the actor-network. Power also is crucial in the actor-network and that of an actor or a network
depends on how other actors can be persuaded, commanded or forced into acting to achieve a particular goal (Latour, 1992).
As Thailand faced some of its worst flooding in 2011, data were collected from this country. The cost of damage was around
$US 75 billion. This situation has an impact on Thai disaster management in various aspects, of which Twitter is one of the
most interesting because it was used as a tool to communicate and inform people during the floods. In 2010, the logo of
#Thaiflood was initiated by a Non-Government Organization, which provided information on flood situations in Thailand.
According to twittercounter.com, #Thaiflood is ranked number one in the country as a disaster information tweeter.
181
Currently, it has 107,680 followers (December 6, 2012). Thus, this study focused on the Tweeting network of #Thaiflood
through the lens of ANT.
The rationale of using ANT in this phenomenon is the need to illustrate disaster management by its nature as a Twitter
network. However, previous studies have focused mainly on one aspect of an event such as tweet analysis (Qu et al., 2011),
user analysis (Sakakiet al., 2010) or provider analysis (Caragea et al., 2011). Therefore, this paper intends to investigate the
Twitter actor-network in a flood situation by using the vocabulary of ANT, including the actor, actor-network, translation,
intermediaries and power. A new set of findings that explain the Twitter network could help in conducting efficient disaster
management.
Furthermore, the ultimate aim of this work responds to the need of Baker (2009, p.114-115), in that Disaster research begs
involvement from marketing scholars. As a function, marketing is fundamentally concerned with needs assessment and
fulfillment and with the efficient distribution of resources.If marketing is to make a contribution to disaster preparedness
and response, it needs to understand how disaster science views the world, and disaster science needs to understand
marketings contributions to its worldview. This study also responds to the intention and request from Finch and Acha
(2008), and Kjellberga and Helgesson (2007) in applying and extending the use of ANT in the area of marketing.
METHODOLOGY
The core data of this study were the tweets from the hash tag #Thaiflood, which were collected in the period of flooding:
September 5, 2012 to November 15, 2012 (35 days). There were 1,533 tweets for analysis. This study employed the content
analysis method in the data analysis. Four assistant researchers were trained for coding the data from each tweet. In some
cases the data were ambiguous, and this was solved by discussion with the authors.
A content coding form was constructed for analyzing the data by following the framework of ANT. Actors in the Twitter
actor-network were identified by their behavior and actions. Therefore, the actors in this study were #Thaiflood (a focal
actor), Twitter users, followers, mobile devices and computers. To depict the actor-network in detail, each tweet was
classified. The date of twittering, type of tweets, re-tweet numbers, and location mentioned in tweets would help to explain
the process of translation and intermediaries; and the number of re-tweet users and their followers could help in exploring the
notion of power in the actor-network.
According to actor-network theory (ANT), #Thaiflood can be seen as the focal actor in an actor-network that combines
human actors, such as the multilayers of #Thaiflood followers, with non-human actors, like smart phones, mobile devices and
computers. In general, this actor-network operates actively in communicating flood information, starting from the focal
actors tweeted messages. Then, the followers re-tweet continually with the help of a non-human actor; an IT device. During
Thailands recent flood, the focal actor tweeted approximately 1,533 times in the 35 days of flooding. The tweets, as the
intermediary, were translated to concern about the flood before being distributed in the actor-network. It was found from
tracking down the re-tweets of 107,680 followers that all of them were seen by their followers at least 6,079,624 times. The
highest number of tweets seen during a limited period occurred on September 10, 2012, when #Thaiflood was tweeted 69
times, re-tweeted 1,540 times and seen 523,932 times. This hints of efficiency and effectiveness of the Twitter actor-network
in flood management. Reported tweets, and messages about the flood situation and dangerous zones, were the most attractive
intermediaries for the focal actor (745 tweets, 48.60%). This implies that these kinds of intermediary can hold together and
stabilize the actor-network, due to their interests being embedded by warning information, with the focal actor and its
followers possibly perceiving their usefulness.
On the other hand, success of this actor-network has to be measured by its capacity to cover all areas of flooding. During the
Thailand flood, it could be said that the active network operation was geographically limited, as nearly 50 percent of tweets
were provided in areas such as Bangkok (the capital city) and nearby provinces, which obtained the most tweets (743 tweets,
48.47%). More than 15 other provinces out of Thailands 76 experienced flooding, but they were not included in the actornetwork. It could be said that remote areas, which lacked a combination of human with non-human actors such as smart
phones, mobile devices and computers, could have problems in developing a strong and efficient network. The digital divide
may answer the question as to why those actors could not enrol into the actor-network.
182
Power is vital in the actor-network. A large number of multi-layer followers may be recognised as the big power of this actornetwork. Even though the focal actor has 107,680 followers; that is only 0.62 per cent of internet users in Thailand. This
shows there is more room for expanding the power of this actor-network. However, when zooming into the individual user, it
was found that some kinds of actors could be considered as powerful, which could help to support the power of this actornetwork. For instance, the former governor of Bangkok had 98,083 followers, who would see a message on floods as soon as
he re-tweeted. Therefore, the more the power of the actors; the more the messages can be seen, and this means creating a
network.
In summary, the Twitter network of #Thaiflood showed its capacity as a crucial part of flood management. It can generate
information on flooding effectively, but it is still limited by the problematic issues of developing countries such as the digital
divide.
According to the findings in this study, success in creating the Twitter network is dependent on, firstly, a broad picture in
translating the tweet into continual negotiation between different sets of actors (e.g., Twitter, users and followers) (Law and
Callon, 1992); and secondly, existing actors should be able to control new ones that are being enrolled (e.g., powerful Twitter
users and followers) (Latour, 1992). Thirdly, the interests of actors should be harnessed so that they will participate willingly
in certain ways of thinking, and act in creating and maintaining a stable and durable output of relationships within the actornetwork (e.g., the benefit of receiving flood tweets) (Latour 1987 and Walsham, 1999).
Disaster management shares similar concepts with marketing science, as it is involved with social processes, situation
assessment and fulfilment of human needs (Baker, 2009). This study may propose and achieve those concepts by providing
an alternative perspective of seeing the phenomenon as a network of humans and technology. Therefore, policymakers and
marketers should understand how the network of social media, such as Twitter, works in order that it can be included as a
contingency plan for disaster management. This plan should set the way for constructing the network of Twitter for disaster
management, for example, identifying the focal actor, providing reliable tweets and enrolling more actors (e.g., people with
IT devices) into the network. This concept could help governments to create better public services by increasing rapidity with
quality services of disaster management for citizens.
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Baker, S. M. (2009). Vulnerability and resilience in natural disasters: a marketing and public policy perspective. Journal of
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Bijker, W.E., and Law, J. (1992). Shaping technology/building society: Studies in sociotechnical change. Cambridge, MA:
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(2011). Classifying text messages for the Haiti earthquake. Proceedings of the 8th international conference on information
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Cheong, F., and Cheong, C. (2011). Social media data mining: A social network analysis of tweets during the 2010-2011
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Hanseth, O., Aanestad, M. and Berg, M. (2004). Actor-network theory and information systems. What's so special?,
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Latour, B. (1992). Where are the missing masses? The sociology of a few mundane artifacts. In: Bijker, W. E. and Law, J.
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AN EXPLORATORY STUDY OF CONSUMER ATTITUDES TOWARDS QR CODE READER APPLICATIONS

Selcuk Ertekin, Missouri Western State University, U.S.A.
Lou E. Pelton, University of North Texas, U.S.A.
ABSTRACT
Wireless communication hardware and software are rapidly changing by advancing technology. This results in a wide variety
of telecommunication offerings for consumers. Wireless electronic software applications are developed in many different
forms in order to facilitate marketing exchanges. Specifically, QR code reader applications now allow consumers to scan QR
codes on virtually any flat surface. QR code scanner applications are expected to offer more creativity and are set to become
even more popular. This study focuses on younger segment of retail consumers. By using an exploratory research approach,
we concluded that: consumers liked QR codes and would continue to use them in the future; they enjoyed the convenience
and speed of information offered by QR codes; and given some time and changes, they would embrace their usage.
Convenience, functionality, standardization, information reliability, and security were listed as most important attributes for
successful QR the code readers. We also found that QR code readers have the potential to be a viable alternative to cutting
out coupons, mail-in promotions, computer screen browsing and physical store visits for researching products.
INTRODUCTION
Wireless communication hardware and software are rapidly changing by advancing technology. This results in a wide variety
of telecommunication offerings for consumers. Wireless electronic software applications are developed in many different
forms in order to facilitate marketing exchanges. Specifically, QR code reader applications now allow consumers to scan QR
codes on the products, in magazine ads, and on almost any flat surface (Klie 2012). A QR code is an alternative terminology
for a Quick Response, or 2D barcode that can be read by downloadable smart phone readers with camera scanning
capabilities (Massis 2011).
When consumers scan the QR codes on the products, they can compare prices, check the item availability in nearby stores,
and get instant savings by sales promotions targeted specifically for their needs. In addition, they are given the store locations
by detailed maps and obtain instant contact information. Furthermore, they can learn about all kinds of products on sale by
checking the recently scanned items, glancing at product pictures, perusing the relevant consumer reviews and watching
relevant instant video streaming. When they scan the QR codes in magazine ads, they are immediately linked with the
relevant business and take advantage of special sales promotions. QR code scanning applications are expected to offer more
creativity (Aquinto 2011) and are set to become even more popular (Akhtar 2012).
Due to the increasing number of people who have iPhones, Androids and other smart phones, there was a 1200% increase in
QR code scanning in the U.S. from July to December in 2010 (Tucker 2011). In terms of demographics, some 14 million
U.S. consumers or 6.2 % of the total mobile audience scanned a QR or barcode on their mobile decides in June 2011
(Handley 2012). For all companies who choose to implement the use of QR codes it is a great advantage for marketers. They
are easy and inexpensive both to set up and use. For instance, banks believe that in using QR codes it would help them
attract the younger/tech-savvy customers (Albro 2011).
The healthcare industry is yet another segment beginning to use QR codes. Though there is some debate surrounding it
(usefulness vs. inaccurate data) the number of users are growing. As people become more reliant on technology, advances
such as QR codes make it easier to connect marketers and consumers whether thats a brand and a shopper, or a doctor and
a patient (Jones 2012).
Marketing research is slow in coping with the breath of the implications of this quick change. Currently, there are no studies
in marketing literature that explore consumer response related to the usage of QR code scanner applications. However, due to
the practical importance of this subject, efforts to develop a comprehensive understanding of what affects shoppers decisions
to use QR code scanner applications is exigent.
Specific Goals
This study focuses on younger segment of retail consumers that are potential and existing technology adopters. In order to
study their responses to QR code reader applications we used exploratory research. Our research mission was to qualitatively
assess the salient dimensions of consumers states of being (demographics), states of mind (consumer cognitive attitudes
towards various components of QR code scanners), and states of action (consumer behavioral attitudes for QR code scanner
185
applications). Specifically, we focused on Generation X and Generation Y consumers. Consumers in these generational
segments represent tech savvy, more educated and resourceful and hence profitable target markets for technology products.
Thus they are an immediate market for the expanding technology products. Overall, this study explores a relevant and timely
situational context for consumer behavior, by proposing an exploratory framework that studies the topic among current and
potential adopter categories, particularly Generation X and Generation Y consumers.
METHODOLOGY
Exploratory research, based on face-to-face focus groups were used to study relevant dimensions of consumer attitudes
toward QR code scanner applications among profitable and tech savvy Generation X and Generation Y consumer groups. The
use of a qualitative research approach is suitable for our research question because the phenomenon under investigation is
very recent. Hence, existing research is not immediately applicable to our research question. Exploratory research would
provide insights into untried research questions before successive quantitative techniques can be utilized (Burns and Bush
2010).
We conducted three focus group sessions. We used an identical base list of exploratory, open-ended questions. We developed
the questions in the study in order to quantitatively explore the cognitive and behavioral components of consumer attitudes,
as well as consumer perceptions of group influences. We also asked respondents for their suggestions for product
improvement. In addition, we developed two introductory questions. Since, one of the objectives of focus group research is
exploring consumer attitudes (Burns and Bush 2010), our research technique would provide the needed insights.
In terms of the cognitive attitudes, we focused on general cognitive attitudes (CAG1, CAG2), cognitive attitudes about
usefulness (CA1, CA5, CA6, CA7, CA15), security (CA2), ease of use (CA3), and impact of products availability for scan
on worthiness for scanning (CA4).
In terms of behavioral component of attitudes, we looked at frequency of usage (BA1), general usage (BA2, BA3, BA5),
affect of ability to scan on product purchase (BA4), future usage intentions (BA6), behavioral alternatives (BA7).
We started the sessions by asking two introductory questions (I1, I2) and finished by asking for their suggestions for
improvement (SFI1, SFI2, SFI3). In addition, during each session, we explored consumer perceptions of QR code application
users (G1, G2). The base set was used in Session A (Table 1). In Session B, some questions are added as probing questions
(I2p, CA5p, CA2p) and some questions are taken out of the list (G4, BA2) in order to keep the session duration under check
(approximately 45 minutes). However, the base set was substantially covered. The order of questions was manipulated in
order to enhance the flow of communication (Table 2 - ordered list). On Session C, again the same set was used with several
added probing questions (CAG2p, BA4p, BA6p, SFI3p) and several omitted questions (BA2) that were deemed redundant
(Table 3 - ordered list). We had 5 respondents in Session A, six respondents in Session B and five respondents in Session C.
Each session was audio taped and transcribed by trained moderators (session transcriptions are available upon request).
DATA ANALYSIS
The final sample of this study consisted of 16 respondents. The sample is representative of the target demographic (Table 4).
75% of the respondents own a device that can scan QR codes and the remaining respondents represent potential owners.
More than half of the participants used QR code scanners before the sessions (FrontFlip and QR Reader), and remaining
learned more about them during the sessions. Focus group sessions were arranged and run by trained moderators in a midsize city in Midwest through July - December 2012. The moderators were college business majors who were given course
credit for their contribution. Session participants voluntarily provided their responses.
RESULTS
Consumers commonly agreed that it is easy to use QR code readers (88% agreement - CA3). In session A, consumers agreed
that they are not likely to use QR codes often whereas on Sessions B and C consumers agreed that they would use it often
(BA1). In Session A, Patrick argued that if the QR code is in an ad, it is more attractive, whereas in Session B, one participant
particularly liked when scanning a QR code brought them somewhere with more information about the product, like product
specifications or videos of usage (CAG2). Also on Session B, one major factor that participants liked was the opportunity to
save money or get additional benefits such as recipes, or additional uses of a product. In session C, contests were mentioned
as being particularly attractive (CAG2).
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Consumers mentioned that they are most likely to use QR code readers in malls, restaurants, at the store, the university,
online, and home (especially on products if it could provide sales) (SIT1). They also indicated that they would use it for
personal, rather than business use (BA2).
Consumers in Session A agreed that they are not always on the lookout for a QR code to scan, but they would do that if they
see and notice them. Sessions B and C concur with Session A in that, most respondents disagreed with actively seeking a QR
code to scan but they would if they particularly notice one (BA3).
Consumers indicated that they are not more likely to purchase a product if they are able to scan it first (Session A). Most
participants of Session B were in agreement with this statement. However, several respondents in Session C and a respondent
from Session B pointed at the availability of discount prices and stated that, if there is a good deal or a good review, then they
may be more inclined to make the purchase (BA4).
Consumers listed convenience and speed of information as most useful about QR codes. They argued that QR codes
eliminate the need to cut and carry around coupons, and they can provide a plethora of promotional possibilities. The speed of
information, including product reviews and pricing information at different locations were mentioned as very useful (CA5).
Consumers indicated that security and reliability of information are major problems. They also mentioned that there are too
many applications to choose from, and hence they are somewhat confused about their functions (CA6).
Consumers stated that QR code readers can make product knowledge available by demand. They implied that this would
provide easy access to personally tailored purchase knowledge. Respondents in Session B unanimously agreed that the
availability of information in a convenient manner will be in higher demand in the future. They also agreed that promotions
for free products are very effective. One participant indicated that more expensive product purchases will be more available
as time progresses. (BA5).
Respondents suggested development of only one application that would work on all QR codes, which would eliminate
consumer confusion. They also indicated that improved vendor integration (examples given were Hyvee and Walmart) would
be a very nice feature to have. A specific concern mentioned was some sort of quality control assurance and quality control
checks on the information entered by users to improve reliability. More information about local vendors and local item
availability were also demanded (SFI1).
Respondents indicated that QR code readers fit in American culture in that people want to know they have information at
their fingertips which takes less effort and less time, making things easier (G2).
A particular situational factor that was mentioned was seeing a QR code when casually reading magazines and noticing
instant sales promotions (SIT2) or other promotional means that are mentioned in previous questions (SIT2).
Ease, functionality, standardization, information reliability, and security were listed as most important attributes for the
respondents (CA7).
The alternatives mentioned to the use of QR code readers were: cutting out coupons, typing a link on a computer screen,
looking up information over computer, going to the store and researching products physically, and mail-in coupons (BA7).
Consumers almost as a whole agreed that they would use QR code readers in the future (BA6).
They also mentioned having the ability to save personal lists and local deals and ability to synchronize them through various
devices would be good product improvements to save time and money (SFI2). They also advised companies to educate the
consumers on their utility. They argued that this would make consumers consistently use them.
CONCLUSION
In this study, we explored consumer responses to wireless electronic software applications that are developed in many
different forms in order to facilitate marketing exchanges. We used a qualitative research approach in our study. Qualitative
researchers rarely try to simplify what they observe. Instead, they recognize that the issue they are studying has many
dimensions and layers, and they try to portray it in multifaceted form (Leedy and Ormrod 2013). Hence we identified
several key factors for consumers: the respondents liked QR codes and would continue to use them in the future; they liked
the convenience and speed of information offered by QR codes; and given some time and changes would really embrace their
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usage. Thus our findings agree with Monroe (2011) in that when people get used to seeing QR codes and using them, they
will be handy.
A specific concern mentioned was the need for some sort of quality control assurance and quality control checks on the
information entered by users to improve reliability. More information about local vendors and local item availability and
integration of different stores were mentioned as useful improvements. Convenience, functionality, standardization,
information reliability, and security were listed as most important attributes for successful QR the code readers.
We also found that QR code readers have the potential to be a viable alternative to cutting out coupons, mail-in promotions,
computer screen browsing and physical store visits for researching products.
.
TABLES
Table 1: Session A Questions List
Number of
Respondents
5
Questionnaire Items
I1: Do you have a phone able to scan products?
I2: Have you ever used a QR code scanner before?
CAG1: If so what did you think of it?
G1: Who do you think is the typical user of QR codes and readers?
CA1: How would you estimate the usefulness of QR codes?
CA2: Is security a concern of yours when dealing with QR codes?
CA3: How easy or difficult do you think it is to use QR codes and scanners?
BA1: How often are you likely to scan QR codes?
CAG2: What attracts you to the QR codes?
SIT1: Where are you most likely to scan QR codes?
BA2: Do you think yourself more likely to use QR codes for personal or
business use?
CA4: Do you find the products available for scanning worth scanning?
BA3: Are you always on the lookout for a QR code to scan when you first see
a new product?
BA4: Are you more likely to purchase a product if they are able to scan it first?
CA5: What do you think is most useful about the codes?
CA6: What is the most important problem about QR code usage?
BA5: How would QR codes and scanners change the consumers usage
behavior for the future?
SFI1: Do you have any suggestions of improvement for future cell phone
applications and QR code readers?
G2: How do QR codes fit into American culture?
SIT2: In which situations is a QR code particularly useful?
CA7: What attributes of QR codes matter to you most?
SFI2: If you were to come up with your own QR code scanner, how would it
be like?
SFI3: If you were to create your own QR code what would it be for?
BA 6: Would you use QR codes in the future?
BA7: Is there an alternative to using QR codes?
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Average
Age
22.8
Table 2 Session B Questions List

Questionnaire Items
Number of
Respondents
6
Average
Age
35.5
Number of
Respondents
5
Average
Age
27.7

I2p: What was the name of the application that you used?
CA3: How difficult was it to use the QR scanner?
G1: Who do you think is the typical QR code user?
CA5: How useful are QR codes?
CA5p: In reference to ShopSavvy, do you feel the online price list is
useful and why?
BA4: Would you purchase a product through the application?
CA2: Are you comfortable providing personal information for the application?
CA2p: Would security be a concern for you?
BA1: How often are you likely to scan QR codes?
CAG2: What attracts you to QR codes?
BA3: Do you actively look for QR codes on products or advertisements?
BA4: Are you more likely to purchase a product if you scan it first?
CA5: What is most useful to you about QR codes?
CA6: What is a major concern to you about QR codes?
BA5: How do you think QR codes will affect consumer behavior?
SFI1: Do you have any suggestions for improvement for QR code readers?
SIT2: In which situations is a QR code useful?
CA7: What attributes of QR codes are most important to you?
BA6: Would you use QR codes in the future?
SFI2: What features would you like to see in a QR reader?
Table 3: Session C Questions List
Questionnaire Items
CAG1: If so what did you think of it?
G1: Who do you think is the typical user of QR codes and readers?
CA1: How would you estimate the usefulness of QR codes?
CA2: Is security a concern of yours when dealing with QR codes?
CA3: How easy or difficult do you think it is to use QR codes and scanners?
BA1: How often are you likely to scan QR codes (if you were able to and if it
was easy enough would you do it a lot)?
CAG2: What attracts you to the QR codes?
CAG2p: Does anything besides coupons attract you to it?
SIT2p: Would you do it from a magazine, would you do it on the product, or
maybe online?
BA2: Do you think yourself more likely to use QR codes for personal or
business use?
CA4: Do you find the products available for scanning worth scanning?
BA3: Are you always on the lookout for a QR code to scan when you first see
a new product?
BA4: Are you more likely to purchase a product if they are able to scan it first?
BA4p: So if you were shopping and looking for something long-term you
would be more opt to want to scan it to make sure it is worth your
investment?
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CA5: What do you think is most useful about the codes?

SFI1: Do you have any suggestions of improvement for future cell phone
applications and QR code readers?
CA6: What is the most important problem about QR code usage?
SIT2: In which situations is a QR code particularly useful?
SFI2: If you were to come up with your own QR code scanner, how would it
be like?
BA 6: Would you use QR codes in the future?
BA6p: And why do you think you would?
BA7: Is there an alternative to using QR codes?
SFI3: If you were to create your own QR code what would it be for? (not the
scanner, the actual code, what would you use it for?)
SFI3p: Overall, do you think QR codes are going to be more popular or
less popular?
Table 4: Participant Profiles
Session
Moderator
A
V. Boxrucker
Respondent Name
Occupation
Age
Amber
Student, Business Major /

Employee of Worlds of Fun
Employee of Legoland
Student, Business Major /
Employee of Aspen Leaf
Yoghurt, Rocky Mountain
Student, History Major /
Volunteer Employee of a Public
Library in Midwest
Student, Education Major /
Employee of a Regional
Midwest University
22
Amanda
Patrick
Troy
Chelsea
Session
B
Session
C
Moderator
E. Pace
Moderator
J. Cassity
21
21
31
19
Respondent Name
Occupation
Age
Sarena
Mark
Antoinette
Hope
41
42
22
23
Jerry
Lisa
Director of Nursing
Student
Employee at Capital One Bank
Student / Employee of NCO
Company
Mechanic and Supervisor
Nurse
Respondent Name
Occupation
Age
Caitlin
Maureen
Sara
Megan
Student / Employee at Arbys

Employee of Cracker Barrel
Employee of Postal Community
Credit Union
Student, Nursing Major /
18
34
31
28
Krista
190
44
41
n/a
REFERENCES
Akhtar, Tanzeel. 2012. Writing the New Formula for Success.. Marketing Week: 29.
Albro, W. 2011. QR Codes: Scan To Learn More. ABA Bank Marketing 43(7): 16-20.
Aquino, Judith. 2011. Five Hot Marketing Trends. Customer Relationship Management, 16(1): 20.
Burns, Alvin C. and Ronald F. Bush. 2010. Marketing Research. New Jersey: Prentice Hall.
Handley, A. 2012. Cracking the Mobile Code. Entrepreneur 40(2): 56-57.
Jones, J. 2012. Scanning Saves. Response 20(5): 31-35.
Klie, Leonard. 2012. Who Benefits from QR Codes? Customer Relationship Management 16(3): 11.
Leedy, Paul D. and Jeanne E. Ormrod. 2013. Practical Research: Planning and Design. New Jersey: Pearson Education Inc.
Massis, Bruce E. 2011. QR Codes in the Library New Library World 112(9): 466-469.
Monroe, Ian 2011., Out of the Box ABA Journal 97(6): 14.
Tucker, A. 2011. What Are Those Checkerboard Things? How QR Codes Can Enrich Student Projects? Tech Directions
71(4): 14-16.
The authors would like to acknowledge the contributions of MWSU Craig School of Business Students: Victoria Boxrucker,
Erik Pace and Jennifer Cassity.
191
SELF DISCREPANCY AND CONSUMPTION ATTITUDES

INTRODUCTION
Why do the same consumers shop at Costco or Wal-Mart, buy private label dishwashers, drive a Mercedes, eat at Panera, and
drink Starbucks coffee (Silverstein and Fiske 2003). Further, despite the negative impact of global recession on disposable
incomes, the global market for luxury goods and services are steadily increasing, reaching one trillion dollars in 2010 (Research
and Markets 2011). Interestingly, the have-nots spend the greatest fraction of their income on status goods than the haves
(Banerjee and Duflo 2007). Research shows that only about one fifth of all consumptions related to income (Hall and Mishkin
1982). Consumer culture theory has long identified the relationship between the self and consumption behavior (Belk 1988;
Mittal 2006; Sirgy 1982). Existing studies suggest that consumers rely on consumption to derive happiness (Chaudhuri and
Majumdar 2010) or reject consumption for life contentment (Zavestoski 2002). Others use consumption to be unique, valued,
and loved (Ahuvia 2005; Aron et al. 1991); reflect and communicate their beauty, life satisfaction and relationships to society
(Solomon 1983; Thompson and Hirschman 1995). We take this relationship between self and consumption a bit further by
identifying the underlying negotiation process of the self that promotes consumers behaviors in distinct ways. In other words,
we look at the discrepancy between actual self, ideal self, and ought to self, and investigate the effect of these gaps on
consumption behavior.
The main contribution of this study is in introducing the intra-identity negotiation concept, and explaining how self-discrepancy
activates this self-negotiation or consumption. Self is a very powerful concept which influences everything we do, including
buying and consumption behavior. However, self is unlikely to exist in vacuum, it becomes meaningful when we compare and
contrast with some benchmark intra-identity negation. This perspective of consumption attitudes based on self-discrepancy
and intra-identity negotiation has interesting implications for how marketers can tap into consumers hopes and aspirations to
create better consumer relationships through more effective marketing strategies. Further, it is hoped that the intra-identity
negotiation concept will provide new research direction for scholars to enrich the marketing and consumer behavior discipline.
LITERATURE REVIEW
One of the most dominant views of the self is the inevitable discrepancy of the self (Higgins 1987). Self-discrepancy theory
posits that there are three domains of the self: ideal, ought, and actual self. The ideal self is the representation of wishes, hopes,
and aspirations that an individual or his / her significant others would like him / her to become. The ought self is the
representation of duties, responsibilities, and obligations that an individual or his / her significant others feel he / she should
become. The actual self is the representation of his or her current state (Higgins 1987). The self-concept is bounded by
contextual influences. One can exert simultaneously or discretely actual self-image and social self-image, ideal self-image and
ideal social self-image (Sirgy 1982). These self-images can be congruent and contradict to each other. Through consumptions
and possessions, one strives to confirm, complete, verify, enhance, and attain ones actual, ideal, and ought self (Belk 1984;
Brown et al. 1988; Swann Jr et al. 1992); and cultivate, dispose, and reconstruct specific self-identity and social identity (Kleine
Iii and Kleine 2000). Each representation of the self originates and roots from different sources of motivation, self- worth,
standards, and values (Brewer and Gardner 1996). As a result, the discrepancy between the actual and ought or ideal self has
been found to affect mental well beings, including depression, sadness, anxiety, and tension (Higgins 1987).
Self-discrepancy
In their self-awareness theory, Duval and Wicklund (1972) posit that when attention is directed toward the self, an evaluation
of the current self is compared against the ideal self. The relationships between the actual and idea or ought self sometimes are
in harmony and independent, while at other times are contradicting in value, interests and interdependent (Higgins 2000;
Higgins et al. 1994). Typically, the comparison yields affects that favor the ideal self. The higher the differences between the
actual and ideal/ought self, the higher the discrepancy, and the higher the possibility of self-conflicts and feelings of discomfort
(Higgins 1987). Thus, the negative affect motivates behaviors aimed at narrowing the discrepancy gaps either through changing
current self-representation to closely match the ideal self-representation or turn away self-attention (Hoyle 2006). Other
strategies are employed to maintain a predictive and controllable self, including bringing other people to see ones un/desired
self, or being relatively more internal focus, deliberate, intentional, and intrapsychic (Higgins et al. 1994; Swann 2005; Swann
1987). In self-verification strategy, individuals choose to be with objects and people to verify their self- concepts no matter
192
how harsh their revealed self-concepts might be for them (Gmez et al. 2009). In self-enhancement strategy, individuals choose
to associate with positive identities and outcomes (Brown et al. 1988). Individuals also rely on consumptions and possessions
to reconstruct their self-identity and social identity (Kleine Iii and Kleine 2000). According to self-completion strategy, people
acquire and display material possessions to compensate for certain inadequacies aspects of the self (Wicklund and Gollwitzer
1982). Thus, (non)consumption is used to narrow the gaps between ideal / ought self and actual self in self completion theory
(Dittmar et al. 1996; Eisend and Mller 2007). The magnitude of self-discrepancies affects the symbolic, functional, or
emotional values of the products and the impulse buying frequency (Dittmar et al. 1996). In addition, discrepancy between
actual and ought self-motivates consumers to rely on the meanings inherent in products to construct their social roles, especially
the novel ones (Solomon 1983).
Intra-identity Negotiations
Negotiation is a complex decision-making task in which negotiators are faced with alternative courses of action and
choicesthat are determined by negotiators judgments of the task (Thompson 1990; Thompson et al. 2010). Negotiation is
a process by which two or more parties decide what each will give and take as an attempt to allocate gains among participants
(Cross 1965). We propose that intra-identity negotiation is employed to resolve conflicts between actual self-perception and
ideal/ought self-perception. This intra-identity negotiation process is internal focus, can be conscious or automatic, effortless
or purposeful. The outcomes of intra-identity negotiation process are negotiated between the actual self and ideal/ought self.
Negotiated outcomes
Drawing on the works of Munson (1974) and Horney (1964), conspicuous products are preferred by the ideal self- and the
inconspicuous products are preferred by the actual self- (Horney 1964). Thus, in negotiated outcome, the gap between ideal/
ought self- and actual self-concept will influence an individuals preferences for (1) conspicuous products, namely extravagant
consumptions, (2) rational consumptions, (3) frugal consumptions, and (4) anti-consumptions.
1. Extravagant Consumption
The idea of extravagance can be traced back to Veblen (1899). Veblen (1925) states that, in order to gain and to hold the
esteem of men, it is not sufficient merely to possess wealth or power." The wealth or power must be put in evidence, for esteem
is awarded only on evidence (p.36). He posits that conspicuous consumption is a deliberate and conscious activity that
individuals employ to enhance or achieve status and prestige (Bagwell and Bernheim 1996). Extravagant consumption is
defined as living beyond what one can comfortably afford economically. Conspicuous consumption is defined as visible
consumption of goods as a mechanism to enhance ones social standing (Grace and Griffin 2009). Even though extravagant
and conspicuous consumptions are often used to gain social status, their differences lie in the economic factor as denominator.
Extravagant or conspicuous consumers use these ostensive status symbols to categorize himself- / herself- in the society, to
express his / her multiple identities, and to facilitate his / her self-transitions to achieve a sense of self- congruency (Belk 1988;
Chaudhuri and Majumdar 2010). In the modern consumption culture, the desire for high status consumption or extravagance is
not limited to high income consumers (Grace and Griffin 2009). Among the low income consumers, the greater the self-threat,
i.e., ideal is greater than actual, the greater the desire to compensate the unstable and incoherent self- through extravagant
consumption (Sivanathan and Pettit 2010). This is especially true if the ideal is linked to what others think of the focal
individual and it is anchored in material possession. In contrast, the ought self- contains some sense of rightness, and the gap
between ought self- and actual self increase, one could argue that it will result in lower levels of extravagant consumption
behavior. Thus,
H1: Extravagant consumption is positively related to the actual-ideal discrepancy.
H2: Extravagant consumption is negatively related to the actual-ought discrepancy.
2.
Value conscious
Evans and Over (1997) define rationality in two different ways. Rationality refers to individuals ability to think, speak, reason,
and make a decision based on normative theory. Secondly, rationality also insinuates the ability of individual to make efficient
and reasonable decisions to reach ones goals (Evans and Over 1997). These individuals exhibit high rational behaviors by
balancing the needs of both ideal / ought and actual self- to create a satisfied and happy synergy of the self-. Being too loose or
too tight with money does not transfer to well-being. In fact, consumers well-being is an art of balancing all the conflicting
needs (Tatzel 2003). However, one could argue that the notion of value conscious consumption means being calculative all the
time, which goes against the very grain of being idealistic. On the other hand, being calculative and constantly looking at the
193
notion of value difference between what one is paying and what one is getting, may be perfectly in synch with being right
i.e., the ought self. Thus,
H3: Value conscious consumption is negatively related to the actual-ideal discrepancy.
H4: Value conscious consumption is positively related to the actual-ought discrepancy.
3.
Thriftiness
Frugality is defined as careful use of resources and avoidance of waste (DeYoung 1986, p. 285). Converse to extravagance,
frugality is characterized by the ability of individual to efficiently use and acquire resources to achieve long-term goals
(Lastovicka et al. 1999). Satisfaction is derived neither from pleasure of immediate consumption nor status consumption, but
rather by removing the pain of paying. Materialism, compulsiveness, impulsiveness, and high status consumption have minimal
influence on frugal individuals. These individual are highly price and value conscious (Park and Mowen 2007). In other words,
frugality/tightwadism is the opposite end of extravagance / spendthrift. Empirically, Rick et al. (2008) find strong correlation
between spendthrift-tightwadism scores and credit card debt and savings, but little connection with income. Lastovicka et al.
(1999) find that frugal individuals are less compulsive in their buying habits, more price-value conscious, and higher buying
restraint. In a study of children and adolescents, those are high in frugality have higher self-esteem (Kasser 2005), and frugality
relates positively to high self-esteem in youth (Arnold et al. 2010). Self-esteem is an important predictor of consumers attitudes
toward acceptance or rejection of symbolic goods (Banister and Hogg 2004). Based on this we argue that the gap between the
ideal self and actual self, if the ideal is based on moral principles and not materialistic principles, will be positively associated
with thriftiness. In contrast, most people believe that to thrifty may not be good in todays day and age, in the same way that
most would agree that being extravagant is not right. Hence, the gap in ought (based on rightness) self and ideal self will be
negatively associated with thrifty consumption.
H5: Thrifty consumption is positively related to the actual-ideal discrepancy.
H6: Thrifty consumption is negatively related to the actual-ought discrepancy.
4.
Anti-consumption
Anti-consumption can be defined in either anti specific brands / products or overall consumption. Witkowski (2010) identifies
four categories of anti-consumption based on motivational frame and situational specificity. Motivational factor is equivalent
to global or personal continuum, and situational specificity is equivalent to specific situations for brands / products (Witkowski
2010). Simplifiers are those who defy culture of consumption and attempt to obtain personal happiness through buying only
what needed (Jenkins 2006). Global impact consumers are those who wish to benefit society or planet by reduction in
consumption. For example, the modern hyper-consumption culture is believed to contribute to the anti-consumption movement
(Albinsson et al. 2010). In this study, anti-consumption refers to the rejection and resistance of consumption altogether. Based
on the discussion so far, we argue that given the negative effects of consumption culture and materialistic society, anticonsumption is likely to be appeal to a very idealistic self- , but would be completely unreasonable to someone who is a
pragmatist believes in ought to be. Thus,
H7: Anti-consumption is positively related to the actual-ideal discrepancy.
H8: Anti-consumption is negatively related to the actual-ought discrepancy.
METHODOLOGY
A self-administered, on-line survey is distributed to students at a large higher education institution located in Southwestern
regions of the U.S. Extra credit is awarded to participants; however, participation is voluntary. Respondents are made aware
that participation in the survey or lack thereof has no impact on grading, and that the survey is completely anonymous. In
addition, the survey is programmed to rule out missing values and distributed to 850 students. Five hundred and thirty eight
students respond, yielding a response rate of 63%. Females make up 56.7% of the sample. Eight six percent of the sample ages
range from 18 to 24. Forty six percent of the sample has an annual family income from $40,000 $60,000, and 41% of the
sample has annual self income of less than $10,000. Whites make up the largest percentage, 57%, and 92% of the sample is
single/never married. Nonresponse bias is assessed by splitting the sample into early and late responses to and measures
differences in demographics data using Chi-square tests (Armstrong and Overton 1977). The result indicates no statistically
significant difference.
194

Items are first examined using Principal component analysis and Varimax rotation. All Cronbachs s are at acceptable level
( > .7) (Nunnally 1978). Second, the resulting sets of items are analyzed via confirmatory factor analysis using LISREL 8.8
to verify unidimensionality. The goodness of fit indices indicate good fit (GFI=.91, NFI=.95, IFI=0.97, Standardized
RMR=.035, RMSEA=.059). The chi-square statistic is significant (chi-square 561.67, 194 df; p<.01). However, chi square
statistic often rejects valid models in large samples research (Bagozzi and Yi 1988). In addition, reliabilities and validities of
measures are assessed using average variances extracted and composite reliabilities. Most of the AVEs are also above
recommended level (>.5) except for actual ought and actual ideal (Fornell and Larcker 1981). All the composite reliabilities
are above the recommended level (>.7). Thus, model provides good convergent validity. Discriminate validity is assessed by
comparing the AVEs by each construct to the shared variance between the constructs (Fornell and Larcker 1981). For each
construct, AVEs exceed all shared variances except between ideal and ought self-discrepancy. Since this is a more rigorous test
than comparing the fit indices of constrained and unconstrained constructs, model provides reasonable discriminate validity
(Hair et. al 2010).
The proposed structural equation model is estimated with LISREL 8.8, using maximum likelihood estimation method. The fit
statistics indicate good fit (GFI=.90, NFI=.93, IFI=0.95, Standardized RMR=.089, RMSEA=.067). Again, the chi-square
statistic is significant (chi-square 679.59, 200 df; p<.01). H1,2 predict that extravagance is positively (negatively) related to the
actual-ideal (actual-ought) self-discrepancy. The path coefficients for ideal and ought are statistically significant (t=2.29, 2.65; p<.001). Thus, H1,2 are supported. Similar to H1,2 (extravagance), H3,4 predict that value conscious is positively
(negatively) related to the actual-ideal (actual-ought) discrepancy. The results are not statistically significant. Thus, H3,4 are not
supported. H5,6 predict that thriftiness is negatively (positively) related to actual-ideal (actual-ought) discrepancy. The results
are not statistically significant. However, the directions of the results are all consistent with H3,4,5,6. H 7,8 predict that anticonsumption is negatively (positively) related to the actual-ideal (actual-ought) discrepancy. Both of the path coefficients are
statistically significant (t=1.78, -2.1; p<.001). Thus, H7,8 are supported. In addition, the future-ideal and future-ought selfdiscrepancies are not hypothesized, but the directions of the paths are quite interesting. The directions of the future-ideal and
future-ought self-discrepancy are always in opposite directions with the actual-ideal and actual-ought self. Value conscious
path coefficients for future-ideal and future-ought self-discrepancy are statistically significant (t=2.55, -2.69; p<.001).
CONCLUSIONS AND IMPLICATIONS
The purpose of this study is to investigate how intra-identity negotiation and individual idiographic assessment of selfdiscrepancy promote different consumption attitudes. The results of the study are quite encouraging. In general, the higher the
ideal self discrepancy is the higher the need to be extravagant. Individuals long to achieve that dreams, hopes, and aspirations
through symbolic consumptions. The result explains the consumption culture phenomenon of the US since individuals are
valued and encouraged to achieve the American dreams (Wattanasuwan 2005). However, these individuals when think of
their responsibilities and duties, the Protestants cultural values of hard work and frugality are still embedded in their selves.
Thus, these two selves behave contradictorily to each other. Interestingly, ideal and ought self discrepancies of anticonsumptions behave similar to extravagance, the higher the ideal self discrepancy the higher the need to be anti-consumption.
Perhaps, the American dreams put pressures on these individuals and widen the ideal self gaps. Unable to battle the social
pressures, they become cynical by resisting consumptions altogether. This explanation is supported by the recent work of
Mikkonen et al. (2011). In the Politics of self, Foucault (1983) describes individuals who are against social order of
contemporary and the normalized subjectivity. They refuse to be what they are and attempt to use discursive and subversive
strategies to create a new identity (Mikkonen et al. 2011). In this case, anti-consumption is the new identity. Furthermore, the
most interesting finding relates to the directional differences between ideal and ought discrepancy, regardless of the time
dimensions. In each scenario, the ideal self and the ought self always behave in the opposite directions. In other words, dreams,
hopes, and aspirations motivate consumers in direct opposition of roles, duties, and responsibilities. Perhaps, the constant
struggle of work-life balance exemplifies this difference. Working hard to achieve the American dreams can also has
detrimental effects on individuals responsibilities with their family. What most interesting is that the difference in ideal and
ought self not only manifests through psychological well-being, social relationships, but also through consumption attitudes
and behaviors.
REFERENCES
195
THANKS FOR THE MEMORIES. TOWARDS A MODEL OF MEMORABLE SERVICE EXPERIENCES

Rod McColl, ESC Rennes School of Business, FRANCE
Jan Mattsson, Roskilde University, DENMARK
ABSTRACT
Although memory has been studied extensively in the fields of psychology and physiology, and to a lesser extent in
advertising, this literature gives insufficient attention to the role and function of memory in the consumption of service
experiences. Episodic memory includes recollections of our autobiographical experiences and events (Tulving 2002). Many
researchers have suggested that memory mediates behavioural intentions (Kozak 2001; Mazursky 1989). Despite more than a
decade of interest amongst practitioners, research by marketing researchers remains scant. Fundamental questions remain
unanswered. What do consumers remember from their experiences and do these memories change over time? What makes an
experience memorable? Is a positive experience more memorable than a negative one? If a first time experience is
memorable, what is the impact of subsequent exposure to the same experience? What are the antecedents and possible
consequences for consumer behaviour? And finally, how should we measure experience memories?
The purpose of this paper is to help stimulate dialogue and increase research activity by proposing a comprehensive
multidimensional model conceptualising experience memory and its antecedents and consequences. We examine
systematically the memory literature from related fields of psychology and neurophysiology, describing what is known about
the various factors that influence how memories are created and retrieved, and applying those findings to experiences. In
addition, various research propositions are presented which provide directions for further research.
We define a memorable experience as the recall from a personally encountered event or experience, such as the time and
place, personal circumstances and sensory images which are often linked to emotions felt at the time. Various experience
characteristics are important influences of experience memory. These characteristics affect experience outcomes and
influence our long-term memories in a two-way effect as memories in turn influence post-experience assessments. Our
research propositions are as follows: P1: Experience valence affects experience memories. P2: Unique and first time
experiences are more memorable than repeated experiences. P3: Repeating an initially special experience weakens memories
of that first experience.P4: Experiences with a positive ending are more memorable than those with a negative or neutral
ending. P5: Experience memories may be modified by marketing communications. P6: Experience memories can be
affected by elements within the servicescape. P7: Highly emotional experiences are more memorable than those less
emotional. P8: Positive emotional experiences are more memorable than negative emotional experiences. P9: Engaging
experiences are more memorable than those less engaging. P10: Important experiences are more memorable than those less
important.
Recollections of the outcomes of previous experiences are thought to influence future behaviour (Hoch and Deighton 1989;
Wirtz et al. 2003). We argue that four measures are affected by our memories which in turn impact on the strength and nature
of our memories. These include satisfaction with an experience, perceptions of service quality, word-of-mouth behaviour and
loyalty.
196
MANAGERIAL AVERSION TO AMBIGUITY:

A DECISION THEORY PERSPECTIVE WITH A NOTE ON INNOVATION
Mayoor Mohan, Oklahoma State University, USA
Kevin E. Voss, Oklahoma State University, USA
ABSTRACT
Extant research has attempted to examine various parameters that play a role in decision-making. Among them, two in
particular have attracted intense attraction among decision theorists - ambiguity and risk (Trautmann, Vieider, and Wakker
2008). Knight (1921) was at the forefront when he suggested that there is a clear distinction between risk a situation where
uncertainty is bound by known probabilities; and ambiguity where uncertainty cannot be quantified. Essentially, there are
two types of uncertainty, measurable uncertainty or risk, which can be represented by precise probabilities, and unmeasurable
uncertainty, which cannot, called ambiguity (Fox and Tversky 1995, p. 585).
Interestingly, in terms of decision-making and judgment, Daniel Ellsberg (1961) found that people, when given a choice, are
more likely to choose a riskier bet with known probabilities as opposed to a less risky one in which the probabilities are
ambiguous. Ellsberg (1961) exhibited this phenomenon in a number of simple experiments, the most famous of which is widely
referred to as the two-color problem. Given two urns each containing a hundred balls, a study participant is told that the first
urn contains 50 red and 50 black balls and that the second urn contains red and black balls in an unknown proportion. Ellsberg
(1961) demonstrated that when a participant is offered a reward depending on the outcome from randomly drawing the balls,
participants (while indifferent on betting either red or black balls for either urn) were more likely to bet on the first urn (with
the known composition) rather than the second urn (with the unknown composition). In other words, study participants
exhibited a preference for gambles with known (risky) rather than unknown (ambiguous) probabilities of winning
(Muthukrishnan et al. 2009; Ellsberg 1961).
The phenomenon exhibited in Ellsbergs paradox has become known as ambiguity aversion (Muthukrishnan et al. 2010;
Trautmann et al. 2008; Fox and Tversky 1995; Camerer and Weber 1992; Heath and Tversky 1991). Fox and Weber (1992)
suggest that ambiguity aversion is basically an unwillingness to bet on probabilities that are vague in nature. In a similar
manner, Heath and Tversky (1991, p.11) suggest that ambiguity aversion implies that people will prefer to bet on a chance
event whose probability is well defined rather than on their judged probability, which is inevitably vague in nature. This study
adopts Trautmann et al. (2008, p.225) definition of ambiguity aversion - situations where people prefer options involving clear
probabilities (risk) to options involving vague probabilities (ambiguity).
Marketing as a field of study has spent far more time studying concepts like risk aversion at the expensive of equally important
decision-making phenomenon like ambiguity aversion. This is an important issue to point out since it has an adverse impact
on the overall scope of theory development in our field. The current paper attempts to provide insight into the decision-making
phenomenon of ambiguity aversion. In doing so the authors rely on the predominant perspective on ambiguity aversion
espoused by decision theory. A discussion on the important role of managerial ambiguity aversion on innovation related
decisions is also provided within the paper.
197
PREDICTING BUSINESS CUSTOMER POTENTIAL DISLOYALTY AND SHARE OF WALLET:

PROPOSITION OF A NEW THEORY AND MODERATING EFFECTS
Jol Le Bon, University of Houston, USA
ABSTRACT
This research suggests the existence of a theoretical relationship between business customers dissatisfaction, late payment,
and their potential disloyalty and share of wallet. We test a new proposition which states that business customer potential
disloyalty may be revealed by the accounting figure of Days Sales Outstanding (DSO average number of days a company
takes to collect revenue after a sale), which is associated to share or wallet. We also introduce and test moderating effects
pertaining to service recovery quality (i.e. distributive, procedural, interactional justice).
Multiple sources data collected at three time points from 577 customers of a large service organization reveal that customer
dissatisfaction impacts customer late payment. Results also reveal a positive relationship between late payment and customer
potential disloyalty, and a negative effect on share of wallet, after controlling for invoice correctness, financial difficulties and
switching costs. Results also show that relationships between customer dissatisfaction and customer payment are moderated
by distributive justice only. Such findings offer intereting new insights for marketing thought and practice.
198
FROM MOBILE PHONE TO SMARTPHONE: WHATS NEW ABOUT M-SHOPPING?

Grard Cliquet, University of Rennes 1 Graduate School of Management, France
Christine Gonzalez, University of Rennes 1 Graduate School of Management, France
Elodie Hur, University of Rennes 1 Graduate School of Management, France
Karine Picot-Coupey, University of Rennes 1 Graduate School of Management, France
INTRODUCTION
M-commerce is a fast growing activity whose importance was acknowledged very soon by both managers and researchers
(Balasubramanian et al 2002; Dholakia and Dholakia 2004). Models have been proposed to better understand the
determinants of the intention to m-shop. Most of them have been based on mobile phones (Kleijnen et al. 2007; Ko et al.
2009) whereas smartphones have many other functionalities especially the applications (apps) which are changing totally the
face of m-commerce. The purpose of this research is to develop and test a model of the determinants of m-shopping in the
context of smartphone use. The contribution of this model lies in the consideration of these technological evolutions and of
their impact on mobile shopping experience.
BACKGROUND
M-commerce can be seen in various aspects from either the retailer side or the consumer side. Here we focus on the
consumer side. M-commerce is preferred to m-channel (Kleijnen et al. 2007) because defining m-commerce as a new
channel could be confusing: is it a distribution channel or a communication channel? Hence we consider m-commerce as a
new channel of communication but not of distribution (Nohria and Leestma 2001) following Luschs (1979) definition of
marketing channels as both distribution and communication channels. In this context of m-commerce which is of interest for
both consumers and retailers, this research deals with m-shopping viewed as the use of smartphone by consumers while
shopping.
Smartphones possess three unique characteristics: accessibility (ease and consistency with which consumers can access the
service), ubiquity (the possibility of using the smartphone anywhere and anytime) and all in one (the ability to perform
multiple tasks and to use multiple applications in one tool) that may impact the way consumers shop. M-shopping is then a
form of anytime and anywhere shopping, using the smartphone in a physical shopping context or using it to proceed to the
entire shopping process online. This paper focuses on the intention of consumers to shop with a smartphone within a
traditional shopping context because of its potential consequences on the shopping experiences and values.
In the literature on new technology usage, researchers often refer to the Technology Acceptance Model (Davis 1989).
Following Kleijnen et al. (2007), we consider that the TAM cannot fully explain the intention to use a new technology in
every context (Taylor and Todd 1995) and that the value framework is useful in understanding m-shopping intention.
According to previous research (Pihlstrm 2008), mobile service value incorporates cognitive and emotional elements.
Consumers integrate sacrifices and benefices without conscious calculation; the costs and the benefits associated with
mobiles services then form the dimensions of consumer value.
Thus this research extends Kleijnen et al. (2007)s model (1) by adopting a multidimensional approach to value rather than
the one-dimensional approach adopted by these authors and (2) by integrating hedonic as well as utilitarian components of
value (see Snchez-Fernndez et al. 2009 for a presentation of the literature on value). The distinction between utilitarian and
hedonic dimensions is relevant here as more recent research recognizes the role of hedonic value in determining mobile
service adoption and usage by consumers (Kim and Han 2011). Hedonic value results from fun and playfulness than from
task completion (Babin et al. 1994). The improved web experience on smartphones may enhance the hedonic aspect of
shopping experience (1) by enabling an easy access to information that may satisfy consumers curiosity and (2) by reducing
the efforts devoted to tasks in favor of more hedonic aspects of shopping. Smartphones also provide access to playful
functionalities (QR Codes for example) that may also create hedonic value by enhancing the interactions with the store
environment.
Another contribution of this model is to add three other determinants of smartphone use for m-shopping to Kleijnen et al.
model in order to understand how hedonic and utilitarian values are created: (1) privacy (Lee et al. 2011), (2) spatial
convenience and (3) perceived enjoyment (Agarwal and Karahanna 2000; Van der Heijden 2004; Turel et al. 2011;
Venkatesh et al. 2012):
199
x
Research on privacy has been recently developed for reasons specific to smartphones because of the ability for stores
to reuse personal data through this technological device. This risk is increased when using smartphones as means of
payment. It is all the more pertinent to study this antecedent of the m-shopping intention as managerial studies suggest that
privacy may not be as important for consumers as past academic research suggests.
x
Time convenience has already been taken into account (Kleijnen et al. 2007) with time consciousness as a
moderator, but these characteristics are not exclusive to smartphones: computers generally speaking can also bring this
temporal advantage of shopping at any time. On the contrary, a smartphone through the Geographical Positioning System
(GPS) related apps and through its inherent characteristics cited above, and in particular ubiquity (Watson et al. 2002) adds
some spatial convenience to the more common time convenience. Spatial convenience was thus included to take into account
the ability consumers have to shop anywhere.
x
Perceived enjoyment was included as an important antecedent to take into account the intrinsic joy (Turel et al.
2011, p.1047) of using the smartphone while shopping. Our goal is to contrast it with more utilitarian perceptions of
smartphone usage while shopping such as convenience, risk, user control, cognitive effort and privacy.
The model tested in this paper is presented in Figure 1.
METHOD
Concepts and Measurement Instruments
Existing scales and indices were translated and adapted to the French mobile shopping context. Hence a first survey (n =
896) helped to choose and to purify measures of existing and self-developed scales and indices.
200
Construct
Perceived
enjoyment
Convenience
User control
Perceived risks
Cognitive
effort
Privacy
M-Shopping
value
M-shopping
intention
Definition (Authors)
pleasure and enjoyment derived
from using the smartphone while
shopping
(adapted
from
Agarwal
and
Karahanna 2000)
Spatial convenience The degree to
which the spatial constraints and costs
associated
with
shopping
are
minimized
(self-developed)
Time convenience the degree to
which shopping is quick and without
delays
(adapted from Kaufman-Scarborough
and Lindquist 2002)
the extent to
which consumers can determine the
timing, content, and sequence of a
transaction
(Kleijnen et al. 2007)
consumer's perceptions of the
uncertainty and adverse consequences
of engaging in an activity here using
the smartphone while shopping
(adapted from Dowling and Staelin
1994)
the total amount of cognitive
resources including perception,
memory, and judgment - needed to
complete a task
(Cooper-Martin 1994)
the ability of the individual
to personally control information
about one's self"
(Milberg et al. 2000)
"an interactive relativistic preference
experience characterizing a subject's
experience of interacting with some
object. The object may be any thing
or event"
(Holbrook and Corfman 1985)
intention to adopt m-shopping
Nature of the construct Author Number of items
Reliability
convergent
validity
and
Scale developed by Agarwal and

Karahanna (2000)
4 indicators measured with a 5 point
Likert scale
AVE = 0,86
= 0,92
Index developed by the authors

Likert scale
Communality= 0,7
Index adapted from Mathwick et al.

(2001)
Likert scale
Communality=
0,83
Index adapted by Mathwick and Rigdon

(2004)
Likert scale
Communality=
0,76
Index adapted from Kleijnen et al. (2007)

Financial risk: scale with 4 indicators
measured with a 5 point Likert scale
Performance risk: scale with 4
indicators measured with a 5 point Likert
scale
Scale developed by Kleijnen et al. (2007)
Likert scale
Scale adapted from Milberg et al. (2000)
Lickert scale
Scale developed by Park and Yang (2006)
Utilitarian value: 3 indicators measured
with a 5 point Likert scale
Hedonic value: 4 indicators measured
with a 5 point Likert scale
Scale adapted from Dabholkar and
Bagozzi (2002)
Likert scale
201
AVE = 0,70
= 0,85
AVE = 0,61
= 0,79
AVE = 0,85
= 0,83
AVE = 0,69
= 0,89
AVE = 0,91
= 0,94
AVE = 0,84
= 0,94
Communality=
0,92
Data Analysis
A second survey (n = 600) was used to test the model through a PLS structural equation model (e.g. Fornell and Bookstein
1982; Henseler and Sarstedt 2012) because, on the one hand, both reflective and formative (spatial convenience, time
convenience and user) constructs can be easily incorporate and, on the other hand, complex causal models can be estimated
(Hair et al, 2011). Indeed, two second order formative constructs were also identified, convenience and perceived risk. Data
were analyzed on SmartPLS 2.0 software (Ringle et al. 2005). Prior to testing the model, descriptive statistics were
computed for all variables.
The main results of the analysis with PLS-SEM show positive and significant relationships between: (1) perceived enjoyment
and hedonic value (0.397 ; t = 3.161) ; (2) user control and utilitarian value (0.396 ; t = 2.783) ; (3) convenience and
utilitarian value (0.308 ; t = 2.032) ; (4) hedonic value and m-shopping intention (0.422 ; t = 2.724) ; (5) utilitarian value and
m-shopping intention (0.495 ; t = 3.167). The cognitive effort construct has no significant effect on any of the value
constructs, nor the privacy concern and the perceived risks. The perceived hedonic and utilitarian values are interesting
constructs to explain the m-shopping intention. These results are depicted in bold on figure 1 above.
The findings show that both hedonic and utilitarian values explain m-shopping intention. These results also show that the
utilitarian value of m-shopping is explained by convenience and perceived control whereas perceived enjoyment is correlated
to the hedonic value of m-shopping. M-shopping ability to increase consumer control on the timing, content and sequence of
shopping seems highly task relevant and creates utilitarian value. As a matter of fact, consumers may use smartphones to
take decisions that are at the same time (1) independent from retailers and marketers influence, (2) based on a more
diversified and extent information search and thus (3) more relevant. According to descriptive results, m-shopping is not
perceived as inducing cognitive costs, probably because of the improvement of the mobile web experience and of the
usability of mobile apps and site. On the contrary, descriptive statistics shows that consumers are relatively concerned with
privacy and risks; however these two variables neither explain m-shopping perceived value nor m-shopping intention. People
may have incorporated this risk, probably because of their Internet shopping experience.
A first contribution of this paper is to test a m-shopping adoption model enlarged from the Kleijnen et al. (2007) one. A
second one lies in the addition of a new dimension to convenience spatial convenience that integrates the ubiquity
characteristic of a smartphone. A new scale was then developed to measure this variable as a higher order formative
construct. Future research should investigate the nature of the links between perceived risks and m-shopping adoption: (1)
the moderating role of situation and product category and (2) the relationship between risks and the abandonment of mshopping.
FIGURES
Figure 1: A model of intention to use smartphones for m-shopping
In bold: significant relationships
202
OPTIMIZING GEOFENCING FOR LOCATION-BASED SERVICES:

A NEW APPLICATION OF SPATIAL MARKETING
Odile J. Streed, Offutt School of Business, Concordia College, Moorhead, MN, USA.
Grard Cliquet, CREM, IGR-IAE, Universit Rennes 1, France.
Albert Kagan, Offutt School of Business, Concordia College, Moorhead, MN, USA.
INTRODUCTION
Since the beginning of modern retailing, retailers have used geographic information to determine the trading area around their
stores (Christensen and Tedlow 2000). Subsequently elaborated spatial marketing techniques have emerged and sophisticated
models have been developed to address location based marketing efforts (Huff 1964, 1966; Applebaum 1966; Nakanishi,
Cooper and Kassarjian 1974; Huff and Batsell 1977; Gautschi 1981; Malhotra 1983; Cliquet 1995, 2006; Baray and Cliquet
2006; Post and Kagan 2012). Today, the emergence of m-commerce and location based services (LBS) represent a new
marketing challenge as well as opportunities for retailers. The ability to track customers moves through their smartphone
Geographic Positioning System (GPS), allows retailers to refine their trading area and deliver timely and relevant
promotional strategies to customers in their immediate vicinity through geofencing. According to the Pew Internet and
American Life Project (2011) 28% of American adults and 58% of smartphone users, use Location-Based-Services. More
specifically, Location Sharing Services (LSS) such as Foursquare, Google Places, and Facebook Places, (where users
voluntarily indicate their location through check-in services) are starting to interest retailers as a way to reward and interact
with loyal customers. However, privacy concerns have long plagued LBS and LSS applications: early adopters have agreed
to share their location information in exchange for social interaction, gaming and competitions with their peers. Other
consumers are more cautious and require substantial benefits from retailers such as timely and personalized promotions
before opting-in for location sharing and the information transfer necessary to implement these operations. Technology has
also been a partial impediment concerning the adoption of LBS and LSS applications: GPS tracking systems do not work
indoor or around large buildings, and current smartphone battery life is also an issue as non-stop background tracking of
users positions would deplete batteries in a relatively short time. Nevertheless, mainstream adoption of location-based
retailing services appears to be just around the corner as Apple, Microsoft, Nokia and many other technology companies are
actively researching solutions to these technological problems.
The literature on LBS, LSS and also Context Aware Services (CAS) is starting to emerge but is still limited (Cuellar 2002;
Barkhuus and Dey 2003; Junglas and Watson 2008; Dhar and Varshney 2011; Kupper, Bareth and Freese 2011). Prior
research has focused on customer perception of these applications, and more specifically on privacy issues, but few have
researched ways to optimize implementation by retailers. This study proposes to research the notion of geofencing and in
particular the calculation of an optimal virtual fence around a retail location. Geofencing is a natural complement to LBS and
is particularly useful when the retailer uses a push strategy to send personalized messages to customers as they cross this
virtual threshold. Push-based LBS, contrary to pull-based applications does not require users to indicate their location. The
location is automatically transmitted through the users smartphone GPS to the geofencing platform and when the user enters
the virtual fence area messages are automatically sent to the potential consumers smartphones in the form of invitations,
coupons or other types of promotions.
OPTIMIZING GEOFENCING
To date there appears to be no academic studies that have been conducted to determine the optimal size of this virtual fence
and to give guidance to retailers: too small and the prospect would not have the time to receive the promotional message from
the retailer and too large and the message would not be relevant. Customers are getting annoyed with irrelevant and useless
messages that clutter their smartphones. It is therefore important for retailers to be precise in determining the perimeter they
want to cover at a given time.
Huff (1964) defines the trade area as A geographically delineated region, containing potential customers for whom there
exists a probability greater than zero of their purchasing a given class of products or services offered for sale by a particular
firm or by a particular agglomeration of firms. This author highlights breadth and depth of merchandises offered by each
shopping area, product categories and competing shopping areas as determinants of the attraction power of a specific
shopping area (store or shopping center). Spatial components such as physical distance but also temporal and contextual
203
elements are to be considered. The traditional methods and models used in spatial marketing to calculate trade areas may be
applicable to geofencing.
APPLYING SPATIAL MARKETING METHODS AND MODELS
To date customizing the shape and size of a virtual fence has not been a mainstream option for retailers. Defining the
geofence perimeter is a complex task that offers constancy and a certain similarity to the definition of a traditional trade area
around a retail store. The purpose of this study is to review the existing spatial marketing models and to determine their
potential application in geofencing.
Applebaum (1966) delineated trade areas according to the proportion of clientele through customer spotting and spacedistance approach and proposed to divide the trade area into three sub-areas forming circles around the shopping area:
primary, secondary and tertiary (or marginal) according to the proportion of customers attracted by the shopping area. Today
GIS (Geographical Information System) software is able to draw trade areas from customer addresses obtained by for
instance loyalty cards and show that most of the time these trade areas have nothing to do with circles.
Early models (Reilly 1931; Huff 1964) were built for prediction purposes mostly around the notions of distance and store size
where newer models (Gautschi 1981) incorporated additional parameters such as store image (Lindquist 1974; Nevin and
Houston 1980), transportation mode (Brand 1973; Sherret and Wallace 1973; Domencich and McFadden 1975), or store
perception (Cliquet, 1995; Nakanishi and Cooper 1974). It has been used for grocery stores (Popkowski, Sinha and Sahgal
2004), convenience stores (Achabal, Gorr and Mahajan 1982), furniture store (Cliquet 1995; Huff 1964) and so on. These
models are difficult to implement according to categories of products and specific features of these models. Attraction models
used in retailing can be either strictly gravity models (Reilly 1931; Huff 1964) or both gravity and market-share models like
the MCI model (Cooper and Nakanishi 1988; Nakanishi and Cooper 1974). The MCI model took over because it is more
flexible according to the category of products: some categories and the specialized stores which sell them imply a continuous
attraction whereas others (e.g. furniture stores, Cliquet 1995) needs to consider thresholds (Malhotra 1983). For mathematical
reasons (transformation of the MCI model into a regression model), ratio scales should be used for data (Gautshi 1981) and
when interval scaled data are only available, a zeta squared transformation has been proposed (Cooper and Nakanishi, 1983)
to get ratio scaled data. These models need to divide the market area into geographic cells and the choice of this division can
alter the results. To control the possible nonstationarity of the regression parameters, a typology of cells (Cliquet 1995;
Ghosh 1984) can be used to overcome this difficulty. Using a regression model, a too limited number of shopping areas
considered in the study can disturb the estimation of the regression coefficients. Cooper and Finkbeiner (1983) proposed a
simple method to cope with this hinder. Another problem is caused by the IIA (Independence of Irrelevant Alternative)
relative to any market-share model (Luce 1959) can be also solved through the use of the zeta squared transformation. Hence
using MCI model can be a hard task. But these models can also predict customer attraction and then be useful in geofencing.
Furthermore they can be used as well in defining the attraction power of promotional arguments as it was proposed and
already empirically tested in the retail furniture market through the use of conjoint analysis (Cliquet 1995).
Many of these methods and models are currently available in GIS software however the interface with geofencing
applications is still evolving.
DISCUSSION
This paper aims to recommend methodologies for future empirical research in geofencing. The objective is to analyze the
parameters used in traditional spatial marketing and their relevance in defining a virtual fence around a static or mobile retail
location such as an ice-cream truck for example. One can expect that the perimeter and shape (circles, ellipses or polygons) of
this virtual fence would vary depending on the store and situational variables such as geography, time of the day,
competition, traffic flow and product mix. This knowledge would allow retailers to customize the set-up of their geofence and
to contact potential customers, crossing this virtual threshold, in a timely, precise, and efficient manner. Moreover, through
this process, retailers will collect valuable data, such as customer traffic flows at specific times and days in various locations,
and their behavioral patterns. Analytics generated by geofencing and LBS applications are therefore important parameters
that should help retailers refine their geofencing strategies. The development of Context-Aware Services (CAS) which means
that services are personally dedicated to a specific smartphone user, unlike LBS which imply services for everyone, needs a
very precise definition of geofencing.
204

It is critical for retailers to break through the clutter of Location-Based-Advertising (LBA) and to capture the unique
opportunity to interact with customers by sending time sensitive notifications likely to increase store traffic and customer
loyalty. It is therefore important to develop practical guidelines for retailers, applicable to their retail category, target market
and geographic location. This conceptual paper is a meta-analysis that explores the application of traditional spatial
marketing theories into location-based marketing. A conceptual model based on existing spatial marketing theories will be
proposed. In subsequent studies, the authors propose to test this model through empirical research and to complement this
present analysis.
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206
CUSTOMER-BASED CORPORATE REPUTATION: A STUDY OF SUPERMARKET CUSTOMERS

Nic S Terblanche, Stellenbosch University, South Africa
ABSTRACT
This paper deals with a study on how supermarket customers in a developing country perceive the corporate reputation of a
store they have bought from for a long period of time. The abridged customer-based corporate reputation (CBCR) scale of
Walsh, Beatty and Shiu (2009) was used to measure customer perceptions. The study only found support for two of the five
dimensions of the shortened Walsh et al. scale. The two dimensions are Customer orientation and Competitiveness of the
firm. The findings are in line with the concerns expressed by earlier researchers when scales that originated in a developed
country are considered for application in a developing country context.
INTRODUCTION
Various attempts to define corporate reputation have been made over time. Fortunately all the earlier efforts to define
corporate reputation enable us today to delineate what corporate reputation is all about. Yoon, Guffey and Kijewski (1993)
consider corporate reputation as a mirror reflecting a firm's past and which expresses features of a firms offerings to its
target markets in contrast with those of the firms rivals. Herbig and Milewicz (1993) see reputation is an estimation of the
consistency over time of an attribute of an entity and in their view a firm can thus have several reputations, one for each
attribute such as price, merchandise quality, competent staff, decor or a global reputation. Gotsi and Wilson (2001: 29) define
corporate reputation as a stakeholder's overall evaluation of a company over time. This evaluation is based on the
stakeholder's direct experiences with the company, any other form of communication and symbolism that provides
information about the firm's actions and/or a comparison with the actions of other leading rivals. Argenti and Druckenmiller
(2004: 369) perceive corporate reputation to be the collective representation of multiple constituencies images of a
company, built up over time and based on a companys identity programs, its performance and how constituencies have
perceived its behaviour. Da Camara (2006: 13) state that reputation is best understood as being founded in perceptions and
experiences of an organisation and denotes a judgement on the part of all stakeholders over time . a holistic concept that
encapsulates people's judgement of an organisation's actions and performance. Ou and Abratt (2006: 245) are of the opinion
that corporate reputation can be defined as relatively stable, long-term, collective judgments by outsiders of an
organizations actions and achievements. It implies a lasting, cumulative assessment rendered over a long time period. An
examination of the afore-mentioned reputation definitions and characterisations found the following characteristics of
corporate reputation in common, namely that it is (Terblanche, 2009): dynamic by nature; an appraisal of a firms actions and
awareness of perceptions; a summary of a firms perceived standing against its competitors; different from stakeholder group
to stakeholder group as a result of the particular groups interaction with the firm; a result of earlier actions of a firm; an
outcome of a process of perception formation which can be lengthy in some instances and short in others. For the purposes of
this paper and to accommodate the above-mentioned characteristics of corporate reputation, the CBCR definition of Beatty
and Walsh (2007) shall apply.
A BRIEF OVERVIEW OF CORPORATE REPUTATION
Positive corporate reputations have been found to be related to various valuable outcomes. For instance, Roberts and Dowling
(2002) as well as Deephouse (2002) found that firms with relatively good reputations are better able to prolong superior profit
outcomes over time. However, good corporate reputations do not only possess potential for value creation, they also make
imitation by other firms complicated because of the intangible nature of a corporate reputation. Geyser (1999) mentions two
further benefits of corporate reputation for a firm, apart from financial value, namely preference to do business with a firm
when a number of firms' products or services are similar in quality and price and support for a firm in times of controversy.
Corporate reputation has also been found to reduce transaction costs and positively influences customer outcome variables
such as consumer trust and loyalty (Caruana, Ramasashan & Krentler 2004; Roberts & Dowling 2002; Rose & Thomsen
2004). Szwajkowski and Figlewicz (1999) prove that corporate reputation has a compelling influence on shareholder
evaluation. Gardberg and Fombrun (2002) state that a good reputation offers firms a competitive advantage.
Customers are one of the vital stakeholder groups of any. Notwithstanding this groups importance, a small number of studies
focused on measuring corporate reputation from the customers perspective.
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THE PUBLISHED CBCR SCALES

Probably the two best-known and recently published customer-based corporate reputation (CBCR) scales are that of Beatty
and Walsh (2007) and Walsh, Beatty and Shiu (2009). Walsh and Beatty (2007) deems corporate reputation as a multidimensional construct and define customer-based reputation (CBCR) as the customer's overall evaluation of a firm based on
his or her reactions to the firm's goods, services, communication activities, interactions with the firm and/or its
representatives or constituencies (such as employees, management, or other customers) and/or known corporate activities.
Three service firm types in the USA served as the testing ground for the 2007 CBCR scale. The studies resulted in a fivedimensional scale with the following five dimensions: Customer Orientation, Good Employer, Reliable and Financially
Strong Company, Product and Service Quality, and Social and Environmental Responsibility. Twenty eight items measured
the five dimensions. An online survey of customers in one of three categories: banking services (32% of the respondents),
retailing (32% of the respondents), or fast-food restaurants (36% of the respondents) formed the sample for the 2007 CBCR
study. The customers had to respond to items in respect of their current provider of banking, retailing or fast-food services. It
is not clear from the reported information in which industry or industries the retailing provider belonged to.
Germany and the United Kingdom provided the markets to test the 2009 scale. The German study focused on customers of
Internet service firms. Respondents had to select an Internet firm with which they recently transacted from one of three
categories: brokers such as eBay (26.4% of the respondents), information providers such as Yahoo and Google (17% of the
respondents), or online merchants such as Amazon (56.6% of respondents). An online survey was used for data collection.
The study in United Kingdom required respondents to complete an online survey in regards to their current provider in one of
three industries, namely banking services (40% of the respondents), retailing (30% of the respondents), or fast-food
restaurants (30% of the respondents). Similar to the 2007 study, the industry or industries of the retailing provider is not clear.
The 2009 study resulted in a CBCR scale with five-dimensions that are similar to those of the 2007 scale but limited to 15
items in total.
OBJECTIVE OF THE PAPER
The primary purpose of this paper is to report on a study undertaken to replicate the 2009 shortened version of the customerbased corporate reputation scale of Walsh, Beatty and Shiu in the supermarket industry of a developing country. The research
and findings reported here are also in response to Walsh et al.s call in 2009 to conduct further studies amongst different
populations in other countries. This research also heed to Hunter's (2001) call for more replication studies in the field in
diverse service contexts. Furthermore, very few studies have attended to how firms comprehend and measure corporate
reputation as perceived by their end-use customers. This study is an attempt to contribute to our understanding of the latter.
METHODOLOGY
The methodology followed consisted of questionnaire selection, sampling, data collection and the statistical analyses of the
data.
Survey instrument used in the study
The questionnaire applied in this study consisted of 15 items that measured the 5 dimensions of the shortened version of the
CBCR scale as well as 13 further items that measured loyalty, trust, repatronage intentions and overall reputation.
Respondents were also asked to specify how long they have been shopping at the particular retailer. All the dimensions and
their items are from the 2009 study of Walsh, Beatty and Shiu and were, where required, adjusted for the supermarket
industry. The particular five dimensions are Customer Orientation, Good Employer, Reliable and Financially Strong
Company, Product and Service Quality, and Social and Environmental Responsibility. All the items in the questionnaire were
measured on a 7-point Likert scale, where 1 represented Strongly disagree and 7 Strongly agree.
Data collection and sample features
An email address list of 15 000 respondents were purchased from a firm specializing in customer research data provision. A
web-based questionnaire was posted on a website to collect data as all respondents could access this website by email. Data
was collected electronically using the software Check Box version 4.7.1.6.0. The questionnaire was accompanied by a letter
which briefly referred to the purpose of the study and respondents were requested and encouraged to participate in the study.
208
The total number of responses received were 522 (3,63% response rate) and the number of fully completed questionnaires
used for analyses were 382 (2,55% response rate). The overwhelming majority of the respondents (94%) have been shopping
for groceries at the XYZ Supermarket for more than 5 years. More than half of the respondents (56.7%) have been shopping
between 10 to 20 years at XYZ. The sample consisted of 221 (57.9%) females and 161 (42.1%) males.
Statistical analyses
A series of exploratory factor analyses were conducted with the PASW Statistics 19 software programme to identify the
factor structure of the customer-based corporate reputation construct. The exploratory factor analyses were undertaken with
the following settings: Principal Axis extraction, Direct Oblimin rotation (because the factors/dimensions were correlated),
Factor loadings greater than 0.05 were regarded as sufficient. A factor was retained if it was interpretable and had an Eigen
value of at least 1. A two-dimensional structure emerged from these analyses. These two dimensions and their items were
then subjected to confirmatory factor analyses (CFAs). The two factors that emerged from the CFAs are labeled as follows:
Customer orientated this dimension refers to customers perceptions about the degree to which company and employees
go to satisfy customer needs (Brown et al. 2002), and puts customers at center of focus (Deshpande et al. 1993; Narver &
Slater 1990; Saxe & Weitz 1982).
Competitiveness this dimension captures the firms ability and its performance as well as customers perceptions of the
firm to deliver goods and services at competitive prices and service levels and to make the most of market opportunities. The
Competitiveness dimensions items consist of one item of the Product and Service Quality dimension as well as the items of
the Reliable and Financially Strong Company dimension of the Walsh et al. scale of 2009. This factor was relabeled as
Competitiveness as the items are indicative of a firms ability to take advantage of market opportunities.
The dimensions and items of the CBCR scale for a supermarket and the fit indices of the CFA are set out in Tables 1 and 2
respectively. As the data were not normally distributed, the Robust Maximum-Likelihood (RML) estimation method was
used to test the theoretical model and therefore the Satorra-Bentler Chi-square is reported. An assessment of the internal
consistency of all the dimensions produced Cronbach alpha co-efficients above the generally accepted cut-off value of 0.7
(Nunnally & Bernstein 1994). The reliability results are reported in Table 3.
FINDINGS
The dimensions and items of the CBCR scale for a supermarket reported here is parsimonious and consists of two
dimensions, namely: Customer orientation and Competitiveness. All the loadings of the factors in the measurement model
were high and statistically significant with p< 0,001 which is evidence of construct validity. The RMSEA value of 0.0451
indicates good fit and is additional evidence of construct validity. The 90% confidence interval for the RMSEA is between
0.00909 and 0.0745. The X2/df value of 1.77 falls in the accepted range and the NFI exceeds the recommended value of .95
(Hu and Bentler, 1999).The additional fit indices confirm the conclusion that the proposed model demonstrates sufficient
evidence of construct validity.
Both the CBCR dimensions, namely Customer orientation and Competitiveness, had strong correlations with the customer
outcome variables-trust (0.780; .763), loyalty (0.653; .677), repatronage intentions (0.637; .694, and overall reputation
(0.694; 784). The afore-mentioned two dimensions differ considerably from the five identified in the 2007 and 2009 studies
on customer based corporate reputation scales of Walsh et al. (2007 & 2009).
Respondents perceive the firm to be concerned about its customers and the firms employees are able to provide in
customers needs. Customer orientation is positively related to the trust that customers place in the firm. Respondents regard
the firm as being competitive and that the firm has the ability to take advantage of market opportunities.
MANAGERIAL IMPLICATIONS
The CBCR scale and its individual dimensions could serve as diagnostic gauges because firms can identify areas that are
relevant for corporate reputation management. The strengths or weaknesses of relevant areas can be measured to single out
areas in need of attention. This study found that both the CBCR dimensions, namely Customer orientation and
Competitiveness, show positive correlations with customer outcome variables such as trust, loyalty, repatronage intentions
and overall reputation. Tether afore-mentioned customer outcomes are thus dependent upon a positive CBCR.
209
The firm of supermarkets under study here undertakes various social responsibility projects and staff development practices.
These projects are, inter alia, related to sustainable practices such as recycling centres, Fair trade support and job creation in
communities. It therefore seems that respondents (customers) are either not aware of these activities or they do not regard it
as of great value. It thus seems essential that a firm should not only practise the elements of positive corporate reputation, it
must also bring these worthy deeds to the attention of its clients.
Customers visit supermarkets to essentially make a purchase of necessities and in a developing country price is probably the
dominant concern when procuring products. The typical customers that patronise a supermarket such as the one studied here,
are most likely diverse in their awareness of social issues and their interest in such issues as the supermarkets financial
performance. The dimensions of the 2007 and 2009 CBCR scales of Walsh et al. that did not feature in this study are part of
the so-called softer issues such as the way a firm treats staff, attends to environmental issues and create jobs. These socalled softer issues are most likely not of overriding concern when goods and services are purchased at the supermarket.
There is, however, a growing awareness and concern about how firms should behave towards and address issues related to
staff treatment as well as societal and ecological issues. In time the behaviour of the firm in respect of such issues might
influence shoppers choice of supermarket. Therefore, although the so-called soft issues of customer based reputation did
not feature in this study, supermarkets that ignore these dimensions of the CBCR scale will do so at their peril.
LIMITATIONS AND SUGGESTIONS FOR FURTHER RESEARCH
Although the respondents represent at the minimum almost 5000 years of shopping at the particular retailer, a major
limitation of this study is that it only representative of the clients of one supermarket group in South Africa. It might be
advisable to repeat the study with customers from competitive supermarkets. Given the findings of this study, one can ask the
question whether all respondents were familiar with the questions asked and typical responses to the questions. Stated
otherwise, do they understand what they have been asked? Are they knowledgeable about the questions put to them and are
they thus in a position to provide informed answers to the questions put to them? One can also ask how many of the typical
supermarket customers really care or know about such issues as to how the supermarket treats its staff, or what the
supermarkets financial well-being is. The question that begs to be asked is whether respondents should not be given the
opportunity to respond to a Do not know option in instances where they are really not in a position to respond in a
knowledgeable way.
Earlier research confirmed the relationship between corporate reputation and various performance measures that are used to
assess a firms performance. It is therefore important that firms understand how CBCR, as well as individual CBCR
dimensions, influence the behaviour of consumers that result in transactions. An important area of future research is how
consumer behaviour translates via transactions in marketing metrics, such as sales, market share and purchasing rates.
The antecedents of CBCR have received limited research attention. Walsh et al. (2007) refer to the limited number of
empirical studies that focused on the predictors of corporate reputation such as critical news reports and negative incidents.
Such studies, however, do not distinguish between different dimensions of corporate reputation. Therefore, studies enabling
us to understand how the pursuits and acts of firms form and impact on reputation perceptions would be very beneficial.
Given the major differences between the findings of this study and those of the two earlier Walsh et al. studies, it seems
reasonable suggest that researchers should conduct further studies in other countries, where firms and consumers'
perceptions may differ. Studies across diverse service contexts, cultures and sub-cultures may provide more clarity how
corporate reputation influence consumer perceptions.
TABLES
Table 1. Dimensions and items of the CBCR scale for a supermarket
Dimensions
Items
XYZ has employees who treat customers courteously
Customer
XYZ has employees who are concerned about customer needs
orientated
XYZ is concerned about its customers
XYZ tends to outperform competitors
XYZ seems to recognize and take advantage of market opportunities
Competitiveness
XYZ looks like it has strong prospects for future growth
XYZ develops innovative services
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Table 2. Fit indices of the measurement model

Fit Indices
Degrees of Freedom
Minimum Fit Function Chi-square
Satorra-Bentler Scaled Chi-square
X2/df
RMSEA
ECVI
Normed Fit Index(NFI)
Value
13
69.29(p=0.00)
23.06(p=0.041)
1.77
0.045
0.14
0.99
Table 3. Reliability results

Dimension
Customer orientation 0.91

Competitiveness
0.87
Overall
0.91
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THE INFLUENCE OF SPECIAL OCCASIONS ON THE RETAIL SALES OF WOMENS APPAREL

Elsa B. Nieves-Rodrguez, University of Puerto Rico, Puerto Rico
Jos J. Cao-Alvira, University of Puerto Rico, Puerto Rico
Myra Mabel Prez, University of Puerto Rico, Puerto Rico
ABSTRACT
Business literature and practitioners analysis have linked seasonality with consumer behavior, specifically consumption
patterns and expenditure decisions. This paper analyzes the impact of the year seasons, special occasions and weather
variations on womens clothing sales in the year-round tropical climate of Puerto Rico. Using ANOVA and ordinary least
squares analysis we conclude that seasonality does have an effect on the retail sales of womens clothing in the Puerto Rico
market, although it seems to be more related to the occasions of Mothers Day and Christmas rather than the year seasons
usually influenced by weather changes. The regression analysis confirmed that temperature, humidity and the heat index do
not seem to have an influence on the clothing sales.
INTRODUCTION
Seasonality has been linked with consumer behavior, specifically consumption patterns and expenditure decisions. While
Vicary (1955) points out the importance of seasonality in consumer behavior, forty years later Scott (1995) suggests that any
theory which fails to consider the seasonality in consumption is incomplete. However, as Radas & Shugan (1998) argue,
despite its recognized relevance, little attention has been given to the impact of seasonality on marketing strategy. Only a few
marketing articles address this topic. For the most part, research on seasonality has been centered on the statistics and
econometrics fields (Radas & Shugan, 1998).
Holidays, weather changes, and the school calendar influence the expenditure on almost any product category (Wagner &
Mokhtari, 2000 citing Moehrle, 1994; Scott & Buszuwski, 1993). Smith (1999) argues that the December period has an
important economic impact on retailers, calling it the make-it-or-break-it period. Parallel to the business cycle effects of
special occasions, the effect of changes in weather has been studied on different business activities; however, limited
attention has been paid to its effect on the retail sale of goods (Steele, 1951). That is even though understanding the effect of
weather on consumer spending is non-trivial for economic forecasting (Starr-McCluer, 2000). Kirk (2005) discusses a theory
linking weather and consumer spending which suggests that weather plays a significant role in how people spend their
money. He also states that in todays competitive market, many companies are taking action to manage the risks that
unfavorable weather brings to their sales.
The apparel industry is considered by retailers and applied economists to be the classic example of a seasonal good (Wagner
& Mokhtari, 2000 citing Winakor, 1969). For consumers, clothing provides utilitarian needs by offering protection from the
elements throughout the year seasons, and caters social needs by fostering interaction during holidays and festive events
(Wagner & Mokhtari, 2000 citing Horn & Gurel, 1981). According to Rajagopal (2011), social interactions have an
important impact on consumer behavior towards fashion apparel. An extant research shows that apparel expenditures are
affected by consumer characteristics such as income, social class, family type, and location, but little is acknowledged with
respect to how seasonality moderates the effect of consumer characteristics on household apparel spending (Wagner &
Mokhtari, 2000).
The role of seasonality in moderating the relationship between customer characteristics and apparel expenditures is an
important research issue with theoretical and practical implications. Since seasonality is known to influence the demand for
goods and services by shifting consumer preferences from one quarter to the other, seasonal variations can cause special
difficulties in scheduling production and ensuring that the right sources will always be on hand. As such, seasonality may
moderate the relationship of income and prices to expenditure, an issue of central theoretical importance (Wagner &
Mokhtari, 2000).
Llittle research has been done to study the factors influencing the purchase behavior of clothing of Hispanic consumers
(Rajagopal, 2011), and although the apparel retail industry is among the ten biggest retail markets in Puerto Rico (Proexport
Colombia, 2004), no study regarding the seasonality of apparel retail sales or consumer spending is available for the Puerto
Rico market. Therefore, the purpose of this paper is to analyze the influence of the year seasons, special occasions and
weather changes on womens clothing sales in the year-round tropical climate of Puerto Rico. This represents a first attempt
213

at providing a theoretical foundation for modeling seasonality for the apparel sales in Puerto Rico and at illustrating its
usefulness as a valuable source of information for decision making and forecasting.
LITERATURE REVIEW
Seasonality Defined
Seasonality can be defined as the tendency of consumer expenditures on a good or service to vary in some pattern over the
course of a year (Wagner & Mokhtari, 2000, p.315). Furthermore, seasonality is said to be an environmental factor with a
significant role in consumer expenditure decisions, and most expenditures fluctuate in response to changes in weather, the
holidays and the school calendar (Wagner & Mokhtari, 2000 citing Moehrle, 1994 and Scott & Buszuwski, 1993). Radas &
Shugan (1998) emphatically state that almost every product in every industry in every country is seasonal, thus seasonality
dictates business strategy.
Radas & Shugan (1998) indicate that even though not all patterns are known and predictable in regards to seasonal variations,
many have been well identified (see Table 1 Examples of Known Seasonal Patterns). Some seasonal patterns are caused by
exogenous factors such as the holidays, government actions, industry traditions, weather, social phenomena, summer and
school years.
Research on Seasonality
Some research on seasonality suggests that although the year seasons are defined by geographical and climatic factors,
consumers psychological perception and behavior is defined by patterns related to seasonality that do not necessarily
correspond to the spring, summer, fall and winter periods (Vicary 1955).
Scott (1995) assumes that consumption already has a seasonal pattern and the purpose is to determine the factors that
influence seasonality. He considers variables like income, interest rates and climatic variations as possible explanations for
seasonal consumption. After doing univariate and multivariate analysis using United Kingdom data, income, interest rates
and weather variations were not able to explain the seasonality in consumption. Instead it was found that special occasions
motivated by social customs or conventions, like the Christmas holidays, are able to give a better explanation.
Research on Seasonality and Retail Sales
Radas & Shugan (1998) consider that every product is seasonal and that seasonality dictates business strategy. They examine
the sales data for all major films released between 1993 and 1995, and estimate a seasonal pattern for the motion picture
industry. In addition, they suggest that seasonality information is valuable in making decisions involving new product
introduction for which they are dependent on the shape of the products life cycle.
With a similar approach, Kirk (2005) also assumes that some items are seasonal, but the explanation behind is that it is so
because they are weather-influenced. Among others segments (i.e. hardlines, consumer products and energy consumption),
the author analyzes the softlines category, which includes apparel items such as winter coats, shorts, swimsuits and t-shirts.
Using data from the United States, his analysis includes temperature and precipitation as the weather variables, and considers
shorts sales to account for the softlines segment. The author creates a matrix that includes the weather variables denoted as
categories, and also a sales percentage for each combination of temperature and precipitation. In addition, a survey is
conducted for broader insight on consumer shopping behavior. It was found that this particular item sells better during
warmer temperatures and lower precipitation. As a general conclusion, the author states that weather has an effect on
different business sectors, including the softlines category.
Regardless of seasonality, some authors have been interested in studying the effect of weather variations on the retail sale of
goods. In Steeles seminal paper (1951), he analyzes the effect of several weather variables, including precipitation, snow
cover, temperature, wind velocity and amount of sunshine on the sales of a particular department store in the United States.
The study covers the seven weeks prior to the Easter holidays for a time span of nine years. After rectifying the data because
of concerns with the seasonal habits variation, the author uses a multiple regression analysis. Snow cover and precipitation
were found to be the weather variables with the most influence on the sales of this particular department store.
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Starr-McCluer (2000) also conducts an analysis with the purpose of finding the effect of weather changes on retail sales, but
instead of using data from a specific department store, the study uses national data from the United States. According to the
author, the weather is usually pointed out as the reason for the monthly changes in consumer spending, being part of regular
seasonal variations. However, the purpose is to find if weather anomalies, the ones that deviate from what is expected, have
an impact on the retail sale of goods. After applying time series analysis to retail data from the United States Census Bureau
and weather data from the National Weather Service, the author found that weather anomalies are in fact significant for the
monthly fluctuations in retail sales. Nevertheless, when conducting the same process with quarterly data, the monthly effect
seemed to fade away.
Bahng & Kinkade (2012) analyze the relationship between temperature and the retail sale of seasonal garments. The
researchers collected sales data from a retailer of branded women's business wear in South Korea. Interviews with the
retailer's merchandisers were used to supplement interpretation of the statistical data. Results of this study provide strong
evidence that fluctuations in temperature can impact the sales of seasonal garments. During sales periods, when drastic
temperature changes occurred, more seasonal garments were sold. However, the temperature changes from day to day or
week to week did not affect the number of garments sold for the whole period. Of the seasonal garments expected to sell
within the same period, the selling periods of each product category differed depending on the type of fabric and design. For
some seasonal garments, the actual sales dates were one to two weeks in variance from the merchandisers' forecasts.
The most relevant literature on seasonality and its effect on retail sales are summarized on Table 2.
Applications of Seasonality Analysis
As the researchers on seasonality suggest, some practical applications of the analysis and its effects on sales are the
following:
1.
2.
3.
4.
Forecast sales ahead of time by substituting the forecasted weather (Steele, 1951).
Adjust in advance the number of salespeople needed in retail stores (Steele, 1951).
Calculate potential sales for comparison with actual sales (Steele, 1951).
Determine the timing for new product introductions while considering products life cycle (Radas & Shugan,
1998).
In addition, by acknowledging the influence that weather can have on sales, retailers and manufacturers can take proper
actions; for one part, maximize sales for products with seasonal variations by exploiting the opportunities presented by
favorable weather, and for the other part, managing the risk presented by unfavorable weather (Kirk, 2005). A strategy plan
that accounts for future weather makes it possible to achieve better business in any weather. As stated by Kirk (2005, p.34),
understand how weather impacts your business and incorporate weather forecast information into your marketing so as to
improve sales and increase profits.
DATA ANALYSIS
Considering the specific market of Puerto Rico, Figure 1 shows peaks around May and December, indicating that the spring
and winter seasons or the occasions of Mothers Day and Christmas may have an impact on the sales of womens clothing.
On the other hand, in a year-round tropical climate with an average temperature range of 19, it is more difficult to make a
conjecture about the effect of weather variations on the retail sale of womens clothing in Puerto Rico. Further analysis is
needed.
Following the methodology proposed in Starr-McCluer (2000), this study considers national data of retail sales, taking
exclusively into account the retail sales of womens clothing in the Puerto Rico market. The data is aggregated; meaning no
distinction is made between product categories. The source on the data of retail sales is The Export and Trade Company of
Puerto Rico (COCOEX, for its respective Spanish abbreviation), is of monthly frequency and spans from January 2006 to
November 2010.
The data on the Puerto Rico weather included in the study is the heat index, temperature and humidity. The source of this
data is the University of Puerto Rico Weather and Climate Resource Center (UPR-WCRC). In a recent study, see StarrMcCluer (2000), of all analyzed weather factors, temperature was found to be the most influential determinant on consumer
215

spending. For this reason it is included in this analysis to account for weather variations. Humidity is a weather factor also
considered in our analysis, since it is well known that tropical islands are usually affected by it. The heat index, the last of
the weather factors included in the model, is a standardized measure that combines temperature and humidity. This index
attempts to determine the human-perceived temperature. The UPR-WCRC reports weather factors on an hourly frequency.
This data is converted to a monthly frequency using the corresponding averages.
Since the literature points out that retail sales data might have a seasonal component (Steele, 1951; Scott, 1995), an Analysis
of Variance (ANOVA) was first implemented on the study. To do the analysis, the retail sales data was divided into four
groups, where each group contained the value of sales for each year season: spring from March to May, summer from June to
August, fall from September to November, and winter from December to February. The results for this analysis are presented
in Table 3. As we can see, with degrees of freedom (3,55), the F-Value calculated is higher than the critical F-Value,
meaning that there is statistical significance at the 5% level and therefore we can reject the null hypothesis that the variances
are statistically the same. From this result we can say that womens clothing sales in Puerto Rico do have a seasonal
component. For completeness, we also check if the Puerto Rico weather factors are also seasonal. This is a valid question
considering the scarce variability in temperature and the year-round tropical climate in Puerto Rico. On this matter, an
ANOVA was also done with each of the three weather factors. The analysis was conducted in the same way as the sales and
the results are also presented in Table 3. We can reject the null hypothesis that the variances are statistically the same for
temperature and heat index. From this result we cannot rule out that the Puerto Rico climate also has a seasonal component.
Both sales and weather seem to have a seasonal component, however, to be able to see if seasonality in clothing sales is
related to the year seasons, special occasions or weather variations, it is appropriate to perform an analysis using ordinary
least squares regression. To accomplish this, dummy variables are introduced to represent the year seasons and special
occasions in model equations that already link retail sales with weather data; i.e. spring, summer, fall and winter:
{ }, and the occasions of Mothers Day and Christmas:{ }.
We now consider two main modeling environments, one (Model A) where the year seasons are used to control for the
seasonal component on the retail sales data and a second (Model B) where the occasions corresponding to Mothers day and
Christmas are regressors representing seasonality in the data. Since visual inspection of Figure 1 shows that peaks in retail
sales are accomplished on May and December, the benchmark scenarios for the two modeling environments consist of the
summer and fall seasons (Model A) and all calendar months except May and December (Model B). The estimation attribute
of the benchmark scenario is included in the constant regressor of the model equation.
On each modeling environment we consider three competing models. The first of these is the standard model, where the
retail sales are estimated using a constant regressor, a random term, and for Model A the spring and winter dummy variables
and for Model B the Mothers Day and Christmas dummy variables. The second model extends the standard model to include
the heat index as a regressor. The third model extends the standard model to include regressors on temperature and humidity.
Equations (1)-(3) contain the three competing variations of Model A. These models are henceforth denominated as Model
A1, Model A2 and Model A3, respectively.

(1)
(2)
(3)
Equations (4)-(6) contain the three competing variations of Model B. These models are henceforth denominated as Model
B1, Model B2 and Model B3, respectively.

216
(4)
(5)
(6)

RESULTS
Table 4 presents the least squares coefficient estimates of the modeling environments in Equations (1)-(6). Table 4 also
reports, in parenthesis, the absolute value of the t-statistics of the coefficient estimates, and the R2, the adjusted R2 and the
degrees of freedom of each model. The three competing formulations of Model A are represented in the first three columns
of Table 4, and the corresponding three formulations of Model B are in the last three. It is clear that all formulations of
Model B are far superior to those of Model A.
When estimating Model A1, the standard model, only the dummy variable indicating the winter season resulted statistically
significant. The R2, indicating the overall fit of the model, is 15%. The overall fit of the retail sales estimation improves with
Model A2. The R2 of this regression equation is 19% and all regressors now are statistically significant. The estimation fit of
Model A3 does not improve that of Model A2, based on the reported values of adj-R2, and the regressors of weather factors
are not statistically significant. Using an F-test to measure the marginal contribution of the weather factor present in Model
A2 and not in Model A1, it is possible to infer that the marginal contribution of this weather factor is not statistically
significant, and for this Model A1 is preferred to Model A2.
Both Mothers Day and Christmas dummy variables are statistically significant for Model B1, the standard model. The R2
for this model is 87%. Models B2 and B3, that consider various weather factors as regressors, do not noticeably improve the
fit over that of Model A1. In addition, none of the regressors representing the weather factors are statistically significant. Ftests on the marginal contribution of these competing models confirm this conjecture. Model B1 proves being the best
modeling framework for evaluating clothing retail sales. According to Model B1, womens clothing retail sales are relatively
constant throughout the entire calendar year, at 19 million USD per month, and during the months of May and December
they spike, on average, 8.1 million USD and 29 million USD, respectively.
CONCLUSIONS
The purpose of this paper was to analyze the impact of the year seasons, special occasions and weather variations on
womens clothing sales in the year-round tropical climate of Puerto Rico. To the best of our knowledge, no study regarding
the seasonality of apparel retail sales or consumer spending are available for the Puerto Rico market. Since little academic
research is available about seasonality and its effect on clothing sales, the present study contributes to the area of seasonality
in the apparel industry through the development of a model specifically for Puerto Rico.
After conducting an ANOVA and an ordinary least squares analysis we might conclude that seasonality does have an effect
on womens clothing sales in the Puerto Rico market, although it seems to be more related to the occasions of Mothers Day
and Christmas rather than the year seasons commonly associated with weather patterns. This seems to be in agreement with
the argument of Vicary (1955) mentioned earlier. The regression analysis confirmed that temperature, humidity and the heat
index do not seem to have an influence on the clothing sales.
The main practical implication of this research is that it provides a useful tool for apparel retailers to do better forecasting and
strategic planning. Considering that self-esteem is an important driver of consumer behavior (Banister & Hogg, 2004) and
clothing is considered as an opportunity to communicate self-image (Rajagopal, 2011), retailers might use these special
occasions dictated by social conventions as an option to introduce new trends. Additionally, retailers can better manage the
inventory, adjust in advance the number of salespeople, and develop a promotional plan that takes advantage of these special
occasions. Moreover, this analysis could be used to develop an index for benchmarking that companies can use when
assessing performance on selected economic, financial and marketing measures. On the other side, academically, the study
fills a gap in the literature for the Puerto Rico market, giving some insights about the seasonality in consumer behavior.
Despite setting the stage for further research and its interesting results, this study was limited to the sales of womens apparel
and made no distinction between product categories and brands. Knowing which product categories or brands sell the most
during Mothers Day and Christmas could also serve as valuable information for retailers and further research should address
it. Additionally, the analysis could include other marketing variables to evaluate who is doing the buying of womens apparel
during these special occasions, and also consider the price of the items to determine if there is an optimal price range to
maximize the sales. Moreover, an additional study can consider the mens clothing category since it has been well
recognized that there is a huge difference between mens and womens buying behavior (Rajput, Kesharwani & Khanna,
217

2012). It would also be interesting to extend the work presented here to other product or service categories, as well to
comparisons with other countries.
TABLES
Table 1: Examples of Known Seasonal Patterns
Source: Radas & Shugan, 1998, p. 297

Table 2: Summary of Research on Seasonality and Retail Sales
Author/s
Country
Approach
Effect of weather variations (i.e. temperature,
snow cover, precipitation) on the retail sale of
goods of a department store.
Steele
(1951)
United States
Scott
(1995)
United Kingdom
Radas &
Shugan (1998)
United States
Estimate a seasonal pattern for the motion picture

industry.
Star-McCluer
(2000)
United States
Effect of weather anomalies on retail sales.
Factors that influence seasonality (i.e. income,

interest rates, weather variations).
218
Results
Snow cover and precipitation
were found to have the most
influence on the sales of the
department store.
Special occasions motivated by
social conventions, such as the
Christmas holidays, give a
better explanation.
Seasonality information is
valuable in making decisions
involving new product
introduction for which they are
dependent on the shape of the
products life cycle.
Weather anomalies are
significant for the monthly
fluctuations in retail sales.

Kirk
(2005)
Bahng &
Kinkade
(2012)
United States
South Korea
Some items show seasonality because they are

weather-influenced. Effect of temperature and
precipitation among different business sectors
(including the retail sale of apparel).
Effect of temperature on retail sales of seasonal
garments.
Weather has an effect on

different business sectors,
including the clothing category.
Fluctuations in temperature can
impact sales of seasonal
garments.
Table 3: ANOVA Seasonality Tests

Sales
Heat Index
Temperature
Humidity
ANOVA F-Value
3.19
43.02
43.92
0.55
Critical F-Statistic
F=5%(3,59)
2.76
2.76
2.76
2.76
Table 4: Modeling Environments Estimation Results

Model A1
Model A2
Model A3
Model B1
Model B2
Model B3
Intercept
1.9E7
(13.52)***
-2.6E7
(0.98)
-6.8E7
(1.20)
1.9E7
(43.95)***
1.7E7
(2.63)**
1.2E7
(0.89)
3.2E6
(1.31)
6.3E6
(2.09)**
5.9E6
(1.96)*
7.6E6
(3.07)***
1.3E7
(3.27)***
1.2E7
(2.91)***
8.1E6
(5.77)***
8.1E6
(5.69)***
8.1E6
(5.68)***
2.9E7
(18.56)***
2.9E7
(17.99)***
2.9E7
(17.78)***
5.1E5
(1.69)*
2.3E4
(0.31)
9.2E5
(1.32)
-7.4E3
(0.04)
1.4E5
(0.89)
8.4E4
(1.34)
R2
0.15
0.19
0.19
0.87
0.87
0.87
Adj-R2
0.12
0.14
0.13
0.86
0.86
0.86
56
55
54
Df
56
55
54
***: 1% significance; **: 5% significance; *: 10% significance
219

FIGURES
Figure 1: Monthly Womens Clothing Sales in Puerto Rico (USD)
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The Case of the Fashion Industry. European Journal of Marketing 38(7), 850-868.
Kirk, Bill. (2005). Better Business in Any Weather. Research Review 12(2), 28-34.
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Marketing Research 35(3), 296-315.
Rajagopal. (2011). Consumer Culture and Purchase Intentions Toward Fashion Apparel in Mexico. Journal of Database
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Rajput, Namita, Kesharwani, Subodh & Khanna, Akanksha. (2012). Dynamics of Female Buying Behavior: A Study of
Branded Apparels in India. International Journal of Marketing Studies 4(4), 121-129.
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Starr-McCluer, Martha. (2000). The Effects of Weather on Retail Sales.
http://www.federalreserve.gov/pubs/FEDS/2000/200008/200008abs. html
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221
SOCIAL INFLUENCE AND CUSTOMER LOYALTY IN A COLLABORATIVE COMMUNITY:

AN EXPLORATORY STUDY
Cheng-Chieh Hsiao, National Chengchi University, Taiwan
Jyh-Shen Chiou, National Chengchi University, Taiwan
ABSTRACT
Community collaboration becomes particularly influential in contemporary Internet economy. However, the impact of social
influence on member behavior in a collaborative community remains unclear. The objective of this study is to investigate the
relationships between social influence modes (i.e., community identification, value congruence, and community normative
influence) and customer loyalty in the context of collaborative gaming communities of a globally-leading Massive Multiplayer
Online Game. After collecting 347 valid players from the target online game, our results show that community identification
is the most influential determinant of customer loyalty toward an online game. However, value congruence with a collaborative
community appears to be ineffective on customer loyalty. We also find out that community normative influence has a
curvilinear (U-shaped) relationship on customer loyalty. Finally, research implications and limitations for this study are
discussed.
222
THE INFLUENCE OF ONLINE PRODUCT REVIEW VARIANCE ON CONSUMER EVALUATIONS: AN

EXAMINATION OF INTRINSIC AND EXTRINSIC CUES
Ryan Langan, University Of South Florida, USA
Ali Besharat, University Of Denver, USA
Sajeev Varki, University Of South Florida, USA
ABSTRACT
This research examines the potential for variance in online product reviews to have differential effects on consumers product
evaluations depending upon the type of intrinsic and extrinsic cues employed by the consumer. Drawing on the accessibilitydiagnosticity framework, we predict that higher levels of variance among product review ratings (e.g. 1-star vs. 5-star) will
have a deleterious effect on consumers product evaluations; however this effect may be offset depending upon the type of
intrinsic and extrinsic cues involved in consumers evaluation of the product. Our results suggest that in the absence of
additional diagnostic information, greater variance among product review ratings creates uncertainty, thereby diminishing
purchasing intentions. Evidence is also found for an interaction between the online reviews variance and product attribute
type, such that when review variance is low, no difference is observed between search and experience attributes; however
when variance is high, the diagnosticity of search attributes is diminished, resulting in lower purchase intentions. From an
extrinsic cue perspective, our study finds that only the credibility of the reviewer source and not brand equity, serves to offset
the negative influence of product review variance on consumers purchase intentions.
223
INTERACTIVITY: DOES ONE SIZE FIT ALL?

Larry Chiagouris, Pace University, USA
Vishal Lala, Pace University, USA
Jennifer Thomas, Pace University, USA
ABSTRACT
The literature documenting the positive effect of perceived interactivity on consumer attitude is substantial; however
differences in consumer response based on individual differences are less-studied. Interactivity takes a cognitive toll and as a
result, the effect of perceived interactivity on consumer response may not always be positive. The results of a study based on
a sample of 443 adults, purposively sampled for both younger digital natives and older digital immigrants, suggest that
perceived interactivity in digital information products, such as digital books, leads to more positive attitudes and adoption
intentions for digital natives but not for digital immigrants. This surprising result is explained by differences in the value
these two groups place on active control and two-way communication, two facets of perceived interactivity. Given the
importance of age as a segmenting variable, implications for practitioners are provided.
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CONSUMER GENERATED LUXURY BRAND COMMUNICATION ON THE INTERNET

Anita Radn, University of Bors, Sweden
INTRODUCTION
Consumers today are not passive recipients of a constructed brand identity that is communicated towards them. Instead
research suggests that the consumer is in fact an active part in constructing brand meaning. Salzer-Mrling and Strannegrd
(2004) held that brand managers are confronted with the fact that they are not the owners of the brand who can actively
manipulate brand images in the minds of passive consumers. The importance of consumption activities and how these play a
part in the development of meaning has been demonstrated by authors such as Wallendorf and Arnould (1991), who
interpreted the consumption rituals of Thanksgiving and explored the linkages and cleavages between consumer ideology and
consumer practice. Arnould and Price (1993) investigated the relationship between client expectations and satisfaction and
concluded that the narrative of the rafting experience (multiday river rafting trips in the Colorado River basin was the
empirical context for their article) rather than relationships between expectations and outcomes was central to its evaluation.
Belk and Costa (1998) showed the creation of fantasy consumption enclaves through processes of inventing and
mythologizing tradition, and Pealoza (2001) investigated consumers cultural production processes at different levels and
concluded that consumers negotiate meanings and that business activities and specific references are significant for
consumers in providing authenticity. In later research it is argued that brands belong to and are created within groups,
communities or tribes (e.g. Brown, Kozinets and Sherry Jr., 2003), or that consumers are actively creating brandscapes
(Thompson and Arsel, 2004) neo-tribes (Cova and Cova, 2002), the concept of brand communities (Muniz and OGuinn,
2001; McAlexander, Schouten and Koenig, 2002; Muniz and Schau, 2005; Algesheimer, Dholakia and Herrmann, 2005),
subcultures of consumption (Schouten and McAlexander, 1995), and brand cultures (Schroeder and Salzer-Mrling, 2006).
Muniz and OGuinn (2001) emphasized the triangular relationship between consumers and the brand and consumer
relationships. McAlexander, Schouten and Koenig (2002) broadened this perspective by studying customers relationships
with a branded product and related marketing agents, institutions as well as other customers. In their view, consumers
socialize around brands, which are defined as brand objects, but they still consider brand meaning as being developed first by
marketers. Related to the brand community is the concept of neo-tribes, examined by Cova and Cova (2002), who hold that
a tribe is not necessarily a brand community, since brand communities are explicitly commercial, whereas tribes are not.
However, when a tribe is organized around a same passion of a cult-object it exhibits many similarities with a brand
community (p. 603).
Alongside the concept of brand community research has viewed the consumer-producer dichotomy in new ways of coproduction: the customer as co-producer (Wikstrm, 1996; Vargo and Lusch, 2004), the reversal of consumption and
production (Firath and Venkatesh, 1993), the consumer role in production and consumption (Firath and Venkatesh, 1995),
consumers as customizers and producers (Firath, Dholakia and Venkatesh, 1995), customers as active co-creators of
experience (Prahalad and Ramaswamy, 2000), the concept of customerization (Wind and Rangaswamy, 2000). Bendapudi
and Leone (2003) viewed customer co-production in the construction of goods and ser-vices and claimed that consumer coproduction extends to meanings as well and that consumers are not just passive receptacles of brand identity projected by
marketers; they are active co-producers of brand meanings (p.26). They called for more attention to the implications of
consumer co-produced marketing images given the empowerment of consumers through the Internet. Kozinets et al. further
(2004) introduced the notion of interagency where consumer and producer interests are embedded in one another.
METHOD
The choice of a research strategy based on multiple methods is in line with Denzin and Lincoln (1994:2), who define
qualitative research as, multimethod in focus, involving an interpretive, naturalistic approach to its subject matter,
meaning that ... the qualitative researchers study things in their natural settings, attempting to make sense of or interpret
phenomena in terms of the meanings people bring to them. The natural setting here is de facto online. Denzin and Lincoln
(1994:2) further define qualitative research as involving the studied use and collection of a variety of empirical
materials. The possibility to use different methods for generating empirical data, such as online field work, interviews with
consumers and sales personnel and retailers and consumers of counterfeit merchandise, is believed to give a greater
understanding of the phenomenon.
225
Qualitative research online is defined as: qualitative research that relies upon networked computers as a vehicle for data
collection (Miller and Walkowski, 2004:3). Technology enables new types of Internet-based measurement, such as access to
discussion groups, Website visitor tracking systems, e-mail consumer panels, on-line surveys and on-line focus groups
(Quelch and Klein, 1996). Mann and Stewart (2000:2) refer to this as computer-mediated communication (CMC), and is
defined as the direct use of computers in a text-based communication process. CMC or qualitative research online in this
study refers to a means of generating data and reaching respondents online and is not to be confused with research on
behavior online.
Miller and Walkowski provide a general classification of methods for qualitative research online. The model notes (1)
whether a researcher, interviewer or moderator is actively involved with participants and (2) the synchronous or
asynchronous time frame for the research. The approximate time over which the communities and websites have been studied
is three years. Time is not of essence concerning data obtained on bulletin boards in online communities because most
opinions can be viewed long after they have been posted. One online research method that has been used is e-mail interviews,
which are asynchronous in time line. However, there is an interaction between researcher and subject with open-ended and
follow-up questions. An-other online method used is online mini-surveys. These mini-surveys are posted on bulletin boards
in online communities and may consist of open-ended questions as well as quantitative rankings of most luxurious brands.
Instant messaging has been used as a means of communication with consumers. Bulletin boards and conversations in
communities have been monitored, with both active participation and sole observation.
Based on the material studied five main types of community are distinguished: (1) the luxury and/or fashion community. A
community dedicated to discussing and sharing opinions on all topics within the very broad spectra of either luxury and/or
fashion related things; (2) the fashion magazine community, which is the online equivalent of a fashion magazine; (3) the
celebrity community, which is a site dedicated to identifying the fashion and products worn by celebrities. This community is
sometimes not open for sharing opinions and advice online but is nevertheless classified as a community because it is the
interaction between consumers that characterize this type of site and that it often has forums for the exchange of advice and
opinions; (4) the anti-community, which is a community online dedicated to hating brands, celebrities and such; and (5) the
consumer-to-consumer site, which is a community mostly directed toward online auctions and sales, but considered a
community based on the common interest of fashion and luxury brands. The communities online are connected, except for
the common interest in luxury brands, mainly by the participants engaging in conversations in these online communities.
The examination of the different types of community website demonstrates that, depending on the type of community, the
impact on luxury brand image could be either good or bad. In some communities the allure and desirability of the luxury
brand is very tangible and thus increases the demand for the brand, whereas other communities can affect the brand
negatively or can, for instance, promote counterfeits. Three main aspects can sum up the role of community websites in the
creation of a sense of luxury brand: identity reinforcement or impairment, interconnectedness and voluntary participation.
The Internet has proven to be of utmost importance in examining how (and by whom) a sense of luxury brand is created. The
consumer producer dichotomy in a luxury context is much less apparent nowadays. There have traditionally been two basic
views on luxury brands: those who define luxury brands and those who buy luxury brands. With the introduction of the
Internet, this dichotomy has become less apparent. Those who buy luxury are now also a part of defining it more than ever
before. This change in the sense of how a luxury brand can be created has been primarily put forward by the roles that
different actors can take in the online environment. The results of this re-search show the components that co-create the sense
of luxury brand, (not components of the luxury brand itself) and this within a specific setting, the online context. The sense of
a luxury brand is viewed as something that is created in context by different actors and the activities that they perform. This
co-creation is also seen in the larger scope of handling luxury brands.
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228
A NEW WAY TO MEASURE RELATIONSHIP LEARNING

Xinchun Wang, Texas Tech University, USA
ABSTRACT
Selnes and Sallis (2003) propose a new theory to study organizational learning----Relationship Learning. They suggest that a
supplier and a customer can improve their joint learning activities by facilitating information exchange, developing joint
learning sense, and updating their behavior accordingly. The findings of this paper are evolutionary to marketing literature.
However, the present study has several concerns on the measurement scale developed by Selnes and Sallis (2003) to measure
relationship learning. First, a reflective measurement is preferred for relationship learning rather than formative measurement.
Second, the author argues that the original measurement model of relationship learning did not fit very well. Using the data
set collected by this study, we provide empirical evidences to support our argument. Moreover, by doing multi-sample
invariant analysis, the present study also argues that there is significant variance between the supplier measurement model
and customer measurement model. Therefore, it is suggested that customers may have a different way to perceive relationship
learning than suppliers. Finally, a new process based approach is proposed by this study to improve the measurement of
relationship learning.
229
INVESTIGATING THE IMPACT OF STUDENT SAMPLES ON DATA QUALITY

AND RESEARCH OUTCOMES
Jennifer A. Pelletier, University of South Florida, Tampa, FL
Nazuk Sharma, University of South Florida, Tampa, FL
ABSTRACT
Over the years, the level of analytical rigor in marketing research continues to rise, with journals asking for stronger theoretical
justifications, more complex models and improved managerial contributions (Lehmann et al. 2011). Despite the improvements
in rigor, the sample frame choice of researchers remains a vital decision that impacts the reliability and validity of a studys
findings and literature contributions. Once a researcher chooses a sampling population, the differences between the selected
sample and defined target population have the ability to alter the data quality and outcomes of research. While the debate over
using student versus non-student subjects is not new, this research will contribute to the literature by determining when and
how student subjects adversely impact data quality. Specifically, this research will investigate (1) the relationship between the
sampling choice (student versus non-student subjects) and data quality, (2) the impact of student versus non-student data quality
on research outcomes (i.e., hypothesis testing, generalizability, contributions, etc.) and (3) the characteristics that determine
how well a sample population represents the defined target population (i.e., training, education, familiarity, etc.). Better
understanding of these research issues will aid future researchers in designing research plans that yield high quality data.
When conducting research in an ideal world, researchers would always draw upon the defined target population (Beltramini
1983). However, researchers often encounter limitations that prevent them from using the target population as the subjects of
their research. Bello et al. (2009) suggest three main reasons for researchers opting for a student sample frame rather than a
more appropriate defined target population frame- convenience, accessibility and costs. However, student subjects can lower
data quality and the generalizability of the findings regarding a specific defined target population. Looking at the literature
suggests that in many situations, the sample frame decision should be determined by the representativeness criteria. A studys
theoretical scope and selected data collection method directly affect sample frame decisions. Compromising the data quality of
any research endeavor will subsequently and negatively affect the development of constructs and scale measurements, as well
as the reliability of empirical findings and literature contributions.
To identify and track the trends of how student sample frames are currently being employed in research, we conducted a review
of articles published in four high-quality marketing journals for the years 2009-2011 (Journal of the Academy of Marketing
Sciences [JAMS], Journal of Consumer Research [JCR], Journal of Business Research [JBR] and Journal of Marketing [JM]).
Using selected evaluative criteria, we analyzed each article published during this three-year period to determine the research
methods and sample frame choices used by researchers. In total, we reviewed 1,090 articles (148 from JAMS, 224 from JCR,
567 from JBR and 151 from JM). Of the 1,090 articles reviewed, 736 articles contained studies with student or non-student
samples, or both. Articles including both student and non-student samples were excluded for claritys sake, leaving a total of
627 articles. Analysis of trends in these four high-quality marketing journals provides preliminary support for the objectives of
this research. For instance, across the four journals, 41% of the articles containing student subjects found support for hypotheses
compared to only 25% of articles containing non-student subjects ( = .023, two-tailed t-test). Researchers also seem
significantly less likely to recognize student subjects as a potential limitation to research, with only 22% of studies utilizing
student subjects (n=228) recognizing students could impact the results ( = .000, two-tailed t-test). Further, researchers offer
incentives to 65% of student subjects, while only providing 17% of non-student subjects with incentives ( = .000, two-tailed
t-test), a practice that could also adversely impact data quality.
With the preliminary insight generated from this review of trends in four high-quality marketing journals, the next steps will
be to conduct empirical research to determine how student versus non-student sample choices impact data quality, research
outcomes and the condition under which a sample population can represent a defined target population. We will be conducting
empirical research in the domain of restaurant quality to investigate our research questions. Eating out is a practice both students
and non-students should have experience with, however, restaurant quality also affords us the flexibility to investigate the
differences between students and non-students through the type of restaurant utilized. Thus, we expect to find differences in
the levels of data quality generated by students versus non-students, as well as determine some boundary conditions for when
students can meaningfully represent non-students.
230
CO-CREATION AS A RESEARCH METHOD IN B2C NEW PRODUCT DEVELOPMENT

Lena Reimers, TU Dortmund University, Germany
ABSTRACT
The traditional way of new product development is slowly becoming a growing challenge for international companies. In
todays transparent times of the World Wide Web, the growing importance of social media and online platforms, terms such
as crowdsourcing, co-creation, user innovation, virtual customer integration and open innovation are becoming increasingly
popular (Tanev et al. 2011, Hopkins 2011). They all characterize the same fundamental issue: the integration of end
consumers in the innovation process. While the integration of customers into the internal innovation process is not entirely
new, the term co-creation goes beyond customers expressing their desires and needs, but rather encourages the consumers to
contribute their own personal creativity and problem-solving capabilities (Prahalad and Ramaswamy 2004). They become cocreators (Fueller 2010). In order to benefit from this wide range of creativity and knowledge of customers, management has
to unseal the innovation process to become a successful player in open innovation (Chesbrough and van Haverbeke 2006).
In this research we illustrate how a co-creation process is successfully implemented into the early stages of the innovation
process. Most important issues are the questions of how to integrate customers into the idea generation and refinement as
well as strategically using their feedback within defined product concepts. Based on a co-creation workshop in a FMCG
company, the aim of this paper is to identify relevant success factors of a full co-creation process through a participatory
observation and focused interviews. Furthermore, we aim to develop managerial implications for B2C companies on where
and how to implement a co-creation process properly.
Results indicate that co-creation plays an important role in the context of market research and traditional ways of including
customers in product development. Co-creation is perceived as a supplementary research method and is most successful in
packaging or design topics. Furthermore, it is crucial for co-creation to be embedded into some sort of online tool, enabling
the customer to playfully approach a new product idea. Concerning the observed co-creation process, six important factors
influencing the co-creation activity could be identified. Depending on the key questions of Who, What, How, Where, How
much and How long, a co-creation process differs in its design and implementation.
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TOWARD A THEORY OF BUBBLE PSYCHOLOGY: CURRENT APPROACHES AND A CONSUMER-LEVEL

EXPLANATION
INTRODUCTION
The rise and fall of investment markets is not a new story. Spilling across time from rampant speculation on tulip bulbs in
17th century Holland to the recent collapse of the US housing market starting in 2007, it has been quipped that speculation
and bubbles are eternal, only the object varies (Lybeck 2011, p. 122). Still, the rapid ascension and precipitous fall of
investment markets can be a catastrophic force with enormous societal consequences and costs.
For the purpose of this work, a market bubble is defined as an unsustainable and speculative rise in market valuation for
assets unmoored from the likely long-term value of the assets (Kindleberger and Aliber 2011). Taking the most recent
financial bubbles as examples, the societal response to crashes follows a rather formulaic process. Following the crash
resulting from the still ongoing subprime housing crisis, regulators again responded by correcting the flawed institutions
and practices within derivatives trading and lending practices that lead to the crisis and (unsuccessfully) prosecuting key
culprits such as Angelo Mozillo of Countrywide Financial and Joseph Cazzano of AIG.
As has become common practice in the crashes following such bubbles, a few substantive considerations that are easily
visible and more easily regulated are trumpeted as the causes (e.g., poor accounting practices, poor risk management). As
final step in the societal response, Machiavellian culprits are paraded around as an exercise in attributing the crisis to the illconceived actions of a few abnormal individuals and organizations. The ritual of causes, culprits, and regulation allows the
marketplace to move on with business as usual.
However, this ritualized cycle does little to address the question of what makes consumers repeatedly vulnerable to types of
bubble-building behavior frequently described as ignorant or speculative. Similarly, the cycle of causes, culprits, and
regulation fails to address systematic consumer susceptibilities that aggregate to form market bubbles. In the modern-day
investment marketplace, many of the major actors are consumers. Investment bankers, securities analysts, executives, and
individual investors consume financial securities to meet differing objectives. What role do all of these consumers play in
building market bubbles that inevitably crash? The purpose of this current work is to integrate insights from construal level
theory (Liberman and Trope 1998; Trope and Liberman 2010), regulatory-focus theory (Higgins 1997), and diffusion of
innovations theory (Rogers 1982) to explain how individual-level consumer psychology influences consumer behavior that
can lead to market bubbles and their inevitable crashes.
RISK SENSITIVITY, EUPHORIA, AND CONSTRUALS
In the case of bubble-building behavior, consumers frequently display a startling insensitivity to historical and current
information about risk. For example, in the midst of Enrons sharp rise, financial analysts were so enamored with the
immediacy of gains that they discounted the probability of future losses to a nearly imperceptible level. During the housing
bubble, as long as prices continued to rise, sophisticated institutional consumers such as securities traders and average
consumers such as sub-prime mortgage holders acted as though they were blinded by the tangibility of immediate gains to
considerations of how much could be lost in a reversal of fortunes. In short, the immediacy of sizeable gains appeared to
overwhelm sensitivities to loss contrary to the general predictions of Kahneman and Tversky (1979) and other conceptions of
consumers as rational or risk-averse actors in the marketplace.
Referred to as euphoria by economists, purchasers of assets such as sub-prime mortgages and Enron stock speculated on a
continuing upwards rise in the value of the asset even when there was no demonstrable change in the anticipated uses or longterm demand for the asset or security (Kindleberger and Aliber 2011). At the very least, episodes of euphoria and the
associated risk-insensitivity call into serious question the assumption of whether consumers can be reasonably treated as
rational, long-run focused, and utility maximizing automatons that respond in a consistent, predictable manner to market
forces. Episodes of euphoria and risk-insensitivity are evidence that consumers are far more complex. Consumers are
agents of disequilibrium in the marketplace because they respond to market forces far more heterogeneously and
unpredictably than they would if they were always rational and utility maximizing (Bagozzi 2000). However, if one relaxes
these assumptions, the door opens to evaluating how consumers actually behave and what psychological mechanisms are at
work when they suspend their normal risk-aversion in times of euphoria.
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The importance of understanding these mechanisms and the actual bubble-building behavior of consumers is underscored by
the impoverished view of the consumer (Bagozzi 2000) influencing societal responses to and methods for preventing market
bubbles. If these assumptions about risk-aversion are systematically violated by an overpowering effect of immediate gains,
current market systems and regulations resulting from this perspective would be expected to fail in understanding and
preventing negative outcomes resulting from risk-seeking consumer behavior that builds the momentum of market bubbles.
Alternatively, if the starting point of analysis is that consumers are constrained in their capacity for cognition and consistently
struggle in their analysis of long-term effects, the expectation is clear that consumers will adopt decision-strategies diverging
drastically from the gold-standard of long-run focused, utility maximizing decision-making (Bettman, Luce, and Payne
1998). In pursuing a variety of goals (only one of which is utility maximization), consumers use decision-making strategies to
accomplish goals including minimizing the cognitive effort required for the decision, minimizing the experience of negative
emotion while making the decision, or maximizing the ease with which a decision can be justified (Bettman et al. 1998, p.
192). To date, Kahneman and Tversky (1979) present one of the strongest examples of a series of consumer decision-making
criteria that apparently violate rational utility-maximization. In their Prospect Theory, Kahneman and Tversky (1979)
illustrate that consumers form construals of events as either gains or losses and respond more sensitively to the possibility of
losses than prospect of gains (e.g., risk-aversion). This over-sensitivity to risk should, in most cases, protect consumers from
participating in bubble-building behavior. But, the intriguing question remains- why do consumers reverse their normal
aversion to risk/losses and engage in bubble-building behavior?
Cognitive construals of an event or situation are not solely construed as gains or losses. A more basic construal is that of
psychological distance and, more specifically, temporal distance (Liberman and Trope 1998; Trope and Liberman 2003). A
consumers perceived temporal distance to an event or situation determines whether the cognitive construal of the event or
situation will be more abstract or concrete. Resulting when a consumer perceives a situation to be far off, abstract construals
of situation result in a focus on the desirability of an outcome (Liberman and Trope 1998), higher conformity to norms (Eyal,
Liberman, and Trope 2008), and lower subjective probability assessments of the situation occurring (Wakslak and Trope
2009). Resulting when a consumer perceives a situation to be near at hand, concrete construals of a situation result in a focus
on the feasibility of an outcome (Liberman and Trope 1998), lower conformity to norms (Eyal et al. 2008), and higher
subjective probability assessments of the situation occurring (Wakslak and Trope 2009). More generally, abstract construals
connect to the why of pursuing a goal (rationale) while concrete construals connect to the how of pursuing a goal
(means) (Trope and Liberman 2010). In the midst of a bubble with prices rapidly rising, consumers are likely to construe the
immediacy of gains very concretely. In turn, this concrete construal has the potential to: 1) exclude thoughts on the
desirability of taking on such risks; 2) increase subjective probability assessments of achieving a gain; and 3) reduce
conformity to market norms of risk-aversion. At the same time, consumers are likely to construe the possibility of losses in
the future very abstractly. This abstract construal has the potential to 1) exclude thoughts on the means of avoiding such a
loss while 2) decreasing subjective probability assessments of a future loss. For the purposes of developing a theory of
bubble-building consumer behavior, we propose that the concrete and abstract construals resulting from consumers
perceptions of temporal distance dominate the effects of gain and loss framing (Kahneman and Tversky 1979) and result in
reversals of normal risk-aversion.
CONSTRUAL LEVELS, REGULATORY FOCUS AND DIFFUSION
While the effects of concrete and abstract construals offer an explanation for why consumers suspend their normal risksensitivity in the midst of a market bubble, a more extended framework is needed to connect the consumer-level phenomena
with the pattern and aggregation of consumer behaviors that would lead to a market bubble and crash. The rising pattern of
price and consumer participation in market bubbles shares a striking similarity to the diffusion of innovations model proposed
by Rogers (1982) which he directly related to the consumer-level phenomena of adoption.
When considered as a general model for the diffusion of ideas, increasing perceived asset value (an idea) diffuses to new
consumers to build up a pricing bubble. As more consumers adopt the perspective of increasing asset value, the pace of
price increase accelerates (steeper curve) until the adoption begins to slow. To explain the actual pattern of adoption, we
posit that the chronic regulatory focus (Higgins 1997, 1998) of consumers plays a significant role in the pattern of consumerlevel adoption and market-level diffusion. Regulatory focus refers to an individuals tendency to pursue either promotion
(approach) or prevention (avoidance) goals. Connecting this to gain and loss construals mentioned earlier, promotion goals
involve pursuing gains while promotion goals involve avoiding losses (Idson, Liberman, and Higgins 2000). Connecting
promotion and prevention focus to concrete and abstract construals, promotion focus tends to relate to more temporally
233
distant, abstract construals while prevention focus tends to relate to temporally closer, more concrete construals (Pennington
and Roese 2003).
Emerging out of these connections, consumers can be segregated by their relatively chronic regulatory focus (promotion or
prevention) to establish an expected pattern of consumer adoption of bubble-building behavior and how that aggregates to the
observed market-level phenomena. The earliest group of adopters for the perspective of increasing asset values would have
the highest promotion focus. These high promotion-focused consumers would construct abstract construals of the desirability
of longer-term gains from asset appreciation. At early stages of adoption, the intensity of desire to purchase for high
promotion focus consumers would actually be lower than following cohorts because their highly abstract construal of the
situation involves lower subjective probability assessments of gain and less means-oriented beliefs (Wakslak and Trope 2009;
Liberman and Trope 1998). Moderately promotion-focused consumers would be the second group of adopters for the
perspective of increasing asset value. With the substantially increased number of adoptions in this cohort, the pace of price
increase begins to accelerate as construals become more mixed (abstract and concrete) when progressively less promotionfocused consumers adopt the perspective of increasing asset value and enter the market as buyers. Accordingly, any increase
in buyers for specific items (if supply is fixed or only slowly increasing) in the market tends to drive prices higher for the
specific items whether they are houses, gold, or investment securities.
Moving to the third cohort, the immediacy of gains available from the increasing price of the assets along with a stronger
inclination to conformity (Zhang, Higgins, and Chen 2011) begins to push moderately prevention-focused consumers into
adopting the perspective of increasing asset value. With the timeline to positive return on investment becoming shorter as the
pace of price increases accelerates, consumer construals become far more concrete resulting in increasingly higher subjective
probability assessments of gain and more purchase-oriented beliefs (Wakslak and Trope 2009; Liberman and Trope 1998).
This results in even further acceleration of the price increase even while the actual pace of adoption for their perspective of
increasing asset value begins to slow. In the final cohort of adopters, high prevention-focused consumers adopt the
perspective of increasing asset value most weakly of all the cohorts as they experience a mismatch between their strong
regulatory focus of prevention and adopting a potentially risky gain goal (Lee, Keller, and Sternthal 2010). The pace of price
increases slows, stalls, and, without another cohort of adopters to prop up the inflated price, begins to crash as consumers
begin to apply concrete construals of risk avoidance.
CONCLUSION
By integrating construal level theory (Trope and Liberman 2010), regulatory focus theory (Higgins 1997), and diffusion of
innovations theory (Rogers 1982), this work offers one possible consumer-level explanation of how basic cognitive
representations and regulatory predispositions can interact across heterogeneous consumer populations to create market
bubbles. Moving well beyond traditional societal responses of easily identifiable causes, corrupt culprits, and reform of
flawed institutions, a theory of consumer bubble-building behavior offers the potential for understanding generally why
bubbles occur rather than focusing on specific bubbles such as dot-com bubble or the subprime housing bubble.
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235
SUBJECT TO INTERPRETATION: INDIVIDUAL MANAGERS CONCEPTS OF CONSUMERS DURING NPD

Sarah J.S. Wilner, Wilfrid Laurier University, Canada
ABSTRACT
The idea that discerning and responding to the needs and wants of consumers is essential for sustainable firm performance is
a cornerstone of marketing thought and theory. However, despite copious concern with the relationships that consumers have
with companies (Bhattacharya and Sen 2003) and brands (cf. Fournier 1998), to date there has been little investigation of the
reverse: how producers relate to their targeted consumers. In the firm context, the consumer is primarily conceptual and
managers learn about consumers through research findings, in which they are sometimes rendered as a persona or character.
The study described herein asks, how do individual members of product development teams conceive of their targeted
consumer during the product development process? Interweaving employee and firm-level conceptualizations of customer
orientation (CO), I investigate individual managers and their interactions with target consumers via, for example: research
reports; pictorial representations, videos, focus group observation and/or interviews during new product development (NPD).
The findings presented here are drawn from empirical data gathered during an 18-month ethnographic study of five Fortune
500 consumer products firms NPD processes. Organizations were theoretically sampled (Glaser and Strauss 1967) to include
slow- and fast-moving industries; radical and incremental innovation, low and high product complexity and both products
and services. Because each firm was a complex multinational corporation, key informants were asked to select a focal
product to speak with me about. Snowball sampling (Atkinson and Flint 2004) within the organization provided additional
informants who also worked on the same project. Informants were selected if they were contributing members of NPD teams,
regardless of their function (e.g. marketing, R&D, product planning, engineering).
In addition to participant-observation, 39 semi-structured depth interviews were conducted with 32 informants. Data was
analyzed from a symbolic interactionist (Solomon 1983; Prus 1996) perspective. Symbolic interactionism (SI) is an ideal lens
for this analysis because it foregrounds three important constructs relevant to this investigation: the role of others in
constructing meaning and providing context; the centrality of the individual in sensemaking; and the ever-evolving
negotiation of subjective meaning. SI emphasizes two concepts which are integral to this analysis: inter-subjectivity and roletaking. That is, when product developers engage in the interpretation of consumers behaviors, they inevitably rely upon the
shared understanding or mutual expectations of those who broadly share a common culture. In addition, they have
intersubjective understanding of both their functions and their organizations norms and expectations.
Analysis of the data revealed that members of NPD teams relate to the consumers for whom they develop based on their
readings of the consumer as a symbolic object, influenced by the salience of roles and orientations they develop towards the
consumer in the course of a project. Managers who foregrounded their role within the organization, i.e. as a decision-maker
or representative of a functional area, had different interpretations of consumers needs than those who allowed their personal
experiences (e.g. as consumer) to be salient. Similarly, individuals varied on the emotional interpersonal distance they
maintained from the targeted consumer. On one end of a continuum of responses, product developers actively worked to get
closer to the targeted consumer in order to discern their desires, for example, by conducting thought experiments or spending
time outside of the office in the contexts that the target might occupy. On the other end of that continuum, managers
distanced themselvesphysically and emotionallyfrom the consumer and were, for example, more likely to be satisfied
with received definitions and conclusions about consumers. These two dimensionsrole orientation and interpersonal
distancecombined, resulted in very different relationships among product developers and their target consumer.
Accounting for managers various experiences and expectations is vital, because they can lead to two seemingly different yet
simultaneous outcomes: objectivity and empathy. Objectivity is presumed in believing that others see what you see.
However, shared understanding and expectations makes it possible for managers to engage with consumers by walking in
their shoes. Therefore each manager, while engaged in sensemaking through shared social systems, also holds a host of
individual experiences and roles which can shift their interpretations of consumers. Individual predilections, training and/or
beliefs, among other factors, can activate and foreground the objective or the empathetic, and thus shift perceptions of the
consumer and relevant solutions for him or her. This studys contribution lies in examining the role of both individual
interpretation and intersubjective sensemaking; activities assumed to be governed by firm norms. Avenues for future research
include optimal NPD team composition; the role of interpretation in conflict and contestation and the influence of
intersubjectivity on the commissioning and interpretation of consumer research (particularly in the context of innovation).
236
EQUITY EXCHANGE THEORY: AN EXPLANATION OF PROSOCIAL CONSUMPTION

Spencer M. Ross, University of Massachusetts Amherst, USA
ABSTRACT
Some products and services offered in marketing are prosocial, forcing consumers to consider their prosocial attributes in the
decision making process. Definitions of prosocial consumption include a variety of complex issues beyond those focused on
by popular culture (Devinney, Auger, and Eckhardt 2010; Peloza and Shang 2011). For marketers, these prosocial issues may
broadly fall under three macro level pillars of strategic sustainability: economic, social, and environmental (Sheth, Sethia, and
Srinivas 2011). However, the broad complexity and heterogeneity of issues within these sustainability pillars implies
consumers must vary in sensitivity to prosocial issues when making consumption choices. Whether consumers consume
prosocially or not has significant implications on both individual consumer and collective well-being (Mick 2006). I propose
that equity theory (Adams 1963; 1965), a theoretical framework established in the management literature, will help explain
when, why, and how consumers make prosocial consumption choices.
While marketing exchange facilitates greater prosocial consumption, little is known of why consumers fail to engage in both
pro-individual and pro-social consumption behaviors. Prior research on prosocial consumption has been met with mixed
success, focusing mostly on product attributes in conjunction with information-processing and reasoned action explanations
of behavior (Brinkmann and Peattie 2008; Ehrich and Irwin 2005; Luchs et al. 2010; White, MacDonnell, and Ellard 2012).
These reasoned action approaches to explaining prosocial consumption are often lost in the context of marketing exchange by
assuming that consumers are always rational in their decision-making processes. In particular, the reasoned action approach
creates an intention gap between the consumers intent-to-purchase and the consumers actual purchase behavior (De
Pelsmacker, Driesen, and Rayp 2005). With respect to prosocial consumption, this gap is even wider, since consumers wish
to be seen as ethical, caring, and altruisticsometimes contrary to, or inconsistent with, actual behaviors (Papaoikonomou,
Ryan, and Ginieis 2011). The intention gap posed by the theory of planned behavior and suggested for further research by
Carrington, Neville, and Whitwell (2010) insufficiently explains why consumers say one thing and do another when it comes
to prosocial consumption (Prothero et al. 2011). If business is to make more efficient and effective investments in
sustainability marketing, then an alternate, consumer-centric framework to prosocial consumption is necessary. However,
although understanding prosocial decision-making is important, little research has adequately used theory to explain it; this
paper uses marketing exchange theory to create an explanatory framework of prosocial consumer decision-making.
This paper integrates equity theory with traditional marketing exchange theory (Bagozzi 1975) to provide a theoretical
framework of prosocial consumption. Equity theory (Adams 1963; 1965) explains how justice (fairness) is exchanged within
relationships. In the management context, equity theory explains how employees relate with their employers in terms of
perceived intrinsic and extrinsic outcomes and inputs. Though the marketplace is different from the workplace, many of the
same principles of intrinsic and extrinsic outcomes and inputs are relevant. Sometimes these outcomes (benefits) or inputs are
prosocial, sometimes theyre not. Therefore, equity theory better demonstrates how individuals tradeoff self-interested inputs
and benefits with collective-interested inputs and benefits through the marketplace exchanges of justice. The equity exchange
theory (EET) proposed in this paper uses individual differences to explain these tradeoffs.
237
EMPLOYEE-BRAND OWNERSHIP IN CUSTOMER SERVICE INTERACTIONS

Adam J. Mills, Simon Fraser University, Canada
Anjali S. Bal, Dominican University of California, USA
Kirk A. Plangger, Simon Fraser University, Canada
ABSTRACT
Literature on brand equity in service businesses highlights the centrality and importance of employees in delivering an
organizations brand to its customers. However, most existing research in the area of internal branding takes a managementcentric approach. An emerging body of work on employee branding recognizes that, since employees are at the core of this
concept, a bottom-up approach needs to be taken in exploring service brand delivery in customer service interactions.
This paper joins the discussion of employee branding by proposing the concept of brand ownership and presenting a
conceptual model of employee-brand ownership as related to service interactions. Findings, based on analysis of interviews
with restaurant servers, suggest that employee brand ownership, unlike prior conceptualizations of brand internalization, is
not constant, and varies depending on the nature of the employees service interaction. A model of employee-brand
ownership is proposed to present and explore four different degrees of ownership and to articulate boundary conditions
between these degrees.
238
THE ROLES OF MASS MEDIA AND PERSONAL INFORMATION SOURCES ON ADOPTION OF PANDEMIC
VACCINES
Sanjit Sengupta, San Francisco State University, USA
Hui-Ming (Deanna) Wang, San Francisco State University, USA
INTRODUCTION
In June 2009 the World Health Organization (WHO) declared the H1N1 (swine flu) virus was a global pandemic caused by a
highly contagious new combination of bird, pig and human viruses. Eighty percent of the victims were under 65 years and
30% had no underlying health risk factors (Dawood et al 2012). Some of the dramatic media stories focused on young,
healthy people succumbing to the H1N1 virus (CBS 60 Minutes 2009). Others reviewed the history of influenza pandemics
from the previous century. In 1976, following a swine flu infection in Fort Dix, New Jersey, the first mass influenza virus
vaccination was developed. The mass vaccination program that followed exposed a serious side effect called Guillain-Barre
syndrome, an acute disorder that can cause paralysis and death (Wang and Palese 2009). All of these reports elevated public
concerns about the serious threat of the 2009 H1N1 virus and the safety of the vaccine developed to prevent its spread.
Concerns of the US public were documented in several national polls. Between July October 2009, when the supply of
vaccine was limited, only about half the US public said they expected to receive the vaccine while a higher percentage said
they expected to get their children vaccinated. In making their decision, some people appeared to make a trade-off between
the perceived risk of the virus and the perceived risk of the vaccine (ABC News/Washington Post Poll 2009).
Deaths from H1N1 began to taper off in 2010 with the WHO declaring the end of the pandemic in August 2010. Critics
claimed the WHO had spread confusion and frightened people unnecessarily. On the other hand, updated estimates of the
number of people worldwide that died in the pandemic vary from 18,500 to 280,000 (Naik 2012). From a social marketing
perspective, an important question is, how to design a communications approach to minimize the number of deaths in future
pandemics. Providing timely, accurate information about the seriousness of the threat and the availability of a safe, effective
vaccine through appropriate information channels could motivate individuals to get vaccinated and stay healthy during future
pandemics.
We collected survey data from 321 adults in a large western US city during November 2009 by mall and street intercepts. We
analyzed their beliefs, attitudes and intentions with regard to adoption of the H1N1 vaccine. We developed and tested two
alternative models on the role of mass media and personal information sources on the attitude towards the disease and the
intention to get vaccinated. The purpose of testing these models is to draw implications on how mass media and personal
information sources could be better utilized in future pandemics.
MODEL DEVELOPMENT
Research in behavioral choice theory posits that an individuals intention to act is the single best predictor of behavior
(Davies et al 2008). The intention to act is, in turn, influenced by attitudes towards performing that behavior, which is, in
turn, influenced by beliefs (Fishbein and Ajsen 1975). The Health Belief Model (HBM), in this tradition, posits that the
likelihood of an individual engaging in a preventive healthcare action, like getting vaccinated, is a function of the degree of
threat perceived by the person and a benefits-to-cost analysis of the preventive actions (Janz and Becker 1984). Individual
differences (e.g. demographics), cues to action (e.g. mass-media and personal sources of information), and past behavior
affect the perceived seriousness of the threat of the disease (attitude) which affects the intention to get vaccinated. Such HBM
models have received empirical support in the literature (Jayanti and Burns 1998).
Independent of behavioral choice theory and healthcare research, the theory of diffusion of innovations and media-effects
research has looked at the communication mechanisms by which information sources affect peoples attitudes, intentions and
behavior. Media-effects research recognizes differences in credibility between personal and mass media information sources
and their corresponding impacts on attitudes, intentions and behavior (e.g., Lee, Salman and Paek 2007). Rogers (1962)
categorized segments of a population as innovators, early adopters, early majority, late majority and laggards based on their
timing of adoption of innovations. Katz and Lazarsfeld (1955) proposed a two-step flow of communication where mass
media information sources affect the attitudes of opinion leaders who then use personal influence (word-of-mouth) to change
the beliefs, attitudes, intentions and behavior of the rest of the population. Integrating these two research streams, Robertson
239
(1967) suggested that mass-media advertising was more effective in influencing the innovators and early adopters, while
personal word-of-mouth information was more effective in influencing the early majority, late majority and laggards.
An alternative theory is the one-step flow of communication (Bennett and Manheim 2006) which says that society,
technology and individual communication habits have evolved over the past 50-60 years. Television and cable channels have
proliferated, email databases and data mining provide better targeting opportunities, and individuals are more socially
isolated than before. All of these conditions create opportunities for mass messages to be crafted and sent directly to selected
individuals without any social meditation to alter their beliefs, attitudes and behavior.
We wish to test whether mass media and personal information sources act according to the HBM model (they affect attitude
alone, which, in turn affects intention) or whether they operate simultaneously on both attitude (perceived seriousness of the
threat) and intention to get vaccinated. The latter is an important theoretical extension of the Health Belief Model which has
significant implications for social marketing of vaccines to minimize the negative impact of future pandemics.
The baseline (HBM) model we want to test is:
Attitude = f (Credibility of mass media information sources, Credibility of personal information sources, Past behavior,
Demographics)
(1)
Intention = f (Residual of Attitude, Cost-benefit of future behavior, Demographics)
(2)
The alternate model we want to test is:
Attitude = f (Credibility of mass media information sources, Credibility of personal information sources, Past behavior,
Demographics)
(1)
Intention = f (Residual of Attitude, Credibility of mass media information sources, Credibility of personal information
sources, Cost-benefit of future behavior, Demographics)
(3)
A one-page survey questionnaire was administered in person to adults in two shopping malls and three different
neighborhoods of a large, west coast US city. Qualified respondents were those who either lived or worked in the city. Over
10 days in November 2009, 330 responses were collected, of which 321 were usable. Although a convenience sample,
demographics of the sample closely matched demographics of the city published by the US census. Since respondent time
constraints limit the amount of information that can be collected in an in-person survey, variables were mostly single-item
Likert scales. Attitude (perceived seriousness of the threat) was operationalized by, On a scale of 1-10 how concerned are
you about getting H1N1/Swine Flu?. Past behavior was captured by, Did you take the flu shot last year? (Yes/No). We
had three demographic variables: Age(18-29, 30-44, 45-54, 55-64, 65+), Gender (Male/Female), and number of children at
home. The cost-benefit trade off was captured by, On a scale of 1-10, how confident are you in the safety of the H1N1
vaccine?. Intention to get vaccinated was operationalized by, Are you planning to take the H1N1 vaccine?
(Yes/Maybe/No). Respondents were provided a list of sources and asked, What is your current source of information about
the H1N1 virus and the vaccine? (they could select multiple sources). For any selected source, they were asked to rate the
level of trust they had in that source on a 5-point Likert scale (1=Low trust, 5=High trust). Information sources were
categorized into mass media (government, news media and non-news internet) and personal sources (doctor, school, work
and friends/family). For each of these two categories, a credibility index was created for each respondent by adding the
weighted level of trust across the selected information sources. These indices reflected respondents credibility in mass media
and personal information sources. We use the mean-centered values of the indices in the model estimation.
The first equation in both our models is the same. Since attitude (perceived seriousness of the threat of H1N1) is measured as
a 10-point Likert scale we estimate this using Ordinary Least Squares (OLS) regression. The second equation in both our
models has Intention to get vaccinated as the dependent variable. To tease out the indirect effects of information sources on
the intention variable, the residual value of attitude from the OLS regression is used as an independent variable in the second
equation. Since the intention variable has 3 ordered response categories (Yes/Maybe/No), we estimate it using the ordered
logit model (Kennedy 2003). Results of our HBM Model are presented in Table 1 (Columns 1 and 2) and results of the
alternate model are presented in the same table as Columns 1 and 3. Columns 1 and 2 show support for the HBM Model. As
expected, credibility of personal and mass media information sources affects attitude (perceived seriousness of threat)
(Column 1) and residual of attitude affects intention to get vaccinated (Column 2). In the alternate model (Columns 1 and 3),
240
we allow credibility of mass media and personal information sources to affect both attitude and intention simultaneously.
Credibility of mass media sources has a strong positive impact on attitude (Column 1) but a weak positive impact on
intention (Column 3). However, credibility of personal information sources has a strong positive impact on both attitude
(Column 1) and intention (Column 3). The Pseudo R-square for the Intention equation in Column 3 (0.160) is higher than in
Column 2 (0.125). We also conducted a likelihood ratio test between the two ordered logit models in Columns 2 and 3. The
chi-square statistic is 22.135, which is greater than the critical value 5.99 with two degrees of freedom. Hence, the results
suggest that the alternative model (Columns 1 and 3) is superior to the HBM model (Columns 1 and 2).
IMPLICATIONS
Social marketing takes the view that influencing attitudes, intentions, and behavior can do more to increase the health of a
population than can treatment of illness (Rothschild 1999). Education through timely, and accurate communications
influences knowledge, attitudes, and beliefs in favor of healthy behavioral choices (Rasmuson et al., 1988). Our results show
that mass media and personal information sources are not equally effective in spreading information about the perceived
seriousness of the threat and influencing intention to get vaccinated. We show that personal information sources are more
effective than mass media sources in impacting both attitude and intention. However, personal information sources such as
doctors, co-workers, school administrators, friends and family are scarce resources. Therefore mass media sources
(government, news media, non-news web sites) must be used up front in the campaign to complement the resources of
personal information sources.
This study has all the limitations of cross-sectional surveys. We have found associations among the variables in our models
but causality cannot be inferred. Our variable measures are limited to single items hence reliability cannot be established. Our
sample of respondents is a convenience sample. Despite these limitations, we believe we have found some interesting results
that can help researchers. Future research should improve on the studys limitations and establish more generalizable results.
TABLES
Table 1.
Column 1
DV for OLS: Attitude
(Standardized estimates)
Residual of Attitude
Cost-benefit of future
behavior
Past behavior
.128**
Credibility of personal
.129**
information sources
Credibility of mass media
.118**
sources
Gender
.097*
Age
.063
Number of children at home .123**
R-square/Pseudo R-square
.112
**significant at p<0.05 *significant at p<0.10
Column 2
DV for Ordered Logit:
Intention to get vaccinated
.415**
.169**
Column 3
DV for Ordered Logit:
Intention to get
vaccinated
.443**
.125**
.538**
.316*
.365
.259**
.240
0.125
.272
.247**
.211
.160
REFERENCES
ABC News/Washington Post Poll (2009). Questions About Vaccine Safety Could Impede Swine Flu Efforts. Retrieved from
: abcnews.go.com/images/PollingUnit/1095a4SwineFlu.pdf on December 1, 2012
Ahmed, R., M. B. Oldstone and P. Palese (2007). Protective immunity and susceptibility to infectious diseases: lessons from
the 1918 influenza pandemic. Nature Immunology, 8, 1188-1193.
241
CBS 60 Minutes (2009). Swine Fu: H1N1. Retrieved from http://www.cbsnews.com/video/watch/?id=5394553n on

December 1, 2012.
Center for Desease Control (2009). Use of Influenza A (H1N1) 2009 Monovalent Vaccine. Retrieved from
http://www.cdc.gov/mmwr/preview/mmwrhtml/rr58e0821a1.htm on December 1, 2012.
Dawood, F. S., Iuliano, A. D., Reed, C. et al (2012). Estimated global mortality associated with the first 12 months of 2009
pandemic influenza A H1N1 virus circulation: a modelling study. Lancet 12 (9), 687-695.
Fishbein, M. and Ajzen, (1975). Belief, attitude, intention and behavior: an introduction to theory and research. Reading,
MA: Addison-Wesley.
Janz, N. K., and Becker, M. H. (1984). The Health Belief Model: A Decade Later. Health Education Quarterly, 11
(November), 1-47.
Jayanti, R. K., and Burns, A. C. (1998). The Antecedents of Preventive Healthcare Behavior: An Empirical Study. Journal of
the Academy of Marketing Science, 26 (1), 6-15.
Lee, B., Salmon, C. T., & Paek, H. (2007). The Effects of Information Sources on Consumer Reactions to Direct-ToConsumer (DTC) Prescription Drug Advertising: A Consumer Socialization Approach. Journal of Advertising, 36(1), 107119.
Kennedy, P. (2003).A Guide to Econometrics, 5th ed. Cambridge, MA: MIT Press.
Naik, G. (2012). Flu Pandemics Toll Raised. Wall Street Journal, June 26, A3.
Rasmuson, M. R., Seidel, R.E., Smith, W. A., and Booth, E. M. (1988). Communication for Child Survival. Washington DC:
US Agency for Internationa Development.
Rothschild, M. L. (1999). Carrots, Sticks, and Promises: A Conceptual Framework for the Management of Public Health and
Social Issue Behaviors. Journal of Marketing, 63 (October), 24-37.
SteelFisher, G. K., Robert J. B., Bekheit, M. M. and Lubell, K. (2010). The Publics Response to the 2009 H1N1 Influenza
Pandemic. New England Journal of Medicine, 362(22).
Wang, T. T. and Palese, P. (2009). Unraveling the Mystery of Swine Influenza Virus. Cell, 137, 983-985.
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ALCOHOL WARNING STATEMENT EFFECTIVENESS UNDER DIFFERENT ALCOHOL CATEGORY

CONDITIONS
Wade Jarvis, University of Western Australia
Simone Pettigrew, University of Western Australia
Doina Olaru, University of Western Australia
ABSTRACT
It has been shown that heterogeneity in worded alcohol warning statement effectiveness affects young peoples choice
behaviour. This heterogeneity has been found to be closely aligned to gender differences. In this study, the research is
extended by considering the influence of alcohol category (type) on choice and how this preference influences warning
statement effectiveness. Choice tasks combining different branded alcohol types, alcohol content and warning statements
were presented online as labels. The context was 18-25 year old drinkers in Australia. The results showed that while gender is
a significant covariate for the different latent classes in the data, it doesnt improve overall model fit. Alcohol category
preferences drive choice behaviour and differences exist with regards to how warning statements are processed. With certain
pre-mixed beverages and wine, worded statements in larger font size had significant negative impact on choice. With rum
drinkers, simpler cues of size and the use of the word WARNING in front of the statement had a negative impact on
choice. With beer drinkers, neither statement nor orientation of the statement influenced choice. The results suggest new
warning statements strategies for dealing with heterogeneity in the wider alcohol market.
INTRODUCTION
Alcohol intake levels among young people have been identified as being of particular concern in Australia (Commonwealth
of Australia, 2010) and have resulted in significant recent discussion about possible intervention strategies aimed at this
group (VicHealth, 2009). In the 2007 National Drug Strategy Household Survey, around 40% of 14-19 year olds and 60% of
20-29 year olds reported consuming alcohol at risky or high-risk levels at least once in the previous 12 months (Australian
Institute of Health & Welfare, 2008). Some advocate groups have been campaigning for warning statements on alcohol
packaging to become mandatory, which would bring Australia in line with other countries (Stockwell, 2006).
Assessing effectiveness of warning statements has proved difficult due to the research focus on non-behavioural outcomes,
such as attitude to the message. Also, self-reported assessment of changes in alcohol related outcomes (i.e. drinking less)
from a warning statement intervention have proved difficult to isolate. One novel method for dealing with all of these issues
is to present warning statements within a stated choice methodology. Based on carefully designed experiments aimed at
providing insights on the individual preferences and decision processes, discrete choice modeling has been extensively
applied in marketing, transport, and health economics (Louviere et al., 2000). The paradigm assumes preference for a good or
service is formed and then expressed as a choice between a discrete number of alternatives, based on the highest utility U(i)
provided to the decision maker by the mix of characteristics of that good of service. The utility function depends not only on
characteristics of the product/service, but also on the individuals attitudes and socio-economic characteristics. Discrete
choice models can use either revealed preference (RP), if the choice (and price) are known and the analyst infers what may
have contributed to the selection of the product/service, or stated preference (SP), which implies that the analyst manipulates
the attributes (and price) of the good/service and elicits a choice from the respondent. The surveys typically involve a
sequence of scenarios or games in which respondents are shown a number of alternatives and asked to indicate their choice.
The resulting response provides insights on the trade-offs made by respondents and supports the estimation of a monetary
value (i.e., willingness-to-pay) for each attribute. In food and beverages consumption, choice experiments allow for a realistic
labeling scenario to be presented to respondents, which then enable quantifying the impact of labeling elements (Mueller,
Lockshin & Louviere, 2010). This is one way of capturing cognitive processing of warning statements under the influence of
competing labeling information, such as a brand or information on alcohol content, for example.
In this study, six worded warning statements were presented in a discrete choice experiment along with six visual alcohol
brands from different categories (see Figure 1 for an example of alternative). The design also included price and alcohol-byvolume content, which is mandatory front label information for alcohol products in Australia. Two further design elements of
the worded warning statements were included in the experiment: 1) the size of the wording; and 2) whether the wording was
introduced with WARNING at the front of the statement. All of these separate pieces of labelling information were therefore
presented for four alternatives. Respondents were given a number of choice tasks (nine) with each respondent having to
choose their most preferred option. These options comprised different combinations of the six attributes listed above
243
(Figure 1). The choice tasks were presented online in a random order to an Australian-wide online panel. The recruitment
targeted (the context was) 18-25 year old drinkers in Australia.
Discrete choice experiments are based on deductive models, dissecting the impact of various attributes on the overall
dependent choice variable. These utility parameters have a direct relationship with the choice probability. Attribute levels can
have a positive or negative influence on choice. A negative parameter reduces utility for an offering, while a positive
parameter adds to the utility. In the presence of attributes, any attribute may have no influence on choice. In this study, it is
hypothesised that warning statements would have a negative influence on choice. The warning statement would reduce the
probability of choosing the alcohol beverage through its diminished utility. Assuming heterogeneity in alcohol beverage
choice, the study used a latent-class modelling approach to test for latent classes in the data. Given differences in gender
responses found in prior alcohol research (Andsager, Austin & Pinkleton, 2002; Jarvis & Pettigrew, 2013) and its close link
with alcohol type preference, the study investigated three models:
1. Latent class model with gender as class predictor.
2. Latent class model with no covariates.
3. Latent class model with gender as covariate.
All three models were compared for model fit and the warning statement results compared. The attributes for the study are
summarised in Table 1.
LITERATURE REVIEW
The basic premise of including warning statements on product labelling is that the information presented at the point of
purchase or time of use will provide heightened perceptual awareness, comprehension, and subsequent behaviour change
relating to the message content (Grunert & Wills, 2007; Wilkinson & Room, 2009; Wogalter & Laughery, 1996). It has not
been established whether warning statements influence beliefs and attitudes at the initial point of purchase, or whether the
heightened perceptual awareness and processing of the message over time leads to better decisions at future point of purchase
situations. Mixed results have been obtained in numerous studies examining the effectiveness of alcohol warning statements
in changing alcohol purchase behaviour (Greenfield, Graves & Kaskutas, 1999; Kaskutas & Greenfield, 1992; MacKinnon,
Nohre, Pentz & Stacy, 2000; Malouff, Schutte, Wiener, Branazio & Fish, 1993). Some United States longitudinal studies
have found that alcohol warning statements have no effect on intended alcohol-related behaviour (Mackinnon et al., 2000),
while others have found moderate effects on consumption and therefore purchase (Greenfield et al., 1999). All studies used
self-reported intended consumption measures.
The lack of analysis of behaviour has likely been the result of the methodological difficulties associated with measuring
warning statements using a reliable measure for behaviour. There is thus a need to identify appropriate means of investigating
the effects of warning statements on behaviour (Wilkinson and Room, 2009). Stated choice experiments have the potential to
achieve this objective and they have been shown to approximate actual purchase decisions for a wide range of product
categories (Louviere, Hensher & Swait, 2000). Recent studies have shown that choice experiments using labelling contexts
provide for valid measures of the impact of such visual elements within the label (Mueller et al., 2010). This allows for better
approximation of the impact of brand visuals, for example, on choice. It also allows for an understanding of the influence
brands may have on the overall choice probability and in negating the potential effects of a warning statement.
In regards to choice studies incorporating warning aspects, three studies have emerged. Lacanilao, Cash and Adamowicz
(2011) studied the effects of fat warnings on snack foods in the context of a potential tax imposed on high fat products in
Canada. Using a latent class approach, their results showed heterogeneity of consumer response. One of the three latent
classes in the data heeded the warning message (23%), with a strong negative effect on choice. One class became more
sensitive to price when a warning message (39%) was present, but were already healthy snack buyers, while in a third class
(38%) the warning had no influence. Their results showed an interesting phenomena whereby a warning message merely
stating that the product is taxed for its high fat content (and no price increase) is sufficient in discouraging consumption (via
purchase) of the product for heavier consuming groups.
Hoek, Wong, Gendall, Louviere and Cong (2011) conducted a best-worst experiment on the cigarette market in New Zealand
using warning statements, warning graphics, brand name, and graphics, with different size manipulations. Their results
showed that options that featured more branding elements were still preferred, even when they also featured a 50% (size)
health warning, but were significantly less likely to be chosen when they featured a large (75%) warning.
244
Jarvis and Pettigrew (2013) investigated the effect of six worded warning statements relating to driving and health on young
people in the presence of brands and alcohol content. They showed that the negatively-framed health-related warning
statement impacted negatively three of five latent classes. This finding suggested that a negative message related to health
had the greatest impact on reducing utility for an alcohol beverage. However, with one class, no impact was identified.
An interesting finding was the positive impact on two of the classes of a positively worded statement around driving (Make
sure you are OK to drive). This was found significant in a class of heavy female drinkers and in a moderate drinking class.
The results suggested that some females undertake greater processing of warning statements than males and that moderate
drinkers use warning statements to reinforce moderate drinking (choosing low alcohol levels).
In summary, the snack food and alcohol studies showed that groups react differently to warning labels, while the cigarette
study revealed the impact of warning wording and graphical size orientation in relation to brand effects. However, only one
study (Jarvis and Pettigrew, 2013) used more than one warning statement.
The present study used a stated choice experiment to assess the effects on youths alcohol purchase decisions of warning
statements in the context of information relating to alcohol type. The first research objective was to provide an empirical
assessment of whether alcohol type provides a better driver of alcohol choice than the covariate of gender. In line with
Lacanilao et al.s (2011) findings, the second research objective was to observe the patterns of these preferences across a
number of different worded warning statements, statement size and the use of WARNING as part of the statement. Given
these objectives, two specific propositions were considered:
P1: Alcohol type explains alcohol choice heterogeneity greater than gender differences.
(a) Different types of alcohol warning statements, as noted in the literature, will have varying effects.
P2: Given P1 and the previous literature, there will be heterogeneity in cross-category effects of the different types
of alcohol warnings.
The population for the study was defined as 18-25 year old current drinkers of pre-mixed alcoholic beverages in Australia.
An inclusion criterion was that respondents had purchased a packaged alcoholic beverage within the four weeks prior to the
survey. The type of alcoholic beverage was selected based on those popular among young people (Doran, Shakeshaft &
Petrie, 2006). The minimum age of 18 reflects the current legal alcohol purchase age in Australia.
The sample was sourced from a web panel provider and included equal proportional representation of two age categories (1821 years; 22-25 years), gender, and geographical representation for state population distribution and urbanisation (city; rural).
Although this approach means that sample representativeness cannot be assumed, the aim was to test the relative effects
rather than estimating aggregate population parameters. As such, the sample was considered appropriate for the study
purposes.
METHOD
P1 was assessed by assuming group (class) differences in the choice data related to alcohol type and to test this against
gender, as both a class predictor and as a class covariate. Because a-prior research had shown gender to have a strong effect
on alcohol heterogeneity and warning statement differences (Jarvis & Pettigrew, 2013), Three models were tested. The first
was to specify the model with two classes, based on gender. This would show any initial differences in alcohol preference
and warning statement effectiveness. The second model would allow for a complete latent class model based on attribute
choice differences only. The third model would include gender as a covariate, both for testing of explanation of the choice
classes and as an improvement in the model. Comparing model 2 and 3 provides for some evidence in support of P1. To
allow for class assessment in discrete choice modelling, the finite mixture approach in discrete choice modelling has been
shown to be one way of capturing and understanding preference heterogeneity, through the endogenous assignment of
individuals to classes with identical preferences and the estimation of the probability of membership to each class (latent
class), along with the respective class-specific parameters (Scarpa & Thiene, 2005). This is usually referred to as a method of
latent class (LC) choice modelling. This modelling approach has as its basis the multinomial logit model (MNL) for
modelling individual choice probabilities (Ben-Akiva & Lerman, 1985). Standard MNLs suffer from the assumption of
independent errors and therefore independence of irrelevant alternatives (IIA) property. LC modelling is part of a range of
flexible choice models that relax this assumption. In this study, it was assumed that LC would be more appropriate than other
flexible models because two or more groups (segments) of respondents are anticipated to have similar preferences for
particular alcohol types. In the present study, the optimum number of classes with homogenous preferences and their
parameter estimates for the three attributes under investigation were investigated via model 2 above. This was compared with
245
the R2 estimates from model 3. Using Latent Gold statistical software (Vermunt & Magidson, 2005), the parameter estimates
and standard errors of the estimates within each class and the across-class parameters were compared via the Wald statistic
(for basic and advanced model specifications see Vermunt & Magidson, 2005).
Once the optimum model from P1 was established, a comparison of the relevant statistics was made in regards to the
variation in the type and level of effectiveness for any warning statement effects.
As shown in Table 1, the experiment was developed comprising four attributes (statement, alcohol type, alcohol content, and
price) with six levels in each and two attributes (size and WARNING) with two levels. Nine choice tasks were provided with
four alternatives in each, with one of these being a none of these option. A pilot test was conducted on university students
in the same age bracket to develop prior parameters, which were then used for obtaining a GA-optimised experimental design
(Olaru, Smith, and Wang, 2011). To avoid order/presentation bias, all respondents received the choice tasks in a randomized
order. The main study DCE was presented to an online panel stipulated at 200 respondents, resulting in information on 1,800
choices for analysis.
RESULTS
Model 1 - Latent Class Model with Gender as Class Predictor
The model was developed merely to highlight potential differences between gender groups. The model with the two classes
had a low adjusted R2 of 0.165. The results are shown in Table 2. The table shows parameter estimates and z-values for all
attribute levels in the two classes. As shown by the p-value column, all attributes were significant except for warning
statement size (p = 0.72). Class 1 (Males) had a significantly higher preference for beer, while class 2 (Females) had strong
preference for pre-mixed vodka alcohol types. Class 1 had strong utility for the highest alcohol content (7%), while Class 2
had the strongest utility for the standard 4% alcohol content in the Australian industry. In regard to the warning statements,
Class 1 was negatively impacted by the inclusion of WARNING in front of the messages, but this was not the case for Class
2. For Class 1, the positively framed message around driving (Make sure you are OK to drive) had significant positive
utility on choice, while the negatively framed health related messages (Every drink of alcohol harms the brain) had the only
other significant z-value, which was negative. This is in line with Jarvis & Pettigrew (2013) who showed that positively
framed messages around driving had a positive impact on choice, whereas negatively framed messages about health had the
greatest deterrent on choice. With Class 2 the positively framed driving messages had the same effect as in Class 1, but the
peer based positive message (Look after your mates) had a negative effect on choice. The results therefore showed
differences in how Males (Class 1) and Females (Class 2) process statements under stated choice conditions.
Model 2 - Latent Class Model with no Covariates
A three-class model had the highest increase in R2 (0.375) which is a good statistical fit for a choice model (Hensher et al.,
2005) as well as a low log-likelihood of 1,768.82. All attributes were significant in the model. The results are shown in
Table 3.
Classes 1 and 3 had strong statistical fits (0.6358 and 0.3307 respectively). Class 1 represented 41% of the sample with strong
preference for pre-mixed vodka and wine (attribute levels 4 and 6 highlighted). Class 2 represented 35% of the sample and
had preference for pre-mixed rum and cola. Class 3 represented 24% of the sample and had preference for beer. Worded
warning statements impacted only Class 1 and these were the two peer based messages. These both had a negative impact on
choice. With Class 1, a larger size (14 font) also had a negative impact on choice. For Class 2, simpler cues of size and
having WARNING in the message had a significant negative impact on choice. With Class 3 beer drinkers, no warning
statement words or orientations affected their choice.
Model 3 - Latent Class Model with Gender as Covariate
The three class model with gender covariate did not improve overall model fit with model 2 (R2 = 0.365 versus 0.375), but
the covariate was significant within the model, explaining the class differences. Class 1 increased in size to 44% of the
sample and included a significant 90% female membership. This class also improved model fit to R2 = 0.528. This class
maintained strong preference for vodka based pre-mix and wine. Class 2 improved model fit over Class 2 in model 2, but did
reduce in size to 31% of the sample. This class included 68% male membership, which was again significant. This class
maintained strong preference for rum based alcohol, but because of the female membership also preference towards the
246
vodka based alcohol type (z-value 1.9591). Class 3 represented 24% of the sample and maintained its strong preference for
beer. This class included 63% male membership which was significant. The results are shown in Table 4.
All attributes in model 3 were significant. Alcohol type had the highest impact followed by alcohol content, the warning
statement and price. When comparing differences between the three classes, alcohol type was significant at the 0.001 level.
Warning statement and price were significant at the 0.05 level and alcohol content was significant at the 0.1 level. The
warning statement size and the wording were not significant when comparing the three classes.
Class 1 in this model shows sensitivity to the peer based warning statements, which had a negative impact on choice. With
Class 2, no warning statements were significant, except for the positively framed driving messages. However, for Class 2, the
size and having WARNING in front of the message had a negative impact on choice. With Class 3, the status-quo maintained
of no impact from any statements or orientation of the statement.
DISCUSSION AND CONCLUSION
Alcohol type explained differences in choices and warning statements worked differently under these different preference
conditions. While gender is closely aligned to preference and significant across all three classes, the type of alcohol was a
slightly stronger predictor of choices. This may be because there was not exactly 100% preference for a particular type of
drink by any one gender. The results gave support for P1, as the type of alcohol drives class differences. With P1a, there were
significant differences between the three classes with regards to warning statement effect. Class 1 in model 1 (females)
undertook greater processing of worded statements, for example. With Class 3, warning statements had no impact.
It would seem that any strategy to include or improve warning statement effectiveness needs to consider the heterogeneity.
Alcohol type choice preference is closely linked to gender and gender differences do exist. However, messages on certain
types of alcohol can have the desired effect if matching the customer heterogeneity and may be easier to isolate from a policy
perspective. Messages need to be targeted and specific words and the orientation of the words can have impact. With our
sample of younger drinkers, peer based messages on vodka and wine products would have a desired negative effect on
choice. With rum products which are consumed by males, but with some female representation, simpler cues of size and
having the word, WARNING would be useful. In this case, the message itself is irrelevant. With some alcohols, warning
statements of any orientation have no effect on choice. In the case of Australia, the beer category may be considered a
commodity or heuristic with labelling information having no desired effect. While not shown in the tables, it was noted that
in the data, Class 3 placed considerable importance on price (31% relative importance). This was twice the relative
importance for the two other classes. Warning statements are ineffective when, for example, the category type is a heuristic
and/or the product is heavily priced driven, where consumers do not undertake additional processing.
Discrete choice experiments are a novel approach for tackling the effectiveness of social messages under competing attribute
and labelling conditions, even if the choice is stated and not observed (Hensher et al., 2005). It would be difficult to align to
actual behaviour (revealed preference) in order to test the validity of the stated choice findings. Also, while our study
included six attributes with various levels and would be considered a complex experiment, the study did not consider the
impact of other labelling elements in negating the influence of warning statements. These may include other design elements
of the brand and colour, for example. Further work is also required to consider if warning statements that have a positive
impact on choice do so via an interaction with lower alcohol content. This would be an important line of enquiry, as it may
suggest that some worded statements, particularly with females may lead to moderate choice behaviour.
TABLES
Table 1: Composition of Discrete Choice Experiment
Attribute Level
Coding
1
2
3
Bacardi
Breezer
Alcohol
Bundaberg
Jim Beam Black Tropical
Orange
1 type
Rum and Cola and Cola
Alcohol
2 content
2%
3%
4%
247
Smirnoff
Ice
Double Black
Heineken
Lager
Yellow
Sparkling
5%
6%
7%
Warning
statement
Make
sure
you're okay to
drive.
Drunk
kills.
driving
$1.99
$2.49
10 font
14 font
No "Warning:"
in
front
of
statement
3
Price per
4 bottle
Warning
statement
5 size
Warning
6 wording
Warning:
Keep
your
brain
healthy.
Every drink of
alcohol
harms
your brain.
Dont get
into fights
with your
friends.
Look after
your
mates.
$2.99
$3.49
$3.99
$4.49
Table 2: Model 1 - Latent class model with gender as class predictor

Class1
Class2
Male
Female
Overall
R(0)
0.066
Attribute
Class1
z-value
0.2334
Class2
z-value
0.1647
Wald
p-value
0.1271
0.4414
-0.6609
-2.1859
80.265
4.50E-13
32.734
0.0003
25.804
0.004
0.6693
0.72
12.378
0.0021
Alcohol type
1
2
-0.398
-1.5425
-0.6989
-2.6479
-0.6119
-2.5662
0.8512
3.8432
0.0238
0.1049
1.2759
5.8135
0.9269
4.2654
-1.0902
-4.2166
-0.0679
-0.2149
0.3229
1.131
Alcohol content
1
-0.5244
-1.4676
-0.2207
-0.6209
-0.4525
-1.8463
-0.5378
-2.4246
0.3326
0.8823
0.8088
2.2923
0.3542
1.8985
0.0698
0.3956
-0.6034
-1.7094
-0.5803
-1.6148
0.8934
2.9825
0.4602
1.6028
Warning statement
1
0.9879
3.0181
0.7042
2.0882
0.1128
0.6528
0.0441
0.2397
-0.2099
-0.5492
0.0648
0.1769
-0.594
-2.1791
0.1527
0.5921
-0.259
-0.9049
-0.3674
-1.2809
-0.0378
-0.1389
-0.5984
-2.5078
Warning statement size

1
0.013
0.126
0.092
0.8084
-0.013
-0.126
-0.092
-0.8084
Warning wording
1
-0.4458
-3.1857
-0.2201
-1.493
0.4458
3.1857
0.2201
1.493
248
Price per bottle

1
0.5041
1.2248
0.5632
1.385
-0.2343
-1.2188
0.1312
0.7257
0.5935
2.4076
0.2041
0.8723
-0.0085
-0.032
-0.0693
-0.2746
0.001
0.003
-0.0479
-0.1421
-0.8557
-2.4701
-0.7814
-2.4049
22.802
0.012
Table 3: Model 2 - Latent class model with no covariates

Class1
Class2
Class3
Overall
R(0)
0.6358
0.0883
0.3307
0.375
size
0.4028
0.3548
0.2424
Attributes
Class1
z-value
Class2
z-value
Class3
z-value
Wald
p-value
-0.7146
-0.7075
0.9761
2.3135
2.6305
1.6318
60.6709
1.90E07
-3.1839
-2.4543
-1.2682
-3.3455
0.3795
0.2471
33.2135
0.0044
25.2622
0.046
10.9392
0.012
10.7129
0.013
Alcohol type
1.4919
1.7121
-0.3402
-0.8544
-0.7709
-1.041
5.8977
4.2303
0.4705
1.636
-2.4246
-1.8414
-6.9192
-3.5235
-0.5833
-1.3832
2.6938
3.1723
3.4281
2.1695
0.7451
1.8962
-2.5082
-1.3447
Alcohol content
1
-2.8278
-1.7412
-0.5655
-1.5253
-2.2846
-1.1906
-2.9671
-2.3015
-1.1384
-3.3272
-0.4793
-0.7157
3.8167
2.4421
1.0579
1.7282
2.2641
0.8427
1.8138
1.4995
-0.0318
-0.1243
-0.5245
-0.5875
-1.4785
-1.1264
0.1476
0.3074
-1.4659
-0.6218
1.6429
1.3249
0.5301
1.2005
2.4901
1.4
1.6588
0.6242
1.2806
3.5871
1.1578
Warning statement
1
2.832
-1.0481
-1.2326
-0.2039
-0.9237
-0.0733
-0.139
2.3205
1.395
-0.2541
-0.4028
-2.6439
-1.5516
1.1014
1.1942
0.6934
1.4831
0.2461
0.2986
-3.2197
-2.2226
-0.3417
-1.0538
-0.9365
-0.76
-1.9862
-2.3909
-0.5179
-1.4325
-0.1795
-0.1758

1
1.1612
2.1117
0.4285
2.5023
0.1074
0.3783
-1.1612
-2.1117
-0.4285
-2.5023
-0.1074
-0.3783
Warning wording
1
-0.0144
-0.0302
-0.4807
-3.1091
-1.1289
-1.0137
0.0144
0.0302
0.4807
3.1091
1.1289
1.0137
Price per bottle
249
1.1259
0.7274
0.4078
0.6426
4.1828
1.1478
1.3868
1.8719
-1.1872
-3.1658
-1.0442
-1.1265
-0.4433
-0.4845
0.6004
1.7545
2.1379
1.647
1.508
1.4386
0.5321
1.6932
0.8072
1.029
-1.5425
-1.1069
0.4227
0.657
-0.3878
-0.6956
-2.0348
-1.7572
-0.7758
-2.0998
-5.6959
-1.2024
29.2411
0.015
Table 4: Model 3 - Latent class model with gender as covariate

Class1
Class2
Class3
Overall
R(0)
0.5288
0.1407
0.3288
0.3656
size
44%
FEMALE 90%
31%
MALE 68%
24%
MALE 63%
Attributes
Class1
z-value
Class2
z-value
Class3
z-value
Wald
p-value
-1.4709
-3.4024
2.832
4.9702
-4.3691
3.2612
1.0136
-0.5392
-1.0149
0.6778
0.1449
-0.2821
2.024
-1.1974
-1.979
1.9591
0.298
-0.5973
2.4734
0.3622
-0.7355
-2.3244
2.6717
-2.4475
1.5844
0.2471
-1.0269
-1.8589
3.2144
-1.3149
61.2084
1.60E07
-1.3575
-2.2258
3.5726
1.0153
-1.5423
0.0489
-0.1346
-1.225
0.1495
-0.014
0.3017
0.9224
-0.2834
-3.3927
0.2079
-0.0449
0.5219
1.7345
-2.2295
-0.6166
2.1871
-0.5104
-1.3427
2.512
-1.2328
-0.9415
0.8703
-0.5685
-0.6068
1.4903
42.9981
0.00016
1.1719
-1.1722
2.1536
1.6232
-2.0403
-4.128
1.4158
-0.0984
-0.924
0.1581
-0.0188
-0.5327
2.301
-0.3606
-1.1221
0.2971
-0.0477
-1.338
3.5034
-0.0724
-2.656
0.1874
-0.8878
-0.0747
1.2118
-0.1418
-1.5814
0.2348
-0.7661
-0.0747
40.3361
0.0004
2.0579
-2.0579
0.3895
-0.3895
1.9306
-1.9306
0.1235
-0.1235
0.4422
-0.4422
8.2776
0.041
-0.2582
0.2582
-0.507
0.507
-2.7483
2.7483
-1.1388
1.1388
-1.0942
1.0942
8.8072
0.032
0.3283
1.5773
-1.2832
2.0069
-0.0975
-2.1157
0.5605
-1.5408
0.947
0.7925
-0.6096
-0.1497
0.7304
-3.2075
2.0747
2.0623
-0.7386
-0.3294
4.0362
-1.0312
2.1691
0.745
-0.3496
-5.5695
1.1766
-1.1431
1.7567
0.9951
-0.63
-1.2565
28.5628
0.018
-6.7029
0.5298
4.2901
0.4249
3.3695
45.3662
1.40E-
Alcohol type
1
-1.2228
2
-3.4525
3
1.7335
4
5.0966
5
-6.137
6
3.9821
Alcohol content
1
-1.5471
2
-2.1188
3
4.2211
4
0.9532
5
-1.5547
6
0.0463
Warning statement
1
1.5358
2
-0.7145
3
2.6992
4
1.1156
5
-1.9627
6
-2.6733
1
0.7746
2
-0.7746
Warning wording
1
-0.1033
2
0.1033
Price per bottle
1
0.4086
2
0.9435
3
-0.7376
4
1.6122
5
-0.1045
6
-2.1221
Male
-0.9547
250
10
Female
0.9547
6.7029
-0.5298
-4.2901
-0.4249
-3.3695
FIGURES
Figure 1: Example of one of the six alternatives
REFERENCES
Andsager, J. L., Austin, E. W., & Pinkleton, B. E. (2002). Gender as a Variable in Interpretation of Alcohol-Related
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FROM CRISIS TO CONTROL - ALL ABOUT COMMUNICATION?

Maria Ek Styvn, Lulea University of Technology, Sweden
INTRODUCTION
The supply of drinking water is a crucial and vulnerable element of the Swedish infrastructure. In the past few years it has
suffered several crises due to contamination and waterborne diseases. Therefore, management of water crisis has become a
highly topical issue for the country's municipalities, particularly after two recent outbreaks of cryptosporidium. This protozoan
parasite is often spread through contaminated water and causes a parasitic disease that affects the intestines and typically causes
an acute short-term infection. The largest known outbreak of cryptosporidium in drinking water occurred in 1993 in Milwaukee,
US, where more than 400 000 people were infected. In Sweden, two large outbreaks have occurred during the past few years.
The drinking water in stersund, a mid-sized city with around 59 000 inhabitants, was infected with cryptosporidium in
November 2010. The number of people infected reached approximately 27 000, and the outbreak lasted for 12 weeks. Just a
few months afterwards, Skellefte, with 71 000 inhabitants, had a similar experience. At least 20 000 people were infected in
an outbreak lasting 20 weeks. This type of crisis affects many people for a long time, and effective communication, therefore,
is essential to limit the impact of the crisis.
Previous research has acknowledged the important role communication and public relations play in effective crisis management
(e.g., Windsor, 1990; Barton, 1993; Rice, 1990; Rowan, 1991; Williams & Treadway, 1992; Coombs & Holladay, 2008;
Reynolds, 2006; Tirkkonen & Luoma-aho, 2011). However, available literature on crisis communication focuses mostly on the
private sector, while very little attention is given to crisis communication in the public sector (Horsley & Barker, 2002). In a
crisis situation, municipalities must communicate with employees, citizens and the surrounding community, which can be
complex and challenging. Few municipalities have sufficient resources to employ full-time public relations staff to prepare and
implement crisis communication plans (Horsley & Barker, 2002). Several actors become involved when a crisis occurs and
many different channels of communication need to be coordinated. Moreover, citizens today play an active role in the
dissemination of information, particularly through social media. Thus, during a crisis, municipalities face challenges of
coordinating and controlling both internal and external information through many different channels simultaneously, often with
limited resources and with a need to reach out to all citizens.
During a crisis the amount of information that needs to be communicated increases. At the same time, the number of channels
used is decreasing due to time and resource limitations. Thus, relevant information runs the risk of being delayed or, at worst,
does not even reach the intended audience (Hale, Dulek, & Hale, 2005). Today's technologies provide opportunities to ease
these difficulties by making it possible to reach many people quickly and simultaneously through several channels. Recent
research has shown that people increasingly view the Internet as the most reliable source of news, especially for timely
communication (Liu, Austin, & Jin, 2011). For example, social media can be used to develop real-time communication with
people to build trust and motivate action in crisis situations. Today, the use of social networks and blogs has increased
tremendously, and during crises people spend even more time online to search for and share information. Peoples changing
patterns of behavior imply changes in how organizations effectively reach out to them during a crisis (Liu, Austin, & Jin, 2011).
Even though previous research has shown the benefits of including social media in crisis communication, few organizations
have incorporated social media into their strategic communication (Liu, Austin, & Jin, 2011). Further research should therefore
investigate the use and combination of different media to be used in crisis communication, and examine the effectiveness of
different channels (Schultz, Utz, & Gritz, 2011). By understanding the needs, behaviors, and attitudes of various groups of
people, municipalities can increase the effectiveness of their internal and external crisis communication. The aim of this study,
therefore, is to investigate and compare citizens and employees experiences of crisis communication during the outbreak of
cryptosporidium in the drinking water of two Swedish cities, stersund and Skellefte.
METHODOLOGY
This study used a combination of qualitative and quantitative methods. Data was collected in several steps to investigate both
employees and citizens experiences of crisis communication. Firstly, two focus groups were established, with the expert group
in a municipality encompassing 14 employees responsible for managing crises and crisis communication. Secondly, six focus
groups comprising employees from both cities, were set up. 40 employees from 29 to 65 years of age took part. Thirdly, five
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focus groups were established with citizens from respective cities. In total, 24 citizens aged 18-73 participated in the focus
groups. Finally, a postal survey was sent to 1 600 (800+800) randomly sampled citizens between 20-74 years in both cities. 22
envelopes were returned unopened due to wrong address and 66 citizens were withdrawn from the sample since they did not
reside in the municipality at the time of the crisis; thus reducing the sample to 1512. In total, 663 completed questionnaires
were returned, representing an effective response rate of 44 percent. The survey comprised questions relating to the following
topics: sources of information, secondary crisis communication, information quality, communication with the municipality,
trust in government, positive meaning, innovativeness, Internet and cellphone behavior, and demographics.
Results from the focus groups with the experts show that both municipalities acted rapidly and decided to release a VMA
(important notice to the public) as soon as they suspected a problem with the drinking water. The crisis management team that
was formed in each municipality at the outbreak of the crisis included only the core people directly involved in the actual crisis.
In fact, the actual composition of the crisis management team turned out to be different from the team that was supposed to be
appointed according to the previously established crisis management plan. Communication was perceived as the most important
action in taking control of the crisis. Having designated spokespersons throughout the crisis and a clear strategy for public
communication were perceived as key factors for managing the crisis. The aim was to take control of the public media through
well-planned and continuous press conferences and press releases. In addition to these, the municipality website was perceived
to be the most important channel of communication. A critical success factor was to provide open, uniform, and continuous
information throughout the crisis, both to media and the public. However, crisis management teams in both cities felt they did
not have enough resources or supporting methods to reach out efficiently with internal communication during the crisis.
Results from the focus groups with employees from the two municipalities show that they received the initial information about
the water crisis through the VMA, local newspapers, and friends, and not through internal communication. Employees found
the information on the municipalitys webpage valuable; however, most of the information was collected through local media
and word of mouth. The need for information varied substantially among different groups of employees, depending on their
work tasks and what group of citizens they met at work. Results from these focus groups also show that both municipalities
lack effective methods to distribute internal information throughout the organization.
Citizens received the initial information regarding the water crisis through the VMA, local newspapers, and friends. The need
for information changed during different phases of the crisis. At the outbreak, citizens needed practical information and facts.
During the crisis, citizens wanted to be informed about progress, the source of contamination, and the predicted duration of the
crisis. The main information need towards the end of the crisis encompassed assurances that the water was safe to drink,
information about the source of contamination, and how the municipality planned to act in order to prevent future water crises.
In addition, citizens who had been infected by the parasite experienced a lack of information regarding health-care
recommendations. Most citizens perceived the continuous information, available on the municipalities homepages, as up to
date and valuable. However, some citizens, mostly in one of the cities, still suspected that the municipality initially had withheld
information, which delayed the first warning messages, and many rumors occurred.
Results from the survey directed at the citizens support the focus groups findings. Only a few of the citizens (16 percent)
perceived a lack of information during the crisis. Information was generally disseminated by talking to friends and colleagues.
Only 19 percent of the citizens spread information through social media. Not more than 5 percent of the respondents contacted
the municipality during the crisis. However, out of those, the majority (73 percent) had been infected with the parasite or had
family members who had been infected. Results show that most citizens trust their municipality and for most citizens (75
percent) their trust has not been affected by the water crisis. However, trust is somewhat lower among citizens who were
infected. More than two-thirds of the citizens were willing to register their e-mail addresses and cellphone numbers to receive
rapid information from the municipality if a similar crisis occurs in the future. At the same time, 25 percent were unwilling to
do so.
CONCLUSION AND IMPLICATIONS FOR THEORY AND PRACTICE
This study investigated and compared employees and citizens experiences of crisis communication during the outbreak of
cryptosporidium in the drinking water of two Swedish cities. Many similarities with respect to crisis communication can be
found across the two cities. One main difference between the two municipalities was the attention from local and national news.
This might be explained by the order of the outbreaks, with the first one receiving much more national coverage. In addition,
during this outbreak the World Cup biathlon was taking place in stersund, which attracted a lot of national and international
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media representatives. Overall, citizens perceived need for information differed. In one city, citizens were looking for
information to establish the source of contamination. This was not an issue in the other city; the focus, instead, was to get
information on progress regarding problem solving. A difference could also be found with respect to the citizens suspicion
toward the openness of information from municipalities.
To increase effectiveness in internal crisis communication, municipalities need to develop methods that are easy to use so
relevant information can be sent to different groups of employees immediately when a crisis occurs. To succeed with external
crisis communication municipalities need to assure transparency with respect to information, take control over media and the
flow of information, establish a well-defined crisis communication team and appoint official spokespersons, and produce
uniform and continuous information throughout the crisis. In summary, the results of this study show that the water crisis was,
to a large extent, a communication crisis. Therefore, the way to take control of the crisis is to control communication.
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SOCIAL MARKETING AND SOCIAL MEDIA: HELPING STUDENTS DISCERN THE DIFFERENCE
ABSTRACT
Although there is agreement that social marketing can be defined as the application of commercial marketing principles to
influence behavior for the benefit of individuals or wider society (Wood 2012, p. 96), there is still considerable confusion
regarding the nature of social marketing (Wood 2012). The burgeoning use of social media and the resultant attention it is
given by the popular press has only added to this confusion as social media is often confused with social media (Wood 2012).
Regrettably, undergraduate students who have extensive experience with social media and limited exposure to social
marketing concepts in marketing course work may also confuse social marketing with social media.
It has been suggested that completing a Social Marketing Plan (SMP) may be an effective method of teaching undergraduate
students about social marketing while at the same time, advancing the social marketing discipline (McKay-Nesbitt,
Demoranville, and McNally 2012). The purpose of this research therefore is to extend this work by exploring the
effectiveness of an SMP as a means of developing social marketing knowledge and alleviating the confusion between social
marketing and social media. This research therefore, tests and compares the social marketing knowledge of marketing
students who complete an SMP as part of their course requirements with those who simply introduced to social marketing
concepts as part of their introductory course requirement.
Ninety-nine sophomore students from four course sections of an introductory marketing course taught in a private university
in north-eastern USA participated in the study. As all students who attend the university are required to take this course, the
students were from the Colleges of Business and Arts and Sciences, and from a variety of disciplines within those colleges. A
questionnaire that assessed social marketing knowledge and attitudes toward business was administered in a computer lab at
the end of a 14 week semester.
Two of the sections were taught by one instructor and two were taught by another instructor. The instructors were matched in
terms of teaching experience and student evaluations. The marketing course is standardized in that students in all sections use
the same text and all sections adhere to the same learning objectives and course schedule. Assignments however, are at the
discretion of the instructor. Students in two of the sections taught by the same instructor completed the SMP group project as
part of their course requirements (experimental group) and students in the two other sections completed an alternate group
assignment as part of their course requirements (control group).
Analysis of the data revealed that at the end of the semester, students in the experimental group had significantly higher
social marketing knowledge scores than students in the experimental group. Furthermore, members of the control group were
significantly more likely to confuse social marketing with social media than were members of the experimental group. These
results were not impacted by gender. Although there were no differences between the experimental and control groups with
regard to attitudes toward marketing activities, interestingly, experimental group members had significantly more positive
attitudes toward business than control group members.
This research lends support to earlier work that has suggested that an SMP as part of an introductory marketing course is an
effective way to introduce students to social marketing and to advance the discipline (McKay-Nesbitt et al. 2012). This work
has shown that incorporating a social marketing project into an introductory marketing course increases social marketing
knowledge and helps them distinguish social marketing from social media. Furthermore, this work has shown that an SMP
project has no adverse effects on student attitudes toward marketing or business. As such, we have demonstrated that an SMP
project in an introductory marketing class is an effective means of advancing the social marketing discipline and achieving
social marketing goals.
256
AN EXPLORATORY INVESTIGATION OF SOCIAL RESPONSIBILITY IN DTC ADVERTISING ---EVIDENCE FROM OUTLIER ANALYSIS
Kabir Chandra Sen, Lamar University, USA
Vivek S. Natarajan, Lamar University, USA
Avinandan Mukherjee, Montclair State University, USA
INTRODUCTION
The USA and New Zealand are the only two countries that allow advertising of prescription drugs directly to consumers.
Although these drugs are not available over the counter, the rationale for allowing this type of advertising is that prospective
customers can recognize their symptoms in the advertisements and approach their physicians for prescriptions for the
advertised drugs. This type of advertising, called DTC advertising is an example of a pull strategy, where advertising to the
customer generates a demand for the advertised product, which is then pulled through the channel. DTC advertising is often
complemented by push strategies, such as sampling and detailing. Sampling involves the distribution of free samples by
pharmaceutical representatives to physicians offices. Detailing covers the expenses of these representatives as they visit
physicians offices.
In addition to these three types of expenditures, pharmaceutical companies also advertise their drugs in medical journals that
are read by physicians. Notwithstanding the variety of ways that drugs get promoted in the pharmaceutical industry, the
permission to advertise drugs that are only available through prescriptions raises important ethical questions about the
practice. This paper discusses the issues and examines the relevant questions through an examination of outliers identified by
a regression, using share of total DTC advertising from US data to predict market share based on unit drug sales. While the
comparison of outliers in two sets based on over and under predicted shares, show similar average prices, there are significant
differences in other characteristics of the drugs, including their age (based on their introductory year) and type. This study
sheds some light on issues related to the social responsibility of DTC advertising.
METHODOLOGY
A report entitled Direct-To-Consumer Advertising: Analysis of DTC Spend by brand, company and media published by
PharmaLive.com, was purchased from the Canon Data Products Group for the purpose of the study. The report contains data
on DTC advertising in the US, collected by the Nielsen Company. We complemented this data with data on drug sales,
reported by Verispans Vector One: National (VONA) and published by Drugs.com. We compiled each brand name drugs
market share based on both dollar and unit sales. We also calculated the average price, the advertising intensity (measured by
advertising dollars to sales dollars) and the share of voice (which is the brands advertising dollar expenditure as a percentage
of total advertising dollar expenditure). These values were calculated for the years 2003 to 2008. Approximately 60 to 70
observations were obtained for each year.
OLS regressions were used to investigate the influence of share of voice on average price. The results were not significant for
each year, suggesting that highly advertised brands do not necessarily have the highest prices. However, the OLS regression
results show a strong influence of share of voice on unit market share. Thus, a higher share of the advertising dollars is
positively related with the share of total units sold by a particular brand. While previous scholars (Hollon 1999; Rosenthal,
Berndt, Donohue et al. 2002) have analyzed the role of DTC advertising, few studies have compared the intrinsic differences
between drugs that differ in their relationship between share of voice and unit market share. Towards this end, we selected ten
outliers from each tail of the OLS residuals. Outliers with the largest negative residuals were selected from one end. These
ten outliers from each year had shares of voice that should lead to higher unit market share than they actually have. We
labeled them as over-spenders. From the other end, we picked ten outliers from each year which had the largest positive
residuals. These brands achieve higher share of unit sales than predicted by their share of voice. Thus, although they have
lower shares of voice, they achieve disproportionately higher market shares, based on units sold. We labeled them underspenders. Thus, over six years (2003 to 2008), we compiled sixty drugs for each set of outliers. The major contribution of this
paper is to evaluate differences between the over-spenders and under-spenders and use our conclusions to discuss the social
responsibility implications for DTC advertising.
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A comparison of the two sets- over-spenders and under-spenders shows that there are no significant differences between
their average prices. However, the two sets differ on other dimensions. The set consisting of over-spenders (i.e., drugs which
do not achieve market shares, in spite of achieving high shares of voice) are newer (based on approval date), have lower
average sales and also spend more on advertising as a percentage of sales. These are to be expected in any sector where there
are new entrants into the market. However, from a social perspective, the interesting aspect is that there are major differences
in certain types of drugs that are exclusive to either set. Drugs which treat depression, anxiety, high cholesterol, and
osteoporosis are common to both sets. In the over-spender set, these drugs are newly introduced compared to those in the
under-predicted set. However, drugs that deal with the symptoms of benign prostate, erectile dysfunction, herpes infection,
irritable bowel syndrome and menopausal problems are only in over-spender set.
Two questions for future research emerge from our findings. The first is: do the newly introduced drugs treat the same
symptoms treated by more established, older drugs in a significantly better way? The second question is: are drug companies
over spending on advertising to cure maladies of certain symptoms which are of a more private nature, instead of dealing
with ailments that are of a more serious nature? A related question is would it be in the social interest to divert the money
spent on maladies of a more private nature to push drugs that treat more serious maladies? There does not appear to be a
significant difference in the drug companies in the sets of over and under spenders. Thus, drug companies can easily reduce
their spending on drugs catering to ailments of a private nature to more serious diseases, some of which can be covered under
the Orphan Drug Act. The US Food and Drug Administration, under the Orphan Drug Act, provides many benefits, including
tax credit and marketing incentives to drugs that treat rare diseases or medical conditions. Does the difference in types of
drugs in the two sets indicate that companies should do more to divert their DTC expenditures to these orphan drugs?
The results of our analysis show that in addition to being newer, the drugs that have higher share of voice in comparison to
their unit market shares are in many cases of a different type from those that are under predicted. These drugs often treat
symptoms that deal with personal health issues that are of a private, sensitive nature. The potential influence of the impact of
advertising, particularly on TV, where the prospective customer has little time to hear the intricate details of the potential side
effects, cannot be over emphasized. This pull strategy can result in a drug which is not yet ready or is not suitable being
sold to a susceptible consumer. Among the sixty incidences of over predictions (six years x ten outliers), four (6.67%) are for
a product that was later taken off the market, because the FDA found that it had serious side effects. This occurred after the
drug was advertised for four years. While this might be only one incident, the case underlines the serious potential of damage
that an over advertised, but unproven drug can do.
We recommend that DTC advertising be restricted to drugs that have passed stricter laboratory tests conducted by the FDA as
a solution to this potential problem. Our papers comparison between two sets of outliers is one of the few attempts to bring
to light the inherent differences between the different types of drugs that are currently being advertised to potential consumers
in the USA.
REFERENCES
Hollon, M.F., (1999). Direct-to-consumer marketing of prescription drugs --- creating consumer demand. JAMA, 281(4), 3824.
Rosenthal, M.B., Berndt, E.R., Donohue, J.M. et al. (2002). Promotion of prescription drugs to consumers. New England
Journal of Medicine, 346(7), 498-505.
258
STARTUP ACCELERATORS: ENTREPRENEURIAL MATCH MAKERS

Paolo Borella, Boro Oy, Finland
Tawfik Jelassi, ENPC School of International Management, France
Nicolas Saillant, University of Warwick, United Kingdom
ABSTRACT
Earlier studies outline the importance of new ventures and startups, to catalyze wealth creation and innovation, thus
enhancing the economy on both regional and national levels. (Rice, Matthews and Kilcrease, 1995; Phan et al. 2005). In such
a scenario, incubators assisting the emergence of new ventures, enjoy augmented status and have an important role to play
(Dee et al. 2011; Miller and Bound 2011; Hansen et al. 2000; Levy 2011; Bruton 1998). In the recent discourse of business
incubation research, startup accelerator programs (e.g. Y Combinator, Tech Stars, Seed Camp etc.) are beginning to receive
increasing attention (Bollingtoft & Ulhoi 2005, Christiansen 2007, Miller and Bound 2011). They are a new breed of
incubators that facilitate rapid development and commercialization of startups, e.g. Dropbox, Scribd and Airbnb which
graduated from the Mountain View based accelerator, Y-combinator. These accelerator programs possess five common
attributes (Miller and bound 2011): competitive application process, access to capital or provision of pre-seed investment,
usually in exchange for equity, focus on small teams instead of individual founders, time-limited support with intensive
mentoring and programmed events, and batches of startups rather than individual companies. Despite the increasing
prominence and growth of startup accelerators, earlier studies have rarely focused on the resource needs of startups
participating in accelerator programs. Equally unclear is the role of accelerators in satisfying those resource needs and
gearing these participating teams for the market. In addition, a related query concerns how the resource needs evolve for a
new venture and thus what is the right time for a startups to seek an accelerator program. This study intends to fill this gap by
exploring three themes: what specific resource needs propel startups to participate in accelerator programs, how do
accelerator programs meet those needs and prepare startups for the market, and how does the resource needs of startups
change over time and does it have an impact on their timing to join an accelerator. Furthermore little is known of the key
stakeholders involved, their motivations, and the organizational issues that face such an entity. In this context, this paper
outlines the issues confronting successful running of a startup accelerator through closely examining, two successful
European startup accelerators, Startup Sauna in Espoo, Finland and Le Camping in Paris, France. To respond to our research
themes, an exploratory qualitative approach was adopted. As the study intended to cover an array of topics a mixed sample
was chosen. In total forty in-depth semi-structured interviews were conducted with members of graduated startups and
stakeholders of both accelerator programs. The startup members were either founders or co-founders of startups graduating
from the programs, while the stakeholders were, mentors, investors, organizers and industry experts associated with the
programs on a regular basis. Since we were using a comprehensive approach, the interviews were analyzed through a
thematic content analysis using NVIVO where the coded findings were eventually categorized into themes. The general
findings reveal that accelerator programs act as entrepreneurial match makers and provide a range of benefits to participants,
including assistance for teams in form of feedback and technical knowhow, time bound support, education and mentoring
focused on business and product advice, and networking programs. An in-depth analysis highlights the evolution of Startup
resource needs and the matchmaking role of accelerators in fulfilling those startup resource needs. These needs change during
the three stages of startups, i.e. through nascent (conception) stage, functional (prototype) stage, and operational
(commercialization) stage. The focus on resource needs shifts during these three stages, from relevant feedback, to relevant
networks and to relevant investments. At all stages the accelerators act as match makers, providing new ventures with
appropriate feedback towards product refinement and business model adjustments. Next, accelerators introduce new ventures
to relevant networks, which helps them better understand growth contingencies, market reality and necessary adjustments to
the product and business strategy.
259
IS PLANNING OVERRATED? EFFECTUAL MARKETING PRACTICES AMONG SILICON VALLEY TECH

COMPANIES
Fabian Eggers, Menlo College, USA
INTRODUCTION
A substantial body of marketing theory is rooted in the view that successful organizations are those that utilize their
understanding of customer needs to create a product mix (Drucker 1954; Dibbs et al. 2005). These customer-centric
organizations emphasize the importance of following the customers lead (Kotler 2003). In contrast, product-centric
organizations emphasize the importance of leading their customers and, thereby escaping their [customers] tyranny
(Hamel and Prahalad 1991).
The process of leading customers seems particularly common in young, entrepreneurial firms that lack the time and resources
to follow the classic Kotlerian marketing strategy (Eggers and Kraus 2011). While numerous studies have examined
entrepreneurial marketing approaches (for an overview see Hills et al. 2010), there is still a gap in the literature regarding
product-centric marketing in entrepreneurial firms. In this study, we attempt to better understand the processes companies in
the highly innovative tech environment utilize to formulate new product development strategies and the role, if any, of a
customer- or product-centric focus in their entrepreneurial decision-making.
CONCEPTUAL FOUNDATION
While the marketing concept itself is well-established, it is questionable whether the marketing efforts of the majority of
firms evolve in such a planned fashion. In fact, studies have shown that successful entrepreneurial companies instead may
follow an effectual approach (Sarasvathy 2001). Rather than defining a market as the universe of all possible customers
(e.g. Kotler 2003), an effectuator would define the market as a community of people willing and able to commit sufficient
resources and talents to sustain a particular enterprise with the assumption that the firm creates the market by bringing
together enough stakeholders who "buy into" the idea in order to sustain the enterprise (Read et al. 2009). Since the structure
of defining the enterprise is left open and is dependent upon the particular commitments made by the stakeholders, the need
for prediction is greatly reduced, if not completely eliminated (Read and Sarasvathy, 2005). We are interested in learning to
what degree, if at all, the marketing processes of young, entrepreneurial tech companies can be described as highly effectual.
In addition to being indicative of an effectual organization, lack of planning also is an important defining element of
improvisation processes. Improvisation can be described as the deliberate and substantive fusion of the design and execution
of a novel production that is initiated immediately after the occurrence of real-time experiences (Moorman and Miner 1998a).
Improvisation offers a promising lens for investigating entrepreneurial processes as many entrepreneurs may not formulate
careful plans when starting their business but, instead, respond to sudden opportunities in ways that fit the definition of
improvisation (Miner et al. 2001). For example, improvisation is impacted by prior routines and knowledge about the
improvising units. Prior learning and organizational memory shape the skillful and fruitful improvisation of novel
performances. In this regard, improvisation represents an avenue of organizational learning and may even be learned itself.
Therefore, improvisation, as an unplanned concept, still demands the existence of improvisational knowledge or
organizational memory that is the basis for successful improvisational outcomes (Moorman and Miner 1998b). Therefore, we
are interested in learning to what degree, if at all, the marketing decision-making processes of young, entrepreneurial tech
companies can be described as highly improvisational.
RESEARCH METHODS
Ours is a multi-staged research project. In this initial stage, we utilized a series of depth interviews to explore and clarify the
scope of future stages of the project and develop tentative explanations for the various findings that grew out of this initial
research. Specifically, we conducted six depth interviews with founders of growth-stage tech start-ups whose businesses are
housed in a Silicon Valley global accelerator. Each interview lasted approximately forty-five minutes. The entrepreneurs with
whom we spoke represent the following business segments: enterprise software, personal financial software, indoor maps for
mobile platforms, real-time media sharing over the Internet, invoice software, and online surveys for digital products. All of
the ventures are two-to-four years old, and their founders have customer acquisition experience. Some of the entrepreneurs
have started more than one company.
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Prior to the depth interviews, we structured an interview guide with open-ended questions in order to learn how tech startups
find their first customers and what they do to build an initial customer base, as well as what role, if any, effectuation and
improvisation play in their new product development efforts. The audio-recorded interviews resulted in 3.5 hours of
conversation and 41 single-spaced pages of transcription. Analysis of the data was an iterative process (Thompson 1997).
Our interpretations were developed over multiple readings (Spiggle 1994). Following Strauss and Corbin (1990), we used a
hermeneutic framework in which we analyzed each participants data holistically and open coded it (Goulding 2002) until
recurrent themes appeared and then completed an inter-textual analysis, identified patterns, and developed thematic
understanding that accounted for the data (Spiggle 1994). We separately analyzed the transcripts and then conferred and
refined to develop a common, acceptable understanding of the data.
Our insights from the depth interviews revealed numerous findings regarding the processes innovative tech start-ups utilize to
formulate new product development strategies and the role a customer- or product-centric focus plays in the ventures
decision making. Three key themes emerged from the data. They are self-focus, need finding, and network creation and
utilization.
Self-Focus
When we asked about business creation, the entrepreneurs reported their initial product/service ideas were personally
motivated. One participant stated, My view was, I was probably too immature to even care about what the market wanted. I
just wanted to build this because it was cool. Another said, We created something really cool which we liked, and then we
thought about who could use it. A third reported, I am very passionate about my product. I was clear about the market
requirements and why the market will need this product. I am a risk taker and follow my gut feeling. I believe common sense
is a key to success.
It is evident from this small sampling of quotes that our tech entrepreneurs utilize a product-centric, not customer-centric,
approach to entrepreneurial success, as their initial product-development strategy does not consider stakeholder groups,
including potential customers but rather is self-focused (Brockner, Higgins and Low (2004).
Need Finding
Only after the individuals we interviewed created an offering did they go about finding a need for it. During their initial need
finding, the entrepreneurs most often relied on their own expertise to inform their decisions. One said, You then take that
hunch [product] and then try to see if there is a need for it. Another added, I guess from experience, we knew who the
market would be.
As their venture evolved, the entrepreneurs began to adapt their offerings based on listening and learning. You do not start
necessarily with a plan. You start with the vision. It needs a vision to spark, to do something different, and then you get into
it. You realize after a while you have to make an adjustment because you listen to your consumers. Successful start-ups do
that a lot. You learn new things and then you have to make adjustments; you have to make changes. Another added, Im
always listening to see what people are thinking and how theyre reacting, and Im synthesizing that to figure what we should
do next. It is at this point in the evolution of their businesses that the participants worked in what the data revealed as middle
ground, the area where they both improvise and plan and routinely move back and forth between the two.
Network Creation and Utilization
Instrumental to both self-focus and need finding is the third key concept that arose from our data analysis: network creation
and utilization. The identifying and developing of personal and external relationships is not entirely distinct from the first
two concepts. Rather, network creation and utilization reflects the procedural aspects that these entrepreneurs utilized to form
their initial product concept and to need find. As one entrepreneur said, There is a chance to put resources [the offering] and
opportunity [the network] together and build something competitive. Another stated, Probably the most important decision
that I actually had to make right in the beginning . . . . One was . . . convince my friends to join and do it [partner in the
venture], and then the second one was bring in the people from the valley [Silicon Valley] who had already done a startup,
had advised startups, or had been with a bigger company and wanted to do a startup. You have to go out there and seek the
experts in those fields to help you to being able to optimize your success in that space. A third person stated, I looked at all
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the connections that I have with friends and companies, like Google and Facebook and Yahoo, that would be interested in
such a startup. Those elements come together and lets formula something. So thats how things came together. Another
entrepreneur indicated that The main sources are actually coming from my personal networks . . . emails that I sent out to
people and say, Hey Im doing this, do you see any opportunities in your network? They say, Hey if youre doing that,
please talk to these people. So the majority comes from people you already know. . . . and the secondary is just more picking
their brains or to have secondary conversations without this intention.
Focusing on product development rather than on customer needs in the early stages of the companys life speaks towards
shaping the future rather than following existing demands. This thought of shaping the future prevails in the need finding
stage where the entrepreneur might adjust the product according to customer feedback. However, here the focus is still on the
initial idea of the entrepreneur and his or her assessment of right or wrong.. As one entrepreneur stated So last Thursday
they called us up and said Oh, we need this particular function feature. We thought you were going to do it. And we said
Nope. Thats custom work. . . . and he said, Well what if we paid? Im like Im not interested in the money. Its not a
question of money; its a question of resources and time and whats core and whats not core. Another entrepreneur said, I
mean people [are] telling you stuff, and everything is great and useful; but you have to decide how to put in your gut feelings.
So you talk to the people and get feedback and figure out which [path] might be the best for you. Finally, the creation and
utilization of networks provides resources to enable the enterprise to shape the future.
All three key themes that were revealed in the data have effectual and improvisational elements. Shaping the future rather
than following existing demands speaks towards controlling an unpredictable future, an element of effectuation theory
(Sarasvathy 2001). Rather than predicting an uncertain future, the entrepreneur does whatever (s)he knows and is able to do
rather than speculating what others might be interested in. All three elements, self-focus, need finding, and network creation
and utilization cater towards controlling an unpredictable future. One evidentiary example of the use of effectuation is the
fact that none of the firms prepared a formal marketing plan, and the two that engaged in planning did so only to gain a better
understanding of their current situation, (e.g., the current needs of their first-customer group) but not to predict the future.
Moreover, need finding is impacted by another element of effectuation theory: exploitation of contingencies (Sarasvathy
2001). The ability to react to new trends and customer feedback enables the firm to adjust the initial product idea to market
needs. Doing this quickly and on-the-spot also caters towards improvisational skills of the entrepreneur (Moorman and
Miner 1998a), which in turn are facilitated through the availability of entrepreneurial expertise (Read et al. 2009). At the
same time, self-focus does not mean that the entrepreneurs we interviewed are betting everything on one horse. Rather they
invest just enough resources (that typically come from their networks) into a new product idea to test its acceptance (need
finding). This is what effectuation theory describes as affordable loss. Effectuation predetermines how much loss is
affordable and focuses on experimenting with as many strategies as possible with a given set of limited resources.
Networking and the utilization of strategic alliances as described above represents the fourth element of effectuation theory
(Sarasvathy 2001).
While this initial study suggested that high-tech start-ups utilize effectual and improvisational methods in problem-solving, it
is important to note that none of the businesses relied on a purely effectual and improvisational approach. Rather the they
used a combination of effectual/improvisational and causal methods for problem-solving with the more experienced firms
demonstrating more causal processes. The fact is that some do engage in planning, even it is more short-term; and the startups heavy focus on previous experiences and existing knowledge is causal in nature. As one entrepreneur stated, I have
domain expertise, and I have expertise in fundraising and building a team and taking the product to market. Thus, saying
that the marketing approach identified among our sample firms is purely effectual and improvisational is incorrect. Rather,
the firms work the middle ground between effectuation and causation, as well as the middle ground between improvisation
and planning, as already mentioned above.
All firms in this initial study followed the product first customer second approach. That is they all developed a product
without researching customer needs and discovered their target market by identifying who purchased the product. After this
initial stage, the entrepreneurs started to look into the needs of their new customers and considered changing their products
accordingly, relying on improvisation as they made quick adaptations. What we see is a marketing process that is very much
effectual at the beginning and becomes more causal over time. This finding is in line with the literature since, as mentioned
above, effectuation is particularly suited for situations of high uncertainty (Sarasvathy 2001). As a venture establishes itself
and grows, its surroundings typically become more predictable and foreseeable (Schulte and Eggers, 2010), which could
explain the surge of more causal practices over time.
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The effectual approach identified in this paper is important as technology is leading the economic rebound and expected to
expand its reach (LaSalle 2011). Product first instead of customer first caters to the particular characteristics of young
tech companies and can serve as an explanation for the innovativeness of these firms. Implicitly these firms seem to follow
Christensens (1997) thought that innovation is hindered by listening too much to customer needs. Additional studies are
needed that develop and test our propositions on a larger scale and incorporate a success variable. At this point, we know that
our partner firms have succeeded with the marketing approach they have chosen. However, we do not know if this approach
is superior or inferior to traditional, planned marketing. We intend to examine the conditions under which each approach
might be the better choice and investigate if and how larger firms are able to use the marketing approach identified in this
study. Also, a closer investigation of different tech industries is advisable. Shaping the future and working under the
assumption of affordable loss might be easier in some areas of technology and more difficult in others. Our sample
companies were all software firms, an area were resource investments should be generally lower than, for example, in the
biotech industry. That is, trial-and-error, as found in our sample, might not be a feasible approach in other areas. Thus,
entrepreneurial tech marketing is not only distinct from the classic, customer-driven marketing approach but seems to offer
additional challenges that require further adaptations to different tech industries.
REFERENCES
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NEW PRODUCT DEVELOPMENT PERFORMANCE: THE INTERPLAY OF ENTREPRENEURIAL

ORIENTATION AND MARKET ORIENTATION
Todd Morgan, Kent State University, United States
Sergey Anokhin, Kent State University, United States
Andrey Kretinin, Kent State University, United States
Johan Frishammar, Lulea University of Technology, Sweden
INTRODUCTION
New product development (NPD) is essential for firms in competitively intense markets as it contributes to the
competitiveness and growth of firms (Clark & Fujimoto, 1997). Due to dynamic business environments, firms must
implement changes to speed products through development and improve process efficiency and overall NPD effectiveness
(Griffin, 1997). NPD has been shown to enhance external visibility and legitimacy and increase the likelihood of survival
(Deeds & Hill, 1996). NPD also allows for first-mover advantage within the market leading to market preemption, a higher
reputation within the market, and a greater learning experience (Wiklund & Shepherd, 2003). Past research has shown that in
technology driven industries, NPD contributed to over forty-percent of firms profits (Zirger & Maidique, 1990) and in
another study across several industries NPD provided over thirty-percent of profits (Hamilton, 1968), thus indicating that the
importance of NPD is growing over time. As such, it provides a firm with a competitive advantage in the marketplace and
may allow long-term growth and financial independence if the firm has the capabilities to implement this strategy.
The key to implementing such a strategy is through the internal capabilities of the firm such as its strategic orientation
(Gatignon & Xuereb, 1997). Entrepreneurial orientation (EO) and market orientation (MO) are two dimensions of a firms
strategic orientation that it may rely on to develop highly successful new products to remain competitive within the
marketplace (Miles & Arnold, 1991). EO refers to the processes, practices, and decision-making activities that lead to entry
into markets that have not been explored by an existing firm (Rauch et al., 2009); it consists of the innovativeness,
proactiveness, and risk-taking of the firm. MO consists of intelligence generation, intelligence dissemination, and the
organization-wide responsiveness to it (Jaworski & Kohli, 1993). Both orientations are considered to be dynamic capabilities
since they belong to the subset of a firms competencies that allow a firm to create new products and processes to respond to
changing market circumstances (Frishammar & Horte, 2007).
Previous NPD research has suggested that there is a strong link between EO and MO and firms with a combination of the two
orientations will outperform other firms (Atuahene-Gima & Ko, 2001). Slater and Narver (1995) purport that EO and MO are
important complementary orientations that may enhance market performance and MO has been shown to have a positive
effect on overall firm performance (Zhou et al., 2005). But, a meta-analysis conducted by Henard & Szymanski (2001)
suggested that MO is not a primary driver of NPD performance and other research has also indicated that MO has shown
mixed results (e.g. Frishammar & Horte, 2007). We define NPD performance as the extent to which management perceives
new products to meet their market share, sales and customer use, sales growth and profit objectives (Gatignon & Xuereb,
1997). While each orientation may have its benefits for overall performance, research needs to further clarify the effects of
these orientations on additional outcome variables.
While a firm that possesses a high MO may understand the needs of the market better than the one that does not, EO is a key
component in developing new products to bring to the marketplace. The combinatory effects of innovativeness, risk taking,
and proactiveness may provide benefits for the overall effect of EO (Miller, 1983). Each component of EO has unique
benefits that may provide the firm with partial capabilities of enhancing NPD performance. The EO of a firm encourages
creativity and allows the firm to introduce and reap the rewards of successful innovations (Madsen et al., 2007). Firms with
an entrepreneurial culture may not be as controlled by bureaucratic inertia and resistance to get approval for NPD ideas
(Chandy & Tellis, 2000). EO stresses internal idea generation and may be a key to NPD since customers may not know
exactly what they want or cannot ascertain their future needs (Atuahene-Gima & Ko, 2001). The ability to take risks, be
more innovative, and initiate change sets firms apart from low EO firms (Zhou et al., 2005) in terms of NPD. Proactiveness
toward new opportunities enables firms to create products ahead of competitors and also ahead of consumers wants and
needs within product markets (Zhou et al., 2005). Thus, EO is hypothesized to have a positive effect on NPD performance
(H1).
EO is aggressive in the initiatives and causes a high level of financial uncertainty and risk (Atuahene-Gima & Ko, 2001). A
high EO may have a positive effect on the degree of product newnessthe extent to which new products produced by a firm
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are compatible with experiences and consumption patterns of consumers (Atuahene-Gima & Ko, 2001)as successful
innovations manifest when firms fill the gap between what the market needs and what is currently offered (Slater & Narver,
1995). Atuahene-Gima and Ko (2001) suggest that an EO is a capability to which firms engage in aggressive initiatives to
alter the competitive landscape in their favor. High EO firms have a strong focus on major innovations in which a market is
not currently in existence which must be created for product diffusion to occur (Frishammar & Horte, 2007). Thus, we
hypothesize, entrepreneurial orientation is positively related to the degree of product newness (H2).
Although a firm may possess a high degree of EO, the degree of product newness may adversely affect NPD performance.
Safer, more incremental innovations will lower the degree of learning for potential customers that may adopt the new product
(Lawton & Parasuraman, 1980). Consumers may be unaware of the utility that they may receive to which they may avoid
behavioral changes associated with learning effort and attaining potential benefits of radical new products (Hoeffler, 2003).
When the costs of purchase, trial, and overcoming information asymmetry outweigh the current usage of products, then the
consumer may forgo the purchase and stick to familiarity (Alexander et al., 2008). Thus, we hypothesize the degree of
product newness will be negatively related to new product development performance (H3).
An alternative strategic orientation, MO, may provide benefits to the firm in some situations, when in conjunction with EO,
but it may also hurt the firm in other regards. A firm that possesses a MO philosophy may be too reliant on new product ideas
from consumers, which leads to more imitative rather than innovative products (Lawton & Parasuraman, 1980). Prior
research has touted MOs effects on NPD performance (Zhou et al., 2005) yet the meta-analysis conducted by Henard and
Szymanski (2001) shows that MOs effects on NPD performance is not generalizable across research studies. We posit that
when firms become entrenched in the product-market in which they operate, they suffer from innovation resistance and
technological inertia (Chandy & Tellis, 2000) due to losing focus on breakthrough innovations that may develop new
markets. If signs from the market or consumers are not visible, high MO firms may steer clear from radical innovations.
Thus, we hypothesize market orientation will negatively affect the relationship between EO and NPD performance (H4a).
Although MO may be harmful in terms of NPD performance, it may work positively in conjunction with EO in other regards.
MO may lead to a competitive advantage by assessing the needs of consumers and implementing a strategy to fulfill those
needs. MO places priority on the profitable creation and maintaining superior customer value (Zhou et al., 2005). If a firm
develops radical new products but has a high MO, then the market and customer research that was generated, disseminated,
and implemented by the company could be the driving force behind the product newness. Thus, we hypothesize market
orientation will positively affect the relationship between the degree of product newness and NPD performance (H4b).
METHOD
The data for this study was obtained from 224 Swedish mid-sized manufacturing firms. The data was collected via mail
survey over a total period of four months. The data came from the Affarsdata database for an initial sample of 848 firms,
which was the universe of Swedish mid-sized manufacturing firms with 50-250 employees. A random sample of 400 firms
was pulled from the frame due to time and financial constraints. The average firm had 98 employees and annual sales of
approximately 20 million. The sample spans across several industries representing 210 SIC codes. Twelve of the firms
were dropped due to firms being subcontractors, lacking their own product development, or exiting the market through
bankruptcy. The remaining firms in the sample were then sent the questionnaires to be filled out. The authors received a total
of 224 completed questionnaires for a response rate of 57.7%. The questionnaires were completed by CEOs (93%) and R&D
or financial managers (7%). There were a total of 18 questionnaires that did not have all of the questions completed; as such
we deleted those from our sampling frame. The final sample consisted of 206 manufacturing firms.
Our research involves studying associations among latent and directly observed constructs; we utilized a structural equation
modeling technique that allowed us to estimate both measurement and structural models simultaneously to test our
hypotheses. The major benefit of SEM with respect to our research is the ability to incorporate multi-level confirmatory
factor analysis with path analysis. As a result, we obtained an overall good fit of our model to the data.
Measurement model. Confirmatory factor analysis showed a good fit to the data (2=114.938, 2/df=1.437, p=0.006). Since
the model is significant, the additional fit indices further examined show a good fit: CFI=0.969, RMSEA=0.046. We assessed
discriminant validity of the measurement model by comparing the square root of AVE scores, shown in the diagonal of Table
265
1, to the off-diagonal numbers: the diagonal values are much greater than the off-diagonal values showing support for
discriminant validity. Discriminant validity is supported by composite reliability scores greater than 0.67 and highly
significant factor loadings (p<0.001).
Since all the data came from the same questionnaires, we also estimated common method bias utilizing a common latent
factor test. The common latent factor method identified insignificant estimates ( =0.277, p=0.128), indicating insignificant
common method bias of 7.6% of variance. Since there is no single rule of thumb for this test, we concluded that common
method bias is low and our model is trustworthy since the number indicated by the test is much lower than 0.5 (Podsakoff et
al., 2003)
Full Model. The model was tested using SEM in AMOS 20.0. Overall, the model demonstrated a good fit to the data
(2=121.511, df=84, CFI=0.966, and RMSEA=0.047, 2/df=1.447). We predicted a positive relationship between the EO of
the firm and NPD performance. The model showed a significant positive coefficient (=0.44, p<0.001) providing support for
hypothesis 1. Our analysis showed that EO is also a significant predictor of the degree of product newness (=0.21, p<0.05)
supporting hypothesis 2. The model showed that the degree of product newness is negatively associated with the performance
of NPD (=-0.20, p<0.05) and provided support for hypothesis 3.
Multi-group Analysis. In order to test for the moderation effect of MO, a multi-group analysis was conducted (Unconstrained
model: 2= 236.490, df=168, CFI=0.966, RMSEA=0.045, 2/df=1.408). The sample for the study was dichotomized by MO
using a mean split for the items remaining after reliability checks ( > .70). There were 110 observations for low MO and 96
observations for high MO. The path coefficient was constrained between EO and NPDs performance (2=7.613, df=1,
p<0.01) and found that there are significant statistical differences between effects of EO on NPD given the two levels of MO.
This lends support to hypothesis 4a. Conversely, hypothesis 4b was not supported as we found no significant difference
between the two groups after constraining the path between the degree of product newness and NPD performance.
In contrast to existing literature, we found that MO may help or hurt a firms efforts on NPD performance. When companies
try to implement an EO strategy, they must be aware of the potential impact of MO, which can decrease the performance of
NPD. Organizational inertia may decrease EOs effect on NPD performance when a firm implements a high MO and lets the
market dictate the products being developed rather than being innovative. Conversely, if a firm implements a strategy to
develop products with a high degree of product newness, MO can reduce the effects of consumer learning and adoption rates.
In other words, firms high on both orientations may have both its advantages and disadvantages. While they may have
different philosophies, they may help each other in NPD performance by reducing the degree of leaning for consumers while
still developing successful new innovations. Alternatively, if they each are focused on NPD performance, then they will get
in each others way and do more harm than good. While our final hypothesis (H4b) was not supported, future research should
explore the notion of MO moderating such relationships. Research has shown that MO may be helpful or a hindrance to
firms that implement the strategy, but further studies may benefit from investigating the relationship between MO and NPD
performance. We hope this study opens the dialogue on this issue.
The results need to be interpreted in light of the studys limitations. The sample for this study consisted of mid-sized
manufacturing firms which may have played a role in the results. The measures for the variables may be slightly skewed to
the right given the firms propensity to enhance its favorability. Parts of the questionnaire, such as degree of product
newness, are better off being answered by the customer rather than the firms since the implications for the firm lie within
consumer perceptions and learning. While a firm may not perceive a radical degree of change in product newness, the
customer may feel what is offered by the firm in fact is a radical change. Another possible limitation is that NPD
performance is perceptual rather than empirical. Future research should explore the notion of measuring these variables
directly rather than using a perceptual measure by the firm.
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Clark, K., & Fujimoto, T. (1997). Product Development and Performance: Strategy, Organization, and Management in the
World Auto Industry. Journal of Product Innovation Management, 14(6), 429-458.
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Deeds, D. L., & Hill, C. W. (1996). Strategic Alliances and the Rate of New Product Development: An Empirical Study of
Entrepreneurial Biotechnology Firms. Journal of Business Venturing, 11, 41-55.
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Development Performance in Manufacturing Firms. Technology Analysis & Strategic Management, 19(6), 765-788.
Griffin, A. (1997). PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best
Practices. Journal of Product Innovation Management, 14, 429-459.
Hamilton, B. A. (1968). Management of New Products. New York: Booz Allen & Hamilton.
Henard, D. H., & Szymanski, D. M. (2001). Why Some New Products are More Succesful Than Others. Journal of
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Hoeffler, S. (2003). Measuring Preferences for Really New Products. Journal of Marketing Research, 40(November), 406420.
Jaworski, B. J., & Kohli, A. K. (1993). Market Orientation: Antecedents and Consequences. Journal of Marketing, 57(July),
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Lawton, L., & Parasuraman, A. (1980). The Impact of the Marketing Concept on New Product Planning. Journal of
Marketing, 44(1), 19-25.
Miles, M., & Arnold, D. (1991). The Relationship Between Marketing Orientation and Entrepreneurial Orientation.
Entrepreneurship Theory & Practice, 15(4), 49-66.
Miller, D., & Friesen, P. (1987). Archetypes of Strategy Formulation. Management Science, 24(9), 921-933.
Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common Method Biases in Behavioral Research:
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Rauch, A., Wiklund, J., Lumpkin, G., & Frese, M. (2009). Entrepreneurial Orientation and Business Performance: An
Assessment of Past Research and Suggestions for the Future. Entrepreneurship Theory and Practice, 33(3), 761-787.
Slater, S. F., & Narver, J. C. (1995). Market Orientation and the Learning Organization. Journal of Marketing, 59(3), 63-74.
Wiklund, J., & Shepherd, D. (2003). Knowledge-Based Resources, Entrepreneurial Orientation, and the Performance of
Small and Medium Sized Businesses. Strategic Management Journal, 24, 1307-1314.
Zhou, K. Z., Yim, C. K., & Tse, D. K. (2005). The Effects of Strategic Orientations on Technology- and Market-Based
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COMPLEMENTARY EFFECTS OF ENTREPRENEURIAL ORIENTATION, MARKET ORIENTATION AND

NETWORK TIES ON PERFORMANCE OF ENTREPRENEURIAL FIRMS IN A DEVELOPING ECONOMY
Nathaniel Boso, University of Leeds, United Kingdom
Vicky M. Story, University of Nottingham, United Kingdom
John W. Cadogan, Loughborough University and Lappeenranta University, United Kingdom
Ebenezer Ashie, Nestle Business Services - Africa, Ghana
ABSTRACT
Entrepreneurial orientation (EO), market orientation (MO) and network ties are typically modelled as separate antecedents of
performance. This research argues that the boundary conditions for such models are under-explored, as is their applicability to
developing economy settings. Accordingly, this study develops a model that argues that the performance benefits of EO and
MO are complementary, and varies across levels of social and business network ties.
Using primary data gathered from 203 entrepreneurial firms operating in Ghana, this study finds that the performance benefits
of EO and MO are greatest when both activities are highest. The results also indicate that performance outcomes increase when
high levels of EO, MO, and networks of social and business ties are aligned in entrepreneurial firms operating in developing
economies.
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UNDERSTANDING THE ROLE OF OTHERS PREFERENCES IN VOTER DECISION MAKING IN US

PRIMARY ELECTIONS
Neil Bendle, Ivey Business School, Western University, Canada
Mihaela-Alina Nastasoiu, Ivey Business School, Western University, Canada
ABSTRACT
Other voters preferences complicate the application of the marketing concept in many elections. Not only should a political
marketer serve the preferences of a voter but the marketer must also persuade the voter that other voters also like the candidate.
In a primary there are two ways others preferences may influence a voters consideration:
1) Viability, a candidates chance of winning the nomination,
2) Electability, a candidates chance of winning the eventual presidential election.
To begin to better understand the impact of other voters preferences we analyzed publically available data sources in respect
of primary elections. We investigated 3 questions: 1) Do voters care about electability? 2) Are viability predictions subjectively
determined? 3) Are voter predictions correlated with the best estimates available? We find that, electability matters to voters,
but the impact varies between elections. Participants views of viability are subjectively determined; those who did not like
Barack Obama were more resistant to being persuaded he would win the 2008 primary. Finally, we show that the general
publics assessment of viability is highly correlated with prediction market data. This work suggests a number of lessons for
political marketers and future avenues for research.
References available on request.
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MARKETING HAPPINESS IN POLITICS: STRANGE BEDFELLOWS,

BUT A WINNING PRESIDENTIAL ELECTION FRAMEWORK?
Theresa Billiot, Cameron University, USA
T.F.J. Steyn, Cameron University, USA
INTRODUCTION
Research on happiness has become prevalent in academic literature spanning across psychology, sociology, healthcare,
marketing, economics, and political science. See for example Cook and Chater (2010), Crossley and Langdridge (2005), Frey
and Stutzer (2002), Martin (2008), Mogilner (2010) and Mogilner, Kamvar, and Aaker (2011). The happiness concept have
influenced firms like Coca-Cola, Clinique, Zappos.com, Yahoo!, and Hugo Boss to connect to consumers by linking positive
emotions to their brand in a downturn economy (Mogilner, Aaker, and Kamvar 2012). Coca Cola has, for example, integrated
the word happiness into their campaigns with Open Happiness and Where will happiness strike next? while Clinique
commodified happiness with its perfume brand Happy. However, the direct usage of the happiness concept to connect
consumers with political candidates in a struggling economy has been avoided. Political marketers, however, use happiness
indirectly in an effort to produce favorable outcomes. This leads us to ask the following questions: How can political marketers
create an emotional connection that bonds individuals with their brand? How can politicians conceive a strategy to lead people
down a path of happiness? How can happiness bolster a political candidate into victory?
To address these questions we explore happiness from a collectivistic perspective by focusing on the constructs of
connectedness, perceived control, perceived progress, and a larger vision. However, because the economy occupied such a
prominent position in the 2012 presidential campaign we first investigate some economically related dimensions of happiness.
These dimensions include the concepts of employment, income equality and economic freedom.
ECONOMICALLY RELATED DIMENSIONS OF HAPPINESS
Studies have indicated a relationship between income and happiness, although the magnitude of the relationship is still unsure.
Kahneman and Deaton (2010) found that both emotional well-being and life evaluation (two indicators of subjective wellbeing, or happiness) improve with increased income up to $75,000 a year. Above the $75,000 level only life evaluation rises,
but emotional well-being remains constant. Frey and Stutzer (2002) describe a non-linear relationship between income levels
and happiness due to the dual concepts of relative income and aspiration levels, i.e. the propensity of individuals to compare
their (already higher) incomes to other (even higher) incomes motivates them to aspire to those even higher levels with the
resulting tension making them feel less happy.
If money does not equal happiness per se, what other economically related dimensions to happiness can we distinguish? Frey
and Stutzer (2002) points to employment, or more specifically, unemployment impacting individual happiness on two levels.
Firstly, unemployed people suffer non-pecuniary psychic and social costs diminishing their happiness, while secondly, general
unemployment (or bleak general economic prospects) signals a challenging future to individuals. This latter negative impact
on individual happiness is even more pronounced in individualistic societies like the USA which values the ability to provide
for yourself. Voters confirmed the importance of the economy and employment in the run-up to the 2012 election. According
to a national Pew Research Center survey (Pew Research Center 2012) conducted September 12 16 2012, 87% of registered
voters rated the economy as very important to their vote, while 83% indicated jobs to be very important in determining their
vote. These issues ranked first and second in importance for voters (p.1). Males as well as females indicated jobs to be very
important to their vote (78% for men to 86% for women) and 85% of men to 89% of women indicated the economy to be very
important to their vote (Pew Research Center 2012, p.4). To appeal toward women voters on the economy and jobs, President
Obama presented his first bill into law, the Lilly Ledbetter Fair Pay Act, during campaign rallies and at the town-hall
presidential debate as upholding one of this nations first principles: that we are all created equal and each deserve a chance
to pursue our own version of happiness (Stolberg 2009, p.1). Moreover, President Obamas first term administration appealed
toward young male and female college students through student loan reform, Pell Grant expansions, and student-loan interest
rates (Hellerman and Smith 2012; Perry 2012; Liberto 2012). These administration initiatives provide students with resources
to afford college so that each American has better future employment opportunities (Perry 2012).
Oishi, Kesebir and Deiner (2011) found that income equality impacts the happiness of Americans. They found that lowerincome Americans were on average happier in years with less national income inequality than in years with more national
income inequality. More income inequality was associated with less perceived fairness and general trust. Perceived fairness
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and general trust weighed especially important for lower-income respondents explaining why the negative association between
income inequality and happiness held for lower-income respondents, but not for higher-income respondents. These findings
need to be considered against the backdrop of Americans being more accepting of income inequality than Europeans because
they perceive upward mobility easier than Europeans (Frey and Stutzer 2002). To increase income equality and thereby
happiness, the Obama campaign advocated an economic plan that would close the income gap by mandating the rich to pay
higher taxes. President Obama stated how countries with less inequality tend to have stronger and steadier economic growth
over the long run (Lane 2011, p.2). He presented his proposed tax plan as enabling critical investments in education and
training, which were projected to create future economic growth and equality (Lane 2011; Sahadi 2012). By investing in
education and training, President Obama asserted greater equality and social mobility for Americans (Lane 2011).
Gropper, Lawson & Thorne (2011) found a positive relationship between economic freedom and national levels of happiness.
Such positive influences of economic freedom on happiness are magnified by an increase of GDP per capita. They also found
that freer people generally are wealthier, live longer and are happier. Greater economic freedom is usually associated with
capitalism, and the Pew Research Center (2011, p.1) found in a national sample of 1,521 adults that 50% of respondents hold
a positive view and 40% held a negative view of capitalism. The term socialism (generally associated with less economic
freedom) was regarded as negative by 60% of respondents while only 31% regarded it positively (Pew Research Center 2011,
p.1). Analyzing the views of ethnic, age, party, and ideology groups on these issues revealed more acute differences. While
more White respondents regarded capitalism positive than socialism (55% to 24%), Black (55% to 41%) and Hispanic (44%
to 32%) respondents showed the inverse with more positive feelings towards socialism than towards capitalism (Pew Research
Center 2011, p.3). All age groups 30 and older (although with diminishing support among younger groups) regarded capitalism
more positive than socialism, but respondents aged 18 29 years of age regarded socialism more positive than capitalism (49%
to 46%) (Pew Research Center 2011, p.3). All flavors of Republican as well as Independent respondents overwhelmingly held
more positive views of capitalism than socialism, while conservative/moderate democrats only indicated a marginal difference
in favor of capitalism (42% to 37%). Liberal democrats, however, regarded socialism more positive than capitalism (59% to
46%) (Pew Research Center 2011, p.3).
COLLECTIVISTIC DIMENSIONS OF HAPPINESS
Collectivistic behaviors are common in business settings where teamwork concepts, group harmony, and relationships are
highly desired to produce positive outcomes. Conjoined with psychological constructs that influences happiness, collectivism
can create an organizational culture that drives competitive advantages. For example, Aaker (2011) stated how Tony Hsieh,
founder of Zappos.com, designed a collectivistic framework centered on four happiness dimensions (i.e. connectedness,
perceived control, perceived progress and a larger vision), which created brand relevancy in retailing by facilitating exceptional
customer relationships. These dimensions played an essential role in constructing the ethos of Zappos culture, making it
conducive to diffuse happiness internally (among employees) and externally (among customers) (Aaker 2011). Analogous to
Heishs model, President Obamas 2012 campaign demonstrated a collectivistic marketing model by using these dimensions
in an effort to strengthen his loyal base and to attract new voters.
Connectedness
A valuable benefit of a more connected society is the development of social relationships, which is an important driving factor
to produce happiness (Hsieh 2010; Martin 2008). As stated by Crossley and Langdridge (2005), connected societies create
happiness because social relationships represent a source of joy and a bolster for self-esteem (p.108). Furthermore, connected
societies shape ones self-concept where they advance knowledge about their identity, cultivate positive feelings (Oyserman
2006), and shape behavior toward a brand (Campbell, Converse, Miller, and Stokes 1960; Lloyd 2008).
How did the Obama campaign create happiness through connectedness? The answer is to be found in the concept of inclusion.
To be connected, individuals need to be included around a common objective (Oyserman 2006). According to Bird (2012) the
Obama campaign focused on inclusiveness by attracting new individuals into the voting process. This included marginalized
groups into the political process and simultaneously broadened the electorate (Bird 2012). Moreover, the inclusion strategy
defined segmented audiences, allowing the Obama campaign to narrowcast its messages toward key demographic groups to
create connections and to influence voting behavior (Parsons and Memoli 2012). By emphasizing inclusiveness, the Obama
campaign benefited disproportionately from minority groups, winning 71% of the Latino vote (Bennett 2012; Williams 2012),
73% of the Asian vote (Williams 2012), 93% of the African-American vote (Williams 2012), 60% of 18 to 29 year-olds (Bennett
2012), and 75% of the homosexual vote (Cohen 2012).
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While inclusion can connect individuals to a brand, individuals must engage in happiness-inducing activities perceived to be
meaningful, challenging, and engaging that leads to valuable relationships (Cskiszentmihalyi 1997; Martin 2008). The design
of these activities should use demographical and psychological underpinnings to deliver happiness. For instance, research
indicates how the meaning of happiness shifts across an individuals lifespan due to the amount of time an individual has left
to live (Carstensen 2006; Drolet and Williams 2005; Mogilner et al. 2011). This research suggests how younger adults are more
likely to experience excited happiness, while older adults are more likely to sense peaceful happiness. (Mogilner et al. 2011).
However, more recent research by Mogilner et al. (2012) suggests that temporal focus plays a more significant role to determine
how one defines happiness. This research suggested that individuals focused on the future will experience excited happiness,
while those focused on the present moment will experience peaceful happiness (Mogilner et al. 2012).
Perceived Control and Perceived Progress
Activities designed to provide perceived control and perceived progress also prove valuable as these factors represent
interrelated psychological constructs that can enhance individual happiness (Cook and Chater 2010; Hsieh 2010). The
underpinnings of the perceived control-perceived progress relationship stems from Banduras (1997) self-efficacy and selfregulation theory. As noted by Bandura (1997), self-efficacy determines how individuals approach goals, tasks, and challenges.
For instance, an individual with higher self-efficacy takes greater ownership of his/her activities, thus creating higher levels of
perceived control of these activities (Cook and Chater 2010). As individuals level of perceived control increases, they are more
likely to face up to challenges, overcome obstacles, undertake difficult tasks, and develop strong commitments to reach their
desired goals (Cook and Chater 2010). The individuals self-efficacy, however, is impacted by levels of perceived progress
toward goal accomplishments, as asserted by the self-regulation theory (Bandura and Locke 2003; Wanberg, Zhu, and van
Hooft 2010). As individuals become successful (i.e. goals reached), they develop perceived progress and self-efficacy because
they witness their activities moving forward, especially while having perceived control of these activities. This develops higher
levels of confidence and increases their level of happiness (Hsieh 2010). Moreover, those with high self-efficacy have a lower
likelihood to develop negative emotions (Cook and Chater 2010) because they have a stronger perceived control over their
emotions (Bandura 1997; Cook and Chater 2010). However, if individuals feel constricted and constrained on activities, a lack
of perceived control and perceived progress threatens (Frazier, Keenan, Anders, Perera, Shallcross, and Hintz 2011), having a
negative impact on happiness (Hsieh 2010).
To increase perceived control, Banduras (1994) social modeling can increase ones self-efficacy by providing one with a locus
of control, where people believe that they are in control of the events that can affect them. With social modeling, individuals
observe similar people complete tasks and reach goals successfully, which instills beliefs that they also possess abilities to
succeed in comparable activities (Bandura 1994). President Obamas bottom to the top campaign approach served as a form
of social modeling, where the campaign developed a technological culture to assist local volunteers with increasing their
perceived control in events such as registering voters, ensuring these new voters voted, and increasing donations from
individuals who were geographically and demographically similar to them (Daily Kos 2012; Kolakowski 2013).
To increase perceived progress, Banduras (1994) social persuasions premise states that people can influence individuals
through positive verbal encouragement by confirming that they have similar capabilities to succeed in their tasks and goals.
This social persuasion helps individuals to overcome self-doubt and to increase self-confidence. Evidence of social persuasion
was seen through the Obama campaigns Dashboard, which served as an online hub for connecting and conversing with voters
(Tummarello 2012). The Dashboard kept supporters up-to-date on campaign events and tracked volunteers perceived progress
to achieving state and national goals (Tummarello 2012). Moreover, Dashboard disseminated emails to congratulate the
Presidents supporters and acknowledged that without their efforts, skills, and determination, the campaign would not be able
to succeed (Tummarello 2012). Such encouraging messages were designed to socially persuade individuals who have been
hesitant to participate in campaign activities. These messages can boost individual self-esteem to accomplish goals and thereby
feeding perceived progress and individual happiness.
Larger Vision
Even though it is natural for people to have dreams, such visions must extend into a higher purpose for happiness to result.
While focusing on a larger vision, a person pursues happiness indirectly by helping others, which leads to ones own true
happiness (Hsieh 2010; Martin 2008). This personal commitment to helping others restricts psychological egoism, which leads
people to make sacrifices and to abandon excessive self-seeking and self-preoccupation (Martin 2008). What does this vision
with a higher purpose look like?
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According to David Axelrod, President Obamas Chief Media Advisor, the President holds a fundamental belief that individuals
should be part of something larger than themselves, and if one spent your life improving communities, countries, and the world,
then you will live a more valuable life (Biography Channel 2009). As the 2004 Democratic National Convention (DNC) keynote
speaker, (then) Senator Obama spoke on how this larger vision can become possible if different worlds such as Liberal America,
Conservative America, Black America, White America, Latino America, and Asian America work together and overcome
adversity (Public Broadcasting Service 2004). This vision was shaped through President Obamas personal and internal racial
identity struggles, acknowledgement of power inequities due to race, his need for connectedness in the Black culture, living in
impoverished Indonesia, and sharing his mothers devotion to help the underprivileged (Obama 2009).
We started out asking the question how political marketers can create an emotional connection that bonds individuals with their
brand. An appropriate emotional connection seems to be happiness. We also asked how politicians can conceive a strategy to
lead people down a path of happiness. The answer to this question can be found in a collectivistic approach that facilitates
individual happiness. A third question was asked on how happiness can bolster a political candidate into victory. Looking for
ways to enhance individual happiness even amidst obviously negative conditions (like the economy) can set the stage for
electoral success.
Even though this paper integrates academic and applied research that constitutes the identified happiness constructs, the
concepts still needs to be empirically tested. The complexity of the political environment also needs to be discounted. For
example, the media plays an integral role in shaping public opinion about political parties, candidates and campaigns. Political
consumers who may not have long-held ideological beliefs can become swayed toward one candidate from the medias
coverage of and tone about candidates, while political consumers with long-held ideology may consume media that
disseminates information aligning with and reinforcing their beliefs toward a political party or candidate.
Would the marketing of happiness indirectly serve as a successful framework for all political candidates? We would argue in
the negative because the candidate using this framework would have to be perceived as competent by the electorate as well.
This contention would also apply in corporate settings where unsatisfactory products would eventually fail despite any efforts
of marketing happiness. Also, President Obama has been characterized as an effective orator and as charismatic, which can
impact the way individuals engage with his happiness strategy. Therefore, political competency, oratory skills, and charisma
are a few variables that may mediate the success of marketing happiness in a political environment.
This paper proposes a number of implications for political marketing. Firstly, the identified framework highlights the value of
empowering voters through four collectivistic happiness constructs during the campaign process, namely connectedness,
perceived control, perceived progress and a larger vision. Invoking these happiness constructs indirectly contributed towards
positive election results for President Obama. Marketing happiness therefore indirectly shapes campaign strategies, techniques,
and principles building a voting base which appreciates individual and social benefits and extends financial benefits for
campaign success.
Secondly, the framework illustrates why happiness should be directed at the micro-level rather than projecting happiness toward
the masses. Community members better understand the economic and social needs of their precincts or districts. Therefore, if
happiness constructs target community members, it helps to create engagement in niche, yet personal, marketing. This niche
and personal marketing approach leads to a creation of powerful local connections that feed individual happiness momentum
to sustain a political brand over time.
Thirdly, this research heightens the importance of creating dialog between voters and political brands through diverse marketing
communication channels. Marketing communication channels should create connected human networks through grassroots and
social media efforts that can shape the way individuals think, feel, and behave. Moreover, these networks advocate and recruit
for a political brand, leading to a broader voter base.
REFERENCES
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A POLITICAL MARKETING PERSPECTIVE ON SOCIAL MEDIA ADOPTION BY

US CONGRESSIONAL CAMPAIGNS
Christine B. Williams, Bentley University, United States
Girish J. Jeff Gulati, Bentley University, United States
ABSTRACT
Using a marketing perspective, this study investigates why candidates adopted Facebook and Twitter in the 2010 elections to
the U.S. Congress. Our content analysis of 62 interviews with candidates and campaign staff members provides a richer
explanation for the factors underlying these decisions. This relatively large sample of House races affords the opportunity to
investigate differences between Democrats and Republicans as well as between incumbents and those who are challengers or
contesting open seats. The sample is sufficiently representative that our findings should generalize to the larger population.
In assessing the value of social media use, campaigns generally espouse a cautious if not negative view. Regarding market
segmentation, many campaigns are not targeting particular groups in adopting social media, but focus on young voters when
they do. Finally, campaigns are more focused on communicating their positions (product orientation) than mobilizing or
engaging voters through social media (sales and market orientation).
INTRODUCTION
The 2008 elections marked another major milestone for the Internet and political campaigns in the United States. For the first
time, over half of the voting-age public (55%) used the Internet to connect in some form to the political process in an election
year. In 2010, the 54% of adults who used the Internet in this way far surpassed the 31% who did so in the 2006 midterm
contest (Smith 2011). In all categories of online political activity, the last two election cycles saw record numbers of
Americans going online for political news, to view official campaign videos, and to use Facebook and other online social
networking sites to engage in the campaign (Smith 2009; Smith 2011).
Also in 2008, candidates for Congress made significant strides integrating Web sites and social media into their larger
communication strategy and were poised to build on these gains and seek new tools in the next election cycle. In 2010, 92%
of the major party candidates had created a campaign Web site, and 92% had a presence on Facebook. In addition, 71% of
candidates had a presence on Twitter, the newest addition in social media campaign tools.
This embrace of social media by a large majority of candidates running for Congress is changing the way that campaigns are
managed, how money is raised, resources are allocated, and the means candidates use to communicate with the electorate and
with their supporters and staff. Ultimately, social media have the potential to alter the dynamics of campaigns and elections.
In its original formulation (Newman 1999, p. xiii), political marketing was defined as the
Application of marketing principles and procedures in political campaigns by various individuals and
organizations. The procedures involved include the analysis, development, execution and management of strategic
campaigns by candidates, political parties, governments, lobbyists and interest groups that seek to drive public
opinion, advance their own ideologies, win elections and pass legislation and referenda in response to the needs and
wants of selected people and groups in society.
Kotler and Kotler (1999) operationalize this definition through their marketing process model that posits six sequential steps:
environmental research, assessment, market segmentation, goal setting and strategic planning, tool development and
implementation. Mauser (1983) streamlined the same concepts into a three stage process while Lees-Marshment (2003) has
specified a more comprehensive and granular eight stage model. The various conceptualizations all see the adoption decision
as rooted in the initial stages of the process: research and assessment of the political environment. In political science
literature, the environment typically references constituency demographics. The rationale derives from diffusion of
innovation theories, which argue that constituency factors lead candidates (more broadly, individuals or organizations) to
adopt new technologies because they are mindful of the degree to which an innovation is compatible or incompatible with
expectations (existing norms and values), as well as with users/customers needs and capacities (Tornatzky and Klein 1982).
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PRIOR RESEARCH ON CAMPAIGN TECHNOLOGY ADOPTION

The constituency attributes most often selected to explain campaign Web site adoption are those that have been shown to
correlate with citizen access to and use of the Internet: education, income, ethnicity, age, and urbanization (Chadwick 2006;
Klotz 2004; Mossberger et al. 2003). Other studies have examined the precursors to adoption in terms of assessments of the
external political environment. For example, Adler, et al. (1998) found that Republicans, younger legislators and
representatives from electorally marginal districts were more likely to become early adopters by creating homepages on the
World Wide Web when they first became available to members of the U.S. House of Representatives between June and
August 1997. Jackson (2003), on the other hand, did not find marginality to be a predictor of early adoption by MPs in the
U.K. Research on website adoption by campaigns shows that in the early days, incumbents were less likely than challengers
to campaign on the Web, but a competitive race increased its use by incumbents and challengers alike (Kamarck 2002; Xenos
and Foot 2005; Foot and Schneider 2006; Hernnson et al. 2007). Electoral attributes are less important today in
differentiating which campaigns have a Web site, but remain important determinants of the degree to which they provide
more sophisticated content and use their Web site to engage and mobilize supporters (Gulati and Williams 2007). With
respect to social media, (Gulati and Williams 2010) found that incumbents were significantly more likely to have adopted
Facebook, but incumbents were significantly less likely than both challengers and open seat candidates to be early adopters of
Twitter; competitiveness of the race did not matter.
Internal assessment factors typically involve resources. For example, diffusion of innovation studies often relate adoption
decisions to the size and age of the business, its IT support and budget, and technology experience (e.g., Goode and Stevens
2000). With respect to campaigns, financially disadvantaged candidates were less likely to have a campaign Web site in the
early days of Internet campaigning (Gibson et al. 2003), although this has proved less of a barrier subsequently. Financial
resources and major party (as distinct from minor or third party status, which in the U.S. renders them inconsequential) still
differentiate which campaigns incorporate the latest technology and features, however (Foot and Schneider 2006). In the
case of Facebook and Twitter adoption, candidates who raised the most money were the most likely to have adopted (Gulati
and Williams 2011). Experience also figures in campaigns internal assessments. Familiarity with technology and earlier
generations of online media increased the likelihood of adoption. Candidates who also had a campaign Web site were more
likely to have adopted Facebook than those candidates without a Web site. In addition, candidates who had a Web site and a
Facebook profile were more likely to have adopted Twitter (Gulati and Williams 2011).
While these studies and findings indicate who adopts social media in campaigns and who does not, these and other results
from statistical models are unable to tell us the reasons why candidates adopt new technologies. What are the targets, goals
and plans (the latter stages in Kotler and Kotlers process model) that underlie these decisions, and do they collectively
represent a marketing strategy or orientation? A political marketing perspective further leads us to question how these new
technologies are being used (implementation stage) and their consequences (evaluation).
x
x
x
x
Is the permanent campaign evident in these campaigns use of new technology, or is it a one-off application
with limited or unspecified objectives and motivation?
What kinds of communication do these new technologies afford campaigns in terms of purpose (e.g., seeking
feedback) and direction (one-way or two-way)?
Are these new technologies directed at building networks and relationships between candidates and the electorate
or segments thereof?
Do campaigns applications of new technologies evidence professionalism, i.e., are they holistic and strategic in
their approach? More specifically, have campaigns: (a) specified their objectives; (b) identified their target
audience; (c) reached clarity about their goals and how to achieve them; (d) identified the best delivery medium
or media for each of the above and chosen their message accordingly; and (e) assessed their success?
THE DATA: CANDIDATE INTERVIEWS
The goal of this study is to obtain a deeper understanding of how congressional candidates use Facebook and Twitter, and to
uncover the underlying motives and strategic goals for adopting social media. We conducted interviews with representatives
from 62 different campaigns who had first-hand knowledge of the campaigns Internet strategy and operations between
October 15 and December 13 2010. Using a semi-structured interview protocol developed by the authors, the interviews were
conducted by 19 student assistants who were enrolled in a class on campaigns & elections. All assistants asked the campaign
representatives to provide the reasons why their candidates were using social media in general and which specific
applications and features they were using, and describe how they were integrating the social media into their larger strategy.
Candidates who had not adopted one or both media also were interviewed and asked to discuss the reasons why they had not
done so.
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Although our objective for conducting these interviews was to understand why (and how) some campaigns chose to use (or
not use) Facebook and Twitter, rather than make generalizations, we did strive to obtain as representative a sample as
possible. Each assistant was randomly assigned approximately 23 races, which yielded list of approximately 38 candidates to
interview. Contact information was obtained from the candidates web sites. In some cases, the person in charge of social
media activities or maintaining the site was identified by browsing the candidates Facebook page. At least one attempt was
made at contacting each candidates campaign either by e-mail or phone, but nearly all of the interviews were conducted over
the phone. In 10 cases, the candidates themselves responded to the interviews. At the end of the field period, we obtained
interviews from 62 campaigns. In our sample, 61% were Republicans, 40% were incumbents, 44% were challengers, and
16% were candidates running in open seats. In addition 29% of the interviews were from campaigns involved in competitive
races. The average age of the candidate was 53.6 (median = 53), 91% were white, and 82% were men. We acknowledge that
the sample is somewhat biased towards Republicans, which we assume is the result of the greater accessibility of challengers
and more challengers being Republicans in 2010. Another 26 interviews were conducted but not used because they were of
Senate candidates, had responses dealing only with YouTube, or were unusable for quality control reasons.
INTERVIEW ANALYSIS
Assessment
There are 36 campaigns out of the 62, or just over half of our sample whose interviews offer assessments of whether social
media are necessary or important to winning, and the strategic purposes for which they were being employed. We subdivided
Assessment into three sub-topics: Necessary/Important, Specific Strategy, and Opponents Actions. Necessary/ Important
was the most frequently cited comment (18 campaigns) followed by Opponents Actions (12 campaign references), and 6
Specific Strategy references. We further divided the sub-topics to differentiate positive from negative assessments. Table 1
illustrates types of comments that evidence a strategic calculus and how these distributed themselves by sub-topic.
Of the 18 comments about the role of social media, 12 of the campaigns said it was not necessary or important; only 6 of
them said they felt it was. Thus by a 2 to 1 margin, campaigns are cautious or negative in their strategic evaluations of social
media. Turning to the comments about their opponents influence, 7 of the 12 campaigns represented here did not care
whether their opponent had adopted social media or indicated that the opponents actions did not influence their decision; 5
said the opposite. Interestingly most knew whether or not and how their opponent was using social media: In the primary
our competitor didnt use Facebook at all; the competitors page was an absolute failure. They would post challenges for us,
but it didnt behoove us to engage in these challenges.
Once the positive and negative references within the Necessary and Opponents Actions sub-topics are separated, too few
remain to confidently assess the difference between Democratic and Republican campaigns and between incumbent and nonincumbent candidates. The cases we do have show that Republicans were somewhat less interested in their opponents
actions and less convinced of the importance of social media than Democrats. Non-incumbents were slightly more
influenced by their opponents social media actions, but less convinced of the technologys importance than incumbents. In
both cases it may be that those in an advantageous electoral position (Republicans in 2010 and incumbents generally) can
afford to ignore the opposition. In assessing importance, challengers in Congressional races may feel, and realistically so,
that other factors such as financing weigh much more critically on their chances than their social media presence. A much
larger sample of interviews is needed to ascertain whether these findings are borne out.
Although not numerous (6 campaigns), there were a variety of Specific Strategy comments. These ranged from citing social
medias strategic value to first-time candidates, for offsetting incumbents advantages, fewer resources, or a climate that
favored the opposite (Republican) party. Another viewed social media in a particular capacity, namely as an extension of the
campaigns advertising strategy. That very few campaigns identified any specific strategic assessment of social media shows
this is still a new technology with which campaigns are experimenting. Even though 92% of Congressional campaigns had a
presence on Facebook in 2010 and 71% had Twitter accounts, we do not yet see standardization in how campaigns view their
role, nor evidence social media have been integrated into a larger campaign strategy or with other, traditional marketing tools.
Market Segmentation: Target Groups
Market segmentation divides the electorate into subgroups based on criteria such as partisanship, likelihood of voting, and
demographics and tailoring a strategy accordingly (Cwalina, et al. 2011). There are 34 campaigns out of the 62 campaigns
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we interviewed, or nearly half of our sample that reference a group that they targeted through social media or indicated that
they were not targeting a specific group or anyone in particular. We subdivided the Target Groups category into four subtopics: Youth, Not Youth or No Target, Partisans, and Other. Not surprisingly, the largest number of campaigns directed
their comments to the youth demographic: 18 said that they were targeting younger voters, and 11 said either that they were
not targeting youth, were targeting everyone, or described their constituency as older. Only two identified party supporters or
activists as their intended target group, and one identified a different criterion for targetingtheir local district. A few
mentioned Others (young professionals, urban voters) as a secondary target, but our analysis focuses only on the primary
group. Table 2 illustrates the comments indicative of market segmentation and how these distributed across target groups.
Our sample of 34 Target Group references has 12 (35%) Democrats and 22 (65%) Republicans. For the sub-topic Youth, 7
of the 18 (39%) are from Democrats and the other 11 (61%) are from Republicans. That is very close to the sample
distribution with Democrats being slightly more youth oriented in their targeting. We see a much clearer difference in the
party split on the sub-topic Not Youth/No Target. Here only 3 of the 13 (23%) are from Democratic campaigns while 10
(77%) are from Republicans. In other words, Republicans are either not targeting youth or are targeting everyone. This
appears consistent with the age differential in partisan supporters generally and in 2010 specifically where under 30 was the
only age group to support Democrats (Connelly and Marsh 2010).
None of the sub-topic splits based on incumbency status reveal any differences in campaigns targeting behaviors. Whereas
parties concern themselves with mobilizing their base, and the supporters who comprise their base are differentiated
demographically, there is no inherent reason why groups should differentiate themselves based on incumbency status. Since
there were no candidate age differences in motivation, strategic calculus or target group, the older age of incumbents has no
confounding effect here. We were unable to test whether the competitiveness of the race affected targeting behavior,
motivation or strategic calculus because so few Congressional contests are competitive. That would require a larger sample or
over sampling those races in the interview selection process.
Goals and Plan
Lees-Marshment (2003) offers insights into the middle stages of the marketing process, developing a strategy and plan, using
three vantage points: product orientation, sales orientation and marketing orientation. Political parties use these in
combination or at different times. Product orientation focuses on their platform and issue positions while a sales orientation
is focused on using market research to develop and implement advertising and communication techniques to persuade voters.
Market orientation, in contrast, uses intelligence not just to identify voters needs and wants, but to respond to and meet them.
There are 46 campaigns out of the 62, or three quarters of our sample whose interviews describe their specific motivation in
terms of goals and a plan for adopting Facebook or Twitter. Our subdivisions of this category reflect Lees-Marshments
product, sales, and market orientations: Research/Polling, Communicationof positions and record--(product orientation),
Mobilization (sales), Engagement (market orientation), and Non-adoption. Communication was the most frequently cited
motive (25 references) followed by Mobilization/Engagement (19 references), and 2 Non-adoption references. Only one
campaign interview included a secondary research motive (it gave our office the option to see how voters felt about issues
and to see the level of support we had). Table 2 illustrates comments indicative of Goals and Plans by sub-topic.
The 25 references to the sub-topic Communication divided evenly between the parties: 12 came from Democratic
candidates campaigns and 13 came from Republican campaigns. However, since the 46 Motivation comments as a whole
represent 28 (61%) Republicans and 18 (39%) Democrats, Republican campaigns are underrepresented and Democratic
campaigns are overrepresented in the Communication group. The reverse obtains when we split the references to the subtopic Mobilization/Engagement between parties. Here 14 (74%) of the comments came from Republican candidates
campaigns and only 5 (26%) from Democrats. This suggests that in the 2010 elections, Republicans were more actively
seeking to energize supporters, and it is consistent with anecdotal descriptions of the parties behavior and respective
competitive positions in the midterm election (Drake 2010; Lightman 2010).
Regarding incumbency status, 11 of the Communication references came from incumbents, whereas 14 of them came from
challengers (8) or those contesting open seats (6). The distribution across all 46 Goals and Plan comments is 39%
incumbents and 61% challengers (41%) plus open seats (20%). This means incumbents have a somewhat higher propensity
to reference Communication than their proportion in the larger sample (44% vs. 39%). Mobilization/ Engagement produces
the opposite split: only 6 incumbents referenced mobilization or engagement in contrast to the 10 challengers plus 3 open seat
candidates who referenced it (68.5% vs. 61%). This is consistent with early studies of campaign website adoption which
277
found incumbents were slower to adopt new technologies (e.g., Kamarck 2002). There seems to be less incentive for
incumbents to go beyond basic informing practice (Foot and Schneider 2006) or product orientation when they do adopt.
CONCLUSION
Much of the previous research on the adoption of Internet applications by congressional candidates has relied exclusively on
quantitative data analysis. This paper set out to understand the factors related to the decisions of Congressional candidates to
adopt social media, namely Facebook and Twitter. We conducted semi-structured interviews with 62 campaigns, asking
them their assessment of social media adoption, market segmentation strategy, and goals and plans to implement these.
More specifically, we focused on how campaigns calculated the costs and benefits of adoption, the segments of the electorate
that they wanted to reach through social media (i.e., target groups), and what specifically they hoped to accomplish and how
they planned to integrate social media into their larger communication, mobilization and engagement strategies.
Our interviews uncovered a number of interesting insights not previously gleaned from the estimates generated from
statistical models. One of the most noteworthy findings is that social media did not receive very positive assessments in the
2010 election cycle. Most of the campaigns said that they did not see Facebook or Twitter as necessary or important for
winning, and some were either unfavorable or skeptical towards social medias strategic value. These findings are consistent
with the findings from statistical analyses from the past two election cycles that showed that the competitiveness of the race
was unrelated to the decision to adopt (Gulati and Williams 2011; Williams and Gulati 2009). But now we have more of an
understanding for why that is the case. Speculation had been that the reason competitiveness was unrelated to adoption was
that social media was becoming a standard campaign tool. While that may be the case, the campaigns do not see it as
necessary or even advantageous for winning. It will be interesting to see whether that changes in 2012 or future elections.
It is assumed that since Facebook began as a medium restricted to college students and that younger people are the most
eager and capable of embracing new technology, that campaigns would use social media to communicate to young voters in
particular and use it to engage and mobilize them as well. Statistical models have not shown that the median age or
percentage of elderly people in the district differentites campaigns that adopt from those that do not (Gulati and Williams
2011). Yet, the analysis of our interview data clearly shows that a majority of the campaigns targeting a specific constituency
are indeed using social media to try to reach young people. This is a decision divorced from the common inference that the
proportion of elderly or younger voters in the district is the mechanism influencing the decision to target that market segment.
Finally, we found the main goal for campaigns in adopting social media was to communicate their message to the voting
public, i.e., a product orientation. To a lesser extent, campaigns sought to mobilize (sales orientation) and engage (market
orientation) supporters and other target groups. Incumbents, who have more to say, were more motivated by communication,
while non-incumbents were more motivated by engagement. This indicates the underlying motivation to adopt is not tied to
conventional constituency characteristics, and electoral circumstances elicit different motivations. Statistical models
generally omit, or are ill suited for testing, these nuances underlying the decisions to adopt and use social media.
While there have been other studies that have taken a qualitative approach (e.g., see Foot and Schneider 2006; Howard 2006;
Jackson 2003), it has been rare for researchers to combine a large-N quantitative study with numerous in-depth interviews.
Our previous study (Gulati and Williams 2011) combined with these 62 interviews with candidates and staff from the
campaigns provide a richer explanation for the motivation behind candidates decisions to adopt social media and sets the
stage for our study of the 2012 campaigns. Our goal is to conduct twice as many interviews as we did in 2010, have a more
representative sample of candidates, and a more structured interview protocol for our student assistants. We also want to learn
more about the people who comprise the campaigns social-media team, how content is generated, the process by which
content is placed and managed on the social media sites, and more about how it is being integrated in the larger campaign
strategy. We urge others to adopt this approach as well to learn more about how and why candidates adopt social media.
278
TABLES
Table 1. Sample Interview Comments Referencing Assessment
ASSESSMENT (36 campaigns)
sub-topic: necessary, negative (12 campaigns)
e.g., Representative xxxx did not think that it would have a significant
impact on the outcome of the election.
sub-topic: necessary, positive (6 campaigns)
e.g.,We think that it is one of many great resources that are needed in
order to win a political campaign.
sub-topic: opponent, negative (7 campaigns)
e.g., The campaign manager felt that the social media wasnt utilized by
the opponent and didnt feel that it was something they needed to do.
More of an on-foot campaign situation.
sub-topic: opponent, positive
(5 campaigns)
e.g., Our challenger didnt have one so it became clear that this was one
area where we could excel in our campaign strategy.
sub-topic: specific strategic goal
(6 campaigns)
e.g., We knew that defeating an incumbent is difficult in any election so

we knew that even though the political climate was favored towards the
Republicans, we had to utilize as many tools as possible.
Table 2. Sample Interview Comments Referencing Target Group

TARGET GROUP (34 campaigns)
sub-topic: youth (18 campaigns)
e.g., Our main target was the younger generation, anyone 35 or
younger. Facebook is inherently popular among that age group.
sub-topic: not youth/no target (13 campaigns)
e.g., The biggest demographic of our voter base was women over 55.
We didnt target people under 18 because they werent able to vote.
Most of our fans fell into the traditional democratic voter base.
sub-topic: partisans (2 campaigns)
e.g., Mainly geared towards people who were activists or supporters.
e.g., Mostly for people who were already supporters- encourage them
to get their friends involved. Hispanics untapped potential.
sub-topic: other (1 campaign)
e.g., The largest target demographic would be people who live in the
district.
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Table 3. Sample Interview Comments Referencing Goals & Plan
GOALS & PLAN (46 campaigns)

sub-topic: Communication (25 campaigns)
e.g., It was primarily used for the dissemination of information. People
can use the page to see how __________ voted on specific issues. If
they want to know how he voted on the smoking ban, then they can
easily check out the Facebook page to find that information. Facebook is
a great way of keeping the public informed on __________s work in
office
sub-topic: Mobilization/engagement (19 campaigns)
e.g., Basically to connect people to our campaign and possibly engage
them. To increase rally turnout.
sub-topic: Non-adoption (2 campaigns)
e.g., didnt want to waste time on something that wouldnt return any
concrete results.
e.g., no need for social media, felt it didnt hurt them.
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EXPRESSING CONSUMER DISSATISFACTION ONLINE: ANTECEDENTS AND EFFECTS OF NEGATIVE

WOM IN SOCIAL MEDIA
Oliver Cruz-Miln, University of Texas Pan American, USA.
INTRODUCTION
Based on the models of consumer satisfaction/dissatisfaction (CS/D) studied in past research (Churchill and Surprenant 1982;
Oliver 1980), complaint behavior occurs when consumer become dissatisfied with a purchase that did not meet their
expectations about quality or performance. Satisfaction or dissatisfaction are among the main reasons for customer to engage
in either positive or negative word-of-mouth (WOM), respectively (Sundaram et al. 1998). According to Keller and Libai
(2009), more than 75% of WOM occurs in face-to-face settings, but the emergence of Internet communications has given rise
to concerns from companies regarding complaining behavior of their consumers online (Harrison-Walker 2001).
The existence of web-based platforms available for consumers can make the complaining process easier, especially when
these have been unable to do it via conventional company channels and customer service desks (Hennig-Thurau et al. 2004).
If consumers views and opinions are not regarded by firms, an online mob culture can be created quickly and easily
challenge a particular brand's identity, service, or practice (Anderson et al. 2012, p. 28). Therefore, further research is
needed about consumers protest-related behavior through the Internet (Ward and Ostrom 2006), and also about the drivers of
WOM in online and offline (i.e., face-to-face) settings (Berger and Schwartz 2011).
The objective of this work is to explore some of the antecedents and outcomes of negative WOM through traditional (face-toface) and web-based (social media) settings, by proposing and testing hypotheses associated to negative WOM and negative
electronic word-of-mouth (eWOM). This might provide insights for marketing academicians and practitioners about how
some factors exert an influence on which medium consumers employ to express their negative experiences. A brief review of
constructs related to negative WOM and negative eWOM as well as the research hypotheses are presented next.
Hypothesized Relations
Attitude toward complaining is the extent to which a person agrees that it is appropriate for consumers to complain when they
experience a dissatisfying transaction (Bruner, Hensel, and James 2005). It has been suggested that consumers with a more
positive attitude toward complaining tend to engage more in negative WOM (Singh 1990).
H1:
A greater attitude toward complaining will increase the (a) negative WOM and (b) negative eWOM.
Involvement can be thought of as the consumer's enduring perceptions of the importance of the product category based on the
consumer's inherent needs, values, and interests (De Wulf et al. 2001), and has been described as a motive for engaging in
WOM (Hennig-Thurau et al. 2004).
H2:
A greater level of involvement will increase the (a) negative WOM and (b) negative eWOM.
In addition, according to Rahtz and Moore (1989), higher levels of involvement with products are predictive of purchase
intent. As noted by Hume and Mort (2008) involvement has an important impact at all stages of consumption and repurchase intent (p. 299).
H3:
A greater level of involvement will increase the repurchase intent.
Based on Sundaram et al. (1998), WOM is a form of interpersonal communication between consumers concerning their past
experiences with products or services, and represents also a powerful marketing tool for businesses. From the consumer
perspective, negative WOM is likely to dissuade potential buyers from considering a particular product or brand
(Sundaram et al. 1998, p. 527), and has been found to be inversely related to repurchase intention (Blodgett et al. 1993).
H4:
The greater the (a) negative WOM and (b) negative eWOM, the lower the repurchase intent.
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According to Shih (2004), the ease of use of the web refers to the perceived ease of browsing and inquiring online. Perceived
ease of use has been found to be related to usage intentions for a wide variety of technology (Venkatesh and Davis 2000).
This could suggest that ease of use of the web might moderate consumers preference for either web-based or conventional
communications. However, it is necessary to study and understand the directionality of such interactions.
H5
The effects from attitude toward complaining to (a) negative WOM and (b) negative eWOM are
moderated by the ease of use of the web.
H6
The effects from involvement to (a) negative WOM and (b) negative eWOM are moderated by the
ease of use of the web.
METHODOLOGY
In order to investigate the proposed hypotheses, it was necessary to collect data from consumers who had experienced
negative experiences with products or services and who complained about it. A condition was that such consumers possess a
Facebook account, in order to have the possibility of engaging in negative eWOM through social networks. Thus, an
invitation to fill out an online survey was sent to540 Facebook users, asking them to describe a recent experience in which
they were dissatisfied with a product or service, and for which they lodged a complaint with the product seller or service
provider (Tax et al.1998). 195 subjects completed the questionnaire (36% response rate), and after eliminating surveys with
incomplete data, a total of 118 usable cases were included in the quantitative analysis.
The operationalization of the constructs to measure attitude toward complaining was based on the scales from Singh (1990);
involvement with products from De Wulf et al. (2001); perceived ease of use of the web from Nguyen (2007) and Shih
(2004); negative WOM and eWOM from Zeelenberg and Pieters (2004); and repurchase intent from Maxham and
Netemeyer (2002). In addition, some open-ended questions were included in the questionnaire as a way to elicit answers
about diverse reasons that consumers might have for engaging (or not) in negative WOM in social media.
CFA was conducted with AMOS 21.0.0., revealing a chi-square to df ratio (2/df) of 1.0, a RMSEA of .003, and all items
loading significantly (p < .05). In addition, the analysis yielded a TLI of .95, a CFI of 1.0, and a PNFI of 1.0 above the
recommended values (Hair et al. 2010). The majority of the standardized factor loadings and the AVE values were greater
than .5, and all construct reliabilities satisfy the criterion of .70 (Nunnally 1978). All AVE values are greater than the
squared correlations between any constructs (Fornell and Larcker 1981). The instrument has an acceptable degree of
construct validity, reflecting that the indicators of the constructs share a proportion of the variance, and these are able to
capture distinct phenomena under study (Hair et al. 2010).
The regression results of a base model (for testing main effects) showed that the relation between attitude toward
complaining and both negative WOM and negative eWOM is positive and significant, providing support for H1a (.538, p <
.01) and H1b (.372, p < .01), respectively. However, the relations between product involvement and both, negative WOM
and negative eWOM were not statistically significant, which indicates a lack of support for H2a and H2b. A positive and
significant relation between product involvement and repurchase intent corroborated H3 (.159, p < .10). In addition, the
analysis revealed an inverse, significant effect of negative WOM with repurchase intent (-.353, p < .01) and a positive,
significant relation between negative eWOM and repurchase intent (.166, p < .10), showing corroboration for H4a and H4b.
By testing a second model (for interaction effects), it was found that attitude toward complaining and ease of use of the web
interact together to influence negative WOM and negative eWOM, providing evidence to support H5a (-.190, p < .10) and
H5b (.357, p < .01). The analysis yielded that there was no significant interaction between implying a lack of support for
H6a and H6b.
The findings support hypothesized relations partially, revealing that attitude toward complaining tends to be associated with
the extent to which consumers engage in negative WOM or negative eWOM. However, the regression analysis indicated that
being involved with products or services for which there is dissatisfaction is not related to negative WOM, either face-to-face
283
or online. This seems to suggest that the extent to which consumers feel a duty to complain is more influential than their
level of product involvement when deciding to express their dissatisfaction through negative WOM.
Consistent with the literature, the findings reported indicate that that repurchase intent can be predicted by product
involvement. In addition, an inverse significant relation was identified between negative WOM and repurchase intent, and a
positive one between negative eWOM and repurchase intent. This implies that in deciding to repurchase a product or service
for which there was dissatisfaction, consumers do not take much into account their previous behavior of negative WOM
dissemination through social media. A conjecture for this could be that negative WOM through an online medium is not felt
by consumers as meaningful as engaging in negative WOM in a personal, face-to-face situation, so it would not necessarily
related to repurchase intent.
This could be supported by the taking into account participants responses to open-ended questions, since many considered
that social media is a tool for entertainment or joy, but not for disseminating negative, personal experiences in their lives. For
example, about one third of those who expressed reasons for not engaging in negative eWOM view Facebook as a space to
share positive feelings and experiences with friends, instead of projecting the bad things that happen in ones life.
As expected, the interaction effects indicate that the ease of using the web enhances negative eWOM in social networks, and
diminishes negative WOM in traditional, offline settings. This appears congruent with conventional wisdom, since it is
usually assumed that younger, educated consumers are more familiar with information technologies and therefore would be
more prone to engage in WOM in social media. Nevertheless, a correlational analysis between these demographic variables
reveals that such may not be always the case. Indeed, it was found that older respondents tend to have more difficulty using
Internet. However, it was also found that consumers with higher levels of completed education tend to engage more in
conventional negative WOM, but not in negative eWOM in social media. Perhaps this implies that consumers that are more
educated might also be less prone to be conformist, so they express their inconformity openly, in a conventional WOM form.
This has implications for marketing practitioners, since not necessarily the more educated consumers are the ones that engage
more in eWOM. For example, managers responsible of customer service need to carefully monitor the firms social media
sites or other online platforms, but without neglecting traditional company channels and customer service desks. As revealed
by the regression effects from negative WOM and eWOM into repurchase intent, the former has an important inverse impact
on the probability of doing business with the same firm in the future.
Finally, further research work may be conducted for understanding the particular situations and factors that enhance and
inhibit the use of traditional and online media for telling others about dissatisfying experiences with products and services.
For example, studies with qualitative emphasis could provide more nuanced insights from consumers, which are sometimes
difficult to be elicited through survey methods. Finally, the sample size and the non-probabilistic selection of participant in
this work call for caution in inferring generalizations.
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285
SOCIAL MEDIA GAME DESIGN: UNINTENDED EFFECTS ON CONSUMER CHOICE

Richard C. Hanna, Northeastern University, USA
ABSTRACT
Social media is an important topic in business today as many firms struggle to find how to use it as part of their overall
marketing strategy (Hanna, Rohm, and Crittenden, 2011). More and more, companies are using social media websites such
as Facebook and Twitter to distribute promotional coupons and offer loyalty programs. In an effort to leverage the fact the
people play various games alone and with friends on these social media sites, many companies have attempted to merge
promotional distributions, such as coupon giveaways, with social games. The games used for these giveaways range from
simple games of chance (e.g., lottery, scratch ticket, etc.) to games that require significant effort (e.g., treasure hunts, quizzes,
etc.). This use of game play mechanics in non-game applications, also known as gamification, has been used in a variety of
situations including promotions, training programs, goal achievement programs, and others. While consumer responses to
these games are generally positive, it is less clear under what conditions consumers are most likely to ultimately redeem
earned rewards.
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ONLINE SOCIAL NETWORKS: MOTIVATIONS AND VALUE CO-CREATION

Carolyn (Casey) Findley Musgrove, Indiana University Southeast, USA
Timothy Butler, The University of Alabama, USA
Yuna Kim, California State University Fullerton, USA
INTRODUCTION
Online social networking has become an omnipresent part of modern society. Facebook, Pinterest, LinkedIn, Twitter,
Instagram, YouTube, and Amazon, just to name a few, have practically become household names as consumers and
businesses alike are joining in droves. To illustrate, in 2011, there were 175 million Twitter users, 100 million LinkedIn
users, and 640 million Facebook users (Hird 2011). Many consumers use social media sites as part of the consumer decision
making process. Close to 70% of consumers within these sites use social media as a means to gather product information
prior to making purchases, with nearly half making a purchase decision based on such information (Fisher 2009).
As the popularity of online social networking among consumers grows, practice and the popular press has been taking notice.
Many companies and brands have entered the online social networks and are building communities through advertising,
dedicated profiles, fan clubs, and even islands. Ganim Barnes (2010) posits that 56% of Inc. 500 companies believe that
social media is very important to their business. Social media marketing spending by businesses is expected to exceed $3
billion by 2014 (Forrester Research 2010). Schultz (2007) suggests that online social networks are a major new marketing
revolution, in which traditional marketers will have less influence over the landscape of branding, and that the new branding
landscape will be increasingly fueled by consumer-generated content that drives social networks. Traditional business models
that allow firms to control the marketing message are threatened in social media (Hennig-Thurau et al. 2010). Kozinets,
Hemetsberger, and Schau (2008) also assert that online communities are transforming the world of marketing. So, it is
surprising to find that the marketing literature is only beginning to focus this emerging aspect of society.
The study of online social networks is an emerging topic area and research stream. As with most emerging streams of
literature, there are several limitations that provide opportunities for new research. First, while it is a wildly popular topic area
among the practitioner literature and popular press, there is relatively little academic research dealing with online social
networks. The bulk of academic research on online social networks is conceptual, which leads to the need for collection and
empirical testing of primary data. Third, the few empirical studies that are available focus on diffusion and the use of social
network analysis technique. This leaves researchers focusing on subjects relating to online social networks with little to build
upon, outside of diffusion. Finally, there are no existing studies that investigate the antecedents and consequences of general
online social network use behavior. The current study attempts make a contribution by adding to the research in this
emerging topic area by collecting and analyzing primary data and using an empirical analysis that focuses on something other
than diffusion. This study uses qualitative methods to investigate motivational antecedents of online social networks and
consequences for customers and organizations that result from value co-creation.
CONCEPTUAL AND THEORETICAL BACKGROUND
Social networks are not novel concepts; they began with the first humans, and later developed into tribes, kingdoms, states,
and countries. Simply put, a social network can be defined as a set of actors and the relationships among them (Goldenberg,
Han, Lehmann, and Hong 2009). Social networks can be found in a variety of contexts, including religions, political parties,
and universities (Schultz 2007). However, this study focuses on online social networks, which is a relatively new
phenomenon. Online social networks occur whenever two or more people become connected over the internet and share
information (Goldenberg et al 2009). These networks are changing the way that marketing is done because of the capability
of consumers to add information and other content. Online social network users are communicating with each other and with
companies through these outlets. This capability stimulates co-creation of value through what has been called consumergenerated content (Dwyer 2007), consumer-created content (Schultz 2007), and collective consumer innovation (Kozinets et
al 2008). In fact, this new atmosphere creates value for the consumers, as well as for the social networking site (i.e.
Facebook, Twitter) and the other organizations that are involved in the network.
McGuires (1974) broad and inclusive system of 16 basic human motivations provides a framework for the motivational
antecedents of online social network use. McGuire (1974) was the first to synthesize both the cognitive and affective streams
of research motivational into a holistic theoretical perspective. The motivations are developed in matrix form that
incorporates four dichotomies: 1) affective versus cognitive motives, 2) motives that focus on self-preservation versus those
287
that focus on self-growth, 3) whether the behavior is an active versus passive response to circumstances, and 4) whether
internal versus external goal orientations are associated with the motive. These sixteen motivations, which help to explain the
reasons behind the gamut of consumer behavior, are: consistency, attribution, categorization, objectification, autonomy,
stimulation, teological, utilitarian, tension-reduction, expressive, ego-defensive, reinforcement assertion, affiliation,
identification, and modeling. McGuire (1974) describes each of these motivations, cited various supporting theories for
individual motivations, and described how each of them can provide mass communication gratification.
Vargo and Luschs (2004) Service-Dominant Logic paradigm provides explanation for co-creation of value for consumers
and companies through online social networks. Their pivotal article outlines a major paradigm shift in marketing from a
goods-centered to a service-centered dominant logic. The focus went from operand resources (goods) to operant (service)
resources, which act on operand and other operant resources to produce effects. Online social networks are an operant
resource because they are intangible, dynamic processes that provide information and enable consumers to co-create, and
multiply the value of, operant resources. Vargo and Lusch (2004) identify the use of operant resources as the key to obtaining
competitive advantage. Consumers are also operant resources themselves in that they act on the online social network to cocreate value through behaviors such as posting information, providing word-of-mouth communications with other users, and
making purchases. This study investigates value that is co-created for consumers and for firms through consumers
behavioral co-creation activities.
METHOD
Qualitative data collection in the form of depth-interviews is currently in progress to gain deep insight into the motivations
for with engaging in online social networking, behaviors specific to online social networks, and the ultimate value reaped by
consumers and organizations. Preliminary results are presented below, but more complete findings will be available at the
date of the upcoming conference, if this abstract is accepted. A laddering technique, also known as a means-end chain
analysis (Gutman 1982), is being employed in the in-depth interviews. This method is appropriate for this study because it
guides respondents through concrete and abstract attributes, benefits and values to provide a deep understanding of the
underlying factors of concrete online social network behaviors, as well as the abstractions of value that are co-created in the
process (Frauman and Cunningham 2001). This approach is said to provide unique insights into the factors that motivate and
guide choice and patronage behavior and the ultimate abstract goals or consequences of such behavior (Klenosky, Gengler,
and Mulvey 1993). This technique has been successfully used in several studies that use one-on-one interviews (Bagozzi and
Dabholkar 1994, Botschen and Hemetsberger 1998, Frauman and Cunningham 2001) to uncover specific linkages between
relatively concrete meanings and attributes and abstract meanings, value, or benefits.
Interviews guide respondents on the ladder of abstraction by asking the respondents what is important to them in regard to
some context. The subsequent questions are based on the answers to the previous questions, as the interview continues to
probe further into the respondents answers by asking why that is important to them. This process stops when the respondent
can no longer provide any further information, but then starts again with another attribute that is important to the respondent
in the particular context. After the interviews are complete, the transcriptions will be content analyzed into categories of
meaning based on attributes, benefits or consequences, and/or value (Reynolds and Gutman 1988).
While qualitative data collection is currently underway and complete results will be presented at the conference if this
structured abstract is accepted, some preliminary work has begun to uncover various themes in terms of motivations for
online social network use, associated behaviors, and resulting co-created value. Some motivations for online social network
users are establishing a business online, receiving promotional benefits, learning about others, socializing with others,
developing traffic, getting and giving help (Baker 2009), helping people connect, collaborating at work, and gaining
popularity (Carey 2009). Several behavioral variables that may be related to online social networking are frequency of use,
number of hours of use per week, number of contacts, number of brands to which one is connected, level of participation in
applications, level of spending, degree of interaction with other members of the social network, and level of self-disclosure.
Online social network use co-creates value for both consumers and organizations. Some emerging consumer value themes are
subjective well-being, hedonic value, utilitarian value, and identification (with the social network and/or brands), while some
variables that provide value for organizations are customer advocacy, consumer devotion, customer citizenship behaviors,
consumer engagement, and brand loyalty.
288
This work presents great opportunities for future research. Once qualitative data collection and analysis is complete,
deductive reasoning will be employed, in conjunction with theory, to develop hypotheses that will form the basis for a
quantitative study to be conducted using survey research. That work will further validate the motivations, behaviors and value
for consumers and organizations that is associated with online social networks. Other fruitful opportunities for research
include the investigation into individual difference variables that could play either an exogenous or moderating role in value
co-creation in this emerging context. Finally, the inductive, qualitative findings and conceptual model that will result from
this study provide a framework from a consumer perspective. This framework could become the basis for refinement and
development of a model that focuses on motivations, behaviors, and value from a purely organizational perspective.
IMPLICATIONS FOR THEORY AND PRACTICE
The results of this study have both important managerial and academic implications. The academic literature dealing with
online social networks is in its infancy stages. The results of this study could provide practical implications to inform
managers strategic decisions in terms of target market selection based on motivations, advertising and other types of
promotion, relationship marketing, and maximizing value co-creation when dealing in online social networks.
The lack of empirical research on consumers and online social networks, outside of the diffusion literature, is a deficiency in
the marketing literature that will begin to be remedied with this study. Research involving antecedents and consequences of
consumers growing use of online social networks by integrating multiple theories to provide a more holistic view of the
process involved in online social network use will help to provide a ground work for future research in online social
networking.
Additionally, McGuires theoretical system of motivations will be expanded and updated to encompass modern forms of
communication. In terms of mass media and communication, McGuires 16 motivations dealt in one-way communication
between organizations and consumers when they were first developed in 1974. Conversely, through online social networks,
consumers generate content, shape their own experiences, and add value.
Vargo and Luschs (2004) service dominant logic paradigm will be demonstrated in a novel context involving almost
exclusively operant resources acting on other operant resources in the co-creation of value. This research extends Vargo and
Luschs (2004) service dominant logic paradigm to a new context. With online social networks, the network itself is an
operant resource, providing a platform for consumers, who are also operant resources, to generate content and value for
multiple parties. There is only minimal use of operand resources in this context (only computer equipment to allow users to
access the internet). These conditions of almost exclusively operant resources acting on other operant resources to co-create
value offers an extreme example of how the service-centered paradigm is increasingly prevalent in society.
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program standardization. Journal of Business Research, 42, 151-159.
Dwyer, P. (2007). Measuring the value of electronic word of mouth and its impact in consumer communities. Journal of
Interactive Marketing, 21, 63-79.
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Goldenberg, J., Han, S., Lehmann, D.R., & Hong, J.W. (2009). The role of hubs in the adoption process. Journal of
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290
ARE WE LOCKED IN PRINT? EXPLORING CONSUMER PERCEPTIONS OF DIGITAL VERSUS PRINT

MAGAZINES
Sheen Kachen, LHS, USA
Zeenath Haniff, University of Nevada Las Vegas, USA
ABSTRACT
The impending downfall of the age of printed magazines is greatly implied by the current technologically savvy youth. In
fact, recent research shows that the age gap might widen rather than decrease in the current social commerce revolution
(Krishen and Tillett 2011). In particular, Time magazine statistics show that fifteen percent their readers access content
strictly in digital form, while thirty percent of them use both print and digital information (Affinity Research 2011). While
some consumers in the marketplace cling to the comfort of routine and tradition, the millennial generation is quickly forming
a path which the baby boomers might follow towards the age of social technology. At present, approximately 22% of tablet
users report reading various magazines at least on a weekly basis (Mitchell 2011). Since the release of the e-reader,
innovative companies have been exploring ways to draw magazine readers into the digital marketplace by using shelves and
smartphone apps to appeal to bibliophiles. The durability of tablets is also an important factor in deciding whether to read
digital versus print media; while paper is frail and brittle, digital gadgets and devices can withstand wear and tear. However,
regardless of the trends in devices, single magazine copies still have a higher selling rate in print than in digital form (Matsa,
Sasseen, and Mitchell 2012).
We base our conceptualization of e-magazine adoption in the cognitive lock-in and power law of practice theory base
(Newell and Rosenbloom 1981). The power law of practice, at a qualitative level, states that when individuals practice a
certain task, repetition creates higher efficiency and due to higher familiarity, they tend to become locked-in to that
environment (Johnson, Bellman and Lohse 2003; Breugelmans et al. 2012). In the internet environment, multiple empirical
studies show that cognitive lock-in, a form of cognitive loyalty, occurs to consumers when they learn how to traverse a
website to complete a transaction; this lock-in increases their likelihood of returning to the same website again for their next
transaction, even if doing so produces a sub-optimal decision (Steckel et al. 2005). Likewise, Zauberman (2003) provides
three experiments, showing that consumers cognitively lock-in to websites, making them more reluctant to search or switch
to possibly better alternate choices. This loyalty, in particular on the internet, is especially ironic, given the nature of internet
shopping, such as bargain hunting, comparative shopping, and consumer online goals. For example, through clickstream
research, Moe (2003) suggests that consumers tend to have four key goals during online transactions: browsing, searching,
learning, and buying. Since three of those four goals do not involve completing a transaction, consumers have the freedom to
carry out those three ones with virtually no salesperson pressure or stigma associated with returning to the same shopping
environment repeatedly without purchasing (Krishen, Hardin and LaTour forthcoming). This lower level of purchase pressure
coupled with online search optimization capacity should normally reduce switching costs in the internet shopping
environment.
Given the fluctuating nature of magazine consumption in the U.S. at present, our study aims to explore consumer motivations
to adopt e-magazine format. While previous research addresses the characteristics of magazine readers (Stevens, Maclaran,
and Brown 2003; Stevens and Maclaran 2005; Stevens, Maclaran, and Catterall 2007) and experiments with magazine
advertisement recall (Zanjani, Diamond, and Chan 2011), we inquire about a more basic question of consumer e-magazine
motivations. To do so, we conduct a quantitative pretest followed by a series of focus groups and provide a theoretical
framework based on extant research.
291
ANTECEDENTS AND CONSEQUENCES OF USERS ATTITUDES TOWARDS OSNS ADVERTISING:

A CONCEPTUAL FRAMEWORK
Caroline Lancelot Miltgen, University of Angers, France
Yolanda Jordaan, University of Pretoria, South Africa
Melanie Wiese, University of Pretoria, South Africa
INTRODUCTION
The rapid growth of participation in Online Social Networking Sites (OSNS) at the beginning of the twenty-first century has
changed the boundaries between the private and public lives of individuals (Acquisti and Gross 2006; Lareau 2011). By making
each person into a potential global publisher in a much more user-friendly format than through Web 1.0, OSNS have expanded
the ordinary individuals ability to share information. This situation has led to an increased uncertainty and disagreement about
what information should be shared and what should be kept private (Tufekci, 2008).
OSNS represent a great opportunity for companies to advertise their products and services as well as target and personalize
their messages based on the data users declared online. However, how users perceive and react to the advertisements posted on
their own online social profiles is still largely unknown. For example, we still dont know whether, and under which conditions,
the users consider such advertisements to be (or not to be) an intrusion into their private, albeit social, space.
The main objective of this paper is thus to conceptualize the causal relationships between the attitudes of OSNS users towards
OSNS advertising, including the antecedents of such attitudes and the subsequent behavior to OSNS advertising practices. The
longer-term goal being to test the identified relationships empirically once the conceptual model is refined. The final aim is to
determine if users perceive OSNS advertising as an intrusion of brands into their privacy, reflecting the idea that their profile
is a private space where brands are not welcome. Or if, on the other hand, users value OSNS advertising due to the benefits
such practices bring to them, for example being informed about new products / services targeted to their needs.
MODEL DEVELOPMENT AND RESEARCH HYPOTHESES
The conceptual framework is based on the Theory of Reasoned Action (TRA) developed by Fishbein and Ajzen (1975) and
Ajzen and Fishbein (1980) and further extended by Ajzen himself (1991) into the Theory of Planned Behavior (TPB). The
components of the TRA are three general constructs: behavioral intention (BI), attitude (A), and subjective norm (SN). The
TRA suggests that a person's behavioral intention depends on the person's attitude about the behavior and subjective norms (BI
= A + SN). The TPB involves the addition of one major predictor to the model, namely perceived behavioral control (Miller
and Howell, 2005).
Following the TPB, we thus predict that users behavior (or intended behavior) towards OSNS advertising will be influenced
by their attitude towards OSNS advertising, the subjective norms, perceived behavioral control, and trust in the OSNS
advertiser. The attitude itself depends on two main beliefs (OSNS advertising value and OSNS advertising intrusiveness) which
are themselves dependent on many other antecedent variables. Based on the work of Roberts (2010), three forms of behavior
should be distinguished in reaction to OSNS advertising: privacy-related (e.g. changing the privacy settings on the platform),
advertising-related (e.g. viewing the advertisement or not, passing the advertisement on to friends or not) and company-related
(e.g. positive or negative word-of-mouth).
PROPOSED METHODOLOGY
Due to the large number of variables in the conceptual framework, the research design will involve two phases which will also
contribute to increasing the external validity of the results. Phase one will entail primary data collection (quantitative research)
using a structured online questionnaire. As previous research suggests that consumer attitudes are context specific (Chau, Cole,
Massey, Montoya-Weiss and OKeefe 2002), the survey-based study will be run in two countries (South Africa and France) to
test for the effect of national culture. The survey will aim to test the centre of the model i.e. whether the attitude towards the
OSNS advertising is driven by the OSNS advertising value and OSNS advertising intrusiveness, the subjective norms, the
behavioral control, and the trust variables.
In a second phase, we will design an experiment. The value of experimental research lies in its controlled testing of causal
processes. The Internet provides opportunities for experimental design on a large scale as it is possible to manipulate different
292
variables, while holding everything else constant. In this experiment we will manipulate some important characteristics of an
OSNS advertisement (for example the degree of personalization, the credibility and/or relevance of the message) and will
measure the impact of such characteristics on the attitude towards the advertisement and, if possible, on all behavioral outcomes.
Again, the experiment will aim to study the reactions in both national cultures. We will ensure to control as many possible
exogenous effects as possible to enhance the validity of the experiment.
This paper contributes to the literature by being, to our knowledge, one of the first to address the drivers and consequences of
consumers attitudes towards OSNS advertising. The model focuses on two drivers of this attitude, namely advertising value
and advertising intrusiveness, with the final objective to study the relative importance of each. Although several studies already
considered advertising intrusiveness, there is little empirical research up-to-now on the effect of OSNS advertisements on the
attitudes of users in a social network environment. The paper also contributes to the privacy literature as one of the first to study
advertising intrusiveness on OSNS platforms from a privacy perspective. This is an important contribution as OSNS and
surveillance have, with some rare exceptions (Albrechtslund 2008), been rather unstudied (Fuchs 2010).
This paper should also help practitioners to understand what drives consumers behavior in response to advertising in a social
network environment. There is indeed a critical need for designers of such platforms, advertising companies and brands that
would like to advertise on such platforms to appreciate the form, nature, and appropriateness of commercial intrusion into
personal spaces. Knowledge of what contributes to advertising value can help find the right type of advertising message and
personalization. Also, awareness of the kind of advertising practices that users find intrusive, can assist practitioners to develop
improved advertising strategies i.e. strategies that do not violate consumer privacy expectations therefore benefitting users,
advertisers, and policymakers alike. Gangadharbatla (2009) states that OSNS are changing the way advertisers reach consumers
and these changes are transforming online advertising all together. There is thus a critical need to better understand how OSNS
users are considering and reacting to these new advertising practices.
CONCLUSION
This article deals with the issue of OSNS advertising, a matter of importance nowadays given that a social networking platform
like Facebook has generated 82% of its $1.6 billion in revenue in the first half of 2011 from advertising sales, which is double
what
the
platform
earned
the
year
before
(http://www.reuters.com/article/2011/09/07/us-facebookidUSTRE7863YW20110907). The world's largest social network isn't just appealing to its 750 million users but also to its
advertisers. However, we still do not know how OSNS users react to these new advertising practices and what are the factors
that influence their reactions. This paper, therefore aims to present a conceptual framework which identifies the main drivers
of OSNS advertising acceptance or rejection.
The objectives of the research is twofold: a) assessing the relative influence of positive (through perceived value) versus
negative (through perceived intrusiveness, with a specific focus on privacy issues) beliefs related to OSNS advertising ; and b)
testing whether the effects would be different given the cultural background of the targeted user. The next step will be to pretest the conceptual model to refine and validate the measurement scales. A final step will be to empirically test the model in
both South Africa and France in two phases: a survey approach followed by an experimental approach.
REFERENCES
(This work is based on a research supported by the South African National Research Foundation. Any opinion, finding and
conclusion or recommendation expressed in this material is that of the authors and the NRF does not accept any liability in
this regard.)
293
THE ROLE OF HEALTH-RELATED PRODUCT ATTRIBUTES, HEALTH CONCERNS, AND CHILDRENS

AGE ON ATTITUDES AND INTENTIONS TOWARD ORGANIC FOOD
Hyun-Joo Lee, Oklahoma State University, USA
Zee-Sun Yun, Western Michigan University, USA
ABSTRACT
The purpose of this study is to develop a theoretical model based on the Mehrabian and Russells Stimulus-OrganismResponse model (1974) in order to examine the influence of consumers health-related organic food attributes on
utilitarian/hedonic attitudes and behavioral intentions. In addition, the moderation effects of health consciousness and
childrens age are tested. According to Cue Utilization Theory (Cox 1967; Olson and Jacoby 1972), consumers may try to
overcome their uncertainty by choosing one or more cues as a basis for their evaluation of product quality. In our study, two
key product attributes (i.e., nutrition and natural content) are used to evaluate the value of health and safety in organic foods.
As to the moderation effects of health consciousness and childrens age, we expect that health-conscious consumers are likely
to be deeply committed to evaluate food quality attributes and establish perceptions and attitudes toward organic food
purchases. We also expect that consumers attitudes will become more positive when childrens age in a family is younger.
Accordingly, the following six hypotheses are developed:
H1: Health-related organic product attributes will have a significant positive effect on utilitarian attitudes.
H2: Health-related organic product attributes will have a significant positive effect on hedonic attitudes.
H3: Utilitarian attitudes will have a significant positive effect on behavioral intentions to buy organic foods.
H4: Hedonic attitudes will have a significant positive effect on behavioral intentions to buy organic foods.
H5: Health-related organic food attributes will have a more significant effect on (a) utilitarian and (b) hedonic attitudes
among more health-conscious consumers than among less health-conscious consumers.
H6: Health-related organic food attributes will have a more significant effect on (a) utilitarian and (b) hedonic attitudes for
consumers who have children aged 12 years old or under than for those who have children aged over 12 years old or no
children.
Seven hundred twenty-five consumer panels registered with a market research firm participated in the web survey. Multi-item
scales validated in previous studies were identified and modified for the current study. Five childrens age categories (less
than 1 year old; 1-5 years of age; 6-12 years of age; 13-17 years of age; and 18 years old or older) were measured. Fifty-five
percent of the respondents were female. The mean age was 43 years old with a range of 20 to 85 years old. 60.8% of the
respondents were married. The two most common income categories were $30,000 to $59,999 and $60,000 to $89,999. In
regard to education, 38.8% had completed their bachelors degree.
Data analysis was conducted using structural equation modeling with AMOS 19.0. The fit indices for the measurement model
indicated a reasonable fit of the data: 2 (195) = 681.089, p < 0.001; 2/df = 3.493; RMSEA = 0.059; CFI = 0.960; TLI =
0.952. The results also revealed a good level of fit for the structural model: 2 (197) = 931.869, p < 0.001; 2/df = 4.730;
RMSEA = 0.072; CFI = 0.939; TLI = 0.929. All the hypothesized paths were significant and each effect was in the same
direction to what was hypothesized.
We found strong evidence for the proposed model as indicated by support for all the hypothesized relationships. Healthrelated attributes showed a significant effect on both utilitarian and hedonic attitudes. Although both relationships were
significant, health-related attributes were more closely related to utilitarian attitudes than hedonic attitudes. It seems that
health-related attributes encourage consumers to be more engaged in cognitive judgments than emotionally driven
evaluations. Based on the finding that utilitarian attitudes more strongly affected behavioral intentions than hedonic attitudes,
we conclude that utilitarian attitudes play a more critical role in consumers purchase decision of organic food than hedonic
attitudes. Therefore, organic food retailers should endeavor to make consumers to develop utilitarian attitudes by illuminating
how organic food can fulfill their practical (health-related) needs. Based on significant moderation effects of health
consciousness and childrens age, organic food retailers should pay more careful attention to consumers who are concerned
about their health. In addition, organic food retailers should target a family with infants and young children (12 years old or
less).
294
How does Positive Mood Moderate Message Framing Effect on Safety Communication Persuasiveness?
Sidney Su Han, University of Guelph, Canada
Karen Gough, University of Guelph, Canada
Lefa Teng, University of Guelph, Canada
ABSTRACT
A traditional view regarding message framing effect on consumers response to risk information shows that intentions to
conduct risk preventive behaviour are generally higher when the target behaviour is communicated by loss-framing than by
gain-framing. Current research argues that consumers incidental mood can moderate message framing effect. Specifically,
the study employs full factorial experimental design to investigate how consumers respond to framed risk information under
positive mood condition. The main study found that, under positive mood condition, gain-framed risk information is more
effective in influencing consumers risk-handling behaviour than loss-framed risk information.
295

CONSUMER CHARACTERISTICS, NUTRITION LABELS AND DIETARY CHOICES
Khaled Aboulnasr, Florida Gulf Coast University, USA
ABSTRACT
The Center for Disease Control and Prevention estimates that a considerable segment of American adults suffers from obesity
(CDC 2012). Given the strong link between consumers dietary behaviors and the rising obesity rates, the Food and Drug
Administration has introduced a number of transformative guidelines to the way nutrition information is presented on food
products. These changes aimed at aiding consumers make better food choices by making the nutrition label less complicated
and more comprehensible (Burton, Garretson & Velliquette 1999). While these efforts may have simplified the nutrition
label, the utilization of nutrition information prior to making food purchase decisions may be influenced by consumers
characteristics, beliefs and knowledge. The current study investigates the role of self efficacy, response efficacy and
consumers nutrition knowledge in the process of nutrition information use. Results of the study emphasized the important
role of these variables in consumers dietary behavior and choices.
296
PROBING DETERMINANTS OF INTENTIONS TO PURCHASE PROCESSED FOODS AND SOFT DRINKS:

EXPLANATION THROUGH MEDIATION
Jeremy J. Sierra, Texas State University, United States
Harry A. Taute, Utah Valley University, United States
Anna M. Turri, Texas State University, United States
ABSTRACT
Research shows that both cognitions and emotions illuminate consumer decision-making processes; however, quantitative
examination of such factors concomitantly as antecedents (i.e., dual-process theory) of food and beverage purchases is deficient.
To address this research fissure, data were collected to help explain processed food and soft drink consumption. Data collected
for this model support dual-process theory in a food and beverage consumption context; mediating factors are also uncovered.
INTRODUCTION
Practitioners and policy makers would benefit from a better understanding of the cognitive and emotive antecedents influencing
consumers purchases of processed foods and beverages. We propose a mediation model of intention to purchase processed
foods and soft drinks. Specifically, we measure consumer self-expression via food consumption (EXPRESS), personal expertise
about organic food (EXPERT), and brand tribalism regarding organic food (TRIBE). These individual factors are modeled as leading
to and mediated by nutrition seeking (NSEEK), to affect consumer attitudes toward fast food establishments (AFOOD), the corn
sweetener industry (ACORN), and emotional responses toward ranchers that raise their animals on a corn diet (ERANCH) and
companies that produce artificial sugar (ESUGAR). These cognitive and affective responses in turn serve as antecedents of
intentions to purchase processed foods and beverages [i.e., meat in which the animal was raised on a corn diet (PIMEAT), candy
made with artificial sugar (PICAND), and soft drinks made with artificial sugar (PISOFT)].
METHOD AND RESULTS
Using students (N=206) at a southwest U.S. business school, a measurement model was estimated with LISREL 8.72 and the
57 items comprising the eleven scales. The AVE for each construct, aside from TRIBE (46.95%), exceeds 0.50. Also, the AVE
for each construct, apart from (ERANCH and PIMEAT) and (EXPERT and TRIBE) (both .5476), is greater than the squared correlations
between each construct and the other constructs. The model produced the following GOF statistics: (1484df)=4909.51
(P=0.00), (CFI)=0.93, (NNFI)=0.92, and (SRMR)=0.065. The studied paths were tested using SEM with LISREL 8.72 (COV
matrix, MLE, pairwise deletion). Model estimation here produced the following GOF statistics: (1520df)=5127.63 (P=0.00),
(CFI)=0.92, (NNFI)=0.92, and (SRMR)=0.12.
The t statistic associated with 14 of the 18 path coefficients is significant at the P<0.05 level or better. Specifically, EXPRESS
relates positively to TRIBE (H1; t=4.17) and NSEEK (H4; t=4.54), and EXPERT relates positively to TRIBE (H2; t=8.45).TRIBE relates
positively to NSEEK (H3; t=3.12), which in turn relates inversely to AFOOD (H6; t=-7.47), ACORN (H7; t=-3.86), ERANCH (H8; t=4.82), and ESUGAR (H9; t=-6.40). Regarding direct antecedents of intentions to purchase, AFOOD relates positively to PIMEAT (H13;
t=3.38), ERANCH relates positively to PIMEAT (H17; t=11.19), ESUGAR relates positively to PISOFT (H18; t=8.60), and ACORN relates
positively to PISOFT (H14; t=3.36) and PICAND (H16; t=5.77), and inversely to PIMEAT (H15; t=-2.20). Thus, self-assessed expertise
about, and following of, the organic food culture leads to seeking and sharing of nutritional information. This shared
information leads to negative attitudes regarding fast food establishments and the corn sweetener industry, while evincing
negative emotions regarding ranchers feeding corn to cattle and companies producing artificial sweetener. These cognitive and
emotional responses positively affect intentions to purchase candy made with artificial sugar and artificially sweetened soft
drinks while negatively affecting intentions to purchase meat from corn fed cattle.
Further analysis reveals that TRIBE fully mediates the relationship between EXPERT and NSEEK, AFOOD fully mediates the
relationship between NSEEK and PIMEAT, ERANCH fully mediates the relationship between NSEEK and PIMEAT, ESUGAR fully
mediates the relationship between NSEEK and PISOFT, and ACORN fully mediates the relationships between NSEEK and PISOFT,
PIMEAT, and PICAND.
REFERENCES
297
A CROSS-CULTURAL COMPARISON OF FEMALE NUDITY PERCEPTION IN PRINT ADVERTISING

AMONG FEMALE CONSUMERS IN THE UK AND THE NETHERLANDS
Alexandra Rome, University of Edinburgh, UK
Essam Ibrahim, University of Edinburgh, UK
ABSTRACT
Female nudity has served to operationalize sex appeals in advertising and a majority of the current research operates under
this presupposition (Peterson and Kerin, 1977; Reichert, LaTour and Ford, 2011). One common theme that has emerged from
the research is the support for an opposite-sex effect, of which advertisements displaying the opposite sex are viewed more
favorably than those depicting models of the viewers own sex (Peterson and Kerin, 1977). As such, the common notion that
sex sells to female consumers is undermined by said results and heeds further exploration. Additionally, a majority of these
studies have been limited to the United States and in instances where cross-cultural research is considered, do not typically
examine perceptions within the confines of Western Europe, despite noted cultural differences (Reichert, 2002). The present
study examines cross-cultural responses of woman towards the use of female nudity in advertising, in the UK and the
Netherlands, investigating attitude towards the ad and the self-declared purchase intention.
This research adopted a two-phase method approach, in which focus groups were used prior to the primary data collection to
select the five adverts employed in the survey. The research sample consisted of 204 female consumers in the UK and the
Netherlands. A self-administered survey and five adverts constituted the primary data. The five adverts were categorized as:
(1) partially clad (2) full nudity with a focus on the breasts (3) full nudity with a focus on the pubic area (4) full nudity with a
focus on the buttocks and (5) full nudity with a focus on the breasts and pubic area. The scaled items included in the
questionnaire were adapted from Sciglimpaglia, et al. (1979). The data was analyzed using multiple regression analysis and
analysis of variance testing (ANOVA) to identify relationships between attitudes and nationality. Simple logistic regressions
were conducted to predict the relationship between attitude and the consumers self-declared purchase intention.
The findings suggested that attitudes held between both nations were largely classified as negative towards all ads containing
nudity. In particular, overwhelmingly negative responses were recorded for the ads displaying (1) full nudity, focusing on the
breasts and pubic area and (2) the advert displaying full nudity, focusing on the pubic area explicitly. In terms of crosscultural effects, the results indicated that there were statistical attitudinal differences between women in the Netherlands and
the UK, among the ads displaying (1) full nudity with a focus on the pubic area, (2) full nudity with a focus on the buttocks
and for (3) the partially clad model. An evaluation of attitudinal means indicated that women in the Netherlands expressed
more favorable attitudes than women in the United Kingdom and this finding was evident across each significant attitude
construct and each of the five adverts. The results additionally supported the notion that the attitude-towards-the-ad construct
was a valid predictor of the consumers self-declared purchase intention, across all five ads.
The findings of this study indicate that the sampled female consumers held primarily negative attitudes towards the use of
female nudity in advertising and as such, advertisers need be cautious about such implementation in their campaigns,
especially those targeted towards a female audience. However, attitudes also varied cross-culturally, indicating that the
female model is a variable necessitating adaptation, and what may be considered acceptable in the Netherlands may be
largely offensive in the UK. Such implications contribute to the on-going discussion regarding the use of sexual appeals in
advertising, as well as the standardization/ adaptation debate, providing support for customization based on geographical
segmentation. Further research should consider additional cross-cultural examinations of consumer perceptions towards
nudity-appeals within what is often considered a heterogeneous market.
298
ARE BLONDES MORE HEDONIC THAN BRUNETTES? STEREOTYPE EFFECTS ON WILLINGNESS TO

PAY FOR HEDONIC AND UTILITARIAN PRODUCTS
ABSTRACT
This research examines the fit between stereotypes and hedonic and utilitarian products. We suggest that the product-stereotype
fit and gender influence consumers willingness to pay for a product. Stereotypes were activated by showing participants two
versions of advertising (hedonic and utilitarian) with a blonde (vs. brunette) spokesperson. Results from a pilot study show that
the blonde stereotype increases willingness to pay for hedonic products and brunettes for utilitarian products; these effects are
only valid for men, but not for women. The paper presents the implications for the advertising of utilitarian and hedonic
products.
299
ETHICAL IDEOLOGY EFFECTS ON ALCOHOL ADVERTISING APPRAISALS: THE MODERATING ROLE

OF ETHNIC IDENTIFICATION
Miguel A. Ziga, Morgan State University, USA
Ivonne M. Jasso, New Mexico State University, USA
ABSTRACT
In an extension of generational theory, the present research argues that ethical ideology (i.e., idealism vs. relativism) impacts
alcohol advertising responses (i.e., ad attitudes, brand attitudes, and purchase intentions). Additionally, this research studies
how this relationship is mediated by ethical appraisal of alcohol ads and moderated by the level of ethnic identification (i.e.,
high vs. low). The results of this experiment provide additional evidence in support of generation theory which states that
each generational cohort holds distinct ethical ideologies.
This study further identifies ethical ideology differences among the Generational Y cohort. Participants with high ethnic
identification and an idealistic ideology rate the alcohol advertisements (ads) lower. These consumers feel they belong to a
group because they identify strongly with that group, this coupled with their sense of idealism makes them rate alcohol ads
lower because they perceive the ads as unethical. These results are consistent with the notion that participants sense of
belonging and ethical ideology influences responses to alcohol ads.
300
HUMOR DETERMINANTS AND RELEVANCE IN HIGH ENGAGEMENT SOCIAL TV ADS

James Barry, Nova Southeastern University, USA
Dena Hale, Nova Southeastern University, USA
INTRODUCTION
Breaking through advertising clutter remains a challenge for marketers. With the rising popularity of TV commercials re-cast
on video sharing websites, digital metric evidence now reveals that commercials with high entertainment value offer more
opportunity for viewer attention and engagement than even the best of informative feature pitches. Humor, in particular,
accounts for most of this entertaining interaction. Yet despite the nearly $50 billion spent annually on worldwide
commercials intended to be humorous, little is known about its impact on audience attention and engagement in a social
setting.
This research examines humor from the afterlife performance of commercials re-casted online. Applying Specks (1991)
humorous message taxonomy to a large, high performing sample of these re-casted commercials, the study illustrates how
humor best stimulates audience interest. The choice of Specks (1991) taxonomy allows a solid foundation in which to
examine humor stemming from absurdities, irony and surprise (theories of incongruence); feelings of sudden glory from
others misfortune (theory of superiority); or the release of anxiety in the form of social order deviancy (relief theory).
Consistent with Specks (1991) research, the authors examine the resulting humor types known as comic wit, sentimental
humor, satire, sentimental comedy and full comedy.
In order to study the message relatedness and structural placement of humor, the research further examines the degree to
which humor-dominated ads perform relative to information- and brand image-dominated ads having humor elements placed
at the beginning, the end and throughout the ads. Examination is then made of how humor type and message relatedness
impact audience engagement across 4 product groups defined by the level of purchase involvement and whether the product
purchase is seen as rationally or emotionally induced (Rossiter & Percy, 1997). Finally, the authors examine the extent to
which humor outperforms non-humorous entertainment across these product groups.
METHODOLOGY
A search was made of re-casted television ads garnering over 50,000 views on YouTube. Excluded from the list were ad
duplications, feature overviews, public announcements or ads released before 2002. Comic devices and non-humorous
descriptors were then recorded for 2107 humor-based ads and 1208 ads based on non-humorous entertainment. The
descriptors were grouped into categories aligned with the humor theories and Specks taxonomy as shown in Exhibit I.
Engagement statistics were then recorded and plotted in Exhibits II and III using the number of YouTube likes, dislikes and
comments as a metric for engagement. Total video views were used to measure audience attention.
Each of the sponsored brands were classified into 4 product groups labeled as blue (low involvement, rational), white (high
involvement, rational), yellow (low involvement, emotional) and red (high involvement, emotional) (see Spotts, Weinberger
& Parsons 1997). Finally the videos were evaluated for message relatedness along the following categories: humor-dominant,
information-dominant or brand image-dominant, whereby the humor is embedded into the message for brand enhancement.
The latter two were further examined for humor placed initially, at closing or embedded in the storyline.
As shown in Exhibit I, the use of incongruity-based humor in the form of absurdities, irony or surprise resulted in the highest
level of ad attention. Its combination with arousal-safety mechanisms (e.g., embarrassing situations, narrow escapes or
unruliness) contributed to sentimental comedies, which performed the highest overall in engagement. Satire in the form of
putdowns, enjoyment of others misfortune and outwitted arrogance showed above average levels of engagement but less
than average attention. This would suggest that the superiority theory has strong appeal but only to a limited audience. Only
the heartfelt categories of non-humorous entertainment exceeded the performance of humor. These commercials, consisting
of proud tributes, romance and compassion, reached engagement levels 20% above average. Like sentimental humor,
however, this form of entertainment has limited viewership. This suggests that relief theories based on sentimental arousal
work well only when combined with incongruence that better stimulates our cognitive desires (e.g., solving the wit) or satire
that affirms our feelings of superiority from the disparagement of others.
301
An examination of humor across product grids reveals distinctions in effectiveness across product categories. For example,
Exhibit II shows that non-humorous entertainment performs better in high involvement, emotional (red) decisions. Nearly
60% of these ads involve some form of serious performance, amazement or heartfelt moments. Humor works better on low
involvement, emotionally driven products (e.g., beer, candy). In this case, humor represents 74% of high performing
commercials. Comic wit, full comedy and sentimental comedy, in particular, get far more attention with low involvement
decisions as compared to their high involvement counterparts. Sentimental humor, on the other hand, gets far more
engagement with low involvement, emotionally made decisions suggesting that aggressive forms of humor (e.g., satire) and
comic wit serve more as attention getters than mechanisms that invite comments and likes. Finally, concept imagery does
not work well across any of the product quadrants.
An examination of message relatedness across product types revealed stark variances across the grid (see Exhibit III). When
humor is used, humor-dominant content performs the best in audience attention across all product quadrants; however, it is
most effective in low emotional, rational product categories (white and blue). For the emotional categories, image-dominant
humor increases the level of audience attention. Finally, message-dominant humor has little effect on audience engagement
except for red products or with image-dominant ads where humor is placed at the beginning of the ad.
The fact that rationally driven products show higher interest in humor than their emotional counterparts especially in high
involvement purchases (red) could imply that the inherent complexities of humor do not work well for expensive items such
as jewelry. For example, a commercial featuring a touching moment after a women receives a diamond may be better served
with a heartfelt song or theatrical performance. Humor in all high involvement cases may even serve as a distraction as
viewers attempt to grasp the nuances of a sports car (red) or subtle feature claims of a car insurer (white).
The fact that more rationally based, low involvement products react better to humor suggests that humor may offset an
otherwise dull dialog. Without humor, performance of commercials aimed at these products would likely be low. Sentimental
comedy, in particular, works well for these products. Its combination of incongruence and sentimental humor is often
depicted through indignant behaviors, unprepared awkward moments or the outwitting of censorship. As a more complex
form of humor, it normally requires a lengthy storyline where the audience is highly intrigued by the humor itself.
For white and yellow products, advertisers will create the most engagement and attention if humor-dominant content is used.
When information-dominant humor is used in these categories, humor is most effective when it is message embedded.
Although humor-dominant ads create the most attention for blue products, it has little effect on engagement regardless of
where the humor is placed. Finally, in the case of red products, ads devoid of humor will elicit the most engagement in this
product category. In cases where humor is used, humor-dominance works the best for these products.
No doubt ad agencies and marketers are gearing up for social TV as a way to re-cycle their commercial ad assets for brand
awareness and engagement testing. And yet, little research is devoted to understanding what types of humor work best across
product types. Exhibits II and III show examples where a large number of commercials fail to gain above average results in
both views and engagement (e.g., satire for blue products). Much of this is likely due to insufficient knowledge of how humor
works differently across product involvement and emotional attachment to the purchase. This research highlights these
differences and creates a new foundation from which advertisers and marketers can begin strategically creating effective
advertisements within the viral community.
REFERENCES
302
Exhibit I: Framework for Examining Entertaining Commercials
303
304
DO HAPPY BRAND PLACEMENTS LEAD TO HAPPY BRANDS?

Anvita Kumar, Cass Business School, U.K.
George Balabanis, Cass Business School, U.K.
ABSTRACT
Effect of emotions on brand placement effectiveness is, hitherto, an unexplored area. This study examines the impact of
positive emotions (happy, interest) and level of character-brand interaction level (CIL) on consumers response to brand
placements. In the experiments conducted, it was observed that consumers in a positive emotional state were more likely to
respond favourably to the placed brands when the character interaction with the placed brand was low. However, with high
plot integration and characters emotional integration with the brand in a placement sequence, the scenario changed: for
happy emotion states consumers showed no change in attitudes as opposed to interest and neutral emotions, the latter,
interestingly, indicated an increase in brand attitude change.
Given the high attention level of happy and interest as emotions, it was observed that in case of high character interaction
with the brand for happy placement, the attitude for consumer was negligible which indicates that although happiness may
allow for a decrease in cognitive processing it does not prove productive for brands looking for reinforcing their brand image
or enhance their resonance if the happy placement is juxtaposed with a highly stimulating execution strategy. On the other
hand, placing brands as part of the programmes mise-en-scene (visual/verbal) with low character-brand bonding may lead to
greater return on investment if the sequence generates interest for explicit processing of brand evaluation.
Besides, the role of characters when interacting with brands in a placement sequence becomes crucial under emotions vs.
neutral condition. If the brands are placed in plot connection with low emotional integration with the characters, the neutrality
of the placement sequence will actually lead to decrease in the consumer attitude. An evidence of affect transfer is also seen
for no emotions sequence whereby, although the sequence does not generate any emotion, the high emotional character-brand
interaction leads to increase in brand attitude (mimicking the effect seen in Interest evoking placement condition with high
character-brand interaction level).
Thus, the findings of this study indicate that emotions have a significant effect on the consumer attitude towards the placed
brands and practitioners may need to re-evaluate the placement strategies, particularly, when placing the brands in a happy
situation with high plot integration. However, the findings further discern that not all positive emotions may forge the same
attitude in context of executional variables, such as, the character-brand interaction within plot modality, indicating that
pairing brands with characters in affective placements sequences lead to formation of brand attitudes with varying strength.
Also the neutrality of the placement sequence may be overcome by the emotions generated by the characters for the brands
but only if the consumers perceive it as novel.
305
A TALENT BASED APPROACH TO LEARNING AND TEACHING

IN MARKETING UNDERGRADUATE AND GRADUATE PROGRAMS
Paul S. Busch, Texas A&M University, USA
ABSTRACT
My teaching philosophy and approach revolves around three core concepts: caring, student engagement in their learning
process and students career and personal development. While I use a portfolio of techniques and methods to animate my
philosophy, I focus here on one tool which has proven to be highly effective for me and my students, namely Gallups Clifton
Strengths Finder. Strengths Finder is a web-based tool which provides an individual with their Top 5 innate talents from an
inventory of 34 talents.
The following is an assignment which has been especially helpful to my marketing students in the process of crafting a
personal branding statement.
Personal Branding Statement (PBS). The Personal Branding Statement is an assignment which combines the results of
StrengthsFinders with another web-based tool entitled 360Reach. The 360Reach enables a student to receive feedback on
their strengths and weaknesses from key stakeholders (classmates, family, coaches, employers, and mentors) in their lives.
Below is the process which students go through in creating a personal branding statement.
This process begins with self-reflection, which is guided by thoughtfully writing their answers to the following questions:
What is it that I love to do? What is it that Im good at doing? What do I value most, or what is important to me? What is it
that needs doing in the world? By answering these questions, students have the opportunity to reflect upon what types of
activities excite them, what they are good at and their values.
The next step in the process is to take the StrengthsFinder assessment online. This piece of the process serves as an internal
self-assessment that determines their strengths based upon how they answer questions about themselves. Next in the process
is the 360Reach Feedback assignment. By gathering feedback from people in every sphere of their lives, students are able to
take an external assessment of their strengths and weaknesses. This feedback provides solid insight into the perceptions
created based upon the students everyday interactions and relations. As marketers, we can all agree that managing
perceptions of a brand is an important part of maintaining a healthy brand for a good or service. Just as it is important for
goods and services, it is vitally important to make sure that external perceptions match internal understanding of ones
personal brand.
Once the two assessment processes have been completed, it is time for students to analyze all these inputs in order to draw
conclusions. Ideally, the information gathered through the 360Reach process affirms the results from the StrengthsFinder
assessment. If this is the case, we know that the individuals internal and external perceptions match. If this is not the case,
the individual may need to reflect on which parts dont match up and how to create a congruent brand internally and
externally. Once a singular brand personality is established (based upon strengths, weaknesses, brand skills, and brand
attributes), the personal branding statement can be crafted. The purpose of the personal branding statement, the last step in
this process, is to convey an individuals personal brand in a concise, yet detailed manner.
While the PBS is an important output, the most significant student benefit is the process of taking the Strengths selfassessment, gathering feedback from others, and reflecting upon those inputs to enhance self-awareness and to plan for their
future personal and professional lives based on that self-knowledge.
The feedback from students who have gone through the process of crafting a PBS has been extremely positive. Some of the
most often expressed benefits are: feeling well prepared for job interviews, enhancing self-confidence, identifying areas in
need of improvement and a better understanding of job choices and career paths on which they are most likely to succeed.
306
ENGAGEMENT AND EVALUATION:

CREATING A MEANINGFUL STUDENT LEARNING EXPERIENCE
Brian A. Vander Schee, Aurora University, USA
ABSTRACT
The idea that students are more engaged with classroom active learning is well established in the literature. I have taken this
to heart over my years of teaching by venturing away from lectures to a more hands on approach that makes practical
application of theoretical concepts. I routinely assign client-based projects to students in upper level marketing courses. The
local businesses appreciate interacting with the students and the students benefit from working in the field with real output
and consequences for their efforts. Students who complete the best projects then present at the Aurora University
Undergraduate Research Conference.
This challenge and support approach motivates students to do well in every area. Thus teaching innovation is not restricted to
the collegiate classroom. I challenge students to examine how their collegiate experience ties in with their long-term goals.
This has led to success, for example the team that I advise won the 2013 GfK NextGen Marketing Research Competition. I
accompany marketing students on corporate visits, professional conferences and community service projects every semester.
This helps to bridge the gap between collegiate experience and corporate expectations.
The Principles of Marketing course is often populated by first and second-year students. Many only take the course to fulfill a
graduation requirement in the business curriculum. With this in mind I have developed classroom activities to keep students
engaged in the learning process. This active learning takes place via in class games I have developed with interesting
parameters, required interactivity and a competitive element.
At every level I aspire to bring new and interesting teaching tools to the classroom. However entertainment is not the goal, I
always use assessment of learning outcomes to establish that the innovation in question is a more enjoyable class experience
and to demonstrate students learn more effectively than a traditional approach. I then use student and colleague feedback to
refine my approach to the classroom to ensure that I stay current, challenging and connected with student learning.
Students routinely say that I set high expectations regarding classroom learning and academic performance yet I also provide
resources to help them reach their collegiate goals. Again challenge and support captures the basis of my teaching
philosophy. Being a lifelong learner I also take that approach in my own growth as I adapt to the changing needs of students
and demands in the marketing discipline. Thus I feel good about my involvement as conference program chair, track chair,
paper reviewer, journal editor, article reviewer, competition founder and organizer, judge, and fund raiser knowing that these
out of classroom endeavors contribute to the marketing education profess as a whole. They all serve to help students at all
institutions be more successful in their academic experience and professional goals.
307
VALUE-BASED LEARNING BUILDING A BRIDGE TO CHANGE

Charles H. Fifield, Baylor University, USA
ABSTRACT
Success in todays business world is a value-driven proposition with heavy emphasis on customer-centered lifecycle
management. Businesses continually seek insights and tools to enable increased customer experience satisfaction (shortterm) and customer loyalty (long-term). For colleges and universities, this customer lifetime value journey often commences
in the classroom with selected student-teacher experiences. Teaching marketing and professional sales courses is an ideal
front line opportunity to engage mostly business-minded students and initiate a win-win oriented student decision story. At
Baylor, the opportunity to interpersonally engage and sometimes even mentor individual students is augmented by its
commitment to a relatively low classroom student: teacher ratio. There are three key components to my teaching philosophy.
Sell, Dont Tell. Although most of my initial teaching is lecture format, it is designed to establish a necessary foundation
(mindset and skill set) for the more demanding experiential learning that follows during the latter stages of any course. It
begins with the desired end in mind, which is to guide them into an understanding of the subject so that they will be able to
successfully interact with others in some segment of the business world. It ends with students being expected to apply some
of what has been offered in class in either a simulated or actual business context. In order to achieve a reasonable level of
competency, my role is to guide or coach them through several course concepts and stages of learning. To accomplish this, I
employ what I term, heart selling, which is connecting with your customers in a more nurturing fashion. It is like Zig Ziglar
said, People dont care how much you know until they first know how much you care. In order to produce meaningful
behavior change gains, usually some pain must precede the desired outcome. This often requires my personal coaching and
some relationship likeability and trust must be earned for effective cooperation. We are selling an experience to gain a
lasting value-adding change and therefore, the knowledge being offered has to be carefully balanced with the process used to
deliver it. The selective use of real-life stories also helps to validate some of the studied content.
Emphasize Productivity. Based on many years of working with others in the business world, my experience taught me that a
productive person is a more motivated person. To foster this, our course syllabus is often front-end loaded with work
assignments that are relatively easy to perform at an acceptable level. My office maintains an open door policy to anyone
who wishes to come by and visit; however, most of my office time is spent on expanded learning opportunities performed in
a business-like fashion. If a student wishes to discuss a classroom subject that has direct application to an upcoming
assignment, I want them to engage with me in a manner or style consistent with what is being taught in the classroom. If they
do so, then improved productivity via the office exchanges usually follows.
Practice (Model) With Them What I Preach. In order to achieve enhanced learning, my courses consistently engage in some
form of active learning. In our sales courses, these experiences range from recorded in-class role plays with local business
buyers to making actual sales calls in the field. In marketing courses, my students are challenged to operate student-run
businesses, including a record and artist management company, a concert promotions company and a soon-to-be-opened
internet-based radio station. Limited capital and human resources for these ventures necessitates our students practice
valuable interdisciplinary collaboration. Effective communication habits, relationship skill development, and team building
are also highly emphasized in these endeavors. Since our student leadership is consistently turning over, my position is to
provide day-to-day management assistance as a faculty advisor and counselor. One of our music marketing courses finishes
its semester long study with a personally guided trip, Baylor in Nashville. During our two-weeks there, we will interactively
engage with at least twenty-five music industry leaders and artists who are successfully practicing within the entertainment
industry.
In my courses, students are expected to take a responsible approach to their learning because what they will receive out of it
is determined largely by the commitment they put into it. My role is to guide learning-inspired students through a jointly
executed skill development or bridge building process that begins in the classroom, followed by both classroom and hands-on
instruction of what to change to and then to set the stage through active learning experiences for desired change to be realized
and put into applied practice. For the students, success is most often measured by the grade earned, and in the described
learning environment, my grades are impacted by the students demonstrated process of practicing the targeted mindset and
skill set development and their achieving incremental productivity gains. Throughout my value-driven teaching, I strive to
balance sound theory with effective pedagogy, a continuously improving process.
308
WINE AND TOURISM: A GOOD BLEND GOES A LONG WAY

Jasha Bowe, University of South Australia
Larry Lockshin, University of South Australia
Cam Rungie, University of South Australia
Richard Lee, University of South Australia
INTRODUCTION
Wine and tourism are seen as good bedfellows, and rightly so. Globally the wine industry is increasingly dependent on leisure
and tourist visitors to sustain the growth of local and export sales, both in terms of immediate turnover from cellar door
transactions and as a long-term image generating mechanism (Lockshin, 2001). Growing interest, both applied and academic,
in wine tourism as an industry is indicative of the fact both practitioners and researchers consider it an important contributor
to continued success for wine producers (Bruwer & Lesschaeve, 2012). However, only a relatively small percentage of the
total international visitors to a country actually visit a winery when on holiday (Department of Industry Tourism and
Resources, 2009).
This is true for Australia, despite being well known for its world-class wine and picturesque wine country. While Australian
wine tourism figures show that the industry is growing strongly, on average 90 per cent of inbound tourists will not visit any
of the countrys wineries (Department of Industry Tourism and Resources, 2009). It is reasonable and probable to assume
that within the vast majority of tourists who do not visit wineries there is a significant segment of wine consumers. This
represents a large number of potential customers that producers would like target, yet are unable to have experiential contact
with. This segment of tourists may, however, not be a lost cause to the wine industry.
This research builds on recent advances in the country-of-origin and tourism literature that suggests that simply visiting a
country on holiday is enough to influence consumers propensity to buy that countrys products. If this is the case then local
wine producers can still effectively target these consumer-tourists, despite the fact the majority of them will not visit wineries
or engage in traditional wine tourism activities. Given the prevalence that tourism plays in global commerce and the sheer
number of people traveling each year across the world, the outcomes of this research should be of some significance to
managers in the wine industry as it may present a viable and effective avenue for marketing their products to an amenable
audience, one which otherwise they might not have such direct access to.
TOURISM AND EXPORT PRODUCT PREFERENCE
Recently, a number of studies have been reported in the country-of-origin and tourism literature that suggest that touring a
country in itself may have a positive impact on international visitors propensity to purchase a countrys export products
irrespective of whether they have had any direct product experience (Elliot, Papadopoulos, & Kim, 2010; Lee & Lockshin,
2011). These studies suggest that by visiting the country on holiday, potential international consumers have a higher regard
for, and are more likely to purchase, products from a country they have visited on holiday in comparison to those who have
not visited the country. In particular, Lee and Lockshin (2011) found this to be the case for Australian wine when comparing
a cohort of Chinese tourists on holiday in Australia to non-tourists at home in China. The tourists had not visited any wineries
when they were surveyed.
This study presents a further investigation into this field of inquiry by analysing the state choice behaviours of a sample of
Chinese consumers, just under half of whom report visiting Australia on holiday in the past two years. Prior studies in this
area have been based on attitudinal measures; this is the first study to analyse choice behaviour to explore the relationship
between tourism and product preference. The intended contribution of the study is to highlight the potential of the greater
visiting tourist cohort to the wine industry, and the strategic implications this may have for exporters and producers. Further it
provides an alternative method for quantifying the relationship that may exist between tourism holistically and wine
preference.
CONTEXT
China is forecast to become Australias largest tourism source market by 2017, and to record 2.65 million visitors per annum
by 2025 (Department of Industry Tourism and Resources, 2006). While China holds vast potential for Australian wine, the
country accounted for only 4% by volume and 6% by value of Australias total wine exports in 2009-2010 (AWBC, 2010).
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This combination of increasing numbers of Chinese tourists to Australia and a relatively low market share and awareness of
Australian wine in China provides a suitable platform to test the proposition that there are differing choice propensities
regarding wine from Australia for Chinese consumers who have been to Australia compared to those who have not.
As a result the following hypothesis is generated:
H1: Chinese consumers who have visited Australia on holiday have a greater preference Australian wine than
Chinese consumers who have not been to Australia on holiday.
METHOD
An international consumer panel company provided 1030 respondents who took part in a discrete choice experiment (BenAkiva & Lerman, 1984). Respondents were sourced from the Chinese Special Economic Zones (SEZs) and Coastal
Development Areas, which represent a concentration of Chinese wealth and in and out-bound economic activity (Zeng,
2011).
Participating in international tourist travel and purchasing expensive foreign imports, relative to domestic products, clearly
requires a requisite level of economic capacity. As the purpose of this research is to generalize findings to a population of
possible international tourists, selecting provinces with a concentration of wealth - where residents are more likely to have the
capacity to be an international tourist and buy imported products - was deemed appropriate for the purpose of the study.
Respondents ages ranged from 18 to 60 years, with 33% female and 67% male. The majority of respondents came from the
large cities of Guangzhou (Guangdong province), Jiangsu, Shanghai and Beijing. However, other provinces in the SEZ and
Coastal Development Areas were all well and evenly represented. The respondents came from a diverse range of industries
with none particularly overrepresented, although overall these industries were of a skilled rather than unskilled nature
To participate in the research respondents had to have been on an overnight holiday at least once in the 2 years prior to the
survey that is, been engaged in some form of tourism domestic or international. Further respondents were also asked if the
had visited Australia on holiday (this question was asked after they had completed the experiment so as not to confound their
responses). Just under half the sample (n=480) indicated that they had visited Australia at least once, making possible a
between-subjects comparison of visitors versus non-visitors responses. The DCE was presented in simplified Chinese
following a standard back translation. Respondents were not aware of the origin of the survey/experiment.
EXPERIMENTAL DESIGN
The experiment uses a D-optimal orthogonal main effects design (Street & Burgess, 2007) with four attributes, two with two
levels and two with four levels (22 + 42). Contextually respondents were asked to consider in a restaurant / banquet situation
which alternative would they choose. Respondents were randomly assigned to one of two blocks of a balance incomplete
block design. Each respondent viewed 8 choice sets of 4 alternatives. (see, Hensher, Rose, & Greene, 2005; Louviere,
Hensher, & Swait, 2000).
A generic red wine with a fictitious brand was the single product type being tested, as of primary interest was the utility
associated with country of origin and any possible brand or prior usage effects had to be factored out. The two two-level
attributes being manipulated were 1.) Label colour either red or white and 2.) Closure type cork or screw cap. The two
four-level attributes were 1.) Price 200 RMB, 400 RMB, 600 RMB or 800 RMB and 2.) Country of Origin Australia,
France, Chile (the three largest exporters of wine to China) and China (for domestic comparison).
After segmenting the sample based on their visitation to Australia, multinomial-logit models were estimated to determine a
set of utility values for each segment using Nlogit 4 (Greene & Zhang, 2011). A comparison of the visitor versus non-visitor
utility coefficients generated demonstrated a greater level stated choice preference for the Australian wine included in the
experiments for those who had visited. Further, in comparison to those non-visitors, visitors were overall less price sensitive,
and more reliant on country-of-origin information.
For non-visitors, the country of origin attribute was apportioned the highest utility value and range (as dummy code was used
the range is equally to the highest utility, as base attribute levels are 0). Therefore it is the most important attribute for the
determinant of choice for the cohort. The most preferred country of origin for red wine is France (=0.76) followed by Chile
(=0.33) as second most preferred and Australia (=0.15) as third most preferred. China is the least preferred country of
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origin. It is worthy of note that in this condition while France remains most preferred, respondents choices indicate a
preference for Chile over Australia. This is interesting as Australia is the second largest international import, after France, for
bottle wine in China. This perhaps speaks to the power of the French wine image and the relatively low awareness of
Australian wine overall in China.
For visitors, utility values and range - the indicator of attribute importance - for country of origin are considerably increased
in comparison to non-visitors. This means that respondents who have visited Australia are relying more on the country of
origin attribute in determining their choice than those who have not been the utility range almost doubles between the
cohorts. The utilities for both France (=1.25) and Australia (=0.67) are considerably larger between the two cohorts, while
the utility for Chile (=0.19) is much lower. France is still the most preferred country, but Australia is clearly preferred
second over Chile and China.
This is the first time that a choice-based example has been used to posit the existence of increased preference for the products
of a country once that country has been visited on holiday. This has two major practical implications: Firstly, managers
involved in wine production, sales and exporting should be looking for avenues to approach tourists when they are incountry, rather than just have tourists come to them, to further increase the salience of their particular products in the mind of
traveling consumers be it in tourist marketing communications, in restaurants frequently patronised by tour groups or by
other means. Secondly, tourism managers should look to partner with local exporters to value-add their service delivery, as
such partnerships would be of financial value to both parties. It also suggests, for Australia at least, the positive interaction
between wine and tourism may extend beyond traditional wine tourism, and that this knowledge should be of strategic
value to the industry as a whole.
REFERENCES
AWBC. (2010). Wine Export Approval Report (July 2010). Australia: Australian Wine and Brandy Corporation.
Ben-Akiva, M., & Lerman, S. R. (1984). Discrete Choice Analysis: Theory and Application to Travel Demand. London: The
MIT Press.
Bruwer, J., & Lesschaeve, I. (2012). Wine Tourists Destination Region Brand Image Perception and Antecedents:
Conceptualization of a Winescape Framework. Journal of Travel & Tourism Marketing, 29(7), 611-628.
Department of Industry Tourism and Resources. (2006). National Tourism Emerging Markets Strategy Capability Audit (pp.
54). Canberra: Australian Government: Department of Industry, Tourism and Resources.
Elliot, S., Papadopoulos, N., & Kim, S. S. (2010). An Integrative Model of Place Image: Exploring Relationships Between
Destination, Product, and Country Images. Journal of Travel Research, 1-15.
Greene, W. H., & Zhang, C. (2011). Econometric analysis (7th ed.): Prentice hall Upper Saddle River, NJ.
Hensher, D., Rose, J., & Greene, W. (2005). Applied Choice Analysis: A Primer. Cambridge: Cambridge University Press.
Lee, R., & Lockshin, L. (2011). Halo Effects of Tourists' Destination Image on Domestic Product Perceptions. Australasian
Marketing Journal, 19, 7-13.
Lockshin, L. (2001). Using Involvement and Brand Equity to Develop a Wine Tourism Strategy International Journal of
Wine Marketing, 13(1), 72-81.
Louviere, J. J., Hensher, D. A., & Swait, J. D. (2000). Stated choice methods: analysis and application. Cambridge:
Cambridge University Press.
Street, D., & Burgess, L. (2007). The Construction of Optimal Stated Choice Experiments: Theory and Methods. Hoboken,
New Jersey: John Wiley & Sons, Inc.
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Zeng, D. Z. (2011). How do special economic zones and industrial clusters drive China's rapid development? Policy Research
Working Paper. Africa Regiom: World Bank.
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TELLING THE STORY OR SELLING THE EXPERIENCE: WINERY MANAGERS' PERCEPTIONS FROM
AROUND THE WORLD
Daniel J. Flint, The University of Tennessee, United States
Susan L. Golicic, Colorado State University, United States
ABSTRACT
Telling a brand story is nothing new and in fact has been a part of the brand management and advertising lexicon for years. It
has been said that brand storytelling as the articulated form of a brands character and personality is essential for creating
powerful brand narratives and messaging. Some stories tap into powerful memories of brand usage while others create an
identity that resonates with consumers but does not necessarily drive memory of lived experiences with the actual brand.
One way brands can tell a story is unidirectional. Here brand managers create a story around their brand. They create a brand
identity what it stands for, where it comes from, how it is made, what the brand means and then communicate this through
a story to consumers. In this approach, control of the story lies with the marketer. However, a co-creative view and research
within high involvement consumption experiences such as tourism, recognize that successful storytelling depends on the
consumers own construction of narratives based on their personal experiences and as such their ability to be builders of their
own story. The difficulty is not as much recognizing that a brand needs a story but rather what story to tell and how. Therefore,
we explored this issue in a hypercompetitive industry where the brand is extremely important the global wine industry. We
find that in this industry, small niche brands can thrive and compete with larger national ones by creating and telling a different
kind of story.
Our findings emerged from a large, multi-year, multi-wine region exploration into unique marketing practices and other
business issues in the wine industry. We adopted aspects of ethnography, grounded theory and phenomenology in data
collection and interpretation and followed accepted procedures rigorously. In total we visited 54 wineries in nine regions,
conducting interviews with 64 participants, collecting marketing collateral, and photographing/observing operations over a
three year period. Open coding led to collapsing many codes into the two categories of storytelling and selling the experience.
We identified over 130 different document source instances in our data where references to storytelling or selling the experience
were overtly made. Beyond that, deeper narrative interpretation enabled this nuanced difference to emerge.
When a winery is committed to the idea of telling their story, the stories might represent a winerys founders, the region, the
varietal or some potential brand benefit. We encountered hundreds of passages concerned with how wineries embrace their
own unique story and use that to breathe life, personality and character into their brands and wineries. In the same vicinity
of wineries leveraging their own unique story, we discovered numerous wineries committed to an alternative approach, one
of creating a unique memorable experience for customers and leveraging customers own memories as the story they could tell.
In some cases, wineries tried to coax their customers into sharing their experiences to try to incorporate them into the brand.
These brands specifically sought to become part of customers lives in a co-creative sense.
Although we did come across some wineries leveraging both kinds of stories at once, most wineries typically were committed
to one form or the other. So what does this mean? When do or should one form be used over the other? Our data suggest that
managers at larger wineries, wineries with long heritages and especially but not only those within Old World wine regions such
as Italy tend to adopt the telling our story approach. Managers at younger, smaller or boutique wineries seemed to adopt the
selling the experience strategy. Our interpretations suggest that either approach can work, but managers must be committed
to authenticity in both cases. If telling a story is the strategy chosen, the story must be genuine, compelling and unique.
Alternatively, co-creating experiences can be an effective way to compete for some organizations; however, if chosen, resources
must be allocated to creating genuine and memorable experiences.
Although it is known that brand storytelling can be useful and can be seen as an old concept, we have found new life in the
concept when applied to such an experientially-based, high-involvement product such as wine. Moving forward, a shift away
from traditional brand storytelling to the selling the experience approach may turn out to be the most powerful storytelling
route, especially as firms become more sophisticated in their use of social media tools, such as Facebook and Twitter, to interact
with customers as well as observe the stories customers are sharing. Future research into customers inclusion of brands into
their life-stories may be what is needed to provide the next act in this story.
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COUNTRY-OF-ORIGIN AND WINE KNOWLEDGE:

AN EMPIRICAL STUDY ON CHINESE CONSUMERS WINE EVALUATIONS
Fang Liu, University of Western Australia, Australia
Jamie Murphy, Australian School of Management, Australia
ABSTRACT
This study examined the effect of Product-Country Image (PCI), a country-of-origin concept, on Chinese consumers attitudes
towards local and foreign brands. It also examined the moderating effects of objective product knowledge (OPK) and subjective
product knowledge (SPK) towards wine on the relationship between PCI and attitudes towards local and foreign brands.
Adopting a three-country between-group factorial design and a field experiment in China, this study found that PCI had a
significant positive effect on consumer attitudes towards both local and foreign brands, but the effect on foreign brands was
country specific. OPK and SPK significantly attenuated the positive effect of PCI on brand attitude for local wines. However,
the attenuating effect of OPK and SPK on foreign wines was also country specific.
INTRODUCTION
Scholars have examined country of origin (COO) effects extensively in western countries (e.g., Schooler 1965; Papadopoulos
et al. 1987, 1990; Lawrence et al. 1992) and the majority of these studies found that COO had significant effects on product
and brand attitudes, as well as purchasing intentions. Furthermore, studies suggest that several factors moderate the effect of
COO. To date, one of the most widely studied moderators of COO effects are product knowledge (e.g., Phau and Suntornnond
2006).
China is an attractive wine market, the expanded substantially from 460 million litres sold in 2005 to an estimated 775 million
litres in 2009, or 13% annual growth (Snapshots 2005). Chinas per capita wine consumption of under 0.5 litres, however, is
one-fifteenth of the world average of 7.5 litres and even less than the average 20 litres drunk in western countries such as France,
Australia and the US (Jin 2004). Chinas huge market potential, complemented by recently reduced wine import duties, tempts
international wine marketers to target China. Foreign wines, particularly from France, Australia, and the US, are flooding into
China (Winechina 2007). In the first two months of 2006, for example, China imported nearly 18 million litres of wine, a 79%
increase compared to the same period in 2005 (Cnfoodnet 2008).
Only a couple of studies (Balestrini and Gamble 2006; Liu and Murphy 2007) examined COO effects in Chinese consumers
evaluations of wine brands. Given the sheer size and importance of the Chinese market, these studies of Chinese consumers
seem inadequate. Furthermore, none of these studies examined the role of product knowledge in wine evaluations among
Chinese consumers, nor did they compare the moderating effects between local and foreign brands. This study is among the
first to empirically test the COO effects in Chinese consumers evaluations of both local and foreign wine brands. The study
will also investigate the role of product knowledge, both subjective and objective wine knowledge, on the relationship between
COO and brand attitudes.
LITERATURE REVIEW
Country-of-Origin (COO)
COO is an important cue consumers use to evaluate local and foreign products and brands. Since the 1960s, studies have shown
COO impacts consumer attitudes (e.g., Schooler 1965; Nagashima 1970; Bilkey and Nes 1982; Papadopoulos et al. 1987, 1990;
Khachaturian and Morganosky 1990) and purchasing intentions towards local and foreign products and brands (Han 1990;
Lawrence et al. 1992; Lin and Sternquist 1994; Zhang 1996). COO effects extend to durable goods (Watson and Wright 2000),
non-durable goods and services (Cubillo et al. 2006).
COO has evolved into sub concepts, such as general- or product-country image (Batra et al. 2000). General country image
refers to consumer perceptions of a foreign countrys economic, social, cultural, and technological environment (Martin and
Eroglu 1993). Product-country image (PCI), which this paper uses, is consumer perceptions of a product category from a foreign
country (Nagashima 1970). Product-country image seems to be more adopted in consumer research than general-country image
due to formers direct relationship with a specific product category (Liu and Murphy 2007).
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That consumers in less developed countries tend to favour developed country products and brands (Batra et al. 2004) can apply
in China. Chinese consumers have favoured foreign products and brands for over two decades, due in large part to leader Deng
Xiaoping launching Chinas Open-door Policy in 1978 (Zhang 1996). Yet this century there may be a tendency by Chinese
consumers to shy away from foreign products and brands and towards made in China due to increasing consumer ethnocentrism
and improving local products (Zhou and Hui 2003).
Increasing consumer knowledge of foreign products and brands may also diminish foreign brands appeal in less developed
countries such as China (Dickson et al. 2004). For example, knowledge that Nike shoes are produced in China could reduce
the shoes foreign appeal to Chinese consumers. Thus, it is questionable whether COO still plays an important role in Chinese
consumers evaluations and subsequent attitudes towards local and foreign brands.
Country Image and Chinese Wine Market
COO studies on Chinese consumers show that COO is a significant brand evaluation cue. Ahmed and dAstous (2004), for
example, found that Chinese consumers had better perceptions of a fictional T-shirts quality and value if the Country of Design
(COD) and Country of Assembly (COA) was a highly industrialized country such as Canada rather than if the COD and COA
was a newly industrialized country such as Mexico. Delong et al.s (2004) study on apparels had a similar finding that Chinese
consumers rated US apparel brands more favourably than Chinese brands.
Among these COO studies, only a handful of studies measured COO effects by testing COO related constructs such as general
country image or product-country image. Liu et al. (2006), for example, tested Chinese consumer reactions to signs for a
fictional bread store, and found that product country image (PCI) had a significant effect on brand attitudes for a US brand but
insignificant effect for an Australian brand.
Empirical studies on COO and wine consumption in China are scant. Balestrini and Gamble (2006) asked Chinese consumers
in Shanghai to rate the importance of COO, price and brand in their wine purchasing decision-making and found COO, as a
product cue, was more important than price and brand. However, their study did not measure country image nor examine its
effects on product evaluations. The results of a qualitative study suggested that Chinese consumers had positive attitudes
towards French wines but almost no awareness of Australian wines (Liu and Murphy 2007).
Both Balenstrini and Gamble (2006) and Liu and Murphy (2007) have shown the importance of COO in Chinese consumers
wine brand evaluations. A key reason for the importance of COO is that, unlike in many western countries such as Australia,
wine is a luxury product in China (Qian 2005). A local Chinese wine costs 20-30 Yuan a bottle while a bottle of French or
Australian wine costs three or four times the local wine. As the average monthly income in China is around 2000-3000 Yuan,
drinking wine, particularly foreign wines, is a luxury consumption for lower and middle income Chinese (Winechina 2007).
Piron (2000) claimed that COO, in particular, product-country image, is more important to consumers when they evaluate
luxury products than when they evaluate necessity products. Therefore, PCI should be important for evaluating wine in China
prior to purchasing. Thus, it is hypothesized that:
H1: Product-Country Image (PCI) has a significant positive effect on Chinese consumers attitudes towards both local and
foreign wine brands.
Product Knowledge
Consumer knowledge about a product, or product knowledge, is an important construct in understanding consumer attitudes
and purchasing behaviours (Alba and Huchingson 1987; Park et al. 1994). Studies (e.g., Brucks 1985) distinguished two types
of product knowledge, objective and subjective. Objective knowledge is accurate product information stored in a consumers
long-term memory; subjective knowledge refers to consumer perceptions of how much they know about a product. The
formation of these two types of knowledge may differ. Park et al. (1994), for example, found product experience had a more
important effect on forming a consumers subjective knowledge than forming their objective knowledge. The effects of
objective and subjective knowledge on consumer attitudes may also differ. Chiou et al. (2002) found that the effects of these
two kinds of knowledge on consumers attitude towards a service brand differed significantly.
Consumers usually evaluate products on intrinsic and extrinsic cues (Ophuis and van Trijp 1995). Intrinsic cues for wine could
include physical attributes such as colour, aroma, and taste. Extrinsic cues, such as price and PCI, associate with the product
but are not physically part of the product (Dimara and Skuras 2001, p. 692). Expert consumers often rely on intrinsic cues to
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judge a product, whilst novice consumers tend to rely on extrinsic cues (Maheswaran 1994). When product information is
ambiguous, both expert and novice consumers tend to use COO in their evaluations; however, the effect of COO may differ
(Maheswaran 1994).
Only a few studies have examined the effects of product knowledge along with country-of-origin effect on evaluating local and
foreign brands. In an important COO work, Han (1990) argued that consumers with little knowledge about a product relied
heavily on extrinsic cues, such as the COO information, to form brand attitudes. Furthermore, wine quality is experienced and
assessable only during and after consumption (Chaney 2000). As the ability to assess wine quality prior to purchase is difficult,
consumers often turn to extrinsic cues such as COO to help assess quality (Speed 1998).
Using a self-administered mail survey, Phau and Suntornnond (2006) found that COO had a weak effect on Australian
consumers evaluations of beer brands. However, they claimed that objective product knowledge, mediated the extent that
consumers relied on COO in product evaluation. Using computers as a product category, Pecotich and Ward (2007) found that
highly knowledgeable consumers used COO in an analytical manner while novice or non-expert consumers used COO as a key
product attribute. In other words, the effect of COO on product evaluation was less significant when a consumer was highly
knowledgeable.
To the authors knowledge, no study has examined the role of product knowledge, wine knowledge, on Chinese consumers
evaluations of wine brands. Given the above discussion on COO effects and product knowledge, it is hypothesized that:
H2a: Objective product knowledge attenuates the effects of product-country image on Chinese consumers attitudes towards
both local and foreign wine brands.
H2b: Subjective product knowledge attenuates the effects of product-country image on Chinese consumers attitudes towards
both local and foreign wine brands.
METHOD
Design and Measures
This experiment used a three country between-group factorial design. As French and Australian wines are two major foreign
competitors in the Chinese wine market (Jin 2004), comparing both wines had practical significance. Another reason for three
countries was that PCI effects tend to be country specific. Chinese consumers, for example, had significantly different
perceptions towards US and Canada even though both were developed countries (Ahmed and dAstous 2004). An Australian
wine company produced three labels for one of their existing wine brands, with each version containing both the brand name
and country-of-origin in Mandarin characters (noting made in Australia, France, or China).
As discussed in earlier sections, PCI tends to influence consumer evaluations of a local or foreign products quality
(Khachaturian and Morganosky 1990) and value (Ahmed and d'Astou 1993). In addition to these two variables, and to cater for
wine, the PCI scale included taste (Dodd 1999), image (Delong 2004) and reputation (Beverland 2004). The scale for attitude
towards the brand (AtB), adopted from Liu et al. (2006), included three statements: I react favourably to the brand; I feel
positive towards the brand; and I dislike the brand. The responses for PCI and AtB were both a five-point scale from strongly
disagree to strongly agree.
Objective product knowledge was the respondents view on four statements of general wine knowledge: General speaking, the
earlier the vintage, the better quality the red wine; Generally speaking, the earlier the vintage, the better quality the white wine;
As a rule, red wine should be served chilled; and As a rule, red wine is served with red meat. Consumers responded to each
statement with True, False or Do not know. Subjective product knowledge used two self-assessed statements (Chiou 2002):
Compared to average persons, I have better knowledge about wine and Compared to average persons, I do more search on
wine.
Sample Selection
A key Chinese wine market segment is the Xiaozi or middle-class. Well educated and white-collar, these middle to upper
income Chinese live in urban areas and favour a western life style (Wilson and Huang, 2003). Sampling from this group had
practical and theoretical significance as Xiaozi would be familiar with and likely to drink wine. As wine is more popular in
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cities with higher economic development than cities with lower economic development or rural areas (Winechina 2007),
Guangzhou, one of Chinas most prosperous cities, seemed appropriate.
The experiment ran at a restaurant catering to Xiaozi in a major city in China. The restaurant management agreed to host the
experiment and suggested sampling consumers during the restaurants peak dining time, 6:00-7:30pm. After ordering their
meal, customers waited 15-20 minutes for their dishes to arrive. During this period, a trained research assistant approached
tables with two to five adults. Tables with more or less diners seemed difficult for surveying.
The research assistants asked each adult at the table to take the survey in exchange for a 50 Yuan reduction of their bill, typically
from 60 to 250 Yuan per person. Over half the approached diners accepted the offer. The research assistant then randomly
selected and presented a bottle of closed wine with one of the three labels. The respondents took a few minutes to evaluate the
closed bottle before completing the questionnaire. The researchers collected 148 valid questionnaires, 50 each for the Made
in France and Made in Australia labels, and 48 for the Made in China label.
Confirmatory factor analyses showed all five items loaded on the PCI factor for all three countries, with satisfactory
Eigenvalues and Cronbach alphas (see Table 1). Similarly, all AtB items loaded satisfactorily on all countries. CE and SPK
items also loaded as separate factors. The Cronbachs alphas indicated satisfactory reliability for all constructs (see Table 1).
Product-Country Image and Brand Attitude
The results of a one-way ANOVA test showed significant product-country image differences (F=4.65, df=2, p<0.011). As the
mean values showed, Chinese consumers had the most favourable perceptions of product-country image towards French wines,
followed by Australian and Chinese wines (see Table 1). Albeit insignificant, their attitude towards the wine brand tested was
most favourable when the label noted from Australia, followed by China and France (F=.894, df=2, p=.411). This finding may
suggest that a favourable product-country image does not necessarily lead to a more favourable brand attitude.
Multi-group Structural Equation Modelling via AMOS and the maximum-likelihood method tested PCI effects on AtB. Data
cleaning prior to analysis eliminated seven cases with more than half the responses missing (Enders and Bandalos 2001). Most
2
tests indicated a good model fit (Boolen-stine bootstrap p=.179; RMR=.045; GFI=.991; CFI=.915; RMSEA=.01; X / df=1.802,
p=.032).
The path coefficients () showed product-country image had a positive effect on brand attitude, significantly so for France
(=.707, t=5.264, p<.001) and China (=.707, t=3.777, p<.001) but insignificant for Australia (=.175, t=1.354, p=.176). These
results largely support the first hypothesis; PCI had a positive effect on Chinese consumer attitudes towards wine brands. The
multigroup analyses showed country was a significant main effect on the relationship between PCI and AtB (CMIN=35.286,
df=2, p<.001).
Product Knowledge
Testing possible moderators required two steps, first examining the moderating effect of product knowledge and consumer
ethnocentrism for each country. The second step compared the baseline model with the constrained model for each country.
Objective product knowledge (OPK): OPK was the summed responses to four statements. Coding correct choices as 1 and other
choices as 0 yielded a PK range from 0 to 4 and a mode of 2. The result suggested that Chinese consumers had low objective
knowledge towards wine. Drawing on a tripartite partitioning method in studies of personal differences (Cacioppo and Petty
1982; Zhang and Buda 1999), the respondents were rank ordered and split into three groups. Subjects with values under 2
formed the Low OPK group; subjects with values over 2 formed the High OPK group.
The results showed how OPK moderated the effect of PCI on AtB (see Table 2). Irrespective of country, low wine knowledge
moderated PCI on AtB positively, significantly so for the French and Chinese wine labels. If a consumer had high wine
knowledge, the effect of PCI on brand attitude was negative and insignificant.
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The differences between the baseline and the constrained models showed the moderating effects of OPK were significant for
both the Chinese brand (CMIN=6.212, df=1, p=.012) and French brand (CMIN=4.252, df=1, p=.032) but insignificant for the
Australian brand (CMIN=2.394, df=1, p=0.122). In other words, the results largely supported H2a in that OPK attenuated the
effect of PCI on Chinese consumers attitudes towards both local and foreign brands. However, the moderating effect of OPK
on Chinese consumers evaluations of foreign brands seemed country-contingent: significant if the brand was French but
insignificant if it was Australian.
Subjective Product Knowledge (SPK): The mode for SPK was 3 out of 5, which again indicated that Chinese consumers were
insecure about their wine knowledge. Using the same partitioning, subjects with values under 3 formed the Low SPK group,
whilst subjects with values over 3 were the High SPK group. The results showed that irrespective of country, low SPK
knowledge moderated PCI on AtB positively, significantly so for the French and Chinese brands (see Table 3). If a consumer
had high SPK, the effect of PCI on brand attitude was negative and insignificant.
The differences between the baseline and the constrained models showed a significant moderating SPK effect for the French
brand (CMIN=4.355, df=1, p=.037), marginally significant for the Chinese brand (CMIN=3.362, df=1, p=.061) and
insignificant for the Australian brand (CMIN=2.076, df=1, p=.150). The results also largely supported H2b in that SPK
attenuated the PCI effect on Chinese consumer attitudes towards both local and foreign brands.
Similar to OPK, the moderating effect of SPK on Chinese consumer evaluation of foreign brands was country-contingent:
significant for the French brand but insignificant for the Australian brand. Comparing the significant values between local and
foreign brands showed that OPK had a stronger moderating effect on foreign brand whilst SPK had a stronger effect on local
brand.
Summary and Theory Implications
This study empirically tested COO effects, specifically the effect of product-country image on Chinese consumer evaluations
of local and foreign wine brands. Previous studies of PCI influences on brand evaluations and buying decisions suggest the PCI
effect is product specific (Kaynak and Kara 2002). Consistent with PCI studies of Chinese consumers (Zhang 1996; Liu et al.
2006), this study extends the appeal of foreign products and brands to a luxury product, wine. PCI affected Chinese consumers
attitudes towards wine brands from Australia, China and France, significantly so for the latter two countries. This finding aligns
with previous findings (e.g., Papadopoulos et al. 1987; Ahmed and d'Astous, 1993) of country specific PCI effects on attitude
towards foreign brands. Extending previous studies (e.g., Balestrini and Gamble 2006; Liu and Murphy 2007), this study found
that PCI was an important determinant for luxury product evaluations in China.
Furthermore, this study examined the interaction between PCI and product knowledge, offering insights into how product
knowledge moderated the relationship between PCI and Chinese consumer evaluations of local and foreign brands. For example,
Chinese consumers in general had low objective and subjective product knowledge towards wine which resulted in their
reliance on product-country image in wine evaluations. This finding was consistent with previous studies such as Jin (2004)
and Liu and Murphy (2007).
For both local and foreign brands, the lower the objective product knowledge (OPK), the greater the PCI effect on attitude
towards the brand. Alternatively, the greater the consumers OPK, the less they relied on PCI to form attitudes towards local
and foreign brands. These findings are consistent with previous studies (e.g., Phau and Suntornnond 2006; Pecotich and Ward
2007).
Besides OPK, this study investigated the moderating effect of subjective product knowledge (SPK) and found that SPKs
moderating effect was similar to OPK. This finding implies that the moderating effects of these two types of product knowledge
on Chinese consumer evaluations of local and foreign brands are similar. However, OPKs moderating effect may be stronger
for foreign brands than local brands while SPKs moderating effect may be more significant for local brands than for foreign
brands.
This study also illustrates how CPK and SPK can have country specific moderating effects on the relationship between PCI
and brand attitude. When consumers had low OPK or low SPK, PCI had a significant positive effect on brand attitude for
French wines but not for Australian wines. Consistent with a qualitative study on Chinese wine consumers (Liu and Murphy
318
2007), this selective product knowledge effect suggests that Chinese consumers have little objective and subjective knowledge
of Australian wines.
Managerial Implications
China is an attractive and highly competitive market for local and foreign brands. This study found that for a luxury product,
wine, product-country image played an important role in Chinese evaluations of both local and foreign brands. Among various
market strategies, country-of-origin, brand names and images on the labels may be a key success factor for foreign brands in
China (Wilson and Huang 2003). Furthermore, both France and Australia had positive product-country images among Chinese
but this image translated into a favourable attitude only for French brands.
PCIs country specific effects suggest that a good understanding of a foreign countrys PCI among Chinese is essential for
effective brand marketing. In a related manner, the country specific moderating effect of product knowledge also suggest that
before marketing a foreign brand in China, marketers should understand the target market knowledge as well as its effects on
brand attitudes. For brands from some foreign countries, Chinese consumers product knowledge may be an important variable
for consideration.
Last but not least, this study found that Chinese consumers had favourable perceptions of local products or brands. This finding
suggests that when marketing local brands, locally made has a strong appeal to Chinese consumers. However, using this local
appeal strategy also should consider a consumers product knowledge. For highly knowledgeable consumers, the positive effect
of PCI on their evaluations of local brands may be attenuated.
Limitation and Future Studies
The field experiment has good internal validity, but the results lack external validity and generalizability. Further, a large
sample size may shed more light on significant findings. Future research should replicate this study in other Chinese cities and
with larger samples. For example, due to regional socio-cultural differences, Northerners such as those living in Beijing tend
to have stronger CE than Southerners living in Guangzhou (Zhou 2006).
Future research should also consider other variables related to purchasing. As Qian (2005) claimed price was an important
consideration in wine purchasing, future studies could examine the interaction between price and product-country image.
Chinas culture of face value, mianzi, plays a key role in a Chinese consumers purchasing and consumption (Tang 2005).
Chinese tend to purchase inexpensive wine for private consumption and expensive wine for public occasions, yielding more
mianzi in front of others (Liu and Murphy 2007). Future research could look into the relationship among product-country image,
mainzi and occasion.
Besides objective and subjective product knowledge, future research could examine product knowledge by country. The finding
that PCI had a significant effect on French wines and Chinese wines but not on Australian wines may be due to a sample less
familiar with Australian wines as compared to their familiarity with French and Chinese wines. Chinese consumers may know
less about Australian than French wines (Liu and Murphy 2007).
319
TABLES
Table 1: Confirmatory Factor Analyses of Constructs
Construct
Product-Country Image
(PCI)
Attitude towards Brand

(AtB)
Subjective Product Knowledge
(SPK)
COO
Item
Eigen
value
Variance
Explained
Cronbachs
Alpha
Mean
Australia
50
3.67
61 %
.89
3.56
France
50
3.62
60 %
.86
3.72
China
48
3.50
59 %
.88
3.29
Australia
50
1.50
50 %
.75
3.46
France
49
2.16
72 %
.81
3.31
China
48
2.46
82 %
.89
3.32
_____
148
1.56
77 %
.72
2.87
Table 2: The Moderating Effect of Objective Product Knowledge

The Effect of PCI on AtB under different COO
Country-of-origin: Australia
Country-of-origin: France
Country-of-origin: China
Low OPK
High OPK
.137
-.442
Critical ratio
.788
-.714
.431
.475
.560
-.649
Critical ratio
3.390
-.748
<.001***
.455
.450
-.530
Critical ratio
2.128
-.826
.047*
.405
Table 3: The Moderating Effect of Subjective Product Knowledge

The Effect of PCI on AtB under different COO
Country-of-origin: Australia
Country-of-origin: France
Country-of-origin: China
Low SPK
High SPK
.183
-.153
Critical ratio
.383
-1.344
.377
.179
.502
-.115
Critical ratio
1.833
-1.053
.051*
.292
.889
-1.215
Critical ratio
2.173
-.615
.030*
.539
320
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323
THE PERCEPTION OF PRICE PREMIUM POLICY FOR SINGLE MALT SCOTCH WHISKY BY
CONSUMERS:
IS THERE A TRADING-UP PHENOMENON WITHIN THE INDUSTRY?
WORK-IN-PROGRESS
Benot LECAT, Burgundy School of Business, France
ABSTRACT
The demand for premium Single Malt Whisky is rising and five targets appear as being very interesting for the industry: (1)
emerging markets; (2) established/historic markets with a focus on the USA; (3) Latin America and Africa/Middle East with
the best growth per value; (4) travelling business men visiting Duty-free shops and (5) Connoisseurs. The objective of this
paper is to assess if there is a trading-up phenomenon within the industry or in other words if the consumers of the targets are
willing to pay more for the Single Malt Scotch Whisky. This paper will also identify the fourteen attributes that are important
in order to create price premium product especially for the two last targets (limited edition, vintage, cask number, special
commemorative event, single malt bottled by independent bottlers, bottled by a shop, bottled for a private business club or a
bar, bottled for a specific country, number of bottles released, choice of wood for casks, length of ageing in barrel, barrels
coming from closed distilleries, percentage of alcohol and packaging). As it is a work-in-progress, not all the data are yet
collected but some of them will be presented during the conference.
324
WHEN WEB-SITES CHANGE: THE CONSUMER'S EMOTIONAL RESPONSE TO PERCEIVED

ENVIRONMENTAL CHANGE IN THE RETAIL WEB-SITE
Jeremy Ainsworth, University of Canterbury, New Zealand
INTRODUCTION
Change is an inevitability many online retailers face in their endeavors to obtain or sustain competitiveness amidst
technological, social, economic and competitive pressures. This is particularly true for the exchange environment within the
online channel, where rapid technological developments and heightened competitive pressures are encouraging retailers to
develop compelling online settings in the hope of forming competitive advantages (Wang, Baker, Wagner and Wakefield,
2007) and consumer stickiness (Lin, 2007). Yet, despite anecdotal evidence of change within online retail environments, such
change has been applied in isolation of any academic enquiry. As such, the impact of change on all retail stakeholders
remains unknown. Consequently, while change has been engendered within the online setting, little is known about the
consumer's response to a changed online environment. One central response to the successful implementation of change is
emotion. The influence of consumer emotion on consumer behavior has been demonstrated in numerous prior studies,
particularly those examining consumer responses to environmental stimuli (e.g. Eroglu, Machleit and Davis, 2003). As such,
the consumer's emotion response to change is expected to play a central role in the retailer's successful implementation of
web-site change. Consequently, this paper reports on the consumer's emotional response to a change in online retail
environment.
Utilizing web-site typology literature and the Stimulus-Organism component of the Stimulus-Organism-Response paradigm
(see Mehrabian and Russell, 1974), the effects of two types of change task-relevant (reflecting functional changes) and nontask-relevant (reflecting aesthetic changes) on consumers' emotional states were examined. Specifically, this research
developed and tested a model which utilized, in part and Berkowitz' (1993) lower-level affective reaction theory, Pham's
(1998) feelings as information theory, Mehrabian and Russell's (1974) traditional Pleasure-Arousal-Dominance (PAD)
paradigm to model dominance and arousal as lower-level responses to the environment which influence the consumer's
pleasure state. However, in addition to this attributional structure of arousal and dominance on pleasure, the original direct
effect of the environment as purported by Mehrabian and Russell (1974) is included, whereby change directly influences the
valence of pleasure (e.g. assessment of liking/disliking of the change). The rationale for this study lies in the belief that
although change evokes a direct and distinct valence of pleasure on subjective measures such as liking, joy or despair, the
consequences of change to other aspects of the environment, namely stimulation and navigational freedom, are also key
considerations in a consumer's feelings of pleasure in an unfamiliar setting.
As pre-change attributions of affect and cognition influence the meaning and implications of the change for the consumer
(such as whether change signals losses, or opportunities, or both), in addition to the main relationships, the consumer's
familiarity and experiences with the web-site prior to change were also examined as an influence on the emotional response
to change.
METHODOLOGY
To examine the effects of change on consumer emotion a 2 x 2 between-subjects experimental design was utilized to generate
four different change environments. In doing so, two levels of task-relevant change (low and high) and two levels of nontask-relevant change (low and high) were manipulated as independent variables to provide four unique change conditions,
each represented by a single experimental web-site. To engender the change conditions, the four facsimile web-sites were
developed as adaptations of a source web-site (an active commercial web-site). For this research, the source web-site was
selected from the retail banking sector as it serviced a large group of frequent online users and due to higher switching
barriers, was expected to offer a variety of previous experiences (i.e. positive and negative) amongst active users.
Given no approach exists in the extant literature for manipulating change itself, based on observations of commercial website change, a procedure for manipulating change was developed which utilized the modification of existing attributes and the
addition of new attributes within the online environment. Following observed convention in information research (e.g.
Wilkie, 1974), the levels of change were manipulated by varying the number of individual attribute variations within each of
the two web-site dimensions. Subsequently, for each change dimension, in the low manipulation, the web-site had two
attribute variations; while in the high manipulation, the web-site had eight attribute variations (including the two attribute
variations from the low manipulation). To classify attribute variations as either task-relevant or non-task-relevant, where
325
available, the prior classification within the typological literature was considered, however all attribute variations were
ultimately classified through appropriate fit with the operational definitions of task-relevant and non-task-relevant change.
Given restrictions set by the governing ethics authority for directly recruiting customers, adult customers for the top ten
regional banks were initially targeted through convenience sampling and screened into a sub-set of current customers of the
stimulus bank using filtering questions. In total 1428 participants were recruited. Of those, 1060 were identified as noncustomers of the stimulus bank, with the remaining 368 forming the screened respondent sample. Within the screened
respondent sample, 65 participants exercised their right to withdraw from the research.
Participants in the screened respondent sample were invited to participate in a research project on web-site design preferences
that required them to use a modified version of the personal banking pages of the web-site for a fictitious user. To encourage
depth of navigation and to replicate normal online behavior, respondents were required to remain on the web-site for two
minutes and were given a list of six routine banking tasks from which they were to complete the three they were most
familiar with. After two minutes had elapsed, respondents were then able to access the questionnaire and complete the
research. On completion of the research participants were thanked for their time and debriefed. After completing the
experiment, from the 303 submitted responses, 280 usable responses comprised the final data set (with 70 subjects per
experimental condition).
Results indicate that non-task-relevant change and task-relevant change both have an individual effect on consumers'
emotional responses to change; moreover, the effects are very different. In particular, non-task-relevant change carries
positive consequences notably increased pleasure, while the effects of task-relevant change carry negative consequences,
such as reduced dominance and reduced pleasure. Moreover, the effect of engendering task-relevant change in an online retail
environment is far superior to that of non-task-relevant change. Overall, this is not an entirely surprising result, as the greatest
impact of change on the consumer is expected to occur when the consumer faces changes that require modification and
integration of their own behavior as opposed to change that can be observed without significant consequences for behavior.
Results also support the roles of dominance and arousal as environmental markers from which the valence of pleasure is, in
part, derived. Specifically, results indicate that consumer's perceptions of task-relevant (functional) change evoke feelings of
behavioral restriction (dominance) and in the context of a changing environment consumers find behavioral restriction
unpleasant. Against expectations, change has only a weak relationship with arousal, with arousal being influenced only by
non-task-relevant (aesthetic) change and with minor overall effect (R2 = .03). Consequently, as consumers' arousal states were
essentially unaffected by change, arousal responses reflected measures of general environmental stimulation, yet never-theless operated in an antecedent capacity holding a positive effect on consumers' pleasure states. That is, higher levels of
reported arousal, irrespective of change, corresponded to higher levels of reported pleasure. This finding is consistent with
existing theories on the presence of environmental cues, such as atmospherics (e.g. Eroglu, Machleit and Davis, 2001).
Finally, contrary to the pivotal role predicted, the consumer's pre-change experiences with the web-site discerned little
additional influence in the consumer's response to the change, having no significant influence on the direction of any existing
relationship.
The results of this study show that change has a considerable impact on consumer's emotional states, and as such change can
influence how changed stimuli are accepted by consumers. Given non-task-relevant change results in positive consequences
and task-relevant change results in negative consequences, online retailers engendering change within their web-site should
be focused on managing the change process to enhance the positive effects of non-task-relevant change while minimizing the
consequences of task-relevant change. As such, retailers should develop change implementation plans which incorporate
consumer management activities, which could include: informing consumers of change prior to launch focusing on new task
capabilities and the benefits of such capabilities; developing and promoting alternate communication channels to facilitate
real-time customer support, such as live chat; guiding consumers through new features, such as the take a tour or learn
whats new options; and celebrating the new look and feel of the web-site with consumers after launch to associate positive
emotions with the change environment.
Moreover, given the prominence of task-relevant change on consumer response, while online retailers should carefully
manage change within the non-task-relevant dimensions of the web-site (such as background changes and font changes),
326
special emphasis should be given to managing change in the task-relevant dimensions (such as web-page hierarchies and
navigation tools). To do this, retailers can: offer extra customer service during times of change to ensure the reduction in
dominance (and its negative consequences) can be offset by directive assistance; ensure that task-relevant change is wellaligned with consumer needs or that the benefits of task-relevant change are clearly articulated to counter the negative
emotional response; promote settings in which consumers can be exposed to change without the need for task
accomplishment (such as 'sneak peak' or 'beta versions' of pre-launched changes); or facilitate (where possible) a change-over
period (for instance one month) where consumers are empowered to revert between 'new' and 'old' sites at their will.
This study also provides some exciting theoretical contributions. First, the study has developed a general typology of change
(task-relevant and non-task-relevant) applicable not only to online environments, but also to brick and mortar retail stores and
service settings. Second, this study has provided initial insight into the effect of change on consumer response by
demonstrating that change as a source of sensory stimulation induces positive emotional states, while change as a source of
behavioral stimulation induces negative emotional states. Finally, this study has identified the prominence of task-relevant
change, while acknowledging the significance of non-task-relevant change, as emotion inducing cues in the online setting.
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327
INVESTIGATING POST PRODUCT RECALL SALES DYNAMICS USING FUNCTIONAL DATA ANALYSIS

Kyung-Ah, Byun, Texas Tech University, USA
Mayukh Dass, Texas Tech University, USA
ABSTRACT
Extant marketing literature suggests that negative effects of product recalls are not limited to the brand or the product
category in which a product is recalled, but also spills over to performances of other brands and product categories. Given
such wide effects of a recall event where some products benefit while others face losses; it is imperative that retailers and
brand managers should have a strategy on how to limit their damages by strategically managing their inventory and shelf
space allocations. In this study, we propose that such planning requires a more in-depth examination of how sales of various
products and categories change (i.e. sales dynamics) just after a product recall. Using functional data analysis, an emerging
statistical methodology for the analysis of curves or functions (Ramsay and Silverman 1997), we examine the sales dynamics
of affected and related brands during the recall of IAMS cat food in June 2010. Using a total of 18,508 transaction data from
482 UPCs and 62 brands across five related product categories, we (a) identify different patterns of sales recovery of the
affected brands; (b) investigate how the patterns vary across similar and dissimilar products of competitors, and other
categories. This study extends the current literature on product recalls and identifies marketing functions that play a
significant role in post recall sales. The paper concludes with a discussion of the managerial implications on how to develop a
post recall strategy to reduce the negative effect of the event.

328
ARE HEALTH WEBSITES READY FOR THE MOBILE WORLD? A STUDY OF READABILITY AMONG
TRADITIONAL AND MOBILE WEBSITES
Janice R. Cunningham, Royal Institute of Technology, Sweden
Linda Lee, Royal Institute of Technology, Sweden
ABSTRACT
By 2015, mobile devices will be more popular than personal computers to access online information. This expected shift is
particularly important for health information, as the near ubiquitous penetration of mobile phones will present new
opportunities to disseminate information to traditionally hard-to-reach populations. This study asks whether the mobile
websites of health organizations have taken into consideration the greater difficulty of reading text on the small screens of
mobile phones. Specifically, this study examines readability scores of traditional websites and mobile websites among 55
American health organizations.
While 22% of the organizations studied had mobile websites, only one-third of the mobile websites had better readability
than their traditional website counterparts. The Grade Level Score for these mobile websites averaged 6.5 compared to 8.5 for
their traditional websites, and none had the recommended superior readability scores of 5th grade level or lower. Conversely,
another one-third of the mobile websites had worse readability than their traditional website counterparts. These findings
suggest most health organizations have yet to truly leverage the greater accessibility of online information through mobile
phones.
329
SHOPPERS ADAPTATION STRATEGIES UNDER CONDITIONS OF CROWDING: THEORY, EVIDENCE

AND IMPLICATIONS
Yue Pan, University of Dayton, USA
ABSTRACT
Research on retail density has suggested some crucial factors that may influence shoppers coping strategies under conditions
of crowding. For instance, Eroglu and Harrell (1986) contend that crowding is experienced when the environment is judged
as being dysfunctionally dense; these judgments will vary across individuals depending on expectations, personal tolerance
levels, time pressure, and shopping task. More recently, researchers have provided theoretical and empirical evidence for
shoppers differential patronage behavior in crowded service (as opposed to goods) settings (e.g., Pan and Siemens 2011;
Pons et al. 2006).
This study seeks to extend the extant research by proposing and testing one potential moderator variable (i.e., shoppers
incidental affects) that may interact with shoppers perception of crowding and subsequently affect their coping strategies
(e.g., refraining from stressful crowding experience, intention to enter or browse/buy in the store). Building upon the theories
of incidental affect (e.g., affective evaluation theory and affect regulation theory), we suggest that shoppers adaptation
strategies under conditions of crowding are dependent on their mood state. Furthermore, we argue that happy people should
avoid over-crowding, and sad people are likely to engage in more proactive behavior when mood-changing cue is present. In
the absence of a mood-changing cue, happy peoples positive evaluations of the store ambiance should lead them to take
proactive adaptation strategies (e.g., enter and browse in the store, make a purchase), whereas sad peoples negative
evaluations of the same should result in more passive adaptation strategies. We tested and supported the hypotheses with a
two-phase study.
REFERENCES
Eroglu, SA, Harrell, G. (1986). Retail crowding: Theoretical and strategic implications. Journal of Retailing, 62, 346-363.
Pan, Y, Siemens, JC. (2011). The differential effects of retail density: An investigation of goods versus service settings.
Journal of Business Research, 64, 105-112.
Pons, F, Laroche, M, Mourali, M. (2006). Consumer reactions to crowded retail settings: Cross-cultural differences between
North America and the Middle East. Psychology & Marketing, 23(7), 555-572.
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SOCIAL RELATIONS BEYOND TEAM-BASED LEARNING

M Wiese, University of Pretoria, South Africa
E Botha, University of Cape Town, South Africa
G van Heerden, University of Pretoria South Africa
INTRODUCTION
Management teachers have been encouraged to pay attention to the fact that due to the success of teamwork in business,
employers are now seeking graduates with experience in working in teams during their academic programmes (Lamont,
2001). Industry needs individuals that can help reduce costs, shorten product development cycles and improve customer
service and quality and according to Lynn (1998) teamwork and team learning are credited for helping businesses to do just
that. It is therefore imperative that educational institutions, especially in the field of management, respond by incorporating
teamwork and problem solving into their curriculum (Lamont, 2001). Baldwin, Bedell and Johnson (1997) note that different
group interaction patterns or peer interactions in an educational setting may lead to student satisfaction and achievement.
Therefore a need for greater understanding of student interaction and the nature and value thereof should be recognised, and
Baldwin et al., (1997) argues that social networks in educational programmes are applicable.
Business schools have designed initiatives to promote teamwork where the learning processes and outcomes are different
compared to individual learning outcomes (Baldwin et al., 1997). Laverie (2008) points out that team-based projects emulate
the workplace and facilitate students development of leadership, problem solving, task-completion, time management and
team cooperation skills. In a context where students predominantly do not have any industry experience, the aforementioned
skills are necessary for them to make their first transition into the workplace. In designing a new curriculum, the value of cooperative learning strategies motivated the decision to incorporate team-based learning as a fundamental into the curriculum
and this paper will share some interesting findings.
The goal for the new curriculum design was to stimulate students cognitive capabilities and the teaching model implemented
used a combination of client-based and in-class challenges to engage in deep learning of key marketing concepts. These
challenges or initiatives were aimed at engaging students in team-based learning where they were encouraged to develop their
own skills and to work effectively as part of a team, an important skill demanded by future employees (Chapman, Meuter,
Toy & Wright, 2010). This paper aims to show that when cooperative learning strategies are incorporated into educational
activities, it does not only prepare students for the job-market, but also contributes towards building stronger social networks.
These social networks, in turn, provide students with various positive educational outcomes such as knowledge sharing.
The paper starts by providing background on cooperative team-based learning and how it resulted in an educational
environment that created a learning experience. A discussion on the value of social networks is then followed by the
methodology, results and findings of the social network analysis. The paper concludes with the value of social networks as a
result of curriculum design.
COOPERATIVE TEAM-BASED LEARNING AND THE DEVELOPMENT OF CURRICULUM
The context of team learning in an academic setting involves small groups of students working under the guidance of an
educator to extend and apply their learning (Herreid, 1998). Lamont (2001) used interactive simulations and notes that three
factors should be taken into consideration in creating and using team-based learning. Firstly, the educator must integrate the
simulation into the course; the relevance to our context is the integration of the various challenges into the course. Secondly
consideration must be given to organising the class into teams and thirdly, designing the assignments, evaluating performance
and managing the learning experience. Therefore, when a part of the academic experience involves students working together
to solve problems, sharing, explaining and defending their ideas according to Lamont (2001) learning is experienced.
Prichard, Bize and Strafrod (2006) argue that when team-based activities are properly facilitated the ability to collaborate,
compromises, cooperate and tolerate others are fostered. The value of team-based learning is thus based on the premise that
knowledge is gained and learning is exchanged.
In an attempt to create and facilitate an educational environment where learning can be exchanged by exposing students to
work in both randomly and self-selected teams, whilst solving the client-based or in-class challenges a healthy competitive
environment was cultivated amongst the various groups. Practically, the aim was to understand the nature and value of
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student interaction and an unintended consequence of these team-based activities was the development of social networks
amongst the class.
THE VALUE OF SOCIAL NETWORKS
The value of social networks is said to be social capital which relates to bonding similar people and bridging between diverse
people, with norms and reciprocity (Uslaner, 2001). Adler and Kwon (2002) view social capital as the goodwill available to
individuals and groups. Its source lies in the structure and content of the actors social relations. This paper will specifically
look at the structure of the students social network before and after they experienced the cooperative team-based initiatives
i.e. the new curriculum designed courses. The structures of social networks are important not only because they provide
opportunities for the exchange of information, but they also impose constraints on behaviour (Kohler, Behrman & Watkins,
2012). For example, dense social networks can provide network actors with normative rules for good conduct within a group.
Network density can be described as the proportion of all possible social links that exist in the observed network (Kohler et
al., 2012). When referring to the structure of social networks according to Obstfeld (2005) the debate on social capital has
recognised the contrasting benefits of dense and sparse networks. One stresses the benefits of closed, dense networks
(Coleman, 1988) including cooperation, trust and the potential to build knowledge through intensive, repeated interactions
and exchange of ideas (Ahuja, 2000). However, whilst dense networks have a structure that initiates mobilisation, it hinders
the generation of new ideas known as the idea problem (Granovetter, 2005).
On the other hand, according to the theory of structural holes, networks with structural holes, expose an actor to novel
communities, diverse experiences and unique resources (Burt, 1997). When referring to the purpose of information sharing
for the sake of learning, it is argued that sparser (i.e. less dense) social networks are better (Granovetter, 1973) specifically
referring to the strength of weak ties. However, Kohler et al. (2012) argue that the denser the network (i.e. the more ties) the
more social norms or acceptance of ones behaviour by friends and community members, become more important.
Furthermore Burt (2004) postulates that while structural holes lead to good ideas, due to unconnected people found around
the structural holes, it is more difficult to mobilise or coordinate action. This type of network often struggles to implement
ideas. The distinction between social learning and social influence becomes essential. If social learning dominates within a
dense social network, then positive behaviour can be facilitated through the social network and positive behaviour can
dominate. i.e. the best behaviour will be learnt and spread through the social network. If, however, social influence
dominates, a different behavioural pattern may result.
With a cooperative team-based curriculum design, teaching students how to interact with one another, and how to adapt to
social standards and norms, is one of the key outcomes of the design. In other words, where students are required to share
information more freely and work together with various partners, a less dense network might be more effective. However, if
the curriculum design makes the student network denser it might facilitate students enjoyment of the course as well as the
establishment of group norms but it could inhibit learning and innovation (Kohler et al., 2012). Consequently, the impact that
this curriculum design has on students social networks is of central importance in guiding the initiatives to challenge
students on various levels.
METHODOLOGY
A descriptive research design was followed and a census was done on the entire post-graduate class. Students specialized in
marketing and had been involved in the cooperative team-based curriculum design for 10 months. This approach was
followed in order to get a complete picture of the students social network. Social network and demographic information
were obtained through the use of a self-completion survey. A total of 54 questionnaires were distributed but 12 incomplete
questionnaires resulted in a sample size of 42. As the level of analysis is that of a complete network or system, this sample
size resulted in 42 nodes and 1722 (N-N) possible dyadic ties to investigate (Knoke & Kuklinski, 1982).
With regards to the social network data, for complete networks, Ebener (2008) suggests that one collect data on a roster, only
once and only ask respondents about themselves. That is the approach that we followed. With regards to the roster,
respondents were asked to rank their relationships with their classmates first at the beginning of the year, and then again at
the end of the year.
An important step in the structural analysis of a complete system is to identify the significant positions within a given
network of relations, i.e. the structure of the social network (Knoke & Cuklinski, 1982). This was done using UCInet
software (Version 6; Borgatti, Everett & Freeman, 2002). UCInet is a comprehensive programme for the analysis of social
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networks and is the best-known and most frequently used social network analysis (SNA) software (Carrington, Scott &
Wasserman, 2005). The goal of the SNA was to take an exploratory look at the structure of the students social network.
RESULTS AND DISCUSSION OF THE SOCIAL NETWORK ANALYSIS
Positive feedback was received about the team-based approach which is evident in some of the remarks students made such
as, Enjoyed the interaction; Challenging and motivating, enjoyed it thoroughly, This course makes the three years of
marketing undergraduate worthwhile as we now have the opportunity to apply acquired knowledge and lastly Great for
preparing you for industry and workplace demands. The structured question regarding students team experiences was
measured using a 7-point Likert scale, where 1 was strongly disagree and 7 strongly agree. The results of the paired-samples
t-test indicated a statistical significant difference. Students indicated that they prefer it when teams are randomly allocated by
the educator (M=5.81; SD=1.31) instead of selecting their own teams (M=3.52; SD=1.838), t (41)=-5.186, p<.000.
Due to the fact that students worked in various groups it was interesting to know how students co-ordinated their group
activities for each of the challenges. This was a critical aspect due to the fact that each of the challenges required students to
work in a different group. Various means of communication activities were employed by the students in co-ordinating their
activities. Students indicated that they mostly made use of their own technological means of communication such as
Blackberry Messenger (BBM), WhatsApp software downloaded onto smart phones and email.
All these communication activities around students curriculum contribute towards building their social network. The primary
goal of this paper, however, is to investigate how the curriculum design could have possibly influenced the students social
network. To do this, SNA was done on students social network at the beginning of the year (i.e. before the course started)
and their social network at the end of the year (i.e. after the completion of their curriculum). NetDraw was used to visually
display the social network data.
In this first social network it is clear that there are relatively few ties between students and that structural holes are present
within the social network. Not all students (i.e. not all 42 nodes) were represented in the network, implying that there were
some students who were completely isolated from the group. There are two key nodes (person A and person B) that link
some of the students to the rest of the group. Without these two nodes, these six students (person C, person D, person E,
person F and person G) would have been isolated.
There is one relatively well connected cluster on the right side of the SNA, but many students have very few ties to other
nodes (e.g. person H and person I has one tie), and these students function at the periphery of the social network. This is not a
very dense network (i.e. proportion of actual ties to the number of possible ties) (Kohler et al., 2012). According to Kohler et
al. (2012), a network with this many weak ties and structural holes, might be better suited to information sharing and
innovation. However, this social network is not very well suited to situations where social norms come into play. They state
that dense social networks exert a stronger normative influence on individuals behaviour than do sparse social networks.
Figure 2 on the other hand, looks at students social networks after the cooperative team-based design was experienced.
It is evident that the social network of students after completing the years curriculum is much denser than at the beginning of
the year. There are no structural holes and information flows freely between nodes. Each student (node) has at least three
network ties. Such a dense network may not be well suited to an environment where it is crucial to find information about
opportunities or where innovation is critical (Granovetter, 1973), but this network facilitates a strong normative influence on
individuals behaviour (Kohler et al., 2012). In a network with relatively isolated nodes (see Figure 1), behavioural constraint
is minimal. The advantages of dense social networks, with more frequent communication and strong ties include trust, norms
of cooperation and more effective exchange of complex knowledge (Obstfeld, 2005). Furthermore dense networks tend to be
the locus of shared knowledge (Nahapiet and Ghoshal, 1998) and language, which facilitates communication.
IMPLICATIONS OF THE VALUE OF SOCIAL NETWORKS WITHIN AN ACADEMIC PROGRAMME
The results of the social network analysis indicate that the co-operative learning strategies incorporated into the educational
activities had an impact on the structure of students social network. Initially, a network with few ties and structural holes,
illustrate the unfamiliarity of the group, this is suitable for information sharing and innovation (Kohler et al., 2012). At the
beginning of the academic year the activities planned as part of the educational programme illustrated that the flow of
information was necessary and innovation in terms of teamwork and outcome was evident. Towards the end of the academic
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year, where students had the opportunity to work together with a number of other peers, a dense network was present,
illustrating a number of ties for each student that facilitated a strong influence on team activities. It is evident that both these
types of social networks were present in the academic year and both provided challenges as well as advantages in terms of the
educational outcomes, specifically when team-based learning is at the core of the curriculum design.
In terms of the educational outcomes the benefits that the social networks created, initially was challenging in terms of
motivating students to engage in co-operative learning strategies, this was predominantly due to unfamiliarity with one
another. However, towards the end of the year the same advantage became a challenge due to the fact that the level of
familiarity was very high. From an educational point of view the latter is an interesting and valuable contribution when teambased learning is included in the curriculum and therefore in optimising the structure of the network it might affect the
planning of challenges. Initially activities centred on working together to solve challenges, created a challenge for the
students. However, when the familiarity and ties within the network became dense, more emphasis should have been placed
on challenging students to creatively solve challenges. When focussing on the structural analysis the density of the social
network may lead to a high level of student satisfaction. Another critical educational outcome specifically for curriculum
design that incorporates initiatives to stimulate and encourage the ability to work in a team could also be a positive result of a
dense network. From a student point of view the value is not merely increased satisfaction and improvement of team skills,
making them more employable, but the team-based challenges also contributed in creating a friendship network which did not
exist previously. This realisation needs further investigating and consideration in terms of its nature and value for designing
a new curriculum.
FIGURES
Figure 1: Social network of students at the beginning of the year
*To ensure anonymity names and surnames have been removed.

Figure 2: Social network of the students at the end of the year
*To ensure anonymity names and surnames have been removed.

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THE FIFTY PERCENT RULE: THE CHALLENGE OF ENGAGING STUDENTS IN SOCIAL MEDIA IN THE
CLASSROOM
Debra Zahay, Northern Illinois University, USA
Alex Eddy, Northern Illinois University, USA
Ira Kaufman, Lynchburg College, USA
ABSTRACT
This paper describes the use of three separate community-sharing tools in the classroom over time to teach a marketing
technology class at a large Midwestern University and a class blogging project over three semesters at a small Eastern College.
These methods include a class wiki, a private Ning social network and the public Google+ social network. The paper describes
the features of each and evaluates the pros and cons through their application for the learner-centered teaching approach. The
research measures and reports the results of these efforts, discusses the challenges of engaging students in social media and
online communities, explores underlying rationales and suggests opportunities for improvement. Rather than suggest
widespread use of social media in the classroom, these results indicate that engagement might not be 100% and that social
media should, of course, be supplemented with other forms of engagement.
To test the hypothesis that the more learner-centered the tool the higher the usage by students, we evaluated the various levels
of engagement on the wiki, Ning and Google+ over each of the three semesters. The wiki was evaluated by wiki karma bars
which measured contribution. The more an individual contributed to a particular wiki, the higher the karma rating. For the
Ning social network, class participation grades were reported to measure engagement (ten postings of 10 points each for 100
points was the metric). For Google+ participation measurement, the number of postings were counted. For Ning and Google+
ten postings were required but not all students did ten postings, in spite of course requirements. Comments on postings, which
are more difficult to evaluate, were eliminated from the analysis. The quality of postings was not an aspect of this analysis.
In spite of broad adoption by social media for personal use by what is known as the Millennial generation, student engagement
across these community-sharing tools seemed to be stuck at the fifty percent mark. Our general hypothesis that the more the
tool facilitated the principles of learner-centered teaching, the more it would be adopted by students, was not supported. In
fact, the results of a student survey indicate students did not think that the public social media network Google+ was a good
way to share course information, although students did think the public network was a good way to share information on what
was happening in interactive marketing. Qualitative feedback from students over three semesters from a blogging assignment
at an Eastern College supported these results and indicated that blogging was considered a homework task to be put off until
the last minute, if completed at all.
Therefore, across Universities, semesters, and social interaction tools, it appears that a rule of engagement of somewhere around
fifty percent is the norm for social media use in the classroom, consistent with engagement in other areas such as the Forrester
Engagement Ladder. Therefore, we coin the term: The Fifty Percent Rule to suggest that educators need to understand
that using social media in the classroom is not a guarantee of engagement. Other methods may need to be used to involve
students than these tools. The paper discusses the reasons for this lack of engagement and ways to improve participation.
More research in this area needs to be conducted to determine the appropriate role of these collaborative and communitybuilding technologies in the classroom These results confirm the results of other researchers that social media is a tool like any
other and must be used as appropriate to facilitate classroom communication. Like any other teaching tool, some students will
be interested in using the tool and some students will not. Future studies should focus on the benefits to the students of the use
of social media and expand beyond the limited setting of these educational institutions to see if other methods of student
engagement will break the Fifty Percent Rule.
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EFFECTS OF A CLIENT SPONSORED PROJECT ON STUDENT ATTITUDES TOWARD CLIENT SPONSORS

AND LEARNING
ABSTRACT
One of the ways that marketing educators provide realistic, experiential learning for their students is by incorporating clientsponsored projects (CSPs) into the educational curriculum (Strauss 2011). While most literature focuses on the effects of
CSPs that are incorporated in upper-level marketing courses, this paper explores the effects of incorporating a CSP into an
introductory marketing course. Furthermore, this paper investigates a CSPs effect on student attitudes toward client sponsors
and on student perceptions of learning. It also explores the effects of i) student attitudes toward competition, ii) perceptions of
instructor helpfulness, and iii) perceptions of team functioning on students views about the learning that takes place by
participating in a CSP.
Part of an organizations willingness to sponsor projects for students arises from their desire to assist in developing certain
skills in prospective employees. For example, businesses want to hire individuals with technical, analytical, and creative
problem solving skills (Barr and Mcneilly 2002) and CSPs are recommended as a strategy for developing those skills (Strauss
2011, Umbel, Umble and Artz 2008). It is possible therefore, that organizations sponsor student projects assuming and
expecting that students who participate in such a project and develop the desired business skills will want to come to work for
the client sponsor. Therefore, we expect that students who participate in a CSP will develop positive attitudes toward the
client sponsor.
The marketing literature suggests that CSPs enhance student learning of important marketing concepts (Ackerman and Hu
2011). CSPs however are typically ambiguous and lacking in structure and some students find this frustrating (Strauss 2011).
Furthermore, CSPs are frequently carried out by student teams and it is possible that a poorly functioning team may impede
student learning (Chapman, Meuter, Toy, and Wright 2010). Furthermore, some CSPs involve competitions for money or
other prizes awarded by the client sponsor. Thus, while we expect that a CSP will enhance student learning, we also expect
that the level of instructor assistance, the extent to which the student team functions effectively, and student attitudes toward
competition will all influence the impact of the CSP on student learning.
Our hypotheses were tested in a sample of 592 students (sophomores, 66% business majors, 55% male) enrolled in several
sections of an introductory marketing course in a large business school in north-eastern United States. These students were
required to prepare and present a marketing plan for a client-sponsor. The topic, selected by the client sponsor, was a current
business problem being faced by the sponsor. The CSP required students to work in groups of five to develop marketing
plans to increase product sales of pet products (fall semester project) or sporting goods (spring semester project). Teams
submitted a written report and presented their recommendations in class during the third to last week of classes. One team
from each section was chosen to present their plan in a final competition that was judged by executives from the client
sponsor along with some senior-level business faculty. Winning teams shared cash prizes ($1000, $750, $500) and all
participants in the final competition received a small cash prize.
The impact of the CSP on student attitudes toward the client sponsor were assessed with measures administered both before
the project was introduced and after it was completed. The impact of the CSP on student attitudes toward learning and the
impact of instructor assistance, teamwork, and competition on student attitudes toward their learning were assessed with postproject measures.
The data analysis revealed significant pre- to post-project increases in students desires to seek employment with the client
sponsor. The analysis also revealed that the CSP was an effective way to enhance learning of marketing concepts.
Furthermore, student attitudes toward competition and beliefs that their instructor was helpful were found to significantly
influence students views that the CSP helped them learn marketing concepts. These findings extend the literature on clientsponsored projects. They also provide instructors with convincing evidence that may assist them in recruiting sponsors for
class projects. Finally, while these results suggest that a CSP must be carefully managed, they also suggest that marketing
instructors should not hesitate to introduce a CSP at the earliest stages of a marketing program.
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TaxI: A STATISTIC DESCRIBING THE ACCURACY OF

MULTIPLE-CHOICE QUESTION DIFFICULTY CLASSIFICATIONS
John R. Dickinson, University of Windsor, Canada
INTRODUCTION
Banks of multiple-choice questions accompany virtually every introductory-level marketing text. Given the ubiquity of
published multiple-choice questions in marketing, and the taxonomies into which questions are invariably classified, it is
surprising that only sparse research has evaluated those questions and taxonomies. Questions are usually classified on the
dimension of difficulty and usually into three levels: easy, medium or moderate, hard or difficult. Previous research (Dickinson
2012a, 2012b, 2011, 2005) has shown that for four question banks (Solomon, Zaichkowsky, and Polegato [SZP] 2011, 2005;
Levy and Weitz [LW] 2009; Hawkins, Mothersbaugh, and Best [HMB] 2007) measured difficulty is transitive on average.
That is, the mean percent correct for questions classified as easy is greater than the mean for questions classified as medium
which, in turn, is greater than the mean for questions classified as hard. However, the standard deviations of those percents in
the respective difficulty classifications are substantial. Empirically, the three difficulty levels are not mutually exclusive.
Examination of the complete distributionsnot just the meansof the percents correct is warranted.
For example, Dickinson (2012b) examined a sample of questions from LW (2009), operationally defining questions empirically
easy as those having percents correct greater than 70 percent and empirically hard as those having percents correct less
than or equal to 30 percent. He found that 48.2% of questions classified as medium were as easy or easier than questions
classified as easy. 28.4% of questions classified as hard were as easy or easier than questions classified as easy. 3.9% of
questions classified as easy were in fact as hard or harder than questions classified as hard. And so on.
PURPOSE
Describing the overlap of percents correct in the above fashion is informative. However, that approach suffers three
limitations. First, it involves multiple pairwise comparisons among the three difficulty levels rather than yielding a single
statistic reflecting classification accuracy across all difficulty classifications together. Second, while the percent correct
dividing levels of 70 and 30 percent may seem reasonable, those specific levels are still a matter of judgement and are not
intrinsic to the question banks. Third, any dividing levels such as 70 and 30 may not be equally commensurate with different
question banks, compromising comparisons of question banks and their taxonomies across texts. The purpose of the present
research is to introduce the Taxonomy Index (TaxI) statistic that remedies these limitations.
The conceptual and operational underpinnings of TaxI are presented. In addition, a chance criterion is developed against
which TaxI may be compared. In essence, the respective probabilities of a question being selected from the test bank being of
a specific difficulty level with (TaxI) and without (chance criterion) reference to the published taxonomy are compared. Further
a classification matrix, relating empirical-classified difficulty to taxonomy-classified difficulty is developed. Parallels with
discriminant analysis are drawn.
Illustrative results for four question banks are presented.
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AN INVESTIGATION OF EFFECTIVE ADVERTISING STRATEGIES FOR RECRUITING LONG HAUL

TRUCK DRIVERS
Carol C. Bienstock, Radford University, USA
Marla Royne Stafford, University of Memphis, USA
INTRODUCTION
As the US economy slowly recovers from the economic recession that began in late 2007, product demand is shifting upward,
increasing the need to move materials and finished goods through the various modes of transportation. Trucks or motor
carriers transport about 70% of the freight in the United States (http://www.truckline.com 2006), yet during the economic
downturn, several transportation companies shut their doors while others laid off employees. Although demand for truck
drivers has always exceeded supply, this gap seems more pronounced than ever as companies seek to hire truck drivers to
support the current economic upturn. In addition, the Comprehensive Safety Analysis (CSA) 2010 system launched by the
Federal Motor Carrier Safety Administration (FMCSA) presents the potential for new obstacles in the hiring process (smarttrucking-jobs.com 2010), resulting in additional recruiting challenges for transportation and logistics firms.
Developing appropriate and effective advertising strategies to recruit truck drivers, however, is challenging. Suggestions exist
on what to do and what not to do in such advertising, but this information is limited and fails to provide adequate direction
for carriers in the recruiting process. Additionally, there is a perception that much of recruitment advertising is directed at
current drivers and simply encourages them to move from firm to firm as opposed to increasing the driver labor pool (Lemay
and Taylor 1988). In addition, Min and Lambert (2002) have noted a lack of strategic advertising for targeted labor pools.
Consequently, while advertising is often used to recruit truck drivers, there has been no systematic effort to ascertain the
effectiveness of various advertising approaches within the industry. Thus, the objective of this research was to identify the
specific message tactics and media strategies to use in creating effective truck driver recruitment advertising.
METHOD
To accomplish our research goals, we developed and planned to conduct simultaneous online surveys to corporate employees
(managers involved in the recruiting process) and drivers of participating trucking companies. Hence we contacted a number
of local and national companies to secure their participation.
Initial response to the project was extremely positive, and a number of companies indicated their strong support of the
research and full intention to participate. One major company was particularly excited about the research and shared
considerable material on their advertising strategies. Some of this information was ultimately used in the development of the
questionnaire. Unfortunately, despite repeated promises and continued communication from the principal researcher, this
company never followed through with their intended commitment. Several other companies failed to get the needed support
for participation while others simply could not engage the drivers to participate. While we received a handful of responses
from a few different businesses, one major company that followed through fully comprises the bulk of the sample.
Regrettably, despite the companys repeated attempts in contacting the drivers, response to the survey was disappointingly
low.
Because we were not told by the companies how many truckers and corporate staff members actually received the
questionnaire, it is impossible for us to calculate a response rate. However, our resulting sample sizes were 138 drivers and
30 managers, although some of the questionnaires were not fully completed.
RESULTS
Because our goal was to assess differences in perceptions between drivers and managers, most of the survey questions were
developed to allow for a direct comparison. First, to better understand perceptions of what was important to include in an
advertisement, we provided respondents with a list of items that are often used in truck driver recruitment advertising.
Respondents were asked to indicate on a scale of 1-7 how important each of these items was to include in a recruitment
advertisement.
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On more than half of the items, importance levels were equal, indicating that corporate personnel are somewhat in tune with
drivers perceptions (24/7 dispatch; 75% drop and hook; assigned equipment - no slip seating; competitive pay; flexible home
time; home daily; large volume of hub group freight; no haz-mat; up to $5000 sign-on bonus; weekly pay). However,
significant differences were observed on seven items: direct deposit available; lease to purchase program; trade in ability;
paid fuel surcharge, loaded and empty; paid vacation; save up to 30 percent with tire discount program; and save up to $4000
with fuel discount program. On all but two of these seven items, managers felt these specific benefits were significantly more
important to include in a recruitment advertisement than did the drivers. However, drivers felt it was significantly more
important to include direct deposit availability and paid vacation in recruitment ads. Not surprisingly, including competitive
pay in the advertisement ranked number one among both drivers and managers, with weekly pay and flexible home time also
ranking toward the top for both groups. Paid vacation, another item with a significant perceptual difference, was at the top
for drivers, but not for managers.
We observed some interesting results regarding the types of advertising media sources used for recruiting/job searching by
managers/ drivers. While the Internet, driving school recruitment, truck convention recruitment, newspaper advertising and
word of mouth were all heavily used (more than 50% indicated using), only the Internet and word of mouth had use levels of
above 50 percent among drivers. The Internet was the most used source by drivers and the second most used source by
managers. Word of mouth was the most used by managers and the second most used source by drivers.
Furthermore, specific Internet sites used by drivers for seeking a job and managers seeking drivers differ considerably. While
50% of managers use cdljobs.com, only 7.2% of drivers do. BigRigLease.com is used by more than a quarter of the
managers (26.7%), but none of the drivers indicated they used this site. And while nearly three fourths of the managers use
Craigslist.com, less than one-fifth of the drivers used it to look for a job, although it was the most used website among drivers
who use online sites for their job search. Bestdriverjobs.com and Careerbuilder.com were each used by 17.4% of the drivers,
and Monster.com was also a popular website; 14.5% of the drivers and 23.3% of the managers used it.
The most frequently used magazine for seeking employment was Truckers News with 19.6% of the drivers using it in their
job search. It was also one of the three most used by managers; Best Driver Jobs, Hiring Truck Drivers and Truckers News
were each used by 10% of the managers. Eighty percent of the managers and 37% of the drivers also used other magazines
that were not part of the magazine list.
Although not directly related to recruitment advertising, we also assessed the perceived quality of four company benefits and
compared perceptions of them between drivers and managers. For all four items (health care program, insurance policy,
retirement plan and vacation policy), managers perceived the quality as significantly higher than did the drivers. In addition,
we evaluated perceptions of manager/driver relations using four items (management's respect for drivers with significant
experience; level of support from supervisor; level of trust between drivers and management; respect shown by management
for drivers' opinions). On all four items, management perceived the strength of these relations to be significantly stronger
than did the drivers.
IMPLICATIONS AND CONCLUSIONS
Our results indicate that in many cases, managers are utilizing resources and including important issues in their advertising.
Items such as flexible home time, competitive pay and weekly pay were perceived as important to drivers to include in
recruitment advertising and perceived the same way by managers. However, our results also highlight some areas where
managers should consider changing their advertising message strategies. For example, benefits related to direct deposit
availability and paid vacation were two items of particular importance to drivers, but not perceived at the same level of
importance by managers. At the same time, including items such as lease to purchase programs and trade-ins in
advertisements -- perceived as important to managers -- may not have the desired effect. Hence, managers should consider
including the specific items identified by drivers as more important in recruitment ads to achieve the best response possible.
Our results also suggest a reevaluation of media strategies to ensure that managers are utilizing those media used by drivers.
While there is some overlap, our results indicate that some change in the arena is necessary. In particular, the use of different
Internet sites needs to be examined carefully.
It is interesting to note that in all cases, managers viewed company benefits and manager/driver relations in a more positive
manner than the drivers. This suggests a critical disconnect between the driver and the company. While this is beyond the
scope of this study in general, it does indicate the need to further investigate manager/driver relationships to enhance driver
339
attitudes and perceptions about the company, possibly as a mechanism to enhance driver recruitment and increase driver
intention.
Because of our small sample sizes, we must offer caution with regard to our findings. Nevertheless, our results do offer some
preliminary insight into what might work better for advertising that is developed to recruit a base of truck drivers critically
needed for our recovering economy.
REFERENCES
Lemay, S. A. and Taylor, G. S. (1988). Truck Driver Recruitment: Some Workable Strategies. Transportation Journal, 28(1),
15-22.
Min, H. and Lambert, T. (2002). Truck Driver Shortage Revisited. Transportation Journal, 42(Winter), 5-16.
What is CSA 2010 and how it affects truck Drivers (2010), What is CSA 2010 and how it Affects truck Drivers. Retrieved
from: . smart-trucking-jobs.com/csa2010.html [Accessed on February 21, 2011].
Holcomb,
R.
D.
(2006)
When
Trucks
Stop,
America
Stops.
Retrieved
from:
http://www.truckline.com/Newsroom/White%20Papers/When%20Trucks%20Stop%20America%20Stops.pdf
[Accessed
February 25, 2011]
340
IMPROVING CROSS-BORDER LOGISTICS: THE ROLE OF PUBLIC-PRIVATE PARTNERSHIPS

Donna F. Davis, Texas Tech University, U.S.A.
ABSTRACT
Cross-border logistics involves complex operations carried out by private enterprise such as freight transportation,
warehousing, border clearance, and payment systems. However, the efficiency of these activities depends on government
services, investments, and policies that provide the logistics infrastructure for global trade (Arvis et al., 2012). Hence,
effective public-private partnerships are critical to the quality of cross-border logistics (McLinden, 2011; Sands, 2009).
Public-private partnerships (PPPs) are defined as cooperative ventures between public agencies and private enterprise in
which both parties share the risks and rewards of delivering a service and/or facility for the benefit of the general public
(Linder, 1999; NCPPP, 2012).
Partnerships and partnering behavior have received significant attention in logistics research. This stream of research has
produced a wealth of knowledge about partnerships between private sector business entities, but does not consider the nature
or role of partnerships between actors in the private and public sectors. Given the interdependence of private enterprise and
the public sector in supply chain logistics, the lack of research that examines PPPs represents a critical gap in the knowledge
base of logistics management. The purpose of this study is to address the gap in logistics knowledge by developing a
theoretical framework of public-private partnerships that facilitate cross-border logistics.
The research relies on a grounded-theory analysis of primary data collected in a case study of cross-border logistics between
the United States and Canada. PPPs related to cross-border logistics at two U.S/Canadian border crossings between Montana
and Alberta were selected for this case study. The two crossingsCoutts/Sweetgrass and Wild Horseare located
approximately 100 miles apart on the eastern section of the Montana/Alberta border. These crossings were chosen because
they are located on the multi-modal Ports-to-Plains transportation corridor that links U.S. and Canadian markets. In addition,
these two border crossings are significantly different in their operations.
Reports of seven PPPs were collected in interviews with 34 key informants, including 3 elected government officials, 12
economic development officers, 16 business owners, and 3 border crossing employees. Interview transcripts, researcher
memos, photographs, and documents were loaded into a software tool that facilitates systematic coding and analysis of
qualitative data (QSR International, 2011). The data were analyzed using a grounded theory approach.
Findings reveal that the collaborative capability of private enterprise and the level of cooperation among public agencies
contribute directly to the performance of public-private partnerships which, in turn, supports the quality of cross-border
logistics. While the bulk of research on public-private partnerships begins with the public sector point-of-view, this study lays
the groundwork for examinations of industry-led public-private partnerships. Industry leadership was reported as essential to
the success of PPPs focused on improving cross-border logistics. Further, findings show that these PPPs were ultimately
concerned with economic development. Indeed, the rationale for investments in the logistics infrastructure was almost
exclusively stated in terms of contributions to sustainable local, state/provincial, and national economic growth.
The propositions put forth in this study provide a foundation for a quantitative test of relationships among constructs in
research designs that rely on surveys or econometric modeling of secondary data. Such research could test the robustness of
the basic premise of this study, namely, that the performance of public-private partnerships is significantly related to the
quality of cross-border logistics. In addition, further studies could measure the relative importance of private enterprise
collaborative capability and public interagency cooperation to the performance of public-private partnerships.
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DESIGN AND DEVELOPMENT OF PACKAGING IN SUPPLY CHAIN MANAGEMENT:

A CASE STUDY
Vahid Sohrabpour, Lund University, Sweden
Annika Olsson, Lund University, Sweden
INTRODUCTION
Achieving effectiveness and efficiency in supply chains is one of the focus areas for industry as well as for academic
research. One way to achieve these goals is to design and develop product and packaging systems (See Figure 1) which can
meet the needs of different actors in the supply chain. Packaging, as an interface between the supply chain and its main
customers (the end users), affects supply chain effectiveness (Klevs and Saghir, 2004). Moreover, from an efficiency
standpoint packaging is defined as a techno-economic function aimed at minimizing costs of delivery while maximizing
sales (and hence profit) (Paine, 1981).
At the same time, most research in design and development focuses rather on the product itself and tends to overlook the role
which packaging plays in the effectiveness and efficiency of supply chains. One example is the concept design for supply
chain management, which does not include packaging and the intermediary role it has in the supply chain. In practice, the
lack of supply chain-focused packaging design and development methods to provide effective and efficient solutions is also a
problem for packaging development engineers. Previous study that has touched upon this issue is Oghazi (2009), who puts
supply chain management in a marketing perspective and focuses on how its design and development can contribute to
creating a competitive advantage for marketing of a consumer product. In order to provide tangible business value, many
world-class manufacturers strive to deliver their products and services in both an efficient and an effective manner. The
critical components in this effort are the design and coordination of the supply-chain activities and processes (Mostaghel et
al., 2012).
If the supply chain and product/packaging are considered as two interacting systems, they need to satisfy each others needs,
in order for high effectiveness and efficiency to be attained and maintained. Previous research (Sohrabpour et al., 2012), has
identified that gaps exist between the actors needs placed on product/packaging systems and the satisfaction of those needs
in the supply chain (see Figure 2).
As a fundamental sub-system, packaging can play an important role in satisfying supply chain needs, since it may be adapted
to the product on one hand and to the supply chain on the other. Product/packaging system as a whole can contribute to the
greater efficiency and effectiveness along the supply chain. Consequently, operations from upstream to downstream and the
reverse may have certain needs which product/packaging has to comply with. Figure 3 illustrates these needs from operations
in the supply chain. Therefore, it is necessary to have supply chain-focused packaging design and development methods
which can reduce this gap by providing effective and efficient packaging system solutions. However, only a few researchers
in the fields of packaging, logistics and supply chain management address the issues of how product and packaging systems
can be designed and developed to do so (i.e. Klevs and Saghir 2004 ; Bramklev and Hansen, 2007). To the authors
knowledge, no detailed supply chain-focused design methods have yet been presented. Suitable design and development
methods are vital to assist in satisfying the needs placed on packaging, and improving the overall supply chain performance.
The purpose of this paper is therefore, on a deeper level, to explore and analyze a packaging design and development method
used in a global packaging company to satisfy the needs different actors place on product/packaging systems in the supply
chain.
METHOD
To investigate design and development methods in practice, a single case study was carried out at a global packaging
company in order to understand the procedures used in the packaging development process. In the context of the global
packaging company, the case focused on investigating how design and development methods were used within the company,
with a special focus on how the methods served in fulfilling supply chain needs.
The study was based on the research question: How can design and development methods be used in order to satisfy the
needs placed on packaging in the supply chain? Since the research was explanatory and the research question was a how
question, case study methodology was chosen as the preferred method according to Yin (2009). The unit of analysis is the
342
supply chain-focused packaging design and development method, for packaging sub-systems (primary and secondary
packaging) and the use of this method.
Multiple sources of input were used in this case study, sources such as the companys internal documentation, informal
interviews, and observations. The internal documentation included design and development manuals and previous documents
from projects that were utilized the companys packaging design and development method. Open interviews about packaging
development processes were conducted with six company internal experts in product and packaging design and development,
and packaging logistics. The interviewees in this study had both used or developed design and development methods for
package development within the company. In addition, one of the authors made direct observations in projects that utilized
the packaging design and development methods within the company. The results of the data collected from theory and
practice were analyzed, based on themes from the literature review. The literature review on which this case study was based
was carried out using the following search words/terms: product, packaging, logistics, design, development and supply chain.
As a result, suggestions for enhancements of the method for considering various needs along the supply chain were suggested
and the final results were reviewed by design and development experts at the case company.
The design and development method used in the case company is the Package Requirement Cascading (PRC). It is
internally developed at the case company based on Olssons (1976) theories. PRC is used to produce draft specifications that
provide guidelines for further development of primary and secondary packaging into finished packaging solution where
characteristics such as dimensions (size), strength, and material choice are set. It is also used to identify needs, priorities
important functional requirements, and design attributes stemming from needs identified in the supply chain on primary,
secondary, and tertiary packaging (usually standard pallet sizes).
Supply chain needs are supposed to be identified and categorized based on the life cycle of the packaging (i.e. development,
production, distribution, use, elimination). The most undefined area is that of setting the needs from supply chain. The most
suitable way to categories, the needs coming from the supply chain is to follow the chain and collect the needs in different
parts of it. The packaging life cycle used by the case company today has five categories, while a more complete way to
categorize would be to include development, sourcing and procurement, production, warehousing and handling, transport,
marketing, use and elimination as in Figure 3 (adapted from Olsson, 1976 and Sohrabpour et al., 2012).
The method used by the case company in this case study, is adapted to make a more detailed design and development method
for packaging design and development based on supply chain needs. As one of the most important components in the supply
chain packaging has to satisfy various needs, since it is the interface between the product and the logistics system (Ebeling,
1990, Twede 2002) throughout the supply chain. Due to important role of packaging, there are various needs on
product/packaging systems throughout the supply chain that need to be considered. The reason for developing or redesigning
packaging sub-systems is usually because of gaps identified between needs and them being satisfied along the supply chain.
Those gaps are based on the interactions between the supply chain and the product/packaging system. The authors suggest a
supply chain-focused design and development method based on insights from the case study and the literature review in the
relevant field (i.e. Chen, 1999; Olsson, 1976; Suh, 1990). The suggested method is illustrated in Figure 4. The supply chainfocused design and development method can provide opportunities for developing effective and efficient packaging in
practice for industrial supply chain applications. This research further contributes to product/packaging system design and
development methods from a supply chain perspective.
CONCLUSIONS AND IMPLICATIONS FOR THEORY AND PRACTICES
This study has set out to adapt product design and development methods for packaging into a new perspective, i.e. that of
supply chain-focused packaging design and development. This study complements previous research about product design
and development. Moreover, it contributes to body of literature regarding product and packaging systems in the supply chain
management. In practice, adapting product development methods for packaging development, and using requirements
management approaches provide a structured and reliable technique for developing effective packaging, which meets
requirements throughout supply chains.
This paper suggests an enhanced design and development method for satisfying supply chain needs placed on packaging subsystems, leading to increasing effectiveness and efficiency. This investigation also provides an enhanced design and
development of the focal firms supply chain management. Furthermore, this study acknowledges the supply chain
343
management perspective and shed further light to packaging area that has to satisfy various needs when products are moving
in the supply chain from producer to the end customer. It explores consumer needs from a marketing perspective while
addressing different supply chain needs regarding operations (i.e. distribution and production needs). This study represents an
attempt to identify and show a better mapping of needs placed on product and packaging systems in the supply chain to
requirements on packaging sub-systems.
FIGURES
Figure 1 Product and packaging System (Adapted from Sohrabpour et al., 2012)
Primary
packaging
Product
Secondary
packaging
Tertiary
packaging
Figure 2 Gap model of interaction between supply chain and product/packaging system
Figure 3 Supply chain needs on a product/packaging system

Design &
development
Sourcing &
procurement
Production
Warehousing
& handling
Transport
Marking
Use
Elimination
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Figure 4 Supply chain-focused packaging design and development method
REFERENCES
345
TAKING PRODUCTS TO THE MARKET: DECISION-MAKING WITHIN CREATIVE INDUSTRIES

Aikaterini C. Valvi, Department of Management, Birkbeck, University of London, United Kingdom
INTRODUCTION
Many managers flounder when it comes to make creative choices. What managers actually do and why they do it, is generally
shrouded in mystery (Hayashi 2001). Nevertheless, the place of creativity in management has long been recognized. One way
its importance has been recognized at a popular level is by the numerous stories of businesses failing to make the best
decisions. For example Decca turned down the chance to record the Beatles and 12 publishers declined The Philosophers
Stone before Bloomsbury offered JK Rowling a contract. On the other hand businesses such as Apple, E-Bay and Google
have been lauded for their creative processes and practices. This research will examine the situational and demographic
variables that influence the nature of creative decision-making with a focus on the UKs creative industries. The objective of
this proposal is to develop a scale that can be used to examine the situational, demographic and psychographic factors that
influence creative decision-making and help inform managers choices. The overall issue of creativity is particularly salient
in current market conditions with all kinds of businesses faced with low cost competition from China, India and Eastern
Europe in a variety of goods and services. Many companies readily appreciate they often cannot compete solely on the bases
of cost and efficiency against such competition.
DECISION-MAKING
Decision-making may be positioned in the realm of logic, probability, uncertainty and heuristics (Barnes 1984). Logic
focuses on mental models and cognition to solve problems and preserve the truth in well-structured problems. Probability
sees the mind working in an inductive rather than deductive manner given samples of information that are prone to error and
thereby necessitating risky bets on the future state of the world. By contrast heuristics tend to be used when the problem is
ill-defined, when time is limited and the probabilities are unclear (Deshpande and Zaltman 1984). Heuristics are rules of
thumb, educated guesses, intuitive judgments or simply common sense (Zuckerman and Chaiken 1998). They are methods
that management may have learned from experience for finding good-enough solutions to problems Heuristics are based
upon ordered cues that offer a means to minimize noise in any forecast and thereby often outperforming the cognitive
advantages of logic and probability (stebo and Elhedhli 2006). Heuristics enable decision-makers to forget data and focus
only on the pertinent issues. Behavior adapted to the past will often fail when environments change quickly. This studys
research question is what type(s) of decision tools do managers apply when choosing between competing projects to take to
market?
METHOD
The data were obtained from an online survey of senior managers in advertising and related creative industries (digital,
entertainment, publishing, software and TV and video) within the UK. The questionnaire was first developed in liaison with
ten senior managers in London, UK. The survey was administered via Qualtrics.com and sent to 905 key informants. The
instrument included items measuring decision-making, business practices, market environment and personal and company
demographics for a total of 19 questions. The following decision-making typology (Gigerenzer 2008) was employed (please
note that the items marked with an * were developed from qualitative interviews and feedback from survey tests):
x
x
x
x
x
x
x
x
x
x
x
Algorithmic: The one that proved best based upon analyzing the data
Default: The one most similar to what we normally choose to do
Defer: We hired a consultant to make the choice*
Equality: We didn't make a choice; we allocated resources equally to all competing projects
Experience: The one that the most experienced person in our team wanted
Fluency: The one we recognized quickest
Hierarchy: We chose the one that senior managers wanted*
Instinct: We followed our instincts*
Majority: The one most people wanted
Recognition: The one we most recognized
Satisficing: The first one that exceeded our objectives and then we ignored the rest
346
x
x
Take-the-best: The one we thought would be best for the client or sponsor
Tallying: The one with the highest number of favorable points about it
Most responses were measured on nominal scales or 7-point Likert scales. Recipients were directed to pass on the
questionnaire link to the most senior marketing person in the company if not them. After two mailings, 172 proved to be
undeliverable (or changed address) which yielded 149 replies; providing an effective response rate of 20.3%. The
overwhelming majority of respondents were sales and/or marketing directors/presidents (43%), VP advertising/advertising
manager/director marketing communications (35%) and president general manager/senior VP (8%) with the remainder VP
sales promotions, VP Consumer sales, sales manager, VP/PR manager, and one franchise director. The respondents major
markets were retail / mail order, food / drink / tobacco, automobile, tourism /entertainment / toys and pharmaceuticals. Factor
analysis, cluster analysis and independent sample t-tests were employed to analyze the data. All analyses were done with
PASW 18.0.
RESULTS
The 13 items examining classic types of heuristic and analytical decision making were subjected to principal components
analysis (PCA) using PASW 18.0. Prior to performing PCA, the suitability of data for factor analysis was assessed.
Inspection of the correlation matrix revealed the presence of many coefficients 0.300 and above. The Kaiser-Meyer-Olkin
value was 0.708, exceeding the recommended value of 0.600 (Kaiser 1974) and Bartletts Test of Sphericity reached
statistical significance (Bartlett 1954), supporting the factorability of the correlation matrix. PCA revealed the presence of
five components with eigenvalues exceeding 1, explaining 26.4%, 11.6%, 9.4%, 8.3% and 8.1% of the variance respectively.
An inspection of the scree plot revealed a clear break after the second component. Using Cattells scree test, it was decided to
retain two components for further investigation. This was further supported by the results of parallel analysis, which showed
only two components with eigenvalues exceeding the corresponding criterion values for a randomly generated data matrix of
the same size (13 variables x 149 respondents). The two component solution explained a total of 38.0% of the variance. To
aid in the interpretation of these two components Oblimin Rotation was performed. The rotated solution revealed the
presence of simple structure (Thurstone 1947), with both components showing a number of strong loadings and all variables
loading substantially on only one component. Factor 1 can be interpreted as heuristic scores for each respondent, since
authentic heuristic variables loaded more on this factor (Table 1) and Factor 2 can be interpreted as an analytic score since
these variables loaded more on this factor. Factor scores were chosen to depict these latent factors. Cronbachs alpha for
Factor 1 (6 items) was 0.735 and for Factor 2 (5 items) was 0.625, which both indicate acceptable reliability.
A three-step procedure was followed for clustering managers (Punj and Stewart 1983). First the appropriate number of
clusters was determined using the hierarchical clustering algorithm developed by Ward (1963). This analysis provided strong
support for the two cluster solution. Second, the cases in the sample were assigned to the appropriate cluster using k-means.
Third, the stability of this cluster assignment was assessed using kappa coefficient of agreement (Cohen 1960). Results
indicated a satisfactory stability of kappa = 0.432 (95% CI 0.283-0.581). In order to develop a taxonomy of heuristic
processes, the identified clusters had to be validated to allow for meaningful interpretations (Rich 1992). The cluster means
for each of the thirteen heuristic decision making variables were used to identify the clusters. The first cluster had strong
analytical features, since all means were statistically higher compare to the second cluster. So this group was named
analytic (n=82). The second cluster had only two means statistically different from the first cluster, indicating that they had
more or less equal proportions of analytical and heuristic features. This group was names dual.
The differences in situational and cultural features were assessed between clusters with independent samples t-tests. It was
found that importance, complexity, risk taking, and size of the project and time taken were statistically significant for
analytical managers compare to dual. Also, the difference in confidence in decision between clusters was assessed with
independent samples t-test. It was found that analytic managers were more confident in their decisions than dual.
DISCUSSION
What does this all boil down to? Within the context that managerial heuristics often perform well (Wbben and Wangenheim
2008), the study suggests that when it comes to deciding what projects to take to market that analytics tools (algorithmic,
take-the-best, tallying and satisficing) tend to be used when the choice is deemed more important, more complex, more risky
and when the potential project is bigger. Such decisions tend to take longer, but managers using these tools were more likely
to be confident in their choices. Put simply, when it comes to deciding what projects to take to the market, analytic tools
outperform heuristic.
347
TABLES
Table 1: Factor analysis of decision tools applied when choosing between creative projects
Items
Heuristic
Hierarchy
0.725
Recognition
0.739
Instinct
0.702
Experience
0.655
Fluency
0.563
Majority
0.549
Default
0.430
Defer
0.121
Equality
0.110
Algorithmic
0.226
Take-the-best
-0.049
Tallying
0.344
Satisficing
-0.022
Analytic
-0.025
0.267
0.171
0.100
0.467
0.548
0.170
0.004
-0.007
0.725
0.615
0.609
0.569
REFERENCES
stebo, T., & Elhedhli, S. (2006). The effectiveness of simple heuristics: forecasting commercial success for early-stage
ventures. Management Science, 52 (3), 395-409.
Barnes, J. H. (1984). Cognitive biases and their impact on strategic planning. Strategic Management Journal, 5(2), 129-137.
Bartlett, M. S. (1954). A note on the multiplying factors for various 2 approximations. Journal of the Royal Statistical
Society. Series B (Methodological), 16(2), 296-298.
Cohen, J. (1960). A coefficient of agreement for nominal scales. Educational and Psychological Measurement, 20(1), 37-46.
Deshpande, R., & Zaltman, G. (1984). A comparison of factors affecting researcher and manager perceptions of market
research use. Journal of Marketing Research, 11 (2), 32-38.
Gigerenzer, G. (2008). Why heuristics work. Perspectives on Psychological Science, 3 (1), 20-29.
Hayashi, A. M. (2001). When to trust your gut. Harvard Business Review, 79(2), 59-65.
Kaiser, H. (1974). An index of factorial simplicity. Psychometrika, 39(1), 31-36
Punj, G., & Stewart, D. W. (1983). Cluster analysis in marketing research: review and suggestions for application. Journal of
Rich, P. (1992). The organizational taxonomy: definition and design. Academy of Management Review, 17(4), 758-781.
Thurstone, L. L. (1947). Multiple-factor analysis. Chicago: The University of Chicago Press.
Ward, J. H. (1963). Hierarchical grouping to optimize an objective function. Journal of the American Statistical Association,
58(301), 236-244.
Wbben, M., & Wangenheim, F. V. (2008). Instant customer base analysis: managerial heuristics often get it right. Journal
of Marketing, 72 (3), 82-93.
Zuckerman, A., & Chaiken, S. (1998). A heuristic-systematic processing analysis of the effectiveness of product warning
labels. Psychology & Marketing, 15(7), 621-642.
348
MOBILE APPLICATIONS (APPS) IN ADVERTISING: A GROUNDED THEORY OF EFFECTIVE USES AND

PRACTICES
Aikaterini C. Valvi, Department of Management, Birkbeck, University of London, United Kingdom
INTRODUCTION
The emergence of e-commerce in 1990 onwards has dramatically changed the way companies conduct business and people
communicate (Peters et al. 2007; Lu and Su 2009). The 21st has witnessed a tremendous growth of mobile networks and
devices, which have turned consumers interests to the adoption of the mobile internet and the usage of mobile commerce (mcommerce or wireless e-commerce) for any transaction via their wireless telecommunication networks without location and
time limits (Ngai and Gunasekaran 2007; Khalifa and Shen 2008).
Therefore, with the rapid increase of mobile technologies, the penetration of wireless devises (mobile phones, Personal
Digital Assistants, tablets), the contribution of smart phones (iPhone, Android phones, Blackberry, Windows 8) and the
recent emergence of mobile applications (Apps), significant demand has been created for new channels of marketing and
advertising (Okazaki and Barwise 2011; Bellman et al. 2011) as advertisers chase audiences who are abandoning or reducing
their usage of so-called traditional media from an historic perspective (the internet is of course a standard choice for
advertisers now, so, in a sense, can also be called traditional).
BACKGROUND
Mobile advertising (m-advertising) is classified into two types: push and pull (Barnes 2002). According to push typestrategy, advertisers push or send a message to customers without asking their permission or not such as, SMS, MMS and
alerts. Pull type-strategy is characterized by the placement of adverts on browsed wireless content, where advertisers ask
consumers agreement before receiving an advert like QR codes or Apps. On the other hand, push type-strategies are
characterized by formulaic advertising on the web such as with banners and pop-ups. Research on m-advertising has focused
mainly on identifying the factors that influence consumers behavior from the adoption of push rather than pull advertising
tools by testing or extending existing customer behavior theories such as Technology Acceptance Model, Theory of
Reasoned Action and Theory of Planned Behavior.
However, attention needs also to be given to pull m-advertising (e.g. Apps: software running on a mobile device that
performs certain tasks and provide value to users) literature and not just because our knowledge of pull strategies and tactics
are sparse. It is vital to be understood that traditional customer behavior theories cannot be immediately applied to pull in the
mobile environment due to the fact that personal contact is decreased, information provision is intensive, brand presentation
is audiovisual and time of interactions is mostly consumer-dictated (Rose et al. 2011). Having said that it is also the case that
there are limited studies on managers practices, experiences and motivations.
Thus, the purpose of this research is to develop a better understanding and potentially build a theory based on the meaning
that marketing and advertising executives give to the adoption of pull strategies via Mobile Applications (Apps) madvertising. Apps have been chosen as they constitute a rapidly developing segment of the global mobile market within
overall pull activities. The types of advertisements through Apps are divided into two categories; In-application display such
as banner and mobile coupons and sponsored (paid for by an advertiser) to promote a brand or product.
Hence, the research questions are proposed:
RQ1: Is the use of Apps an effective tool for advertising?
RQ2: What are the effects from the adoption of either pull or push advertising strategy on the advertised brand?
METHODOLOGY
Classic Grounded Theory (Glaser and Strauss 1967) was followed to explore managers experiences and perceptions of Apps
and not on the researchers interpretations. In other words, from a philosophical standpoint the research took the position that
there was an external reality which could be discovered from data. As such, in-depth semi-structured interviews were
conducted with twenty marketing and advertising executives between January to October 2012. The interviews were
performed either in the interviewees offices or via telephone and their length ranged from 30 to 60 minutes. Fifty open-
349
ended questions were developed based upon the literature and in line with the research objectives covering such topics as:
apps and marketing/advertising; apps and brand loyalty; m-commerce and customer behavior; and the future of apps. All
interviews were audio-recorded and transcribed verbatim. Qualitative software NVivo 7.0 was used for the coding. The
sample consisted of sixteen males and four females with their ages to vary from 25 34 to 45 54 years old. The
demographic characteristics of the participants are shown in Table 1. All the participants worked for leading app developers
in London, UK.
RESULTS
At the beginning of the analysis open coding was used, with the aim of identifying the initial concepts by interpreting
transcripts line by line and giving meaning to the data. In total 275 open codes were identified. Some examples of open
coding are illustrated in Table 2. Memos were used during data collection and analysis with the aim of identifying
associations. An example of a memo is shown below:
In general, privacy and security concerns do not prevent customers in accepting Ads through Apps because
people are not aware of that. They just click NEXT without reading all those information when they download an
App. So, customers' lack of information awareness is very important.
After open coding, the core category App branding emerged through saturation and relevance that allowed us to go on to
selective coding, which meant limiting coding to those variables that were related to the core category. At this stage, we tried
to make sense of the chaos of 275 open codes by creating more abstract categories. In total, 65 emerging categories have been
created such as, features of different mobile platforms, images of both managers and consumers and motives for
positive/negative adoption of advertising through Apps. The last step, known as theoretical coding was followed with an
examination of how codes may relate to each other as hypotheses to be integrated into the theory.
In Figure 1, we illustrate the first model developed from the data. This model shows the market strategy of Apps, which
answers the first research question. According to this model, the App market strategy is consisted of four possible App
categories (Game Apps, Entertainment Apps, Utility Apps and Failure Apps) based on how low or high the longevity and
frequency of use of Apps is.
Game Apps: are characterized by high frequency of use and low longevity. According to managers, game apps are not an
effective place for advertising. For example a manager said: games are very hard to advertise in, because people are
generally tied into their game, they want to play and they do not reply to ads.
Entertainment Apps: are characterized by high frequency of use and high longevity (e.g. Social Media). This category is the
most effective place for App-advertising and especially for non well-known brands as it offers a strong content. Particularly,
a manager said that ultimately we think that the association with our X brand around content is the value that we can use
to advertisers. Also another manager said that: because people when look at Facebook for example, they tend to do lots
of things, so they might be more positive to reply to an advert.
Utility Apps: are characterized by low frequency of use and high longevity. In general, this category is not an effective place
for advertising, because as a manager said: this kind of consumers uses their App not very frequency, so they will not
reply to an advert.
Failure Apps: are characterized by low frequency of use and low longevity. This category clearly is not an effective place for
advertising.
In Figure 2, the second model is presented. This model shows the brand focused strategy, which answers the second research
question. According to this model, the key objective of well-known brands should be the achievement of brand awareness
through either push (e.g. SMS) or pull (e.g. Apps) advertising strategy. However, well-known brands prefer using pull
advertising strategies (although they are much more expensive) as they are characterized by lack of price sensitivity. On the
other hand, the aim of new or unknown brands should be the achievement of brand building through targeted pull advertising
strategy (e.g. banner advertising) and not through push advertising strategy as the likelihood of creating negative customers
behaviour increases (e.g. intrusive SMS advertisements). Conversely, less known brands prefer using push advertising
strategy as its cheaper and their budgets are not high.
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CONCLUDING REMARKS
The present research hopes to contribute to existing marketing and advertising literature by examining Apps pull advertising
strategies and tactics and the managerial intention to adopt App-based m-advertising. Additionally, the results will extend
previous SMS advertising literature and introduce some novel results.
TABLES
Table 1: Demographic characteristics of the sample
No.
Gender
Age
1
Male
35 - 44
2
Female
25 - 34
3
Male
35 - 44
4
Male
35 - 44
5
Female
25 - 34
6
Female
25 - 34
7
Male
25 - 34
8
Male
35 - 44
9
Male
35 - 44
10
Male
35 - 44
11
Male
25 - 34
12
Male
45 - 54
13
Male
25 - 34
14
Male
25 - 34
15
Male
45 - 54
16
Female
25 - 34
17
Male
35 - 44
18
Male
45 - 54
19
Male
25 - 34
20
Male
25 - 34
Job Title
Senior Mobile Product Manager
Mobile Planner
Co-Founder & Chief Executive
Creative Director
Head of Digital Sales
PR Marketing Manager
Head of Off Page Strategy
Digital Market Researcher
Co-Founder & COO
Director of Operations
Senior Consultant / Technical Director
Managing Director
Software Developer
Head of Technology
Director of Innovation & Development
Marketing Manager
Director
Executive Editor
Head of Mobile
Director
Table 2: Examples of open coding

Data
So typically, I think a strategy should be that you create good
content that people want to come to. (Interview 2)
People dont mind a full screen ad experience if its short. If it
goes on for too long and interrupts their game play its going
to become annoying. (Interview 3)
The more engaged a customer is the more loyal theyll be and
therefore the less likely they are to switch to a competitor.
(Interview 5)
Open coding
Stress the importance of content in App-advertising
Banner adverts can become annoying (possible
disadvantage)
Engagement might affect consumer behavior in Appadvertising
FIGURES
Figure 1: App Market Strategy
351
Figure 2: Brand Focused Strategy
REFERENCES
Barnes, S.J. (2002). Wireless Digital Advertising: Nature and Implications. International Journal of Advertising, 21(3), 399420.
Bellman, S., Potter, R.F., & Treleaven-Hassard, S. (2011). The Effectiveness of Branded Mobile Phone Apps. Journal of
Interactive Marketing, 25(4), 191-200.
Glaser, B. G. & Strauss, A. L. (1967). The Discovery of Grounded Theory: Strategies for Qualitative Research. Chicago:
Aldine.
Khalifa, M., & Shen, K.N. (2008). Explaining the adoption of transactional B2C mobile commerce. Journal of Enterprise
Information Management, 21(2), 110-124.
Lu, H.P., & Su, P.Y.J. (2009). Factors affecting purchase intention on mobile shopping web sites. Internet Research, 19(4),
442-458.
Ngai, E.W.T., & Gunasekaran, A. (2007). A review for mobile commerce research and applications. Decision Support
Systems, 43(1), 3-15.
Okazaki, S., & Barwise, P. (2011). Has the Time Finally Come for the Medium of the Future?: Research on Mobile
Advertising. Journal of Advertising Research,51(March Supplement), 59-71.
Peters, C., Amato, C.H., & Hollenbeck, C.R. (2007). An exploratory investigation of consumers' perceptions of wireless
advertising. Journal of Advertising, 36(4), 129-145.
Rose, S., Hair, N., & Clark, M. (2011). Online Customer Experience: A Review of the Business-to-Consumer Online
Purchase Context. International Journal of Management Reviews, 13(1), 24-39.
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ADVERTISING EFFECT EVALUATION BASED ON MEANS-END CHAIN THEORY

Chin-Feng Lin, National Pingtung Institute of Commerce, Taiwan
ABSTRACT
Purpose- This study attempts to integrate MEC theory and similarity analysis to design an analytical model for identifying
different products that offer customers similar benefits and values. By using the identified benefit and value variables, the
authors can design multiple examples of advertising copy and compare consumer cognitive differences before-and-after
exposure to the in-store advertising copy of a retail store, to verify the effectiveness of advertising content design.
Design/methodology/approach- This study performed an experimental test in a cooperative retail department store, designed
advertising copy for products offering similar benefits and values to target customers, and analyzed sales entry data gathered
over the period running one week before and after the advertising experiment.
Findings- Product similarity analysis revealed that adverting copy based on the means-end contents are more effectively
attract customers to purchase.
Originality/value- This study proposes a novel model called the advertising design and effect evaluation model to evaluate
advertising copy effectiveness. Marketers adopting the model can design effective advertising copy to attract consumers and
increase sales volume accordingly.
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HOW ABOUT FINANCIALLY HEALTHY?

THE ROLE OF FIT BETWEEN SELF-REGULATORY FOCUS AND MESSAGE FRAMING IN THE
EFFECTIVENESS OF FINANCIAL SERVICE ADVERTISEMENT
INTRODUCTION
How important is self-regulation? Let us see, people have faced problems for which low self-control or lack thereof is the major
reason. If we look up to the longitudinal data, we can figure that nowadays people are fighting against financial problem. Living
beyond means, credit misuses, and compulsive shopping have become the sources of depleting saving and investment in the
last decades in the US. People over 65 years old are averaging $ 10,200 in their credit card debt (Pham 2011), whereas nationally
the number of revolving debt reaches $ 852 billion (Federal Reserve 2010). Not just saving is no longer a norm; credit abuse
has led to national crisis, triggered not just by individual but also the financial industry (Bearden and Haws 2012).
Among younger cohort, financial control among college students has become a big issue related to the low ability of the college
students to balance the risk in managing their financial affair. As of 2009, in average, students have at least one credit card with
average balance $ 3,173 (Sallie Mae 2009), have low score in financial literacy test, underestimate the time needed to pay back
their credit, and dont have a clear understanding on the impact of the interest rate of their credit card (Brougham et al. 2011).
Self-regulation has been studied as the underlying factor that explains why one group of people can direct themselves away
from problems related to self-regulation, whereas on the other extreme, one group of people seems to get into problem most of
the time. This study attempts to provide an empirical study on how fit between individual regulatory focus and message framing
may affect consumer disposition toward advertisement and their intention to use the advertised service. Specifically this study
will examine the extent to which college students' regulatory focus interacts with advertisement framing affecting their attitude
toward financial service advertisement. Although previous studies have focused on the role of fit between self-regulatory focus
and message framing in different contexts, the investigation in financial context is relatively rare. So this study is expected to
bring more understanding on the role of fit between self-regulatory focus and message framing in the financial context
METHODOLOGY
A 2 (Promotion Self-Regulatory Focus: low vs. high) X 2 (Message framing: prevention vs. promotion) between subject design
was created to test the hypotheses. This design is intended to examine consumers attitude toward advertisement, toward the
product, toward the bank and also consumers intention to apply for the financial service as well as consumers judgment if
their peers intend to apply for the financial service.
Participants and Procedures
A partial course credit was offered as incentive to take the online study using Qualtrics software. During study, participants
first filled out the questionnaires measuring the self-regulatory focus. Next, a hypothetical advertisement was presented to the
participants. Pertained to the random assignment, participants received either the advertisement with promotion framing or the
advertisement with prevention framing. After the advertisement exposure, the participants were asked to rate their attitude
toward the advertisement, toward the product, toward the bank and the intention to use the financial service advertised.
Participants' financial responsibility and perceived importance of financial management were measured. Finally after the
questionnaires about their demographics, participants were debriefed and the survey was closed. 130 students participated in
the study, after excluded uncompleted and suspicious responses, 91 dataset were further analyzed. Out of 91 participants, 52
(49%) were males, and mostly in age group 21-25 years old (62%). Most of the participants have some college education (88%)
and holding part time job (61 %).
Manipulation of Advertisement Framing
Participants were randomly assigned to evaluate one of two hypothetical advertisements about new financial product of a
hypothetical bank. Prior the survey, the hypothetical advertisements were evaluated by four doctoral students who did not know
the purpose of the research. This small group assumed the difference between two advertisements as progressive versus vigilant
advertisement. After some small changes, the hypothetical advertisements then were used in this study.
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The advertisement in promotion framing used the word promote and other progressive wordings.
"PROMOTE Financial Health: The College Combo Account is designed for students who actively seek to improve their
financial health. A progressive reliable financial service encourages personal control to navigate the complicated banking
systems, free from hidden fees. The College Combo Account provides maximum service to promote healthy financial habits.
Its a free checking account that acts like a savings account with a non-withdrawal balance"
The advertisement in prevention framing used the word prevent and other vigilant wordings.
PREVENT Financial Disasters: The College Combo Account is designed for students who actively seek to avoid financial
problems. A prudent, reliable, financial protection shields against complicated banking systems, free from hidden fees. The
College Combo Account provides maximum service to avert unhealthy financial habits. Its a free checking account that acts
like a savings account with a non-withdrawal balance"
Measure
Chronic regulatory focus was measured using Higgins' Regulatory Focus Questionnaires (Higgins et al. 2001). Five items were
used to measure the prevention focus (=.839) with three questions were reversed (e.g., Growing up did you ever act in ways
that your parents thought were objectionable?). Six items were used to measure promotion focus (= .617), four items were
reversed (e.g., Compared to most people, are you typically unable to get what you want out of life?). All measures used a 7point scale (often- rarely).
Following Pascal (2003), attitude toward the advertisement (Ad attitude, =.928) was measured by four 7-point semantic items
(e.g., bad/good). Similar four seven-point semantic items (e.g., unfavorable/favorable, negative/positive) were used to measure
the attitude toward product (Product attitude, = .966), and toward bank (Bank attitude, = .959). Intention to apply for the
service (Individual Int., = 971) was measured following Sung and Choi (2011) using four seven-point items (would not seek
out/would seek out, not very likely/very likely). Similar set of items were modified to measure perceived peers intention to
apply for the service (Peers Int., = 971). We believe that individual perception of peers intention mirror their personal
intention. In the situation when it is not easy to elicit personal intention, researchers can measure the individuals perceived
peers intention as the measure of personal intention. A single index for each dependent variable was formed by averaging the
corresponding items (Sung and Choi 2011). As the covariate check, we measure the importance of financial issues (very
important/not at all important) for the participants (Fin Imp, = .945) using six items of questionnaire, and their financial
responsibility (highly responsible/ not responsible) using three items of questionnaire (Fin Resp, =.729)
To test the hypotheses, first we did a median split on chronic promotion focus. We made composite scores for promotion and
prevention measures. The score of prevention regulatory focus then was subtracted from the score of promotion regulatory
focus. The minus score suggests individual as having more prevention focus. The participants with minus score were eliminated
from data set so the data set contain only the promotion focus individuals (Higgins et al. 2001). Based on the median score, a
median split classified the participants as having high and low promotion regulatory focus.
Manipulation Check
We examined the manipulation check with the remaining dataset. As expected, in the prevention condition participants rated
the advertisement with prevention as more preventive than those in promotion condition (MPrev =5.386; MProm = 4.089; t = 4.77,
p < 0.01) the difference is significant. In the promotion condition, participants rated the advertisement as more promotion than
those in prevention condition (MPrev = 5.273; MProm =5.447, t = .716; p> 0.1), however the difference is not significant.
Advertisement credibility was measured, no significant difference found between two conditions (MPrev = 4.300; MProm = 4.329;
t = -.103, p > 0.1). No significant difference between two conditions on the perceived credibility of the source in the
advertisement (MPrev = 4.000; MProm = 4.329; t = -.535, p > 0.1) were found. Participants financial responsibility was measured
and the mean between two group was not significant (MPrev =4.667; MProm = 4.967; t = -1.146, p > 0.1). Perceived importance
of financial affair for participants was also measured no significant difference between two conditions (MPrev =6.273; MProm =
6.243; t = .153, p > 0.1).
Hypothesis Testing
To test the hypotheses, two way ANOVAs were conducted. No significant main effect of individual promotion regulatory focus
as well as no significant main effect of message framing found. We found interaction effect of individual promotion regulatory
355
x message framing as significant on attitude toward the product (FProduct Attitude= 6.260; p = 0.014); individual intention to apply
for the service (FIndividual Int. = 6.888; p = 0.01); and perceived peers intention to apply for the service (FPeers Int. = 4.427; p =
0.043). A marginally significant interaction effect of individual promotion regulatory x message framing was found on the
attitude toward the bank (FBank Attitude = 3.943; p = 0.05); and attitude toward the advertisement (FAd Attitude= 3.727; p = 0.057)
The cell means for dependent variables are reported in table 1 together with the effect size of each dependent variable. Although
the interactions are significant, the means and the directions of the effect are at the opposite of the hypotheses. Hence H1a,
H1b, H1c, H1d, H1e are not supported.
Supplemental Analysis
No main effect of gender was found to affect dependent variables (F < 2.944). No interaction effect of gender neither with the
message framing nor with the level of promotion self-regulatory focus was found to affect dependent variables (F < .347).
ANCOVAs show that source credibility and ad credibility are significant covariates, whereas finance importance and
responsibility are not significant covariate.
Contrary to the expectation, significant interaction effects found in the study show opposite direction from the hypothesized
interaction effects. These findings could be explained by the limitations of this study. On the manipulation check, the
participants under promotion condition could not discern whether the promotion framing advertisement has more promotion
appeal than prevention appeal, although the group under prevention condition significantly can discerns that the preventionframing advertisement has more prevention appeal than promotion appeal. Further analysis shows the difference is more
noticeable for the participants with high promotion regulatory focus than the ones in the low promotion regulatory focus.
This study found that the prevention-framing ad induces better attitude toward the product from the participants with high
promotion regulatory focus. This group shows also higher intention to apply for the banking service advertised, as well as
having higher perception that their peers will apply for the banking service. Slightly more positive attitude toward the
advertisement and toward the bank were shown from this group, when theyre exposed to the advertisement with prevention
appeal.
The promotionframing advertisement, on the other hand, induces better attitude toward the banking product from the
participants with low promotion regulatory focus. The exposure of promotion-framing advertisement induced higher intention
to apply for the banking service and higher perception of the peers intention to apply for the banking service. A slightly more
positive attitude toward the advertisement and toward the bank were shown, when this group was exposed to the advertisement
with promotion appeal.
This result could be related to the object of the study. As financial issues has important role in consumers life, moreover after
the financial crisis in the USA since 2007, it might be true that consumers are more prudent and vigilant in evaluating financial
service. Hence the vigilant appeal in the financial service advertisement may be more salient to the consumers. Especially for
the people with high promotion regulatory focus, prevention appeal might be more attractive for them to balance their
progressive nature.
CONCLUSIONS AND IMPLICATIONS FOR THEORY AND PRACTICES
The finding from this study revealed that despite individuals self-regulatory focus, it might be that the congruence between
regulatory goals and the message framings produces more positive attitude toward the ad, toward the product, and toward the
company. In term of behavior intention, the congruence between self-regulatory goals and message framings produce higher
intention regardless the individuals self -regulatory focus. The finding on the congruency of goal context and ad regulatory
framings was discussed by Nan (2008) in which counterfactual thinking induced regulatory goals, and regardless individual
regulatory focus, the fit between message framing and regulatory goals increase the appeals of the message. The study shows
that implying negative outcome leads to more positive attitude toward prevention-framing advertisement, regardless the focus
of individual self-regulatory focus, and vice versa. Scholer et al. (2008) demonstrated that individuals with promotion
regulatory focus show more conservative attitude toward positive framing message, whereas individuals with prevention
regulatory focus show more conservative attitude toward negative-framing message. The study shows that prevention focused
356
individuals were more eager in using positive words whereas the promotion focused individuals were more eager in using
negative words.
We can interpret the finding of this current study as: when financial security becomes consumers self-regulatory goal, a
message framed as to prevent financial problems should be more attractive than a message framed as to improve financial
health. This study shows that financial matters are important for all groups, however since this study did not calibrate the
financial goals of the participants, this study could not discuss further the possible explanation of the results; that financial
security is the regulatory goal of the participants.
Practically this findings suggest that utilizing regulatory focus appeal (promotion vs. prevention) in advertisement should
consider carefully the target market regulatory goals. Although previous studies have shown that fit between individual
regulatory focus and message framing increase the message effectiveness, Some other studies have found also that this fit could
be undermined by different congruency such as between message framing and the regulatory goal, or between message and
emotional goals.
The limitation of this study provides the avenue for future studies. More diverse participants might provide better results. This
study sampled students which to some extent are considered to have similar demographic background, a factor that produce
almost similar individuals regulatory focus among the participant, hence it limit the scope of generalization of the finding.
Second limitation is the manipulation need sharper refinement to produce a stark difference between promotion and prevention
appeals in future studies.
The author is a Fulbright Scholar affiliated with Sebelas Maret University, Indonesia
TABLES
Table 1: Dependent Variables as Function of Self-Regulatory Focus and Message Framings
Low Promotion
High Promotion
Regulatory Focus
Regulatory Focus
Prevention
Promotion
Prevention
Promotion
Appeal
Appeal
Appeal
Appeal
Product attitude
3.843
4.275
5.043
4.048
Individual intention to apply for the
3.370
4.362
4.533
3.440
service
Peers intention to apply for the
4.037
4.212
4.870
3.702
service
Bank attitude
3.935
4.275
4.565
3.988
Advertisement Attitude
3.917
4.062
4.783
3.905
N
25
25
24
17
Note: Mean scores are based on a scale of 1 to 7
REFERENCES
357
.067
.073
.046
.043
.041
BRAND ORIGIN RECOGNITION ACCURACY AND ITS INFLUENCING FACTORS IN EMERGING MARKETS
PC MARKET IN SHANGHAI AS A CASE
Pan Yu, Beijing University of Posts and Telecommunications, China
Gao Li, Shanghai International Studies University, China
Zhu Ling, East China University of Science and Technology, China
Gerard Cliquet, University of Rennes 1, France
ABSTRACT
Previous brand origin studies used to assume that consumers lack brand origin information and extend such assumption world
widely. This paper challenges this proposition with the evidence of computer brands in China. In this research, the brand
origin recognition accuracy of high-involved products (BORAHI) of Chinese consumers is measured and the following
findings are achieved: BORAHI of Chinese urban consumers is quite high; education level is positively correlated with
BORAHI; male consumers have higher BORAHI than female; consumer ethnocentric tendency is negatively correlated with
the BORAHI of foreign brands; international experience is positively correlated with BORAHI of foreign brands but has no
effect on BORAHI of local brands. This research contributes to current brand origin literatures and establishes a model about
urban consumers BORAHI in emerging markets that will help marketing practitioners to develop brand strategies
effectively.
INTRODUCTION
Along with economic globalization, more and more multinational companies have rushed into emerging markets and the
competition becomes overheated. Making the right brand strategy is now crucial for the success in emerging markets. Under
such background, the concept of brand origin has attracted much attention of marketing researchers and practitioners. Brand
origin concept stems from the concept of country of origin, defined by Roth and Romeo as consumers general recognition of
the products from a country or region based on their knowledge of the products advantages and disadvantages in
manufacture and marketing [24]. The flourish of multi-national co-production leads the brand origin studies to new scope. In
this study brand origin refers to the place where the brand owners headquarter is located [1,13,14] despite the fact that many
products could be manufactured elsewhere. If a feature of a product or brand helps the consumers make choices, such a
feature is regarded as of attribute diagnosticity [18]. Brand origin is one of the many attributes which is perceivable by
consumers. Attribute diagnosticity changes along with time and user group, and brand origins influence on consumer
decision-making changes with environment [6]. In this research we will explore the brand origin knowledge status of Chinese
consumers.
LITERATURE REVIEW
Previous studies contain an implicit pre-assumption that consumers know the product origin when purchasing [17, 35]. However,
there are contradictory empirical results after 1980s [10, 12]. Some studies find that consumers knowledge about brand origin is
very limited [5, 17, 23, 26]. Samiee, Shimp, and Sharma propose the concept of Brand Origin Recognition Accuracy (BORA) and
establish a model to validate the correlations between BORA and social economic status, international travel experience,
foreign language skill, age, gender, etc. [26]. They find that American consumers have limited brand origin knowledge and the
importance of brand origin may be overrated. Yet the universality of the model needs further validation.
Consumer ethnocentric tendency is another key concept in brand origin studies [29]. It is a belief hold by consumers, a
tendency whether they feel moral or not to buy foreign products. Consumer with strong consumer ethnocentric tendency
usually prefers domestic products to foreign ones. Klein, Ettenson and Morris improve the consumer ethnocentric tendency
scale [15], which is widely adopted by researchers later on. In the process of globalization, consumers international experience
came to the scope of brand origin studies. Samiee et al. use the number of foreign trips and level of foreign language skills to
measure international experiences and find they are determinant factors affecting BORA.
RESEARCH HYPOTHESES & QUESTIONNAIRE DESIGN
Hypotheses
Products can be categorized to low-involved and high-involved ones according to the money, time and risk involved in
358
purchase. For high-involved products such as computers and automobiles, consumers spend a lot of money, time and
consideration in purchase [16]. In a word, consumers are highly involved in purchase of such goods. In China, many high
involved products are imported from developed countries which give consumers a perception that imported goods are of
high-quality. Chinese consumers prefer foreign brands when choosing electrical appliances [36] and that motivates them to
learn about brand origins. Therefore, we hypothesize H0: urban consumers in emerging markets have certain knowledge
of BORAHIC (BORAHI of Chinese brands) and BORAHIF (BORAHI of foreign brands).
Samiee et al. suggest that well-educated consumers know more about product origin [26]. Chinese scholars find that the degree
of preference of foreign products follows a reserved-U model [36]. Well-educated people usually have more access to brand
origin information. Therefore we hypothesize H1: education level is positively correlated with BORAHIC and BORAHIF.
High-income consumers are more likely to buy foreign products [8, 28, 32, 36] and know more about brand origin [26]. Therefore
we hypothesize H2: income level is positively correlated with BORAHIC and BORAHIF. Age is a deciding factor of
marketing preference [11] and is related with product knowledge [33]. Studies reveal that age is negatively correlated with brand
recognition [26, 27, 33]. Chinese researchers find that as age increases, the preference for foreign brands diminishes [36].
Therefore, we hypothesize H3: age is negatively correlated with BORAHIC and BORAHIF. Gender counts in consumers
preference [11]. Samiee et al. find that American males know more about foreign product origin while females are better with
local brands [26]. Men are generally more interested in high-involved products of high technique such as PCs and automobiles,
thus we hypothesize H4: males have higher BORAHIC and BORAHIF scores than females.
Consumers with high-level ethnocentric tendency are more likely to reject foreign products [29]. Its found that in American
market consumer ethnocentric tendency is negatively correlated with BORAHIF [26]. The weaker ethnocentric tendency
consumers have, the more likely they know about brand origin [4]. Therefore we hypothesize H5a: consumer ethnocentric
tendency is negatively correlated with BORAHIF. Consumer ethnocentric tendency will not change peoples attitudes
towards local brands [4] and may not affect the knowledge of local brand origin [26]. Thus we hypothesize H5b: consumer
ethnocentric tendency is not correlated with BORAHIC.
International experience is related to BORA [26]. It can be measured by the number of international trips and foreign language
skills. Ones income and education level are closely related to the number of international travels [3, 31, 25]. Therefore we
hypothesize H6a and H6b: education level and personal income are positively correlated with international experience.
In developing countries, young people usually have higher level of foreign language skills and take more international trips
than old people. Thus we hypothesize H6c: age is negatively correlated with international experience. People with foreign
language skills are more likely to know foreign brand origin. International travels increase their interest in foreign products [27,
33]
. Therefore we hypothesize H6d: international experience is positively correlated with BORAHIF. There is no evidence
that the relation exists between BORAHIC and international experience, thus we hypothesize H6e: international experience is
not correlated with BORAHIC.
Questionnaire Design
The questionnaire is composed of the following three parts of contents:
(1) BORAHI. Personal computers are chosen as the representative of high-involved products for the survey. Twelve famous
PC brands (5 local and 7 foreign) are selected as recommended by Integrated Marketing Information of Chinese Consumers.
The questionnaire lists brand names and country names for the respondents to choose which country a brand belongs to.
(2) Consumer ethnocentric tendency. The consumer ethnocentric tendency scale (CETSCALE) by Klein [15] is used to
measure Chinese consumer ethnocentric tendency.
(3) International experience and personal information. The method of Samiee et al. [26] is used to measure international
experience based on the number of international travels per year and the level of foreign language skills. The survey also
includes personal information such as education, monthly household income, age and gender.
DATA COLLECTION & ANALYSIS
Data Collection
Shanghai is selected for questionnaire survey for several reasons. First, China is one of the largest emerging markets in the
world. Second, Shanghai is the largest city in China. With a population of 23 million, it has all types of consumers. Third,
Shanghai is Chinese largest business center and a most attractive market for both domestic and international brands. The pilot
test is conducted in a college in Shanghai, based on which two confusing Taiwan brands are excluded. Formal survey is
carried out in various public areas such as subways, hospitals, banks, etc. Out of the total 346 respondents, 325 are valid.
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Demographic statistic of the samples is shown in Table 1.

The Measurement of BORAHI
The method of Samiee et al. [26] is used to measure BORAHI based on consumers overall knowledge of all twelve brands.
the number of correct answers to brand origin
100%
BORAHI score =
the number of all tested brands
To check the reliability of BORAHI, two surveys (using the same questionnaire) are conducted with 23 college students in two
months. ANOVA analysis is conducted for the two tests and the p value is 0.112, indicating good reliability of BORAHI.
Factor Analysis
Confirmatory factor analysis is conducted to test the CETSCALE. All construct items have strong correlation, but model fit is
not good. RMSEA is higher than 0.15, GFI, Adjusted GFINFIRFIIFICFI and TLI are all lower than 0.90 (in Table 2).
After downsizing CETSCALE to 4 items (in Table 3), the model fit indices improve significantly. RMEEA is lower than 0.15,
and GFI, adjusted GFINFIRFIIFICFI and TLI are all higher than 0.90 (in Table 4), which means the new CETSCALE
is an acceptable construct. Exploratory factor analysis is conducted to analyze the items of the constructs of CETSCALE and
international experience and test their structural validity. The two factors explain 59.825% of the variation (in Table 5). The
reliability of the two constructs is tested in SPSS. Coefficient alpha for the 4-item CETSCALE is 0.74, indicating good
reliability. The Pearson correlation coefficient between the two items of international experience is 0.255, significant at 0.01
level. The correlation coefficient is acceptable according to Clark and Watson [7].
Structural Model Analysis
We construct structural equation model of BORAHI of urban consumers in emerging markets (in Fig. 1) to test the hypotheses.
The model is based on the model of Samiee et al [26] and developed according to emerging market circumstances. The 6-item
scale by Klein et al. [15] is used to measure the CETSCALE. International experience is measured by average number of
international trips per year and the level of foreign language skills. AMOS is used to formulate the two models: model
BORAHIC and model BORAHIF. Construct intercorrelations, mean values and standard deviations are shown in Table 6. For
both models, RMSEA is lower than 0.15, GFIAdjusted GFINFIRFIIFICFI and TLI are all more than 0.90 (Table 7).
Both models are acceptable.
As shown in Table 8, the relationship between education and BORAHIC and that between education and BORAHIF are
significantly positive, supporting H1. The relationship between income and BORAHIC and that between income and BORAHIF
are positive but not statistically significant. H2 is not supported. The relationship between age and BORAHIC and that between
age and BORAHIF are not significant. H3 is not supported. Gender is negatively correlated with BORAHIC and with BORAHIF,
supporting H4. CETSCALE is negatively correlated with BORAHIF, supporting H5a. CETSCALE is not significantly
correlated with BORAHIC, supporting H5b.
In both models, consumers education levels are positively correlated with international experience, H6a is supported; income
is positively correlated with international experience, H6b is supported; age is negatively correlated with their international
experience, H6c is supported. Consumers international experience is positively correlated with BORAHIF, H6d is supported.
Consumers international experience has no significant effect on BORAHIC. H6e is supported.
BORAHI Result
68.0% of respondents answer correctly about brand origins. They possess similar level of knowledge about the origins of
Chinese (M=69.9%, s.d.=0.313) and foreign brands (M=66.6%, s.d.=0.287). Previous studies presume consumers have little
brand origin knowledge [17,26,23,5]; while this study reveals the opposite. Chinese urban consumers can identify more than half
of the PC brands origins correctly and their knowledge about Chinese and foreign ones is at similar level. We further analyze
BORAHI and brand familiarity. Brand familiarity is measured by the percentage of respondents who know about a brand.
BORA scores of six brands are lower than the average level 68.0%: TCL, Thunis, Dell, NEC, LG, and HP (in Table 9).
BORA scores of Thunis and NEC are comparatively high in the six. 58.3% of the respondents know about Thunis and 58.0%
can tell the origin correctly. 68.8% of the respondents know about NEC but only 52.1% tell its origin accurately.
360
We then analyze the result of the other four brands with very low BORA. 26.4% of the respondents think that TCL (Chinese
brand) is foreign; 22.2% dont know its origin. 32.6% of the respondents dont know the origin of Dell (American brand), and
9.2% think its from other countries. 29.2% of respondents dont know the origin of HP (American brand), 21.8% think its
from other countries. As for LG (Korean brand), 12.9% think it is Chinses and 24.0% dont know the brand origin. This result
is related to the brand strategies the companies carry out in China. TCL uses a name composed of English letters to conceal
its origin from consumers. It is effective as 26.4% of the respondents think TCL is a foreign brand. In emerging markets, it
still works sometimes when enterprises use foreign names to conceal its real origin.
Interestingly, Dell, HP and LG are famous computer brands in Chinese market but their BORA scores are much lower than
their Japanese competitors. Japanese electrical appliance brands have enjoyed good reputation in China for decades, thus
Japanese companies usually highlight brand origin in marketing in order to benefit from the halo effect extending from
whiteware to computer brands. Dell, HP and LG more focus on international brand images and do not highlight brand origins
in marketing as doing so probably donnot bring significant added value to their business in Chinese market.
CONCLUSIONS
The empirical result supports H0, H1, H4, H5a, H5b, H6a, H6b, H6c, H6d and H6e. Unlike developed countries, in emerging
markets like China, urban consumers have averagely high BORAHI. Consumers education level is positively correlated
with BORAHI. Male consumers BORAHI is higher than females. CETSCALE has negative correlation with BORAHIF.
Consumers international experience has positive correlation with BORAHIF, while has no relationship with BORHIC. This
study does not prove whether income and age have correlations with BORAHI. It is probably due to the products we choose in
the survey. The computer brands in the survey are all well-known, very often seen in shops, and purchased by all kinds of
consumers. Thus the influences of income and age on BORAHI of those brands may have been averaged.
Theoretical Contribution
This study contributes to current brand origin literatures. Previous studies suggest that consumers knowledge of brand origin
is finite [17, 26, 5] and some even claim that consumers brand origin knowledge is limited all over the world [23]. This study
reveals that urban consumers in China have fairly good knowledge about brand origin of high-involved products. Moreover,
this study introduces a new BORAHI perception model of urban consumers in emerging markets (in Figure 2), which provides
a new perspective for researchers and marketers to better understand consumers in such market places.
Practical Contribution
In time of economic globalization, companies can buy raw material, components and parts, manufacture and assemble
products all across the world. Brand origin becomes the only stable product information[30]. This study shows that urban
consumers in emerging markets have fairly good knowledge of high-involved products brand origins. Generally speaking,
Chinese consumers think more highly of foreign durable electronic products than local ones [34]. When purchasing
high-involved products, consumers spend much time and effort to search for product information, such as function, quality
and brand origin. Therefore, if a multinational corporation plans to sell durable electronic products in China, they should
make brand strategies properly to reinforce consumers perception of brand origins. This study also reveals the relationships
between age, education, income, gender and consumers recognition of brand origins. Companies should take these factors
into consideration to form proper brand strategies to make brand be accepted by consumers more quickly and effectively.
Limitation and Future Research Direction
Due to resource constraints, this study has some limitations. Fist, the survey only covers samples in Shanghai and focuses on
personal computers. The universality of the result needs further examination. Second, the study analyzes the effect of
personal characteristics, ethnocentric tendency and international experiences on BORAHI and ignores other factors such as
consumers previous purchase experiences and marketing situations. Third, the study finds that urban consumers in emerging
markets have certain knowledge of high-involved products brand origin, but its role in consumers purchase decision has not
been discussed. Future research can move further in these directions on basis of this research.
361
TABLES
Table 1: Demographic Statistic of the Samples
Number of
Item
Range
samples
Gender
Average
Monthly
Household
Income
( RMB)
Proporti
on %
Male
Female
800
801-1200
1201-1600
172
153
15
13
16
52.9
47.1
4.6
4.0
4.9
1601-2000
32
9.8
2001-4000
4001-6000
6000-10000
10000-20000
>20000
111
81
34
15
8
325
34.2
24.9
10.5
4.6
2.5
100
Total
Item
Age
Education
Range
16-24
25-34
35-44
45-54
Above 55
Below middle
school
Middle school
High school
Junior college
Bachelor
Master and PhD
Total
Table 2: The Fit Indices of 6-item CETSCALE

Index df Chi-square
P
GFI
Adjusted GFI
Value 9
104.698
0.000
0.893 0.750
NFI
0.792
RFI
0.654
IFI
0.807
Number of
samples
Proporti
on %
55
79
84
75
32
16.9
24.3
25.9
23.1
9.8
14
4.3
46
77
64
103
21
325
14.2
23.7
19.7
31.7
6.5
100
CFI
0.804
TLI
0.674
Table 3: Standardized Regression Weights

Path
RMSEA
0.181
Estimate
0.667
Question 1Purchasing foreign-made products is un-Chinese. CETSCALE
Question 2Its not right to purchase foreign products because it puts Chinese people out of jobs. 0.823
CETSCALE
0.538
Question 3We should purchase products manufactured in China instead of letting other countries get rich off
of us. CETSCALE
Question 4Chinese consumers who purchase products made in other countries are responsible for putting their
fellow Chinese out of work. CETSCALE
Table 4: The Fit Indices of 4-item CETSCALE
P
GFI
Index df Chi-square
Value
4.134
0.127
0.994
0.623
Adjusted GFI
NFI
RFI
IFI
CFI
TLI
RMSEA
0.968
0.987
0.960
0.993
0.993
0.979
0.057
Table 5: Rotated Component Matrix

Component
International experience
Items
CETSCALE
Question 2 of CETSCALE
.822
.756
.750
.685
The number of international trips
.808
The level of foreign language skill
.711
(Extraction method: principal component analysis; rotation method: varimax with Kaiser Normalization.)
362
Table 6: Construct Correlations, the Mean Value and Standard Deviation

Gender
Age
Education
Gender
1
Age
.078
1
Education
-.164(**)
-.439(**)
Income
.016
-.084
CETSCALE .071
.216(**)
International
-.067
-.461(**)
Experience
BORAHIC
-.234(**)
-.233(**)
BORAHIF
-.244(**)
-.330(**)
Mean value
1.4708
38.2369
Standard
.49991
12.31865
deviation
** They are significant at P2-tailed <0.01.
112.439(34)
CETSCALE
BORAHIF
.591(**)
.325(**)
-.150(**)
.479(**)
.488(**)
3.7969
.201(**)
.215(**)
5.1938
-.182(**)
-.197(**)
2.6200
.373(**)
.436(**)
1.8492
1
.699(**)
.6985
1
.6655
1.31538
1.68580
1.07557
1.10779
.31333
. 28652
0.000
NFI
0.983
RFI
0.968
IFI
0.988
TLI
0.977
CFI
0.988
RMSEA
0.087
0.984
0.969
0.989
0.978
0.989
0.084
EducationoBORAHI
IncomeoBORAHI
AgeoBORAHI
GenderoBORAHI
CETSCALE oBORAHI
EducationoInternational Experience
BORAHIC model
1C =0.297 (0.001) a
2C = 0.050 (0.341)
3C =0.074 (0.331)
4C = -0.166 (0.001)
5bC =-0.105 (0.050)
6aC =0.467 (0.034)
BORAHIF model
1F =0.214 (0.020)
2F = 0.061 (0.240)
3F =-0.013 (0.873)
4F = -0.177 (0.000)
5aF = -0.112 (0.033)
6aF =0.459 (0.000)
Incomeo International Experience

Ageo International Experience
International Experience oBORAHI
6bC = 0.123 (0.000)

6cC =-0.383 (0.000)
6eC =0.237 (0.072)
6bF = 0.119 (0.038)

6cF = -0.380 (0.001)
6dF = 0.316 (0.029)
Values in parentheses are P2-tailed.
Table 9: Further Analysis on BORAHI

Chinese brand
Lenovo
Mean value of BORA
BORAHIC
1
-.074
Table 8: The Path Coefficients of the Two Models

Path
International
Experience
1
.291(**)
-.168(**)
Table 7: The Fit Indices of the Two Models

P-value
2 (df)
BORAHIC model
117.443(34)
0.000
BORAHIF model
Income
80.1%
a
TCL
Founder
Amoi
Thunis
51.4%
78.8%
81.3%
58.0%
Brand familiarity ratio
91.6%
86.0%
85.3%
84.1%
58.3%
Foreign brand
Sony
Dell
NEC
LG
HP
Toshiba
Samsung
Mean value of BORA
89.3%
52.5%
52.1%
57.5%
42.3%
92.3%
80.4%
Brand familiarity ratio
94.4%
73.5%
68.8%
82.9%
83.5%
96.3%
96.9%
91.6% of the total respondents were familiar with Lenovo.
363
FIGURES
Figure 1: Structural Equation Model-BORAHI of Urban Consumers in Shanghai
International
Experience
H
6a
Education
6b
6c
Income
H ,H
6d
6e
BORA
HIC
BORA
Age
HIF
Gender
H ,H
5a
5b
CETSCALE
Figure 2: BORAHI Model of Urban Consumers in Emerging Markets

International
Experience
Education
Income
BORA
Consumers
HI
Age
Gender
Consumer
Ethnocentric
Tendency
Emerging Markets
364
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366
THE MOTIVATING FORCE OF VISUAL ATTRACTIVENESS IN PRODUCT DESIGN

Gratiana Pol, University of Southern California, Marshall School of Business, USA
C. W. Park, University of Southern California, Marshall School of Business, USA
Martin Reimann, University of Southern California, Department of Psychology / Brain & Creativity Institute, USA
INTRODUCTION
Consumer psychology has long recognized that aesthetically appealing objects represent a genuine source of value (Bloch,
Brunel and Arnold 2003; Richins 1994) even when the product has no functional use. Nevertheless, what it is that makes beauty
such a valuable attribute remains poorly understood (Charters 2006; Patrick and Peracchio 2010).
The current paper addresses this knowledge gap by proposing that beauty creates value by simultaneously fulfilling two distinct
needs, an intrinsic (hedonic) and an extrinsic (social) need. The intrinsic value implies that beauty is inherently rewarding in
that its ownership fulfills a universal human need for aesthetics (e.g., Maslow 1970). The presence of such need is best
illustrated by peoples automatic and visceral wanting responses towards attractive objects. This makes beauty similar to other
primary reinforcers such as food, drugs, or sex, whose presence is instantaneously craved, even when no actual need for the
stimulus can be identified. The extrinsic value of beauty is more cognitive in nature, and suggests that the ownership of beautiful
products satisfies esteem needs by enhancing consumers perceived self-value (e.g., Venkatesh and Meamber 2008). This
enhancement is due to products with aesthetic appeal representing extremely effective tools for self-expression and reflecting
the good taste of their owners. While the intrinsic value of beauty is accessed automatically upon encountering a beautiful
product, the extrinsic value becomes salient when consumers anticipate the experience of owning and consuming the product.
We argue that together, these intrinsic and extrinsic benefits best account for why beauty commends such high value in the
eyes of consumers.
STUDY 1
To examine this argument, in Study 1, we employed a thought recording procedure to investigate consumers reactions to
product beauty. Participants were shown a range of audio speakers that differed in visual appearance, but were depicted as
identical in terms of functionality, quality, brand, and price. They were then instructed to select the product they found the most
beautiful, and one they would best describe as neutral in appearance (meaning that it does not elicit any kind of emotions).
Each group was subsequently presented with either the beautiful or the neutral product choice and asked to indicate (1) their
very first reaction to the product (as a measure of the intrinsic value of beauty) and (2) how they would feel if they were the
owner of the product (as a measure of the self-related value of beauty). We find that when consumers are exposed to a beautiful
product, the first thought they report is a clear and instantaneous desire to possess the product, without providing any specific
reason aside from a positive reaction to the products appearance. When imagining themselves as product owners, participants
anticipate experiencing positive self-related emotions such as pride. In contrast, participants in the neutral group do not report
any such instantaneous desire or self-related emotions. Differences between the two groups remain significant even when
alternative (such as luxury or novelty) are controlled for. Moreover, we find that consumers report significantly higher
perceptions of overall product value in the beautiful than in the neutral condition, and that the frequency of thoughts that capture
either the intrinsic or extrinsic benefits of beauty positively correlates with these overall value perceptions. Thus, we find
preliminary evidence that beauty is associated with two types of benefits, which in turn are related to the perceived value of
beauty.
STUDY 2
Study 2 provides a measurement instrument for the two types of value associated with beauty and demonstrates that the two
value sources are distinct from one another. More specifically, we find that the intrinsic benefits of beauty are triggered
primarily by a products sensory characteristics, and do not require successful categorization of a beautiful, yet functionally
ambiguous product. On the other hand, consistent with the idea that a products ability to enhance ones perceived self-value
is contingent upon knowing what the product is or does, the extrinsic value of beauty is perceived as higher when the product
can be successfully categorized. These results suggest that the intrinsic value of beauty can be automatically perceived and is
primarily affective in nature, while the self-related value is influenced by product categorization processes. Moreover, the two
sources of value code two distinct types of benefits, such that the experience of one benefit (intrinsic value) can occur
independently of the other (self-related value).
367
STUDY 3
In Study 3, we show that the hedonic and social benefits of beauty can best account for behaviors that point towards beauty
representing a source of value, such as engaging in difficult-to-enact product acquisition, or taking particularly good care of
the product after purchase. We also address an alternative explanation, namely that, consistent with the beautiful is good
stereotype, beautiful products automatically evoke expectations or even perceptions of superior functionality, and that these
perceived functional benefits may contribute towards the value of beauty. In support of our main argument, we find that
functionality benefits can neither alone nor in combination with any of the other benefits of beauty explain the value of a
beautiful design as effectively as the hedonic and social benefits together can.
DISCUSSION
This research heeds calls for marketing and consumer researchers to engage in a deeper investigation into the psychological responses
elicited by visually attractive products and to develop a more comprehensive theory of aesthetics in consumption (e.g., Orth and
Malkewitz 2008; Reimann et al. 2010; Patrick and Peracchio 2010). Across three studies, we uncover why a product designs visual
attractiveness has such a powerful influence on consumers, as well as how the motivational power of attractiveness differs from that
of other hedonic product attributes.
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368
REVISITING DETERMINANTS OF SPORTS SPONSORSHIP RESPONSE:

A SCHEMA THEORY PERSPECTIVE
Angeline Close, University of Texas at Austin, USA
Young-A Song, University of Texas at Austin, USA
BACKGROUND
Consumer attitudes towards marketing communications efforts in the context of out of home experiences and entertainment,
such as sporting events is an important consideration given the heightened proportion of investments in sponsorship and
events (IEG, 2011). The average consumer attends various sponsored events, especially in the context of sports; however, the
consumer may not be aware of the sponsor (Bennett, 1999) or consider the sponsorship in other brand-based considerations
(Pham and Johar, 2001). In 2000, Speed and Thompson contributed a valuable framework of the determinants of sport
sponsorship response to provide insights on how sponsorship works. Their framework was tested with individual regression
analyses with hypothetical sponsorship scenarios and a student sample. Here, the authors employ a schema theory lens and
reexamine the sponsor-based constructs tested with structural equation modeling with a real-world sponsorship and event
attendee sample. A conceptual difference here is that an outcome variable is how enhanced purchase intent towards the title
sponsor enhances interest in the sponsors future marketing communications. As sponsorship is often an ancillary marketing
communications tool (Close, Finney, Lacey, and Sneath, 2006), it is important to examine what determines a sponsorships
ability to spark a consumer to notice, pay attention, and recall the sponsoring brands advertising and promotions in other
occasions.
One demonstrated determinant of event sponsorship response is the fit between the event and sponsor. Sponsorship efficacy
models consider how well the sponsor and the sponsored event fit either functionally or symbolically (Chien, Cornwell, and
Pappu, 2011; Koo, Quarterman, and Flynn, 2006; Rifon, Choi, Trimble, and Li, 2004). Congruence, consumer perception of
similarity between entities, has explained such fit as relevance or compatibility (Gwinner, 1997). Previous studies on
sponsorship indicate that a consumers perceived fit between the sponsor and event tends to induce positive consequences of
sponsorship such as enhanced attitudes toward the sponsor (e.g., Speed and Thompson, 2000), purchase intention (e.g., Koo
et al., 2006). Fit can make such effects more likely to transfer to sponsored brand attitudes and relevant behaviors (e.g.,
Gwinner, 1997; Gwinner and Eaton, 1999).
This effect of fit, that is, how fit induces changes in consumer attitudes and behaviors toward the sponsored brand, can be
explained in terms of schema theory. Schema theory purports that consumers assimilate or accommodate to incoming brand
information based on their cognitive structures (schema) in memory, and the fit facilitates these two processes (Lynch and
Schuler, 1994). Specifically, schema theory explains that the schema functions as a filter of incoming information which
eventually facilitates a process of congruent information while filtering out incongruent information (Misra and Beattty,
1990). This explains why and how the fit changes consumers reactions toward the sponsor (Lynch and Schuler, 1994).
Along with general brand information processing, schema theory has been used to interpret the effects of sponsorship (e.g.,
Cornwell and Maignan, 1998; Lynch and Schuler, 1994).
RESEARCH OBJECTIVES AND OVERVIEW
The objective of this study is to revisit Speed and Thompson (2000) and test a theoretically sound model explaining the
determinants of a successful sponsorship in a real-world context. A main difference is this work simultaneously tests
hypotheses via structural equation modeling, vs. Speed and Thompsons testing of individual hypotheses. Based on
congruence effects and schema theory, a conceptual model that is a proposed modification of Speed and Thompson (2000),
shows the relationships among: sponsor focus, sponsor sincerity, event-sponsor fit, sponsor attitude, sponsor favorability,
purchase intention, and interest to the sponsors future marketing communications (Figure 1). Specifically, unlike the original
framework, this study predicts that sponsor ubiquity and sincerity influence attendee perception of event-sponsor fit. Such fit
is in turn more likely to induce positive consequences regarding sponsor (i.e., attitude to sponsor, interest, favorability, use),
which eventually increases the likelihood of attendees to notice the sponsors marketing communication on future occasions.
The way that attendees perceive event-sponsor fit is based on how sincere they perceive the sponsor to be with the
sponsorship and how focused the sponsoring brand is in their event sponsorship portfolio. It is thought that when the title
sponsor is more sincere in keeping the best interests of the event at heart and focused on sponsoring similar types of events,
attendees will perceive the sponsor to fit the event better. Schema theory holds that this match, or fit, leads to enhanced
369
attitude toward the sponsoring brand, which in turn enhances their interest in the sponsors other marketing communication.
This heightened interest creates greater favorability toward the sponsor. Favoring the sponsor leads to higher intention to use
sponsors products.
This model is an application of Speed and Thompson (2000), who tested individual relationships among event sponsorship
constructs via individual multiple regressions. These were tested with student subjects who did not attend a particular event.
Here, the authors seek to improve the contribution by simultaneously testing a set of regressions of latent variables (i.e.,
Structural Equation Modeling) while employing a theoretical basis (schema theory) to comprise the proposed model. Further,
the present study employs fieldwork at an on-site survey of attendees (i.e., consumers) at a sponsored event. Also unlike
Speed and Thompson (2000), this study proposes characteristics of sponsorship (i.e., sincerity and focus) as influencers of
perceived fit, versus outcomes of perceived fit.
The authors tested the model via an on-site sample of attendees at a professional auto race in the southeast (U.S.)The
Mazda Petit LeMans. A total of 505 attendees (78.8% male, 51.5% between ages of 41 to 60) were recruited on site in
exchange for an official event t-shirt and poster. Five-point scales on constructs in the hypothesized model were adopted and
modified from previous studies (e.g., Bruner and Hensel, 1992; Speed and Thompson, 2000).
RESULTS
The authors used structural equation modeling (SEM) to empirically test the proposed relationships. Reliability and validity
of the reflective measurement models were assessed by means of goodness of fit indices. Overall model fit is satisfactory
( = 1023.681, p < .001; CFI = .921; TLI = .910; RMSEA = .089). In addition, the model supports all hypotheses
(Table 1).
CONCLUSION
As sponsorship becomes one of the fastest growing areas in marketing communication, understanding factors increasing, as
well as measuring, its effectiveness becomes crucial. Sponsor event fit increases positive attitude toward a title sponsor, as
well as sponsorship effectiveness. This work shows a model, based on theory and past work that explains a process of sport
sponsorship efficacy.
This research has implications for scholarship and practice. Scholars can consider this model, and its applicability in other
sports or in event domains outside of sport. In practice, the findings warn marketers attempting to sponsor as many events as
affordable by showing that focus (as opposed to ubiquity) of event sponsorship portfolios increases positive sponsor attitudes.
Further, a focus (e.g., in sponsoring auto races) gives the impression that the sponsor is more sincere to the event and the
sport. As explained by schema theory, a closer fit with the event produces positive attitudes and intentions towards sponsors,
and this positive association induced during the event will be more likely activated in future occasions.
TABLES
Table 1. Hypotheses and Structural Path Estimates
Hypothesis
Structural Path
Estimate*
H1
Focus of Sponsor Event-Sponsor Fit
.45 (.53)
H2
Focus of Sponsor Sincerity of Sponsor
.79 (.76)
H3
Sincerity of Sponsor Event-Sponsor Fit
.21 (.57)
H4
Event-Sponsor Fit Attitude to Sponsor
.92 (.77)
H5
Attitude to Sponsor Interest (to Sponsors Future Marketing)
.74 (.70)
H6
Interest (to Sponsors Future Marketing) Favorability of Sponsor
.85 (.85)
H7
Favorability of Sponsor Use
.83 (.81)
*Numbers represent unstandardized estimate (standardized estimate). All estimates are significant at p < .001.
370
FIGURES
Figure 1. Hypothesized Model
Focus of
Sponsor
H2
Sincerity
of
Sponsor
H1
EventSponsor
Fit
H4
Attitude
to
Sponsor
H5
Interest in
Sponsor
H6
Favorability
H7
Use
H3
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Chien, P. M., T. B. Cornwell, R. Pappu. (2011). Sponsorship Portfolio as a Brand-Image Strategy. Journal of Business
Research, 64, 142-149.
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Attendees with the Sponsor, Community, and Brand. Journal of Advertising Research, 46(4), 420-433.
Close, A.G., A.S. Krishen, and M.S. LaTour (2009). This Event is me! How Consumer Event Congruity Leverages
Sponsorship. Journal of Advertising Research, 49(3), 271-284.
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Cognition, Affect, and Behavioral Intentions. Sport Marketing Quarterly, 15, 80-90.
Lynch, J. and D. Schuler. (1994). The Matchup Effect of Spokesperson and Product Congruency: A Schema Theory
Interpretation. Psychology & Marketing, 11, 417-445.
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Pham, M. and G. V. Johar. (2001). Market Prominence Biases in Sponsor Identification: Processes and Consequentiality.
Psychology & Marketing, 18, 123-143.
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372
SEX AND THE UNIVERSITY: THE EXPLORATORY STUDY OF STUDENTS PERCEPTION OF THE
RELATIONSHIP BETWEEN ALCOHOL CONSUMPTION AND SEX
Dariusz Siemieniako, Biaystok University of Technology, Poland
Krzysztof Kubacki, Griffith University, Australia
ABSTRACT
Research investigating the relationship between alcohol consumption and risky behaviours of university students remains
largely concerned with the most urgent social problems, such us: injuries including car accidents (Park, 2004; Wechsler and
Nelson, 2008), drink-driving (Park, 2004), sexual assaults (Hill et al., 2005) and family problems (Cismaru et al., 2008; Hill et
al., 2005). However, despite the fact that the role of alcohol in university students life has been well documented (Banister
and Piacentini, 2006), the proportion of students engaging in risky alcohol consumption remains high. In Poland, where the
research reported in this paper was carried out, alcohol consumption among university students is on the rise (MakaraStudziska and Urbaska, 2007). Moreover, research indicates that students drinking to a high risk level are also likely to
engage in risky sexual behaviours while intoxicated (Scott-Sheldon et al. 2008). This research, therefore, investigates university
students associations between alcohol consumption and their sexual behaviours.
All participants were drawn from a pool of students studying at a university in the Polish city of Biaystok. The sample consisted
of 82 students aged 20-21, including 48 females and 34 males, who were divided into 14 groups. The groups were run in three
sessions, with five groups working simultaneously in the first two sessions and four groups in the last session. The students
were asked to bring to the class a variety of popular magazines which they read regularly in order to use materials that reflect
their worldview and communication style; further materials were also provided by the researchers. Each group was told to
produce a collage entitled Alcohol as part of a students life. Once all the collages were assembled, the researchers collected
them and brought them back to the class a week later. Then, each group presented an interpretation of their collage. Participants
were encouraged to comment on any aspect of their work, its structure and materials used. During the course of each
presentation they were questioned by researchers in order to better identify the reasons behind their selection and layout of
images, pictures and words, and their meaning. All presentations and discussions were filmed using a digital camcorder.
The initial data analysis indicated that 10 out of 14 collages contained images and texts that were classified as related to sex,
and on majority of them the relationship between alcohol consumption and sex was presented by participants as one of the
dominant themes, taking a significant amount of space. Juxtaposing was identified by Vaughan (2005) as one of the unique
characteristics of collages as research methods, seen as an interplay of fragments from multiple sources, whose piecing together
creates resonances and connections that form the basis of discussion and learning, and representing internal conflicts among
participants. The initial data analysis also suggested that in constructing the relationship between alcohol and sex through
collages and verbal commentaries participants frequently relied on juxtaposing positive and negative consequences of the
relationship.
The indicative findings offered in this paper present some of the emerging themes grouped into three main categories: personal
experiences, social relations and morality. While we originally set out to explore the role of alcohol consumption in students
lives, the analysis of collages and verbal commentaries provided by participants pointed towards a very strong relationship
between alcohol consumption and sex. The relationship was shaped by its perceived negative and positive consequences, as
they were often juxtaposed by our respondents, who were balancing between two opposing consequences of their risky
behaviours. Our indicative findings point toward many conflicts experienced by respondents when engaging in risky
behaviours, including social relations with their peers and perceived morality of their behaviours and attitudes. The indicative
findings reported in this paper constitute a first attempt to organise a substantial amount of data and will be followed with
further detailed analysis of the identified themes. This research was limited by a small sample collected at one university. Yet
even at this early stage the initial themes will be used to guide further data analysis and the development of future research
focusing on exploring the areas identified in this paper.
373
MIND, HEART, AND BODY: EVERYDAY CONSUMPTION EXPERIENCES AND CONSUMER HAPPINESS
Bernd H. Schmitt, Columbia University, USA
Lia Zarantonello, IESEG School of Management, France
ABSTRACT
We explore how daily experiences, evoked by ordinary, everyday consumption activities, contribute to happiness and quality
of life. Based on works in philosophy (Dewey, 1922; 1925) and cognitive science (Pinker, 1997), Brakus, Schmitt, and
Zarantonello (2009) identified four dimensions of experience: sensory, affective, intellectual, and behavioral. Sensory
experience refers to the stimulation of the senses. Affective experience includes moods and emotions. Intellectual experience
includes analytical as well as imaginative thinking. Finally, behavioral experience includes experiences resulting from an
action-oriented interaction with the environment. All four types of experiences may be evoked during consumption activities
that are part of our daily livesfor example when we eat, exercise, or consume entertainment.
We think that the experience and the happiness constructs are tied conceptually. Both are concerned with elements that can
transcend everyday life. Importantly, the four experience dimensions seem to map closely the three happiness dimensions:
pleasure (Kahneman, Diener, and Schwarz, 1999), meaning (Waterman, 1993), and engagement (Peterson, Park, and
Seligman, 2005). Specifically, evoked sensory-affective as well as behavioral (bodily) experiences may contribute to
pleasure; evoked intellectual experiences may contribute to meaning; and evoked behavioral experiences may contribute
to engagement, which occurs when individuals are focused on an activity. Thus, overall, we predict that experience is an
important contributor to happiness-as-state in everyday life. We also expect that when consumers are directly engaged in a
consumption that evokes specific experience, their judgments of their subjective state of happiness at that moment will be
largely independent of their chronic orientation to happiness (Peterson, Park, and Seligman, 2005).
To understand the relationship between everyday consumption and the perceived happiness, we conducted a diary study with
consumers. We asked the respondents to keep the diary for a week and they addressed the same set of questions every day.
First, we asked them to report the level of activity by stating how much they engaged in each of the following activities:
eating or preparing food, entertaining yourself, engaging in physical activities, grooming and dressing, and
shopping (from 1 = very little to 7 = very much). Second, we asked how much each of the five activities stimulated a
specific experience, using a similar scale (level of experience). Third, we asked consumers to provide descriptions of how
each of the activities that they did stimulated a specific experience. Lastly, the respondents had to complete a nine-item scale
on happiness, adapted from Peterson, Park, and Seligman (2005), that captured the three dimensions of happiness-as-state
and a four-item scale on life quality adapted from Diener et al. (1985). Before they started keeping the diary, respondents also
responded to Peterson, Park, and Seligmans original chronic orientation-to-happiness scale. To make sure that the
respondents addressed all the types of experiences, we randomly divided the sample into four groups and asked the
respondents in each group to focus either on sensory or affective or intellectual or behavioral (bodily) experiences. The
respondents (n = 163) were master-level students at a major European business school.
First, we examined the relations between consumption activities and experiences by estimating a series of regressions. The
results show that all consumption activities can evoke specific experiences. We then investigated the relations between the
specific types of experience and the states of happiness. The level of experience was the independent variable this time and
the dependent variables were the dimensions of happiness states. The results show that pleasure is a consequence of the
evoked affective and behavioral (bodily) experiences. Sensory and intellectual (imaginative) experiences have a positive and
significant effect as well, but weaker. Engagement results especially from behavioral (bodily) experiences. Consumers seem
to find behavioral experiences and intellectual (imaginative) experiences especially meaningful. Respondents chronic
orientation to happiness does not seem to affect or moderate these results. Finally, the results show that each happiness
dimension has a positive and significant effect on the perceived life quality. However, pleasure seems to be its strongest
predictor. Qualitative diary data corroborate these findings.
Our results indicate that individuals derive happiness from mundane consumption episodes, but what really leads to
happiness is the nature of the evoked experience during those episodes, rather than an enduring trait such as orientation-tohappiness. It appears that the experience construct is central to our understanding of happiness, at least when it comes to
happiness as a consequence of ordinary rather than of extraordinary events.
374
AN EXPLORATION OF FANTASY FOOTBALL CONSUMPTION AS A TECHNOLOGICAL PLAYGROUND OF

CONSUMER EMPOWERMENT AND SOCIAL INTERACTIONS
Mujde Yuksel, University of Massachusetts, Amherst, USA
George R. Milne, University of Massachusetts, Amherst, USA
INTRODUCTION
The Internet is at the core of todays various consumption-related technologies; it provides a means to obtain information to
make consumption-related decisions, to participate in the production of consumer goods and services, and to create content to
be experienced on personal terms or by other consumers. Furthermore, the Internet enables consumers to connect with each
other in online consumption communities to create and share experiences on numerous consumption-related platforms
without the restrictions of time and space (Kozinets 1999), shifting the balance between consumers and marketers towards a
focus on consumer authority (Deighton & Kornfeld 2009; Day 2011).
While online communities are structured around a wide variety of consumption-related activities from exchanging
information about a specific brand to playing virtual games, most research on virtual communities of consumption has
focused on the social interactions and structures within these communities and their effects on brands through eWOM (e.g.,
Bagozzi & Dholakia 2002; Ward & Ostrom 2006; Trusov, Bucklin, & Pauwells 2009). Another relevant characteristics of
these online communities is their ability to provide technological platforms that empower consumers not only to engage in
social interactions through information sharing on a specific consumption object but also to experience virtual consumption
experiences (e.g., dating websites, social games on Facebook, a vast number of mobile apps, and fantasy sports). Thus,
research on the capabilities of these technological platforms offering virtual consumption experiences that are imitations of or
complements to actual consumption activities is yet to be explored.
Thus far, research on such virtual imitations has mostly focused on fantasy as a consumption form (e.g., postings in Internet
forums of Star Trek's subculture of consumption [Kozinets 2001]). Although such consumption activities may be challenged
by modern positivism as non-existing abstraction lacking the concrete and the probable, they may as well be characterized as
residing in reality without having material existence (Shields 2003). Castells (2010) defines this as the culture of real
virtuality hypothesis that explains the integration of virtuality as a fundamental dimension of reality resulting from the digital
networks that have become inclusive of all cultural expressions and personal experiences. Defining such imitative consumer
experiences within the context of digital virtual consumption (DVC), Denegri-Knott and Molsworth (2010) emphasize that
they are an extension of the use of the imagination in order to produce pleasure, with the market aiding actualization of those
imaginings in some way (p.128).
Many contemporary forms of DVC are present in todays consumer world that empowers consumers through technology and
provides social interaction opportunities through online communities. These consumption experiences have not attracted
much attention for empirical investigation despite their everyday significance.
Sociotechnical consumption culture theory draws attention to the characteristics of the technology-induced social interactions
and consumer empowerment as building blocks of contemporary DVC experiences (Yuksel, Milne, & McDonald 2013).
Lehdonvirta (2010) suggests that consumers desires to experience virtual objects of consumption do not differ from their
needs for consumption of material objects, which help establish social status and express identity, emphasizing the relevance
of social interactions opportunities within DVC experiences. Furthermore, many researchers draw attention to the
empowerment of consumers through digital platforms of new technologies (e.g., Pires, Stanton, & Rita 2006; Deighton &
Kornfeld 2009; Day 2011). Accordingly, social interactions and the consumer empowerment inherent in these DVC
platforms constitute the empirical foundation of this study. In this regard, with the aim to demonstrate the effects of social
interaction level, consumer empowerment level, and their interaction on the effectiveness of the DVC experiences, we
hypothesize that:
H1: Social interaction level of a given DVC experience is positively associated with (a) evaluative and (b) behavioral
consumer responses to that experience.
H2: Consumer empowerment level of a given DVC experience is positively associated with (a) evaluative and (b) behavioral
consumer responses to that experience.
H3: Social interaction level of a given DVC experience moderates the effect of the empowerment level on the consumer
responses such that high social interaction level strengthens the positive effect of the empowerment level on (a) evaluative
and (b) behavioral consumer responses to that experience.
375
This researchs intended contribution is to explore a popular DVC experience (i.e., fantasy football) on account of technology
providing consumer empowerment and social interactions opportunities. We believe that this interplay between
empowerment and social interactions can offer insight into the changing dynamics of technology consumption.
RESEARCH CONTEXT
Fantasy sports have evolved into a popular consumption phenomenon with more than 34 million participants in the U.S. and
Canada (Fantasy Sports Trade Association [FSTA] 2012), providing digital virtual imitations and complements to sport
spectatorship experience. The average fantasy sports participant spends an average of $467.60 per year playing fantasy sports
with about 3 hours per week managing their teams (FSTA 2012). Although there are many fantasy sports ranging from
baseball to bass fishing; fantasy football has developed to be the most popular with 72 percent of fantasy sports players
participating at least in one fantasy football league (FSTA 2012). Recently, fantasy football experience has created its own
industry with numerous online service providers, informational custom websites, TV and radio programs, magazines, experts,
and even a TV show called The League.
In addition to its popularity, fantasy football is chosen as the context of the study because it virtually imitates managing an
NFL team and technologically complements NFL spectatorship, making it a DVC platform that directly interacts with actual
consumption experiences. In its simplest form, fantasy football experience can be described in terms of fantasy football
leagues that are shaped by statistical calculations based on the actual performances of NFL players. The virtual communities
of fantasy football exemplifies a straightforward DVC environment such that the fantasy football teams are real within the
framework of the digital fantasy sports platform, but does not materialize in the actual world.
METHOD
This research consists of a 2 (social interaction: low versus high) 2 (technological empowerment: low vs. high) design with
the two factors manipulated between subjects. Participants were recruited from undergraduate students enrolled in an
introductory marketing course at a large East Coast university. Only students, who had prior fantasy football experience, were
allowed to participate in the study. As a result, 123 undergraduate students took a scenario-based online survey in exchange
of extra course credit. Upon agreement to take the survey, each participant was randomly presented with either a public
fantasy football league (i.e., low social interaction; you don't know any of the other participants in the league) or a fantasy
football league with friends (i.e., high social interaction; you know each of the other participants in the league) and either a
league with auto-draft (i.e., low technological empowerment; which uses a preliminary draft ranking set by the computer to
automate the draft cycle; that is, you dont draft your own players personally) or a live draft (high technological
empowerment; which enables participants to utilize real-time strategy and reactionary measures to acquire specific available
players; that is, you draft your own players personally). Our dependent measures were intended to capture the evaluative
response and the behavioral intent towards the fantasy football league each participant was presented with. Accordingly, they
were asked to evaluate their fantasy football league experience in the context of their assigned scenarios on seven-point scales
(1=poor, and 7=excellent; 1=negative, and 7=positive; 1=unfavorable, and 7=favorable; 1=unappealing, and
7=appealing; 1=not at all likeable, and likeable) and were later asked to report their willingness to participate on a
seven-point scale (1=very unwilling, and 7=very willing). As manipulation checks, participants were asked, How much
would you be socially interacted with the other participants of this league? on a 7-point scale (1 = not at all, and 7 = very
much) for social interaction and they were later asked to evaluate the following statements on a seven-point scale for
technological empowerment (1 = strongly disagree, and 7 = strongly agree; adapted from Fuchs, Prandelli, and Schreier
2010): I see that I have some control in determining which players to have in my fantasy team and I have some influence
in determining which players to have in my fantasy team.
First, the manipulation checks revealed that there was a significant effect for social interaction condition (t(119) = 4.49, p <
.001) and a significant effect for technological empowerment condition (t(120) = 7.86, p < .001), supporting our manipulation
of the concepts. The correlation between evaluative response and behavioral intent was considered to be high for a
MANOVA analysis (r(120)= .92, p<.001); thus, as suggested by Maxwell (2001), we ran ANOVAs on evaluative response to
account for both of the dependent variables. Following this, we conducted two 2 (social interaction) 2 (technological
empowerment) ANOVAs on evaluative response for all our hypotheses. Accordingly, main effects of both social interaction
(F(1, 120) = 8.93, p < .01) and technological empowerment (F(1, 120) = 134.66, p < .001) were significant, in support of H1
376
and H2. More important for the purposes of this research, the interaction between social interaction and empowerment was
significant (F(1, 120) = 7.95, p < .01). The interaction effects are visualized in Figure 1 (H3).
Previous marketing and consumer behavior literature mostly concentrates on how to market products and services through
Internet technologies and does not pay much attention to technological consumption experiences that are virtual imitations
and/or technological complements of traditional consumption experiences. Denegri-Knott and Molsworth (2010) refers to
these imitative and complementary consumption forms as digital virtual consumption (DVC) and calls for future research on
[this] terra incognita worth exploring (p. 129). Following their call, the results of this research show that technological
empowerment and social interaction levels of a DVC experience are significantly influential in evaluative and behavioral
consumer outcomes. Furthermore, these concepts enhance the impact of each other on the DVC experience. These results
contribute to the literature by bridging the domains of social interaction in online communities and consumer empowerment
through technology to account for their individual and mutual impact on DVC experiences. Further research may test the
effects of these concepts on several other DVC forms such as social games and smart phone applications. Specifically, the
smart phone applications have been increasingly entering the daily lives of numerous consumers on a vast number of areas
ranging from tracking physical activities during running to mapping the stars when observing the night sky, from providing
the latest breaking Black Friday ads before Black Friday shopping to paying just with your name at stores without any credit
cards or money. The role of social interactions and consumer empowerment on the popularity of these applications may
gleam further insights for marketers.
FIGURES
Figure 1 Interaction Effects for Evaluative Responses
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Culture, 13(2), 109-132.
Fantasy Sports Trade Association [FSTA] (2012). 2013 Media Kit. Retrieved from http://fsta.org/mk/MediaKit.pdf on
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Fuchs, C., Prandelli, E., & Schreier, M. (2010). The psychological effects of empowerment strategies on consumers' product
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Kozinets, R. (1999). E-tribalized marketing?: The strategic implications of virtual communities of consumption. European
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Consumer Research, 28(1), 67-88.
Lehdonvirta, V. (2010). Online spaces have material culture: Goodbye to digital post- materialism and hello to virtual
consumption. Media, Culture and Society, 32(5), 883- 889.
Maxwell, S. (2001). When to use MANOVA and significant MANOVAs and insignificant ANOVAs or vice versa. Journal
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Pires, G.D., Stanton, J., & Rita, P. (2006). The internet, consumer empowerment and marketing strategies. European Journal
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Shields, R. (2003). The Virtual, New York: Routledge.
Trusov, M., Bucklin, R.E., & Pauwels, K. (2009). Effects of word-of-mouth versus traditional marketing: Findings from an
internet social networking site. Journal of Marketing, 73(5), 90-102.
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Yuksel, M., Milne, G.R. & McDonald, M.A. (2013). Fantasy football: A model for the metamorphosis of traditional
consumer experiences through sociotechnical consumption. In 2013 AMA Winter Marketing Educators' Proceedings:
Challenging the Bounds of Marketing Thought, (24), Jim Burroughs and Aric Rindfleisch, eds., Las Vegas, NE: American
Marketing Association, 407-408.
378
AMBUSH MARKETING OF THE LONDON OLYMPICS: A CONTENT ANALYSIS

Debbie Vigar-Ellis, KTH, Royal Institute of Technology, Sweden
Daniel Hall, KTH, Royal Institute of Technology, Sweden
ABSTRACT
Global sporting events such as the Olympic Games attract significant amounts of sponsorship spend by companies that want
to position their brands with such a high profile event. There are very few events that can achieve this on a truly global scale,
but the Olympic Games are one of these events. However, it is also the case that these types of events attract ambush
marketing as rival companies seek to have their brands associated with the Olympics, but at only a fraction of the cost.
Ambush marketing has been termed associative marketing as the ambush marketer attempts to associate the brand with and
event and trade off the goodwill associated with the event. Thus ambush marketing attempts to confuse the consumer into
believing that the ambusher is a sponsor. Ambush marketing strategies include sponsoring media coverage of an event,
sponsoring a sub-category of the event, consumer promotions, congratulatory messages, pourage agreements and corporate
hospitality. However, Burton and Chadwick (2009) say ambush marketing has evolved, from mainly broadcast sponsorship
campaigns and advertising at the events, to more creative and associative marketing efforts away from the event, to the use of
spectators or fans to promote the brand.
Although ambush marketing of such an event is not necessarily new, the 2012 London Olympics presented an intriguing
research scenario because firstly it had the strictest anti-ambush legislation and enforcement policies of any other previous
Games. In an attempt to protect the extensive sponsorship spend (in excess of 3.7 billion) required to host the London
Olympic Games, a total of 24 statutory instruments and five acts of Parliament were brought into being including bans on the
use of numerous words associated with the Olympics, including Games, 2012 and combinations of Gold, Summer,
Medals, safe zones where sponsors have sole rights and aggressive onsite policing. Ambush marketing is no longer just a
civil matter but a criminal one. Such strict control measures had the potential to both alienate the public as well as lull the
sponsors into a false sense of security. The second aspect making the London Olympics an interesting research event was the
strong social media presence. These Games were even described as the digital games. This paper looks at how effective
this legislation was in practice given the strong social media presence, by undertaking a content analysis on text extracted
from Google using the key word search term london olympics ambush marketing. A search was done every day for a month
before, and the time during the Olympics. For each period all the articles were then combined into a single word document.
A total of 406 354 words (1108 pages) were included in the data set for the before period and 413 433 words (1008 pages)
in the during set. Leximancer, text mining software used to analyse (thematically and semantically) the content of textual
documents and produce conceptual maps, was used for the data analysis.
The Leximancer maps revealed that in the month before analysis the main themes exhibit a strong focus on the highly
regulated nature of the London Olympics and the extreme lengths that the IOC and LOCOGs have gone to protect the
official sponsors. The main themes during the Olympics while still emphasising the measures in place to protect the official
sponsors, revealed an emergence of more discussion on the ambushers, with Nike and Dr Dre featuring prominently. Both
these ambushers appear to have tiptoed around the IOC and LOCOG legislation and rules. The role of social media is
highlighted. Comparing the data from the two periods, the research findings suggest that the legislation did curtail ambush
marketing to some extent, although did not eliminate it. Despite concerns about a backlash from spectators and the possibility
of negative publicity due to the strict controls, this did not appear to materialise. Furthermore, the nature of ambush
marketing seems to have changed from a direct assault on the event, to more subtle ambushing techniques, also more difficult
to predict. The hype surrounding the London Games as the first truly digital Games, with the anticipated mass use of Social
Media as an ambush medium of the Games did not materialise. This may have been due to the cooperation of the leading
Social Media sites with Facebook banning advertising associated with the Games during the Olympics. Similarly, Twitter
announced a ban any potential ambush tweets. The concept maps did pick up the theme of media for both before and during
the Games with the central concept in both periods relating to Social Media. It is difficult to tell how effective the Games
were for the official sponsors in terms of raising the profile of their brands. Only four brands were picked up by the concept
maps, two official sponsors (Adidas and Coca Cola) and two unofficial sponsors (Nike and Beats). It would seem that
sponsoring the Games does not get everyone talking about your brand. Limitations in this research are acknowledged.
References are available on request.
379
THE MADE-IN-EU LABEL: AN ENTITATIVITY PERSPECTIVE ON COUNTRY-OF-ORIGIN EFFECTS

Marc F. Herz, University of Vienna, Austria
Adamantios Diamantopoulos, University of Vienna, Austria
Nicole Koschate-Fischer, University of Erlangen-Nuremberg, Germany
ABSTRACT
Origin designations have long been recognized as relevant cue impacting consumers evaluations and behavior towards
products or brands. Yet, one aspect that has widely been neglected is the concept of entitativity. The general understanding
within origin research is that the relevant entity is the country. However, consumers may also perceive entities based on
regional designations. The European Union (EU) reflects such a superordinate regional entity and countries within the EU are
often treated as a group in consumers minds. There even exists a voluntary Made-in-EU label, depicting the consolidated
production origin. It is, however, unexplored how consumers react to such regional/superordinate entity labels compared to
concrete COO labels designating specific countries. From a managerial perspective, it is important to know whether and
when to promote a Made-in-EU label instead of a concrete COO label on a brand. In three complementary experiments, the
present study assesses differences in consumers reactions to country-specific origin designations vs. superordinate entity
labels, focusing on three outcome variables: brand quality, brand affect and purchase intentions. Findings show a strong
consumer preference for close entity designations and a moderating effect of consumers identification with the EU entity.
Theoretical and managerial implications of the findings are considered and future research directions identified.
380
MATCHING TOURISM TYPE AND DESTINATION IMAGE PERCEPTIONS IN A COUNTRY CONTEXT

Stella Kladou, Hellenic Open University, Greece
Antonios A. Giannopoulos, Athens University of Economics & Business, Greece
INTRODUCTION
Recent upheavals caused in a largely globalized macroeconomic environment have affected places and countries that
previously seemed immune to challenge. Country image perceptions are gradually reconsidered while the post-recession
status is in a dynamic formulation. Cities, regions and countries strive in order to market themselves professionally in the
international arena (van Ham, 2001) and achieve higher levels of market orientation, possibly reinforced by factors such as
market turbulence and competition intensity (Denis, Czellar and Graber, 2001). Tourism plays a crucial role in the field of
country image since it allows personal interaction with locals and the host country culture (Dinnie, 2011, p.80).
International tourism market comprises of a variety of destinations offering alternative selling propositions to a proliferation
of tourism segments. A single country may provide several tourism products (i.e. distinct forms of tourism) and may be
multibought by different groups at the same time; hence, it must be multisold, or sold as a product to these segments
based on their need (Mossberg and Kleppe, 2005, p.9). The question raised relates to the possible effect of country image on
the various tourism forms in the destination portfolio.
Research on country image has a long history (Heslop, Lu and Cray, 2008) mainly focused on studies referring to the
construct of Product-Country Image PCI- (Han, 1989). Galvanized by the maturing discussion on Country-of-Origin
(COO), the country-image-effects research (Heslop et al., 2004) may be extended to the services sector as well. Based on
previous framework on COO effects (Roth and Romeo, 1992), the present study builds on Roth and Romeos framework
(1992) as replicated by Dagger and Raciti (2011) and provides new directions to the research on the tourism destination
image in a country image context (Nadeau et al., 2008). Following a quantitative research design, results are extracted and
discussed in relation to the intention to visit the destination, determining if the dimensions underlying a favourable
association between a country destination and a tourism type can be used to explain visitor preferences.
METHOD
The quantitative research design employed an on-line survey using a structured questionnaire answered by 241 French
students. A homogeneous sample (i.e. nationality, education, age) provides control over random sources of error (Burnett and
Dunne, 1986; Calder, Phillips and Tubout, 1981). Moreover, France is an important tourism market (inbound/outbound),
classified fifth in tourism expenditure (UNWTO, 2012, p.13).
The construct of destination image in the country context was operationalized using the scale adapted from Nadeau et al.
(2008). Respondents were asked to evaluate the destination image dimensions of four countries on 5-point scales (1 =
low/poor, 5 = high/good) and assess the importance of these dimensions for five specific forms of tourism (1=not very
important, 5=very important).
The four countries included USA, China, Turkey and Greece based on the official international tourism statistics (UNWTO,
2012, p.6). The group of countries includes both developed and emerging countries, which is another important pre-condition
for the specific research, given that the level of development can affect both country and destination image (Martinez and
Alvarez, 2010). Nearby competitive places (e.g. Mediterranean region) also support the common practice for tourism-related
comparative studies (Baloglu and Mangaloglu, 2001). Regarding the forms of tourism, respondents were asked about leisure,
business, educational, sports tourism as well as visit to friends and relatives (VFR), based on the UNWTO classification
(UNWTO, 2012, p.4; Memento du tourisme, 2011, p.17). Tourism types were anchored by specific examples to render the
questions applicable in each case (e.g. Erasmus programme for educational tourism).
The level of familiarity was measured against each tourism type and country destination on a 5-point scale alike (1=not very
familiar, 5=very familiar). Finally, respondents were asked to rate the willingness to visit to perform a particular tourism type
(1=not willing, 5=very willing). Control variables concerning possible previous experience with the specific forms of tourism
and the countries mentioned were put forward in the analysis, as shown below.
381

To examine the country destination-tourism type match/mismatch, image perceptions and tourism type importance ratings
were assessed across the six dimensions of built environment beliefs (BEB), natural environment beliefs (NEB), people
competencies (PCo), country competencies (CCo) as well as people character (PCh) and country character (CCh). It is
observed that PCh is the most important dimension across all types of tourism. Similarly, the U.S. had the highest overall
country image rating.
Nevertheless, it is the match between image and tourism type that determines the attractiveness of performing the specific
tourism type in a particular country and not the country image alone. Examining the means at the destination and tourism
type level provides information on which dimensions are considered important per country and per tourism type. Findings in
terms of the four cases of favourable and unfavourable matches/mismatches (Roth & Romeo, 1992) unveil:
1) A country destination-tourism type match applies when the perceived strengths of a country are also important
features or benefits for the tourism form. A favourable destination country image-tourism type match is evident in
the case of the business tourism in the U.S., because the U.S. is perceived as having a high overall country image
based on CC and CCh, highly important dimensions for business tourism alike. The same occurs for leisure tourism
in Greece and, to a lower degree, in Turkey. Thus, tourism strategies based on empowerment of the positive aspects
of both the tourism type and country image are more likely to be effective. Additionally, as a favourable image
positively affects tourism perceptions, implementing respective marketing activities may effectively reinforce
country and tourism type images.
2) An unfavourable country destination-tourism type match occurs when important tourism features are not perceived
as strengths of the country; it appears between business tourism and China, because of low ratings for China in
terms of PCh and CCh, which are the most important dimensions for business tourism. This suggests that potential
tourists perceive China to have relatively low performance in important tourism features for business tourism.
Consequently, promoting destination country image may not be successful enough in terms of tourism performance.
3) A favourable mismatch emerges when the image dimensions for a country are positive, but not significant for the
corresponding tourism form; it is found in sports tourism in the U.S. Potential tourists rank U.S. high in terms of
CCh and CC, which are not highly important to sports tourism. It is then advocated that further promoting positive
country destination image may act as a secondary benefit.
4) An unfavourable mismatch is identified in the cases where the image dimension is neither an important tourism
characteristic nor a strength of the country; it hereby exists between China and educational tourism. China performs
low in terms of PC and NEB, which are not important dimensions for educational tourism. DMOs, NTOs and tour
operators would better avoid promoting relevant information.
Going one step further, the effect of country-tourism matches on tourists willingness to perform a specific tourism type in a
specific country was investigated. The results of correlations between the overall ratings in the destination country image
with willingness to visit a specific country for a particular tourism type revealed significant correlations between overall
country image and willingness to travel for business, leisure and VFR. For example, the willingness to visit the U.S. for
business tourism is strongly related to the relatively positive image of the U.S. as a country destination. Similarly,
respondents low willingness for business tourism in the other three countries accounts for their poorer overall image. The
same also occurs when leisure tourism is practiced in Greece and, to a certain extent, in Turkey.
In general, the results support the favourable and unfavourable matches. The correlation analysis also indicates that
willingness to visit a country for educational and sports tourism is not significantly related to the country image. Therefore,
regardless of whether a favourable mismatch or an unfavourable mismatch occurs, there is little difference in the willingness
to visit a country for educational and sports tourism. For example, neither the favourable mismatch between the U.S. and
sports tourism nor the unfavourable mismatch between China and educational tourism represent any significant difference in
the willingness to visit the U.S. or China for these reasons respectively.
382
Literature suggests that potential visitors familiarity with a tourism type and a destination may impact on their evaluations
(Echtner & Ritchie, 1993). In this study, respondents are more familiar with the U.S. and leisure; yet, familiarity across all
the countries and all tourism types but leisure was relatively low. In terms of previous experience, the majority of the respondents have not travelled abroad for business or sports tourism. To assess whether tourism and country familiarity/previous experience exert any influence on the relationship between country image and willingness to visit, first-order partial correlations were extracted controlling for country and tourism type familiarity and experience with the country and form
of tourism alike. The analysis indicated that none of the control variables appear to significantly affect the relationship between country image and respondents willingness for business, educational, leisure, VFR and sports tourism.
The study examines the match/mismatch between destination country image and tourism types in order to explain general
attributes towards specific tourism forms. Evidence suggests that destination image perceptions in a country context may
vary across various tourism types. Due to moderate ratings, the degree of match/mismatch was not as evident for VFR. Since
the match/mismatch framework provides tourism practitioners with a tool in decision making, destination marketers may also
use negative tourism and country images to their advantage.
All options should be considered prior to deciding upon a particular marketing or communication strategy, as follows: a)
when a favourable match applies, tourism practitioners (e.g. DMOs, NTOs, tour operators, tourism authorities and tourism
service providers) can take advantage of the positive ratings and use the information to positively influence the perceptions
of their target groups, b) when an unfavourable match occurs, they may consider focusing on tourism benefits rather than
country image characteristics, c) when a favourable mismatch is evident, tourism marketers may avoid the image dimensions
that are not very important and stress the positive country destination image, and d) when an unfavourable mismatch occurs,
they may focus on other factors.
The research outcomes portray a close relationship between country image-tourism type match and willingness to visit.
Alternatively, when a strong favourable match exists between country image and tourism type perceptions, then COO effect
will positively influence willingness to visit the country. In case of a strong unfavourable match, the COO effect will
negatively influence willingness to visit. Nevertheless, COO effect will not have any effect on the latter when a favourable or
an unfavourable mismatch occurs. For example, regardless of the fact that country destination image may be positive, no
particular influence will be identified on the willingness to visit the specific country that presents a favourable mismatch.
Explicating the match/mismatch mechanism in practice, it may be worthwhile for tourism marketers to focus on the
importance of the image dimensions attributed to the tourism type. Provided that a country-tourism match is evident, DMOs
should assess the country destination image and, then, undertake the necessary actions: a) reinforce the image if it is positive
enough or b) enhance communication practice with the advantages of the forms of tourism offered, if it is below average.
However, when a mismatch occurs (the image dimension is not important for the tourism form), even if DMOs struggle to
regain footing in overall destination image ratings, under these circumstances, any resources invested will not be transformed
into actual or future tourism performance due to the absence of the COO effect on the willingness to visit the country.
On the grounds that the COO effect is complex in nature (Bastien, 2011) and the destination marketing and branding
strategies should be developed in tandem with relevant country perceptions (e.g. Qu, Hyunjung and Hyunjung, 2011), it is
pinpointed that these strategies need to be tailored to each tourism type and carefully examined under the conditions they are
applied (i.e. match/mismatch). A favourable match shows the COO information upon which the communication strategy may
be built. Similarly, an unfavourable match may be useful in the identification of the image dimensions that should be omitted
from the communication mix.
Considering the research limitations on theoretical and methodological issues, the present study will hopefully be enlisted in
the current research stream, shedding more light on the nebulous issue of COO in the tourism context.
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Bastien V. (2011), Quelle valeur pour la marque France? Revue franaise de gestion, 37, 218/219, 125-138.
383
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Actes du 17me Congrs de l'Association Franaise du Marketing, Deauville, France.
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384
THE EFFECT OF BUSINESS SEGMENT STRATEGY AND CULTURE VALUES ON THE MARKET
PERFORMANCE OF INTERNATIONAL COMPANIES
Tianjiao Qiu, California State University Long Beach, USA
ABSTRACT
Despite the fact that the competitiveness of an international company is increasingly dependent on its capability to operate in
multiple business segments, previous research on the effect of business segment strategy on market performance has primarily
focused on American firms, while little evidence has been provided on the performance implications of large international
companies with more diverse cultural backgrounds. The current study takes the initiative to explore how business segment
strategy impacts the market performance of large international companies and to understand the influence of macro-level
cultural dimensions on the market success or failure of business segment strategy. Specifically, we focus on two aspects of
business segment strategy: the number of business segments that an international company operates in and the sales
concentration of its primary business segment among the firms whole business portfolio. We argue that when examining
performance implications of business segment strategy, we need to take into consideration of the four dimensions of cultural
values (1) individualism (versus collectivism), (2) power distance, (3) uncertainty avoidance, and (4) masculinity (versus
femininity).
We empirically examine how the four dimensions of cultural values affect the relationship between business segment strategy
and market performance of large international companies with longitudinal data collected through multiple secondary data
sources. We conducted hierarchical linear modeling and used SAS to analyze the longitudinal data. The findings demonstrate
that the number of business segments and sales concentration have significant relationships with firm market performance.
Further, individualism and masculinity have demonstrated moderating effects on the relationship between sales concentration
and firm market performance.
385
ACTIVITIES AND RESOURCES OF INSTITUTIONAL ACTORS IN INTERNATIONAL DEVELOPMENT

PROJECTS
Richard A. Owusu, Linnaeus University, Sweden
Rana Mostaghel, Linnaeus University, Sweden
Catherine Welch, University of Sydney, Australia
ABSTRACT
In this paper, we draw on industrial network research to analyze the activities and capabilities of institutional actors in project
networks. We use the concept of political embeddedness to show how business and political exchange can be interrelated in
industrial networks, with business actors engaging in political behaviour and institutional actors taking on business roles such
as purchasing. We report on a comparative case study that encompasses three international project networks, which vary
according to the type and role of institutional actors. Our case analysis shows the multifaceted activities and capabilities of
institutional actors, in terms of: 1) their relationships with firms and other institutional actors, and 2) their role and
importance in the network. We also conclude that these activities and capabilities have implications for international project
marketers in terms of their activities at each stage of the project cycle. As our empirical cases come from developing
countries of Africa and Asia we will also provide knowledge and implications for business in the developing and emerging
economies of these regions.
386
MODELING BUYING INTENTIONS

THE ROLE OF NOSTALGIC VALUE, AUTHENTICITY AND BRAND ATTACHMENT
Valerie Swaen, Catholic University of Louvain, Belgium
Nicholas G. Paparoidamis,Catholic University of Lille, IESEG, France
Anne Laure Bartier,Catholic University of Louvain, Belgium
ABSTRACT
The present study is a first effort to test a model of buying intentions incorporating the variables of nostalgic value,
authenticity and brand attachment. The results confirm the impact of nostalgic value on authenticity perceptions with fruitful
implications for the automotive industry. Furthermore authenticity seems to play a key role in affecting directly brand
attachment and buying intentions. This means that the automotive industry needs to pay attention on identifying the messages
communicated to prospects that will enhance authenticity expecting positive impact on both brand attachment and buying
intentions. This means that the image automotive companies create for each of their models needs to reflect the personality of
the consumers. The most important authenticity dimension appears to be projection. Clients search in their car models for
identification cues concerning their life-style, personality and character. The second more important is singularity meaning
that clients search for models that are unique. This conclusion holds for models that do not pertain to the luxury products
segment. Origin seems to have no impact and this may be explained due to the fact that many companies decide to build
their models everywhere in the world but also at the design level it is rare that a characteristic points out to the origin of the
product.
387
INTANGIBLE CULTURAL HERITAGE: THE NEW FRONTIER OF DESTINATION BRANDING

Jason Ryan, California State University, San Bernardino, USA
INTRODUCTION
By representing a promise of value and differentiation, brands have become a competitive asset in a growing number of contexts
and activities (Aaker, 1991; Kotler and Gertner, 2002). This is especially true in tourism, where there has been a proliferation
of destination brands in recent years (Balakrishnan, 2009). Ryan and Silvanto (2009, 2010) and Hall and Piggin (2003) assert
that the World Heritage Site (WHS) designation has, in recent decades, evolved into a de facto destination brand that is
widely used to promote and differentiate destinations. The growing importance of the WHS brand has coincided with a quiet
paradigm shift in the field of heritage protection and preservation. This change concerns the extension of World Heritage Status
from natural and cultural sites to intangible cultural heritage (ICH) in the form of living cultural practices and traditions (Ahmad,
2006). Intangible cultural heritage (ICH) is promoted by UNESCO as a counterpart to the World Heritage Sites. In 2003, the
UNESCO General Conference Adopted the Convention for the safeguarding of intangible cultural heritage (ICH); following
its approval by 30 state parties, the Convention came into force in 2006 (UNESCO, 2012). By assigning the same importance
and protections to intangible aspects of culture- often referred to as living culture- as the 1972 UNESCO World Cultural
Convention (UNESCO, 2012) had assigned to cultural and natural heritage sites, the new Convention significantly expanded
the heritage universe and, by implication, the way in which tourism officials and professionals can use the World Heritage
designation to brand, promote and differentiate destinations and locations (Ruggles and Silverman, 2009).
Initially conceived as a preservation and management initiative to protect precious natural and cultural patrimony, the UNESCO
World Heritage Site (WHS) designation has over four decades evolved into a coveted brand and seal of approval for tourism
planners and professionals (Ryan and Silvanto, 2009, 2010; Hall and Piggin, 2003). The WHS designation or brand, by attesting
to the quality and distinctiveness of a site, can play a critical role in a destination or locations promotion and marketing (Ryan
and Silvanto, 2009, 2010). Indeed, as Baker and Cameron (2008) note, branding has become a critical success factor in the
development of effective tourism strategies and plans.
The aim of this article is to explore how the extension of World Heritage Status to intangible culture expands and redefines its
use as a destination brand. More specifically, the paper examines whether ICH is leading to a democratization and expansion
of World Heritage Status to new countries. ICH provides a unique opportunity to assess how countries use World Heritage
Designations as it is a new designation that virtually any country with a vibrant culture can apply for. Prior studies suggest that
applications for WHS status are closely tied to the number of tourists a country receives (Ryan and Silvanto, 2011). Frey and
Pamini (2011) assert that political and economic clout is one of a number of factors that help to explain the pattern of distribution
of WHS designations. In recent years, there has been growing concern that the distribution of WHS has become skewed in
favor of western and developed countries to the detriment of developing nations (Smith and Akagawa, 2011). Ryan and Silvanto
(2011) observe that this trend is potentially alarming as WHS designations are important brands and assets for poorer nations
in their efforts to attract tourists.
Another important way in which ICH transforms destination branding is by shifting the focus from seeing cultural heritage to
experiencing it and becoming part of it (Gonzalez, 2008). Tourism focused on cultural processes and participation is, of course,
neither new nor novel, but has usually been regarded as something of a cottage industry, involving visits to handicraft shops,
farms, folk festivals and the like, usually by limited numbers of individuals. Only in recent years, has intangible heritage been
discussed as an important new area for the development of tourism (Gonzalez, 2008). The ICH designation can lend credibility
and an assurance of quality and authenticity to cultural experiences. In that regard, it adds a new dimension to destination
branding.
METHOD
This study uses data from UNESCO, the UNWTO, the IMF and the The Anholt-GfK Roper Nation Brands Index (2011) to
assess whether ICH designation distributions are, indeed, resulting in a democratization and expansion of the World Heritage
Status designation and brand to new and less affluent countries. The dependent variable in this study is the number of ICH
designations a country has. There are currently 145 countries with ICH designations. The data from the UNWTO, The AnholtGfK Roper Nation Brands Index (2011) and the IMF are used as proxies for what Balakrishnam (2009) describes as Vision
Drivers for Destination Branding. These are the underlying forces that predispose countries to seek to create destination brandssuch as tourism. The article first examines bivariate correlations between the number of ICH designations a country has and its
388
WHS, its GDP per Capita, Foreign Arrivals and its Nation Brand Ranking. This is used to identify and underscore key
relationships within the data. The statistically significant relationships in the bivariate analysis are then examined in a
multivariate analysis to determine what types of influences or Vision Drivers seem to characterize the countries that are
currently receiving ICH designations.
The results of the bivariate analysis indicate that ICH does not have a statistically significant negative relationship with GDP
per Capita. In fact, these two measures have a statistically insignificant positive relationship. ICH is, however, significantly
correlated with tangible World Heritage Sites and Foreign Arrivals. Thus, three variables from the bivariate analysis are used
in the multivariate analysis. Intagible Cultural Heritage is used as the dependent variable and World Heritage Sites and Foreign
Arrivals are used as independent variables. In the multivariate analysis, Foreign Arrivals, which is used as a proxy for tourismmakes a statistically significant contribution to predicting the dependent variable. This finding is significant because it suggests
that countries with larger tourist industries are applying for ICH designations in greater numbers. The data indicates that ICH,
since its introduction in 2006, has been more widely used by countries that already have large numbers of international arrivals.
The adjusted R2 for the equation is .233. This may be interpreted as demonstrating that about 23% of the variance in selection
for UNESCOs Intangible Cultural Heritage (ICH) list.
The findings of this preliminary study indicate that the countries that have the most ICH designations are also countries that
receive a large number of foreign visitors. This suggests that decisions to seek ICH designations may be closely tied to the size
and importance of a countrys tourism sector. As Balakrishnan (2009, p. 621) notes, Destinations must choose combinations
of brand components for attracting customers, helping customers take a decision to visit and to create loyalty. An ICH
designation, if properly managed and maintained, could contribute to that goal.
The positive relationships between the dependent variable and both foreign arrivals and World Heritage Sites seems
intuitive: the two independent variables are, in fact, the rewards that countries seek by proposing more of their cultural practices
and traditions recognized as ICH. Establishing a link between ICH and tourism is a significant contribution to knowledge. It
helps explain the importance of having intangible cultural heritage recognized by UNESCO and inscribed on the ICH list. It
associates it with the World Heritage brand. From a theoretical perspective, this study is important because it demonstrates
how destination branding strategies and practices are evolving in complexity and nature.
What does this study say to practitioners? First, the Intangible Cultural Heritage designation provides a common denominator
for stakeholders to rally about and use in their promotional efforts. It allows public and private parties to develop strategies for
promoting destinations as locations for exploration and the development of ones knowledge and sensitivities (Gonzalez, 2008).
TABLES
389
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Ryan, J., and Silvanto, S. (2010). World Heritage Sites : The Purposes and Politics of Destination Branding, Journal of Travel
and Tourism Marketing, 27(5),533-545.
Ryan, J., and Silvanto, S. (2011). A brand for all the nations: The development of the World Heritage Brand in emerging
markets. Marketing Intelligence and Planning, 29 (3), 305-318.
Smith, L. and Akagawa, N. ( 2009). Intangible Heritage. London: Routledge. Thompson, P. 1988. The Voice of the Past. Oral
History. 2nd ed. Oxford: Oxford University Press.
UNESCO (2012). Text of the Convention for the Safeguarding of Intangible Cultural Heritage. Retrieved from:
http://www.unesco.org/culture/ich/index.php?lg=en&pg=00022 accessed on 19 February, 2012.
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IMPACT OF UNIVERSITY HERITAGE AND REPUTATION ON ATTITUDES OF PROSPECTIVE STUDENTS

Altaf Merchant, University of Washington, Tacoma, USA
Geoffrey Moody, University of Washington, Tacoma, USA
ABSTRACT
The mention of a specific university name often evokes a variety of associations and emotions. In many cases, these associations
and emotions can be attributed to the institutions brand heritage and reputation. Past research has shown that good institutional
reputation has resulted in increased market share and organizational sales. Meanwhile, brand heritage has been shown to be
strong driver of brand perception and consumer behavior. This study delves further into the research areas of brand heritage
and reputation. More specifically, it investigates the effects of university heritage and reputation on attitudes of prospective
students; using data collected from 118 respondents. Theoretical and managerial implications are also provided.
391
NOSTALGIA EVOKED BY BRANDS: A FIRST STEP TOWARDS SCALE DEVELOPMENT AND VALIDATION
Anne-Laure Bartier, Universit Catholique de Louvain, Belgium
Mike Friedman, Universit Catholique de Louvain Mons, Belgium
ABSTRACT
Nostalgia evoked by brands is at the forefront of contemporary marketing theory and practice. To date, scales have been
developed to measure the propensity to be nostalgic as an individual difference but little attention has been paid to measure
consumers perceptions of the nostalgia aroused by brands. Moreover, prior research has focused on personal nostalgia even
though brands are likely to evoke both personal and historical memories. This article outlines a research project designed to
conceptualize, develop, and validate a new 14-item scale to measure brand nostalgia. Results from our studies show that this
construct comprises three inter-related dimensions: personal memories and feelings, perceived brand oldness and historical
memories. Results indicate that our multi-dimensional scale is valid and shows a high degree of reliability and validity.
392
THE IMPACT OF PROCESS VERSUS OUTCOME SIMULATION ON INFORMATION SEARCH BEHAVIORS

OF ONLINE REVIEWS
ABSTRACT
Mental simulation is the imitative mental representation of events. When considering different products, consumers can
mentally simulate the use of the product (process simulation) or the benefits of using the product (outcome simulation). This
paper examines how each type of mental simulation impacts consumers search behavior in an online reviews context. It is
argued that consumers are more likely to use certain features (e.g., quantity of reviews, overall user recommendations,
detailed content of reviews) within an online reviews context depending upon the type of mental simulation they are engaged
in. This search behavior is posited to be moderated by the type of product considered.
393
THE POWER OF STORIES: A RESEARCH PROPOSAL OF LEARNING STYLES AND THE PERSUASIVE
POWER OF STORIES
David Locander, Louisiana Tech University, US.
ABSTRACT
This research proposal sets up a study that will examine how an individuals learning style will affect the persuasiveness of
story based advertisements. Stories are not just entertainment, they also convey messages to the listener. Marshall McLuhan,
the noted educator, philosopher, and scholar, said Anyone who thinks theres a big difference between entertainment and
education knows nothing about either subject (McLuhan, 1967). Stories are a natural way to educate and persuade listeners
because people tend to think narratively rather than argumentatively or paradigmatically (Hiltunen, 2002; McKee, 2003; and
Weick, 1995). It has been claimed that corporations tell three kinds of stories 1) about the company, 2) about products and
services, and 3) customers own stories about products/services (Denning, 2011). Thus, story based advertisements could be
an effective way to communicate the companys message.
Most research on individual learning style uses David Kolbs model featuring two bipolar dimensions: concrete experience
(feeling) vs. abstract conceptualization (thinking) and active experimentation (doing) vs. reflective observation (watching)
(Kolb, 2005) . So, an individual, when approaching a task or imagining doing a task, one can do or watch and at the same
time think or feel. Below is figure 1 that shows Kolbs learning style dimensions and their corresponding quadrants
identified by Roman numerals.
Therefore, understanding individual differences among consumers could identify whether a story based advertisement or a
more traditional one could be more persuasive to the target consumer.
The proposed study will examine the difference in information retained (recalled from memory) for two styles of
advertisements: a story based ad and information only copy. The study will incorporate consumers learning styles so as to
determine the impact of the treatment ads and consumer learning styles on measures of advertising effectiveness. The study
will be conducted using 400 undergraduate students and be carried out in five stages:
Stage 1: will consist of a pretest to determine a suitable product category for the advertisements.
Stage 2: respondents will be randomly given one of two booklets that contain two short articles and other ads, the
manipulated variable (type of ad). One will be a traditional copy based ad and the other will story based. Both ads will be for
a same new product in a product category familiar to the student subjects. Embedded within the story will be the same
product information as in the traditional ad.
Stage 3: will be a distraction exercise like a video.
Stage 4: respondents will fill out questionnaire
Stage 5: respondents will be debriefed as to the true nature of the study.
Using the Romero et al. (1992) measure of experiential learning theory, respondents will be grouped into one of the four
quadrants. The studiesguiding hypotheses are as follows:
H1: Accommodators (Quadrant 1) will score higher on the dependent variables for the story ad treatment than the factual ad
treatment.
H2: Convergers (Quadrant 2) will score higher on the dependent variables for the factual than the story ad.
H3: Assimilators (Quadrant 3) will score higher on the dependent variables for the factual treatment than the story treatment.
H4: Divergers (Quadrant 4) will score higher on the dependent variables for the story treatment than for the factual ads.
FIGURES
Figure 1:
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HOW TO REDUCE POST-PURCHASE INFORMATION SEARCH TENDENCY BEHAVIOR THROUGH

MENTAL SIMULATION
ABSTRACT
Reverse logistics can cost companies up to 15% of gross sales, totaling $215 billion, of which product returns account for
about 7% of a gross sales, or $100 billion. One way firms mitigate return tendency is to employ post-purchase techniques
such as surveys, follow-up calls, and price return guarantee, which are costly to the company. By controlling for or reducing
product return behavior, companies can increase overall profits and shareholder value. This paper examines the role of mental
simulation on reducing post-purchase information search tendency, which contributes to post-purchase cognitive dissonance.
It is argued that consumers primed with process simulation (i.e., thinking about the use of the product) will search for less
information than those primed with outcome simulation (i.e., thinking about the benefits of using the product). Consumers
who search for less information are less likely to experience greater levels of post-purchase dissonance. This behavior is
posited to depend upon whether the consumption of the product purchased is made in the near future or the distant future.
395
ONLINE RETAIL SERVICE QUALITY DIMENSIONS AND RETAIL CHANNEL-PRODUCT CONGRUENCE

ABSTRACT
Online retailing has experienced a fast growth for the past several years. It is predicted that online retailing will reach some
stability in 2014 with an average annual growth of 10% with sales volume of $ 250 billion, making up to 8% of US total retail
sales. Researchers found that a high percentage (82%) of consumers are satisfied with their purchase at an online retail store
(in comparison, only 63% of customers were satisfied with their purchase at the physical stores). This suggests that the fast
growth of the online retail sector could be attributed to its ability to outperform the service from the physical retail stores
(Caruana and Ewing 2010; Mitra and Fay 2010).
Previous studies on service quality of retail store have focused on the risk and security of online transaction (Baldad, Jong and
Steehouder 2010; Benedicktus et al. 2010), interactivity and design (Yoo, Lee, and Park 2010), and multichannel strategy
(Schrder and Zaharia 2008; Grewal et al. 2010; Aksen and Altinkemer 2008; Konu, Verhoef, and Neslin 2008) as the
determinants factors to conduct online transactions. Our present study focuses to examine the online stores' service quality
dimensions, and to investigate their relationships with consumers willingness to shop for certain products online or offline.
We focus on this research question because despite the fact that online retail stores grow so fast, and steadily gaining
prominence, there are some evidences show that consumers are more comfortable buying certain goods at an online store, and
buying another set of goods at a brick and mortar store. Other evidence is the increasing number of physical stores developing
their online presence to increase the competitiveness. Our study, should help answer if this is inevitable, or perhaps both online
and offline retail channel will serve different needs for different basket of goods.
We conducted online survey using Qualtrics software. 440 participants were recruited based on their history of online shopping
in the last six months prior the study. 317 completed questionnaires were further analyzed with SEM method. The results
indicate that only perceived value on service quality dimension was positively associated with intention to purchase all product
categories at an online channel. Previous studies have found that the perceived value, refers to the perception that online retailers
can deliver better price, enhances online sales (Fagerstm and Ghinea 2011; Ba et al. 2008); consistent with the existing
research - perceived value is the underlying reason to shop online. On the other hand, the physical presence of online store was
not counted to enhance the service quality of online stores. For this finding, we may conclude that expanding the presence from
brick and mortar store into the online format could support the business and consumers' approval, but this effect does not work
the other way around. Trust is an important factor for consumers to conduct online transaction. Interface is another factor that
enables consumers to interact and to transact smoothly with the online establishment (Kim and Forsythe 2008). We found
perceived trust and interface of online stores increase the intention to shop at the offline stores for offline-congruent-products.
These findings could be related to the typical products that consumers still prefer to purchase at offline stores due to the high
touch and high service nature of the products (Ba et al. 2008). Perhaps, consumers use the online stores to gather the
information, and further visiting the offline stores to "get the feel" of the products and purchase it at the offline stores (Schroeder
and Zaharia 2008; Weltevreden 2007). We found in this study that the empathy dimension of online store' service quality
negatively related to the intention to purchase at the offline store (Morrison and Roberts 1998; Jahng et al. 2000; Han and
Back 2008; Badrinarayanan et al. 2012). Hence, although Ladhari (2010) proposed that empathy is the factor that consumers
consider less when they choose online service, in this study, perceived empathy of online channel also decreases the intention
to shop at offline store even for typical product seen as offline-store-congruent.
This study suggests that consumers have different preference for the stores channel when it comes to the product categories to
purchase. This results confirm previous studies which found that the growth of online stores does not necessary decrease
the willingness to shop at physical store (Weltevreden 2007; Konus et al. 2008); and that different product categories steer
consumers to choose different stores channel (Schoenfeld 2010; Schoeder and Zaharia 2008;Kwon and Lennon 2009).
Conceptually this study contributes to our understanding of the consumers perceptions of the services offered by the online
stores and their preference for stores types for different bundle of goods. Despite the growth and popularity of the online stores,
the study shows that physical stores are to some extent offers better option to shop for particular products. Managerially these
outcomes assist in identifying the categories of products that consumers feel comfortable to make the purchase online and
offline, and the service elements that help in this process.
(The author is a Fulbright Scholar affiliated with Sebelas Maret University, Indonesia)
396
RETAILER AND MANUFACTURER BUNDLING IN DISTRIBUTION CHANNELS

Minghui Ma, University of Kansas, USA
Suman Mallik, University of Kansas, USA
INTRODUCTION
Bundling of two more products is a common marketing strategy followed by many retailers and manufacturers. While the
literature on the bundling is vast and varied (see Venkatesh and Mahajan, 2009, for a review, only a handful of the studies
deal with bundling decision under the context of a distribution channel. Motivated by the observation that retailers like
Amazon.com sell a bundle of blu-ray/DVD disks as well as standalone blu-ray disks (but not standalone DVDs) for recent
and popular movies, we explore the decision problems associated with bundling of a basic product and a premium product in
distribution channels. Our work provides economic insights about bundling of basic and premium products and provides
guidelines about when bundling by a retailer is profitable over bundling by a manufacturer.
Existing literature on bundling mainly focus on the scenario where a single firm manufactures all products, makes bundling
decisions, and sells directly to the consumers and characterizes optimal bundling strategy, e.g., selling components only,
selling pure bundle, and selling mixed bundle, of the seller (Stigler 1963, Adams and Yellen 1976, Wu et al. 2008, Banciu et
al. 2010). Bhargava (2012) is one of the first to consider the effect of channel structure in bundling. He considers the case
where a retailer might sell products from two manufacturers, either separately or as a bundle, and concludes that channel
conflicts weaken the case of bundling. Bhargava (2012), however, does not explore the tradeoffs associated with bundling by
a manufacturer versus bundling by a retailer. The key contribution of our work is to generate insights about the scenarios
under which bundling by a retailer is profitable over bundling by a manufacturer in a distribution channel.
METHODOLOGY
We consider a distribution channel consisting of a single manufacturer and a single retailer. The manufacturer produces a
basic product and a premium product. The premium product is characterized by a higher quality compared to the basic
product. The two products can also be sold together as a bundle. The bundling can be done either by the manufacturer or by
the retailer and that there is a non-negative cost associated with producing the bundled product from the two products. The
three products (i.e., the basic, the premium, and the bundle) are sold to the end consumers exclusively through the retailer.
The customers are characterized by their differing valuation for quality modeled by a uniform distribution over [0, 1]. To
model the quality of the bundled product, we consider both subadditivity (when the quality of the bundled product is less than
or equal to the sum of the qualities of the basic and the premium product) and superadditivity (opposite of subadditivity). We
measure degree of subadditivity by a subadditivity parameter, a higher value of which implies a less significant subadditivity.
A consumer chooses to buy a product that gives her the highest surplus. The manufacturer sets the wholesale prices of the
products it produces while the retailer sets retail price of all products it sells.
We use the standard game theoretic approach to model the interactions between the manufacturer and the retailer and obtain
closed-form analytical solution for the equilibrium outcome. Our model assumes no information asymmetry. We use the
analytical expressions for equilibrium profits, prices, and demands to develop insights about the economics of the bundling
process and to generate sensitivity analyses of the equilibrium results with respect to various problem parameters.
Our results are presented and discussed under four headings: bundling by the manufacturer, bundling by the retailer, the
comparison of two bundling strategies and extensions.
Bundling by the Manufacturer
Proposition 1: Under manufacturer bundling, when bundle cost is less than a certain number, the equilibrium strategy for the
manufacturer is to produce the premium product and the bundle.
Lemma 1:
Cost sensitivity:
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The retail and wholesale price of bundle will go up with bundling cost. Equilibrium quantity of premium product will
decrease with bundling cost. The profit for manufacturer and retailer will decrease with bundling cost.
Subadditivity parameter sensitivity:
As the subadditivity becomes less significant, retail price and wholesale price of bundle will go up; equilibrium quantity of
premium product will go down, equilibrium quantity of bundle will go up; the profit for both manufacturer and retailer will
go up.
Vertical differentiation sensitivity
The retail and wholesale price of bundle will go up with vertical differentiation; the retail and wholesale price of premium
product will go up with vertical differentiation; the profit for both manufacturer and retailer will go up with vertical
differentiation.
Bundling by the Retailer
Proposition 2: Under retailer bundling, when bundle cost is in a reasonable range, the equilibrium strategy for the retailer is to
sell a full range of the product line. Otherwise, the equilibrium strategy of the retailer is to sell the premium product and the
bundle, same with manufacturer bundle strategy.
Lemma 2 (only for selling full range of product line):
Cost sensitivity:
The retail and wholesale price of basic product will go down with bundling cost. The retail and wholesale price of premium
product will go down with bundling cost. The retail price of bundle will go up with bundling cost.
Equilibrium quantity of basic product and bundle will go down with bundling cost, but equilibrium quantity of premium
product will go up with bundling cost.
The profit for both manufacturer and retailer will decrease with bundling cost.
Subadditivity parameter sensitivity:
As the subadditivity becomes less significant , The retail price and whole sale price of basic product will go up , retail price
of premium and bundle will also go up, wholesale price of premium product will do down. As the subadditivity becomes less
significant, Equilibrium quality of basic product and premium product will go down but equilibrium quality of bundle will go
up. Profit for retailer will go down with the parameter, but profit for manufacturer will go up with the parameter.
Vertical differentiation sensitivity
Retail and whole sale price of premium product will go up with vertical differentiation; retail price of bundle will go up with
vertical differentiation. Profit for both manufacturer and retailer will go up with vertical differentiation.
Comparison of the Two Bundling Strategies
Proposition 3: Manufacturer will generate more profit from manufacturer bundle, and retailer will generate more profit from
retailer bundle. As for the total profit, under some special region (decided by subadditivity and vertical difference), retailer
will generate higher profit.
Lemma 3: Comparison of retail prices, wholesale prices and equilibrium quantity under two bundle strategy
The retail prices of premium product and bundle will be lower when manufacturer do bundling.
The whole sale price of premium and basic product will be lower when retailer does bundling.
When manufacturer do bundling, the equilibrium quantity of premium product will be lower, but the equilibrium quantity of
bundle will be higher.
Extensions
Proposition 4: Integrated system will generate more profit than manufacturer bundling, forever. Retailer bundling will
generate more profit than integrated system under special region.
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Proposition 5: With limit supply of premium good, both retailer bundling and manufacturer bundling will produce a full
range of the product line. The limit supply of premium good, will impact total profit under retailer bundling or manufacturer
bundling in the same way, with the same function. As a result, whether retailer bundling or manufacturer bundling generating
higher profit only depends on subadditivity parameter and vertical difference. Additionally, the limit supply parameter will
decrease total profit first and then increase total profit.
Proposition 6: If horizontal difference exists in the vertical market, manufacture bundling will produce only premium and
bundle, while retailer will produce a full line of good. Total profit under retailer bundle will be higher under special region.
Interestingly, with higher horizontal difference, premium quantity will be lower and bundle quantity will be higher at
equilibrium.
CONCLUSION AND IMPLICATION FOR THEORY AND PRACTICE
Our work demonstrates the effect of distribution channels and vertical quality differentiation in product bundling decisions.
We showed that under manufacturer bundling only the premium product and the bundle are sold. On the contrary, under
retailer bundling, depending upon the magnitude of the subadditivity parameter, a full range of products might be offered. We
characterized the condition under which retailer bundling results in a higher channel profit compared to manufacturer
bundling. To the best of our knowledge, ours is the first paper to compare and contrast retailer and manufacturer bundling
decisions.
Our work shows how the bundling strategy can benefit the two parties (manufacturer and retailer) in a channel with vertical
product differentiation and differing consumer valuation. Our work extends the literature on bundling by comparing and
contrasting the economics of retailer and manufacturer bundling and by developing insights about its implication on channel
profit. Our results can serve a useful qualitative decision making tool to guide a practitioner on making bundling decisions.
As our presentation will show, many of the observed examples of bundling can be explained using the framework of our
model.
REFERENCES
Adams, W. J. and Yellen, J. L. 1976. Commodity Bundling and the Burden of Monopoly. The Quarterly Journal of
Economics 90 (3): 475-498.
Banciu, M., Gal-Or, E. and Mirchandani, P. 2010. Bundling strategies when products are vertically differentiated and
capacities are limited. Management Science 56 (12): 2207-2223.
Bhargava, H. K. 2012. Retailer-Driven Product Bundling in a Distribution Channel. Marketing Science 31(6): 1014-1021.
Moorthy, K. S. 1988. Product and Price Competition in a Duopoly. Marketing Science 7 (2): 141-168.
Stigler, G. 1963. United States v. Loew's Inc: A Note on Block-Booking. The Supreme Court Review: 152-157.
Venkatesh, R. and Mahajan, V. 2009. The Design and Pricing of Bundles: A Review of Normative Guidelines and Practical
Approaches. Handbook of pricing research in marketing: 232.
Wu, S., Hitt, M. L., Chen, P. and Anadalingam, G. 2008. Customized Bundle Pricing for Information Goods: A Nonlinear
Mixed-Integer Programming Approach. Management Science 54 (3): 608-622.
399
ASSESSMENT OF BUYER- SUPPLIER RELATIONSHIPS IN PUERTO RICOS SMES

Enid Miranda, Universidad del Turabo, Puerto Rico
INTRODUCTION
Companies are interested in making more productive and lasting relationship with their suppliers (Cannon and Perreault Jr.,
1999). Quality relationship between buyers and suppliers results in more than just transaction of goods; instead it creates a
special bond that results in a long-term relationship that benefits both parties (Ford, 1980). Then, the main question relies on
how the buyer achieves a relationship quality with its supplier, in other words, which factors needs to be considered when
building a relationship quality. Many researchers have investigated the effect of several factors on quality relationship each
one considering different factors and testing them in different settings (e.g. Anderson and Narus, 1990; Heide, 1994). But, the
concern that arises is if those factors have the same effect in buyer-supplier relationships in other countries and/or different
industry sectors. Although many researchers have investigated about buyer-supplier relationships there is still no consensus
on the components of a relationship quality model (Huntley 2006; Skarmeas et al., 2008).
The purpose of this study is to test a relationship quality model (RELQUAL) applied to the buyers perspective of the
relationship with their supplier in Puerto Ricos small and medium size enterprises (SMEs). This model is interpreted as a
high-order construct (e.g. Lages et al., 2004) and has been previously tested in other countries: Sweden, Norway, Taiwan,
Canada and United States (e.g. Mysen and Svensson, 2010; Lee, Svensson and Mysen, 2010). The model consists of twelve
relationship construct with the intention of representing the multidimensional perspective of the buyer-supplier relationship.
Some of these construct have independently been included in other researches, but to the best of our knowledge there is no
research that has investigated the effect of these factors in the same study of RELQUAL model in Puerto Ricos SME. The
intention is to contribute to marketing and supply management literature by determining which factors contribute to the
development of a quality relationship between buyer and supplier in Puerto Ricos SME. Also, the information will help
Puerto Ricos SME to better know their supplier and understand which constructs are critical to develop a business
relationship strategy based on quality.
METHODOLOGY
The sampling frame used in this research consisted of a convenience sample of 170 small and medium-sized companies in
Puerto Rico (25-250 employees). A total of 105 questionnaires were filled for an overall response rate of 69.4%. The
questionnaire had twelve variables each with five to six questions. All the variables are responded in a five-point Likert-type
scale being (5) agree very strongly and (1) disagree very strongly. The RELQUAL- construct is composed of the twelve
variables included in the questionnaire, one dependent variable which is satisfaction and eleven independent variables: trust,
commitment, cooperation, coordination, specific assets, satisfaction, dependence, opportunism, formalization, continuity,
competitive intensity and market turbulence. The variables included in the model were borrowed and modified from previous
researchers.
As suggested by Norusis (1994) and Hair et al., (2006) a factor analysis was performed for the independent variables with the
data collected from the questionnaires. The factor analysis was used to evaluate if each question in the questionnaire
measures the construct that was supposed and to identify which factors were significant. Based on the orthogonal approach of
Varimax rotation those factors that showed eigenvalues greater than one were identified as significant and included in the
analysis.
Adequate results were obtained from the third factor analysis (KMO .771). As suggested by Hair et al. (2006) factor loadings
above 0.5 were considered significant. The variables showed communalities ranging from 0.707 to 0.953. The ten factors that
were considered significant explain 85.35% of the total variance and therefore were identified as different constituent of
RELQUAL model for Puerto Ricos SME. Data for the eleven factors obtained from the factor analysis was saved to
performed other statistical analysis such as reliability test using Cronbachs Alpha coefficient and multiple regression to
determine which of the independent variable influence satisfaction and how. The coefficient of Cronbachs Alpha for the
eleven variables ranges from 0.765 to 0.951, which is considered excellent (Nunally, 1978). The regression model consisted
400
of satisfaction as the dependent variable and ten independent variables: continuity, specific assets, dependence, opportunism,
coordination, trust, cooperation, commitment, formalization and competitive intensity. The results from the regression
showed that continuity, opportunism, trust, cooperation, commitment, formalization and competitive intensity affect
significantly satisfaction between buyer-supplier relationships in SMEs.
The results obtained from this research confirmed that a contribution to theory in the arena of business relationship was
achieved. Some of the construct considered in the RELQUAL model were tested by researchers before, but to the best of our
knowledge not all were considered in one single study (e.g. Lages et al., 2004). This RELQUAL model was developed and
previously tested in other countries but small and medium size companies in Puerto Rico had not been considered. The
replication of this study in other countries and business type was recommended in those previous studies (Mysen and
Svensson, 2010).
The contributions obtained from this study can be summarized in three statements. First, a RELQUAL construct with its
measurement instrument is available for future studies. Second, the constructs that influence buyers perceived satisfaction of
the relationship with the supplier in Puerto Ricos SME were identified. Third, findings from this research will benefit
owners of small and medium size companies in Puerto Rico by providing a guide of the key elements they need to consider to
develop and maintain a quality relationship with their supplier in which both partners achieve satisfaction. Also, this findings
are of great benefit for SMEs owner since they can focus their efforts on building and improving a relationship characterized
by continuity, trust, cooperation, commitment, formalization and competitive intensity and making sure opportunism does not
arise since it negatively affect satisfaction in the buyer-supplier relationship. As highlighted in the frame of reference,
building and fostering stronger quality relationship between buyer and supplier contributes to a companys competitive
advantage which is critical in an environment characterized by intensified competition. Also this information is beneficial for
researchers in the marketing and supply management area to foster in them the interest of testing RELQUAL model in other
countries, business sectors and or relationships with the intention of determining if similar results emerge.
REFERENCES
Anderson, J. C. and Narus, J. A. (1990). A Model of Distributor Firm and Manufacturer Firm Working Partnerships. Journal
of Marketing, 48(Fall), 62-74.
Cannon, J and Perreault, W. (1999). Buyer-Seller Relationships in Business Markets. Journal of Marketing Research, 36
(November), 439460. Journal of Business Research, 13 (February), 35-48.
Ford, D (1980).The Development of Buyer-Seller Relationships in Industrial Markets. European Journal of Marketing,
14(5/6), 339-353.
Hair, J. F, Black W. C., Babin, B. J., Anderson, R. E. and Tatham, R. L. (2006). Multivariate Data Analysis (6th ed.). New
Jersey, USA: Prentice Hall.
Heide, J. B. (1994). Interorganisational Governance in Marketing Channels. Journal of Marketing, 58(January), 71-85.
Huntley, J. K. (2006). Conceptualization and Measurement of Relationship Quality: Linking Relationship Quality to Actual
Sales and Recommendation Intention. Industrial Marketing Management, 35(2006), 703-714.
Lages, C., Lages, C. R. and Lages, L. F. (2004). The RELQUAL scale: a measure of relationship quality in export market
ventures. Journal of Business Research, 58(8), 1040-1048.
Lee, T-R, Svensson, G. and Mysen, T. (2010). RELQUAL in Taiwanese Business Relationships. International Journal of
Business Excellence, 3(4), 433-451.
Mysen, T. and Svensson, G. (2010). RELQUALs Impact on Satisfaction in Norwegian Business Relationships. Journal of
Business and Industrial Marketing, 25(2), 119-131.
Norusis, M.J. (1994). SPSS Professional Statistics 6.1, SPSS Inc., Chicago, IL.
401
Skarmeas, D., Katisikeas, C. S., Spyropoulou, S. and Salehi-Sangari, E. (2008). Market and Supplier Characteristics Driving
Distributor Relationship Quality in International Marketing Channels of Industrial Products. Industrial Marketing
402
WORD OF MOUTH COMMUNICATION AND ITS EFFECT ON THE AFFECTIVE COMMITMENT

ABSTRACT
In the Information Age, social networks play an important role in spreading the word of mouth communication among
consumers. The question is whether word of mouth may also interfere with affective commitment of the client in relation to a
brand or product, as well as their purchasing choice. The sample for the research has been any person participating actively in
any consumer social networks. The questionnaires were answered by personal and professional contacts of the author, who
accessed the link to the google docs. What is noticed now is a spontaneous articulation between clients in the search for
justice in consumer relations between companies. Consumers are mobilized on social networking sites in search of assistance
and quality products, ready to alert other consumers when companies do not keep their promises or recommend services and
products that have met their goal of excellent value in exchange for their money.
1 INTRODUCTION
The multiple interactions made possible by the internet helped to consolidate a cyberculture. "Cyberculture is the expression
of the aspiration of building a social bond, which would not be found on links or territorial, or on institutional relations,
which are not about power relations, but about gathering around common interests, about sharing knowledge about
cooperative learning, collaboration on open spaces "(Levy, 1999, p 130). Also according to the author, this prevailing culture
encourages the sharing of information and collaborative content creation and collaboration among multiple users.
To Karsaklian (2001), the technologies available and incorporated into peoples routine in the last decade assist in deploying
a more interactive marketing. This allows marketing professionals and consumers to personalize their communication.
Electronic conversations act to establish relationships between users and innovative new technologies, providing customized
information based on the interests of the users.
Bogmann (2000) highlights a significant change in recent years in the way organizations communicate and interact with their
customers. The more traditional view of marketing as a process oriented only to the transaction, for the time of sale, is
gradually being replaced by a differentiated approach in search of long term relationships with consumers, which focus on
building relationships with a consumer at a time. Also according to the author, customer relationships built on solid
foundations influence positively the commitment these consumers will show towards specific brands and products. Pereira
(2010) highlights the important changes which occur also in the way that consumers communicate with other consumers,
incorporating in their daily lives all the new technologies available.
In the Information Age, social networks play an important role in spreading the word of mouth communication among
consumers. According to Pereira (2010), word of mouth in the digital age has enormous reach in spreading information and
impressive speed of dissemination. Word of mouth is considered a strong recommendation from the one advertising to
friends his experience regarding the purchase of a product or usage of a service. This information has a greater receptivity on
the part of the people who receive it. "The development of information and communication technologies have accelerated
the impact of word of mouth on consumer behavior and their relationship network" (PEREIRA, 2010, p. 2).
Castells (2008) argues that the Internet favors the expansion and intensity of hundreds of weak ties which generate a
fundamental layer of social interaction between individuals. For the author, this type of network communication radically
transforms the space, time and the fundamental dimensions of human life. The space of information flow and timeless time
are the main bases of this new culture, a connected society that transcends and includes the diversity of representation
systems historically transmitted. The author also points out such networks constitute the new social morphology of our
societies and that the logic of networks modifies the results of experience, power and culture.
Social networks have millions of followers in Brazil and around the world and have transformed social relations between
individuals. The question is whether word of mouth communication in these networks may also interfere with affective
commitment of the client in relation to a brand or product, as well as their purchasing choice for products or decision for
specific establishments.
403
Pereira (2010) points out social networks are gaining importance in contemporary society because they allow continuous
interaction from information sharing and collaborative creation of contents. Before the popularization of social networking,
marketing was restricted to organizations that possessed enough financial resources to invest in traditional means of
advertising for prospecting new clients such as television, radio, outdoor etc. All these media require high financial
investments. Social networks enable more specific actions and are relatively cheap, allowing companies to use this tool in an
assertive way for the marketing of their products, services and market differentials. The positive and spontaneous word of
mouth spread by satisfied consumers exerts great influence on the social networks.
According to Gruen, Santos and Acito (2000), the involvement of the client in relation to a product or brand cannot be
bought. It's won in the long run, through attitudes that convey trust, respect, care, attention and affection with each other.
The commitment and retention of clients is a process, not an end in itself.
Several companies in Brazil and around the world have realized that social networks are a valuable relationship,
communication, sales and even after sales service to its customers.
According to the company ComScore
(www.comscore.com ), a global leader in tracking digital world with various researches on the digital marketing intelligence,
people in the world already spend close to thirty billion hours a year in social networks. This demonstrates the importance
that these networks have today in the online list of favorite pastimes of the world population.
This intense connectivity across networks is a global phenomenon. Smartphones help increase this phenomenon, as they
ensure unrestricted access to the profiles, posted comments and shared experiences. Also according to ComScore, social
networking sites have currently 1.2 billion users worldwide. Activities related to interactions in social networks more than
tripled in recent years. Currently, still according to this source, 25% of all time spent online is spent by people on social
networks and 1 in every 4 minutes spent online is spent on interactions provided by these networks.
One of the most popular activities are visits to shopping sites, since three out of four users, have a habit of visiting such sites.
One in every two users enter sites related to sports and the same percentage is observed visiting newspaper websites. 62% of
internet users visit gaming sites and 50% visit sites of television programs. The web is now an important tool for banking,
with 38% of visitors. Meteorological sites represent a significant portion in online searches, representing 30% of hits. But
the highlight comes to social networks, which now account for 1 in every 4 minutes spent by users on the Internet. This
means that 25% of all time spent on the web is currently spent on social networking sites.
The topic to be addressed in this paper is very important, especially from the perspective of interaction that social networks
provide, allowing the definition of socialized content and a shared development of products and services. Social networks
allow organizations to listen to their customers more frequently and swiftly, causing them to become an active part in the
process of establishing a brand, service or product. The understanding of consumer behavior in relation to social networks
can significantly contribute to organizations to define its focus and strengthen its market position. Social networks are also a
powerful vehicle for the dissemination of information shared by consumers on their perceptions about products, brands and
services. The word of mouth through social networks can quickly reach multiple customer bases.
Social networks may be contributing to changing relationships between people and organizations. These networks are a
powerful disseminator of word of mouth communication. Within this context it is important that organizations are able to
position themselves and maximize the potential of tools like this in the search for markets and the development of customer
commitment.
The search for better understanding of this phenomenon and how social networks impact the relationships between
organizations and consumers is very important, both from the academic point of view, as under the managerial point of view.
From all the facts exposed above, we have the following research question: what is the impact of word of mouth
communication in social networks on customers behavior in a highly competitive environment? Therefore, the aim of the
research is to evaluate the influence of communication on social networks in customer purchase and customer commitment.
2 THEORETICAL FRAMEWORK
According to Lemos (2002), the idea of the global village is getting closer to reality. Technological change of this era
transformed the relationships between consumers, suppliers and organizations. With borders and geographical boundaries
404
becoming less significant in the act of decision for a service or product, globalization was responsible for integrating markets
and intensifying the competition among them.
Organizations can and should take advantage of opportunities to connect with their customers, minimizing the role of
intermediaries in the relationship. The time is right for organizations to express their values and principles, publicize their
achievements and boost the moments of interaction with customers and prospects. "Post-marketing is strengthening customer
loyalty by meeting their expectations" (BOGMANN, 2000, p. 105).
The digital age has opened a differentiated approach with regard to relationships established between companies, customers
and suppliers. "Marketing is a set of interactive marketing initiatives aimed at creating interaction between the customer and
the company, and that the client has an active role, enabling personalization and customization of products and services"
(LIMEIRA, 2003, p.10). The customer ceases to be a receiver of information and starts to act more actively in their
relationship with the companies. He stops playing a supporting role in these relationships and acts to require, every time,
attention and personalized contact. This customer does not want to be simply another one, but a special one.
Giving clients a pleasurable experience and offering a relationship of trust is investing in winning the loyalty of customers.
Loyalty is a continuous process of conquest.
We went from the era of sales to the era of service. Companies should aim to appreciation of the relationship between the
company and its customers because this relationship is in the process of conquest (prospecting), or loyalty. The customer
wants to be a partner of the firm and to establish a relationship. Being cold, impersonal and anonymous becomes
inadequate. (KARSAKLIAN, 2001, p. 98).
According to Kaplan and Haenlein (2010), social networks are characterized by allowing the individual to build a public or
semi - public profile within a bounded system, articulate a list of other users with whom they share a connection, and also
access posts produced by other people within the network to which he belongs. Yet according to the authors, this format
allows the use of platforms on which applications and content can be changed collaboratively by the parties involved. For
them 75% of Internet users use some social media - a category of online media, where content is created by its audience,
through participation and sharing of user-generated content in the form of network.
Dalmoro et al (2010) consider that interactions with other users, thanks to the formation of virtual communities, cause a
growing connection between its members. It's just that the interactivity lies a major attraction for those networks. According
to Hagel and Armstrong (1997), virtual communities can help meet the needs of consumers with regard to the sharing of
resources, the establishment of relations and trade. Donath & Boyd (2004) argue that online social networks are increasing
access to resources, creating new ways to aggregate them. Once organizations start their activities and start paying visits to
their clients, they begin a powerful network of relationships that may or may not be used to the advantage of businesses.
The network configuration is peculiar to human beings. People will group with their peers and establish working
relationships, friendship and relations of interests that develop and change as its trajectory. These social networks are one of
the underlying strategies used by the companies to share information and experiences through the relationships between the
actors that integrate it (TOMAL; ALCARA; DI CHIARA, 2005).
Moreover, the involvement of the consumer with the brand, product, service or company is an important factor in building
loyalty within this relationship. According Prado (2003), the impairment itself can be considered a central element of the
relationship. To Slongo and Vieira (2008), a commitment to purchase the product or service is due to a personal commitment
to the object, even suffering situational influences and marketing efforts strategic competition. Loyal customers are a
competitive asset in the networking of the organization, not only because they represent ongoing opportunities for shopping,
but also for their influence in the network of personal relationships that they have established throughout their lives. The
commitment is a key factor in building loyalty.
Morgan and Hunt (1994) define commitment as belief in exchange partners in which the relationship is so important that it
should be worth every effort to ensure the maintenance of the relationship. The parties believe that the committed
relationship is a valuable work that should be provided indefinitely. It is the desire of the parties that committed relationship
is lasting. To the authors commitment exists when the relation is important for both parties.
405
The literature suggests a number of dimensions to the construct commitment, exposed objectively as follows. The normative
commitment, according to Gruen, Summers and Acito (2000), is derived from a sense of moral obligation from the individual
to the organization. In this type of commitment it is observed that the individual remains in the relationship because of
previously established norms. This type of commitment is very typical in situations of companies that pay specialization
courses for its employees and then require an employee's length of stay in the company in order to revert to the business part
of the expertise gained through their studies.
The commitment of continuity, also known as calculative, is according to Gruen, Summers and Acito (2000), based on the
self interest of the relationship. In this case, the individual is psychologically linked to the company based on the perceived
costs (economic and social status) associated with the interruption of the relationship with this organization. Vieira and
Batista (2007) go further, stating that this commitment occurs when the individual feels pressured to continue in the
relationship due to not identifying other alternatives to purchase or when switching costs are high or even when the benefits
offered by competitors do not replace those offered by the current vendor.
The affective commitment is, according to Gruen, Summers and Acito (2000), set when the parties feel psychologically
connected with the organization. Regarding loyalty in relationships between customers and companies, the affective
component may become an important factor in establishing the longevity of interactions. Hennig - Thurau and Klee (1997)
define commitment as a consumer orientation to long-term relationships based on emotions (affection) and the belief that
staying in the relationship will bring more benefits than the end of it (cognitive aspects considered) .
The instrumental commitment, according to Brown, Lusch and Nicholson (1995), focuses on aspects related to external
stimuli such punishments by interrupting the relationship or awards for the maintenance of it. The behavioral commitment,
according to Kim and Frazier (1997), is an extension of the activities in which one of the parties offers special help for the
others involved suppressing their needs in times of crisis or need. In this case, one of the parties feels co-responsible for the
success of the other parties, considered as a partner. This type of commitment is very haracteristic in relations between
franchisors and franchisees.
The commitment of resistance, also known as psychological impairment, refers, according to Crosby and Taylor (1983), to
situations when parties tend to resist change due to conflicting information or experiences. Pritchard, Havitz and Howard
(1999) complement this statement suggesting that psychological commitment is best defined by a tendency to resist change in
general.
In summary, Normative Commitment is a moral obligation and is based on internalized norms sometimes predetermined;
Calculative Commitment is regarded to the psychological expense as well as economic and social status of leaving the
relationship, since there are few options for suppliers. Affective commitment is to stay in the relationship because of love.
Instrumental Commitment is linked to the aspects associated with the punishments related to leaving the relationship.
Behavioral commitment is the help coming from a situation of need, ie behavior aid partner. Finally, Resistance
Commitment is a tendency to resist change because of conflicting information or experience." (Vieira & Slongo, 2008, P.
1002)
The commitment can serve as a basis for differentiating the loyalty of repeated purchase. According to Oliver (1999), loyalty
can be considered the existence of a deep commitment to purchase or reuse a product or service consistently in the future.
This action sets up a relationship of repeated purchases of the same brand or company, despite all the situational influences
and marketing efforts that may have a potential competition to encourage behavior change in consumers. Furthermore,
consumers when featuring the commitment to remain in a relationship with the purchasing organization, will have loyalty as
a consequence of this commitment. Commitment is an important construct of loyalty between company and consumer.
The affective component is a vital part in building consumer loyalty. The path to loyalty also involves the heart.
"Consumers become loyal in a cognitive sense first, then in a connotative way and, finally, in a behavioral one" (Oliver 1999,
p. 35th).
The affective loyalty is formed, according to McMullan and Gilmore (2003), in the establishment of the commitment,
stimulated in the customer's mind as cognition and affection. For Oliver (1997, 1999) at this stage the idea is to develop a
love of the brand, or to have a positive attitude towards it. Cognition can be argued. Affection cannot be easily dismissed.
Harris and Goode (2004) argue that affective loyalty is less susceptible to substitution of brand loyalty than the cognitive one
established.
406
Prado and Santos (2003) argue that the conceptual definitions of commitment and loyalty are very close, pointing out that
both converge to the same concept. To the authors commitment and behavioral intention to repurchase are a reflection of
loyalty.
The practices of interpersonal influence have been used for decades. But "word of mouth communication as one of its
manifestations, began to be the object of attention of social researchers since 1950" (Pereira, p. 1, 2010). According to
Harrison-Walker (2001) word of mouth consists of a personal and informal communication between a perceived
noncommercial communicator and a given receptor, linked to a brand, a product, an organization, or a service.
The enormous ability to spread and influence behavior caused by word of mouth was enhanced, especially with the
development and accessibility of new information technologies. It is its potential of quickly reaching multiple customer bases
that has caused many companies to begin to manage word of mouth initiatives proactively. (Pereira, p.1, 2010).
According to Henning-Thurau et al (2004), the Internet has increased the options available to consumers in the search for
unbiased information about products. Many consumers seek the opinion of other consumers and they feel comfortable
sharing their opinions and insights about products and services through electronic word of mouth.
According Dalmoro et al (2010), an element that emerges when dealing with social networks and consumer is the ability of
users to influence the purchasing decisions of others through tweets and posts. These influences are the result of the social
network formed because, according to the authors, the user receives better and open minded messages sent from people with
whom they have a relationship, whether of friendship or admiration. These messages shared though the web can influence
the purchasing decisions of others, especially if the responsible for tweets or posts is a trendsetter or a person with credibility
in the network. Yet according to the authors social networks act as communication channel that allow users to distribute
information via a two-way road: receiving and sending what they produce.
This need is centered on a new concept in consumer culture which outweighs the exchange (in the classical sense of
marketing). This new approach is to share, ie a user distributes something over new channels on the internet, and in a
snowball effect, a sharing network is built. With the characteristics of a community, it is a result of the creation of mutual
value between users. The network is maintained by the desire of consumers to interact with each other and valuing the
shared information. (Dalmoro et al, p. 13 -14, 2010).
According Bruyn and Lilien (2008), electronic communications between friends are an effective way to transform electronic
networking in electronic networks of influence. Friends and acquaintances influence each other, with different intensities on
social networks. The authors emphasize that this type of communication not only captures the attention of the receiver, as
well as triggers interest and eventually results in product adoption and conversion into sales.
The communication by positive and spontaneous word of mouth can be widespread in networks and can become important
competitive strategy in an era where customization is valued in relationships and the costs of mass media have become
increasingly expensive.
3 METHODOLOGY
With regard to the purposes, this study was descriptive, which, according to Vergara (2007), exhibits characteristics of a
given population or specific phenomenon. As for the means, it was a survey. The survey was used because it is an empirical
investigation conducted at the site where the phenomenon occurs or who have any information to explain it.
The sample for the research has been any person participating actively in any consumer social networks. The sample was
defined for its convenience. The questionnaires were answered by personal and professional contacts of the author, who
accessed the link to the google docs on social networks. In total 422 questionnaires were answered. The Figure 1 shows the
model to be tested is this survey.
Given the above, the model will test three hypotheses explained below:
Hypothesis 1 (H1): word of mouth communication in social networks influences positively and significantly the purchase of
a product or service;
Hypothesis 2 (H2): the purchase or repurchase of a product or service influences positively and significantly the consumer
affective commitment to the product or service;
407
Hypothesis 3 (H3): word of mouth communication in social networks influences positively and significantly the consumer
affective commitment to the product or service.
The survey questionnaire used for model validation addressed each of the constructs of the model with six questions, listed
below, measured on the Likert scale of 5 points, ranging from strongly disagree to strongly agree. The questions were based
on research cited in the theoretical framework. We chose to review only the affective commitment due to be treated fair, in
many cases, in two dimensions, attitudinal and behavioral, the latter being represented by the intention to purchase, construct
assumed to be consequent in this research.
Model validation was made through the structural equation modeling. For this purpose the method used was Partial Least
Squares (PLS), which does not require multivariate normality of the variables and can work with a smaller sample size, and
better fit for exploratory studies that the method used by LISREL (Chin, 1998 ). The software used was 2.0 SmartPLS M3.
To verify that the coefficients are found significant at the 5% level of significance it was used the bootstrap method. T
values above 1.96 indicate that the coefficients are significant at the 5% level of significance.
Questions
Word of mouth communication
x
The opinion of my friends posted on social networks about companies, products and services is important to me.
x
I consult my friends in social networks before purchasing products or services of a company for the first time.
x
I check with my friends the reputation of a company, product or service they shared in social networks, before
deciding to purchase.
x
I like social networking pages of companies with which I identify.
x
I expose my point of view on products, services, or companies for my network of relationships through posts on
social networks.
x
I consider the opinion posted by my friends on social networks about products, services or companies.
Purchase
x
I always come back to a store well endorsed by my friends on social networks.
x
I choose to start relationships with companies well recommended by friends on social networks.
x
I prefer to purchase products or services of a company well recommended by my friends in social networks than
experiment new companies.
x
I prefer to buy products or services well recommended on social networks.
x
I avoid buying products or services defamed on social networks.
x
I prefer to buy products or services from companies with which my friends had positive experiences have and had
shared this perception on social networks.
Affective commitment
x
When I'm satisfied with a product or service, I refer to my friends posting comments on social networks.
x
I share the comments posted on social networks about products and services.
x
I place in my social networks dissatisfaction with a product or service to my friends network.
x
I share with my friends in social networks interesting deals I get from companies.
x
I share photos on social networks of the products purchased with my friends.
x
I share with my friends links disclosed by companies that I admire in social networks.
4 RESULTS
A total of 422 questionnaires were answered. More than half of respondents (71.1%) are female. Regarding age, the highest
frequency is observed in relation to the range of 31 to 35 years (34.1%). With regard to educational level, the higher
frequency is related to individuals with complete graduation (36.5%). The individual monthly income in turn is more
frequent in the upper range to $ 5,000 (32.5%). The majority of respondents have registered profile on facebook. The use of
other networks like Twitter, Instagram, Orkut, Google + and others, covers less than 40% of users.
The model was inserted in SmartPLS as it was conceived in the theoretical argument. All indicators had coefficients greater
than 0.5 in the estimation of the structural model. Also it was found that the path linking the purchase to affective
commitment had a very low coefficient (0.013) and that proved not significant (t-value = 0.223), as showed in Figure 3.
408
We then proceeded to review the convergent validity of the model. This evaluation is performed based on Average Variance
Extracted AVE, composite reliability or Cronbachs alpha coefficient. These values, according to Chin (1998) must have a
minimum value of 0.5 (AVE) or 0.7 (composite reliability or Cronbachs alpha). Table 1 indicates that for all constructs the
validity was confirmed.
Regarding discriminant validity, cross-loads of items with the constructs were assessed. As can be seen in Table 2, each item
has the highest load with its own construct than any other, thus confirming discriminant validity.
In summary, the model results are shown in Table 3. It is observed that the H1 was confirmed, indicating that word of mouth
communication positively influences the buying intentions. This result shows a new relationship to some extent, because
traditionally the word of mouth communication is valued as an outcome construct of loyalty, and not as a cause of purchase.
The hypothesis H2 was not confirmed, showing that the purchase does not cause affective commitment. Its a quite surprising
result and what could explain this weak relation? The affective commitment is set when the parties feel psychologically
connected with the organization, according to Gruen, Summers and Acito (2000), or its a love relationship, as stated by
Vieira & Slongo, 2008, or its is based on emotional link with the organization, according Fullerton (2003).
Some possible explanations for this result can be revealed. Firstly, the affective commitment mostly depends on frequent
repurchases, which may not occur, even this aspect did not become investigated. So if there were no repurchases, the
consumer may not feel inclined to establish affective commitment. Characteristics of the studied population are another
possible explanation. Due to the diversity of views and also the speed with which these opinions circulate in network, the
consumer tends not to compromise with a product or service specifically, but with those products and services which receive
positive indications in networking. That is, the influence of the people who are part of the group is the main aspect for
establishing the affection, as evidenced by Sheth and Parvatiyar (1995) and Engel, Blackwell and Miniard (2000) when
addressing issues relating to the reference group. In summary, in the information age, the consumer is committed only with
highly rated products and services in your social network, and rarely with the product or service itself.
The hypothesis H3, moreover, has been supported, confirming the positive effect of the communication word of mouth on the
affective commitment of customers. The results also indicate that 65.5% of purchase intentions are explained by word of
mouth communication and that 67.1% of affective commitment is due to word of mouth communication, primarily and
secondary terms, the purchase.
5 CONCLUSION
The word of mouth communication has always had an effect on how consumers make choices in relation to consumption.
We observe today the enhancement of this communication by word of mouth through technologies that enhance its impact
and speed of the dissemination of such information.
The spontaneous word of mouth communication within social networks gives consumers a new kind of power: their
perceptions may influence other consumers to consume or not a product or service. These insights are disseminated and
shared on the network with a quick reach of multiple customer bases and become determining factors for the decision to
purchase or for the establishment of an affective commitment to the client relationship with a brand or product.
What is noticed now is a spontaneous articulation between clients in the search for justice in consumer relations between
companies. Consumers are mobilized on social networking sites in search of assistance and quality products, ready to alert
other consumers when companies do not keep their promises or recommend services and products that have met their goal of
excellent value in exchange for their money. There is a power shift in the relationship between consumers and businesses. In
the past, a negative perception was seen as just one. How could a single dissatisfied person confront an entire company?
Today, with the rise of social networks in peoples everyday lives, a negative perception generates great influence on
multiple client bases and can indeed influence other consumers in their purchasing decisions. Likewise, a satisfied consumer,
committed towards a company or product by sharing their positive perceptions with others positively and significantly
influences other consumers. These multiple customer bases feel safer to choose a product highly recommended by friends on
social networks.
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Finally we would like to highlight contributions and limitations of this research. As academic contributions, two can be
highlighted: the verification of word of mouth communication as an antecedent of purchase intention and commitment and
the identification of a scale to assess the word of mouth communication in social networks.
The research limitations are due to the choice of convenience sample, which by itself limits the generalization of results.
Moreover, having been sent to networks of contacts of the researchers, there may be some bias of respondents. Therefore, it
is suggested for future research, other data collection methodologies that minimize the limitations previously mentioned.
Furthermore, one may also suggest other research that addresses related issues such as, for example, the effect of faults and
recovery from social networking services as well as other constructs, such as trust, satisfaction and perceived value.
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conceito? Uma resposta a Prado e Santos . RAC, Curitiba, v.12, n.4, p. 995 1018, Out/ Dez.
FIGURES
Purchase
Positive word of
mouth
communication
H2
H1
H3
Figure 1: Proposed model.
Figure 3: Estimated Model.
411
Affective
Commitment
TABLES
Table 1: Description of the model adjusted
AVE
Composite Reliability
R2
Purchase
Affective commitment
Positive word of mouth communication
i1.1
i1.2
I1.3
i1.4
i1.5
i1.6
i2.1
i2.2
i2.3
i2.4
i2.5
i2.6
i3.1
i3.2
i3.3
i3.4
i3.5
i3.6
Purchase
0.694
0.619
0.617
0.424
0.589
0.687
0.768
0.768
0.778
0.820
0.662
0.829
0.514
0.549
0.553
0.429
0.448
0.454
0.597
0.552
0.568
0.898
0.880
0.887
Cronbach's alpha
0.653
0.671
0.864
0.836
0.846
Table 2: Loads Crossed

Affective commitment Positive word of mouth communication
0.552
0.826
0.648
0.794
0.579
0.723
0.617
0.632
0.769
0.738
0.521
0.792
0.560
0.665
0.605
0.672
0.440
0.564
0.535
0.661
0.376
0.491
0.533
0.663
0.803
0.630
0.658
0.619
0.773
0.671
0.746
0.583
0.701
0.530
0.766
0.597
Table 3: Relationship between Constructs Assessed

Relationship Type
H1: Communication word of mouth -> Intention to purchase
Confirmed
H2: Buy -> Affective Commitment
Not - Confirmed
H3: Communication word of mouth -> Commitment
Confirmed
412
Coefficient
0.808
0.013
0.819
PERCEIVED JUSTICE & EMOTIONS IN A NEGATIVE SERVICE ENCOUNTER: A LATIN AMERICAN

PERSPECTIVE
Flvio Rgio Brambilla, Universidade de Santa Cruz do Sul, Brazil
Mario Eduardo Giraldo Oliveros, Universidad del Norte, Colombia
INTRODUCTION
Homburg and Frst (2007) concluded that their study, on a very general level, underlined the high managerial relevance of an
effective complaint management. This relevance becomes visible by the fact that a poor solicitation, handling, and analysis of
complaints inevitably lead to substantial negative consequences for a company (i.e., unfavorable customer post-complaint
reactions).
Logical sense implies that all companies strive to offer favourable customer experiences and services. A service experience
can be viewed as a service process that creates customers cognitive, emotional and behavioural responses, resulting in a
mental mark, a memory (Johnston & Clark, 2001). When a customer has a bad or negative experience, it is likely that they
will communicate their negative emotions to others. It is, however, impossible to eliminate the possibility of failure, due to a
variety of factors that may impact on the process of service co-creation (Vargo & Lusch, 2004), service consumption, and of
the customers perceived values and expectations. It is nearly impossible to maintain Customers Service Experience (CSE)
without dissatisfaction. Service Recovery by Firms (SRF) processes may be seen as a critical moment of truth for firms in
their efforts to satisfy and retain customers.
The objective of this project is to map the constructs of justice and emotions from a Latin American perspective. Based on
papers published in a tourism context (Svari, Svensson, Slatten, & Edvardsson, 2010), and as a part of an international team
of researchers, data from the telecommunications industry may provide data across industries enabling articles of cross
industry and cross cultural comparison. Additionally, this project aims to map the effects of perceived justice and negative
emotions on customer behavior.
It seems there is a need for more thorough examination and testing of perceived justice and negative emotions in CSE and
SRF. In fact, Bagozzi et al. (1999) and Wong (2004) request further research on how emotions should be measured, and how
emotions are related to each other. Also, there appears to be no research that has focused simultaneously on the negative
motions in CSE and the follow-up processes of SRF. Therefore, our research intends to address this gap by focusing on
negative emotions in both CSE- and SRF-processes in telecommunications industry of three Latin American countries. The
objective is to describe and test an SOS-construct and its dimensions of negative emotions in CSE and SRF (i.e. Self, Other
and Situational). Also, we describe similarities and differences of negative emotions in CSE and SRF. Consequently, this
article focuses on an area within service recovery that hereto is neglected. As such this article makes a contribution to the call
for more research on the role of emotions in service research (e.g. Bagozzi et al., 1999).
METHODOLOGY
The project used a quantitative survey on 339 consumers of telecommunication services in Puerto Rico, 400 in Colombia and
284 in Brazil. When compared to other industries, telecom suffers from lower customer engagement scores, higher incidence
of customer problems, and slower problem recovery (Feather, 2009). Consequently, using the telecommunication industry as
a setting is both relevant to the service industry, and at the same time allows the study to be narrowed down to one setting.
All of these factors create a perception of injustice that lead to complaint handling (Svari, Svensson, Slatten, & Edvardsson,
2010).
The results of each item used in the questionnaire are shown in Table 1, which is divided into Customers Service Experience
of Colombia, Puerto Rico and Brazil. Informants responded to seven-point Likert-type scales for all variables. These
measures were anchored at (7) strongly agree and (1) strongly disagree. The following abbreviations are used to illustrate the
outcome of each item in the table referred to: N: number of observations, Mn: mean; SD: standard deviation; Sig:
Significance; and F: f value.
413
The findings shown in Table 1 indicate that there is a significant difference (16 of 19 items) on the level of perceived justice
between Puerto Rican, Colombian and Brazilian customers (see columns ANOVA test).
The findings shown in Table 2 indicate on each item that there is a significantly difference in 18 negative emotions between
Puerto Rico, Colombia and Brazil (see columns of ANOVA test). The dissimilar means in Table 2 support the assumption
that exist differences in negative emotions on customer across countries.
Exploratory Factor Analysis
To examine the underlying pattern of the items of Negative Emotions and Perceived Justice, exploratory factor analysis
(Norusis, 1993 and 1994) was used. Principal component method was used for factor extraction. A Varimax approach was
used to rotate the initial factor solution. Factors that had Eigen values very close to one (i.e. > 0.97) were considered as
significant.
Customers Service Experience (CSE) Perceived Justice
The outcome of the pre-specified items derived from theory and previous studies in the questionnaire of Perceived Justice
was satisfactory for the Puerto Rico sample (KMO: 950 (Overall MSA); Bartletts Test: Approx. Chi-Square: 4968.884: df
171: Sig: 0.000), the Colombia sample (KMO: .966 (Overall MSA); Bartletts Test: Approx. Chi-Square 9232.245: df 171:
Sig: 0.000) and the Brazil sample (KMO: .948 (Overall MSA); Bartletts Test: Approx. Chi-Square: 4195.506: df 171: Sig:
0.000). Three factors were also identified: distributive, interactional, and procedural. The Cronbachs Alpha for each factor
was between 0.87-0.92.
Customers Service Experience (CSE) - Emotions
The outcome of the pre-specified items derived from theory and previous studies in the questionnaire of Emotions was
satisfactory for the Puerto Rico sample (KMO: .862 (Overall MSA); Bartletts Test: Approx. Chi-Square 2434.428: df 171:
Sig: 0.000), the Colombia sample (KMO: .924 (Overall MSA); Bartletts Test: Approx. Chi-Square 5823.629: df 171: Sig:
0.000) and the Brazil sample (KMO: .913 (Overall MSA); Bartletts Test: Approx. Chi-Square: 3064.022: df 171: Sig:
0.000). Three factors were identified. Factor 1 consisted of the items: shame, guilt, regret, embarrassment, sadness,
loneliness, unhappiness, and depression. It was labeled Self, since it reflected previous research findings (Westbrook, 1987;
Oliver, 1993). Factor 2 consisted of the items: anger, irritation, rage, discouragement, frustration, disempowerment, and
distress. It was labeled Others (Westbrook, 1987; Oliver, 1993). Factor 3 consisted of the items: fear, worry, anxiety, and
nervousness, and fit the description of emotions related to the situation. It was labeled Situational (Oliver, 1993;
Westbrook, 1987; Dub et al., 1996). The Cronbachs Alpha for each factor was between 0.89-0.91.
The study brings together, complements and fortifies existing theory on emotions and justice. Additionally the
telecommunication industry has rarely been used as a setting for studies using this theory. Measuring a justice- emotions
complaint framework in an international study has to the researchers knowledge not been done. A comparison of the theory
(and findings) of service vs. emotions and fairness from psychology and literature related to literature can be a contribution to
both fields of research.
This strengthens the DIP model can help the management of the perceived justice in the customer-service industry.
Management might consider using guidelines based on the three dimensions to assure that customers perceive their service as
fair.
From a managerial point of view it is important to understand the emotions created by a failure in service by the company
and the emotions created as a consequence of a negative service. If understood, companies can model their complaint
recovery in a way that better satisfies the customers.
It is important, for companies, to manage their complaint recovery tactics from the complete four dimension emotion
perspective. If it is the companies fault they have to be prepared to handle angry and irritated customers. It is also important
for companies (although in a smaller percentage) to be prepared for customers whose service fault was caused by themselves.
It is not healthy for a company to have customers feeling embarrassed and guilty. After this is taken care of the company has
to be prepared for the consequential emotions that could arise in customers such as unhappiness and sadness.
414
TABLES
Table 1 Comparative Analyses Questionnaire Items Perceived Justice
Colombia
Puerto Rico
Customers
Customers
Service
Service Experience
Experience
Negative Service Encounter
N
M
SD
N
M
SD
The company gave me the respect I
deserved
The company's employees were ethical in
dealing with me during the encounter
The company's employees were honest in
dealing with me during the encounter
I was treated fairly by the company
The company had fair policies for dealing
with customers
The company applied their procedures
fairly
The company had fair practices for
dealing with customers
The company gave me the service I was
entitles to have
The outcome I received was fair
The company really tried to be fair
The company applied their guidelines
fairly
The outcome I received was right
Overall, the procedures followed by the
company were fair
The company gave me the right value for
the money
The final outcome I received from the
company was fair, given the hassle
The company's efforts resulted in a fair
outcome for me
The company responded quickly to my
needs
The final outcome I received from the
company was fair, given the time
The company's employees worked as hard
as could be expected for this service
Brazil
Customers
Service
Experience
ANOVA
SD
Sig
400
3.34
2.00
338
3.89
2.06
284
3.32
1.830
10.743
.000
399
3.35
1.965
338
3.74
1.99
284
3.03
1.765
11.931
0.13
399
3.20
1.902
338
3.36
1.94
284
2.98
1.740
4.373
.013
399
2.94
2.060
337
3.26
2.01
284
2.97
1.775
3.086
.046
392
3.24
1.825
339
3.25
2.14
284
2.73
1.616
17.610
.000
397
2.99
1.820
338
3.22
2.10
284
2.75
1.584
14.015
.000
393
3.14
1.800
339
3.20
1.96
284
2.74
1.614
13.581
.000
399
2.93
1.970
339
3.19
2.09
284
3.10
1.950
3.129
.044
398
3.28
1.730
339
3.12
1.88
284
2.75
1.790
8.749
.000
399
3.21
1.945
337
3.11
1.89
284
2.76
1.675
6.660
.001
397
3.20
1.830
339
3.11
2.10
284
2.68
1.554
14.015
.000
398
3.28
1.730
339
3.09
1.95
284
2.80
1.840
3.318
.037
401
2.76
1.950
339
3.08
1.88
284
2.83
1.747
3.868
.021
395
3.28
1.881
339
3.08
1.85
284
3.02
1.702
2.141
.118
401
2.70
1.943
339
3.06
1.95
284
2.73
1.731
5.018
.007
394
3.05
1.880
339
3.02
1.93
284
2.77
1.703
2.841
.059
401
2.71
1.958
338
3.01
2.02
284
2.46
1.704
8.482
.000
402
2.80
1.891
339
2.99
1.94
284
2.70
1.744
2.533
.080
396
3.10
1.808
338
2.94
1.85
284
2.78
1.712
3.128
.044
N-Number of answered; M-Mean; SD-Standard Deviation

Table 2: Comparative Analyses Questionnaire Items of Negative Emotions.
Negative Emotions
Colombia
Puerto Rico Customers
Brazil
Item
Customers
Service Experience
Customers
Service Experience
Service Experience
N
Mn
Std
N
Mn
Std
N
Mn
Std.
1) Fear
395
2.10 2.045
340
1.50 1.263
287
2.20 1.908
415
ANOVA
F
41.594
Sig
.000
2) Worry
3) Anxiety
4) Nervousness
5) Anger
6) Irritation
7) Rage
8) Shame
9) Guilt
10) Regret
11) Embarrassment
12) Sadness
13) Loneliness
14) Unhappy
15) Depression
16) Disencouragement
17) Frustration
18) Disempowerment
19) Distress
392
393
399
401
402
400
402
401
394
397
395
398
401
401
396
393
390
391
3.14
2.87
2.76
4.42
4.28
4.89
2.08
1.77
2.26
2.46
2.85
2.38
2.38
2.38
3.09
3.81
3.35
2.89
2.118
2.106
2.357
2.386
2.489
2.323
1.424
1.432
1.570
1.647
1.868
1.807
1.789
1.789
2.099
2.579
2.273
2.033
341
339
341
341
342
341
342
341
342
343
343
342
342
341
343
342
342
342
2.81
3.07
2.04
4.53
4.77
4.57
1.79
1.48
2.24
1.66
2.00
1.48
2.22
1.75
3.68
4.35
3.01
2.70
2.157
2.277
1.718
2.384
2.261
2.352
1.454
1.100
1.857
1.319
1.628
1.193
1.933
1.557
2.393
2.408
2.329
2.196
286
288
291
290
289
287
288
289
282
291
291
288
290
287
280
290
291
288
3.78
3.99
4.45
5.09
5.48
5.29
2.14
1.79
2.41
3.75
3.39
2.21
3.44
2.14
4.34
4.67
4.02
3.48
2.350
2.289
2.273
2.264
2.014
2.126
1.777
1.519
2.009
2.242
2.383
1.920
2.366
1.883
2.276
2.292
2.419
2.281
16.186
24.829
108.610
7.537
23.935
.8720
4.733
5.275
.989
114.977
41.820
28.755
27.660
11.887
26.724
11.064
15.411
11.064
.000
.000
.000
.001
.000
.000
.009
.005
.372
.000
.000
.000
.000
.000
.000
.000
.000
.000
REFERENCES
Bagozzi, R., Baumgartner, H., & Pieters, R. (1998). Goal-directed Emotions. Cognition and emotion, 12(1), 1-26.
Feather, K. (2009). Why All The Telecom Customer Service Problems? Retrieved from PeopleMetrics.
Homburg, C., & Frst, A. (2007, Winter). See no evil, hear no evil, speak no evil: a study of defensive organizational
behavior towards customer complaints. Journal of the Academy of Marketing Science, 35(4), 523-536.
Johnston, R., & Clark, G. (2001). Service Operation Management. London: Prentice Hall.
Oliver, R. (1993). Cognitive, Affective, and Attribute Bases of the Satisfaction Response. Journal of Consumer Research,
20(3), 418-430.
Svari, S., Slatten, T., Svensson, G., & Edvardsson, B. (2009). A SOS Construct of negative emotions in customers' service
experience (CSE) and service recovery by firms (SRF). Journal of Science Marketing, 25(5), 323-335.
Vargo, S., & Lusch, R. (2004). Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68(1), 1-17.
Westbrook, R. A. (1987). Product/ Consumption-Based Affective Responses and Post purchase Processes. Journal of
Wong, A. (2004). The role of emotional satisfaction in service encounters. Managing Service Quality, 14(5), 365-376.
416
UNDERSTANDING REACTIONS OF BRAZILIAN CONSUMERS IN SERVICE FAILURES

Flavia Plutarco, Fundacao Getulio Vargas, Brazil
Ana Augusta Freitas, State University of Ceara, Brazil
Marcio Mota, State University of Ceara, Brazil
INTRODUCTION
Understanding the reasons consumers break up their relationships with business organizations has been the
motivation for several researchers (Bitner, Booms & Tetreault, 1990, Coulter & Ligas, 2000). Thtinen and Havila
(2004) affirm that not much attention this topic has been given until the 90s in terms of understanding how, why and
when this relationship was ended. However, the main focus is still related to the understanding of the reasons, and
their predictors. Thus, the process and its consequences of the ruptures are still not much discussed in the academia,
despite its relevance to the marketing management impacts and managerial performances. Gedeon, Fearne and Poole
(2009) suggest that this understanding is still a challenge for empirical researches.
In order to comprehend the reasons of the ruptures of the commercial relationships, the way it occurs, the related
emotions, and the way consumers are willing to restart their relationships, this study is proposing the use of the
attribution theory (Heider, 1958, Kelley, 1976, Jones et al., 1971). The structure of the attribution theory examines
the reactions of consumers of service failures (Weiner, 2000). This theory is present in the daily life of the
consumers in situations where these tend to reflect on the origin of the problem in dimensions, i.e., cause and
responsibility, to form opinions which generate consequences and influence future decisions.
Iglesias (2009) used the attribution theory to analyze the effects of service failures in consumer satisfaction. Indeed,
according to the way consumers perceive these failures, they may modify their decisions. Thus, when consumers
want to rupture with the commercial organization, they find the failures and seek for an answer. When they
understand the causes, they are mediated by emotions, and consequently, they affect directly the way consumers
want (or dont want) to repurchase at this specific commercial organization. Although, the direct effect was already
studied (see Folkes, Koletsky & Graham, 1987), there is a lack in the marketing literature to understand the
mediation of emotion in this process. Therefore, we propose to analyze consumer proneness to restart a commercial
relationship by the attributions given to service failures causes mediated by emotions.
STUDY DESIGN AND METHODOLOGICAL PROCEDURES
In line with the objectives of this research, the proposed conceptual model was tested by a field study involving 245
Brazilian consumers. We gave them several options of service providers (e.g. hotel, restaurant, hair salon, auto
repair shop, and fitness center) in the questionnaire. Then, the respondents had to choose only one for the following
questions. We also asked the time of his/her relationship with the service provider and the main motivation to start
and to finish his/her relationship with it, however there were no significant results for each specific service, the time
of relationship and the main motivation to start and to finish his/her relationship with that specific service provider.
We emphasize that only consumers that have ruptured commercial relationships within one year were considered for
this research. According to Weiner (2000), consumers can still remember facts from a commercial relationship
during one year. Participants were randomly intercepted at shopping malls and grocery stores and asked to
participate in a research study that intended to gauge their behaviors as consumers. The data were analyzed using the
statistical software packages SPSS and AMOS v.16.
We contributed to the development of a new scale with high reliability, convergent and discriminant validities by the
proposition scales of the dimensions of the attribution theory, negative emotions and consumer predisposition.
Indeed, the development of this scale was based on the Phase Completion Scales procedures.
The preliminary outcomes show that (1) the organizations did not receive any information about the service failure
that caused the rupture of their relationships with customers, and (2) the organizations were aware of the situation
but they did not do anything to reverse the causes of consumer dissatisfactions. Managerially, it contrasts to the
importance of the customer equity management/customer relationship management that companies should have. It
also contrasts to the lack of the development of new technological tools by organizations to accomplish customerdriven management.
417

Our study evidences a new field to explore in the marketing literature related to customer retention based on the
reversion of dissatisfaction feelings, which are the previous motives that led consumers to rupture or to reestablish
their returns focused on the solution of the issues that were pivotal to break up with the relationships.
Companies should be better prepared to deal with dissatisfied consumers and to avoid dissatisfaction in order to stop
its evolution into stronger negative emotions, e.g., anger. This research analyzed that these negative feelings weaken
the predisposition to restart a previous ruptured commercial relationship.
We understand that a managerial alternative would be to use database of consumer complaints as source of
information in order to solve current issues. Another alternative is to run periodically qualitative marketing
researches with their customers, and to have a team of specialists to work with churns.
In summary, companies should guarantee that the motives of their dissatisfied consumers are identified, analyzed
and solved. Our research empirically implicated that when consumers perceive that the service failure still occurs,
they are not willing to restart the commercial relationship. Indeed, it is fundamental that companies should add, in
their customer databases, the historical of complaints, and the record of the motives that led him/her to rupture with
the company.
Of course, our study is not without limitations. Firstly, this study should be replicated so that the proposed
questionnaire and scale should be refined. Secondly, although we verified that consumers are emotionally-driven in
service failure situations, the importance of this construct as a mediator of the reactions of other consumer groups
across the globe awaits much-needed confirmation. Finally, we also affirm that it is too soon to generalize the results
due to a topic which is still new in the marketing literature.
REFERENCES
Bitner, M. J., Booms, B. H. and Tetreault, M. S. 1990. The service encounter: Diagnosing favorable and
unfavorable incidents. Journal of Marketing, 54 (1), 71-84.
Coulter, R. A. and Ligas, M. 2000. The long good-bye: The dissolution of customer-service provider relationship.
Psychology & Marketing, 17 (8), 669-695.
Folkes, V. S., Koetsky, S. and Graham, J. L. 1988. Recent attribution research in consumer behavior: A review and
new directions. Journal of Consumer Research, 14 (4), 548-565.
Gedeon, I. M., Fearne, A. and Poole, N. 2009. The role of inter-personal relationships in the dissolution of
business relationships. Journal of Business & Industrial Marketing, 24(3-4), 2009.
Heider, F. 1958. The Psychology of Interpersonal Relations, New York: John Wiley & Sons.
Iglesias, V. 2009. The attribution of service failures: effects on consumer satisfaction. The Service Industries
Journal, 29 (2), 127-141.
Jones, E. E., Kanouse, D. E., Kelley, H. H., Nisbett, R. E., Valins, S. and Weiner, B. 1971. Attribution: Perceiving
the Causes of Behavior, Morristown, NJ: General Learning Press.
Kelley, Harold. 1967. Attribution Theory in Social Psychology. In: Nebraska Symposium of Motivation, v. 15, ed.
D. Levine, Lincoln: University of Nebraska Press, p. 192-238.
Thtinen, J. and Havila, V. 2004. Enhancing research in exchange relationship dissolution. Journal of Marketing
Management, 20 (9), 919-926.
Weiner, B. 2000. Attributional thoughts about consumer behavior. Journal of Consumer Research, 27 (3), 382387.
418
ENHANCING CONTACT EMPLOYEES FIT WITH THEIR ENVIRONMENT AND WILLINGNESS TO

REPORT SERVICE COMPLAINTS
Achilleas Boukis, Strathclyde Business, School, UK
Giannis Kostopoulos, Bedfordshire University, UK
Ilianna Katsaridou, Strathclyde Business, School, UK
Kostas Kaminakis, Athens University of Economics and Business, Greece
ABSTRACT
This study adopts a multilevel research design in order to illustrate the importance of supervisors adoption of Internal Market
Orientation (IMO) for shaping positive employee consequences. The equity theory and the fit theory are integrated so as to
provide the theoretical background of the impact of IMO on employees fit with their organization and their supervisor.
Evidence is provided regarding the effect of IMO on employees perceptions of IMO as well as on different fit types and
behaviours beneficial towards the firm and their supervisor (i.e. willingness to report service complaints).
INTRODUCTION
Due to a highly competitive pressure in the retail environment, retail managers are in need of rendering contact employees
more motivated to deliver superior customer service (Snipes et al., 2005). Acknowledging contact employees centrality for
retail store performance (Liao and Chuang, 2004), scholars emphasize gains from adopting an Internal Market Orientation
(IMO) in terms of having more satisfied, committed and motivated contact employees (Tortosa et al., 2010). However,
existing studies provide a rather simplistic view of how IMO can effectively be implemented so that to increase contact
employees fit with their environment and align them with organizational goals and directives (Wieseke et al., 2009).
Supervisors role for firms internal marketing efforts is rarely acknowledged (Lings and Greenley, 2010), despite the fact
that they constitute the main linking pin between store employees and top management in most retail settings (Lam et al.,
2010). In addition, few studies explore whether adopting an IMO can actually enhance employees extra-role activity which
remains an important aspect of service delivery (Bell and Menguc, 2002).
Under such circumstances, this study integrates the equity theory and the fit theory in order to display the importance of
supervisors adoption of IMO for enhancing employees levels of fit with their organization (E-O fit) and their supervisor (ES fit). Aligning employees with organizational goals and diffusing organizational values across the firm constitute ultimate
goals of IMO adoption (Wieseke et al., 2009), but scholars rarely encapsulate in internal marketing models the importance of
employees fit with their environment, despite the lack of mechanisms of how to increase employees fit with their
organization (Edwards and Cable, 2009). Second, the role of IMO for encouraging contact employee extra-role activity, and
particularly willingness to report service complaints (WRC), is also addressed. We focus on WRC as failures are often in
service encounters (Maxham and Netemeyer, 2002) and contact employees need to be willing to report customer complaints
to their supervisor so as to allow the firm to pursue effective service recovery attempts (Luria et al., 2009). In third, whereas
few marketing studies focus on how cross-level interactions between actors from different organizational levels shape
organizational effectiveness in terms of more effective strategy implementation (Wieseke et al., 2009), this study adopts a
multilevel research design with nested data from both store managers and employees so as to provide a comprehensive
understanding the interactions associated with IMO adoption. This article is constructed in the following way. First, we
provide the theoretical background of the hypothesized relationships. Next, we establish our conceptual framework, analyse
the research design and present the results. Finally, the implications of our findings and provide some insights for future
research are discussed.
In reviewing the IM literature, several similarities with fit research emerge and it is surprising because these two areas
conceptually complement one another. IM and fit research constitute important organizational prerequisites for enhancing
employees performance (Lings and Greenley, 2010; Hofmann et al., 2011) and are associated with similar employee
behavioural consequences such as job satisfaction (Edwards and Cable, 2009; Tortosa et al., 2010) and OCBs (Bell and
Menguc, 2002). Both research streams not only underline the importance of focusing on employees needs and care for wellbeing during their organization life but also illustrate the importance of employees who embrace the organisations values as
their own (Bell and Menguc, 2002; Farrell and Oczkowski, 2009). In addition, studies within these two research streams
rarely address employee OCBs towards their employer or their colleagues (Bell et al., 2004; Farrell and Oczkowski, 2009).
419
Evidence from these two research fields is integrated in order to provide the theoretical underpinnings of our study; the fit
theory (Chatman, 1991) and the equity theory (Adams, 1963). Fit theory underlies our model in the sense that its basic
demarcation provides a meaningful way of assessing how fit with various aspects of the work environment influences
individuals behaviours (Kristoff, 1996). Although individuals often engage themselves into jobs that best match their
abilities and interests, due to changes in their working environment, they may find themselves in a miss-fit situation, which
causes stress and low job satisfaction (Locke, 1976). Organizations caring for employees needs and wants are more inclined
to recover employees congruence with their environment through IMO adoption either by re-establishing job satisfaction
(Gounaris, 2006) or by stressing a positive working environment through the formation of a supportive climate (Johnston et
al., 1990), great doses of empowerment (Gounaris, 2008) and effective communication through formal and informal
communication channels (Lings, 2004).
We also employ the equity theory which is based on the notion that employees evaluate their jobs by balancing their inputs
with their associated outputs (Adams, 1963). Inputs include effort on the job and compliance to organizational policies
whereas outputs include pay, benefits and rewards such as recognition for good work (Huseman and Hatfield, 1990). As a
consequence, organizations face the challenge of providing higher level of value for employees (Simberova, 2007) in order to
establish feelings of obligation, leading them to reciprocate with behaviours that benefit the organization (Dabholkar and
Abston, 2008). As IMO increases employees' perceptions of job-related value, we argue that the firms management should
focus on their needs and wants, as unless contact employees perceptions of outputs exceeds the level of inputs and they will
not respond reciprocally towards their employer by increasing their extra-role performance. Moreover, we propose that the
surplus of value delivered through IMO to contact employees will render them more susceptible to the adoption of behaviours
beneficial for the firm.
LITERATURE REVIEW AND MODEL DEVELOPMENT
Internal Marketing (IM) represents the firms philosophy to create and offer value for its internal market with the aim of
encouraging them to enact the firms external marketing objectives (Ahmed et al., 2003). Recent studies conceptualize
specific managerial behaviors associated with enacting this philosophy as a managerial philosophy which shapes effective
relationships between the companys employees and management based on a commitment to providing superior value for
employees, named IMO (Gounaris, 2006). IMO is associated with different managerial activities related to the generation of
information about employees, the provision of higher managerial support and direct communication between employees and
their supervisors (Lings and Greenley, 2005), making thus, employees realize their importance for organizational
effectiveness and encouraging their positive reciprocal response towards their employer (Bell et al., 2004). Our model
proposes supervisors IMO as a predictor of contact employees E-O fit (H2) and E-S fit (H4). In additions, the impact of
contact employees perceptions of IMO on E-O fit (H3) and E-S fit (H5) are also examined. Finally, the impact of the
aforementioned fit types and IMO on WRC is explored (H6-H8).
Supervisor IMO and employee outcomes
Although IMO implementation requires multilevel management to continuously align employees with organizational goals
(Gummesson, 1987), extant studies focus on single level perspectives (Lings and Greenley, 2010), ignoring whether
managers can influence employees perceptions of IMO, despite normative assessments suggesting that IMO adoption can
create positive employee-related consequences (Ahmed et al., 2003; Naude et al., 2003). This study argues that employees
perceptions of IMO can be enhanced on the basis of a social learning process. The social learning theory suggests that
individuals learn from others by observing their behaviour (Bandura, 1977) and acknowledges two types of learning:
experiential and vicarious learning (Huber, 1996). Experiential learning relates to the fact that individuals learn from the
consequences of their behaviour and thus, they are more likely to adopt behaviours that result in positive consequences
(Bandura, 1977). On the contrary, individuals can engage in vicarious learning by observing other individuals in order to be
able to deal with comparable tasks before engaging in a particular behaviour (Manz and Sims, 1981). Drawing from these
insights, we argue that managers with high IMO can exert normative influence on employees either by using their positional
power or by setting performance standards and rewards, so as the latter adopt behavioural patterns that result in positive
outcomes. Moreover, employees learning can also be vicariously actualized as branch managers are likely to serve as role
models for employees to emulate (Weiss, 1977; Davis and Luthans, 1980). As a consequence, employees develop similar
behavioral orientations. On these grounds, we suggest that supervisors IMO will enhance front-line employees perceptions
of IMO (H1).
420
Fit theory suggests positive employees attitudes due to higher congruence levels (O Reilly et al., 1991). At the heart of this
construct is the congruence between individual and organizational values (Judge and Bretz, 1992). Supervisors IMO through
the provision of higher organizational support can create a climate conducive for employees to embrace organizational values
as their own (Bell and Menguc, 2002) and enhance understanding of their role for organisational performance (Conduit and
Mavondo, 2001). Thus, we argue that supervisors IMO will raise employees E-O fit (H2). The implementation of an internal
marketing program can prove quite beneficial for employee-organization (E-O) fit as higher employees perceptions of IMO
assists them in developing a holistic view of the firms philosophy and instils them the organisation's values and culture
(Gronroos, 1990) through effective internal communication channels. Therefore, higher employees perceptions of IMO will
raise their E-O fit (H3).
Although traditional fit literature focuses on the E-O fit (Tak, 2011; Kristof- Brown et al., 2002), scholars also highlight the
importance of employee-supervisor (E-S) fit which concerns the match that occurs when they share common values and
characteristics (Kristof-Brown et al., 2005). Nevertheless, extant research ignores whether supervisors behaviour actually
produces better value fit or alignment with organizational goals (Ahmed and Rafiq, 2003; Ostroff et al., 2005). Supervisors
IMO is perceived by employees as being more committed to organizational values and mission (Tsai and Wu, 2011; Wieseke
et al., 2009) facilitating, therefore, their own adoption of organizational values (O'Reilly et al., 1991). Additionally,
supervisors support enhances their consistency with organizational values espoused by the supervisor, leading employees to
adopt behaviours that benefit the organization (OHara et al., 1991). Third, info exchange and ongoing feedback about
employees feelings towards their work between them and their supervisor raises employees job satisfaction (Gounaris,
2008) and reduces job uncertainty (Lings, 2004), increasing thus, their willingness to reciprocate the firm. Acknowledging
this evidence, we argue that supervisors IMO can raise employees E-S fit (H4).
The IMO framework encompasses formal and informal interactions between managers and employees. These interactions
require that supervisors pay attention to employees feelings towards their work, the benefits and their needs within their roles
and communicate this information throughout the organisational hierarchy in order for appropriate responses to be designed
and implemented (Lings and Greenley, 2010). As a result, IMO can enhance employees perceptions of value. Due to higher
value perceptions, employees perceptions of IMO are anticipated to enhance their reciprocal response with the adoption of a
value orientation congruent to their supervisors one. In this vein, we argue that higher employees perceptions of IMO can
raise their E-S fit (H5).
Drivers of willingness to report service complaints (WRC)
As failures are often in service encounters, contact employees need to engage in the service recovery process in order to
achieve successful service provision (Liao, 2007). Despite the value of traditional complaint management systems (Harris and
Ogbonna, 2006), several studies indicate that in retail services most of the customers who complain submit their complaints
only informally or to contact staff rather than to senior management (Voorhees et al., 2006; Harris and Ogbonna, 2010).
Therefore, contact employees must be not only adequately trained and supported (Homburg and Frst, 2005) but also
motivated and willing to report service complaints to their supervisor so as to allow the organization to pursue effective
service recovery attempts (Luria et al., 2009).
As contact employees are often averse to report complaints to their supervisors in a complete and accurate manner (Tax and
Brown, 1998), their behaviour can lead to the loss of important customer info. Therefore, the importance of employees WRC
is considered as a key driver of service recovery efforts (Luria et al., 2009). As the extant literature rarely provides
mechanisms which deal with customers informal complaints (Harris and Ogbonna, 2010; Luria et al., 2009), we propose
IMO as a mechanism that increases contact employees willingness to report service complaints. IMO adoption can motivate
employees to report complaints for several reasons. First, IMO enhances contact employees feelings of obligation towards
their employer by producing extra value for them (Simberova, 2007), leading them to reciprocate with behaviours that benefit
the organization. Second, higher level of organizational support through IMO adoption raises employees commitment to
customer service (Bell et al., 2004) and their effort in carrying out in-role responsibilities (Eisenberger et al., 2001) such as
complaint reporting. Higher managerial consideration in terms of supervisory support or increased interest about employees
needs and wants can lead to the engagement to extra-role activities that benefit the organization as a whole (Van Yperen et
al., 1999). Not surprisingly, thus, we hypothesize that IMO can positively enhance contact employees WRC (H6).
Employee-organization (E-O) fit is an important type of fit as it yields significant effects on a variety of employee-level
outcomes such as commitment and job performance (Kristof-Brown et al., 2005; Vilela et al., 2008). Previous studies indicate
that the more individuals fit into their organization, the more positive work-related outcomes will be achieved (Farrell and
421
Oczkowski, 2009; Netemeyer et al., 1997). Although E-O fit has recently been associated with some extra-role activity
(Vilela et al., 2008; Farrell and Oczkowski, 2009), no evidence exist investigating whether higher levels of E-O fit can
render contact employees more motivated to report customer complaints. Therefore, we advance the hypothesis that E-O fit
can positively enhance contact employees WRC (H7).
Despite the value of IMO for enhancing contact employees behaviours during service recovery (Bell et al., 2004), we also
highlight the importance of employee-supervisor (E-S) fit as an antecedent of employees WRC. In the process of value
internalization, E-S fit is critical for work effectiveness in the sense that supervisors act as role models (Maierhofer et al.,
2000) and influence subordinates who cognitively adopt their own value orientation by using information provided by them.
Within a retail context, supervisors act as representatives of the firms management and their manifestation of desired values
enhances employees value adoption (OReilly and Chatman, 1986). High E-S fit can enhance WRC by promoting
communication (van Vianen et al., 2004), as open info exchange among organizational levels establishes a common frame for
describing and interpreting events (Erdogan et al., 2004) which reduces the likelihood of misunderstandings. Given that a
lack of E-S fit may diminish contact employees motivation and commitment to provide feedback regarding to customers
complaints, we hypothesize that high level of E-S fit may enhance employees WRC (H8).
METHODOLOGY
To test the conceptual framework of our study we chose a retail service setting, considering that the specific context is
appropriate for exploring the employee-supervisor dyad, as supervisor constitutes the main linking pin between store
employees and top management. We totally obtained evidence from eighty nine stores of retail chains which operate in
Greece. In particular, we draw evidence from 89 from retail store supervisors through personal interviews and 417 contact
employees. A hierarchical research design is used with data obtained from supervisors and contact employees. Regarding our
samples demographic characteristics, the number of employees per retail store ranges from 10 to 16 and almost seven out of
ten contact employees were women; the average age was approximately 27 years old, 68% of them worked full-time while
the average tenure is about two years. All measures employed in this study were based on extensive review on the services
marketing and psychology literature. All constructs use a 7-point scale, with anchors of strongly disagree (1) and strongly
agree (7). Supervisors report on IMO, whereas employees sample provides evidence for the IMO, E-O fit, E-S fit and WRC
constructs. The IMO scale is adapted from Gounaris (2006) scale, whereas the E-O fit construct was measured based on
Netemeyer et al.s four-item (1997) scale. For assessing E-S fit, Hofmanns et al. (2011) three-item scale was used.
Subjective fit measures are used for E-S and E-O fit, as scholars argue that they have better predictability than objective fit
measures have (Kristof-Brown et al., 2005). Finally, WRC is adapted from Luria et al. (2009).
Given the nature of our data, a multilevel approach is necessary to test our hypothesized relationships (Raudenbush and Bryk,
2002) with the use of the HLM software. First, we estimated an intra-class correlation coefficient (ICC) which represents the
amount of variation in an outcome variable due to the store as opposed to another data level. The levels reported in table I
tend to be typical of those reported for data aggregation. Table I above reports on descriptive statistics and internal
consistency reliabilities. All the measurement scales have reliability indices that exceed the 0.70 threshold and average
variance extracted that is greater than 0.50 (Fornell and Larcker, 1981). Additionally, CFI and TLI indices exceed the 0.90
threshold while the RMSEA index is lower than 0.08 for all studys measures as Hu and Bentler (1999) suggest. Table II
presents intercorrelations of all studys variables.
Four HLM models were performed in order to verify the hypothesized effects. To justify the use of higher-level predictors,
we ran four null models to determine whether there was significant between-group variation. These null models are interceptonly models in which no predictors are selected for higher levels of analysis. For each model we first estimated the null
model with no predictors at either level-1 or level-2 in order to partition the variance into within and between-stores
components for each of the dependent variables (Raudenbush and Bryk, 2002).The results reveal significant between branch
variance for all dependent variables; employee IMO (x2=1103.77, p<.01) E-O fit (x2=1754.71, p<.01), E-S fit (x2=1438.88
p<.01) and WRC (x2=1776.82, p<.01).
Table III provides an overview of the results of the HLM models. Concerning cross-level effects, we find strong support for
the supervisor IMO-employee IMO relationship (=.63, p<.01) and thus hypothesis H1 is verified. Results also suggest that
supervisor IMO significantly predicts employee E-O fit (=.54, p<.01), in support of hypothesis H2. Furthermore, hypothesis
H3 is supported, as supervisor IMO also predicts employee E-S fit (=.63, p<.05). Regarding employee-level effects, findings
422
indicate that individual IMO significantly accounts for both E-O fit (=.66, p<.01) and E-S fit (=.40, p<.05), supporting thus
hypotheses H4 and H5. Additionally, individual IMO is positively related to WRC (=.37, p<.01), in support of hypotheses
H6. E-S fit (=.47, p<.05) also E-O fit (=.28, p<.01) both come up as drivers of employees willingness to report service
complaints, supporting, thus, hypotheses H7 and H8.
DISCUSSION
This study intends to be a key step in bringing IM and fit research together and adds significantly by suggesting IMO as a
mechanism which can raise employees fit with their environment and encourage their reciprocal response towards their
organization. Against traditional IM background which focuses at the single level of analysis and ignores the role of crosslevel influences for IMO implementation in retail settings (Tortosa et al., 2010), we formally include IMO into multilevel
marketing research and provide an important shift for extant research by arguing that store supervisors IMO stresses several
positive employee consequences. This study is the first one that acknowledges the importance of supervisors pivotal role for
enhancing employees responsiveness to the firms internal marketing initiatives. We posit store supervisors at the heart of
the IMO implementation process, given that their role modelling behaviour is a prerequisite for enhancing employees
adoption of organizational goals and values.
From a theoretical view, we extend fit theory by establishing IMO as a key organizational mechanism for recovering or
increasing employees fit with their environment. In this vein, we extend present knowledge by suggesting that IMO
increases employees fit with their organization and their supervisor. Given that both individual and supervisor IMO account
for contact employees E-O fit, two issues emerge. First, the role of cross-level interactions for effective strategy
implementation within a retail management setting; second, diffusing IMO constitutes a prerequisite for better employees fit
with their environment. Employees fit with the organization appears to be influenced by supervisors IMO, indicating thus,
their mediating role for the diffusion of organizational values across lower management levels. The positive impact of
supervisors IMO on E-S fit indicates that retail supervisors also shape employees perceptions of fit with their environment,
as their manifested congruence with organizational values and mission inspires employees to adopt similar value patterns.
Another gain of IMO that emerges from our findings is related to employees complaint reporting. Given the value of
information contained in informal complaints that customers present directly to contact employees (Harris and Ogbonna,
2010), we propose IMO as a mechanism which will eventually render employees more informative and will motivate them to
report critical service incidents to their supervisor. However, it appears that front-line staffs motivation to report complaints
also depends on their perceptions of fit with their supervisor. Although reporting complaints is considered as an in-role
expectation, a lack of E-S fit diminishes their willingness to report problems they encounter keeping management in the dark
about emerging service failures. This finding can perhaps be explained by the fact that employees WRC is not an automatic
response to organizational directives but is influenced by the degree that employees perceptions are congruent with
supervisors ones in terms of a similar value orientation.
The findings of this study have serious implications for practitioners. Considering that supervisors level of IMO accounts for
a significant portion of contact employee perceptions of IMO, it is imperative that top management must first sell the
organization itself especially to middle level managers before implementing an IM program across the whole firm. Therefore,
training programs pertained to IMO implementation should prelude for store managers and only after they have adopted IMO
philosophy should IMO implementation be cultivated across contact employees. Another major implication for practitioners
stemming from our study is related to the importance of IMO as a mechanism which can actually increase employees fit with
their environment. In departing from the view that managers can mainly achieve fit into their organization and avoid misfit
and high turnover rates by carefully attracting and selecting individuals (Van Vianen, 2000), we argue that internal marketing
programs can be employed as a tool for helping employees to embrace organizational values and achieve better fit with their
supervisor. Our findings also suggest some employees beneficial behaviours towards the firm and their supervisor as
outcomes from IMO adoption. Given the importance of service recovery in some settings, managers should take into account
that IMO increases employees willingness to report service complaints to their immediate supervisor. Such willingness
needs to be fostered but cannot be taken for granted. Managers should be encouraged to establish informal communication
channels and mechanisms for obtaining customer informal complaints and act to improve service based on such data.
Practically speaking, store supervisors by displaying a better understanding of employees wants and needs of employees and
providing more support, they will add value for subordinates with the aim of reciprocating towards the firm with different
ways.
LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH
As with all research, our study has some limitations that restrict its interpretation and generalizability. First, this study ignores
the impact of other organizational policies and practices on employees and only assesses the effect of IMO adoption. Second,
our framework features only supervisors impact on contact employees, ignoring, thus, the importance of work group
423
socialization or other individual characteristics for employees fit with their environment. Additional research is necessary to
identify whether different individual characteristics and background influence employees fit with their organization or their
supervisor. In conclusion, the results presented in this study clearly suggest an important first step in understanding the
importance of IMO adoption for employees better fit with their environment. Moreover, we add significantly to the extant
literature by providing some evidence regarding the role of IMO for enhancing employees reciprocal behaviours towards
their firm.
TABLES
Table I Means, Standard Deviation
Mean
4.38
S_IMO
3.91
E_IMO
4.21
E-O FIT
4.48
E-S FIT
4.60
WRC
SD
.83
.90
1.08
1.04
1.13
CFI
.941
.928
.998
.991
TLI
.924
.909
.989
.982
RMSEA
.029
.014
.002
.036
A
.967
.952
.709
.778
.896
ICC
.442
.481
.576
.528
.595
Table II - Correlation Matrix

E_IMO
E-O FIT
E-S FIT
WRC
Table III HLM Results
Model
(dependent)
Intercept (SE)
E_IMO
1
642**
.607**
.458**
E-O FIT
E-S FIT
WRC
1
.608**
.527**
1
.796**
Model 1
E_IMO
3.57** (.03)
Model 2
Model 3
Model 4
E-O FIT
E-S FIT
WRC
4.18** (.06)
4.64** (.06)
4.63** (.08)
(SE)
.63** (.04)
.54** (.07)
.63* (.09)
S_IMO
.66** (.05)
.40* (.08)
.37** (.07)
E_IMO
.47* (.05)
E-O FIT
.28** (.06)
E-S FIT
453.52
756.18
652.96
764.57
Model Deviance
**= p<.01, *= p<.05. E_IMO=contact employee IMO, S_IMO= supervisor IMO, E-O fit= employee-organization fit, E-S
fit= employee-supervisor fit, WRC= willingness to report service complaints.
FIGURES
Supervisor Level (2)
H2
Employee Level (1)
Employeeorganization fit
H7
H3
Internal
Market
Orientation
H1
Internal
Market
Orientation
H6
H5
H4
Employeesupervisor fit
H8
424
Employee willingness to
report complaints
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CUSTOMER BARGAINING IN RETAIL SETTINGS: EMPLOYEE PERSPECTIVES

Stephanie T. Gillison, University of Tennessee at Chattanooga, USA
William Magnus Northington, University of Alabama, USA
Sharon E. Beatty, University of Alabama, USA
INTRODUCTION
Bartering, bargaining, and haggling have long been a mainstream practice in many cultures and for certain retail segments
such as car, furniture, and electronic retailers. The phenomena have been studied in the context of economics and game
theory, business-to-business relationships such as supply chain networks, cross cultural differences of the focal behaviors,
and overall marketing strategy. However, generally ignored dimensions have been the emotional aspects of bargaining and
haggling on front line employees in traditional retail segments, where these practices are not generally accepted or used. It is
especially important to study this phenomenon in traditional retail settings because in this setting neither the employee nor
the customer is generally well equipped with the skills necessary to engage in these behaviors in a productive manner, which
may lead to increased feelings of stress, conflict, anxiety, tension, unhappiness, and job dissatisfaction for the front line
employee. Many consumers have been encouraged by wide-spread news and media stories promoting the practice (e.g.,
National Public Radio (Siegel 2008), NBCs The Today Show (Weisbaum 2009)). Additionally, The New York Times
(Richtel 2008) and Consumer Reports (2009) have also reported that customer bargaining, or instances when the customer
asks the front line employee for a discount or other special deal, is on the rise. While it may be beneficial to both the
bargaining consumer and to the retailer as a whole to haggle over prices and bargain for special deals for the purchase of the
product, this practice may be emotionally exhausting and challenging for many front line employees. In this paper, the
bargaining/haggling phenomenon is investigated from the retail employees perspective in order to better understand the
impact these practices have on front line employees.
MODEL DEVELOPMENT
The role of customer bargaining is important for retailers to understand because it may be very laborious for front line
employees, which may result in negative affect and a decrease in the degree to which the employee will work with the
customer during the bargaining encounter. Based on previous research along with 21 qualitative in-depth interviews with
front line retail employees about customer bargaining (not discussed further here), we develop a model of the customer
bargaining process and its impact on front line employees.
During the qualitative study, several individual traits of the employee seemed to impact how comfortable the employee felt
with the customers bargaining. Comfort with handling the bargaining request is defined as the degree to which the front line
employee feels secure in handling the customers bargaining request. We found that differences in how comfortable the
employees feel handling the customers request based on their opinions of the companys policy toward customer bargaining
such that when the employee did not agree with their companys policy toward bargaining, they felt less comfortable
handling bargaining requests. Similarly, the employees own general feelings about customers who bargain appears to affect
their comfort with handling these requests such that the more the employee dislikes customers who bargain in general, the
less comfortable s/he will be handling these requests.
H1a: As employees opinions on the companys policy on customer bargaining become more positive, comfort with
handling customer bargaining requests increases.
H1b: As employees general feelings toward bargaining increase, comfort with handling customer bargaining
requests increases.
Self-efficacy reflects a persons belief that s/he can perform or attain certain job-related goals (Bandura 1977) and has been
shown to impact the quality of service provided by front line service employees (Hartline and Ferrell 1996). Similarly, in
regard to dealing with customer bargaining requests, we propose that as the front line employees self-efficacy increases, s/he
will be more comfortable dealing with customer bargaining requests.
H1c: As employees self-efficacy increases, comfort with handling customer bargaining requests increases.
Several company-related factors affecting how comfortable the employee is with customer bargaining requests also emerged
in our qualitative study. First, we found that empowerment, or power given by the employer to the employee to use his/her
428
own judgment in decision making (Honold 1997; Vogt and Murrel 1990), can affect how comfortable employees are with
handling bargaining requests. Our interviews revealed that many companies empower their employees to handle bargaining
requests, however, not all employees are comfortable engaging in these empowerment behaviors due to personal and/or
organizational characteristics. Therefore, as the employees comfort with empowerment in general increases, so should their
comfort with handling bargain requests.
H2a: As employees comfort level with empowerment increases, comfort with handling customer bargaining
requests increases.
When customers engage in bargaining behavior, we find instances of role ambiguity resulting because the employee is
uncertain about their role as a salesperson. Traditionally, the role of the front line employee is to provide customers with
knowledge about a product and to sell the product to the customer for the price posted. When the customer bargains with the
employee, s/he is requesting that the employee act outside of their normal capacity by setting new prices for products. Thus,
the bargaining event may cause role ambiguity for the employee over his/her role, which may decrease how comfortable s/he
feels with the bargaining request.
H2b: As employees role ambiguity increases, comfort with handling customer bargaining requests decreases
The depth interviews also revealed that the front-line employee may experience negative affect, or feelings, associated with
customer bargaining. When employees are uncomfortable accommodating the customers request, they may experience
negative affect because they may find the experience unpleasant or distressing.
H3: As employees comfort with handling customer bargaining requests increases, employee negative affect
decreases.
In addition to the impact of the employees comfort with handling bargaining requests may have on affect, the customer
themselves may impact the employees affect. First, our interviews reveal that when customers approach the employee in
calm and unassertive manner, the employee is more likely to listen to and understand the customers request, however when
the customer is dominant, or approaches the front line employee in an assertive manner, the employee may refuse to
accommodate the customer and have negative feelings as a result. Thus, we propose that as the customers dominance
increases, the employees negative affect will increase.
H4a: As customer dominance increases, employee negative affect increases.
Our interviews also revealed that how reasonable the customers request seems to the employee and how the customer
handles him/herself after the employee tells the customer whether s/he can accommodate the request may also influence
employee negative affect. For example, in the interviews, when the customer had what the employee felt was an unreasonable
request, such as simply wanting a discount with no reason provided, the employee reported more negative feelings associated
with the encounter, perhaps because s/he felt put on the spot by the customer. Similarly, after the customer made the
request and the employee told the customer whether or not s/he could accommodate the request, the customers reaction also
impacted the employees feelings. For example, in cases where the employee could not give in to the request and the
customer reacted negatively as a result, the employee left the encounter with greater negative feelings, usually both because
s/he could not help the customer and because the customer had behaved poorly toward the employee, therefore:
H4b: As the reasonableness of the customers request increases, employee negative affect decreases.
If the employee experiences negative emotions during the bargaining encounter, s/he may be less likely to work with the
customer to come to an mutually agreeable deal or discount. The employees felt negative affect may also impact the degree
to which s/he will comply with, or give in to, the customers bargaining request.
H5: As employee negative affect decreases, employee compliance with the bargaining request increases.
METHOD
In order to test the proposed hypotheses, a survey of retail employees was conducted. Respondents were recruited by students
enrolled in a marketing class at a large university. Respondents were provided a URL to the online survey. The total sample
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size after removing cases with large amounts of missing data was 249. The survey asked respondents to recall a time that a
customer asked them for a discount or other type of special deal. First respondents answered open-ended questions about the
encounter to encourage more vivid recall of the event. Next respondents answered scale questions for the focal constructs in
the study. The open-ended responses were independently coded by two of the researchers for the employee policy opinion,
general feelings toward bargainers, and employee compliance with the bargaining request variables. Scale items were used
for the remaining variables. (Note: additional sample details and scale analysis results are presented at the conference,
however, are not discussed due to space limitations.)
RESULTS, DISCUSSION, AND IMPLICATIONS
The proposed model was tested using hierarchical linear regression. The results are presented in the table below.
The results show that how the employee feels about the companys policy regarding customer bargaining, how the employee
feels in general about customers who bargain, and the employees self efficacy impact how comfortable s/he feel in handling
bargain requests, all of which retailers can attempt to control in order to increase employee comfort with these requests. For
example, retail managers could train employees on how to handle these specific requests in order to increase the employees
felt self efficacy, which may increase the employees level of comfort with customers who bargain. In addition, retail
managers might attempt to make employees feel more positive about the companys policy regarding bargaining and
customers who bargain in order to increase the employees comfort level handling these requests.
The results also show that when employees are uncomfortable handling customer requests and when customers are
dominating in their approach with the employee, employees experience negative affect. This negative affect leads to
decreased compliance with the bargaining request. [Note: We also tested the mediating relationship among employee comfort
with customer bargaining requests, employee negative affect, and employee compliance with bargaining requests using the
Baron and Kenny (1986) four step test for mediation. The results show that the relationship between comfort with bargaining
requests and employee compliance with bargaining requests is fully mediated by negative affect.] While not directly tested,
we might infer that this decrease in compliance could be perceived by the customer as a potential service failure, which may
lead to customer dissatisfaction. This negative affect on the employees part may also negatively influence their interactions
with future customers and in the long-term may also impact their overall job satisfaction and commitment.
These results provide an initial look at how front line employees feel about and react to customer bargaining. This research
expands our understanding of bargaining and haggling behavior in several ways. First, while the phenomenon has been
studied in contexts such as automobile and appliance sales where the practice is widely accepted and practiced, we study the
impact of bargaining in traditional retail settings where the consequences of bargaining has not been studied. Here, we gain
insight into some of the factors that can impact how comfortable employees are with handling customer bargaining requests.
Second, we explore the impact of customer bargaining on front line employees. We find that, overall, these customer actions
cause front line employees to experience negative emotions, which in turn impacts the employees compliance with the
request.
TABLES
Table 1.
Hypothesis
H1 & H2
Dependent Variable: Comfort with Bargaining Requests
F = 14.831***
R2 = 0.234
H1a: Policy Opinion
H1b: General Feeling Toward Bargainers
H1c: Self Efficacy
H2a: Comfort with Empowerment
H2b: Role Ambiguity
H3 & H4
Dependent Variable: Negative Affect
F = 42.257***
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Conclusion
0.112*
0.245***
0.337***
0.077 p=0.228
0.001 p=0.991
Supported
Supported
Supported
Not Supported
Not Supported
R2 = 0.341
H3: Comfort with Bargaining Requests

H4a: Customer Dominance
H4b: Request Reasonableness
H5
Dependent Variable: Compliance with the Bargaining Request
F = 11.003**
R2 = 0.043
H5: Negative Affect
* p < 0.05, ** p < 0.01, *** p < 0.001
-0.425***
0.309***
-0.031 p=0.615
Supported
Supported
Not Supported
-0.207**
Supported
FIGURES
Figure 1.
Employee Factors
Policy opinion
General feelings toward
bargainers
Company
Factors
Self efficacy
Comfort with empowerment
Role ambiguity (-)
Customer Factors
Request reasonableness
Customer dominance
H1
H2
Employee Comfort
with Customer
Bargaining
Requests
H3
Employee Affect
Negative affect (-)
H4
H5
Outcomes
Employee compliance
with bargaining
request
REFERENCES
Bandura, A. (1977). Self-efficacy: Toward a unifying theory of behavioral change. Psychological Review, 84(2), 191-215.
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research:
Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51, 1173-1182.
Consumer Reports. (2009). When bargaining pays off. Consumer Reports, 74(8), 11.
Hartline, M. D. and Ferrell, O. C. (1996). The management of customer-contact service employees: An empirical
investigation. Journal of Marketing, 60(4), 52-70.
Honold, L. (1997). A review of the literature on employee empowerment. Empowerment in Organizations, 5(4), 202-212.
Richtel, M. (2008). Even at megastores, hagglers find no price is set in stone. The New York Times, March 23, 2008.
Siegel, R. (2008). Bartering gains steam. National Public Radio, July 16, 2008.
Vogt, J. F. and Murrell, K. L. (1990). Empowerment in organizations: how to spark exceptional performance. San Diego:
University Associates.
Weisbaum, H. (2009). The art of haggling is making a comeback. The Today Show, April 15, 2009.
431
ANTECEDENTS AND CONSEQUENCES OF CLIMATE FOR RETAIL SERVICE

INNOVATION: A MULTILEVEL INVESTIGATION
George D. Deitz, The University of Memphis, US
Emin Babakus, The University of Memphis, US
INTRODUCTION
With heightened competition and an uncertain economic environment, many organizations are adopting team-based
structures to better compete and survive (Sundstrom 1999). In particular, observers have noted the importance of semiautonomous frontline employee (FLE) teams as being critical to service organizations efforts to generate, test and implement
successful innovations. While such efforts have rapidly become cornerstones of organizational change, managers are
simultaneously charged with cost-cutting dictums aimed at streamlining how work is performed and encouraging employees
to adhere to consistent sets of procedures. It follows that managers at all levels greatly desire better understanding of the
mechanisms that enable the organization to efficiently diffuse and embed successful work practices in a manner that does not
detract from the ability of its constituent teams and employees to develop novel, value-creating solutions.
The development and diffusion of new organizational routines depends jointly upon formal and informal mechanisms. On
the one side, the implementation of proven corporate policies and practices, in part through formal HRM systems, enables
organizations to more easily replicate existing organizational know-how. On the other side, effective implementation of this
know-how, particularly in boundary spanning work units, often relies on values-laden, informal mechanisms that encourage
teamwork and engender commitment to the organization. While strategic HRM initiatives can certainly facilitate
establishment of favorable workplace practices, research in the area of organizational climate shows that the perceptions,
attitudes and opinions of peers may play a much stronger role in the formation of positive attitudes and behaviors.
In this study, we examine psychological (individual level) and organizational (store level) climate for retail service
innovation as an indicator of the capacity of retail organizations to innovate from the bottom up. That is, climate for retail
service innovation represents the degree of support and encouragement a retail organization provides its employees to take
initiative and explore innovative approaches.
Conceptual Development
An area of keen interest to organizational researchers over the past decade has been the notion of organizational climate,
defined as employee perceptions of the practices, procedures, and behaviors that get rewarded, supported, and are expected
within an organization. Schneider and Reichers' (1983) assert that it is meaningless to apply the concept of climate without a
particular referent, thus more recent work has moved away from molar conceptualizations of climate to more specific forms
(e.g. a climate for organizational justice, workplace safety, etc.).
A second important distinction has been made between psychological climate and organizational climate (James and Jones
1974). Psychological climate represents an individuals cognitive appraisals, social constructions and sense making of the
organizational context and can be idiosyncratic. These perceptions are based on cognitive schemas arising from members
knowledge structures and value systems (Burke, Borucki & Hurley 1992), which are subsequently applied by individuals to
appraise elements of their work environment. Thus, psychological climate helps employees to determine what behavior is
appropriate in a given work context and serves as a benchmark in molding employee behavior toward the overall standards
and goals of the organization.
When some consensus exists among employees within a work-unit regarding their climate perceptions, organizational climate
is said to emerge at the organizational level. These climate perceptions shape employees inferences about what the
organization is like in terms of how it goes about its daily business and the goals that the organization pursues. Perspectives
such as information processing (Salancik & Pfeffer 1978), socialization (Ostroff & Kozlowski 1992), and attractionselection-attrition (Schneider 1975) provide the theoretical underpinnings for the bottom-up emergence (Kozlowski & Klein
2000) of these shared climate perceptions.
In the present study, we conceptualize climate for retail service innovation (hereafter, CRSI) as a multi-faceted construct that
exists at both the individual (psychological) and unit (organizational) levels. West (1990) broadly defined a climate for
innovation in terms of four dimensions:
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x
x
x
x
Vision is an idea of a valued outcome which represents a higher order goal and a motivating force at work.
Participative safety relates to active involvement in group interactions, wherein members feel able to propose new
ideas and solutions in a non-judgmental climate.
Task orientation represents a shared concern with excellence of quality of task performance, characterized by
evaluations, modifications, and critical appraisals.
Support for innovation reflects the expectation, approval and practical support of attempts to introduce improved
ways of doing things in the work environment.
While we borrow from Wests (1990) four-facet framework, our conceptualization more narrowly focuses on innovations
aimed at enhancing retail customers service experiences. We speculate that stores with stronger CRSI are more likely to
facilitate employees innate abilities to adapt to different customer needs as well as to changes in individual customer
demands over time (Merlo et al. 2006). Such work environments are expected to stimulate pro-social employee behaviors in a
manner that enhance customer satisfaction, retention, and relationship growth (Gilson et al. 2005). Thus, we predict:
H1: Store climate for service innovation will be positively associated with growth in same store sales.
Linking High Performance Work Practices with Psychological CRSI
As increased global competition in many markets has resulted in more rapid erosion of advantages based upon technological
innovations, practitioners and scholars have shown great interest in examining how firms may achieve and sustain
competitive advantages through aligning human resource policies and practices with the strategic aims of the organization. In
particular, SHRM research has examined the influence of high-performance work systems (HPWS) on organizational
performance. HPWS describes a system of HR practices designed to enhance employees skills, commitment and
productivity in such a way that employees become a source of competitive advantage (Dutta, Guthrie and Wright 2005, p.
136).
In keeping with recent conceptual advances in the SHRM literature, the present study categorizes HPWS components into
three broad classes. Policies and practices aimed at:
x
x
x
Improving employing knowledge, skills, and abilities (KSAs)

Enhancing employee motivation
Providing more participative work structures
It is expected that the retailers HPWS will provide FLEs with the requisite knowledge, skills, motivation and opportunity to
needed to deftly adapt their service delivery to meet the unique demands of customers as well as to come up with new ideas
that enhance the efficiency of the retail operation. As a result, we expect that FLEs experience of the three HPWS practice
categories will be positively associated with their psychological climate for service innovation.
H2a-c: Experienced HPWS will be positively associated with FLE perceptions of retailer climate for service
innovation. Specifically, FLE perceptions of the quality of (a) training programs, (b) appraisal systems, and (c)
employee voice will be positively associated with individuals perceptions of psychological climate for service
innovation.
Given that HPWS practices may not be universally applied or received across employees or work units, however, we also
expect that the strength of these relationships may vary across store branches. Specifically, in this study, we consider the
influence of the retail store manager. Even though work-unit managers are typically charged with implementing HPWS
practices and establishing favorable work environments, little research has sought to formally examine the influence of
managers, either in directing HPWS outcomes or in strengthening climate perceptions.
Store managers with longer tenure should have much greater experience in effectively implementing corporate training
programs in a manner that supports store-specific objectives. Similarly, over time, managers gain a better understanding of
how to motivate employees and reinforce positive behaviors through regular performance appraisals. On the other hand,
longer tenured managers may be less likely to solicit and implement ideas from subordinates with much less professional and
organizational experience. Thus, we propose:
433
H3a-c: Store manager organizational tenure will moderate the effects of HR practices upon individuals perceptions
of retailer climate for service innovation. Specifically, the effects of FLE perceptions of (a) training programs and
(b) appraisal systems upon individuals perceptions of retailer climate for service innovation will be stronger in
stores with longer tenured managers. Conversely, the effects of FLE perceptions of (c) employee voice upon
individuals perceptions of retailer climate for service innovation will be weaker for stores with longer tenured
managers.
METHODOLOGY
Data for this study were collected as part of a comprehensive employee and customer survey sponsored by a national retail
chain. The questionnaire was designed jointly by a research team made up of academics and a management team headed by
the retailers SVP of HR. Store managers distributed 8,500 questionnaires to frontline employees in 1,200 stores across 25
states. Employees were assured of confidentiality and could respond anonymously during work hours by keying in their
responses via the companys intranet system. After a 3-week period, 6,575 usable employee responses (77% within-level
response rate) were obtained with an average of around 5 per store. A comparison of the sample profile to company records
indicated that the sample was representative of the population of frontline employees. There was sufficient employee and
customer data from 1133 stores for a 94% between-level response rate.
Likert-type scales were used to measure all latent constructs. All items were drawn from established scales and modified for
the retail service context. In addition, several study measures were drawn from the corporate archives. Same store sales
growth was assessed by measuring the percentage sales revenue growth over the five quarters following survey data
collection (i.e., (Q5-Q1)/Q1). Organizational tenure was assessed by the log of the number of days the employee had been
with the organization at the time of survey completion. Store competitive intensity, a control variable, was measured based
upon a weighted measure of the number of rival stores at various concentric distances from the focal store.
Since between-level components can have a different meaning than the within- components, the same factor structure as seen
in L1 cannot automatically be expected at L2. Thus, measurement soundness was assessed following the four-step procedure
established by Muthen (1989). Following evaluation of a total, within-only, and between-only CFAs, we conducted a
multilevel CFA. As model fit was acceptable in light of accepted standards [2(40) =226.4, p < .01; CFI = 0.993; RMSEA =
0.027 ; SRMR (Within) = 0.016; SRMR (Between) = 0.017], we proceeded with assessing our hypotheses via a multilevel
structural model.
In light of commonly accepted standards, the proposed random intercept (for the CRSI items) structural model provides a
better than adequate fit to the data (Satorra-Bentler 2(30) = 206.8, p < .01; RMSEA = 0.034; CFI = 0.984; SRMR-Within =
0.014; SRMR-Between = 0.016). All reported parameter estimates are non-standardized. Examination of within level
covariate results showed that demographic factors such as FLE age ( = 0.119, p < .001), FLE tenure ( = -0.053, p < .001),
and FLE gender ( = 0.037, p < .05) were significantly related to FLE psychological CRSI. At the between-store level, we
found that store competitive intensity was negatively associated with same store sales growth, confirming the notion that the
level of possible store sales performance over a given year is constrained by the number of rival stores within close
geographic proximity ( = -0.002, p < .01).
Store (organizational) CRSI was positively related to growth in same store sales ( = 0.01, p < .05), conferring H1. In
examining the effects of HPW practices upon individuals climate perceptions, we found that training ( = 0.30, p < .05),
appraisal ( = 0.13, p < .05), and employee voice ( = 0.18, p < .05) were all positively related to FLEs psychological CRSI.
These results lend strong support for our proposed H2a-c. R2 values for the dependent variables were .50 for within-level
CRSI and .02 for between-level same store sales growth.
In order to test the cross-level moderation effects of store manager tenure upon the relationships between HPW practices and
FLE psychological climate, we re-specified the model to allow for the three within-store (level 1) slopes relating to HPW
practices to vary randomly between (level 2) stores. As the study is interested in HPW as a system of HR practices as
opposed to simply the individual practices in isolation, the relationships between store manager tenure and each of the three
random slopes were tested simultaneously. To reduce computational intensity, composites were created and utilized for each
of the HPW practices in testing the moderation model. The direct relationship between store manager tenure and store CRSI
434
was included in the between model and was significant ( = -0.08, p < .01). Results from the analysis show a significant
positive interaction between training and store manager tenure ( = 0.04, p < .05), supporting H3a. However, the expected
positive interaction between appraisal and store manager tenure proposed in H3b was non-significant ( = 0.01, p < .84).
Finally, the negative interaction advanced in H3c between employee voice and store manager tenure was significant ( = 0.04, p < .05).
This study makes three major contributions. First, the paper conceptually distinguishes the climate for service innovation
construct and establishes linkages between store level climate for service innovation and improved store financial
performance. Second, the paper responds to Ostroff and Bowens (2000) call for a multilevel approach to understanding the
HPWS performance relationship. By adopting a multilevel perspective this study effectively captures the emergent nature of
organizational climate, such that individual and organizational characteristics combine to influence and individual and
organizational outcomes (Kozlowski and Klein 2000). Specifically, our model makes a novel contribution by simultaneously
examining the role of HPW practices in forging individual FLE psychological climate perceptions as well as establishing the
extent to which a consensus within a given work unit on such perceptions can lead to improved store financial performance.
Finally, the research distinguishes how one key retail manager characteristic, organizational tenure, differentially influences
the effectiveness of HPW practices in driving climate perceptions. Given the central role retail store managers play in
implementing corporate strategic directives, such as HPW practices, future work may extend upon this study by integrating
other managerial characteristics or employee outcomes.
REFERENCES
435
RETAILER SUCCESS: VALUE AND SATISFACTION

Kevin James, Indiana State University, USA
Barry J. Babin, Louisiana Tech University, USA
INTRODUCTION
A finite number of core elements characterize every discipline. What are the core concepts of marketing? Among marketing
outcomes, consumer satisfaction represents a candidate for a core marketing concept. In many cases, marketing practitioners
and academicians alike treat the concept as a catch-all term that captures the entirety of consumer results from consumption
(Dixon, Freeman, and Toman 2010). The expectancy-disconfirmation model provides marketers with a deep understanding of
how expectations align with current performance outcomes to arrive at a level of satisfaction (Oliver 1980; Garnesh, Arnold,
and Reynolds 2000). In fact, marketing authors present research into a vast number of satisfaction topics including the gaps
model (Zeithaml, Berry, and Parasuraman 1993), satisfied switchers (Maxham and Netemeyer 2002), and an index termed the
American Customer Satisfaction Index, which remains a critical measuring stick for marketing performance for many U.S.
companies (Fornell 1992).
Despite the richness of the satisfaction concept, many companies and authors find evidence that merely satisfying the
customer might not be enough to excel (Fredrick 2003; Balabanis, Reynolds, and Simintiras 2006; Dahlsten 2003). The
evidence suggests that all too often companies try to retrofit current practice to fit an outdated customer model (Dahlsten
2003). Marketing research also fails to identify a consistent relationship between satisfaction and important outcomes. Some
evidence argues against a linear relationship suggesting that the relationship between satisfaction and loyalty is nonlinear
(Fredrick 2003; Balabanis, Reynolds, and Simintiras, 2006). Volvo Motor Company actually discovered a negative
relationship between their customers reported satisfaction levels and loyalty to Volvo suggesting that high satisfaction may
not be as vital to success as once thought (Dahlsten 2003).
Among other potential core concepts, value emerges as a contender for paramount importance. Holbrook (1994), Woodruff
(1997), Zeithaml (1988), Woodall (2003) and Babin et al. (1994) emphasize value as the definitive outcome from marketing
exchange and consumption. These studies range from the purely conceptual in nature to studies including empirical results.
The emerging value theory distinguishes value as an outcome and emphasizes that assessing value prior to consumption
captures something that is not exactly value itself.
Vargo and Lusch (2004) present a service-dominant logic (SDL) paradigm that positions value-in-use as a dominant
marketing concept requiring more attention as the key marketing outcome variable. SDL positions value as the result of a
company doing something for the benefit of another, in other words, value results from serving a customer well (Vargo and
Lusch 2004, 2006). SDL integrates the relationship marketing literature (Morgan and Hunt 1994) and the customerorientation literature (Narver and Slater 1990). Thus, the relative efficacy of value-in-use and consumer satisfaction is the
focus of this research. If valuing something a firm does for a customer is the dominant outcome variable in marketing for the
21st century, marketing academicians and practitioners alike will benefit from a thorough conceptual evaluation and empirical
investigation to clarify and validate value-in-use as perhaps the focal point of marketing activities. The overarching research
question this work attempts to answer is what is the key driver of loyalty and performance? Is it customer value in use or
customer satisfaction?
Zeithaml (1988) recognizes consumers have multiple goals. She differentiates between get versus give trade-offs and between
perceived quality and price, as well as the intrinsic and/or extrinsic benefits that derive. Multiple sources of costs exist
beyond price. Four different views of value result from laddering are: (1) Low price (2) What I want the benefits (3)
Quality for price (4) Get-for-give ratio of attributes weighted by evaluations divided by price weighted by evaluation.
Perceived value is the consumers overall assessment of the utility of a product based on perceptions of what is received and
what is givena tradeoff of the salient give and get components. Further, value lies at a high level of abstraction. Value is
more personal, and thus subjective.
Babin and Harris (2009) and Babin and James (2010) present value as all the customer gets minus all the customer gives. In
this simple get versus give tradeoff, the greater the customer involvement with a project, the greater the chances the customer
will derive more from the get component, all things being equal. If a customer enjoys a task and thus feels prestige or
nostalgia from the purchase or use of a product, the customer then is deriving added value from the task. Thus, the customer
receiving emotional benefits can enhance the get components beyond simple ease-of-use features. This work defines overall
436
customer value as a get versus give trade-off from the customers perspective. In other words, what is the net gratification
obtained from the consumption of service?
Babin, Darden, and Griffin (1994) take value derived from a shopping experience and break it into two components: hedonic
and utilitarian value. The personal shopping value scale (PSV) consists of utilitarian and hedonic value. Utilitarian value
represents the ability to complete efficiently the shopping task while hedonic value represents the emotions and positive
feelings generated from the shopping task. We define utilitarian value as the ability to complete a task while hedonic value is
the extent to which the customer enjoys the experience for the sake of the experience rather than any form of task completion.
On the other hand, Fornell (1992) developed the Customer Satisfaction Barometer (CSB), which is a weighted composite
index based on annual survey data from customers of about 100 leading companies in some 30 industries. The intention of
the CSB is to predict future performance. This indexs intent is to provide a snapshot of the health of the (1) country, (2)
industry, and (3) individual firm. The idea is that the higher the index, the less customers will switch. The three measures for
satisfaction are general satisfaction, expectancy disconfirmation, and comparison to an industry standard. The authors
themselves realize that skewedness is problematic in that 80 percent of customers are satisfied. If everyone is satisfied but
companies still show a disparity in performance, then what is driving this apparent disparity?
METHODLOGY
Respondents are drawn from a national sampling frame of U.S. consumers. In a method similar to that used in the American
Consumer Satisfaction Index studies, each respondent rated retailers on five single-item measures including satisfaction,
hedonic value, utilitarian value, overall value, and loyalty. The retailers were selected based on their inclusion in the
American Consumer Satisfaction Index surveys. The wording used for each single-item scale is provided below:
x
x
x
x
x
Hedonic value: Think about a typical shopping trip at each retailer shown below. Rate each retailer on the extent
to which the shopping trip itself is enjoyable or exciting. In other words, the visit is worthwhile even if you
dont buy anything.
Utilitarian value: Please rate each retailer below based on the extent to which you are able to accomplish the
specific task of shopping (find products you need to buy, buy them at a reasonable price). O means that zero
percent of the task would get completed and 100 means that 100 percent of the task would get completed.
Overall value: Overall, think about everything gained from your shopping experience with these particular
retailers weighed against all the costs of shopping in these stores, and rate the overall value you received from
your most recent interactions with that retailer. A score below 50 means the costs outweighed the benefits. A
score above 50 means the benefits outweighed the costs.
Satisfaction: Rate each retailer based on your opinion of how satisfied you are with your decision to shop at
each retailer.
Loyalty: What is the likelihood of continuing to shop at the retailer based on your recent experiences? Zero
means zero percent chance and 100 means 100 percent chance.
A construct was operationalized to represent firm financial performance. Earnings per share (EPS) and return on assets
(ROA) are used as the two variables to comprise the construct for testing and paired with the scales above. All financial data
was taken from Compustat and was taken in the same quarter for which data were collected.
Sliding scales were used to capture respondent feedback. A 100 point scale was used in each case. A dont know option
was provided to respondents who either could not recall a recent experience or simply had not patronized the particular
retailer. Respondents were presented retailers in random order and dont know options were available to minimize response
bias.
RESULTS
Multicollinearity appears to present a problem for the examination of the variables in standard GLM form. The variance
inflation factors and tolerance statistics are available upon request but surpass critical values from Hair et al. (2010). Based
on the evidence of collinearity, each variable was mathematically transformed using principal component analysis and
varimax rotation. This procedure allows the analysis to continue with uncorrelated factors that can be used as independent
variables. Each factor represents only a single variable as evidenced by each variable loading highly on only a single factor.
437
Table 1 presents results from regression analyses using the transformed independent variables. The results indicate that
hedonic value and overall value contribute the most to explaining the variance in EPS and ROA, respectively, while
satisfaction explains the variance in the loyalty dependent variable. The standardized coefficients indicate that Hedonic
value (p=.001, df=1, =.1) and overall value (p=.001, df=1, =.08) explain more of the variance in EPS than does satisfaction
(p=.001, df=1, =.06). Utilitarian value explains the least amount of variance (p=.001, df=1. =.04). Overall value (p=.001,
df=1, =.08) and hedonic value (p=.001, df=1, =.06) explain the most variance in the ROA dependent variable while
satisfaction explains more variance than does utilitarian value. Satisfaction explains the most variance in the loyalty
dependent variable (p=.001, df=1, =.5) with overall value second (p=.-001, d=1, =.41) and utilitarian value third (p=.001,
df=1, =.36).
The research question presented in this paper is what the dominant drivers of loyalty and financial performance are. The
question seems best answered by separating loyalty and financial performance because the drivers of the two appear to
diverge. If loyalty is the goal, satisfaction seems to dominate but, perhaps, the reason for this finding is the measurement of
the two and the inability of the customer to separate the two variables. When financial performance is measured, satisfaction
appears to take a backseat to the value components including overall value and hedonic value.
The limitations and future research opportunities will be discussed next. This work attempted to assess the relationship
between value-in-use and performance metrics such as EPS and ROA. Given the small sample size of the number of
retailers, in this case, 15 retailers, a multi-level analysis was not attempted. Future research should increase the number of
focal firms to allow such an analysis to ensure.
A second limitation in this work deals with using single-item independent variables. However, every attempt was made to
ensure that the definition for each variable coincided as closely as possible with the measure used above to ensure valid
measures. Face validity tests were conducted prior to survey launch and results indicate convergence with item definitions
and survey wording. Future research should attempt to replicate the work with mulit-item analysis.
This research represents one study in a stream of research investigating the relative efficacy of value vis--vis consumer
satisfaction. The results here do not dismiss consumer satisfaction completely. Results suggest an important role for both
satisfaction and value in driving loyalty, defined here as intended repeated purchase behavior. However, the results for
financial performance point more strongly to value as the key predictor. Thus, when firms have to choose in allocating
resources toward the creation of high value or high satisfaction, these particular results suggest that retailers should place a
relative emphasis on value. Other studies examine different industries and data from other countries.
TABELS
REFERENCES
438
CONSUMER EVALUATIONS OF VIDEO ADS PORTRAYING HUMAN-LIKE AVATARS

Fernando R. Jimnez, University of Texas at El Paso, USA
Bashar S. Gammoh, University of Toledo, USA
Rand Wergin, University of South Dakota, USA
ABSTRACT
Despite that Television (TV) remains the primary outlet for advertising through video format, most companies cannot afford
to run TV ad campaigns due to the high airing cost of TV ads and the high production costs associated with the creation of
commercials. A tentative solution to reduce some of these costs is a new format of video ads that is gaining popularity: avatarbased commercials. Holzwarth, Janiszewski, and Neumann (2006) define avatars as a general graphic representations that are
personified by means of computer technology. These representations may be human-like, animals, or objects. In avatar-based
video commercials, the ads contain realistic animated characters in computer-generated locations instead of actors in real places.
A remarkable example is an animated Coca Cola ad named Heist, that won the Emmy Award in 2009 for outstanding
commercial (www.emmys.com). Although the idea of incorporating avatar-based video ads to a companys marketing efforts
is tempting, the effectiveness or lack thereof of this type of ad format remains unknown. This exploratory study attempts to
fill this gap. In this study, the ad effectiveness of three ads is compared across two different types of viewing instructions.
More specifically, this study employed a 2 (Instruction: storyboard draft vs. final version) 3 (Ad type: human Airwick vs.
avatar Airwick vs. avatar Snow Joe) between-subjects design. Each participant was randomly assigned to view one of six
possible combinations. One hundred and eighteen undergraduate students at a large Southwestern university participated in the
study in exchange for extra credit. Participants completed the online questionnaire in a computer lab. Three ads were employed
in this study. Two ads portrayed an indoor air fragrance carried by Airwick. These two ads were identical in content, context,
duration, and narrative. However, one of the ads shows real actors and real settings whereas the other one shows human-like
avatars in animated settings. The third ad was avatar-based and portrayed a new model of snow blower by Snow Joe. This ad
was included to test for possible differences in familiarity across product categories. Participants were also given one of two
viewing instructions. In one set of instructions, participants were told to evaluate a storyboard (draft) of an upcoming TV ad
that was going to appear on nationwide television. This instruction was especially relevant for the avatar-based ads since
viewers might have erroneously thought that this type of ads could only be a draft version. Furthermore, there are theoretical
reasons to believe that the storyboards may induce imagination in the evaluation of the ads, thus influencing information
processing. The measures of ad effectiveness were attitudes towards the brand, purchase intentions, and unaided brand recall.
All study constructs were measured using multi-item measures adopted from existing literature.
The results of this exploratory study show that participants reported more positive attitudes towards the brand and higher
purchase intentions for an avatar-based ad than for a human-based commercial only when participants were told that the ad
was a draft. In addition, the avatar-based ads performed better than human-based ads only when viewers were familiar with
the product category. Further, brand recall was similar between an avatar-based ad and a human-based ad when the ad portrays
a familiar product. However, brand recall was lower for an avatar-based ad when the ad portrays an unfamiliar product. These
findings suggest that companies may benefit from showing avatar-based previews on their websites as much as they benefit
from showing human-based final versions of the ads. In addition, the results show that familiarity with the product is an
important factor for the success of avatar-based ads. However, managers should interpret these results carefully. There are
several limitations in this exploratory study. A larger sample is needed to strengthen the results because small samples are
sensitive to extreme responses. Furthermore, a more heterogeneous sample should be used to test for the generalizability of our
results.
439
ACHIEVING TRIPLE BOTTOM-LINE PERFORMANCE IN SUSTAINABLE SUPPLY CHAINS: EXPLICATING

THE ROLE OF CAPABILITIES
Karthik N. S. Iyer, University of Northern Iowa, U.S.A.
Huyen Ngo, University of Northern Iowa, U.S.A.
ABSTRACT
For businesses grappling with the challenges of building competitive advantage in todays market environment, an emerging
buzzword is the holistic corporate responsibility idea of sustainability. Sustainability has challenged the traditional
responsibility of shareholder value creation and encouraged firms to re-invent their businesses to become more
environmentally conscious and socially responsive, while creating economic value (Carter and Easton, 2011; Closs et al., 2011).
However, while the importance of sustainability for enhanced performance and competitive advantage is widely acknowledged,
research on appropriate strategies to implement sustainable corporate programs are still in their infancy (Sharma et al., 2010,
p. 330). Even though supply chains offer an important context enabling a broader adoption and development of sustainability
efforts, little work has been done that addresses the impact of supply chain practices on green and social capital, in the process
of generating economic value (Markley and Davis, 2007).
The current research makes a significant contribution by bridging the sustainability, organizational learning, and supply chain
capability streams. A research framework is developed relating key constructs based on the theoretical foundations of resource
based view, stakeholder theory and organizational learning. As capabilities represent essential elements of strategy, it becomes
incumbent upon supply chains to build appropriate capabilities to achieve sustainable performance outcomes. Thus the
conceptual paper contributes to extant literature and theory building by bringing together disparate yet complementary
perspectives to explain the importance of developing critical supportive capabilities in sustainability oriented supply chains to
achieve superior performance
440
SUSTAINABLE PURCHASING IN THE RETAIL INDUSTRY: A MODEL OF ENVIRONMENTALLY

RESPONSIBLE PURCHASING
Mehdi Amini, The University of Memphis, USA
INTRODUCTION
The business community has played an important role in achieving sustainable development over the last few decades
(Kalafatis et al., 1999; Laroche et al., 2001; Han et al., 2009). As corporations are under growing pressure from internal and
external stakeholders to consider the environmental and social implications of their activities, many have made a
commitment to apply the principles of sustainable development to their operations (Searcy, 2009). To meet these
commitments, a multitude of policies, plans, and programs has been developed and many corporations have created
sustainable purchasing policies.
The changing role of the purchasing function reflects this trend. Today, sustainable purchasing strategies are believed to
garner better customer endorsements and therefore contribute to long-term profits (Sharma et al., 2010). However,
sustainable purchasing is not a goal that an organization can reach alone as an entity; rather, it entails the participation of each
member of the organization, especially the main decision makers (Lozano, 2007). Such processes leading to sustainable
purchasing often need a key actor that has specific power and motivation to introduce sustainability initiatives. Moreover, a
noteworthy characteristic of the retailing industry is its reliance on human capital (Deloitte, 2009).
What the literature brings into focus is the point that key individuals will be instrumental in formulating and implementing
companies policies toward sustainable purchasing (Maclagan, 1999). Once we construe sustainable purchasing in this
manner, the importance of individuals values and motives is raised. The approach in this study is to explore how individual
decision makers (i.e., purchasing professionals), focusing on the effects of personal sources on the decision-making process,
make the environmental purchasing decisions, as a subset of sustainable purchasing.
Hence, the research question of this study is formulated as follows:
What determines environmentally responsible purchasing among purchasing professionals in the retail industry?
RESEARCH MODEL AND THEORETICAL FRAMEWORK
To understand how decisions to perform environmentally responsible purchasing (ERP) are processed, previous research
proposed that ethical decisions are not purely rational or cognitive, but rather a combination of cognitions and emotions (Park
& Stoel, 2005). The conceptual framework of this study (see Figure 1) draws on previous frameworks by Fishbein and Ajzen
(1975), Forsyth (1980), Park and Stoel (2005), and Maignan et al. (2005), which adopted the cognitive and affective
perspectives of attitude formation and behavioral change from the field of consumer behavior in combination with business
ethics research to build an exploratory model to explain the ethical buying process.
To create a more comprehensive picture of what will be investigated in this study; research hypotheses were formulated with
support from the research model and the literature (see Figure 1). It is assumed that different moral philosophies are applied
by different individuals when facing an ethical decision (Al Khatib et al., 2005). In general, these philosophies can be
categorized into a two-dimensional personal moral philosophy concept: idealism and relativism (Forsyth, 1980). Idealism and
relativism as two sources of ethical discrepancies between individuals have an impact on ethical beliefs. Fishbein and Ajzen
(1975) proposed that beliefs are the ultimate source of attitudes and when beliefs change, attitude change. According to
Fishbein and Ajzens (1975) cognitive framework, attitude formation of an individual is cognitively based, which leads to the
proposition that beliefs are the ultimate source of attitudes, and when attitude changes behavior changes. Thus, this research
predicted that idealism positively, and relativism negatively, influences environmentally responsible purchasing indirectly
through attitudes:
Relativistic norms used by every individual to make ethical decisions can be influenced by observing how important others
behave in an organization (Park & Stoel, 2005). The level of this impact is very high in case of relativistic behaviors.
Therefore, it is generally assumed that ethical behavior is not only a product of individual beliefs, but also derives from an
interaction between individual and situational, and in the case of this thesis organizational, variables (Higgins et al., 1984;
441
Trevino, 1986). Personal groups or role sets such as peers and a superior such as a top manager are the organizational source
factors that may change beliefs to influence attitudes and eventually environmentally responsible purchasing. Due to these
organizational factors, while idealism is stable, relativism is more likely to change.
This study was conducted in the Swedish retail industry. As a developed country with a high standard of living, Sweden has
high rates of consumption, supported by a growing number of retailers. The ethics position questionnaire (EPQ) (Forsyth,
1980) was the basis of measuring idealism and relativism in this research. In this study, attitude toward ethics and social
responsibility was measured by the existing perceived role of ethics and social responsibility (PRESOR) scale (Singhapakdi
et al., 1996; Etheredge, 1999). Moreover, to measure the actual environmental purchasing of professionals, based on social
screening criteria used by socially responsible investing firms, the previously developed measure by Park and Stoel (2005)
were used. Ultimately, a five-page questionnaire was sent to 1,532 purchasing professionals in the Swedish food retail
industry. After two rounds of data collection, a total number of 573 usable questionnaires were returned providing a response
rate of 37.4%.
To identify and test the underlying structure of the scales and dimensions of the constructs, an exploratory factor analysis
(EFA) (principal components) with Varimax rotation was employed. The minimum loading criterion of .4 (Nunnally &
Bernstein, 1994) and eigenvalue of 1.0 (Hair et al., 2010) were considered while conducting EFAs. Then, CFA using
maximum likelihood estimation was conducted on all latent variables with structural equation modeling (SEM) using AMOS
20 to validate the factors proposed by EFA.
Once the scales were developed and unidimensionality established, reliability was assessed using coefficient (Cronbachs)
alpha all exceeded .7 (Hair et al., 2007). Moreover, all AVE values were greater than the squared correlations, indicating
discriminant validity for all of the latent constructs (Hair et al., 2010). Finally, the construct reliabilities as another indicator
of convergent validity were all above the limit of .7, which suggests very high reliability (Hair et al., 2010). Together, these
results demonstrate that the scale had sufficient levels of reliability and unidimensionality, the items adequately reflected
their corresponding constructs, and all the scales exhibited convergent validity.
To be able to test the hypotheses, the final step of the analysis process was to evaluate the structural model and its validity,
having all the items evaluated in the measurement models. The results of the analysis demonstrate that the structural model
fits the data well (see Table 1).
Since evidence exists of adequate model fit and satisfactory reliability and validity, it is suitable to proceed with testing the
hypotheses using SEM. The findings of the statistical tests done in AMOS 20 for evaluating hypotheses (Figure 1) are
presented in Table 2.
The results indicate that all the proposed hypotheses are supported by the collected data. Peer influence (t-value = 8.075,
p<.001), top management influence (t-value = 3.123, p<.01), and idealism (t-value = 7.179, p<.001) all positively influence
attitude toward ERP while its effect is negative for relativism, as expected (t-value = -4.867, p<.001). Additionally, both top
management and peers affect the respondents level of relativism in a negative way and, finally, there exists a strong and
significant relationship between attitude toward ERP and actual environmentally responsible purchasing (t-value = 13.017,
p<.001).
IMPLICATIONS AND CONCLUSION
This paper investigated the process of environmentally responsible purchasing decision making by incorporating business
ethics and attitude theories. The foremost theoretical implication of this study is that of the constructs that influence ethical
decision making in different studies being investigated in a single research model that was tested empirically. Furthermore,
by focusing on the individual (purchasing professional) decision-making process in an organization, this research provides a
different perspective on enhancing environmental responsibility of a corporation from the bottom level.
In addition to theoretical insights, the findings of this study offer suggestions on how companies can implement ERP
effectively by influencing their employees, yet fundamentally improve organizational culture; such effort can be useful for
442
effective corporate environmental decisions. The results indicate that the ERP decision process involves a cognitive decision
framework of the beliefs-attitudes-behavior sequence in which purchasing professionals carefully assess their moral beliefs to
process environmentally responsible decisions. This is while differences exist between individuals in these personal factors.
Organizations will need to fine-tune their business strategies to deal with such variation in personal factors and moral beliefs
among their employees and integrate this issue into their ethics corporate training programs. This is specifically vital for
businesses involved in a multinational environment and business managers in multinational business firms; they must be
aware that individuals differ in their thinking in reference to ERP, especially in terms of idealism and relativism.
Organizations should also practice and implement ERP to provide better standards to help their employees obtain a clear
understanding of what is appropriate. This can be accomplished by modifying the organizational social and ethical
environment where top management and employees observe each other.
Most importantly, the model provides empirical evidence that purchasing professionals search outside of themselves for
guidance in environmentally responsible decision making. In this regard, peers and top management are effective factors that
can influence both attitude and relativism. Thus, explicit examples of standards for employees should be provided in
organizations, such as workshops where managers and employees can discuss their beliefs; this may result in reducing the
gap between idealism and relativism.
Moreover, programs that can promote interpersonal communication on environmental responsibility issues, such as interdepartmental meetings, internal publications, bulletin boards, discussion sessions, and reward systems, would be effective in
this regard as well.
TABLES
Table 1. Fit index for structural model
Model
RMSEA
.041
Default model
CMIN/DF
1.844
GFI
.900
AGFI
.882
TLI
.966
CFI
.968
NFI
.934
Table 2. Summary of hypothesis testing

Hypothesized Relationship
Peer Influence
Top Management Influence
Relativism
Idealism
Top Management Influence
Peer Influence
Attitude toward ERP
Relativism
Relativism
Attitude
ERP
Attitude
ERP
Attitude
ERP
Attitude
ERP
ERP
toward
toward
toward
toward
Standardize
d Estimate
-.299
-.355
CR
-6.882
-7.974
***
***
Hypothesi
s Test
Supported
Supported
-.225
-4.867
***
Supported
.306
7.179
***
Supported
.135
3.123
.002
Supported
.358
8.075
***
Supported
.647
13.017
***
Supported
FIGURES
Figure 1. The research model with the hypothesized relationships
H3
Relativism
Top
management
influence
H4
H5+
Attitudes toward
environmental
purchasing
H6
Peer
influence
H7+
H2 +
Idealism
443
H1 +
Environmentally
responsible
purchasing
REFERENCES
Al-Khatib, J.A., Stanton A.D., & Rawwas, M.Y.A. (2005). Ethical segmentation of consumers in developing countries: A
comparative analysis. International Marketing Review, 22(2), 225-246.
Deloitte. (2009). Feeling the squeeze global powers of retailing. available on line on www.deloitte.com/consumerbusiness.
Etheredge, J.M. (1999). The perceived role of ethics and social responsibility: An alternative scale structure. Journal of
Business Ethics, 18(1), 51-64.
Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention, and behavior: An introduction to theory and research. Reading,
MA: Addison-Wesley.
Forsyth, D.R. (1980). A taxonomy of ethical ideologies. Journal of Personality and Social Psychology, 39(1), 175-184.
Hair Jr, J.F., Black, W.C., Babin, B.J., & Anderson, R.E. (2010). Multivariate data analysis, a global perspective, 7th ed.,
New Jersey: Pearson education Inc.
Hair Jr, J.F., Money, A.H., Samouel, P., & Page, M. (2007). Research Methods for Business. West Sussex: John Wiley &
Sons.
Han, H., Hsu, L. T. J., &Lee, J. S. (2009). Empirical investigation of the roles of attitudes toward green behaviors, overall
image, gender, and age in hotel customers eco-friendly decision-making process. International Journal of Hospitality
Management, 28(4), 519-528.
Higgins, A., Power, C., & Kohlberg, L. (1984). The relationship of moral atmosphere to judgments of responsibility. In W.
M. Kurtines & J.L. Gertwitz (Eds.), Morality, moral behavior, and moral development (74-106). New York: Wiley.
Kalafatis, S.P., Pollard, M., East, R., & Tsogas, M.H. (1999). Green marketing and Ajzens theory of planned behaviour: a
cross-market examination. Journal of consumer marketing, 16(5), 441-460.
Laroche, M., Bergeron, J., & Barbaro-Forleo, G. (2001). Targeting consumers who are willing to pay more for
environmentally friendly products. Journal of Consumer Marketing, 18 (6), 503520.
Lozano, R. (2007). Collaboration as a pathway for sustainability. Sustainable Development, 15, 370381.
Maclagan, P. (1999). Corporate social responsibility as a participative process.Business Ethics: A European Review, 8(1), 4349.
Maignan, I., Ferrell, O.C., & Ferrell, L. (2005). A stakeholder model for implementing social responsibility in marketing.
European Journal of Marketing, 39 (910), 95677.
Nunnally, J.C. and Berstein, I.H. (1994). Psychometric Theory. New York: McGraw-Hill.
Park, H., & Stoel, L. (2005). A model of socially responsible buying/sourcing decision-making processes. International
Journal of Retail and Distribution Management, 33(4), 235-248.
Searcy, C. (2009). Setting a course in corporate sustainability performance measurement. Measuring Business Excellence,
13(3), 4957.
Sharma, A., Gopalkrishnan R.L., Mehrotra, A., & Krishnan, R. (2010). Sustainability and business-to-business marketing: A
framework and implications. Industrial Marketing Management, 39 (2), 330-341.
Singhapakdi, A., Vitell, S.J., & Kraft, K.L. (1996). Moral intensity and ethical decision-making of marketing professionals.
Journal of Business Research, 36, 245255.
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ENVIRONMENTALLY AND SOCIALLY RESPONSIBLE BUYER SUPPLIER RELATIONSHIP MANAGEMENT

Mehdi Amini, The University of Memphis, United States
Esmail Salehi-Sangari, Royal Institute of Technology (KTH), Sweden
INTRODUCTION
Stakeholders expect corporations to improve their sustainability performance through observing environmental and social
demands, and corporations respond to these requirements through applying corporate social responsibility (CSR). CSR can be
achieved by designing a sustainable supply chain in cooperation with companies along the supply chain. The stakeholder
pressure on corporations to become sustainable transfers across the supply chain to suppliers. Buying firms manage the
relationship with suppliers through supply management. Then, supplying managers attention to customers sustainability
demands and reflecting such demands in their supply can improve the sustainability performance of the suppliers. This
improvement in performance of suppliers emanates in supplied products and services and it gives buying firm a comparative
advantage against competitors. Accordingly, sustainable supply management and buyer-supplier cooperation on achieving
sustainability can address the sustainability concerns of the current business world. However, very few existing studies have
considered the impact of sustainable supply management on improving sustainability performance of the buying firm. The
current study goes beyond improving the sustainability performance of the buying firm. Specifically, the present research
illustrates how sustainable supply management and buyer-suppliers cooperation can boost sustainability performance of the
suppliers.
Conceptual definition of sustainable supply management is based on Carter and Jennings (2004) study, and buyer-supplier
relationship is built on commitment-trust theory of relationship marketing (Morgan and Hunt 1994). Sustainability performance
of suppliers has been designed following triple-bottom line of sustainability to measure economic, environmental, and societal
performance. This innovative design connected stakeholder interest to comparative advantage of the firm through sustainable
supply management and relationship marketing. In order to meet the aim of study, two research questions developed including
how sustainable supply management can improve sustainability performance of the suppliers; and how can buyer-suppliers
relationships can improve the sustainability performance of the suppliers. In addition, a set of hypotheses concerning how a
buyer dependency to suppliers moderates their relationships formulated to explore the complicated nature of sustainable buyersupplier relationship.
METHODOLOGY
A five-page, one sided mail survey of 991 supply managers in Swedish manufacturing SMEs in electronics, chemical, paper,
bakery, and farinaceous industries resulted in 392 completed questionnaires representing an effective response rate of 39.5%.
The survey was comprised of ten sections, namely environmental purchasing (10 questions), philanthropy (3 questions), human
rights (4 questions), safety (6 questions), sustainability performance (13 questions), trust (8 questions), commitment (6
questions), cooperation (5 questions), dependency (4 questions), and demographics (6 questions). The survey questioned
opinions of supply managers using a 7-point Likert scale (1 = strongly disagreed to 7 = strongly agreed).
Descriptive statistics show that sustainable supply management is of paramount importance in SMEs and most of the supply
managers have been involved in sustainable supply management for more than five years. Sustainable supply management
consists of environmental purchasing, human rights and safety, while trust and commitment constitute successful buyersupplier cooperation. The results show sustainable supply management of the buyer improves that buyers trust and relationship
commitment to suppliers. In other words, buying firms show more confidence about the consistency and honesty of the supplier
which can supply environmentally-friendly and socially-responsible products. Buyers are also more willing to maintain a long
term relationship with sustainable suppliers. Altogether, improvement in trust and commitment of the buyer to the relationship
with sustainable suppliers augments the level of cooperation between them. Cooperation between a buyer and their suppliers
on sustainability plans of the suppliers improves the sustainability performance of the suppliers as well. Results also indicate
that sustainable supply management improves the sustainability performance of the suppliers.
Findings of a multigroup moderator analysis also explain that buyer-supplier relationships are stronger when the buyer has
lower dependency to its sustainable suppliers. Lower dependency of buyer to suppliers is equivalent to high bargaining power
445
of the buyer toward its suppliers. Weakly dependent buyer has more power to convince suppliers to commit to its sustainability
plans. These findings are consistent with studies done by Andaleeb (1996) and Abdur Razzaque and Boon (2003). Abdur
Razzaque and Boon (2003) identified that the impact of trust on commitment is lower when the buyer has a high dependence
on suppliers.
The results provide useful input to supply managers to design supply strategies based on stakeholder demand and also to
industrial marketers forming relationships with their suppliers. Taken together, the results suggest that sustainable supply
management and buyer-supplier cooperation contribute to the improvement of sustainability performance of the suppliers.
Overdependence of a buyer to sustainable suppliers weakens trust and commitment of the buyer to its sustainable suppliers, as
well as cooperation between buyer and suppliers. The further research ideas stemming from this include how long term
sustainability performance of the buyer can be improved as a result of progression in sustainability performance of suppliers.
REFERENCES
Abdur Razzaque, M. and Boon, T. G. (2003). Effects of dependence and trust on channel satisfaction, commitment and
cooperation. Journal of Business-to-Business Marketing, 10(4), 23-48.
Andaleeb, S. S. (1996). An experimental investigation of satisfaction and commitment in marketing channels: the role trust and
dependence. Journal of Retailing, 72(1) 77-93.
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446
ANTECEDENTS AND CONSEQUENCES OF MARKETING AND INNOVATION COMPETENCE: DOES

ORIENTATION MATTER?
ABSTRACT
This research provides a conceptual framework that encompasses a complex set of relationships among: (1) strategic
orientation (including market orientation, technology orientation, and aesthetic orientation); (2) market knowledge
competence versus innovation competence (customer and competitor knowledge capabilities versus technological and
aesthetic product innovation capabilities); (3) types of product innovation (technological and aesthetic); and (4) product
versus firm performance. The results support the theorized positive relationship between market orientation and market
knowledge competence; but technology and aesthetic orientations also increase the firms ability to interpret and integrate
customer and competitor knowledge. The results also show that customer and competitor knowledge capabilities are affected
by different orientations, and affect technological and aesthetic innovations differently. Furthermore, the various types of
strategic orientation affect the various types of capabilities differently, depending on their matched domains. Finally, the
hypotheses were tested in both the U.S. and China, two countries very different in terms of market freedom. While there were
some differences (especially in effect sizes), overall most key hypotheses were supported in both the U.S. and China.
INTRODUCTION
Market orientation is a central concept in the marketing literature and thus its effects on innovation and performance have
been studied in detail (e.g., Hurley and Hult 1998, Kumar et al. 2011; Zhou, Yim, and Tse 2005). Similarly, market
knowledge competence has attracted attention due to its positive effects on both product innovation and performance
(Atuahene-Gima and Yinghong 2011; Johnson, Piccolotto, and Filippini 2009; Li and Calantone 1998). Relationships
between market orientation and market knowledge competence have been proposed in theory, there is little empirical
evidence that such important relationships exists. Moreover, market orientation and market knowledge competence can each
be disaggregated into customer and competitor domains: i.e., into customer and competitor orientations and into customer
and competitor knowledge capabilities, as in this research.
The current research goes beyond disaggregating market orientation and market knowledge competence into customer and
competitor domains however. We examine four domains for strategic orientation: customer and competitor orientations
(which together form market orientation); technology orientation; and aesthetic orientation. These strategic orientations are
modeled as antecedents to capabilities; i.e., orientations capabilities. Mirroring the four orientations, we examine four
domains for capabilities: customer knowledge capability and competitor knowledge capability, which together form market
knowledge competence; and technological innovation capability and aesthetic innovation capability, which together form
innovation competence. Orientations reflect the firms focus, while capabilities reflect what is being done or what the firm is
capable of doing. Finally, the consequences of capabilities examined in this research are technological versus aesthetic
product innovation (i.e., capabilities product innovations), and ultimately product versus firm performance. In summary,
the core of our theoretical model proposes that orientations capabilities product innovations, but that the specific
domains of strategic orientation, capabilities, and/or product innovations have significant impacts on the strengths of model
relationships.
This study extends the literature by revealing the different effects of customer and competitor orientations on customer and
competitor knowledge capabilities, and then by revealing the different effects of customer and competitor knowledge
capabilities on aesthetic and technological product innovations. This more detailed analysis is needed because aesthetic and
technological product innovations have different characteristics, but also because combining customer and competitor
orientations into market orientation or combining customer and competitor knowledge capabilities into market knowledge
competence masks differences due to the differences in customer versus competitor domains. For example, we demonstrate
that customer and competitor knowledge capabilities have different effects on technological and aesthetic product
innovations; and that technological and aesthetic orientations are primarily directed respectively in enhancing technological
and aesthetic innovation capabilities. These findings are important because they enable managers to decide which strategic
447
orientation is more likely to lead to which capabilities, and which capabilities are more likely to enhance aesthetic versus
technological innovations.
Finally, while there are several studies about market orientation and/or market knowledge competence in a domestic U.S.
context, studies in an international context are fewer. This is quite surprising because, due to economic differences, the
effects of model constructs can vary significantly among countries. We test whether the hypotheses hold across two very
different economies, i.e., the U.S. and China. For example, the results indicate that in freer economies, the relationships
between market orientation and market knowledge competence are stronger.
We begin by defining terms and specifying the theoretical background for the model. We then develop hypotheses, including
hypotheses about differences in effect sizes. After discussing samples and measures, we present the results for both the U.S.
and China.
An examination of Figure 1 overall reveals that the theoretical model proposes antecedents and consequences of market
knowledge competence and of innovation competence. As an example, consider that market knowledge competence
(customer/competitor capabilities) is preceded by market orientation (customer/competitor orientations). Customer (or
competitor) orientation was defined as the direction and focus of the firm on its target customers (or competitors) (Kumar et
al. 2011; Narver and Slater 1990; Gatignon and Xuereb 1997). In other words, orientation may determine which information
sources interest the firm: customers or competitors (or both). Market knowledge competence, on the other hand, involves
transforming information into knowledge: i.e., it involves abilities to search for, collect, acquire, and/or generate information,
but also to interpret, integrate, understand and learn about customers and competitors. It is a higher order competence and
includes abilities and behavioral processes that are related with market orientation (Li and Calantone 1998; Li and Cavusgil
1999).
Our study is thus based partly on the market orientation literature and extends it by empirically demonstrating the
relationships from market orientation to market knowledge competence. However, as the above definition of market
knowledge competence makes clear, understanding competences role also builds on organizational learning theory.
Learning theory encompasses how and why learning takes place in organizations (Argyris and Schn 1978): learning
underlies that the idea that market knowledge competence leads to superior outcomes ( Atuahene-Gima and Yinghong 2011;
Slater and Narver 1995). In particular, learning facilitates innovation (Baker and Sinkula 2007; Brown and Duguid 1991;
Zhou, Yim, and Tse 2005) through customer and competitor knowledge capabilities (Li and Calantone 1998; Li and Cavusgil
1999). Thus our study examines how customer (or competitor) orientation is transformed indirectly into innovations via
customer (or competitor) knowledge capabilities: i.e., how strategic market orientation is transformed into product innovation
via market knowledge competence.
Teece, Pisano, and Shuen (1997) state that capabilities (such as customer/ competitor knowledge capabilities) are tools for
obtaining competitive advantage, often via product innovation. The resource based view (RBV) defines organizational
capabilities as the ability to use resources to generate competitive advantages (Barney 2001). From an RBV point of view,
customer and competitor knowledge capabilities can be viewed as tools primarily learning tools for obtaining higher
order resources that possess characteristics such as inimitableness, immobility, and undiminishability (Li and Calantone
1998). Knowledge about customers and competitors is such a higher order resource, and the capabilities in creating such
customer and competitor knowledge were developed because the strategic focus is market orientation in our example.
Similarly, it can be argued that knowledge about aesthetics is a higher order resource, and aesthetic capabilities were
developed because the strategic focus is aesthetic orientation. Thus this study examines important tenants of the RBV: i.e., do
specific capabilities result in specific types of product innovations and are they preceded by specific types of orientation?
Customer knowledge capability is the firms ability to generate knowledge pertaining to customers current and potential
needs for new products and it is anchored on the matched domain of customer orientation (Li and Calantone 1998). Thus, a
focus on customer orientation should have a positive effect on customer knowledge capability (H1a). Competitor knowledge
capability is the firms ability to generate knowledge about competitors' products and strategies (Li and Calantone 1998). A
firms focus on customers does not necessarily create a chance for the firm to acquire, interpret and disseminate knowledge
about competitors and thus does not necessarily contribute to competitor knowledge capability (H1b). Thus it can be
hypothesized that:
448
H1c: Customer orientation positively affects customer knowledge capability.

H1d: Customer orientation does not affect competitor knowledge capability.
Competitor orientation and competitor knowledge capability are closely related (H2b), however, a focus on competitors does
not necessarily create possibilities to acquire, interpret and disseminate knowledge about customers (H2a). Thus we test:
H2a: Competitor orientation does not affect customer knowledge capability.
H2b: Competitor orientation positively affects competitor knowledge capability.
A firm can gain important knowledge about its customers preferences and competitors strategies concerning new and
existing technologies while focusing on the developments in the technological arena. The resulting knowledge about
customer and competitors can be interpreted and disseminated within the company, thus building customer and competitor
knowledge capabilities (H3a,b). For example, by focusing on existing technologies, the firm can gain important knowledge
about how its customers interact with existing technology, how they utilize it and how can it be improved to serve their needs
better. The firm may detect new technologies in other industries that can be used for addressing untapped customer needs in
its own industry. Technology orientation also enables the firm to become aware of the emerging technology strategies of its
competitors. Thus it can be hypothesized that;
H3a: Technology orientation positively affects the customer knowledge capability.
H3b: Technology orientation positively affects the competitor knowledge capability.
A firms focus on aesthetics may serve as an important source for customer and competitor knowledge capabilities (H4a,b);
i.e., aesthetic orientation may enable a firm to acquire, interpret and disseminate knowledge about its customers and
competitors. For example, by focusing on aesthetics, the firm can gain important knowledge about emerging customer
preferences that create and strengthen these trends. By examining a declining aesthetic trend, the firm can gain important
knowledge about changes in customer tastes. Examining aesthetic trends can provide valuable information about the
similarities and differences among competitors products, and reveal important clues about competitors aesthetic innovation
strategies. Thus:
H4a: Aesthetic orientation positively affects the customer knowledge capability.
H4b: Aesthetic orientation positively affects the competitor knowledge capability.
Utilizing information about customers and competitors is expected to have an important effect on product innovations. Li and
Calantone (1998; 1999) state that customer knowledge capability enables a firm to explore innovation opportunities created
by emerging market demand and to reduce the potential risks of mistaking buyer needs, whereas competitor knowledge
capability contributes to innovation by providing diagnostic benchmarking. Their findings suggest that both customer and
competitor knowledge capabilities positively affect new product advantage. Learning more about customers or about
competitors may trigger new ideas to improve existing products or to generate radically new innovations. Thus customer and
competitor knowledge capabilities should have positive effects on product innovations (H5,6,a,b).
Firms that have the competence to acquire, interpret and disseminate knowledge about their customers (or competitors) are
expected to have a superior understanding of customers needs and competitive positioning. Products developed with these
types of understanding are expected to perform better, leading to higher product and firm performance (H5,6,c,d). Thus:
H5: Customer knowledge capability positively affects (a) technological product innovation,
(b) aesthetic product innovation, (c) product performance, and (d) firm performance
H6: Competitor knowledge capability positively affects (a) technological product innovation,
(b) aesthetic product innovation, (c) product performance, and (d) firm performance
METHODOLOGY
The dataset was collected from firms in the U.S. and China that operate in industries where both aesthetic and technological
innovations are important (such as Consumer Electronics, Automobile, Home Appliances and PC Industries). The U.S.
sample includes 288 mangers and the China sample includes 386 managers who have responsibilities for the development
and/or launch of new products. A national marketing research firm administered the survey in the U.S. and another national
firm administered the Chinese version in China. The respondents received compensation from the marketing research
companies for their time and effort. All respondents were informed about confidentiality and the purpose of the study.
Similar to previous studies (Hultink et al. 2003), screening questions were used to ensure the eligibility of the companies and
449
the managers in those companies. Most of the items were adopted from previous studies. The measures of aesthetics were
built according to their technology counterparts on orientation, capabilities and innovations in the literature. An individual
translated the survey into Chinese. Another individual translated this version back to English. A third person evaluated the
differences in the two English versions and concluded that the items and questions have the same meaning.
First, measurement equivalence across the U.S. and China was evaluated in three steps: (1) estimating an unconstrained 2group CFA, (2) estimating a constrained model with the loadings of the items on the factors equal across the two groups, and
(3) testing the significance of the chi-square difference between these models. After removing two problem items and
repeating the equivalence tests, the chi-square difference between the unconstrained (Chi-square= 2323.9; df: 922) and the
unconstrained model (Chi-square= 2356.5; df: 944) was not significant (chi-square difference = 32.6, df difference: 22, p
> .05) suggesting that the final measurement models were not significantly different between the U.S. and China. Second, the
measurement models were evaluated. As per Fornell and Larcker (1981): (1) coefficient values and composite reliabilities
are all greater than .70; (2) convergent validity was established, as AVEs for all constructs were greater than .50; and (3)
discriminant validity was established, as AVE was greater than the correlation between any constructs squared. For example,
in the U.S., the square of the correlation between technological orientation and technological innovation capabilities is .738,
while AVEs are .829 and .859; the square of the correlation between aesthetic orientation and aesthetic innovation
capabilities is .714, while AVEs are .890 and .793.
Two-group structural equation modeling with maximum likelihood estimation was used to test the hypotheses.
The between-country differences were tested in four steps: (1) testing an unconstrained model; (2) constraining relationships
between constructs to be equal between two countries; (3) testing the significance of the chi-square difference; and (4) if the
chi-square difference is significant, conducting LM tests to see which constraints need to be freed. The chi-square difference
of 139.1 between the constrained (Chi-Square=192.3; df=70) and the unconstrained models (Chi-Square=53.2; df=36) was
significant (df difference: 34, p < .05) suggesting that there are differences between the U.S. and Chinese models. The LM
test results revealed that freeing some of the constraints in a particular order significantly improved model fit. The withincountry differences between parameters were tested in two steps: (1) constraining the hypothesized parameters to be equal
within a country; and (b) executing an LM test to see whether freeing some constraints would significantly improve model fit.
RESULTS OF HYPOTHESIS TESTING
Table 4 contains the structural parameter estimates and t-values for both the U.S. and China. The model fit statistics at the
bottom of Table 4 indicate a good overall fit of the proposed 2-group model (e.g., CFI=.995; RMSEA=.042). Table 4 also
reports the R2 values for all dependent constructs. At the bottom of Table 4A, the R2 for each of the four capability constructs
is presented: these range from .654 to .751 for the U.S. and .455 to .592 for China. At the bottom of Table 4D, it can be seen
that the R2 for the product innovation constructs are in the .613--.755 range for both countries, while R2 for the product and
firm performance are lower at .216--.376.
Table 4A reports the results for the effects of each of the four orientations on capabilities. The first row for customer
orientation shows that customer orientation positively affects customer knowledge capability (U.S. = .45, p < .01; China
= .29, p < .01), supporting H1a. It also has a positive effect on competitor knowledge capability (U.S. & China: = .12, p
< .01), refuting the null effect in H1b. Competitor orientation (second row in Table 4A) competitor knowledge capability
(U.S. = .49, p < .01; China = .26, p < .01), supporting H2b. Competitor orientation does not affect customer knowledge
capability (U.S. & China: = -.01, p > .05), supporting the null effect in H2c. Technology orientation positively affects
customer knowledge capability (U.S. & China: = .28, p < .01), and competitor knowledge capability (U.S. = .14, p < .01;
China = .15, p < .01) supporting H3a, H3b. Aesthetic orientation positively affects customer knowledge capability (U.S.
= .20, p < .01; China = .21, p < .01) and competitor knowledge capability (U.S. = .17, p < .01; China = .34, p < .01),
supporting H4a, H4b (Table 4A, fourth row). Customer knowledge capability has a positive effect on technological product
innovation (U.S. = .16, p < .01; China = .15, p < .01), product performance in the U.S. ( = .20, p < .01), and firm
performance (U.S. = .17, p < .01; China = .15, p < .01), supporting H5a, H5c and H5d for U.S. firms but H5a and H5d for
Chinese firms. H5b is rejected for both the U.S. and China. Competitor knowledge capability has a positive effect on
technological product innovation (U.S. & China: = .08, p < .05), aesthetic product innovation (U.S. = .07, p < .05; China
= .06, p < .05) and product performance (U.S. & China: = .10, p < .05) supporting H6a, H86 and H6c. However, H6d
concerning the impact on firm performance is rejected.
450
DISCUSSION
The findings provide empirical evidence for the theoretical relationship between market orientation and market knowledge
competence (Li and Calantone 1998). This study extends previous work by showing that customer versus competitor
orientations have different effects on customer versus competitor knowledge capabilities. While focusing on customers
enhances the knowledge capabilities in both customer and competitor domains, focusing on competitors enhances competitor
knowledge capability but not customer knowledge capability. This shows that focusing on customers reveals complete
market knowledge, but focusing on competitors may not reveal customer related knowledge. This held in China and the U.S.,
but there were differences in effect sizes. The relationship between customer orientation and customer knowledge capability,
as well as the relationship between competitor orientation and competitor knowledge capability, were stronger in the U.S. as
compared to China. It appears that firms in economically free countries are better able to leverage these orientations into
capabilities. Second, the results also show that both aesthetic and technology orientations enhance market knowledge
competence (i.e., both customer and competitor knowledge capabilities). These four paths were positive in both the U.S. and
China. These findings indicate that focusing on the aesthetic and technological developments in an industry broadens a firms
understanding of its customers and competitors, and thus enhances market knowledge competence. Testing the effects of
technology and aesthetic orientations on market knowledge competence and innovation competence is a major contribution
of this research.
The positive effects of market knowledge competence (i.e., customer plus competitor knowledge capabilities) on product
innovation overall confirm the findings of Li and Calantone (1998). However they tested market knowledge and innovation
each as single constructs. Our study extends this work by showing that customer versus competitor knowledge capabilities
have different effects on aesthetic versus technological product innovations, with only competitor knowledge capabilities
affecting both types of innovation. Contrary to expectations, a firms ability to process customer knowledge as tapped by
customer knowledge capabilities does not affect aesthetic innovations. This null effect echoes the null effects of customer
orientation on aesthetic and technological capabilities discussed earlier. These non-significant relationships indicate that: (1)
focusing on customers does not enhance the ability to produce aesthetically or technologically innovative products; and (2)
the firms ability to process customer knowledge does not lead to aesthetic innovations. Even though these results are counter
to what was hypothesized, they seem to confirm some management gurus approaches to innovation. For example Steve Jobs
in one of his interviews mentions that You cant go out and ask people, you know, whats the next big [thing.] And he
quotes Henry Fords famous words, If Id had asked my customers what they wanted, they would have told me A faster
horse. However the ability to process customer knowledge capability does positively affect technological innovations. The
reason may be that the customers fall short when providing information about how a product can look better but they can
provide clearer expectations about how a product can perform better. In other words, they like or dislike the aesthetics of a
product only after they see it, but they have a clear notion about how a product can perform better even before they
experience it.
The ability to process competitor knowledge enhances both aesthetic and technological innovations. These effects of
competitor knowledge capabilities on aesthetic and technological innovation echo the positive effects of competitor
orientation on aesthetic and technological capabilities discussed earlier. These findings show (1) the importance of
competitor orientation in the innovation process; and (2) the importance of competitor knowledge capabilities in innovation
outcomes. This suggests that the constructs market orientation or market knowledge competence, both of which combine
customer and competitor domains, are theoretically too broad to identify important differences in structural model
relationships; separating them, as we do in this research, leads to a more refined understanding.
The results for the U.S. show that (1) customer knowledge capability affected both product and firm performance directly; (2)
competitor knowledge capability affected product performance but not firm performance directly.
These patterns of significant versus nonsignificant effects were the same across the U.S. and China with the exception that in
China, customer knowledge capability affected only firm performance and not product performance; i.e., customer
knowledge capability had a stronger effect on product performance in the U.S. Sin et al. (2003) argue that firms in freer
economies learn to utilize market orientation more effectively due to the higher levels of competition and found that market
orientation has a higher effect on performance in a market-driven/free economy than in a transitional (comparatively less
free) economy. This study supports the argument of Sin et al. (2003) by showing that (1) the relationship between market
orientation and market knowledge competence is stronger in freer economies, as discussed earlier; but also (2) firms in freer
economies utilize their capability to process customer knowledge more effectively to increase their product performance.
451
452
.549
.620
.620
.620
.620
.620
.620
.620
.620
.620
.548
Technology orientation
Aesthetic Orientation
Technological Innovation Capability
Aesthetic Innovation Capability
Technological Product Innovation
Aesthetic Product Innovation
Product Performance
Firm Performance
Customer Knowledge Capability
Competitor Knowledge Capability
4
5
6
7
8
9
10
11
12
1
2
3
Customer Orientation
Competitor Orientation
are
1
correlations
Variable
All
.776
.579
.714
.737
.661
.699
.636
.697
.519
.427
.529
.701
.704
.798
.859
.763
.808
.712
.596
.541
.593
.732
significant
.706
.654
.744
.845
.708
.809
.547
.506
.768
.570
.650
.730
.709
.857
.849
.757
.567
.501
.651
.673
.488
.565
at
.743
.683
.781
.861
.554
.517
.690
.741
.823
.516
.631
TABLE 1: CORRELATIONS U.S. (BELOW DIAGONAL), CHINA (ABOVE DIAGONAL)

p
.702
.683
.790
.580
.538
.622
.619
.676
.724
.459
.537
.703
.622
.578
.507
.581
.667
.628
.765
.783
.401
.544
<
.550
.554
.784
.325
.301
.344
.365
.407
.377
.253
.317
.479
.508
.341
.338
.404
.405
.417
.417
.793
.323
.314
10
.01
.730
.616
.601
.668
.658
.678
.578
.317
.379
.583
.495
11
.755
.667
.693
.749
.768
.687
.639
.344
.390
.558
.655
12
two-tailed.
453
.744
.592
.69**
.27**
.12**
.39**
.751
U.S.
China
U.S.
China
U.S.
China
.496
*Significant at p < .05, **significant at p < .01 two-tailed.
Technology Orientation
Independent variables
7.40
2.57
4.99
14.5
U.S.
.20**
China
.20
6.18
6.18
.21**
U.S.
.20
H3e:Technological
Product Innovation
Country
China
.39
.12
.27
.69
2.06
Table 4B: The Direct Effects of Orientations on Product Innovation
R2
.07
.48
.58
. 20
.20
.14
.14
.02
11.1
13.5
4.96
4.96
4.21
4.21
.55
.55
.23**
.25**
.24
.24
7.22
7.22
H4e:
Aesthetic
Product Innovation
.49**
.58**
.20**
.20**
.14**
.14**
.07*
2.06
China
.07
.02
.07*
1.35
U.S.
.04
.04
U.S.
Country
(b)
Aesthetic
Innovation
Capability
.02
.02
China
(a)
Technological
Innovation
Capability
.04
.04
1.35
Table 4A: The Effects of Orientations on Capabilities
.455
.654
.21**
.20**
.28**
.28**
-.01
-.01
.29**
.21
.21
.28
.28
-.01
-.01
.29
(c)
Customer
Knowledge
Capability
.46
.45**
TABLE 4: STRUCTURAL PARAMETER ESTIMATES (STANDARDIZED, UNSTANDARDIZED, T-VALUES)
4.73
4.73
6.04
6.04
-.32
-.32
7.13
11.5
.563
.665
.34**
.17**
.15**
.14**
.26**
.49**
.12**
.34
.18
.14
.14
.25
.49
.12
(d)
Competitor
Knowledge
Capability
.12**
.12
7.33
3.26
3.33
3.33
5.92
9.87
3.82
3.82
454
.23**
.22**
.16**
.15**
.08*
.08*
U.S.
China
U.S.
China
U.S.
China
.08
.08
.16
.16
.22
.22
.26
.376
.18**
China
.755
.18**
U.S.
U.S.
.10
.10
.04
.19
1.85
1.85
.72
3.35
.18
.18
.21
.21
3.25
3.25
3.52
3.52
Product Performance
.10*
.10*
.04
.20**
.21**
(a)
1.77
1.77
.89
.89
12.4
12.4
-.55
China
.07
.07
.03
.03
.58
.58
-.02
-.55
(c)
Product
Performance
.21**
.739
.06*
.07*
.03
.03
.55**
.59**
-.02
-.02
Product
U.S.
2.08
2.08
4.54
4.54
5.03
5.03
5.83
-.02
(b)
Aesthetic
Innovation
China
.613
.632
.216
Goodness-of-fit: Chi Squared = 99.85; p = .00214; df = 63; GFI = .976; CFI = .995; IFI = .995; RMSEA = .042
R2
Aesthetic Product Innovation
Technological Product Innovation
Table 4D: The Effects of Product Innovation on Performance
Competitor Knowledge
Capability
Customer Knowledge
Capability
Aesthetic Innovation
Capability
.25**
China
5.83
.27**
U.S.
Technological Innovation
Capability
.26
(a)
Technological
Product Innovation
Country
Table 4C: The Effects of Capabilities on Product Innovation and Performance
(TABLE 4 CONTINUED)
.08
.08
.16
.16
1.41
1.41
3.03
3.03
.252
.288
.19**
.19**
.16**
.17**
.19
.19
.16
.16
3.38
3.38
2.76
2.76
(b)
Firm Performance
.07
.08
.15**
.17**
(d)
Firm
Performance
FIGURE 1: CONCEPTUAL FRAMEWORK FOR THE RELATIONSHIPS AMONG ORIENTATION

COMPETENCE INNOVATION PERFORMANCE
Market Knowledge Competence

Customer Knowledge
Capability
Strategic
Orientation
(+)
Competitor Knowledge
Capability
(+)
Product
Innovation
(+)
Technological
Innovation
(+)
Aesthetic
Innovation
Aesthetics Orientation
(+)
Innovation Competence
Technological Capability
Aesthetic Capability
455
(+)
Performance
(+)
Product
Firm
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456
THE JOURNEY FROM MARKET ORIENTATION TO NEW PRODUCT PERFORMANCE IN FOREIGN

MARKETS: A KNOWLEDGE AND LEARNING PERSPECTIVE
Mike Chen-Ho Chao, William Paterson University, U.S.A.
Shan Feng, William Paterson University, U.S.A.
Fuan Li, William Paterson University, U.S.A.
ABSTRACT
We utilize the resource-based view of the firm (RBV), complemented by organizational learning and knowledge management,
in developing a conceptual framework of market orientation-product innovation-new product performance linkages in foreign
markets. We argue that there are four resources and capabilities affecting a firms new product performance in foreign markets:
market orientation, host-country knowledge (both explicit and tacit), absorptive capacity (both potential and realized), and
product innovation. First, market orientation influences a firms level of host-country knowledge. Second, potential absorptive
capacity has both a moderating effect on the relationship between market orientation and host-country knowledge and a direct
effect on host-country knowledge. Third, realized absorptive capacity has a moderating effect on the host-country knowledgeinnovation relationship. Finally, product innovation has a direct impact on new product performance, but its influence on new
product performance is moderated by the level of turbulence in the host-country market (i.e., market and technology turbulence).
457
MULTIPLE SALES CHANNEL STRATEGY AND PERFORMANCE: THE MODERATING ROLE OF

INTERNATIONAL EXPERIENCE AND GLOBALIZATION POTENTIAL
Mika Gabrielsson, University of Eastern Finland, Finland
Peter Gabrielsson, University of Vaasa, Finland
Tomi Seppl, Aalto University, Finland
ABSTRACT
Globalization and technological advancement have led to an increase in the numbers of channels available for firms
expanding to foreign markets. Although research has started to address strategic choice, the implications for performance
have not been adequately investigated. This study examines multiple sales channel structure selection and standardization
across foreign markets and the role of foreign knowledge and industry globalization potential in determining the most
profitable alternative.
The study focuses on ICT firms originating in two Small and Open Economies, namely Sweden and Finland. Drawing on
contingency theory, the foreign business learning perspective, and globalization research, a conceptual model and hypotheses
are developed.
Following a hierarchical SEM analysis the study finds support for a direct performance effect of selection of multiple
channels and channel standardization. More importantly, existence of foreign business experience is found to positively
moderate the relationship between channel strategy selection and financial performance. The study concludes by presenting
the theoretical contribution, managerial implication, and avenues for future research.
458
THE ROLE OF CONFLICT RESOLUTION STRATEGIES AND POWER IN THE CONFLICT-EXPORT

PERFORMANCE RELATIONSHIP
Gregor PFAJFAR, Faculty of Economics, University of Ljubljana, Slovenia
Maja MAKOVEC BRENI, Faculty of Economics, University of Ljubljana, Slovenia
Aviv SHOHAM, Graduate School of Management, the University of Haifa, Israel
ABSTRACT
The rationale for this study lies in the mixed viewpoints on the conflict and thus its consequences. Traditionally, conflicts
have been viewed as negative whereas the interactionist viewpoint perceives conflict as energizing by pointing out problems
and unifying a group (Banner, 1995). Thus, the relationship between conflicts and export performance should depend on the
type of these conflicts. On one hand, task conflict as perceived or recognized disagreements within groups about the tasks to
be performed (Amason, 1996), reflects the positive aspect of conflicts and should motivate managers to actively review the
issues and indicate a need for change (Rosenberg, 1974). However, if conflict resolution strategies are not in place to resolve
such conflicts, they could escalate into emotional conflict and harm export performance. On the other hand, emotional
conflict is defined as perceived or recognized interpersonal incompatibilities within groups that are based on friction and
personality clashes (Rose & Shoham, 2004). Here, we observe the negative aspect of conflicts, leading to the resistance to
resolve future conflicts and emotional disruptions and the damage created through subjectivity and distorted judgments
(Rosenberg, 1974). We believe that the latter is closely connected to partners power. High levels of power should encourage
the channel member holding them to behave opportunistically and exploit the weaker party through coercive influence
strategies (Frazier & Rody, 1991), which in turn impact the (emotional) conflicts and performance. In sum, the researchs
intended contribution is to study power and conflict resolution strategies as moderators of the conflictexport performance
relationship. Data were gathered by a structured questionnaire among 105 Slovene exporters. We found a positive impact of
task conflict on emotional conflict, which reduced export performance relative to the expectations of the owners and
representatives on foreign markets, but not relative to the companys plan for the current year or relative to the previous three
years. The relationship between task conflicts and export performance was not supported. Thus, the impact of task conflict on
export performance is fully mediated by emotional conflict. The important implication of this study is that task conflict can
also be perceived with negative outcomes and not necessarily just improve work processes by abolishing problems that arise,
but also hinders the productivity and inflicts possible delays. However, this result also confirms Rose and Shohams findings
(2004) that international channels of distribution are more prone to negative conflict, because cultural differences decrease
the amount of opportunities for interactions to resolve task conflicts. This study takes the discussion a step further, explaining
that conflict resolution strategies have an important effect on the relationship between conflicts and performance. We argue
that the passive aggressive strategy is more like the active avoiding strategy, which is characterized by low assertiveness and
low cooperative integrative style. The reason for these findings may be the long-term orientation of the firms, according to
which firms prefer to engage in stable long-term relationships, where any type of aggression and divergence from win-win
solutions may harm that relationship. In sum, these results are contributing to the development of the theory on conflict
resolution strategies and offer a fresh view on practical implications.
459
A FRAMEWORK FOR EXAMINING INTERNATIONAL STUDENTS RECRUITMENT

FROM B2B RELATIONSHIP PERSPECTIVE
Xu Huang, School of Business, University of the West of Scotland, United Kingdom
Pravin Balaraman, School of Business, University of the West of Scotland, United Kingdom
Heather Tarbert, School of Business, University of the West of Scotland, United Kingdom
ABSTRACT
This paper proposes a conceptual model to examine international students recruitment from B2B relationship perspective.
Since 1996, the number of international students coming to the UK is increasing from 198,064 to 435,235 in 2012 at a growth
rate of 7% annually (HESA 2012). The significant importance of international students segment to the higher education
institutions and their countries has been highlighted by a number of scholars in terms of economical, cultural, political,
educational benefits. Since the early 2000s, the considerable levels of educational cooperation which are between UWS and
its partner intuitions has become a phenomenon which attracts a large number of international students. It is evident that
universities have started to adopt approach similar to industrial and commercial companies where competitive advantages are
sustained through cooperative inter-organizational networks-competing through supply chains and not just intraorganizational integration. Moreover, the extant literatures on business relationship between buyer and seller suggest that
general consensus is that strong relationships provide substantial benefits to both parties (Ravald & Grnroos, 1996). Brown
et al( 1994) state that a crucial element in the marketing of HE institutes is based on a relationship marketing (RM) approach,
which is characterized as helping to develop and foster interactions between the organization and its customers.
Simultaneously, in higher education marketing extant literature, most of studies focus on student side in the following areas:
(1) International students motivations to study abroad and their evaluation of the service quality in higher education
institutes; (2) International students from diverse cultural backgrounds differing in their learning behaviour, learning style
from local students; (3)pull and push factors on university selection from international students perception;(4) student
retention and total quality management ;(5)branding, segmentation strategy (Nicholls et al., 1995; Tonks and Farr, 1995;
Mazzarol, 1998; Seeman and OHara, 2006; Nguyen, 2009; Hemsley-Brown and Oplatka, 2010; Vauterin et al., 2011;
Helgesen 2008; Gray et al 2003;Cheung et al 2010). By pay attention to formation and maintenance of educational alliances,
motivation, delivery issue, cross-cultural issue, commitment, trust, empathy, respect, sincerity, longevity, and sincerity have
been touched by Willis ( 2001a, 2008, 2001b, 2006); Street (1992); Ross (1993), and Ross and Liu(1998). Therefore,
inadequate knowledge of marketing for higher education, lack of understanding in B2B relationship within higher education
sector indicates the gaps that we need to fill in.
This paper is also the theoretical part of a PhD research project that draws on relationship marketing theory to explore B2B
relationship and its quality in higher education context with four specific objectives, namely:
Analyse stages of B2B relationship

Explore what constitute B2B relationship
Frame B2B relationship management
Develop measurement for a B2B RQ with both theoretic and empirical support in higher education context
The focus of this paper is on reporting the development of initial theoretical framework, authors posit relationship between
university and partner institutions as business-tobusiness partnership where both parties possess mutual goal of nurturing a
shared project in which they have both invested. Thus, we model these relationships are not only close, long-term, strategic
with high levels of trust, commitment, mutuality, satisfaction and co-operation; but also with increasing interdependence;
higher value and higher risk(Doherty & Alexander, 2004; Dwyer et al, 1987; O'Malley & Tynan, 2000; Nassimbeni, 2004).
Based on relevant relationship marketing, B2B relationship theory, networking theory, process theory literature, a theoretical
framework is proposed to examine B2B dyadic relationships particularly useful for the focal university and its partner
institutions with the purpose of international students recruitment. It aims to interpret relationship management explicitly in
higher education setting, involving analysis on B2B relationship process stage, investigation on relationship constructs and its
dimensions, value creation and measurement issue. Finally, authors close paper with further empirical case study research
design.
460
STEALING THE SHOW? HOW THE SALESPERSON AFFECTS THE INDUSTRIAL BRAND MANAGEMENT
Jasmin Ulrich, TU Dortmund University, Germany
Markus Blut, Newcastle University Business School, United Kingdom
ABSTRACT
This research examines the role of the salesperson in the context of industrial brand management. While branding was
discussed to be an issue of consumer markets for long, more and more practitioners realize its necessity to develop
advantages in highly competitive business markets (e.g. Doyle 2002; Michell et al. 2001). According to the Global Brand
Scoreboard four of the ten strongest brands including Microsoft, IBM, GE and Intel are operating partially or exclusively in
the b2b-context (businessweek.com 2010). However, b2b-literature still lacks empirical studies dealing with brand-effects to
customer loyalty (Herbst and Merz 2011). Brand values expressed by many b2b-companies focus on functional
characteristics and neglect the emotional brand potential to create strong and long-lasting relationships (Lynch and
Chernatony 2007; Majahan and Wind 2002).
To communicate an industrial brand and handle the highly complex and customer-specific products an intense and individual
interaction with the customer is demanded realizable through interpersonal relationships (Caceres and Paparoidamis 2007).
Bingham et al. (2005) presume that personal selling continues to be the key form of industrial brand communication while
Mudambi (2002) indicates the salespersons outstanding role in affecting the brand message. They suppose that the behavior
of a salesperson is perceived as a hint to the firms interest in a customer relationship and determines the extent of the brand
effects to future loyalty - without providing empirical results. Lynch and Chernatony (2007) argue that b2b-literature shows
gaps regarding the process of brand value communication and raise the question about the salespersons precise role in b2bbrand management. Thus our research addresses the topic and discusses the following opposed questions: (1) Is the
salesperson necessary to build up a brand and intensify the effect to the customer behavior (brand ambassador)? or (2) Is the
salesperson rather able to compensate the brand impact on the customer loyalty to the firm (brand substitute)?
To answer the question about the role as a brand ambassador or substitute in establishing customer loyalty, we test our
research model against a sample of 169 b2b-customers evaluating their sales representative in the chemical and
pharmaceutical industry. We assess the impact of emotional and rational brand values on the customer loyalty behavior and
include the moderating effects of the satisfaction with various salesperson characteristics. Results indicate that both
emotional and rational brand values affect the industrial customer loyalty and reveal a buffering (instead of an amplifying)
impact of the salesperson characteristics on both brand value effects. Our findings emphasize the salespersons outstanding
but risky role in establishing and maintaining b2b-relationships and provide new insights to the industrial brand management.
461
PREDICTORS OF FRANCHISEE PERFORMANCE: THE ROLE OF COMMUNICATION, CONFLICT AND

SATISFACTION
Yi-Chia Wu, University of Texas-Pan American, USA
Mohammad Ali Zolfagharian, University of Texas-Pan American, USA
ABSTRACT
This study examines the relationships between communication, conflict, a franchisees economic and social satisfaction, and
a franchisees performance in the context of the franchise systems. Surveying 141 franchisees in Texas, the authors found that
communication has a significant negative effect on conflict and has a significant positive relationship with economic and
social satisfaction as expected by previous research. However, conflict has a significant positive effect on a franchisees
social satisfaction, a reversed effect from what has been reported in previous research. This implies that some level of conflict
can be positive and harmless. There are nine hypotheses, five of which are supported. A brief discussion and the limitations of
the findings conclude the paper.
462
BEYOND THE RETURN ON ADVERTISING: ELASTICITY OF THE RETURN ON ADVERTISING AS A

DIAGNOSTIC METRIC TO MAXIMIZE PROFIT
Ted Mitchell, University of Nevada, Reno, USA
Igor Makienko, University of Nevada, Reno, USA
ABSTRACT
With increased marketing expenditures managers need to be equipped with valid and reliable measures capable of showing
links between marketing investments and a firms profitable performance. In this paper we demonstrate that traditional return
on advertising (ROA) can be a misleading metric if a firms goal is profit maximization. Then we introduce a new diagnostic
tool the elasticity of ROA and show how this metric can help marketing managers to choose more profitable levels of
advertising. This new measure has the same virtues as other traditional measures of elasticity and provides real advantages
over the conventional metrics.
463
ADVERTISEMENT-EVOKED AROUSALS AND ADVERTISEMENT REPETITION EFFECTS

Jingyi Duan, University of Rhode Island, USA
Daniel Sheinin, University of Rhode Island, USA
INTRODUCTION
The influence of repetition on advertisement (ad) effectiveness has long been an interest to researchers. The leading theory of
repetition maintains that messages gain in impact for a few exposures but further exposures begin to have a negative effect
(Anand & Sternthal, 1990; Berlyne, 1970; Sawyer, 1981). However, exceptions to this inverted-U curve exist. For example,
although Belch and Belch (1984) found that attitude toward ad (Aad) demonstrated the inverted-U curve with 1, 3 and 5
exposures for humorous ads, Zhang and Zinkhan (1991) found that Aad remained unchanged with 1, 3 and 5 exposures. The
conflict in the literature has not yet been addressed. According to Faseur and Geuens (2006), feelings induced by ads lead to
arousal, which influences Aad. Arousal evoked by ads may be the underlying reason why past research on repetition and
emotions of ads shows different and even conflicting changing patterns of Aad under repetition.
The paper aims to explore the role of arousal in ad repetition through two experiments. Substantial research shows that both
ad repetition and arousal separately influence Aad (e.g. Anand & Sternthal, 1990; Faseur & Geuens, 2006). However,
surprisingly little research examines the two factors together. Harrison (1977) is the only researcher we have seen that
investigates the relationship between arousal and repetition; however, he only focuses on high-arousal stimuli. Given that
most ads are repeated and generate a level of arousal, this omission merits further exploration.
Identifying how arousal influences the effects of repetition for ads with low and moderate arousal will provide important
insights for marketers with a more nuanced view of when and how negative effects of repetition are likely to occur for ads
with different arousal levels; theoretically, it will provide important extensions of the literature by more fully understanding
the process in which arousal may influence the ad repetition effects on Aad.
CONCEPTUAL FRAMEWORK
According to Berlynes two-factor theory, the underlying mechanism of repetition is functioned by habituation and tedium
(Berlyne, 1970; Sawyer, 1981). In the context of advertising, habituation occurs when first several repetitions reduce
uncertainty and tension associated with a novel ad, leading to familiarity and liking; tedium occurs when high repetition of
the same ad leads to growing boredom and decreased liking. However, there are also a number of studies that demonstrate the
effects of repetition are more complex under the moderating effects of various factors including processing difficulty (Anand
and Sternthal, 1990); brand familiarity (Campbell and Keller, 2003); ad complexity (Cox and Cox, 1988); type of elaboration
(Malaviya, 2007); processing depth (Nordhielm, 2002) and so on. In a word, substantial factors have been shown as
moderators in the ad repetition effectiveness.
Arousal is defined as level of vigilance or activation, ranging from drowsiness to excitement (Pham, 1996). The intensity of
emotions is determined by level of physiological arousal (Russell, 1980). Research has found that stimuli with moderated
arousal tend to elicit more favorable reactions than stimuli with high or low arousal (Harrison, 1977; Mehrabian and Russell,
1974). The explanation is that because stimuli with moderate arousal are sufficiently arousing to activate the primary reward
system in the brain but not so arousing as to activate the aversion system which inhibits the primary reward system, they are
more pleasurable than stimuli with low or high arousal (Berlyne, 1973; Harrison, 1977).
Harrison (1977) pointed out that for high-arousal stimuli, liking toward the stimuli increases then decreases under repetition.
There are three hedonic systems in the brain. At the first several exposures, high arousal goes through the primary reward
system the first hedonic system, and activates the second hedonic system the aversion system that inhibits the primary
reward system. As the repetition increases, the arousal decreases (Baker, Hutchinson, Moore & Nedungadi, 1986; Harrison,
1977; Pfaff, 2006). The de-arousal finally activates the third system the secondary reward system, which serves to inhibit
the aversion system, resulting in increasing liking toward the stimuli. However, if familiarization and the loss of arousal
continue as a result of further repetition, the stimuli will lose the capacity to activate the primary reward system, leading to
decreasing liking.
The theory of hedonic systems is applied to hypothesize the relationship among low-, moderate- and high-arousal (the
original arousal level) ads under repetition. As high arousal activates the aversion system in the brain which inhibits the
464
primary reward system while low arousal is not able to activate primary reward system, they are expected to receive the same
extent of liking, which are less than the moderate arousal. When the repetition increases to moderate level, the declining
arousal of high-arousal ads activates the secondary reward system that inhibits the aversion system, as a result, the liking
toward high-arousal ads becomes equal to that toward moderate-arousal ads when it is repeated in low frequency. Since there
would not be significant change of the attitude on moderate-arousal ad under low and moderate repetition, high-arousal ads
are therefore expected to be equally evaluated as moderate-arousal ads and higher evaluated than low-arousal ads under
moderate repetition. When the repetition continues to increase, the arousal of both the high- and moderate- arousal ads
decreases to low, they are thus expected to be equally evaluated as the low-arousal ad because they all fail to activate the
primary reward system. The hypotheses are formally stated as below:
H1a: Under low repetition, high-arousal ads are less evaluated than moderate-arousal ads.
H1b: Under low repetition, high-arousal ads are equally evaluated as low-arousal ads.
H2a: Under moderate repetition, high-arousal ads are equally evaluated as moderate-arousal ads.
H2b: Under moderate repetition, high-arousal ads are higher evaluated than low-arousal ads.
H2c: The changed arousal level of high-arousal ads under the low and moderate repetition acts as the mediator between the
interaction of repetition x initial arousal and Aad.
H3a: Under high repetition, ads with different levels of arousal are equally evaluated.
H3b: The changed arousal levels of high- and moderate- arousal ads under the moderate and high repetition act as
mediators between the interaction of repetition x initial arousal and Aad.
METHODOLOGY
Experiment 1
Subjects and Design
350 undergraduate students from a northwestern university will be recruited to participate in this experiment in exchange of
extra credit. Participants will be randomly assigned to a 3 (ad repetition: 1, 4 and 7 exposures) x 3 (ad arousal: low, moderate,
high) x 2 (ad-evoked emotions: humorous, warm) mixed-subject design and a control group. Ad repetition and ad arousal are
between-subject factors and ad-evoked emotions is within-subject factor.
Stimuli
Following Campbell and Keller (2003), participants will watch two 30-minute news programs. Each program will include 12
ad breaks. The ads in one program evoke humorous feeling, while the ads in the other show evoke warm feeling. 1-exposure
group will watch the filler ad 11 times and the test ad once, 4-exposure group will watch the filler ad 8 times and the test ad 4
times, and 7-exposure group will watch the filler ad 5 times and the test ad 7 times (see Table 1 as an example) to represent
low, moderate and high repetition conditions respectively. The news programs and ads will be rotated and counterbalanced
for order and repetition level.
The test ads are about Nationwide Insurance. There will be three versions which differ in the intensity of induced humorous
feelings to generate low, moderate and high levels of arousal for the test ads evoking humorous feelings. Following Unnava,
Agrwal and Hautvedt (1996), the filler ads are for other products and evoke humorous feeling which have the same level of
humor as the moderate-arousal test ad has. The settings for the test ads and the fillers ads evoking warm feelings are similar.
Pretests will be done to see if the arousal evoked by the news and the filler ads is moderate, and if each version of the test ads
evokes corresponding feeling and level of arousal. The rating scales are consistent with Faseur and Geuens (2006). The
induced feelings will be measured by a 6-item, 7-point emotion scale, ranging from "the ad does not evoke this feeling at all"
(1) to "the ad evokes this feeling completely" (7) ( = 0.89). The induced arousal will be measured by a 7-point scale on 4
items calmness, enthusiasm, action and energy ( = 0.89). Pretests to find out if the participants are able to remember the
times that they have seen the test ad accurately will also be conducted.
Procedure
Participants will be randomly assigned to the experimental conditions and the control group. Participants in the control group
will complete manipulation checks on feelings and arousal induced by the news programs, the filler ads and the test ads after
465
they watch all of the stimuli once. Participants in the experimental groups will watch the two news programs, and then finish
dependent variable measures of ad attitude on 7-point scales (good / bad; pleasant / unpleasant; favorable / unfavorable) ( =
0.94) (MacKenzie & Lutz, 1986), the measurement on arousals and how many times they remember seeing the ads, and the
covariates measures on favorability toward the brand, familiarity toward the ads, mood state as well as product category
involvement.
Anticipated Results
Manipulation check
ANCOVA will be conducted for the mean comparison of arousal and feeling ratings that done by the control group, after
controlling favorability toward the brand, familiarity toward the ads, and mood state and product category involvement as the
covariates. The results are expected to show a main effect of arousal, a main effect of humorous and warm feelings of test ads
and a main effect of repetition on self reports of ad repetition and no other significant effects.
Arousal changes
Three ANCOVA models will be done to compare means among the ad-evoked arousals under the different repetition levels,
after controlling the covariates. The results are expected to show significant mean differences of the arousal levels of the
high-arousal ad across the repetition levels; a significant mean difference of the arousal levels only between moderate and
high repetition for moderate arousal ad; no such change for low-arousal ad. It is also expected that there is no significant
mean difference among the three arousal ads under high repetition all show low arousal.
Dependent variable
A 3 (ad repetition: 1, 4 and 7 exposures) x 3 (ad arousal: low, moderate, high) x 2 (ad-evoked emotions: humorous, warm)
ANCOVA will be done to test if there is a significant two-way interaction between arousal and repetition, after controlling
the covariates. Figure 1 shows the anticipated results that will support H1a, H1b, H2a, H2b and H3a.
PLACE FIGURE 1 ABOUT HERE
Mediated moderation
To test if the variations of Aad are due to the arousal changes, in other word, the changed arousal levels under the moderate
and high repetition act as mediators between the repetition (IV) x original arousal levels (moderator) interaction and Aad (DV)
(mediated moderation), a series of regression models will be conducted (Morgan-Lopez & MacKinnon, 2006). The result is
expected to show that the 2 x 3 interaction has no effect when the mediator is controlled. If so, the mediated moderation will
be revealed. H2c and H3b will be supported.
Experiment 2
The purpose of Experiment 2 is to replicate the findings of Experiment 1 with different manipulation of ad-evoked arousal,
repetition, ad medium and product category.
Subject and Design
Participants (n = 350) will be randomly assigned to a 3 (ad repetition: 2, 6 and 10 exposures) x 3 (ad arousal: low, moderate,
high) between-subject design and a control group. Higher repetition is used in Experiment 2 than Experiment 1 because of
the different repetition requirements of static (e.g., print) versus dynamic (e.g., television) advertising (Belch and Belch,
2001; Campbell and Keller, 2003).
Stimuli
Print ads will be used in this experiment. They will be displayed by computer programs which controlled the time and
sequence of the exposure. The test ad is about Toyota car. Based on the psychological findings of feelings and their
corresponding arousal levels (Reisenzein, 1994), and following Faseur and Geuens (2006) that manipulated different arousal
levels with different kinds of feelings, this experiment designs relaxed-feeling version for the low arousal condition, cozyfeeling version for the moderate arousal condition, and excited-feeling version for the high arousal condition. To confirm that
arousals and the selected feelings are orthogonal, an exploratory factor analysis will be done. Similar pretests as that of
Experiment 1 will also be done.
Procedure and Analysis
466
Random assignment will be conducted. Following Campbell and Keller (2003), each participant will individually start a
computer-controlled program that displays a series of print ads on a personal computer screen; each ad will be displayed for
13 seconds. The participants will go through the procedures similar with that of Experiment 1. The manipulation check,
arousal changes check, dependent variable and mediated moderation will be done similar with Experiment 1.
GENERAL DISCUSSION
This research has important implications. Theoretically, this research builds on the existing literature by providing more
nuanced view of when and how negative effects of repetition are likely to occur for moderate- and low-arousal ads. It
demonstrates that arousal moderates repetition effects, and the declined arousal is the underlying cause of the changed
attitudes toward the ads when the ads are repeated with moderate and high frequencies. Managerially, this study will provide
an important insight for marketers that changing the content and induced feelings of ads from time to time is beneficial to
avoid advertising wear-out. Rather than simply employing a high-arousal ad scheme, care should be taken to keep the
repetition frequency within the range of gaining maximum liking. The limitations are, first, the product categories used in the
experiments are limited in beer and car, which are designed to represent different extents of product involvement. Second, ad
repetition to which consumers are typically exposed in reality involves higher levels and more spread out than the
manipulation of repetition in this study. Future research therefore should address these limitations.
TABLES
Table 1
1 exposure: F1 F2 F3 T F1 F2 F3 F2 F3 F2 F1 F3
4 exposures: T F1 F2 T F3 T F1 F3 F2 T F2 F3
7 exposures: T F2 T F1 T F3 T F1 T T F2 T
FIGURES
REFERENCES
467
TIMING OF SPONSORSHIP ANNOUNCEMENTS:

A TEST OF TEMPORAL DISTANCE AND CONSTRUAL LEVEL EFFECTS
ABSTRACT
Corporate sponsorship has become an integral component of the marketing communication mix for companies across the
globe. In addition to communicating through sponsorship, sponsors and sponsored entities also communicate about a
sponsorship. This form of sponsorship-linked marketing is frequently employed when announcing the initiation of a
sponsorship via advertising channels and press releases. In this context, marketers are challenged in terms how best to
communicate the complex relationship created via corporate sponsorships. However, research on the influence of sponsorship
announcements has uncovered mixed results and suffers from two shortcomings. First, previous studies have only considered
the announcement of sponsorships at a generic level, while ignoring the potential for variation in how a sponsorship is
publicly announced (i.e., the composition of announcements). Second, scholars have emphasized investors reaction to
announcements while overlooking any potential effects on consumers, who are a more likely target for sponsorship
communication. In the present study, we therefore investigate how different types of sponsorship announcements influence
consumers perceptions of the sponsoring firm. Specifically, based on Construal Level Theory (CLT), we conducted two
experiments to investigate how the concreteness of the information contained in an announcement as well as the timing of the
announcement influence consumers responses to the sponsorship.
According to CLT, consumers judge information with different levels of abstraction. The theory generally implies a more
concrete (i.e., detailed) interpretation of communication about events closein time, socially, or geographicallyto the
consumer; whereas, individuals are apt to interpret communication about events distant to oneself in abstraction. Based on
this theoretical foundation, we derive three hypotheses about the effects of different levels of information construal in
communication about sponsorships. We anticipate that an announcement containing more concrete details about a
sponsorship (i.e., low levels of construal) will result in more positive outcomes for the sponsoring brand (H1) when compared
to an announcement composed in greater abstraction (i.e., high levels of construal). Additionally considering consumers
mental information processing, we hypothesize that for a temporally distant event, concrete information will require more
information processing to resolve the disparity between individuals expected level of construal and the construal level of the
provided information, thereby leading to more favorable evaluations of the sponsoring brand than abstract information (H2).
On the other hand, for temporally near events, CLT suggests consumers are already predisposed to a concrete mindset. We
therefore assume the level of abstractness of the information provided about events close in time to have no effect on the
evaluation of the sponsoring brand (H3).
To test the proposed hypotheses, we conducted two separate experiments as online surveys. In the first experiment, we
manipulated the construal level of the sponsorship announcement (abstract/concrete) between subjects without any mention
or manipulation of the temporal distance to the event. In the second (2 x 2) experiment, we manipulated the temporal distance
(near/far) to the sponsored event in addition to the construal level of information content (abstract/concrete). Collectively, the
results of the two studies suggest that consumers prefer sponsorship announcements that contain concrete (versus abstract)
information, thereby supporting H1. Results of our second study revealed that in support of H2, respondents who were faced
with a concrete sponsorship announcement for a distant event evaluated the sponsoring brand more positive than those who
were faced with an abstract announcement for a distant event. Hypothesis 3 was also generally supported by the study results;
for temporally near events, we find no significant differences between abstract and concrete sponsorship announcements in
attitude toward the sponsoring brand, trust, and purchase intention. Willingness to recommend the sponsoring brand,
however, was significantly lower among respondents faced with concrete information about a temporally near event than
among those who read an abstract announcement. Possible explanations for this intriguing result are discussed in the paper.
Overall, the results of both experiments highlight the importance of recognizing CLT in sponsorship-linked communications.
On a theoretical level, CLT was found to adequately explain aspects of consumers reactions to sponsorship announcements.
In general, presenting content at a low construal level (i.e., concrete) is preferable to more abstract information. At the same
time, however, the temporal distance to the event at the time of the announcement should be considered, especially when
concrete information is not feasible to provide publicly for reasons of confidentiality.
468
THE VALUE AND VERSATILITY OF BILLBOARD ADVERTISING: MANAGEMENT AND CONSUMER

PERSPECTIVES
John L. Fortenberry, Jr, Louisiana State University Shreveport, United States
Peter J. McGoldrick, University of Manchester, United Kingdom
ABSTRACT
The capabilities of billboards have been largely neglected by the academic research community. This investigation explores
the assumption among many managers that billboards serve primarily attraction roles at early stages of the effect hierarchies.
In the first study, 1,640 consumers provide favorable views of billboards, with indications that billboards are also influential
for later stage effects and for existing customers. Study 2 examines in more depth the views of 241 experienced marketing
executives, indicating through structural modeling and regression analysis that the value of billboards is more widely
recognized than their potential versatility.
The findings suggest self-fulfilling beliefs among many managers, whereby billboards are largely deployed to generate
awareness, which becomes the main focus of tracking studies, thus reinforcing conventional beliefs. As media proliferate and
the intrusiveness of some antagonizes consumers, it is timely both for managers and researchers to re-examine the wider roles
and potentials of billboards.
469
DOES SPORTS ATHLETES CREDIBILITY AFFECTS ATTITUDE TOWARD ADVERTISEMENT AMONG

CONSUMERS IN PENANG, MALAYSIA: A STRUCTURED ABSTRACT
Xin Jian Leong, Tunku Abdul Rahman College, Penang, Malaysia
Yen Nee Goh*, Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia
Salmi Mohd Isa, Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia
INTRODUCTION
Advertisement endorsed by celebrity such as actor, singer or sport athletes have been adopted as an advertising strategy by
many companies. This is due to an endorser credibility play an important role in influencing consumers attitude toward
advertisement and their purchase behaviour. Previous empirical research found that there is a significant relationship between
source credibility (i.e. expertise, attractiveness and liking) and attitude towards advertisement (Clow, James and Stanley,
2008). Source credibility refers to credibility of the endorser, spokesperson or individual in an advertisement (Clow et al.
2008). In addition, a study by Yan, Ogle and Hyllegard (2010) found that source credibility has a direct effect upon attitude
toward advertisement among generation Y consumer. Moreover, Yoon, Kim and Kim (1998) conducted a study on the effect
of source credibility on attitudes and behavioural intentions. The study is aimed to examine the effect of source credibility
namely expertise, trustworthiness and attractiveness on attitude and behavioural intention to both Americans and Koreans.
The result shows that perceived attractiveness is more significant than expertise and trustworthiness in term of influence
attitude toward advertisement (Yoon et al. 1998)
Hence, it is crucial to examine the effect of source credibility (sports athletes credibility as used in the research) on the
attitude towards advertisement. The paper examined whether sports athletes credibility affects attitudes toward advertisement
among consumers in Penang, Malaysia. Specifically, it illustrates whether sports athletes credibility (i.e. expertise,
trustworthiness, attractiveness, similarity and likeability) affects attitudes toward advertisement. The present research
intended contribution is to expand research on source credibility, or as used in this research, sports athlete credibility. The
rationale for choosing sports athletes as the endorser lies in the need to increase consumers awareness towards Malaysian
sports athletes in accordance with the government agenda in promoting sports. In addition, the present research intends to
increase on sports and consumers related studied which are limited in Malaysia context. For marketers, the present research
intends to offer insightful information pertaining to selection of sports athletes as endorsers for a product on the more
preferable characteristic by consumers. This is important as it help marketers to strategize their product and brand to match
with endorser credibility (like sports athletes) which can ensure significant returns for the firms.
METHOD
The target population for sampling is young consumers. According to Euromonitor International (July 2011, p. 16), Malaysia
young consumer aged from 17 to 25 being the most influential group of consumer for marketer to penetrate as this group of
consumer possessed a higher education as well as better spending ability. Hence, the sample frame for this study is young
undergraduate consumer aged from 17 to 25 in Penang region. A total of 550 hardcopies of personally administered
questionnaire were distributed using convenience sampling technique. A total of 300 usable questionnaires were returned
representing an effective response rate of 55%. A mixture of validated scale items derived from literature were adapted and
used to measure all variables (Gaied and Rached, 2010; Holbrook and Batra, 1987; Ohanian, 1990; Stanley, Clow and James,
2011). All items were measure via 5 point Likert scale, i.e. 5=strongly agree to 1= strongly disagree. Firstly, factor analysis
was conducted on expertise, trustworthiness, attractiveness, similarity and likeability. Kaisers rule was used to extract
components resulting in five factors with an eigenvalue greater than 1 with a total of 25 items, explaining 75 per cent of total
variance. The retention decision of each item was based on factor loadings were greater than or equal to .50 and cross-loading
with the other factors generally smaller than .35 (Igbaria, Livari and Maragahh, 1995). The final reliabilities for all scales
were greater than .80 and this preliminary result indicated that the psychometric properties of the scales were acceptable.
Therefore, it was appropriate to examine the relationship between sports athletes expertise, trustworthiness, attractiveness,
similarity and likeability on attitude towards advertisement (refer table 1 and table 2).
Firstly, to test the relationship between sports athletes expertise, trustworthiness, attractiveness, similarity and likeability on
attitude towards advertisement (H1-H5), multiple regression analysis was performed (see Table 3). Three dimensions of
sports athletes credibility, that is attractiveness ( =.259, p<0.01), similarity ( =.203, p<0.01), and likeability ( =.362,
470
p<0.01) were found to have a positive and significant effect on attitude towards advertisement. However, another two
dimensions of sports athletes credibility, that is sports athletes expertise and trustworthiness have no significance
relationship with attitude toward advertisement. Moreover, sports athletes trustworthiness has shown a negative relationship
with attitude toward advertisement.
The results of this research show that sports athletes attractiveness, similarity and likeability affect attitude towards
advertisement. The results of this research suggest that the more attractive, the more similar and the more likeable sports
athletes as an endorser, the greater is the influence on attitude toward advertisement. On the other hand, the result also
implies that sports athletes expertise and trustworthiness are not important to influence Penang consumers attitude toward
advertisement. This may due to the sports athletes whom the consumer favour has been an endorser for too many different
products that eventually does not reflect the expertise of their favourite sports athletes in the product endorsed. Therefore, the
results provide useful input to marketers especially in designing their advertising strategy. Nonetheless, there are some
limitations which need to be highlighted. Data was collected at just one private college in Penang and from an educated and
relatively young group of respondents. Thus, it is possible that the results might not be able to offer a generalized view of the
research studied. To conclude, the authors would like to highlight that purchase behaviour is not reported in this paper as
inclusion of purchase behaviour is warranted by authors in forthcoming paper.
TABLES
Table 1
Factors Loading, KMO and Barletts Test Indicator for Sport Athlete Credibility
Items
Factor 1
Sport Athlete Expertise (6 items; Ohanian, 1990)
I think my favourite sport athlete is an expert person.
I think my favourite sport athlete is an experienced person.
I think my favourite sport athlete is a knowledgeable person.
I think my favourite sport athlete is a qualified person.
I think my favourite sport athlete is a skilled person.
I think my favourite sport athlete is an expert person.
Factor 2
Sport Athlete Likeability (5 items; Stanley, Clow and James, 2011)
I think my favourite sport athlete is a likeable person.
I think my favourite sport athlete is a pleasing person.
I think my favourite sport athlete is a friendly person.
I think my favourite sport athlete is an approachable person.
I think my favourite sport athlete is an agreeable person.
Factor 3
Sport Athlete Trustworthiness (5 items; Ohanian, 1990)
I think my favourite sport athlete is a dependable person.
I think my favourite sport athlete is an honest person.
I think my favourite sport athlete is a reliable person.
I think my favourite sport athlete is a sincere person.
I think my favourite sport athlete is a trustworthy person.
Factor 4
Sport Athlete Similarity (5 items; Gaied and Rached, 2010)
I think my favourite sport athlete and I are similar in term of opinions.
I think my favourite sport athlete and I are similar in term of attitudes.
I think my favourite sport athlete and I are similar in term of activities.
I think my favourite sport athlete and I are similar in term of interests.
I think my favourite sport athlete and I are similar in term of lifestyles.
Factor 5
Sport Athlete Attractiveness (4 items; Ohanian, 1990)
I think my favourite sport athlete is an attractive person.
I think my favourite sport athlete is a classy person.
I think my favourite sport athlete is a beautiful/handsome person.
I think my favourite sport athlete is a sexy person.
Eigenvalue
471
Factor
3
4
.881
.856
.846
.837
.772
.719
.801
.746
.733
.724
.724
.774
.766
.733
.721
.651
.825
.803
.795
.764
.750
5.087
3.803
3.716
.746
.699
.677
.631
3.617 2.408
% Variance (74.53)
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
20.35 15.21 14.86

0.935
Approx. Chi-Square
df
Sig.
Bartlett's Test of Sphericity

Table 2
14.47 9.63
6101.798
300
.000
Factors Loading, KMO and Barletts Test Indicator for Attitude toward Advertisement
Items
I like the advertisement endorsed by my favourite sport athlete.
I am favourable towards the advertisement endorsed by my favourite sport athlete.
The advertisement endorsed by my favourite sport athlete is good.
I am having a positive attitude toward the advertisement endorsed by my favourite sport athlete.
Eigenvalue
% Variance
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Approx. Chi-Square
df
Bartlett's Test of Sphericity
Sig.
Adapted (4 items; Holbrook and Batra, 1987)
Table 3: Multiple Regression Analysis Results
Sports Athletes Credibility
Factor
1
.917
.901
.884
.881
3.211
80.27
.849
859.659
6
.000
Dependent Variable:
Attitude toward Advertisement
.078
-.008
.259**
.203**
.362**
.511
.503
61.467
Expertise
Trustworthiness
Attractiveness
Similarity
Likeability
R
Adjusted R
F
Note**p<0.01, *p<0.05
REFERENCES
Clow, K. E., James, K. E., & Stanley, S. (2008). Does source credibility affect how credit cards are marketed to college
students? Marketing Management Journal, 18(2), 168-178.
Euromonitor International. (2011, July). Consumer lifestyles in Malaysia. Retrieved August 5, 2012, from
http://www.euromonitor.com/.
Gaied, A. M., & Rached, K. S. B. (2010). The Persuasive Effectiveness of Famous and Non Famous Endorsers in
Advertising. IBIMA Business Review, 1-14. doi: 10.5171/2010.474771.
Holbrook, M. B., & Batra, R. (1987). Assessing the Role of Emotions as Mediators of Consumer Responses to Advertising.
Journal of Consumer Research, 14(3), 404-420.
Igbaria, M., Livari, J., and Maragahh, H. (1995). Why do individuals use computer technology? A Finnish case study.
Information & Management, 29, 227-238.
Ohanian, R. (1990). Construction and validation of a scale to measure celebrity endorser, perceived expertise,
trustworthiness, and attractiveness. Journal of Advertising, 19(3), 39-52.
472
Stanley, S. M., Clow, K., & James, K. E. (2011). The impact of visual strategy and race and gender congruency on source
credibility of print advertisements. Marketing Management Journal, 21(2), 81-94.
Yan, R. N., Ogle, J. P., & Hyllegard, K. H. (2010). The impact of message appeal and message source on Gen Y consumers'
attitudes and purchase intentions toward American Apparel. Journal of Marketing Communications, 16(4), 203-224.
Yoon, K., Kim, C. H. & Kim, M. S. (1998). A Cross-Cultural Comparison of the Effects of Source Credibility on Attitudes
and Behavioral Intentions. Mass Communication and Society, 1(3-4), 153-173.
473
A FACTOR ENDOWMENT APPROACH TO INTERNATIONAL MARKET SELECTION FOR DIRECT

SELLING
Scott Widmier, Kennesaw State University, USA
Lance E. Brouthers, Kennesaw State University, USA
ABSTRACT
In an effort to advance the International Market Selection (IMS) literature, we draw on factor endowments theory, a wellestablished theory from the economics and international trade literature, to examine how direct selling businesses choose
countries for global expansion.
Hierarchical regression was used to test the notion that two cheap and abundant domestic factors drive the attractiveness of
specific international locations: (1) the abundance of cheap available labor and (2) access to an inexpensive channel linking
direct sellers to their customers. Our sample consisted of 51 countries, representing 92% of world GDP.
Our findings support the notion that two specific national level factor endowments explain the location choice decisions for
direct selling businesses. Based on our study it appears that factor endowment theory may be extended to businesses outside
of manufacturing, not only to direct selling, but perhaps other channels based businesses as well.
474
TO WHAT EXTENT CAN BEING AN EVENING COUNTRY INFLUENCE ITS REPUTATION AND FDI
ATTRACTIVENESS?
INTRODUCTION
The aim of our research is to analyze the image of the country that is the target for foreign direct investment and determine its
impact on a countrys attractiveness for business. More specifically, the objective is to determine the extent to which
geographical and cultural factors, language or identical morning/evening habits influence a foreign investors evaluation of a
specific country. We propose to measure country of origin image by measuring the extent to which cognitive and affective
dimensions of a country treated as independent variables influence the intention to invest in a certain country by using human
personality traits as measurement instrument. A set of hypotheses have been developed to be tested using a sample of
successful foreign investors in Portugal. The participants will choose three activity sectors from the twenty one items
available in the economic activity code list (CAE Rev.3) (INE, 2007, pp. 27-31). They will then evaluate the country in
terms of its personality. Using structural equations modeling (SEM) we propose to express the extent to which the image of
each activity sector influences the country of origin image. It is expected to confirm the importance of the country of origin
image as a symbolic construct, using the influence of cognitive (beliefs) and affective (emotions) dimensions on the intention
to invest. The identification of the trends of activity sectors and their application by successful investors in Portugal is likely,
particularly to explain the degree to which geographic and cultural characteristics may influence the success of foreign direct
investment.
FDI Host Country - Portugal
Europe is ranked as the second most attractive investment region in the world, with a score of 35 percent. It comes
immediately after China which scores 38 percent according to the Ernst & Young Europe Attractiveness Survey Report
(2011). The results showed that infrastructure and stability, as well as the transparency of the political, legal and regulatory
environment are the main factors for choosing a country to invest in. Hence, Europes attractiveness as a business
destination remains solid (Ernst & Young, 2011) especially for countries that have a strong historical presence (Bevan &
Estrin, 2004). The GDP per capita in European peripheral countries increased during the first decade of their adherence to the
European community, and Portugal in particular, increased around twelve points (1986-1996). Nevertheless, Portugal ranked
at the bottom of the convergence ratings in 1995 and was not able to attract FDI despite low labor costs (Maia, 1995, p. 53).
Portugal had a negative results in the assessment of foreign direct investments into the European Union but it had certain
similarities with Spain which can be observed in the pattern of the Portuguese and Spanish relative attractiveness between
1980 and late 1990 (Castro, 2004, p. 5). This suggests that there may be other relevant external factors.
From another perspective, country selection for foreign market investment can sometimes be a reaction to external elements
such as ethnicity, cultural similarity, geographic proximity (Murat & Pirotti, 2010) or other elements that are not rational or
systematic. There is also some evidence that companies begin their internationalization in markets where they think they can
be easily understood. The roles of a common language and cultural proximity have been referred as important determinants
in the early stages of internationalization by Cechella (2010). We also propose to confirm this fact.
There is still a lack of research in measurement techniques that could better explain the symbolic aspect of the image of the
country of origin and how it can affect peoples attitudes toward certain countrys offering (Assarut, 2006). The existing
studies focus mainly on peoples attitudes toward products from a particular country (Heslop, Lu, & Cray, 2008); therefore
our approach is slightly different. It is related to an outcome associated to FDI focusing on activity sectors rather than
products. In this study the FDI attractiveness relates to the investment in specific activity sectors in a chosen country, and its
relevance is reinforced by the fact that Roth & Diamantopoulos (2009) referred to it as a potential topic of interest for future
studies. (p. 24). The analysis of the country of origin image is still a complex challenge (Roth & Diamantopoulos, 2009).
We propose to measure its cognitive dimension using personality traits to capture the affective dimension of the construct by
personifying it (Nebenzahl, Jaffe, & Usunier, 2003), and measure the conative reactions. This is of particular relevance for
the academy as it would demonstrate the ways in which country personality dimensions (dAstous & Boujbel, 2007) affect
individuals.
475
Research Questions
To what extent does a countrys reputation influence its FDI attractiveness?
To what extent do specific activity sectors influence the country of origin image and therefore country reputation?
To what extent do geographical and cultural factors affect the evaluation of a countrys personality?
How does being a morning or evening country influence a countrys reputation and thereby its attractiveness for
business?
LITERATURE REVIEW
Country of Origin Image and FDI Location
The country of origin image can include country of origin elements (DaSilva, Davies, & Naud, 2001) and role effects
(Bevan & Estrin, 2004), as well as country reputation defined as a combination of stakeholders images of a country over
time (Passow, Fehlmann, & Grahlow, 2005). Even though Roth & Diamantopoulos (2009) argued that the country of origin
image is a confused construct. They proposed to divide it into three groups, focusing on different image object: country
image generic and generalized image of the country (p. 3); country of origin - the effects of the image of the country on its
products (pp. 3-4); and made in image of the products/brands of a country (p. 4). Although the country of origin image
concept has been analyzed by many, few have focused on personality scales (Nebenzahl et al., 2003) to measure attitude
towards products from a certain country.
FDI seems to be affected by country of origin perceptions (DaSilva, et al., 2001) and by the countrys reputation (Passow, et
al., 2005). However, the images investors have may not necessarily match an objective reality and can greatly influence
their decision (Bevan & Estrin, 2004). Roth & Diamantopoulos (2009) suggested analyzing cognition by taking different
outcome variables and investigating their influence on the country of origin image. We propose to use this approach as our
objective is to determine the decisions in the choice of country for business. Characteristics relating to a countrys location
such as geographical distance (Christen & Kepler, 2011) may increase bilateral costs for trade; cultural affinity, language or
even being a morning rather than an evening culture (Dacko, Mohsen, Simes, & Garcia, 2012) may also influence the
image of the country of origins and thereby FDI attractiveness.
Geographical distance Geographic proximity and existing trade agreements positively impact FDI flows (Terpstra & Yu,
1988) despite the fact that the Murat & Pirotti studies (2010) have not come up with conclusive findings. Time zones and
distance (longitude and latitude) (Christen & Kepler, 2011) will be used as proxy measures. Within Europe, the periphery is
still perceived as having high logistical costs (Dunning, 1988). A countrys proximity to the European Economic Market is
an important aspect in the decision to export or to invest (Cechella, 2010). Thus we may hypothesize:
H1-1 FDI is negatively related to the geographic distance to the host country.
Cultural affinity Murat & Piroti (2010) used religion as a proxy and came up with both positive and negative impacts on
FDI flows depending on country specificities. Heritage and cultural similarities also have an impact on bilateral relationships
(Terpstra & Yu, 1988; Cechella, 2010). We will use the common religion as a proxy of measure.
H1-2 FDI is positively related with cultural affinity to the host country.
Language sharing mother language may have a positive impact on investments (Murat & Pirotti, 2010).
language and the countrys second language will also be analyzed.
H1-3 FDI is positively related to countrys native language.
The official
Time scheduling the question of whether it is a morning or evening country was referred by Dacko et al. (2012) in the
context of cross country trade, and peoples age was used as a proxy to measure it (Dacko et al., 2012). Assiduousness (d
Astous & Boujbel, 2007) will be used to measure it.
H1-4 FDI is negatively related to the fact of being an evening country.
METHODOLOGY
The research design was based on a collection of mixed data. Objective data will be taken from secondary datasets, and
primary data will be taken from a questionnaire. The questionnaire will be aimed at a sample of successful foreign investors
in Portugal, using Portuguese Trade & Investment Agency (AICEP) official list. The sample dimension should include at
least 180 people even though d Astous et al. (2008) used 174 people on a similar study. FDI research was carried out by
companies (Dunning, 1988) rather than by countries. However as we based the study on the symbolic aspect of the country
476
of origin image construct using human personality traits, the individual is the unit of analysis. The questionnaire will include
six questions about social demographics in order to obtain data from respondents such as gender, age, education, annual
income, ethnic origin, and language. This data will be useful to access secondary data in order to back up certain theories,
and test the hypotheses. We used the d Astous and Boujbel (2007) country personality instrument based on its six main
dimensions (with four items each) agreeableness, wickedness, snobbism, assiduousness, conformity and unobtrusiveness valid in the description of a variety of countries without adaptations (Roth & Diamantopoulos, 2009, p.20).
The procedure for the questionnaire was as follows: firstly, in order to determine the activity sector used to represent
Portugal, participants were asked to list three activity sectors from a list of the twenty one higher level categories of the
economic activities (CAE Rev.3) defined in Portugal according European Union norms (INE, 2007, pp. 27-31). Next,
participants were asked to rank in a seven point scale where 1= does not describe this country at all, and 7=describes this
country perfectly (dAstous & Boujbel, 2007, p. 24), the 24 personality traits of the country.
The questions used in the questionnaire are (adapted from Assarut, (2006, p.15):
What sort of personality does a person have that invests in sector X, Y or Z in Portugal?
What sort of personality does a person have who invests in Portugal?
Our model analyzes cognitive and affective dimensions as independent variables. The intention to invest in certain activity
sectors in a specific country is treated as the dependent variable, which results in the country of origin image construct being
measured as a whole. In order to empirically show that the image of a country is formed on the basis of the images of the
activity sectors of the country, SEM will be used. The observable variables are the personality traits that survey participants
ascribed to activity sectors and country, while latent variables are the six factors (agreeableness, wickedness, snobbery,
assiduousness, conformity, and unobtrusiveness) as well as the country of origin image, and the overall image of the activity
sectors. The structure of the model will be divided in two parts: the specific activity sector image and the country of origin
image. We expect that the image of the activity sector will reflect the country of origin image.
EXPECTED RESULTS AND DISCUSSION
We propose that the perceived intention to invest in a certain country will increase proportionally with a more positive image
of the same country. Different activity sectors will influence the image of the country of origin accordingly. The
confirmation of the hypotheses is expected; therefore time zone will have a positive impact on FDI attractiveness; willingness
to invest abroad will be positively related to the sharing of language and cultural affinity. Sharing time-scheduling habits,
whether it is a morning or evening country will have a positive impact on a countrys bilateral relations. Time scheduling
seems to be an important factor in international business as people value punctuality as an important element which
influences the countrys reputation and therefore investors attractiveness. We expect our findings to be in line with Passow
et al. (2005) and Heslop et al. (2008). They concluded that the image of a country derives from the image of the countrys
products, and therefore from the activity sectors. The latter reinforce the country of origin image (Lampert & Jaffe, 1998).
According to AICEP inward foreign investment in Portugal is mainly focused on three activity sectors (wholesale and retail
trade, financial and insurance activities, and manufacturing) which together account for over 70% of the gross FDI in
Portugal in 2011. Using academic knowledge we hope to confirm that trend.
IMPLICATIONS FOR THEORY AND PRATICE
Our study aims to demonstrate that the use of human personality instruments to measure the country of origin image is valid
to evaluate product specifics as well as sector activity. It aims to increase knowledge of investor behavior. By measuring
the country of origin image by employing human personality traits, it is possible to link the image of activity sectors and
investor characteristics.
Understanding how investors choose the activity sectors based on country of origin images that overlap with their self-image
can help managers to make their marketing strategies more effective; hence this study is valuable for practitioners managing
the available opportunities on a specific country.
Country size (small), dispersion and sample quality, availability and access to qualified and valid primary data. Future
research on countries sharing the same language as well as considering demographic variations is proposed.
477
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approach. Dissertation . Graduate school of commerce and management.
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Inquiry Journal, 1, 59-72.
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country marketing. Journal of Business Research, 60, 231-239.
Dacko, S., Mohsen, M. G., Simes, C., & Garcia, R. (2012). Can service firms increase productivity and customer
satisfaction by considering "morningness-eveningness" and time-of-day in customer service scheduling? EMAC - European
Markketing Academy - 41st Anual Conference, (p. 374). Lisbon.
DaSilva, R. V., Davies, G., & Naud, P. (2001). Country of Origin and destination effects in buyer decision making: a
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Dunning, J. (1988). The ecletic paradigm of international prodution: a restatement and some possible extensions. Journal of
International Business Studies , 19, 1-31.
Ernst & Young. (2011). FDI in Europe: Europe's True Market Value. Ernst & Young's European Attractiveness Survey.,
Ernst & Young.
Heslop, L. A., Lu, I., & Cray, D. (2008). Modeling country image effects through an international crisis. International
Marketing Review , 25, 354-378.
Lampert, S. I. & Jaffe, E. D. (1998). A dynamic approach to country-of-origin effect. European Journal of Marketing, 32, 6178.
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478
AN INSIGHT INTO GREEK SMES INTERNATIONALIZATION BEHAVIOR

Lida Kyrgidou, International Hellenic University, Greece
ABSTRACT
The current study examines the internationalization behavior of Greek SMEs, considering internationalization activities as a
means towards enhanced competitiveness, and in particular, the determinants of foreign direct investment and location selection
decisions. To this end, the study identifies and analyzes factors that affect Greek SMEs decisions when they adapt the foreign
direct investment internationalization approach, drawing on the Foreign Direct Investments literature and the OLI Paradigm
with an emphasis on location. More specifically, the study focuses on countries that internationalize in the regions of Western
Europe and the Balkan area, examining motives that these firms are driven by in such decisions with regard to location selection
criteria.
INTRODUCTION AND LITERATURE REVIEW
Internationalization processes of SMEs have attracted academic interest within the last five decades and internationalization is
recognized as an important process, given its wide contribution to economic growth (e.g. Leonidou, 2007). As such, it has been
widely reviewed as a topic within the academic literature (e.g. Leonidou and Katsikeas, 1996; Bell et al., 2004). However, it
has also been characterized as a complicated process that discourages several firms. As such, firms behavior and activities
outside their national boundaries has attracted increased academic attention.
International activity may take several forms, including foreign direct investment, on which the current study focuses. Foreign
direct investment (FDI) has received increasing acknowledgement in literature the past years, based on the evidence that firms
adapt FDI as a means of internationalization to a greater extent than exports in foreign countries. This is implied by the fact
that sales of foreign affiliates are now greater than world total exports of goods. FDI is considered important since it aids firms
to achieve better utilization of intangible assets in foreign countries (Dunning, 1988). In addition, globalization has raised an
increasingly more positive attitude towards FDI on the part of governments, given that several countries have adapted favorable
policies to attract investments from foreign firms (Blomstroem and Kokko, 1998). Policy makers seem to have started adapting
favourable policies for investment motives to enhance international firms to invest in their countries, such as favourable taxation
for foreign investors, financial incentives and infrastructure or market preferences. As such, investigation of determinants and
factors that affect FDI appear critical.
Drawing on the above considerations and recognizing the diversity of approaches used in prior research in the area and the
diverse conclusions drawn, the aim of this paper is to further examine and analyze Greek SMEs internationalization behaviour.
The decision to examine SMEs was based on the wide acknowledgement of their importance to economic prosperity, job
creation opportunities and innovativeness (e.g. Katsikeas et al., 1998). The FDI theory together with the OLI Paradigm with
an emphasis on location serves as our primary theoretical frameworks.
METHODOLOGY AND DATA ANALYSIS
Factor analysis was employed as the key statistical method in order to analyze the data gathered. The study was realized within
a period of two years. A total of 190 Greek firms, with international activity were initially contacted in order to participate to
the survey, located in Athens and Northern Greece, 84 of which are active in the Balkan area and 106 of which in Western
Europe. The data gathered aimed at capturing perceptions of Greek SMEs with regard to and incentives they face in their
attempt to expand internationally and examine whether these incentives are differentiated based on the location.
A structured questionnaire served as the data collection tool. In developing the questionnaire, the literature on
internationalization was reviewed to develop appropriate operational measures of the variables examined. Before being
officially distributed to the respondents, the questionnaire was pilot tested and was addressed to 15 academics related to the
field and practitioners to seek feedback with regard to the content and clarity of the questions contained, which were grouped
according to their relevance. The questionnaire was sent to participating firms electronically, to be completed within 30 days
upon receipt, accompanied by a cover letter that stated the nature and purpose of the research and assured that anonymity and
confidentiality would be maintained throughout the process. In the event that respondents did not adequately capture the exact
meaning of a question or required further explanation, clarifications were made through telephone communication. Out of the
questionnaires initially distributed, a total of 137 valid questionnaires were returned. The key informant served as the survey
479
method. In order to ensure that respondents completed the questionnaires appropriately, particular steps were followed. The
questionnaire included closed ended questions that facilitated respondents to fill out the questionnaire and required
approximately 15-20 minutes to be completed. The questionnaire did not include any questions seeking information with regard
to financial information given that the majority of firms are reluctant to provide such information, while it is also hard for firms
to provide financial with regard to their subsidiaries located in foreign countries.
Four factors were found to be important in Greek SMEs FDI process in the Western Europe region, which account for 71,
77% of the total variance extracted. These pertain to the development of participating firms sales network, the development
of synergies, the achievement of economies of scale and advantages associated with the local markets size. The largest
principal component (factor) as the vector corresponding to the largest eigen-value {30, 28, 25, 7, K2} is the group
comprising of variables regarding: 1) the re-inforcement of sales networks [K30], 2) development of sales networks and
synergies [K28], 3) economics of scales [K25], 4) exploitation of size of local market [K7] and 5) exploitation of comparative
advantage of raw materials cost [K2]. The second largest principal component as the vector corresponding to the second largest
eigen-value {25, 6, K32, K13} is the group comprising of variables regarding: 1) economics of scales [K25], 2) access to
infrastructure [K6], 3) improvement of production process [K32] and 4) need for presence in local market [K13]. The third
principal component as the vector corresponding to the third largest eigen-value comprises of the following variables: 1) first
mover advantage [K10], 2) integration of firm in investments of other firms [K22], 3) tax-breaks [K20] and 4) access to markets
of specific regions of the recipient country [K8]. Finally, the fourth principal component as the vector corresponding to the
fourth largest eigen-value comprises of the following variables: 1) exploitation of a nearby market [K9], 2) investment risk
diversification [K24] and 3) access to markets of specific regions of the recipient country [K8].
Likewise, the statistical analysis based on a sample size of 59 firms demonstrated that Greek SMEs that realize FDI in countries
of the Balkan areas were found to be affected by the following three parameters, which account for 74,9% of the total variance
extracted. These are a) increased effectiveness that can be achieved in three ways: 1) through economies of scale [K25], 2)
economies of knowledge [K26], 3) access to the specific market with rapid growth [K14], 4) the development of sales networks
[K28] and 5) the enhancement of already existing sales networks [K30] b) access to specific markets of the host country in
order to 1) develop their sales networks [K28], 2) exploit a nearby market [K9], 3) be present in the local market [K13], 4)
gain access to markets of specific regions of the foreign country [K8] and 5) reinforce their sales networks [K30] c) strong
financial motives such as 1) subsidies [K18], 2) grants [K19] and 3) less developed local market as compared to the foreign
market [21].
DISCUSSION OF FINDINGS AND IMPLICATIONS
Results demonstrate that there are different determinants shaping Greek SMEs internationalization decisions between these
two regions, regarding motives associated with firms internal and external environment, providing evidence that the selection
of location constitutes a key factor affecting foreign direct investment activity. Results are grouped into three categories:
motives regarding firms internal and external environment, as well as motives stemming from firms host countries. As such,
our findings further inform the existing literature and sharpen knowledge around firms foreign direct investment behavior.
In particular, it was found that Greek SMEs mainly internationalize through FDI regarding their production in the foreign
market in countries of the Balkan area, which appear a key destination for such activity in terms of location activity, primarily
Bulgaria and Romania. A key factor contributing to Greek firms FDI pertains to the need for presence in the foreign local
market, while less important factors are related to increased local competition, the ability to take better advantage of the size
of the local market from benefits they will acquire in the foreign country, advantages that can be acquired by a neighbor country
to the host country, the development of the host market and the openness of the market. In addition, taking advantage of the
size of the foreign market is critical for Greek firms activated in the regions of the Balkan area and Europe.
The current study contributes in a number of ways. First, it contributes to further examination of Greek SMEs entrepreneurial
behavior, placing an emphasis on the factors that affect their FDI decisions and the selection of their activities location. In this
way, levels of entrepreneurial activity can be significantly enhanced. Second, it draws important implications for policy makers
in creating a prosperous environment for Greek entrepreneurs to be able to enhance their international activity and aid them
succeed in their internationalization attempts, but also for the Greek economy to become more competitive by attracting foreign
investments.
From a managerial point of view, our findings inform entrepreneurs and managers with regard to the main challenges they are
confronted by in their internationalization attempts and provide rich insight with regard to the location selection criteria. In this
480
way, they aid managers to orient their efforts towards the right direction. Some of the issues that management should consider
pertain to the firms capacity to identify and exploit entrepreneurial opportunities in the foreign markets, as an outcome of the
information and knowledge gathered by the firm before their entry in these new markets. To this end, it is important for
entrepreneurs to be certain that they acquire the appropriate information about the foreign markets of interest that could be
provided by their potential clients in these new markets. In addition, entrepreneurs could use some agents to come in touch
with profitable potential clients. It is also important for management to be informed and participate in funding programs that
might be designed for enhancing internationalization efforts, since they might constitute an important factor affecting their
decisions. Cost constitutes and additional issue for consideration. The cost required for firms to access a foreign market, and
develop might act as a prohibiting factor frequently discouraging their efforts. The employment of skillful, highly qualified
and well trained employees that will contribute to the monitoring of firms international operations, for instance, constitutes a
particularly hard and costly procedure. Last but not least, entrepreneurs might be confronted by undesirable competition in the
foreign country, which might again discourage their efforts. Considering the challenges and issues that entrepreneurs face in
their internationalization efforts, a number of suggestions that would potentially aid them address such considerations are also
provided.
TABLES
Table 1: descriptive statistics for we
7
8
9
10
13
25
28
30
32
2
K6
K20
K22
K24
Mean
3,74
2,46
2,79
2,41
3,06
2,56
2,45
2,78
2,41
1,78
1,85
1,36
1,15
2,54
Std. Deviation
1,72
1,79
1,69
1,77
1,82
1,60
1,64
1,64
1,71
1,52
1,41
1,13
0,72
1,75
481
Analysis N
78
78
78
78
78
78
78
78
78
78
78
78
78
78
Table 2: rotated component matrix for we

Component
1
30
28
25
7
2
6
32
13
10
22
K20
K9
K24
K8
2
,908
,829
,636
,604
,519
,546
,860
,763
,505
,815
,671
,631
,794
,767
,667
,501
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
REFERENCES
482
THE RELATIONSHIPS BETWEEN INTERNATIONAL ORIENTATIONS, CAPABILITIES,

STRATEGIES AND PERFORMANCE: A THEORETICAL PERSPECTIVE
Yoel Asseraf, University of Haifa, Israel
Aviv Shoham, University of Haifa, Israel
ABSTRACT
Peter Drucker (2008, p. 127) once said, The best plan is only good intentions unless it leads into work. However, when
carefully examining the scholarly work on strategic orientations, one can easily observe that previous research overlooked the
role of the process trough which strategic orientation choices affect the firms strategic capabilities and performance. Even
the central construct, market orientation, has not been investigated from a strategy implementation perspective (Homburg
et al. 2004, p. 1332). This is a lacuna in the literature, as strategic orientations do not automatically lead to superior
performance.
In line with previous calls for the identification of the underling action components in order to understand how strategic
orientations work (Zhou et al. 2005, Ketchen et al. 2007), our proposed theoretical model focuses mainly on the link between
strategic orientations and strategic capabilities from the implementation point of view. Specifically, this model follows the
viewpoint that at the core of the strategy implementation approach is the recognition that different types of capabilities,
organizational processes, and systems need to be adjusted in order to implement the selected strategy (Homburg et al. 2004,
p. 1331) by demonstrating that different kinds of strategic orientations lead to different kinds of strategic capabilities.
Our theoretical model makes several contributions to the extant literature. First, a new framework to classify strategic
orientations is presented. Accordingly to this framework, outside-in orientations (focus on customers and competition)
enhance the development of marketing capabilities while inside-out orientations (focus on entrepreneurial and innovation)
lead to the development of technological capabilities. Amazon and Apple, respectively, represent these bipolar approaches.
Second, our model explores the role of a new high order moderator: the ability to implement (ATI) strategic orientations into
capabilities. This construct combines three dimensions: learning orientation, organizational inertia and strategic flexibility.
High levels on this construct reflect a firms ability to transform the firms strategic orientations into strategic capabilities. In
contrast, lower levels reflect a firms tendency to resist the transformation of strategic orientations into strategic capabilities.
Our model gives a special attention to identifying which set of capabilities is most strongly associated with superior firm
performance in general. More specifically, we posit that marketing and technological capabilities affect international
marketing strategy adaptation levels. By doing so, we emphasizes the notion that international firms need to look carefully
not only at which strategic orientations they select, but also at their organizational ability to implement these orientations and
acquire new capabilities as the latter might impact their international marketing strategy and future export performance.
INTRODUCTION
Literature and real life have shown that some business leaders prefer to concentrate on their companies inward orientation,
while others prefer an outward orientation. For example, it is known that the late Steve Jobs, Apples founder, ignored
customer research; he has been quoted as stating it's really hard to design products by focus groups. A lot of times, people
don't know what they want until you show it to them (Sager et al. 1998). In contrast, Jeff Bezos, the founder of Amazon.com,
is known as a champion of the outside-in approach. He believes that the customer is always right (Lyons 2010, p. 20). How
these contradicting approaches influence the way firms develop capabilities? And how it might effect the design of the
international marketing strategy with respect to standardization /adaptation? These questions are in the heart of this research?
Accordingly, we suggest a new theoretical framework to classify strategic orientations as inside-out or outside-in orientations.
While inside-out firms are focused on developing breakthrough technology that will change the marketplace, outside-in firms
are customer and competition-centric.
Recently, Hakalas (2011) review paper, which covered 67 multiple orientations, found that only a few papers studied three
orientations simultaneously. Our research model tests the roles of four strategic orientations, classifying them as outside-in or
inside-out antecedents for development of outside-in (marketing) and inside-out (technological) capabilities. This
classification is based on a conceptual analysis of the orientations core essence. Outside-in orientations are represented in
this research by market orientation, which is a central strategic orientation in the marketing literature; and interaction
orientation, a relatively new strategic orientation which Ramani and Kumar (2008) recently defined as the firms ability to
interact with its individual customers, reflecting the growing interaction between firms and their customers in the age of web
483
tools such as social media. Inside-out orientations are represented by innovation orientation (sometime called technology
orientation), which focuses on product innovation as a key factor for success; and entrepreneurial orientation, which
emphasizes proactiveness and risk-taking. Together, these two orientations reflect firms that seek to understand what they are
good at and how they can change the marketplace, instead of understanding or adapting to it.
Although the selection of strategic orientations is of great importance, previous research has overlooked the role of the
process through which strategic orientations choices affecting a firms strategic capabilities and performance. Specifically,
how strategic orientations are embedded in firms and transform into capabilities is an unstudied area and this is another gap
that this research focuses on. In order to extend the theoretical framework of moving beyond the direct resources
performance link, as suggested by Ketchen et al. (2007) we will be introducing a new moderator that measures the firms
ability to implement the strategic orientations and transform them into capabilities.
The ATI construct combines three dimensions: learning orientation (Hult et al. 2000) organizational inertia (Bennett and
Kottsz 2011) and strategic flexibility (Santos-Vijande et al. 2012). While the learning orientation and the strategic flexibility
dimensions have a potential positive role in transforming orientations into capabilities, organizational inertia reflects the
organizational resistance to change and has a potential impendent role, and is rarely investigated in the marketing literature.
High levels on the ATI construct reflect a firms ability to transform its strategic orientations into strategic capabilities. By
contrast, lower levels reflect a firms tendency to resist the transformation of strategic orientations into strategic capabilities.
Marketing strategy is a central construct in the standardization/adaptation debate, and can explain how a company is going to
achieve its marketing objectives (Kotler and Armstrong 2001). We argue that eventually marketing and technological
capabilities affect the adaptation of the firms marketing strategy to its export market in opposite ways. Specifically, we posit
that marketing capabilities enhance the international marketing strategy adaptation. Hence, the stronger the marketing
capabilities, the higher the adaptation of the marketing mix components. In contrast, we posit that technological capabilities
increase the international marketing strategy standardization. Hence, the stronger the technological capabilities, the higher the
standardization of marketing mix components. The final outcome of the proposed model is international performance,
including financial, strategic, product performance, and managerial satisfaction measures.
While strategic orientations can be seen as the impetus to a firm's strategic direction, a growing stream of research indicates
that strategic orientations per se are not enough to ensure better performance. Murray et al. (2011) and Ketchen et al. (2007)
argued that it is the impact of strategic orientations on the creation of a firms capabilities that leads to superior performance.
According to this view, firms strategic orientation is a precursor to their capability building. Our theoretical model is based
on a new classification for strategic orientations and suggests that different orientations will lead to different capabilities. In
general, Israeli high tech firms are known for their high technological capabilities. However, these companies are often
criticized for not reaching the same high level in terms of marketing know-how and capabilities. This model can be used to
inform the debate regarding the importance of marketing capabilities versus technological capabilities among high tech firms
as a mean for international success.
484
FIGURES
Figure 1. An Integrative Model
Outside-in Focus
Strategic Orientations
Market Orientation
Interaction Orientation
Marketing
Capabilities
Ability To Implement
Learning Orientation
Organizational Inertia
Strategic Flexibility
Psychic
Distance
(+)
International
Marketing Strategy
Adaptation
Product Adaptation
Promotion Adaptation
Price Adaptation
Distribution Adaptation
Inside-out Focus
Strategic Orientations
Entrepreneur Orientation
Innovation Orientation
International
Performance
(-)
Technological
Capabilities
REFERENCE
Bennett, Roger and Rita Kottsz (2011). Management of unprofitable donors by UK fundraising charities. Journal of
Customer Behavior, 10 (4), 309-333.
Drucker, P. (1954). The practice of management, New York: Harper & Row Publishers.
Hakala, Henri (2011). Strategic orientations in management literature: three approaches to understanding the interaction
between market, technology, entrepreneurial and learning orientations. International Journal of Management Reviews, 13,
199-217.
Homburg, Christian, Harley Krohmera and John P. Workman Jr (2004). A strategy implementation perspective of market
orientation. Journal of Business Research, 57, 1331-1340.
Hult, G. Tomas M and Ernest L. Nichols, Jr., Larry C. Giunipero, Robert F. Hurley (2000). Global organizational learning in
the supply chain: a low versus high learning. Journal of International Marketing, 8 (3), 61-83.
Ketchen, D. J., Jr., Hult, G. T. M. and Slater, S. F. (2007). Toward greater understanding of market orientation and the
resource based view. Strategic Management Journal, 28 (9), 961-964.
Kotler, P. and Armstrong, G. (2001). Principles of marketing, U.S.A., Prentice-Hall.
Lyons, Daniel (2010). The customer is always right. Newsweek, 4, 85-86.
Murray, Janet Y., Yong Gao, Gerald and Kotabe, Masaaki (2011). Market orientation and performance of export ventures:
the process through marketing capabilities and competitive advantages. Journal of the Academy Marketing Science, 39, 252269.
Ramani, Girish and Kumar, V. (2008). Interaction orientation and firm performance. Journal of Marketing, 72, 27-45.
Sager, Ira, Burrows Peter and Reinhardt Andy (1998). Back to the future at Apple. BusinessWeek, May 25. Retrieved
December 6st 2012 from http://www.businessweek.com/archives/1998/b3579156.arc.htm)
Santos-Vijande, Mara Leticia, Jos ngel Lpez-Snchez and Juan Antonio Trespalacios (2012). How organizational
learning affects a firm's flexibility, competitive strategy, and performance. Journal of Business Research, 65,1079-1089.
Zhou, Kevin Zheng, Yim, Chi Kin (Bennett) and Tse David K. (2005). The effects of strategic orientations on technologyand market-based breakthrough innovations. Journal of Marketing, 42-60.
485
ESTIMATING ONLINE REVIEWS ADOPTION: A BAYESIAN NETWORK APPROACH

Ilona Heikkinen, Aarhus University, Denmark
ABSTRACT
We use Bayesian Networks (BN) to estimate how the characteristics of online reviews and product involvement affect perceived
message credibility and message adoption. An experimental design and sample data from 236 individuals with knowledge and
interest in online product reviews are used in this study. Participants were asked to read and evaluate eight product reviews
representing different combinations of online message strength, message framing, and source credentials and report the
perceived credibility and likelihood of message adoption. We define the model structure using the existent theoretical
knowledge and refine it using the Bayesian Network learning structure. We capture the most likely structure between the
informational factors of online reviews, involvement and message adoption. By using BNs, we show how to predict and make
diagnostic inferences of adoption of online messages given different scenarios of message characteristics and source credibility.
INTRODUCTION
In online discussion forums, blogs and review sites consumers exchange opinions regarding a variety of products in a multitude
of forms. Usually, the review contains a verbal message weighing the positive and/or negative aspects of the product, followed
by some formalized product rating and reviewers rating indicating how helpful this individual and his/her online contribution
has been (Henning-Thurau, Gwinner, Walsh, & Gremler, 2004). Recent e-word-of-mouth (eWOM) marketing papers discuss
the role of review content and source credibility in online contexts (C. M. K. Cheung, Lee, & Rabjohn, 2008; M. Y. Cheung,
Luo, Sia, & Chen, 2009; Park, Lee, & Han, 2007). Typically, the research design for examining the determinants of the
perceived credibility of on-line recommendations is the survey (C. M. K. Cheung, et al., 2008; M. Y. Cheung, et al., 2009).
The problem with this design is that researchers can only draw conclusions based on the association between general attitudes
towards the reviews and general opinions about source credentials, rather than based on the causal links between a particular
message (stimulus), perceptions and behavior. Providing more knowledge about the causal links in this context would be a
considerable contribution for analyzing consumers reviews perception online and for more accurate and actionable results.
The first objective of this research was to run an experimental study, aimed at understanding the extent to which the online
consumers rely on the message strength, framing and source credentials when forming credibility perceptions in the online
context and how these perceptions influence the message adoption.
Several multivariate methods can be used to analyze the relationships between variables in experimental studies. The traditional
method is based on the analysis of variance (ANOVA, MANOVA, ANCOVA or MANCOVA). However, a number of
background assumptions are required for these techniques and the effects of violating the assumptions are generally neglected.
For example, ANOVA assumes that the variances in the different groups of the design are identical (homogeneity of variance)
and MANOVA in addition requires that the intercorrelations (covariances) are homogeneous across the cells of the design.
ANCOVA additionally assumes a linear relationship between the covariate and the dependent variable for all groups,
homogeneity of regression slopes and independence between the independent variable and the covariate (Cohen & Cohen,
1983). Another alternative, such as structural equation modeling (SEM), assumes that the observations are drawn from a
multivariate normal population, and this assumption is almost always violated in empirical studies. Likewise, in the analytic
phase, the naturally ordinal scales, such as Likert scale, are treated as if they were interval or ratio level rather than discrete
categories in both ANOVA and SEM. Finally, a key limitation is that regression-based approaches such as SEM and ANOVA
do not provide the analyst with the ability to model the processes in a way which is of practical value to decision makers
(Anderson, Mackoy, Thompson, & Harrell, 2004).
Bayesian networks modeling is a more recent technique adopted by the researchers due to their less restrictive assumptions and
a significant number of advantages. Referring to the recent literature on artificial intelligence (Korb & Nicholson, 2004;
Neapolitan & Jiang, 2007), BNs allow analyzing main and interactive effects contained in ordinal measurements; BNs allow
making flexible inferences from the cause to the effect (prediction) and from the effect to the cause (diagnostic) over a variety
of potential scenarios and can be used as an analytical tool in many decision-making situations; BNs accommodate both
gathering data and expert knowledge in one analytical model. Based on these observations, our second objective is to
demonstrate how BNs can be used to analyze experimental data and how the analyst can make inferences based on his/her
interventions, thereby justifying its value in consumer behavior prediction and diagnostic analysis.
486
RESEARCH APPROACH
The theoretical model underlying our methodological analyses relies on the main communication theories (e.g. Dual process
theory, Deutsch & Gerrard, 1955) and eWOM empirical studies. According to the basic communication models, persuasive
communication is a process where an individual transfers stimuli to influence other peoples behavior. The persuasiveness is
determined by different levels of information-processing that people use (central vs. peripheral), and respectively, by two
distinct categories of social influence: informative and normative (Deutsch & Gerrard, 1955). The informational influence
encompasses instances where people are affected by the arguments themselves (e.g. message strength, framing, source
characteristics), while the normative influence occurs when someone is motivated by a desire to meet the expectations of
another person or group. The results of our experiment apply to hypotheses that are particularly relevant to the informative
influence.
Message strength is one of the informational factors used in evaluating communication validity (Wathen & Burkell, 2002).
Message strength has been defined as the quality of the arguments regarding specific product features (Park, et al., 2007). A
strong message is a message whose arguments are objective, relevant, sufficient and understandable (Lin, Lee, & Horng, 2011;
Park, et al., 2007). Strong messages are based on factual specifics about the product such as the performance level of the current
product in comparison to that of a competing product. In contrast, a weak message is emotional and expresses subjective affect
(Park, et al., 2007). Strong messages are more helpful and more persuasive compared to weak, subjective and emotional
messages (Lin, Lee, & Horng, 2011; Park, et al., 2007). Dual-process Theory regards message strength to significantly affect
the message adoption through message credibility (Cacioppo, Petty, & Morris, 1983). Indeed, many empirical studies show
that the message strength is a significant determinant of online message credibility which subsequently influences attitudes
towards purchasing the desired product (M. Y. Cheung, et al., 2009).
Message framing refers to the valence of the online consumer review - that is, whether it is positively framed (e.g., a praise
message) or negatively framed (e.g., a complaint message)(M. Y. Cheung, et al., 2009). Some studies have shown that
negatively framed reviews are perceived as more credible than positively framed reviews. There are two main theoretical
arguments: (1) a negative message reduces the likelihood that the message is actually posted by marketers or by someone who
would like to promote the reviewed product. And (2) people tend to avoid taking risks, and believing in the negative WOM
would help them avoid making a wrong purchase decision (M. Y. Cheung, et al., 2009).
According to the Heuristic Systematic Model (Chaiken, 1980), the heuristic processing of the information includes evaluating
non-contextual aspects in a message. Such aspects refer for instance to various characteristics of the source, including source
credibility. Source credibility is the extent to which the source is considered believable and competent. Chaiken (1980) found
that individuals are often willing to adopt a message based solely on the source credentials, especially when the source
characteristics are positive and convey trust. This hypothesis from the offline context is also expected to be valid in the online
context. However, in an eWOM context, the typical cues of sender credibility (such as physical appearance, body language or
familiarity with the source) are impossible to assess since the exchange is purely textual (Lim, Sia, Lee, & Benbasat, 2006;
Zhang & Watts, 2008). In eWOM, the recipient receives a recommendation message from a previously unknown source.
Therefore, he/she is not able to use cues commonly utilized in offline WOM to determine whether the source is credible
(Chatterjee, 2001). Typically, the reviewers rankings are the cues used in the online context in order to convey credibility
towards the source (Zhang & Watts, 2008). Some studies have found that the credibility of an online source based on the online
rankings has a positive indirect effect on message adoption through perceived review credibility (M. Y. Cheung, et al., 2009;
Park, et al., 2007; Zhang & Watts, 2008); other studies, however, show that source credibility is not important for the
information adoption behavior of online consumers (C. M. K. Cheung, et al., 2008). Thus, it is unclear whether the source
credentials would still be important or sufficient in eWOM evaluation.
The receiver characteristics ultimately determine how the message is perceived (Ajzen, 1992). The characteristics, which may
influence message perception and adoption, are: motivation, involvement and personality. Product involvement has been
defined as the perceived personal relevance that the product holds for the individuals interests, needs or values (Griffith,
Krampf, & Palmer, 2001; Zaichowsky, 1994). Studies by Lin et al. (2011) and Park et al. (2007) indicate that the more involved
the recipient of the eWOM message is with the product, the more detailed (meticulous) they are in accepting the message
conclusion. Involved individuals are more likely to trust messages that are objective and factual, as opposed to subjective and
emotional messages. Therefore it can be expected an interaction between involvement and message strength on perceived
message credibility and possibly message adoption. Using the theoretical arguments identified in the recent e-WOM literature,
we built the conceptual model presented in Figure 1.
487
RESEARCH METHOD
Product and Sample
Most commonly reviewed product categories are airline companies, restaurants, wines, travel resorts, mobile phones, or other
technology items, and mobile phone providers (M. Hu & Liu, 2004). Here, we chose smartphones as the specific object of
investigation. Smartphones are products about which individuals seek most information online (Gupta & Harris, 2010). The
participants included 236 individuals who were contacted using the snowball sampling technique through social media.
Although a non-random sampling, this procedure was considered more efficient than random selection as it allowed locating a
population with knowledge and interest in product reviews. The researcher initially invited 20 respondents to complete one of
the eight experiments. After completion, each respondent invited a number of individuals from their social network to take part
in the experiment. This procedure was repeated until a sufficient number of responses was obtained. The age of the respondents
varied between 21 and 55 (M = 27, SD = 4.17).
Stimulus Design
Eight sample reviews were compiled based on a 2x2x2 design as described in Figure 2. Each review described a particular
smartphone, identical to the product reviews encountered in Amazon.com, the largest source of online consumer reviews.
Message strength: The strong messages were designed to reflect objectivity, relevance, sufficiency and understandability (Park,
et al., 2007). An example of a strong message is displayed in Figure 2 ab and abc. The weak messages were designed to be
emotional and did not provide any product related arguments. Instead, they merely stated if the reviewer liked the product or
not (Figure 2, 1 and bc). Message framing: Positive and negative messages were designed to counterbalance the effect of only
positive or only negative messages. Source credentials: They were manipulated by varying two types of source credentials
(similar to Amazon.com): share of useful contributions and ranking among all reviewers. The share of useful contributions was
96% for highly voted sources and 19% for less voted sources. The ranking was set to be 3rd out of 9,432 for the high-credibility
source and 8,462 out of 9,432 for the low-credibility source. In terms of reviewer ranking, Amazon.com does not offer the total
number of reviewers; instead they give a top reviewer ranking. In our study, the ranking was restated more simply as
reviewer ranking and the total number of reviewers was mentioned to give a better impression of the reviewers expertise.
Procedure
Each respondent read one online smartphone review presented randomly by the computer and answered a brief questionnaire.
The first screen in the experiment thanked the respondents for participation, informed them about the purpose of the study, and
assured them that all responses were anonymous and that they should answer the questions based on their own opinions. The
first part of the questionnaire measured the respondents involvement with the product (smartphone) in general. Next, the
scenario of the study was explained. The respondents were asked to imagine that they planned to purchase a smartphone, and,
before completing the transaction, they wanted to see one more review of the product in order to reinforce the purchasing
decision. Each respondent was given a smartphone review (Figure 2) and asked to read carefully the profile as well as the
message review as if they were to purchase the respective product. Following the review, individuals perceptions were assessed
with respect to the message strength, perceived source credibility, perceived message credibility and adoption.
Product involvement was measured using the multiple-item involvement inventory scale (Zaichowsky, 1994). The respondents
were asked to rate the degree to which they perceived smartphones as important, interesting, relevant, exciting, meaningful,
fascinating, valuable, involving and needed, using a semantic differential scale ranging from (-3) to (3). Perception of message
strength. The respondents were asked to indicate how strong (convincing) they perceived the review that had been presented
on a 7-point Likert scale ranging from (1) weak to (7) strong arguments (Edwards & Smith, 1996). Perception of source
credibility. A 7-point Likert scale was used in evaluating the perception of source credibility and ranged from (1) very
credible to (7) not at all credible (reversed) (Fragale & Heath, 2004). Perception of message credibility was assessed with
an advertising believability inventory (Beltramini, 1982), using a 7-point multiple-item Likert scale, where the respondents
indicated how reasonable, authentic, convincing, honest, unquestionable and decisive the message seemed to them. Message
adoption was assessed by asking individuals to rate the likelihood that they would purchase the product after reading such a
review on a 7-point Likert scale between (1) Unlikely to buy it after reading this review and (7) Likely to buy it. Nuisance
factors caused by product features were controlled by keeping the information regarding the product at minimum: no picture
of the smartphone, no price information and no brand name was given.
488
DATA ANALYSIS BAYESIAN NETWORKS (BNs)

The data analysis was performed using BNs in bnlearn R package (Scutari, 2007) and respectively Rgraphviz package (Gentry
et al., 2010). BNs are formally defined as Directed Acyclic Graphs (DAG) that allows us to represent the joint probability
distributions of the variables ( ), make inferences and reason under uncertainty (Korb & Nicholson, 2004). BNs
have two components: the structure which is considered the qualitative component of BNs; and respectively, the probabilistic
relationships between connected variables referred to as the quantitative component. The DAG defines the prior probability
distribution of every variable that is a root in the DAG and the conditional probability distribution of every non-root variable
given each set of values of its parents (Neapolitan & Jiang, 2007). Modeling with BNs requires the assumption of the Markov
property: every random variable directly depends only on its parents. This assumption implies that there are no direct
dependencies in the system being modeled which are not already explicitly shown via arcs (Korb & Nicholson, 2004).
There are three ways of building the BNs structure and learning the BNs parameters: manually constructed by a domain expert,
automatically constructed by learning them from data, or obtained by using a combination of both techniques. Within the
automatic learning, two approaches are commonly employed (Scutari, 2007):
(1)
Constrained-based algorithms: These algorithms learn the network structure by analyzing the probabilistic
relations entailed by the Markov property of BNs with conditional independence tests and then constructing a graph
which satisfies the corresponding d-separation statement (a set of nodes E d-separates other sets of nodes X and Y
( )if every path from node X to a node Y is blocked given E).
(2)
Score-based algorithms: These algorithms assign a score to each candidate network reflecting the probability
of data being produced by a causal process as specified by a given BN.
In practice researchers apply a combination of the two methods in establishing the correct network structure (Anderson, et al.,
2004). In this paper, we consider a mixed approach by first using independence tests to confirm or reject the hypothesized
causal relationships in the proposed network and, second, a score-based approach for selecting the most appropriate network.
Alternative Bayesian Networks
The model of online review adoption shown in Figure 1 is reconstructed from eWOM literature. This conceptual model was
translated into a network named BN1 in Figure 3. The BN1 structure is the skeleton or the qualitative component of the network.
The quantitative component is not shown here because of space limitations.
The first step in the analysis was to compute an automatic structure of the probabilistic relationships between the variables by
using the constrained-based structure algorithm Grow-Shrink (Margaritis, 2003) and compare it with the conceptual model.
This algorithm uses conditional independence tests to detect automatically the Markov blankets of the variables, which in turn
are used to compute the structure of the Bayesian network. The constraint-based algorithm returned a graph similar to BN1
(theory), but with some missing and undirected paths. Several independence tests, both parametric (Pearson ) and nonparametric (Monte Carlo permutation test) were applied, subject to the assumed independence and dependence constrains of
the structure BN1. Results showed that we could reject the independence for the following relationships: Source credentials
Perceived source credibility (p-value = 0.146); Framing Perceived message credibility (p-value = 0.207); Involvement
Adoption (p-value = 0.333); Involvement Message credibility (p-value = 0.345). Also, some variables, such as perceived
source credibility, were conditionally independent of message adoption given perceived message credibility. To refine the
results, BN2 was developed from BN1 by deleting the non-significant paths identified in the independence tests. BN3 was
developed from BN2 by adding the significant relationships identified in the independent tests, respectively Perceived message
strength Perceived source credibility and Framing Adoption. Next, we applied a Bayesian scoring approach and compared
the network structures with respect to a goodness-of-fit score.
The Bayesian scores of the three networks with a prior precision equal to 1 were -6065.39, -2889.05 and -2676.14. Bayes
factors were computed to compare BN1, BN2 and BN3. These factors suggested that BN3 is the most probable structure for
the review evaluation model in Figure 1. According to BN3: (1) the online source credentials are not related to perceptions of
source credibility; rather the perceived source credibility is significantly determined by the perceived message strength. (2)
Framing has a significant effect on the message adoption but not on the message credibility. (3) The perceived message strength
and perceived source credibility are conditionally independent of the message adoption, given the perceived message
credibility. (4) The receivers involvement with the product did not moderate any of the links included in the model. The
conditional probability distributions consistent with the structure of BN3 were further estimated, but not displayed here due to
their size.
489
Inference with Bayesian Networks

One the basis of the selected network, we performed various predictions and diagnostic checks to provide a quantitative
assessment of the impact of a possible intervention. BNs are particularly useful for calculating new beliefs when new
information called evidence is available (Korb & Nicholson, 2004). An intervention can create: (1) forward network
inference from cause to effect, by selecting a set of causes as the evidence and a set of effects as the query. And (2) backward
network inference from effect to cause with an intervention on a set of effects as the evidence and selecting a set of causes as
the queries to yield. Table 1 presents inference distributions of some target variables conditioned on the main and interactive
combinations of other variables.
The first twelve columns show the conditional probability distribution of different variables given that one variable is
instantiated to a particular value. For example, in column 8, when we instantiate Perceived message strength to 7 (Strong),
the probability distribution of message adoption will dramatically change (in a positive way) versus column 7 where Perceived
message strength equals 1 (Weak). In column 12, when Perceived source credibility equals 7 (Credible), the probability
distribution of message adoption does not change significantly versus column 11 where Perceived source credibility equals
1 (Not credible). In Columns 13-14 we notice the conditional probability distribution of message adoption given interventions
on multiple factors. Intervention 13 shows the predicted probabilities of message adoption when Message framing = 1
(Positive), Perceived message strength = 7 (Strong), Perceived message credibility = 7 (Credible) and Perceived source
credibility = 1 (Not credible). The results reveal that the individuals are very likely to adopt the review under this scenario.
Columns 15-16 present two examples of diagnostic inference. Intervention 16 shows the probability distribution of perceived
message strength knowing that Message adoption = 7 (Likely), Perceived message credibility = 7 (Credible) and Perceived
source credibility = 1 (Not credible). The evidence shows that there is 100% chance that the message was perceived as strong.
CONCLUSION
In this paper we use BNs to model data from an experimental study with the aim of understanding the process of online review
perception, credibility and adoption. BNs constitute an advanced analysis method that has only rarely been explored in
marketing and consumer behavior. A significant improvement of applying BNs in experimental designs is that we model the
stimulus characteristics and individual perceptions within the same model. Typically, the analysis of experiments requires
manipulation checks for the effect of stimulus on the actual perceptions using statistical tests performed independently of the
main model. By using BNs we can predict the likelihood of perceiving the characteristics and the effect of different individuallevel perceptions on the dependent variable in the same model. For instance, in this study, checking whether the argument
strength and source credibility did or did not have a significant effect on message adoption (dependent variable) implies a
certain probability that the characteristics were perceived and the perceptions were actually effective. Furthermore, as shown,
the analyst can make inferences about the effectiveness of the message using different instantiations of its characteristics and/or
the perception levels.
The results of this study suggest several implications related to the object of investigation. For instance, we observe that online
source credentials do not significantly relate to perceptions of source credibility. This result draws attention to two main issues:
either that most individuals did not recognize any cues of source credibility to rely on during the process (strategically this
result would imply that the design of the online message should be improved) or simply the cues on source credibility presented
were irrelevant and other website-related cues may be more effective. Second, framing (positive vs. negative) does not have a
significant influence on message credibility, but negative framing has a significant effect on message adoption. In particular,
negative product reviews on the website decrease the probability of purchasing the products even if these reviews are not
credible. The negative message may not be believed but online shoppers tend to avoid taking risks when reading negative
messages and tend to avoid making a wrong decision by purchasing the product. Third, the perceived message credibility fully
mediates the perceived source credibility effect on message adoption. Individuals are unwilling to adopt a message based solely
on source credentials. Online reliable sources should also provide credible reviews in order to increase review effectiveness.
To conclude, the study is relevant because prior eWOM studies concerned with the role of informational influences on
individual judgment, have only incidentally analyzed causal relationships between online message features and review
adoption; by using BNs, this study discovers probabilistic causal relationships between stimulus and behavior by controlling
for different levels of perceptions.
490
TABLES
Table 1: Probability distributions conditioned on several interventions (BN3)
Variables (scale)
Interventions
Prediction
Main effects
1st 2nd 3rd 4th 5th 6th 7th 8th
9th 10th
Message strength
0 (Weak)
.51 .50 .52 .48 .98 .00
.96 .00
1
0
1 (Strong)
.49 .50 .47 .51 .02 1.00 .04 1.00
0
1
Message framing
0 (Negative)
.48 .47 1
.47 .50 .49 .48
.49 .47
0
1 (Positive)
.52 .53 0
.53 .50 .51 .52
.51 .53
1
Source credibility
0 (Not credible)
.51 .47 .48 .51 1
.51 .47
.51 .48
0
1 (Credible)
.49 .53 .52 .49 0
.49 .53
.49 .52
1
Perceived message
strength
1 (Weak)
.38 .00 .19 .19 .20 .19 1
.86 .00
0
2
.29 .06 .18 .18 .18 .18 0
.14 .00
0
3
.16 .22 .19 .19 .19 .19 0
.00 .00
0
4
.08 .16 .12 .12 .12 .12 0
.00 .00
0
5
.05 .28 .16 .17 .16 .17 0
.00 .00
0
6
.03 .21 .12 .12 .12 .12 0
.00 .00
0
7 (Strong)
.00 .05 .02 .02 .02 .03 0
.00 1.00
1
Perceived message
credibility
1 (Not credible)
.05 .00 .03 .03 .03 .02 .13 .00
1
0
2
.07 .00 .04 .04 .04 .04 .13 .00
0
0
3
.28 .09 .18 .18 .19 .18 .40 .00
0
0
4
.34 .28 .31 .31 .31 .31 .28 .17
0
0
5
.17 .35 .26 .26 .26 .26 .04 .17
0
0
6
.08 .24 .16 .16 .16 .16 .02 .00
0
0
7 (Credible)
.00 .03 .02 .02 .02 .02 .00 .66
0
1
Perceived
source
credibility
1 (Not credible)
.08 .02 .05 .05 .06 .05 .12 .17
.14 .25
2
.08 .13 .10 .10 .10 .11 .08 .17
.14 .25
3
.13 .21 .17 .17 .17 .17 .11 .17
.14 .25
4
.16 .28 .22 .22 .22 .22 .08 .17
.14 .00
5
.13 .17 .15 .15 .15 .15 .06 .16
.00 .25
6
.29 .15 .22 .22 .22 .22 .25 .00
.00 .00
7 (Credible)
.13 .02 .07 .07 .08 .07 .28 .17
.43 .00
Message adoption
1 (Unlikely)
.09 .07 .11 .05 .08 .08 .10 .02
.09 .00
2
.12 .14 .18 .09 .13 .13 .11 .05
.00 .00
3
.19 .21 .28 .13 .20 .20 .15 .08
.00 .00
4
.21 .12 .12 .19 .17 .16 .26 .04
.61 .00
5
.20 .20 .12 .27 .20 .20 .18 .08
.09 .26
6
.15 .19 .12 .21 .17 .18 .12 .22
.09 .26
7 (Likely)
.04 .04 .03 .05 .04 .04 .05 .49
.09 .47
Note: Numbers in bold italic mean that the variables are instantiated at certain values
491
11th
12th
Diagnostic
Interactions
13th 14th 15th 16th
.77
.23
.87
.13
.00
1.00
.98
.02
.96
.04
.00
1.00
.48
.52
.49
.51
0
1
1
0
1.00
.00
.00
1.00
.50
.50
.51
.49
.43
.57
.44
.56
.45
.55
.44
.56
.46
.38
.00
.00
.00
.08
.08
.72
.16
.06
.00
.00
.00
.06
0
0
0
0
0
0
1
1
0
0
0
0
0
0
.86
.14
.00
.00
.00
.00
.00
.00
.00
.00
.00
.00
.00
1.00
.08
.23
.23
.23
.08
.08
.08
.17
.17
.33
.28
.06
.00
.00
0
0
0
0
0
0
1
1
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
1
.15
.13
.15
.14
.00
.00
.43
1
0
0
0
0
0
0
.12
.11
.13
.19
.12
.14
.10
.12
.11
.13
.18
.19
.14
.10
.00
.00
.00
.00
.00
.49
.51
.20
.00
.00
.19
.20
.21
.19
1
0
0
0
0
0
0
0
0
0
0
0
0
1
FIGURES
Figure 1: A message-source credibility model for online review adoption
Experimental design
Combination
Message characteristics
Source characteristics
Objective attributes
Message strength
[Strength]
Message fra ming

[Framing]
Source credentials
[Sourcecred]
Receivers
perceptions
Perceived
message strength
[Pstrength]
Perceived
source credibility
[PSourcecred]
Perceived
message credibility
[PMessCred]
Receiver characteristics
Product
involvement
[Involvement]
Expected behavior
Message adoption
[Adoption]
492
Figure 2: Experimental design and four examples of treatments
493
Figure 3: BN1, BN2 and BN3, with BN3 the most parsimonious and probable network
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495
PERFORMANCE OF TWO PROCEDURES FOR ASSESSING DISCRIMINANT VALIDITY:

MODEL COMPARISONS VERSUS CONFIDENCE INTERVALS
George R. Franke, University of Alabama, U.S.A.
ABSTRACT
Validity is widely seen as a unitary concept that involves multiple types of evidence for the proper interpretation of scale scores
(e.g., Cizek 2012; Messick 1989). One kind of evidence is discriminant validity, the extent to which scores on different scales
appear to reflect distinct constructs (Campbell and Fiske 1959). Two scales whose correlation equals 1.0 are not clearly
measuring different things. Anderson and Gerbing (1988) mention two methods of testing for unit correlations that have become
widely used. In one method, the correlation f between two latent variables is either freely estimated or constrained to 1.0, and
the difference between the resulting chi-square tests of model fit is tested for significance. In the other, the confidence interval
( two standard errors) around the freely-estimated f is examined. If the chi-square difference is nonsignificant, or the
confidence interval includes 1.0, then the discriminant validity of the two scales is in doubt. Anderson and Gerbing (1988, p.
416) describe the two tests as complementary, but give no indication of their relative strengths or weaknesses, or how they
might supplement each other in the validation process.
The purpose of this study is to present simulation results on the performance of the two AndersonGerbing test procedures,
using alpha levels for both one-tailed and two-tailed tests. The results show that both approaches lead to similar conclusions,
especially with one-tailed tests. However, the chi-square difference test is somewhat more powerful than the test based on
confidence intervals, making it more accurate when the null hypothesis is false (fewer Type II errors) but sometimes too liberal
in rejecting true null hypotheses (more Type I errors than indicated by the chosen alpha level). Using both tests together does
not lead to more accurate inferences, suggesting that they are not truly complementary. Researchers who choose to use just one
of these approaches for assessing discriminant validity may prefer the confidence interval procedure with a one-tailed alpha of
.05, because this approach is easier to implement than the model comparison procedure, and provides reasonable control of
both Type I and Type II errors of inference.
References for this paper are available on request.
496
AN EMPIRICAL COMPARISON OF EXPLORATORY VERSUS CONVENTIONAL STRUCTURAL EQUATION

MODELLING
Bjarne Taulo Srensen, Aarhus University, Denmark
ABSTRACT
In this paper we discuss two SEM approaches: an exploratory structural equation modelling based on a more liberalised and
inductive philosophy versus the classical SEM based on the traditional hypothetical-deductive approach. We apply these two
modelling techniques to data from a consumer survey and compare them based on several criteria, such as coefficients,
parsimony, model fit, plausibility, and consistency with the theory. A comparison of the estimates obtained from the two
models clearly indicates that it is not at all a trivial matter whether cross-loadings are allowed in a measurement model or not.
The results shed serious doubt on the generally accepted rule of thumb according to which (cross) loadings can safely be
ignored if they do not have a practically significant loading with an absolute value of at least 0.30 or 0.40.
INTRODUCTION
Theories are generally accepted as a medium for knowledge generation. Theoretical conjectures influence the questions we
investigate, determine our choice of research methods, and condition our interpretation of the results and the conclusion we
draw. Contemporary philosophy of science stresses the primacy of theory: knowledge is theoretical, and if not, then
knowledge is not knowledge but merely data. Positivists in the beginning of the first part of the 20th century devoted their
attention to the logical form of the relationship between scientific knowledge and the facts. It was the opinion that scientific
knowledge should, in one way or another, be derived from facts. Facts should come from observation, and observation should
be conducted independent of theory. Data were systematically collected for the purpose of determining and verifying
theoretical hypotheses. Systematic observation was regarded the point of origin for the construction of theoretical hypotheses
and a safe basis for determining their truth, leading to objective knowledge. The views of logical positivism were strongly
attacked by critical-rationalist philosophers like Karl Popper: observations cannot verify a theory; they can only falsify it.
Theories should not simply be adopted because they have a high level of support. Rather, those that are falsified should be
rejected. Science progresses not through generalisation from data but through a sequence of theoretical conjectures, tests, and
empirical rejections. In Poppers view, observations cannot be interpreted outside the language of theory.
The view of the primacy of theory dominates basic research in many scientific fields. However, it is questionable whether
this is a very satisfactory approach in applied research (Hayek, 1989). Applied research is often selective, and scientific
theory cannot always fully determine which observations should be regarded as relevant and which ones should not.
Moreover, selective observation carries with it the risk of theoretical bias. Theories guide the selection of observations and
their interpretation, and the interpreted observations are then presented in the light of the theories. Since this is a form of
circular argumentation, Popper argued that the theory that endured the most thorough tests was the best supported and
therefore the theory that should be used while still being subject to attempts to reject it.
The criterion of relative support can lead to indeterminacies. Assume that, for a given phenomenon, there are two or more
competing theories and none of them has been rejected yet. In such a situation, there are no guidelines as to which of the
theories should provisionally be accepted as a working theory until all, but one, have been rejected. Hence, a central
problem with falsificationism is that it may result in prolonged ambiguity.
AMBIGUITY AND THE PRACTICE OF SEM
At a first glance, such fundamental philosophy of science questions may appear rather distant from the daily practice of the
marketing analyst or SEM modeller (which tends to be rather more technical). On closer inspection, however, it becomes
evident that one of the problems that the modeller faces on a daily basisthe problem of competing model specificationsis
structurally identical to the ambiguity problem in falsificationism. Consider a situation most modellers are intimately familiar
with: an applied research project has been conducted in which survey data were collected from a large sample of randomly
selected participants. The modeller is asked to join the project team and help with the building of a publishable model. As it
is typical in applied research projects, the construction of survey items was entirely based on considerations of content
validity with respect to the investigated phenomenon (possibly informed by qualitative pilot research), not on considerations
as to how the theoretical constructs of a particular theory should best be operationalized. The modeller typically commences
497
with fitting one or more preliminary models to the data. If the model does not fit the data, the modeller begins a search for
better specifications to improve the fit of the model. Such a process is problematic in two respects: it is constrained by the
initial model, and it is sensitive to random fluctuations in the particular data set in which the specification search is carried
out. Hence, a miserable fit may result when the final model is tested on a new sample. MacCallum, Roznowski & Necowitz
(1992) shows that models constructed by such sequential specification searches can be highly unstable, especially in small
and medium-sized samples.
The philosophy of science traditionally associated with structural equation modelling is critical rationalism with its primacy
of theory. In this paper we argue that a strict hypothetical-deductive approach may be too restrictive in practice: theories are
often causally underspecified, there may be competing theories that lead to equivalent predictions, and theories may simply
be wrong. The objective of this study is to propose and discuss an exploratory SEM approach (Asparouhov & Muthn,
2009). This is a relatively new SEM technique based on a more liberalised and inductive philosophy. In this approach, the
restrictive requirement of specifying highly constrained measurement models that have simple-structure properties is
eliminated (either partially or completely) and replaced with measurement models that are based on exploratory factor
analysis. We apply and compare the results obtained from the conventional SEM and the exploratory SEM using data on
consumers beliefs about conventional and free-range pork production systems, and expectations of the product quality
resulting from these systems.
CONVENTIONAL VERSUS EXPLORATORY SEM
The conventional SEM with m latent variables
K = (1, 2 ,..., m ) can be described by two equations:
Y Q /K .X H
(1)
K D BK *X ]
(2)
Equation 1 is a measurement model for an observed continuous vector Y with intercepts Q , loading matrix / , factor matrix
K , covariates X that have direct effects on Y (modelled by the slopes in the . matrix) and residuals H . Equation 2 is the
structural model, representing the relationships between the latent variables. The latent variables K are regressed on each
B matrix) and on the covariates (with weights in the * matrix). Again, there are intercepts D and
residuals ] in the equations. The assumptions are that H and ] are normal distributed residuals with zero mean and a
covariance matrix 4 and < . The parameters of the model are usually estimated by a maximum likelihood method. / is
other (with weights in the
typically specified as having a simple structure, i.e. one without cross loadings. Loadings are fixed zeros based on hypotheses
corresponding to substantive theory, or previous analyses.
Although it is certainly elegant to create a parsimonious measurement model that is identified and avoids rotation, the
assumption of simple structure is often too restrictive in practice. The measurement theory may not be developed enough,
forcing the researcher to impose more restrictions on the model than he or she is comfortable with. Furthermore,
misspecification in terms of zero cross-loadings leads to distorted factors, overestimated factor correlations, and distorted
structural relations (Asparouhov & Muthn, 2009). In situations like this, a measurement model based on explorative factor
analysis with rotation of the factor matrix may be a better solution (Brown, 2001).
In exploratory SEM (Asparouhov & Muthn, 2009), the measurement model that is normally based on confirmatory factor
analysis can be completely or partially replaced by a measurement model based on exploratory factor analysis, with a
specified rotation method. In a general exploratory SEM, the factors j in (1) and (2) can be classified as either exploratory
K1, K2 ,..., Kr or confirmatory factors Kr 1 , Kr2 ,..., Km . The exploratory factors are further partitioned into blocks of
exploratory latent variables. A block of indicator variables is attached to each exploratory block. Different exploratory blocks
can employ the same indicator variables. The measurement model of the exploratory part is based on using an optimal
rotation for the exploratory factor block. In exploratory factor analysis, only / and < are rotated. In the general setting of
ESEM the optimal rotation, H*, will affect essentially all the parameters of the model, that is, measurement model parameters
as well as structural model parameters:
Q /*
/(H* )1, . *
498
. , 4*
4, D
+ D B*
H*B(H* )1,
**
H**, and <*
(H* )c<H* . In situations where variable complexity is higher than one, Geomin rotation is
advantageous (Browne, 2001).

RESEARCH METHOD
How does this modelling approach fare in practice when it is confronted with the uncertainties of a typical modelling taska
multivariate data set in which the selection of measures was entirely based on considerations of content validity with respect
to the investigated phenomenon, and not on a particular theory? In the following, the modelling approach will be applied to
data from a consumer survey that included measures of beliefs about conventional and free-range pork production systems,
and expectations of the quality of the meat products resulting from these systems. We employ the two types of SEM models
and compare their performance. The sample size was N = 596 Danish consumers.
Measurements
Beliefs about conventional and free-range pork production systems were measured by 20 items that were constructed on basis
of a qualitative pilot study (Bredahl & Poulsen, 2002; Ngapo, Dransfield, Martin et al., 2003). The items were presented as
statements and had to be answered on 7-point scales ranging from completely disagree to completely agree (Table 1).
Expected quality of pork from free-range pork production systems was measured in terms of 12 quality parameters that had
been selected on the basis of existing literature (Bredahl & Andersson, 1998; Grunert, Bredahl & Bruns, 2004) and
qualitative pilot research (Bredahl & Poulsen, 2002; Ngapo, Martin & Dransfield, 2004). Participants were asked Compared
to pork from pigs raised conventionally, how likely do you consider it to be that pork from pigs reared outdoors is leaner,
fresher, healthier, more tender, more juicy, more often produced in your country, tastier, more often free from
hormones or medical residues, comes from pigs raised at a farm nearby, is more often produced with consideration of
animal welfare, and is cheaper. All quality expectation items were answered on 7-point scales ranging from extremely
unlikely to extremely likely. Variable names, labels, means and standard deviations are shown in Table 1.
Exploratory SEM
Model 1 (Figure 1a) was an exploratory SEM (hereafter ESEM) in which the measurement model of the endogenous
variables was a confirmatory factor analysis model with a simple-structure loading pattern (cross loadings set to zero) and the
measurement model of the exogenous variables was an exploratory factor analysis model (Geomin rotation, H 0.001 ).
The observed endogenous variables were the 12 expected quality items. They could easily be categorised as either referring
to intrinsic or extrinsic quality cues, in accordance with the theory (Grunert et al., 2004): intrinsic quality cues refer the
physical characteristics of a product whereas extrinsic quality cues refer to everything else. Hence, a confirmatory factor
analysis model could be specified as the measurement model of the endogenous variables.
x
x
Expected intrinsic quality (EINQUAL) was measured by 6 items (E01-E06: expected leanness of free-range pork,
expected freshness of free-range pork, expected healthiness of free-range pork, expected tenderness of free-range pork,
expected nutritiousness of free-range pork, and expected juiciness of free-range pork).
Expected extrinsic quality (EEXQUAL) was also measured by 6 items (E07-E12: expected domestic origin of free-range
pork, expected taste of free-range pork, expected absence of hormone and drug residues in free-range pork, expected
nearby production of free-range pork, expected animal welfare in free-range pork, and expected low price of free-range
pork).
The observed exogenous variables, on the other hand, were 20 belief items that had been constructed based on qualitative
pilot research (Ngapo et al., 2003). No clear relationship was known between these items and any underlying constructs.
Hence, a measurement model based on explorative factor analysis was specified for these variables. According to the
Bayesian information criterion (BIC), the optimum number of factors in this part of this measurement model was five. (1)
The first factor can be understood as attitude towards industrial production (AINDPRO) and had salient loadings of two items
(B01, pig production is mostly mass-production; B02, large-scale production is harmful to pigs). (2) The second factor
can be interpreted as ethnocentrism (ETHNO) and had salient loadings of three items (B07, I think that pigs in Denmark
have a better life than pigs in other European countries; B08,pig production in Denmark is better than in other countries;
B09, the control, laws and standards regarding pig production are no stricter in Denmark than in other European countries").
(3) The third factor can be understood as beliefs about animal welfare (BANIWEL) and had salient loadings of four items
(B03, pigs kept outdoor have a better life than pigs kept indoor; B11, outdoor production is not good for pigs; B16, pork
499
from outdoor pigs is of better quality than that from conventional pigs; B19, raising pigs outdoors is not a good idea). (4)
The fourth factor can be interpreted as attitude towards animal welfare (AANIWEL) and also had salient loadings of four
items (B10, it is important to me that the pork I buy comes from pigs that are raised in such a way that attention has been
paid to their physical and behavioural needs; B14, the feed the pigs are given influence the quality of the meat; B15, pigs
that have not been subjected to stressful procedures yield meat with a higher quality; B17, long-distance transport of pigs is
harmful to the environment). (5) The fifth factor can be understood as attitude towards outdoor production (AOUTPRO) and
had salient loadings of two items (B18, I think it is a good idea to raise pigs conventionally; B20 all conventional pig
production should be converted to outdoor production).
Conventional SEM with simple-structure measurement model
Model 2 (Figure 1b) is a conventional SEM with confirmatory factor analysis measurement models that has a simplestructure loading pattern. The measurement model is constructed based on the pattern of salient loadings. Consistent with the
common procedure, some of the belief items were excluded because of low and cross-loadings. An item was specified to be
an indicator of a construct if it had its salient loading on that construct and if that loading was higher than 0.30. Common
practice in developing a confirmatory factor analysis model is to begin with an exploratory factor analysis and to ignore all
loadings whose standardised estimates are below a threshold value of 0.30 (Cudeck & ODell, 1994; standard errors for
rotated solutions are not reported by most commercial software packages). Following common practice, we fixed all such
loadings to zero in the confirmatory factor analysis measurement model (Prooijen & van der Kloot, 2001). Also following
common practice, we ensured that all Cronbachs alphas were greater than 0.70, that all item-to-item correlations were
greater than 0.30, and that all item-to-total correlations were greater than 0.50 (Robinson, Shaver & Wrightsman, 1991).
RESULTS
In the ESEM model, AINDPRO, ETHNO, as well as BANIWEL had significant positive effects on both quality factors. The
strongest ones were the effects of BANIWEL on EEXQUAL (0.600) and EINQUAL (0.443). Neither AANIWEL nor
AOUTPRO had significant effects on the dependent variables (Table 2). Comparatively, in the SEM model the effects of
AINDPRO became insignificant and the effect of BANIWEL on EINQUAL increased to 0.867 (Table 3).
The R2 for the prediction of EINQUAL and EEXQUAL were also different in the two models (Table 2 and Table 3). In
ESEM, the R2 for the prediction of EINQUAL was 0.422, and the R2 for the prediction of EEXQUAL was 0.509. In SEM the
R2 for the prediction of EINQUAL was 0.560 (somewhat higher than in ESEM), and the R2 for the prediction of EEXQUAL
was 0.454 (lower than in ESEM). Conventional SEM with simple-structure measurement model had the lowest number of
free parameters and, as expected, is the most parsimonious model. Both information-theoretic goodness-of-fit criteria (AIC
and BIC) would also point to the less complex model as the best representation of the data. The other goodness-of-fit
measures (CFI, TLI, RMSEA and SRMR) are not particularly helpful for comparing the models. In terms of these fit
measures, all models had a very satisfactory fit to the data, and there is only little differentiation between the models in terms
of any of these measures (Table 4).
All models can be regarded as plausible in the sense that no reader, peer reviewer or journal editor would take immediate
offence due to a gross lack of face validity of the results. Hence, plausibility is not a criterion that would allow the modeller
to favour one particular model over the other. The problem here is more oblique, especially in light of the fact that both
models fitted the data exceptionally well: if the modeller had only attempted to find a plausible representation of the data that
also yielded an acceptable fit, both models would have fulfilled this criterion and would therefore in all likelihood have
marked the end of the modelling process. Depending on which modelling approach was initially chosen, however, completely
different models would have resulted.
Consistency with theory is another criterion in terms of which the models are difficult to compare. At a first glance, the total
food quality model by Grunert, Larsen, Madsen and Baadsgaard (1996)a common framework used in studies on consumer
perception of food qualitymight seem to suggest that intrinsic and extrinsic quality cues should somehow be grouped
together, respectively. However, a closer examination of the framework shows that it does not predict any such thing as a
factor-analytic covariance structure in which common underlying factors cause covariation between the perceived intrinsic
quality cues and between the extrinsic quality cues, respectively. No other models or frameworks exist either (or at least none
are known to the author) which would make such a precise prediction. On the belief side, the situation with the measurement
models is similar. None of the existing belief-based attitude theories in the Fishbein and Ajzen (1975) tradition predict a
factor-analytic covariance structure or any other type of pattern in the interrelationship of different beliefs that would allow
500
the specification of a particular measurement model. The beliefs themselves are considered exogenous to the theory, and so
are their interrelationships. Like all psychological theories of attitude, belief-based models focus on general mechanisms, not
on the specific structures that may result from them in particular life domains.
CONCLUSION
Two structural equation modelling approaches were discussed in this paper. One of which is based on a more liberalised and
inductive philosophy than the traditional hypothetical-deductive and falsificationist approach. In an empirical example, these
two modelling techniques were applied to data from a consumer survey about free-range pork production systems. The study
had not been planned as a stringent test of a particular theory. Ratherand this is a situation which is not uncommon in
applied researchit had been motivated by practical considerations, in this case the market potential of free-range pork. Each
model was constructed according to common practice and rules of thumb that are typical in the respective modeling
approaches, and each estimated by common techniques. In the authors opinion the ESEM approach is an improvement in
modelling convenience: it cuts the modelling process short by making the initial (and usually unreported) specification
search for a well-fitting measurement model superfluous. A comparison of the estimates obtained from the two models
clearly indicates that it is not at all a trivial matter whether cross-loadings are allowed in a measurement model or not. These
results shed serious doubt on the generally accepted rule of thumb according to which (cross) loadings can safely be ignored
if they do not have a practically significant loading with an absolute value of at least 0.30 or 0.40.
TABLES
Table 1. Observed measures
Item Label
B01 Pig production is mostly mass-production
B02 Large-scale production is harmful to pigs
B03 Pigs kept outdoor have a better life than pigs kept indoor
B04 Pigs should be given the possibility to behave more naturally
B05 Long distance transportation on lorries is not harmful to pigs
B06 There is no difference in pig production between European countries
B07 I think that pigs in Denmark have a better life than pigs in other European countries
B08 Pig production in Denmark is better than in other countries
The control, laws and standards regarding pig production are no stricter in Denmark than in other
B09
European countries
It is important to me that the pork I buy comes from pigs that are raised in such a way that attention
B10
has been paid to their physical and behavioural needs
B11 Outdoor production is not good for pigs
B12 Raising pigs outdoor is too expensive
B13 It is a good idea to use antibiotics in pig production to prevent disease
B14 The feed the pigs are given influence the quality of the meat
B15 Pigs that have not been subjected to stressful procedures yield meat with a higher quality
B16 Pork from outdoor pigs is of better quality than that from conventional pigs
B17 Long distance transport of pigs is harmful to the environment
B18 I think it is a good idea to raise pigs conventionally
B19 Raising pigs outdoors is not a good idea
B20 All conventional pig production should be converted to outdoor production
E01 Expected leanness of free-range pork
E02 Expected freshness of free-range pork
E03 Expected healthiness of free-range pork
E04 Expected tenderness of free-range pork
E05 Expected nutritiousness of free-range pork
E06 Expected juiciness of free-range pork
E07 Expected domestic origin of free-range pork
E08 Expected taste of free-range pork
E09 Expected absence of hormone and drug residues in free-range pork
E10 Expected nearby production of free-range pork
E11 Expected animal welfare in free-range pork
501
Mean
5.933
5.420
6.063
5.993
2.212
2.671
4.443
4.475
SD
1.222
1.508
1.264
1.111
1.592
1.377
1.198
1.191
4.898
1.212
5.613
1.245
1.918
3.744
2.473
5.819
6.169
5.614
4.890
3.397
2.538
4.533
4.592
4.693
5.105
4.854
5.001
4.951
5.174
5.225
5.169
4.165
5.478
1.235
1.663
1.488
1.242
1.171
1.339
1.662
1.619
1.785
1.783
1.241
1.244
1.229
1.184
1.216
1.185
1.154
1.223
1.247
1.319
1.139
E12
Expected low price of free-range pork
3.063
1.280
Table 2. Exploratory structural equation model: standardised estimates of factor loadings and path coefficients (ML
estimates)
EFA-part AINDPRO
ETHNO
BANIWEL
AANIWEL
AOUTPRO
Var.
Est.
p
Est.
p
Est.
p
Est.
p
Est.
p
B01
.519
.000
-.050
.136
.036
.615
.077
.151
-.173
.041
B02
.846
.000
-.012
.621
.020
.661
-.010
.682
.076
.537
B03
.342
.002
.024
.279
.562
.000
-.040
.264
-.014
.776
B04
.289
.000
.015
.552
.206
.098
.216
.011
.287
.061
B05
-.057
.377
.070
.091
-.143
.076
-.184
.005
-.090
.395
B06
.081
.270
-.073
.094
-.127
.119
-.095
.120
-.054
.496
B07
-.010
.674
.904
.000
-.001
.975
-.013
.462
.035
.097
B08
-.021
.341
.960
.000
.014
.567
-.022
.175
.009
.557
B09
.018
.653
.665
.000
.003
.958
.087
.045
-.104
.041
B10
.009
.666
.147
.001
-.038
.456
.481
.000
.419
.028
B11
.005
.924
.052
.125
-.643
.000
-.036
.401
-.009
.894
B12
.099
.186
.121
.005
-.129
.258
-.111
.153
-.252
.002
B13
-.077
.312
.099
.018
-.081
.297
-.185
.004
-.119
.275
B14
.110
.104
.061
.123
.014
.836
.412
.000
-.079
.534
B15
-.099
.156
-.024
.267
.138
.370
.673
.000
-.080
.625
B16
.054
.260
.021
.366
.656
.000
.132
.037
.127
.299
B17
.137
.071
-.028
.355
-.194
.014
.427
.000
.147
.347
B18
-.009
.799
.152
.000
-.294
.130
.061
.361
-.492
.000
B19
-.060
.413
.045
.262
-.337
.000
.004
.937
.006
.922
B20
.042
.350
.012
.578
.344
.116
-.007
.920
.573
.000
CFA-part EINQUAL
EEXQUAL
Path
EINQUAL
EEXQUAL
Var.
Est.
p
Est.
p
from
Est.
p
Est.
p
E01
.584
.000
0
AINDPRO
.164
.006
.181
.007
E02
.812
.000
0
ETHNO
.159
.000
.144
.000
E03
.886
.000
0
BANIWEL
.443
.000
.600
.000
E04
.878
.000
0
AANIWEL
.034
.569
.033
.599
E05
.887
.000
0
AOUTPRO
.167
.104
-.005
.956
E06
.909
.000
0
.422
.509
E07
0
.586
.000
R2
E08
0
.900
.000
E09
0
.700
.000
E10
0
.416
.000
E11
0
.689
.000
E12
0
.156
.000
Table 3. Conventional structural equation model with simple-structure measurement model: standardised estimates of factor
loadings and path coefficients (ML estimates)
CFA
AINDPRO
ETHNO
BANIWEL
AANIWEL
AOUTPRO
Variables Est.
p
Est.
p
Est.
p
Est.
p
Est.
p
B01
B02
B03
B07
B08
B09
B10
B11
.460
.955
0
0
0
0
0
0
.000
.000
0
0
0
.901
.959
.675
0
0
.000
.000
.000
0
0
.755
0
0
0
0
-.616
.000
.000
502
0
0
0
0
0
0
.686
0
.000
0
0
0
0
0
0
0
0
B14
B15
B16
B17
B18
B19
B20
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
.802
0
0
-.359
0
.000
.000
.388
.499
0
.457
0
0
0
CFA
EINQUAL
Variables Est.
p
EEXQUAL
Est.
p
Path
from
E01
E02
E03
E04
E05
E06
E07
E08
E09
E10
E11
E12
0
0
0
0
0
0
.585
.902
.697
.418
.685
.165
AINDPRO .019
ETHNO
.139
BANIWEL .867
AANIWEL -.022
AOUTPRO .147
.584
.811
.885
.879
.886
.909
0
0
0
0
0
0
.000
.000
.000
.000
.000
.000
.000
EINQUAL
Est.
p
R2
.000
.000
.000
.000
.000
.000
.000
.000
.748
.001
.000
.722
.123
.560
0
0
0
0
-.691
0
.829
.000
.000
EEXQUAL
Est.
p
.059
.160
.577
.026
-.063
.284
.000
.000
.659
.460
.454
Table 4. Goodness-of-fit statistics

Free par.
Model type
df
ESEM
1 factor
2 factors
3 factors
4 factors
5 factors
6 factors
7 factors
8 factors
Conventional SEM
2476.442
461
1431.142
440
1342.652
420
1169.590
401
1098.355
383
984.391
366
913.415
350
No convergence
946.301
303
177
102
503
CFI
TLI
AIC
BIC
RMSEA
SRMR
.728
.866
.875
.896
.903
.916
.924
.707
.849
.853
.872
.875
.887
.892
57912
56714
56574
56437
56359
56292
56251
58347
57241
57189
57136
57135
57144
57173
.086
.061
.061
.057
.056
.053
.052
.082
.053
.047
.045
.043
.038
.037
.902
.887
46413
46861
.060
.048
FIGURES
Figure 1. Exploratory SEM and conventional SEM
a.
b.
504
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THE AMERICANISATION OF SOUTHERN AFRICAN POLITICAL CAMPAIGNS: A COMPARATIVE STUDY

OF MALAWI AND SOUTH AFRICA GENERAL ELECTIONS
Easton D. Simenti-Phiri, University of Chester, UK
Philip C. Harris, University of Chester, UK
David Perrin, University of Chester, UK
ABSTRACT
This paper seeks to examine the extent and rationale of Malawian and South African campaigns incorporating America style
practices and becoming Americanised. Specifically the paper explores the existence of evidence that supports the notion of
Americanisation in both Malawian and South African politics. The paper adopted a mixed methods approach. Semi
structured interviews were conducted with senior politicians (campaign directors, research directors and publicity secretaries)
of six political parties represented in the National Assembly and media managers. Focus groups were also conducted with
media practitioners and voters on the use of experts, advisers and professionals in political campaigns in Malawi. Content
analysis of secondary sources (on-line publications and newspapers) for lack of primary data was conducted for evidence of
Americanisation and use of political marketing professionals (in-house or otherwise) in conducting electoral campaigns in
South Africa. Results show evidence of Americanisation directly or indirectly since 1994 in both Malawi and South Africa.
The Alliance for Democracy of Malawi had a team of American consultants working with its campaign team as early in 1994
when the country held its first democratic elections. The other political parties had experts from either the UK or other
countries like Israel who have had contacts with their American counterparts or were influenced in some way by their work.
In South Africa, the African National Congress (ANC) hired a firm that was advised by Frank Greer and Stan Greenberg,
organisers of Clintons successful 1992 presidential campaigns. Results further show that the growth in the use of marketing
and campaign professionals has been largely related to democratisation, development of the media and changes in the socialeconomic factors in these study countries. Through transnational diffusion, these practices were adopted and adapted to meet
local needs. In fact, Americanisation supplements country-specific situations (hybridisation). The results provide useful
knowledge and insight to international political marketing consultants and advisers to design country-specific campaign
strategies taking into account the media environment and other country-specific factors. Further research ideas stemming
from this study include the inclusion of other countries in Southern African region to make the results of uniform application
to the entire African continent. The study provides useful knowledge and insight into international political marketing. The
papers contribution is to generate knowledge about political campaign practices in Malawi and South Africa, two countries
in the SADC region thereby anchoring the study of political marketing and campaigning in Africa. It is hoped that this study
leads to further discussion and research on the role of political marketing and campaign professionalisation in Africa.
INTRODUCTION
In their seminal article, Kotler and Levy (1969:15) argued that elections should be one of the new arenas of interest for
marketing professionals: political contests remind us that candidates are marketed as well as soap. The earliest use of the
term political marketing, however, did not appear in management studies literature but in the pioneering work of political
scientist Stanley Kelley who charted the emergence of the professional campaign industry in the United States. Commenting
on the activities of the first election consultancies, Kelley wrote: The team relies heavily but not entirely upon their own
intuitive feel for providing political marketing conditions. They pride themselves on having good average minds that help
them to see things as the average man sees them (Kelley, 1956 p.53).
In spite of scepticism from marketing purists, those in sympathy with the broadening thesis that involved the application of
marketing principles and strategies to political campaigning began to attempt to establish and clarify the sub-field of political
marketing from the 1960s onwards. By the mid -1970s, American scholars such as Avraham Shama (1974, 1976) and the
prolific Philip Kotler (1975) were to the fore in developing and deepening theoretical foundations for the subject. Similarly,
academics in Europe began to consider the political dimension to marketing, positing the view than an exchange relationship
existed between democratic elites and their voters (OLeary and Iredale, 1976). By the mid-1980s, a steady stream of
research discussing the emergence of the phenomenon helped confirm its importance (Mauser, 1983; Newman and Sheth,
1985). By 1988, David Reid felt able to conclude that: In Western terms, although seldom recognised by politicians, the
problem of getting elected is essentially a marketing one. (Reid, 1988)
Among political marketing scholars, Kelley (1956) may be generally credited with the first use of the term political
marketing but Maarek (1995) observes that the first genuine manifestation of modern political marketing as a general,

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organised strategy dates back to 1952 with the United States presidential campaign of Dwight D. Eisenhower. He argued that
political communication as such was not even an invention of the Twentieth Century because as far back as Antiquity, kings
and princes knew how to exploit their reputation as warriors and used it as a preliminary scare tactic aimed at potential
adversaries, as well as a device to help them raise taxes. He further argued that the introduction of political marketing came
with the elaboration of a policy of political communication, specifically: a strategy for the design, rationalisation and
conveyance of modern political communication. He explained that the dominant role of modern political marketing in the
USA was rapidly established: within less than a decade, between the presidential election of 1952 and that of 1960, it became
an incontrovertible practice. He suggested that three main factors led to the development of political marketing in the USA,
namely:
(a) Its electoral system with a system of primaries before presidential elections, where voters must choose one candidate
over another, expressing broadly similar political ideas, rather than convince them to vote for a politician from an opposition
party;
(b) its tradition of elections for all public offices in an effort to break from the former British colonial policy, it became
routine to hold elections for most major public office holders from the local sheriff, mayor or judge to the president; and
(c) the rapid expansion of the modern mass media in 1952, there was already a television set in nearly 40 per cent of
American homes and this figure was as high as 60 per cent in the north-eastern states.
The US literature identifies John Beckley, a member of the Thomas Jefferson campaign team as one of the first political
consultants, though similar roles could be identified much earlier in other societies. Robert Harris (2006) in Imperium: A
Novel Set in Ancient Rome, suggests that Ciceros brother was a political marketer and it has been suggested that Nicollo
Machiavelli is the saint of political marketing. The rise of political marketing in the recent past has been attributed to the
development of an investigative press, declining party loyalty, and changes in the political and electoral systems (Newman
1994). Most especially, researchers (e.g. Kavanagh, 1995; Scammell, 1995) have identified the expansion of the media,
particularly television, as having a significant impact on its development.
THEORETICAL FRAMEWORK
Swanson and Mancini (1996) in their seminal article posit Americanisation and modernisation as working hypothesis to
explain the spread of political marketing as a phenomenon. To provide a starting point for comparing campaign practices in
different countries, we believe the Americanisation hypothesis is particularly useful. In brief, the hypothesis holds that
campaigning in democracies around the world is becoming ever more Americanised as candidates, political parties, and news
media take cues from their counterparts in the United States. Many campaign methods and practices that have been adopted
by other countries developed first in the United States, so Americanisation suggests itself as an easy characterisation of this
pattern of innovation (Elebash 1984 cited in Swanson and Mancini, 1996).
The appropriateness of the term is contested, however, by some who argue that surface similarities obscure important
national adaptations and variations (Waisbord 1993, cited in Swanson and Mancini, 1996). Furthermore, not every recent
change in political campaigning in all countries of interest represents the adoption of methods and practice that emerged first
in the US. We regard the matter as an open question and offer Americanisation as a reference point and a working hypothesis
with which to begin the analysis. We believe the concept will be useful for comparing common elements in political
marketing practice and electoral change, so long as care is taken not to overlook national variations, adaptations, and
deviations from the general pattern.
Despite these caveats, our use of the term Americanisation reflects some important developments that are relevant to the
recent changes in election campaigns around the world. Given its super-power status the results of US elections may have
important consequences for many countries, which creates in those countries great interest in following the US campaigns. It
can also happen that, as people in other countries follow the progress of a US campaign, their attention shifts from the
candidates goals and policies (which can have serious impacts internationally) to the way in which the election campaign
itself is conducted.
RELEVANT EMPIRICAL AND CONCEPTUAL RESEARCH
De Vreese (2009) has observed that literature on the professionalization of political campaigns is strongly biased towards the
first-order (national) elections in the US and UK. Based on the survey of candidates for the 2004 European elections in eight
European countries, she wanted to examine whether campaign efforts to mobilise voters were greater in countries with elite

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consensus on the issue of European integration than in countries with elite polarization. The results showed that campaigns in
the consensual electoral context in which political parties differ marginally on most issues of European integration were
longer and involved more public meetings, more canvassing, and a more active use of the internet.
Hutcheson (2007) examined the development of political consulting in post-Soviet Russia. He observed that in recent years,
electoral politics worldwide has become firmly reliant on professional advice and labour. In developing democracies the
influx of advice and consultants from the West initially resulted in an apparent Americanisation of political marketing
techniques. As electoral systems have developed, the political consulting market in each country has evolved in a way suited
to the specifics of its electoral conditions. His analysis places the electoral market in comparative context looking at the
scope, structure and activities of political consulting firms, examining some of the controversies arising from the
professionalization of politics in each country.
Plasser (2000) noted the on-going process of professionalization and internationalisation of electioneering and campaign
practices in media-centred democracies as the central topic of his comparative study. He claimed that only recently have
scholars in the United States begun to study the professional norms and standards of a new power elite: the professional
political consultants. Prominent figures in the US political consultancy business have worked as overseas consultants since
the 1970s. In 1980s, they concentrated in Latin America and Western Europe. Since 1989, Russia and the former Soviet bloc
countries of Eastern and Central Europe, as well as newly democratised countries in Asia and Africa, have become
competitive marketplaces for American overseas consultants. Between 1998 and 1999, a sample of 502 political consultants
and leading party managers in the US, Australia, New Zealand, India, South Africa, Latin America, Western Europe, Russia
and Eastern Europe were interviewed about their professional experience and their concepts of campaigning, with the main
focus being their professional evaluation of various campaign techniques and communication strategies. Plasser (2000)
suggests the existence of the market-driven proliferation of American campaign techniques across much of the countries
where political consultants were interviewed.
Medvic (2003) on the other hand focused on the nature of political consultancy itself, and noted that although political
consultants have increasingly been the subject of scholarly research, there is little agreement as to what a political
consultant actually is. Early research in the field, and a good deal of contemporary work, has provided only vague
conceptualisations of the term. Recent quantitative work that attempts to examine the role and impact of consultants in
elections suffers from a lack of a common operational definition. After a brief review of the way systematic empirical
researchers operationalise professional political consultant, Medvic (2003) offered a comprehensive definition that can be
used in future research on the topic. He defines a professional political consultant as a person who is paid, or whose firm is
paid, to provide services for one presidential/ national or more than one non-presidential / sub-national campaign (whether
candidate or issue) per election cycle for more than one such cycle, not including those whose salary is paid exclusively by a
party committee or interest group. Medvic (2003) further notes that the study of political consultants and the consulting
industry is gathering pace. In recent years, numerous books and articles have been published analysing the role of political
consultants in elections in the United States, Western Europe and elsewhere. In addition, major studies have recently been
launched to examine the activity of consultants, including the Improving Campaign Conduct project at the University of
Virginia by Freedman (1999) and the Global Political Consultancy Survey based at the Centre for Applied Political Research
in Vienna. Yet, for all the attention consultants are garnering, there seems to be little agreement on what, exactly, a
professional political consultant is.
If the claim that American-style campaigning is being implemented throughout the world can be tested, and if an integral
component of American-style campaigning is the use of professional political consultants, then it is incumbent upon scholars
to use a standard definition of the central concept when conducting empirical research. Downs (2011) has noted observers of
elections in European democracies increasingly encountering the assertion that campaigns and candidacies have become
poisoned by a creeping Americanisation. When a comedian in Denmark, a professional wrestler in Finland, or a porn star in
Italy enjoys electoral success by appealing to lowest-common-denominator populism the response emanating from academic
and journalistic quarters is typically the samethe US style of politics has, unfortunately, arrived. The literature supporting
such seemingly pejorative claims is, however, largely anecdotal, usually atheoretical, and almost exclusively directed at
national-level elections. Building upon theories of diffusion at the intersection of comparative politics and international
relationsand drawing upon individual-level survey data from elections to the Scottish Parliament Downs evaluated the
merits and consequences of the Americanisation thesis. His results suggest the importance of political uncertainty as a force
driving candidates and parties to learn from and adopt American campaign strategies and tactics.

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Newman (2012) has argued that to fully appreciate where the field has gone over the past decade, it is instructive to define
exactly what political marketing is. For the purpose of establishing a conceptual foundation to move the approach forward, a
definition was put forward in the preface of the Handbook of Political Marketing, the first formal collection of works in the
field. Political marketing was defined as the application of marketing principles and procedures in political campaigns by
various individuals and organisations. The procedures involved include the analysis, development, execution, and
management of strategic campaigns by candidates, political parties, governments, lobbyists, and interest groups that seek to
drive public opinion, advances their own ideologies, win elections, and pass legislation and referenda in response to the needs
and wants of selected people and society (Newman 1999, p.xiii). Considering this broad range of activities encompassed by
political marketing, the focus is the strategic management of campaigns. Furthermore, what has changed most obviously over
the past decade or so is the increasing amount of money necessary to pay for the execution of these campaigns. Changes in
technology have also played a significant role in the successful implementation of strategies at all levels of political
campaign. Needless to say, the field of political marketing has grown along with and through the establishment of more
advanced technological tools that are essentially used to accomplish the goal of driving public opinion in a desired direction
(Newman, 2012).
The application of political marketing methods continues to grow in North America, Europe, Asia and Latin America and is
now part of campaigns and elections in emerging democracies around the world, whether it is a door-to-door localised
grassroots campaign or a national campaign driven by the internet. This is increasingly the case in Africa, with a number of
emergent political democracies exhibiting many signs of the techniques and strategies apparently developed elsewhere and
debated by political marketing theorists. This is the main focus of attention for our investigation in this article.
THE AMERICANISATION OF AFRICAN POLITICS
From the foregoing discussion, we can formulate a specific question that addresses the key issue is the American style of
campaigning, identified above, a model that seems to have been adopted in other countries, including emerging democracies
like those in Southern Africa? To investigate this, we undertook an exploratory study of campaign practices in Malawi and
South Africa, drawing on data from primary as well as secondary sources.
Within the scope of this enquiry, senior politicians from the six political parties represented in the National Assembly in
Malawi were interviewed as well as key political marketing operatives from these parties. For South Africa, due to the lack of
collaborative partners for primary data collection and also because of non-response from political party officials to participate
in the study when requests were made via email, secondary sources (on-line publications and newspapers) which covered
campaign activities by political parties in the last general elections in South Africa in 2009 were analysed to ascertain any
evidence of Americanised styles of political campaigning. This analysis is followed by some thoughts and remarks on the
current nature of political marketing practice in Malawi and South Africa and a discussion of the factors that might influence
the adoption of any Americanisation of political campaigns. This includes how candidates and their advisors have perceived
the use of experts in campaigns.
METHODOLOGY: THE CASE OF MALAWI AND SOUTH AFRICA
The study adopted a mixed-methods approach wherein qualitative and quantitative methods were used to provide
triangulation and crystallisation of findings. Semi structured in-depth interviews were conducted with senior politicians (three
from each of the six political parties represented in the National Assembly). The parties that took part from Malawi were the
Alliance for Democracy (AFORD), Democratic Progressive Party (DPP), Malawi Congress Party (MCP), Malawi Forum for
Unity and Development (MAFUNDE), Maravi Peoples Party (MPP) and the United Democratic Front Party (UDF). Three
key officers from each of the six political parties were interviewed, namely the Directors of Campaigns, Directors of
Research and Publicity Secretaries. Of the 18 eligible officials to be interviewed, 17 were interviewed while one declined to
take part in the research.
Interviews were done in three phases beginning with Campaign Directors and then Research Directors and Publicity
Secretaries in that order. The interviews were held between September 2011 and January, 2012. The first six (6) party
personnel to be interviewed were the Campaign Directors for Alliance for Democracy (AFORD), labelled (CD1), for
Democratic progressive Party (DPP) coded CD2, for Malawi Congress Party (MCP) coded CD3, for Malawi Forum for Unity
and Development (MAFUNDE) coded CD4, for Maravi Peoples Party (MPP) coded CD5 and for the United Democratic
Front (UDF) coded CD6.

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During the interviews, they were asked to complete the Professionalised Campaign Index developed from the work of
Rommele and Gibson (2001) and Stromback (2007). They were required to tick from the checklist all activities that they
recalled were carried out by their respective parties in the previous campaign of 2009. The index had 19 items. In order to
measure each item on the checklist, a scale of zero to three emerged as the most practicable and broadly applicable level of
measurement to capture variance across the various activities. Such an approach is consistent with earlier work by Gibson
and Rommele (2001). An increase in the score reflected an increased level of engagement in the activity in question. Given
that we had 19 variables in total, this meant a maximum score on the overall index of 57. A full listing of the variables and
scores is provided in the appendix.
During interviews with Research Directors and Publicity Secretaries, some of the issues indicated by campaign directors on
the checklist were also raised with these officials as a way of triangulating the information. Therefore, data used to assign
scores was collected primarily through a self-assessment exercise by campaign directors and follow-up was by means of
interview questions.
Interviews were also held with 17 media managers from both public and private media houses for their comments on the use
of new approaches to political campaigning. Four focus groups were also held with media practitioners and voters to gauge
how they perceived the use of campaign professionals in recent campaigns.
As for South Africa, the study relied heavily on the use of secondary sources (on-line publications and newspapers) which
were content analysed for evidence on the use of campaign professionals and political marketing by political parties in South
African general elections since 1994. Several online-publications (five articles) by key authors on South African campaigns
and four on-line newspapers namely BBC News (Africa service), The Sunday Times/ The Times, The Star and News24 were
analysed for information about the use of campaign professionals. These publications were also analysed for traces of
evidence of American style of campaign practices. Political parties whose campaign activities were followed were the
African National Congress (ANC), the Democratic Alliance (DA), the National Party (NP), Inkatha Freedom Party (IFP),
Congress of the People (COPE) and Freedom Fronts (FF), also known as Vryheidsfont (VF) due to its Afrikaner links.
RESULTS
Americanisation of campaigns
Results show that Americanisation was evident in both Malawi and South Africa. By Americanisation we refer to some
important developments that are relevant to the recent changes in election campaigns around the world. This is as a result of
use of professionals or experts from America who have advised those campaigns to look like those of America or simply a
shift of local campaigns towards those of America through diffusion. Americanised campaigns are known for their use of
professionals or consultants and extensive use of the media.
In the case of Malawi, it was found through interviews with politicians and media managers and focus group discussions with
media practitioners and voters that as early as in 1994 (when the country held its first democratic elections), American
campaign experts were drafted into the campaign team for the Alliance for Democracy (AFORD). This was possible through
their presidential candidate, the late Tom Chakufwa Chihana who had ties with some campaign experts from the United
States. Such partnership with AFORD continued in 1999 and 2004 general elections before the death of its leader in 2006
before the general elections in 2009. The UDF was advised by campaign experts from the Liberal Democrats Party in the UK.
On the other hand, the new party, the DPP, formed in 2005 after the general elections in 2004 and run an affective and
glamorous campaign in 2009 was advised by campaign experts from Israel, South Africa and Zimbabwe. The MCP also had
experts from South Africa and neighbouring Zambia and Kenya. What is observable from these results is the fact that over
the years, advisers or experts/consultants have come from places like the US, the UK, Israel, Kenya, South Africa, Zimbabwe
and neighbouring Tanzania and Zambia to advise on campaigns in Malawi. These advisers have had direct contacts with their
American counterparts or have had their work influenced in some way by their work.
Table 1.0 shows the level of professionalisation of political parties represented in the National Assembly in Malawi. Results
also show that campaigns in Malawi were professionalised. On the aspect of professionalisation of campaigns, this paper
adopts the view by Stromback (2007) who defines professionalised political campaign as characterised by being permanent,
although with varying intensity; by central campaign headquarters coordinating messages and management of the campaign;
and by using expertise in analysing and reaching out to members, target groups and stakeholders, in analysing its own and
competition weaknesses and strengths and making use of that knowledge, and in news management.

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Results further show low scores on presence and use of internal as well as external internet communication system and email
sign-up or subscription lists for regular news updates/newsletters. One plausible explanation is the low usage of personal
computers and internet connectivity throughout the country. According to internetworldstats.com, by late 2011, out of the
estimated total population of 15 million people, Malawi had only 716,400 internet users representing a 4.5% uptake (BBC
News, 2012). Hence parties had to use other means of communication with their officials and the electorate as opposed to a
reliance on the internet or emails. Following a successful campaign period, the DPP secured 114 seats, followed by the MCP
on 27, the UDF on 17 and AFORD, MAFUNDE and the MPP, one seat each. The rest of the members of parliament were
elected to the National Assembly as independent candidates.
The UDF despite being most professionalised came third because its presidential candidate was rejected by the Malawi
Electoral commission (MEC) during submission of nomination papers and that confused their supporters. Results also show
the increased involvement of campaign professionals in Malawian politics. Instead of the campaigns being short and
decentralised, there is a shift towards being permanent in which experts such as pollsters and marketing consultants are
playing key roles. This agrees with findings by Farell (1996), and Farell and Webb (2000) who observe that such is the trend
the world over. It was also noted during interviews that there has been a rapid growth of media evidenced by the
mushrooming of radio stations (both private and public) in Malawi. In 1994, at the dawn of multiparty politics the country
had only 1 public radio station and no television. Television was only introduced in 1999. But as of 2009, there were 26 radio
stations, targeting different communities and stakeholder groups.
In the case of South Africa, it was noted through content analysis of Tom Lodges (1995) article that the ANC borrowed an
approach from Bill Clintons campaign team, and convened a series of Peoples Forums at which Nelson Mandela and other
select leaders would arrive at local gatherings. The audience would be summoned through press invitations directed at
specific groups: workers, teachers, women, squatters and so forth. Here leaders would listen to the people (indeed, this was
essentially the Hearing phase of the ANCs campaign). Bertelsen (1996) supports this view by arguing that parties go to
some length to portray themselves as listening and caring parties to the voters.
It was further noted through Bertelsens (1996) work that parties hired different agencies to help them during the campaign.
For example, the ANC account was handled by Hunt Lascaris, advised by Frank Greer and Stan Greenberg, organisers of
Clintons successful 1992 presidential campaign. They suggested to the ANC to avoid negativity and stick to key issues,
underlying principles and a clear, positive message. Their advice seems to have set the tone for the campaign in that it was
assumed people will be looking for a distinct set of policies: even if you do not read or cannot read the details, you get the
message: the ANC has a plan; its serious (Greenberg, 1994) . On the other hand, she observes that the National Party (NP)
advertising account was handled by Optimum Marketing Communications, the South African subsidiary of Saatchi and
Saatchi. This she argues subjected the electorate to what was known as the Battle of the Titans in political marketing terms:
as packagers of Bill Clinton wrestled for power with the marketers of Margaret Thatcher. Interestingly, the National Party
with its association with apartheid was rebranded The New National Party to position it as a different party (BBC News
2005 and Independent online News (2005). She further observes that the Democratic Party (DP) advertising account was
handled by The Jupiter Drawing Room and their campaign message was to portray themselves as a small, strong and
principled, organisation, indeed a blameless party (with no blood on their hands) who could protect the voters from abuse.
She also observed that Mass Market Co-ordination was responsible for setting up the Inkatha Freedom Party (IFP) campaign
ads. Nationwide they were few in number, and concentrated, due to Inkathas strategy of withdrawal and then late re-entry
into the process, in the last week of the campaign. Freedom Fronts (FF) advertising campaign appears to have been handled
internally by Communications academic Professor Pieter Mulder who is its current leader. The party is also known as
Vryheidsfont (VF) due to its Afrikaner links.
Johnston (2005) has observed that the opposition Democratic Alliance (DA) moved much more quickly, openly and
aggressively than the ANC to develop the kind of focused media and campaign strategies characteristic of mediated politics
and Americanisation. Using focus groups to direct targeted advertising, and media strategies that combine rapid response
rebuttal with self-conscious image building around its leadership, it has successfully remobilised whites and other minorities
by appealing to them as consumers, rather than on the basis of any deeper or longer-lasting attachment.
Agiza Hlongwane (2009) writing for The Star under the heading South African politicians innovate to win voters, showed
how parties have turned to technology, T-shirts and taxis to get their messages across: even water bottles, bibs and CD
pouches were branded in party colours by the ANC and IFP. She observed that Thabo Mbeki had emerged as the most
popular South African politician on social networking website Facebook after Nelson Mandela: It seems South African
politicians have sought to emulate Barack Obama in using technology such as SMSes, e-mail and social networks to drum up

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support (Hlongwane, 2009, p.8). Sibusiso Ngolwa (2009) writing on how the Obama bug bites the ANC commented
about the song the ANC campaign had produced which drew parallels between Mr Obamas and Mr Zumas humble
backgrounds. Siyabonga Mkhwanazi (2009) observed that posters are still a vital communication tool during campaigns in
South Africa while Kim Hawkey(2010) comments about the spiralling costs of campaigns bringing to the fore the fact that
the ANC hired the services of advertising agency Ogilvy for their 2009 campaigns and were failing to settle the bill.
Given this evidence, there is little doubt about Americanisation of campaigns in South Africa, though the performance of
political parties during elections cannot solely or even mainly be attributed to this Americanisation. There are other
underlying factors which would need to be explored. As noted by De Klerk (2010), disappointingly, voters continue to cast
their votes overwhelmingly according to race and not according to political principles or their satisfaction with the
performance of a government. This, he observes, will mean that the Democratic Alliance (DA), despite its energetic leader
Hellen Zille will find it difficult to increase its support much above the 20% represented by the white, coloured and Asian
minorities in South Africa. On the basis of these findings, it can therefore be concluded that political campaigns in South
Africa have been professionalised. Parties have used professionals both externally and as well in-house in planning and
managing their campaigns which is a mark of Americanised campaigns.
According to the BBC News (2012), South Africa is the continents major media player, and its broadcasters and press reflect
the diversity of its people. It has established state-run and commercial TV broadcasting nationally, and hundreds of thousands
of viewers subscribe to satellite and cable. South Africa-based Multi-Choice markets satellite pay-TV in dozens of African
countries. There were 6.8 million internet users at the end of 2010 nearly 14% of the population (via
internetworldstats.com). The use of mobile phones to access internet is driving growth in web access. Local instant
messaging service Mxit is the most popular social media platform followed by Facebook. You tube is available in Afrikaans
and Zulu.
DISCUSSION
From these findings, it is important to note that the growth in the use of campaign professionals has been closely related, not
coincidentally, to Malawi and South Africas process of democratisation (and therefore to the increased competition between
parties) and the emergence of the new media system. In spite of the evidence presented in this paper, it is important to note
that Americanisation is not only a consequence of internal structural changes (modernisation for example, media
development, increased economic development and technological development) that these two countries underwent in the last
decade and a half, nor does it imply progressive homogenisation of campaign practices. The Americanisation of Southern
African campaigns is evidenced by the incorporation of political marketing and professionalised and media-centred
campaigns which is also a consequence of transnational diffusion (Plasser and Plasser, 2002:17) and imply a direct imitation
(), the selective importation and adoption (.) or the adaptation of American practices to an existing set of practices,
assimilating new modes of operation in older ones. (Blumler and Gurevitch, 2001 in Plasser and Plasser, 2002:20).
Malawis and South Africans internal factors were important causes of the change to use American campaign techniques;
however the process also incorporated diffusion. Modernisation theorists claim that structural changes at the macro-level
(changes in media, political and social structures) have caused adaptive behaviour at the micro-level (parties, candidates and
journalists) resulting in gradual modifications of traditional styles and strategies of political communication (Plasser and
Plasser, 2002:17). Supporters of the transnational diffusion theory proffer two models, the shopping model and adoption
model. Whereas the adoption model leads to standardisation of campaign practices, the shopping model leads to hybridisation
of campaign practices. It is clear that there is a massive global interest in US campaigns. (Scammell, 1997:1). The US is
both the pioneer, the media revolution took place first in the US (Plasser and Plasser, 2002:1) and the current leader the
US leads the world in the development and application of high technology tools for campaigning in campaign techniques
and strategies, which implies that many political parties and candidates from other countries including Malawi and South
Africa, can copy and adapt its models. They do this to conform to what is taking place elsewhere in the world.
Also and in spite of the evidence for the growing incorporation of US-style campaign practices and techniques in Malawi and
South from 1994 to 2009, Americanisation is not overwhelming in these countries. The diffusion of the US-American
campaign and marketing techniques is not a linear process resulting in uniform standardisation of international campaign
practices. In fact Americanisation was adapted to the countrys specific context, resulting in a hybridisation of campaign
styles. This agrees with the observation by Plasser and Plasser, (2002:19). As evidence of this, traditional campaign styles
were still present in Malawi and South Africa. For example, traditional dances, imbidzos (a meeting or gathering called by
Zulu elders), door-to-door canvassing, public rallies were evidence of campaigns run in the African way. Even in the highly

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sophisticated (or Americanised) campaign of 2009 general elections, it is important to note both the DPP of Malawi and the
ANC of South Africa used both styles of campaigning. In fact public rallies and traditional dances formed a dominant feature
of the campaign strategy which also proved effective in mobilising the electorate.
Political communication in Malawi and South Africa has changed since the last 18 years (when both countries became
democracies) and has been swept in the direction of what is labelled as Americanisation. The 1994, 1999, 2004 and 2009
general elections in Malawi and South Africa bear witness to this process of expanding of US-like practices in campaigns,
specifically in relation to political marketing, professionalisation and media-centredness. The increasing use, impact and
importance of polls, consultants, internet and television are evidence of this change.
In the first place this change can be explained by internal conditions. In Malawi and South Africa, Americanisation of
campaigns was closely intertwined with very structural changes. These changed the countries political, social, economic and
media systems and transformed closed authoritarian regimes into open liberal democracies. These processes brought with
them an increase in political competition, expansion and autonomy of the media, the decline of partisan identification and
increased volatility, which among other changes, facilitated the incorporation of US-style campaign practices.
However important, this Americanisation process cannot be solely explained by the on-going structural changes in politics,
society and media system (Negrine and Papathanassopoulos et al, 1996 in Plasser and Plasser, 2002:16) (modernisation); the
transnational diffusion of these practices and their local adoption and adaptation is also important. Furthermore,
Americanisation is not a completely overwhelming trend that ends with standardisation of campaigns although in Malawi and
South Africa we can see an important expansion of American style campaigning, this does not mean that these practices have
totally replaced others. In fact Americanisation supplements country-specific situations (hybridisation). However, in adopting
these new approaches, politicians are still conscious of the local needs and cultural norms, as one politician from Malawi
summarised it for us as follows: We are aware of the pressure our western friends are putting on us to change our campaigns
to look like theirs. They want us to be in fast-track mode which can be dangerous for Malawi. We will get there. Just give us
the time because we need to respect our culture as well. (CD2)
Traditional dances, imbidzos, canvassing, rallies, door to door campaigns are clear evidence of this hybridisation. It is clear
that internal contexts of these two countries are fertile grounds for the adoption of these practices.
These results provide useful knowledge and insight to international political marketing consultants and advisers to designcountry specific strategies taking into account the media environment and other country-specific factors. Further research
ideas stemming from this include the inclusion of other countries in the Southern African region so as to make the findings of
this research of uniform application to the entire region and continent.
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APPENDIX
Table 1 showing Professionalised Campaign Index Scores by Party in Malawi
Campaign Item
AFORD
DPP
MAFUNDE
1
Use of campaign controlled opinion 0
2
0
polling
2
Use of campaign controlled focus groups
0
2
0
3
Use of computerised databases
2
0
0
4
Use of in-house and/or outside 2
2
1
consultants in news management/PR
5
2
1
consultants in analysing public opinion
6
3
1
consultants in advertisements
7
1
0
consultants in voter segmentation
8
Use of direct mail to target groups
0
0
1
9
Use of direct mail to own members or 2
0
0
campaign volunteers.
10 Use of telemarketing for contacting target 0
1
1
groups.
11 Use of telemarketing for contacting own 1
1
1
members or campaign volunteers.
12 Conducting semi-independent research of 2
2
0
(SWOT) own campaign
13 Conducting opposition research
1
2
2
14 Use of rapid rebuttal-unit
0
1
0
15 Presence and use of an internal internet 0
0
0
communication system
16 Presence and use of an external internet 0
0
0
communication system.
17 E-mail sign-up or subscription lists for 0
0
0
regular news updates/news letters
18 The Campaign being continuous
1
3
1
19 A centralised campaign headquarters 1
2
1
coordinating management of campaign
Total Score
13
24
10

515
MCP
1
MPP
1
UDF
3
0
0
1
1
0
1
2
1
3
0
0
0
0
1
1
2
0
0
1
0
0
3
0
0
1
2
1
1
3
2
12
10
30
POLITICAL ART: AN INVESTIGATION OF THE JACOB ZUMA SPEAR PAINTING

B.E. Stiehler, University of Johannesburg, South Africa
G. Toscani, EADA, Spain
ABSTRACT
Brett Murrays painting The Spear, which depicts South African president Jacob Zuma in a Lenin-like stance with his
genitals exposed, was received with fuelled government and public reactions. The event received excessive media coverage
around South Africa and was even picked up by the international press. Online comments made on news articles, appearing
on four of South Africas popular newspapers websites, were collected, and analysed as a means of investigating why the
painting generated so much excitement. The results revealed discussions centring on past and present political issues in South
Africa and concerns about Jacob Zumas image as president. The study contributes to the body of literature by indicating how
William Jamess theories, developed in 1890, could be applied to explain the reasons for the emotional reactions caused by a
current painting and further confirm that art has an impact on people, especially when portrayed in a semantic context.
INTRODUCTION
On the 10th of May 2012, the Goodman Art Gallery in Johannesburg, South Africa exhibited a painting by artist Brett
Murray, called The Spear. The painting depicts South African president, Jacob Zuma, in a heroic pose with his genitals
hanging out and painted in a similar style to Victor Ivanovs Soviet era propaganda poster of Vladimir Lenin. (Dubin 2012).
The ANCs (South Africas ruling party) congress secretary, Gwede Mantashe stated that the painting was racist (Timeslive
2012), the first newspaper in South Africa to publish an image of the painting was threatened with a boycott, the Goodman
Gallery was filed with a court order to have the painting removed, a protest march was held outside of the gallery, and a few
weeks after the paintings display, two South African citizens entered the Goodman Gallery and defaced it. The story was
heavily covered by the South African media and the international press even picked up on the event with articles appearing in
the Washington Post, the Economist and reports on BBC news, to name but a few (Inside Politics 2012).
Just a year before in Canada, unlike Jacob Zumas painting where he is mostly clothed, Canadian prime Minister, Stephen
Harper also featured in a painting, but completely naked and lying on a chaise lounge, surrounded by figures in suits and a
small dog at his feet. This painting was done by artist Maggie Sutherland and is called the Emperor Haute Couture. While
the painting generated some criticism, it did not really evoke a lot of public reaction or interest.
Towards the end of 2010, South African artist Ayanda Mabulas painting Ngcono ihlwempu kunesibhanxo sesityebi (better
a fool than a rich mans nonsense) was displayed at the Worldart Gallery. A number of politicians feature in this painting, but
specifically, Jacob Zuma was portrayed very prominently on the left with his genitals exposed and resting on a crutch (Jolly
2010). The South African government and publics reaction to this painting was close to nothing. The question therefore
arises, why was there so much hype and publicity around artist Brett Murrays The Spear painting?
In an attempt to answer the question, the researchers turned to the South African public for answers. Using the qualitative
software package, Leximancer, a total of 41 219 words in the form of online comments, which were taken from articles
appearing on the websites of four of South Africas most popular newspapers, were analysed. The results were interpreted by
looking at a number of themes and concepts that were generated in the form of concepts maps. Themes emerging from the
results indicated little reference being made to the painting (in terms of style or as being a satirical work), but instead showed
people talking about a number of past and present issues in South Africa, with various opinions also suggesting just how
problematic the public image of its current president (Jacob Zuma) is.
As far as could be determined, this is the first study conducted on the reasons for the fuelled reactions to the Jacob Zuma
Spear painting. The study contributes to the body of literature by indicating how William Jamess (Cupchick 1994, 1998)
theories can be applied to a current painting to explain the reasons behind these sets of emotions that caused such an uproar
amongst the South African public and media. It also confirms that art has an impact on people, especially when it is portrayed
in a semantic context, because it has the ability to evoke a number of different emotions related to past memories and present
issues.
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The article starts with a discussion on art and people, narrowing down into the effects and history of art, and art and politics.
This is followed by a discussion of Jacob Zumas history and details of The Spear painting. The methodology and results are
then explained and the article concludes with a summary of the findings and suggestions for further research.
ART AND PEOPLE
The effects and history of art
The philosopher Theodor Adorno famously described art as being the ... magic delivered from the lie of being truth ...
(Adorno 1951). This quote captures the art paradox that has been experienced by people and studied by philosophers,
scholars and even physicians for centuries.
Medical science professional, Sigmund Freud, was captivated with the effect of art on the human psyche and even conducted
research to explore why art is so important to human beings, specifically focusing on what art satisfied at a psychological
level. Freuds work identified three aspects: 1) The ability of expressing unconscious needs, 2) merging pleasure with reality,
and 3) creating emotional effects (Jurist 2006).
In 1890, research conducted by William James attempted to propose an explanation of the relationship between emotions and
art. James divided the response to the aesthetical experience created by an art piece into two groups; an instinctive one
reacting to the instant experience of seeing the image, and a second linking past experiences to the actual aesthetic stimuli
(Cupchik 1994). The link between memories and the present art piece is similar to the process of remembering, which results
in an imagery, coming out from how the individual refers to his or her own memories (Bartlett 1932).
With reference specifically to the instant experience, it is argued that a better appreciation for the style of an art piece requires
a higher level of education. Artists are very aware of this difference between naive and experienced viewers. The naive
viewer tends to relate art to daily life and is much more touched by representational art and by the subject matter or semantic,
than any other kind of stylistic details (Cupchik and Gebotys 1988).
Since representational art has the ability to touch people, advertisers have used high impact images to attract viewers
attention for different goals. There were several examples of advertising campaigns that have been designed for different
causes, starting from health care issues like the breast cancer fund calendar exposing women and their post-breast cancer
surgery scars (Macleod 2006), but it has also been used for commercial purposes in fashion, like the Benetton campaign
using an image of a terminally ill AIDS victim with his family (Back and Quaade 1993).
Other examples of shock advertisements include the campaign used to raise AIDS awareness or to quit smoking, which
attracted lots of attention but were accused of having a doubtful impact on peoples bad health habits (Sutton 1992). Whether
the results of those advertisements were effective or not, the use of shock to attract attention has been proven, because the
viewers retain the experience for a longer time (Dahl, Frakenberg and Machanda 2003).
This longer retained effect, which was extensively studied in relation to the advertisement field, has its own share in the fields
of art defined as Controversial Art or Offensive Art. Several artists utilised shocking subject matters, like the
sadomasochistic images of Robert Mapplethorpe, or materials, like body fluids in Serranos Piss of Christ, to create their art
pieces (Politsky 1995). There were several interpretations, whether this is a creative technique or just a cheap way of getting
known by the public, it has once again proven that it does evoke reactions and emotions when using shock tactics (Dahl et al.
2003).
Art and politics
The well known impact of representational art and specifically images to generate feelings from a simple sight, has led art
pieces to being strongly linked with politics, as early as Platos Republic times (Hung 2007). Art has also been the object of
strong criticism from fierce rulers like Adolf Hitler, who openly detested what he considered degenerate artists like Hans
Hoffman, George Grosz and Josef Albers, who instead could contribute in their field once they left Germany. (Charles 1992).
Communist dictators in Russia and China took firm control of public images and architecture to influence the masses. In
China several examples exist of how art had surrendered to reality and politics at such a level that paintings were constantly
made up according to the status of the politicians therein depicted. If a politician was purged, the painter was requested to
change the painting in order to clean it from the image of the unwanted subject. During the Mao Tse-dong period,
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government bodies were directly involved in contracting art pieces that were specifically made to evoke a specific kind of
emotion in people. The type of emotion it had to evoke was clearly communicated to the artist in advance (Hung 2007).
The political control over art could also be heavily criticised as in the case of William B. Yeats. In 1903, Yeats wrote about
the propagandistic use of art and criticised the fact that aesthetics had to make room for nationalistic needs, as the work of
highly cultivated artists had to surrender to the policy of obscurantism (Johnson 2010).
These are a few examples of how art was created and perceived in historical periods, proving how strong the aesthetic stimuli
of art could be and how it has the ability to evoke a wide range of emotional experiences. An opposite example of how art,
even though extremely explicit, but not showing any significant impact, was in early 2011 when painter Margaret Sutherland
released a new painting where Stephen Harper, Prime Minister of Canada, was depicted totally naked and supposedly
realistically. He was exhibited naked on a chaise lounge with a dog sitting at his feet, reproducing Manets art piece Olympia.
This piece was called Emperor Haute Couture and although being very explicit, did not generate any significant reaction
amongst the public, but instead resulted in more jokes than protest. The Ministers spokesman mentioned how low the
impression generated was, because of it lacking credibility ... everybody knows the PM is a cat person. The painting was
peacefully exhibited in a Canadian public library creating neither social, nor commercial impact (Mackey 2012).
THE SOUTH AFRICAN POLITICAL ENVIRONMENT
A brief history of Jacob Zuma
Jacob Zumas path to becoming the fourth democratic president of South Africa was characterised by quite a number of
events - the biggest being a rape charge that was filed against him on 6 December 2005. These charges were laid by a 31year-old woman, known to the public as Khwezi (Strauss 2009).
Khwezi was not only the daughter of a former anti-apartheid struggle comrade, but she was also HIV positive. The issues of
rape and HIV were very pertinent ones, seeing that sexual violence and high rates of HIV infections are some of the key
challenges facing South Africa (Waetjen and Mar 2009). Zumas infamous response to the fact that the victim was HIV
positive and that he was not wearing a condom during the alleged rape, was that he had taken a shower in order to lessen his
chances of contracting HIV. (Bal, Pitt, Berthon and DesAutels 2009). Zumas response of taking a shower outraged health
professionals and AIDS educators around South Africa, (Waetjen and Mar 2009). This clearly demonstrated incredibly
irresponsible behaviour and complete disregard for an issue as pertinent as HIV infection. Supporters of Zuma regarded the
case as politically motivated and as an anti-Zuma conspiracy. Zuma was eventually acquitted of the charges of crime and
rape, but this trial affected his path to the presidency and still continues to shape political confusion in South Africa (Waetjen
and Mar 2009).
Jacob Zuma became South Africas fourth democratic president on 9 May 2009. Only days before his inauguration as
president, the National Prosecuting Authority withdrew 16 charges that were laid against him at the time. The charges
included racketeering, corruption, fraud and tax evasion. (South African History Online 2012).
Zuma stays true to his Zulu routes and adheres to many Zulu traditions, including polygamy. These traditions have been a
source of criticism from some population segments who regard this as being at odds with modern societal norms, whilst other
segments endeared it (Legassick 2012). Zuma married two more times after becoming president and currently has four wives
and 21 children. The state had to nearly double Zumas spousal budget when he joined the presidential office in 2009. A
survey conducted amongst South Africans in 2010 revealed that almost 75% of South Africans disapproved polygamy
(SAPA 2012b).
Zuma has always been very open and outspoken about his polygamist lifestyle. In February of 2010 he admitted to having
fathered a child outside of wedlock, which is generally frowned upon in traditional Zulu culture. Debates surrounding the
incident continued to grow as critics argued that his behaviour showed complete disregard towards South Africas HIV/AIDS
policies. Zuma later apologised to the nation, his family and the ANC for the distress his actions had caused (Legassick
2012). Zumas personal persona has been much sexualised over the years due to him providing so much evidence of having a
sexual appetite (Rousseau 2012).
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The Spear painting

On 10 May 2012, the Goodman Art Gallery in Johannesburg, South Africa exhibited the works of artist Brett Murray. The
collection, Hail to the Thief II, was a sequel to his body of satirical work shown in Cape Town during 2010 called Hail to the
Thief. Murrays bronzes, etchings, paintings and silk screens form part of a vitriolic and succinct censure of bad governance
and are his attempts to humorously expose the paucity of morals and greed within the ruling elite. (Goodman Gallery 2012).
One of the paintings in this collection is called The Spear. This painting depicts Jacob Zuma in a heroic pose with his genitals
hanging out and is painted in a similar style to the Victor Ivanov Soviet era propaganda poster of Vladimir Lenin (Dubin et
al. 2012).
Murrays earlier work focused on portraying apartheid racist leaders in a satirical fashion and was aimed at exploring culture
and identity. In later years, his focus shifted towards ... South Africas black leaders, corruption and nepotism ...
(Macgregor 2012). The artist argues that to him, the Spear painting had a dual purpose of being a work of protest or
resistance art and a satirical piece and it serves as ... a metaphor for power, greed and patriarchy. (Murray in SAPA 2012a).
Murray further stated that from an artists perspective he felt a sense of betrayal, because previous struggle heroes have now
become corrupt and power-hungry, only to leave those who participated in the struggle for a democratic South Africa
abandoned (SAPA 2012a).
The artist feels that there has been an ongoing narrative surrounding Zuma in the last couple of years which included charges
of corruption against him and a well documented sex life, particularly referring to the latest scandal where Zuma was engaged
in extra-marital sex (SAPA 2012a). Murray postulates that to him, satire serves as critical entertainment and that ... art can
provoke debates, however unsettling they might be. (Murray in SAPA 2012a).
The City Press, a weekend newspaper in South Africa was the first to report the story of the Spear painting on the 13th of May
2012. The story was accompanied by a picture of the painting a move the City Presss editor would later regret. Hardly
anyone had noticed the painting until the ANC had picked up on the article a few days later and issued a statement of its
outrage (The Economist 2012). An urgent application by Zuma, his children and the ANC was filed to the South Gauteng
High Court in Johannesburg to have the painting removed from the gallery and the City Press newspapers website. The ANC
threatened to boycott the City Press, should the paper not remove the image (SAPA 2012a).
Congress Secretary Gwede Mantashe stated Its [the painting] rude, its crude, its disrespectful, its racist. (Timeslive
2012) whereupon the artist responded "I emphatically deny that any such intention motivated the painting or exhibition... I
would like to say that I am a proud South African and a former supporter of the ANC. I am not a racist" (Murray in SAPA
2012a).
At the height of the debate on the painting, two South African citizens, Barend la Grange and Louis Mabokela entered the
Goodman Gallery and defaced the painting on the 22nd of May 2012. They smeared it with red and black paint and both of
them were arrested and later released on bail. Their case was postponed to the 4th of September 2012 (Evans 2012). After the
defacement of the panting, the Goodman Gallery decided to no longer display the painting and reached a settlement with the
ANC, where after the charges were dropped. Charges against the City Press newspaper were also dropped, after the editor
responded by removing the painting from the newspapers website. (England 2012).
The case of the Spear painting caused heated debates in South Africa and was even picked up by the international press. It
was concluded that an investigation on the South African publics opinion and response to the painting could prove to
provide some valuable insights into why the painting caused such uproar.
METHODOLOGY
Sample
The authors analysed comments posted in response to online news articles by the readers of four popular South African
newspapers; The Sowetan, The Mail and Guardian, The Star and the City Press. These four newspapers were selected based
on their popularity and audience profile, in order to ensure as diverse a representation of the South African population as
possible. The newspapers also had to be available online, as well as have a comment function that allowed readers to post
their views and opinions. For the purpose of the analysis process, the newspapers also had to be English, as this ensured that
the majority of the comments by the individuals were also in English.
519
The Sowetan is a daily newspaper. Its online version is called Sowetanlive and has a total of 626 808 unique users. The
majority of its readers are male (61%), black South Africans (73.44%) and aged between 25 and 44 (68.2%). (Sowetan Live
Rate card 2011). The Star is also a daily newspaper with an online presence on IOL, an online news source. No statistics on
the readership profile were available at the time of writing.
City Press is a weekly newspaper and was the first newspaper in South Africa to publish a photo that had been taken of the
painting. Its online readership consists of 107 176 unique users per month (City Press Rate card 2012). The Mail and
Guardian is a weekly newspaper that is also available online. Its website has 643 990 unique users per month and the
websites readers are highly educated 65% of them have postgraduate degrees and the majority are male (70%) and aged
between 25 and 54 (68%). (Mail and Guardian Rate card 2012).
A total of sixteen news articles (four from each newspaper) were identified and the comments on each of these articles were
analysed. The articles all appeared online between 18 and 31 May 2012. This date range was chosen, as the Spear painting
went on display in the Goodman Gallery on the 10th of May 2012, and the defacing of the painting by two South African
individuals occurred during this timeframe. The comments selected were therefore based on articles about the paintings
display in the gallery and its defacement. One of the four articles from the City Press was on the removal of the photo of the
Spear painting from its website, after the paper had received numerous threats from the ANC.
A total of 41 219 words appearing in these online comments produced the units of analyses. News articles from The City
Press (18 015 words) and the Sowetan (13 029 words) had the most comments, followed by the Mail and Guardian (6 420
words) and lastly The Star (3 755 words).
Data Analysis
The comments from each newspapers four identified articles were combined to produce one set of data, which was analysed
using the content analysis tool Leximancer. In a study conducted by Bal, Campbell, Payne and Pitt (2010), the authors highly
recommend the use of Leximancer for its ability to provide faster feedback (compared to more traditional techniques such as
the use of focus groups or in-depth interviews), as well as its relevance to the online setting, where it is able to precisely
measure public opinion from large amounts of information.
Leximancer uses a Bayesian machine-learning technique that can analyse large amounts of textual data. The software has the
ability to do both a conceptual (thematic) and a relational analysis (semantic). It identifies various concepts in the body of
text and indicates how these concepts are interrelated. For each concept, the software further develops a thesaurus of words
that are closely related to each identified concept. This gives the concepts its semantic contents (Rooney 2005).
The software then produces a conceptual map that indicates the dominant concepts, as well as their relationship to other
concepts. Those concepts that are closely semantically related appear close to each other on the map, forming clusters, whilst
those concepts that are directly related, but not necessarily semantically correlated, appear far apart on the conceptual map
(Rooney 2005).
Leximancer has been successfully used by a number of researchers to analyse public perceptions and opinions. Bal et al.
(2010) used the software to interpret viewer responses to political videos posted on YouTube and Campbell, Pitt, Parent and
Berthon (2011) used it to analyse conversations surrounding consumer generated advertisements found on video-hosting
sites.
RESULTS
Figure 1 shows the conceptual map that was produced in Leximancer from the comments to all sixteen online articles that
appeared on the Sowetanlive, City Press, Mail and Guardian and The Stars websites. The main theme on the map is
people.
People: This theme consists of a number of concepts which explain the context in which the word is used. When looking at
the map, one can also see an overlap between the main theme people and three other themes: president, painting and
ANC. The most prominent concepts found in the theme people includes: country, Zuma (the president) and white
and black. The Leximancer thematic summary shows comments made, like people, are putting Zuma on a pedestal,
520
people are debating about this through the whole country, and government wants the painting removed in order to get
people to stay quiet.
The themes people and president overlap on the concept country. Comments on these themes ranged from people in
this country are dying of Aids and people are encouraged not to go to court about the e-toll system, but the president is
going to court about a painting. The e-toll system comment refers to an event that took place early in 2012 in South Africa.
The government had erected expensive e-tolling systems in the province of Gauteng, without asking the publics opinion on
the system and then tried to force motorists to pay the suggested toll. This was strongly opposed and a court case is still
pending on the matter.
The overlap seen between the themes people and ANC on the concepts black and white centred around discussions
on the fact that the artist, Brett Murray, is white and that a black painter Ayanda Mabula had also painted a piece
featuring Zumas genitals. Further comments included discussions on the two men who defaced the painting as being black
and white and then more generalised comments like whites have double standards when it comes to morals, and blacks
undeservedly get certain jobs in the country.
The overlap between people and the theme painting on the concept matter featured comments where people stated
things like the Spear painting as the matter under discussion, with some comments also using the word matter to refer to
no matter how hard the country tries and that some peoples opinions do not matter.
President: The second most prominent theme president consists of a number of concepts, but the most interesting is
definitely the fact that this theme features the concepts father, children and wives. The comments show discussions on
how JZ (Jacob Zuma) had not protected his wives and acted irresponsible as a father when he took a shower to protect
himself from HIV. Other comments suggest that JZ only felt contempt rather than love towards his wives because he has
a bastard child and that JZ is a womanizer, because he had been involved with so many women and has so many wives
and a large number of children.
Further concepts found in this theme showed conversations on how it is ridiculous to just have to respect someone, because
he is the president, that Zuma as president is violating the integrity of the office of the president and that those who
go on about Zumas right to dignity and respect are people who choose not the think. Other debates centred on the image
of the portrait being distributed all across the world, and comparisons between South Africa and the rest of the world.
One person commented on the ANC not addressing concerns about South Africa having one of the highest unemployment
rates in the world and rather choosing to fixate on a portrait.
Painting: The theme painting featured comments like it is not even Zumas penis, its a painting for crying out loud,
that the march had been arranged by the ANC to the gallery and that the president had abused his position of leadership
with his wrong behaviour, whilst other comments suggested that the artist was wrong in painting the Spear piece.
Freedom: Discussions on the theme freedom were mainly centred on the artists right to freedom of expression in art,
whilst others mentioned Zuma as having fought for the nations freedom. Other comments suggested that the freedom of
an artist to express himself is actually allowing for an attack on other peoples dignity.
ANC: The concepts found within the ANC theme centred on the ANC threatening to boycott the City Press newspaper
for publishing an image of the painting in their newspaper and that the ANC and Zuma felt the painting is racist. Other
comments included people accusing one another of being racist in their opinions, whilst others were saying, please they
are not trying to be racist. Another set of comments showed conversations relating to how much longer the media and the
ANC would be milking the issue of the painting.
DISCUSSION
Summary of findings
The purpose of this study was to explore the reasons behind the intense public reactions and media coverage that resulted
from South African artist Brett Murrays painting The Spear. The study used the qualitative analysis software package
Leximancer, to generate themes from online comments taken from sixteen news articles that were selected from four popular
South African newspapers. The results indicated emotionally loaded reactions by the public and rarely centred on the painting
521
itself, in the context of being a work of art. Themes generated from the discussions showed the public talking about past and
present political and social issues in South Africa, and Jacob Zumas questionable relationships and sexualised public image.
William James (Cupchick 1994) theory that the emotions evoked by art are fuelled from a combination of a persons past
memories and present perceptions, proves to be true when referring to the results of the study. The themes emerging from the
concept map indicate a lot of discussions surrounding past political and social issues in South Africa. This can be seen from
the following themes and concepts found in the results: white and black, race, ANC, freedom, and Zuma.
The themes white, race, black and their variations indicate how South Africas history of Apartheid still plays a major
role in the countrys current issues. In each of the four newspapers comments, almost every reference to people was
accompanied by issues surrounding race. References were made to how whites have double standards when it comes to
morals or blacks undeservedly get certain jobs in the country.
Freedom is not only mentioned in the context of the artist and the common mans right to freedom of expression, but also
in the context of South Africas past fight for the freedom of its people. Reference is also made to Zumas contribution in
the fight for freedom. The amount of emphasis placed on the fact that the artist, Brett Murray, is white and that his
painting is therefore racist, further indicates how past tensions of racial issues are still apparent and inherent, especially
amongst the countrys ruling party, the ANC. The ANCs Congress Secretary, Gwede Mantashe stated in response to the
painting: Its rude, its crude, its disrespectful, its racist (Timeslive 2012). The concept black was also used in the
context of a discussion surrounding black artist Ayanda Mabulas painting, where he also depicted Jacob Zumas genitals
in a very prominent fashion, and that this did not come close to the uproar caused by The Spear painting.
The themes and concepts related to current issues that emerged from the results include: ANC, people, president,
painting and country.
The theme ANC was surrounded by discussions on how the ANC was currently running the country and how some
comments suggest that they were making an unnecessary big issue out of the painting, instead of focusing on real problems
such as the fact that the country has a very high unemployment rate. Other issues included that people in this country
are dying of Aids, and people are encouraged not to go to court about the e-toll system, but the president is going to court
about a painting. The e-toll comment refers to a current matter facing South Africans the government had erected expensive
e-toll systems on the Gauteng highways and now want to force Gauteng road users to pay toll fees when using some of the
countrys busiest highways. This matter is however still pending in a highly publicised court case.
William Jamess theory of the semantical element of a painting being easier to understand, than the syntactic, also proves
true, as the results surrounding the painting are much more focused on the subject (Jacob Zuma) portrayed in the painting (the
semantical element), than the style of the painting (syntactical). None of the results from the conceptual maps indicate any
discussions on the fact that the painting had striking similarities to Victor Ivanov Soviet era propaganda poster of Vladimir
Lenin, or the fact that it was a piece of satirical work.
Furthermore, the fact that the concepts wives, father and children are found in the theme president, might be an
indication of just how much the public is concerned with the manner in which the subject (Jacob Zuma) is portrayed in the
painting. The theme wives is discussed in the context of Jacob Zumas polygamous lifestyle, the number of children he
has, and references were made of him having been irresponsible towards them (wives and children), when he indicated,
during his infamous rape trial, that he had taken a shower in order to prevent contracting HIV, after he had had intercourse
with the woman he was accused of raping. Other comments suggested that he was a womanizer, because of another scandal
that emerged concerning a child he had fathered outside of wedlock (Legassick 2012).
Limitations and directions for future research
The use of Leximancer software is not without limitations. The typical danger, as found in the analysis of most qualitative
research, is the subjectivity of the interpretation of the results. The results from the comments on the news articles can be
interpreted differently by other parties. Another limitation includes the fact that the themes generated by Leximancer are not
analysed quantitatively and can therefore not be assumed to be significant. (Bal et al. 2010).
Internet access is more widely available in South Africa, compared to other sub-Saharan African nations, but is less
widespread than in Europe and America (Sonaike 2004). Recent statistics show that South Africa has 12.3 million Internet
522
users (World Bank 2012). The comments used as data to analyse South Africans opinions towards the Spear painting are
therefore only representative of a small segment of the South African population and have also been further reduced to only
include readers of the online versions of four popular South African newspapers whose articles are made available online.
South Africas biggest daily newspaper, the Daily Sun was not included as a source, because the paper has no online
presence.
Suggestions for future research include investigating differences in cultural reactions on shock art, or cultural differences in
reaction to satirical art and comparing different art theories that are concerned with explaining the emotions evoked by
paintings. From a political perspective, a more detailed investigation can be launched into why the ANC (South Africas
ruling party) reacted on the Spear painting in this fashion and what the effects were of their reaction on public opinion and
future votes. A further investigation could also be done into Jacob Zumas current image and suggestions for managing his
image to create a more favourable one in the South African and international publics eye.
FIGURES
Figure 1: Leximancer analysis results of comments appearing on four online websites
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KONY 2012: MEGA VIRAL POLITIVAL ACTIVISM

Chris Archer-Brown, Bath University, UK
Karen Robson, Simon Fraser University, CA
Daniel Hall, KTH Royal Institute of Technology, Sweden
Kelly Weidner, Dominican University of California, USA
ABSTRACT
A theory of viral marketing is used to analyze and understand the spread ofand reactions toa controversial political megaviral video Kony 2012. Kony 2012 is concerning the highly publicized leader of a Ugandan guerrilla group, Joseph Kony. The
video was a call to action and an attempt educate the world about the atrocities committed in Sudan. The video was made by
an organization called the Invisible Children and created by filmmaker Jason Russell. Following the extraordinary success of
Kony 2012 Jason Russell was infamously arrested in San Diego for indecent exposure. The story and video of Russells arrest
and breakdown similarly went viral. The framework that follows analyzes the virality of 2 political videos.
526
WHEN SPYING IS NOT JUST: A CONSUMER SURVEILLANCE FRAMEWORK

Leyland Pitt, Simon Fraser University, Canada
Adam Mills, Simon Fraser University, Canada
ABSTRACT
Consumer privacy issues have become a paramount concern due to increases in surveillance technologies that enable firms to
collect private information. Although scholars from a wide range of disciplines have considered issues of consumer privacy
and corporate surveillance, relatively little has been written on the motivations of firms to protect their relationship with
consumers while partaking in surveillance. Often, consumers do not even think about their provision of private information to
corporations, but sometimes they do. If consumers feel that the surveillance practices are unfair, the corporation faces either
the loss of customers, a public scandal, possible legal actions, or a combination of these. Corporations have an interest in
reducing or nullifying these negative consequences; however there is scant research on consumers thoughts and feelings
toward corporate surveillance practices. These thoughts and feelings may affect the willingness of a consumer to both provide
private information to a corporation, as well as continue doing business with a corporation. This research explores how
consumers thoughts and feelings towards location surveillance having their location tracked and recorded by linking
consumer justice perceptions to elements of consumer privacy and surveillance. In doing so, it goes on to develop a
framework cost-benefit ration versus business model to better understand corporate policies.
527

THE IMPACT OF PRICE PROMOTION TYPES ON SALES AND BRAND PERCEPTION OF PREMIUM
PRODUCTS
Felix Zoellner; EBS University, Germany
Tobias Schaefers; EBS University, Germany
ABSTRACT
Price promotion represents one of the instruments most frequently used by marketing and sales managers to increase sales.
As even for premium brands an increasing use of price promotions can be observed, questions regarding the duality of sales
and brand impacts of price promotion activities gain in relevance. A broad variety of studies have investigated sales
promotions in general and price promotions in particular. While the general positive sales effects of price promotions have
been thoroughly investigated, the negative effects for the brand may be underestimated. Understanding such effects, however,
is vital for companies that rely on strong brands, especially manufacturers of premium products. Despite the different
arguments about the positive and negative effects of price promotion, current knowledge is based on different objects of
research and separated studies, focusing either on sales impact or on brand perception. Furthermore, previous research has
often considered price promotion in general or concentrated on one or two specific types. Our study contributes to the
existing literature by proposing a framework to distinguish four different price promotion types and by consistently
investigating sales as well as brand perception impacts of these specific activities.
We distinguish between direct and indirect price reduction as well as the use of a precondition to investigate the sales and
brand perception impacts of four different types of price promotion. Based on actual sales figures the results show that direct
price reductions have the strongest positive sales impact. The impact on brand perception, based on survey data, shows
differentiated results; the more common price promotions show the lowest negative brand impact.
528
REFERENCE PRICE REDUCTIONS THROUGH REPEATED CONTACTS WITH PRICE PROMOTIONS - THE
ROLE OF THE SAVING FORMAT: A STRUCTURED ABSTRACT
Silke Bambauer-Sachse, University of Fribourg, Switzerland
Laura Massera, University of Fribourg, Switzerland
INTRODUCTION
The objective of a marketing campaign (e.g., a price promotion) is to create positive consumer responses (Raghubir, Inman,
and Grande 2004). Price promotions have the purpose to trigger positive responses in terms of higher purchase intentions
(Alford and Biswas 2002; Chen, Monroe, and Lou 1998). Beyond such positive effects, price promotions can have negative
effects on consumer behavior due to a downward correction of consumers internal reference prices, which in turn leads to a
lower willingness to pay (Ranyard, Charlton, and Williamson 2001). As such negative effects are only rarely covered by marketing research, the objective of this paper is to examine interaction effects of repeated contacts with price promotions and the
format that is used to display the price reduction (% off vs. amount off) in ads that show both the reduced price and the
price reduction on the change of consumers internal reference prices.
BACKGROUND
Previous research focuses mainly on positive effects of price promotions (e.g., Alford and Biswas 2002; Chen, Monroe, and
Lou 1998), while research on negative effects is limited. Research in this latter field has already demonstrated in general that
consumers reduce their internal reference prices after the exposure to a discount (e.g., Chandrashekaran and Grewal 2006;
Folkes and Wheat 1995; Grewal et al. 1998; Lattin and Bucklin 1989). The mechanism underlying this effect can be explained
as follows. When faced with new price information, consumers consciously or unconsciously - change their internal reference
price by incorporating this information (Yadav and Seiders 1998). As internal reference prices are usually formed through
complex mechanisms considering several types of price information (Briesch et al. 1997; Mayhew and Winer 1992; Mazumdar
and Papatla 2000; Rajendran and Tellis 1994; Winer 1986), it can be argued that the contact with one new price triggers a rather
heuristic processing of this information (Chandrashekaran and Grewal 2003; Frankenberger and Liu 1994; Yadav and Seiders
1998). Chandrashekaran and Grewal (2006) mention the anchoring and adjustment heuristic in the context of changes of internal reference prices in response to the contact with advertised price information. They argue that consumers faced with new
price information consider it an anchor toward which they adjust their internal reference prices. We extend this argument in
that this adjustment is likely to be insufficient. Thus, consumers do not completely replace their initial reference price by the
new price information because internal reference prices are usually based on many different types of prices.
The anchor value that consumers use to adjust their internal reference prices to and the extent of this adjustment are likely to
depend on the number of contacts with the price promotion because repeated contacts with information lead to more precise
information processing and storage (Cacioppo and Petty 1989; Pechmann and Stewart 1988), and specifically the price information provided by price promotions might be processed and incorporated into the internal reference price differently depending on the number of contacts. Previous research on advertising frequency provides the notion that an increasing number of
contacts (1, 3, 5, and 7) with a price promotion leads to a reduction of the expected product price (Kalwani and Yim 1992;
Kalwani et al. 1990). However, such studies did not examine interaction effects of the number of contacts and the saving format
on internal reference prices specifically.
The saving format (% off vs. amount off) might play a role in the considered context because in general, price information
is processed differently if the % off format is used instead of the amount off format (DelVecchio 2005; DelVecchio,
Krishnan, and Smith 2007). One study on effects of the saving format provides the notion that changes of internal reference
prices are stronger if the % off format is used instead of the amount off format (Chandrashekaran and Grewal 2006),
whereas another study demonstrated that there are no differences in changes of the internal reference price between the two
saving formats (Renard 2002). However, these studies focused on effects of the saving format rather than examining interaction
effects with other variables such as an increasing number of contacts with a price promotion.
Considering the arguments presented above, this empirical study adds to the existing body of research by examining interaction
effects of the saving format and the number of contacts in the context of effects of price promotions on the change of consumers
internal reference prices. An analysis of these effects provides marketers with important knowledge about consumers unsolicited reactions to price promotions in terms of reducing their internal reference prices.
529
RESEARCH METHOD
The sample of the empirical study consisted of 173 respondents (45% women, 55% men, average age: 29.3 years). The study
was based on a 2 (saving format: % off vs. amount off) x 2 (number of contacts: 1, 5) x 2 (test product: jeans, T-shirt)
between subjects design. The price promotion was presented using ads that displayed the reduced price and the price reduction.
The two different test products were used in order to cover different product categories.
The procedure of the data collection was as follows. The respondents first had to indicate six different prices (average price,
price expected for the next purchase, maximum price, last price paid, appropriate price, minimum price observed; Chandrashekaran 2004; Chandrashekaran and Grewal 2003) for the respective product categories. Then, the respondents were asked
to imagine that they were lingering through a shopping mall with the intention to purchase a T-shirt/a pair of jeans. Subsequently, they were faced with a booklet containing nine ads (1 contact condition: 1 target ad, 8 filler ads; 5 contacts condition: 5 target ads, 4 filler ads) that was presented as the malls advertising folder displaying the deals of the month. The order
of the ads was varied from respondent to respondent in order to counterbalance possible order effects. After having gone
through the booklet, the respondents had to indicate the six prices again. Finally, they had to provide their age and gender.
We calculated the value for the change of the internal reference price by determining the difference priceafter-pricebefore for each
price the respondents provided (price differences = 0.75) and then, we averaged these single differences.
Table 1 displays the reductions of consumers internal reference prices for the pooled sample as well as differentiated for the
two test products. These reductions are shown for one contact versus five contacts as well as for the % off versus the amount
off format.
As the result patterns shown in Table 1 are stable across the test products, the results for the pooled sample will be interpreted
in the following. If the % off format is used, an increasing number of contacts with the price promotion leads to a stronger
reduction of the internal reference price. A possible explanation could be that consumers faced with the price promotion ad
displaying the price reduction and the reduced price do not process the information about the price reduction because the %
off format is too difficult to process (DelVecchio 2005) and thus use the reduced price as the anchor toward which they adjust
their internal reference price. Being faced with such a price promotion repeatedly leads consumers to reduce their internal
reference prices more strongly with an increasing number of contacts because the repeated contact with the reduced price
increases the weight consumers assign to this price in comparison with the other prices that have led to the initial formation of
the internal reference price. Consequently, after repeated contacts with the reduced price, the internal reference price is more
strongly adjusted into the direction of this amount.
If the amount off format is used, the opposite pattern can be observed. An increasing number of contacts with the price
information leads to a lower reduction of the internal reference price. A possible explanation for this finding could be that an
increasing number of contacts with the reduced price and the amount of the price reduction enables consumers to process both
price components increasingly better. Thus, they are able to calculate the normal price out of these two components more and
more precisely. Consequently they include price information in their internal reference price that is increasingly close to the
normal price.
Note that the following assumption underlies the explanations for the findings presented above. On a rather conscious level,
consumers faced with a price promotion focus on the reduced price which might lead to positive reactions in terms of higher
purchase intentions, but on a rather subconscious level, consumers revise their internal reference prices on the basis of the new
price information provided. As consumers know that price promotions are an exception, they try to include price information
that is as realistic as possible into their internal reference prices. In the case of the % off format, the only price information
they can process is the reduced price, but in the case of the amount off format, they can consider both price components that
constitute the normal price and they are increasingly able to do so with an increasing number of contacts.
To conclude, the results of this study provide several new and interesting insights into the effects of price promotions on
consumers internal reference prices. The results basically show that already one contact with a price promotion leads to a
downward correction of consumers internal reference prices. Furthermore, the results indicate that repeated contacts with a
price promotion lead to a stronger reduction of consumers internal reference prices if the % off format is used and to an
attenuation of the reduction of the reference price if the amount off format is displayed. These observations are important for
530
marketers by showing that price promotions do not only have positive effects and that marketers should carefully think about
both types of effects when planning a price promotion. If marketers are specifically interested in achieving repeated contacts
with customers, they should rather use the amount off format for displaying the price reduction because in this case the
negative impacts on the internal reference price are less strong.
TABLES
Table 1. Effects of Saving Format and Number of Contacts on the Change of the Internal Reference Prices
Pooled sample
1 contact
5 contacts
t-test
% off
-4.28
-6.85
t = 2.58**
(n = 44)
(n = 44)
amount off
-3.44
-1.14
t = 3.85****
(n = 43)
(n = 42)
Jeans
1 contact
5 contacts
t-test
% off
-5.84
-8.64
t = 1.72*
(n = 21)
(n = 22)
amount off
-4.54
-1.12
t = 3.11***
(n = 20)
(n = 21)
T-Shirt
1 contact
5 contacts
t-test
% off
-2.85
-5.07
t = 2.23**
(n = 23)
(n = 22)
amount off
-2.48
-1.15
t = 2.54**
(n = 23)
(n = 21)
*
: p < .10; **: p < .05; ***: p < .01; ****: p < .001
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INVESTIGATING THE COST-BENEFIT OF SPONSORSHIP: AN ANALYSIS OF PRICE, EXPOSURE,

AND MARGINAL RETURNS IN MOTORSPORTS
Jonathan A. Jensen, The Ohio State University, United States
Joe Cobbs, Northern Kentucky University, United States
ABSTRACT
The absence of a uniform metric of return for non-traditional marketing techniques, such as sponsorship, amplifies the
challenge of analyzing ROI for such tactics (Clark, Cornwell, & Pruitt, 2002). The purpose of this study was to advance the
scarcity of research that evaluates ROI in sponsorship. Utilizing the context of Formula One (F1) motor racing, we modeled
both the returns from such efforts (in the form of exposure for the sponsoring brand) and the costs paid for affiliation. The
study concluded with a comparison of the returns and costs as a measure of ROI for corporate sponsors. By explicating
several factors that influence ROI for corporate sport sponsors, we contribute to brand marketers capacity to evaluate such
non-traditional marketing opportunities and assist in future decision-making.
Empirical research has demonstrated the value of brand exposure during televised sports programming (Levin, Joiner, &
Cameron, 2001; Olson & Thjme, 2009) and indicated that the amount of exposure received as a result of a sponsorship is
critical to quantifying the benefits to sponsorship (Pope & Voges, 1994; Pruitt, Cornwell, & Clark, 2004). To fully
investigate sponsors televised brand exposure, we utilized multiple regression analysis to produce two highly predictive
models (adjusted R2 = .86 and .79) that indicated that sponsored team points (p < .01), wins (p < .01) and races that were not
finished (DNFs) (p < .05) were significant predictors of brand exposure for the teams sponsors.
Due in large part to the confidential nature of most sponsorship agreements (Pruitt, Cornwell & Clark, 2004; Wishart, Lee, &
Cornwell, 2012), the factors influencing the cost of sponsorship have received almost no attention, despite marketers and
investors growing concern for ROI within such marketing channels (Cobbs, Groza & Pruitt, 2012; Cornwell, 2008). Using a
unique data set of F1 team sponsorships in 2007, we advanced research on sponsorship costs by constructing a model of
sponsorship rights fees that tested several theory-based elements of the sponsorship relationship and controlled for
characteristics of the sponsored team. Results indicated that the level of sponsorship affiliation (p < .01) and ability of the
sponsor to trade value-in-kind (p < .01) were significant predictors of the cost of sponsor affiliation. In addition, the sponsors
congruence with the team, in the form of a shared nationality (p < .05) and product category (automotive and technology) (p
< .05), were also significant influences of sponsors cost. As control variables, the points scored (p < .01) and years of
experience of the sponsored team (p < .01) were also significant influences of the sponsors cost.
In the concluding analysis, we employed logistic regression to examine the potential contributors to surplus ROI for F1 team
sponsors. Only 26 (10.1%) of 257 F1 team sponsors realized exposure value that outweighed sponsorship costs (i.e., surplus
ROI). The sponsored teams points scored (p < .01) and the sponsors operation in the automobile industry (p < .01) emerged
as significant predictors of surplus ROI.
The current economic environment has placed a focus on the maximization of scarce marketing resources, which makes
empirical research examining the factors contributing to marketing returns increasingly important. Therefore, this studys
findings have significant implications for brand marketers, particularly given the dearth of empirical research on returns,
costs and ROI for non-traditional marketing tactics such as sport sponsorship.
533
MODELING COUNTRY-OF-ORIGIN EFFECTS IN THE CAR MARKET: IMPLICATIONS FOR PRICING

Charalampos Saridakis, University of Leeds, United Kingdom
George Baltas, Athens University of Economics and Business, Greece
INTRODUCTION
Various studies have applied hedonic price modeling to show that price variation among new cars can be explained by
differences in key product characteristics such as horsepower, engine capacity, speed, and safety features (e.g., Reis and
Santos Silva 2006, Riera et al. 2006). Such measurable attributes however may not be the only explanatory factors. One of
the most widely examined topics in international marketing is whether the origin of a product or a brand makes it more or less
preferable to consumers. It has been suggested that country-of-origin (COO) serves as an extrinsic informational cue for
consumers perceptions and evaluations of a product (Verlegh and Steenkamp 1999). A brands or a products COO acts as a
signal of product quality, influences consumers perceptions of risk and value, and directly affects the likelihood of purchase
(see e.g., Jaffe and Nebenzahl 2006, Phau and Chao 2008).
In the car market, consumer choice is very wide. In Europe, there are about 50 brands which originate from 12 countries.
Even a casual look at the car market reveals that prices differ in a systematic fashion among car models based on their
brands origin. This pattern may suggest implicit price premiums that are largely independent of technical characteristics and
derive from unmeasured heterogeneity (Baltas and Saridakis 2010). Therefore, the natural question is whether, and if so, how
heterogeneity among brand origins determines different prices for otherwise equivalent cars. At the same time, the
automobile market consists of several car-type segments (e.g., sedans, hatchbacks, multi-purpose vehicles, etc). This market
structure allows car manufacturers to serve better their customers, as different body-types match different customer needs. As
a result, an additional, but also interrelated question is how the structure of brand origin heterogeneity and its respective
effect on prices varies across different car-type segments.
The purpose of this paper is to address these fundamental questions, which are extremely important not only for the car
industry but also for the public. The aim of the paper is twofold, first, to examine how COO effects determine the price
structure of the new car market, after controlling for the effects of key product characteristics; second, to identify any patterns
of differential attribute and COO effects across car-type segments. To that end, we design and implement a standard hedonic
price model considering observable car characteristics, which is subsequently extended to accommodate COO effects. First,
an aggregate model for the whole car market is estimated which assumes that COO heterogeneity can lead to implicit price
discrimination strategies, in which manufacturers may charge different price premiums depending on the respective image of
their home country. Second, in an attempt to capture patterns of differential effects, a disaggregate specification is also
estimated, which assumes that COO effects can vary across car-type segments.
Although research on the COO effect on consumers product attitudes and behaviours has explored many facets of the
phenomenon from different perspectives, price-related consequences of COO have been widely neglected in the respective
literature (Drozdenko and Jensen 2009, Koschate-Fischer et al. 2012). On the other hand, focusing on price as a dependent
variable when examining COO effects, rather than quality evaluations or purchase intentions, has many advantages. First,
price offers a more precise measure of COO effect as it represents the amount of money we must sacrifice to acquire
something we desire (Monroe 2003, p. 5). A second advantage of focusing on price as a dependent variable when examining
COO effects, is that it allows for the monetization of the COO effect (Nebenzahl and Jaffe 1993). Price offers an elegant
way to model COO effects as it reveals the extent to which consumers perceptions of different COOs are reflected in the
differences in the amount that those consumers are prepared to pay for products associated with each COO. It is expected that
countries with a better image will be able to command higher price premiums. From a practitioner perspective, the ability to
monetize the COO effect by translating it to real economic value is of great importance, since price is one of the most
powerful marketing-mix elements and has direct and disproportional impact on profitability (Han et al. 2001).
Against this background, the current study investigates the link between the cars brand origin and actual car sales prices.
Equilibrium prices in the market are formulated based on the interaction between supply-side resources and demand-side
utilities, and thus they also capture consumers willingness to pay. This study contributes to the literature in many ways.
From a theoretical front, we look at price-related consequences of COO effects, which is a neglected topic in the literature.
From a methodological front, we apply hedonic price analysis, which has not yet been applied in COO-related research, to
examine the structure of COO heterogeneity in the new car market. From a managerial front, we provide insights into the
extent to which manufacturers may charge (and consumers would be willing to pay) price premiums, depending on the COO
534
of their product. These insights are of substantial value to marketing managers designing a pricing strategy, particularly when
the consumer is confronted with product offerings from multiple COOs differing in their image. Therefore, the novelty of our
study resides in both the managerial problem and the research methodology. In our context, COO designates not the country
where the car was assembled, but the home country of the brand, which is more relevant from a consumers perspective. So,
according to Jaffe and Nebenzahl (2006) we focus on brand origin effects, rather than COO effects.
METHODOLOGY
Although car characteristics are neither produced nor consumed in isolation, hedonic price models postulate that the price of
a car reflects the bundle of embodied characteristics valued by some implicit or shadow prices. In empirical studies, these
implicit characteristic prices are coefficients that relate prices and attributes in a regression framework. We usually use the
semi-logarithmic specification
log Pi
a 0 E j xij u i
(1)
where Pi is the price of the
i product, a0 is a standard regression intercept, E j are regression coefficients, xij is the j
characteristic of the i product, and ui is the error term.

As noted earlier, COO conveys information about various aspects of a product that are difficult to quantify, such as reputation
and status. Additionally, COO serves as an extrinsic informational cue for consumers perceptions and evaluations of a
product, and acts as a signal of product quality, influencing consumers perceptions of risk. These are particularly so in the
car market where a brands origin plays a traditionally important role in purchase decisions. To investigate formally the
above hypotheses, first, the standard hedonic regression model (1) is extended to include COO effects. Notice that model (1)
has a standard regression intercept ( D 0 ) and as many beta coefficients ( E j ) as the number of product attributes. More
specifically, let ( D c ) represent the effect of COO c. Then, the hedonic model can be written as
log Pi
D c E j xij ui
(2)
where each COO has its own intercept.

Subsequently, we design and implement a disaggregate hedonic price model in which both attribute coefficients and COO
effects are allowed to vary over car-type segments. More specifically, let D cs represent the c COO effect within the s cartype segment, and
E js
represent implicit or shadow price of the j characteristic within the s car-type segment. Then, the
aggregate specification (2) can be expressed using the following disaggregate equation.
log Pi
D cs E js xij ui
(3)
Model (3) allows a different constant term (i.e., COO effect) and slope coefficient (i.e., implicit characteristic price) for each
car-type segment. Both hedonic regression models (2) and (3) incorporate some type of COO-specific intercepts and are, in
essence, panel data models that can be implemented by the fixedeffects technique (Greene 2002). Our estimation dataset
includes prices and characteristics of all new passenger car models available in the car market and is taken from licensed
edition of BBCs Top Gear car magazine, which is a leading international automotive publication. The dataset includes 8
functional car characteristics ( j = 1,...8 ), 12 COOs ( c = 1,...12 ), and 4 car-type segments (s = 1,...4) in 921 model versions (
i = 1,...921).
The standard model (1) that ignores COO heterogeneity has an R-squared of 0.88 and the F-tests for 11 and 71 degrees of
freedom (number of additional parameters in the proposed aggregate and disaggregate specifications 2 and 3, respectively)
reject the constrained specification (1).
Table 1 presents the estimates of the car characteristics based on the proposed aggregate and disaggregate specifications (2)
and (3) respectively. A look at the estimates of the aggregate specification (column 3) suggests that all variables have the
535
expected positive sign. Also, two points are worth noting. First, apart from performance-related attributes (e.g., horsepower
and engine capacity), features related to comfort and luxury (e.g., leather interior and automatic air-conditioning) have also
positive and significant effects. Second, the two safety features (i.e., airbags and electronic safety systems) have highly
significant positive coefficients.
In Table 1 the estimates of the car characteristics based on the disaggregate specification (3) are also presented (columns 4-7).
It can be seen that most of the coefficients have the expected positive sign and are highly significant. Furthermore, the
estimated coefficients (i.e., implicit car attribute prices) vary significantly across car-type segments. For example, our
findings suggest that safety features (e.g., airbags and ESP-TCS systems) command higher price premiums in mainstream,
mass car-type segments (such as hatchbacks and sedans), whilst the respective coefficients are insignificant in high-end, sport
car-type segments (such as coupe and convertible). Similarly, features related to comfort and luxury (e.g., alloy wheels and
leather seats) command higher price premiums in high-end sport car-type segments (such as coupe and convertible) and
SUVs, whilst the respective coefficients are insignificant in mainstream, mass car-type segments (such as hatchbacks).
Findings like the ones presented here are particularly relevant for major car manufacturers that view multi-segment strategy
as a means to diversify, increase profitability, and maintain long-term survival. The results clearly suggest that car-type
segments are sufficiently heterogeneous to allow price discrimination strategies. Evidently, the same car characteristic can be
implicitly priced at a different price-level depending on the targeted car-type segment.
In Table 2 the estimated effects of the 12 COOs are presented based on the proposed aggregate and disaggregate
specifications (2) and (3) respectively. A look at the estimates of the aggregate specification (column 2) suggests that all
COO-specific parameters are highly significant at the 0.01 level and most of them intuitively sized. These parameters can be
interpreted as shadow COO prices that reflect intrinsic COO values. It can be seen that COO premiums increase as we move
from countries such as Russia, China, and Korea to countries with long tradition and expertise in car manufacturing, such as
Germany, USA, and UK.
In table 2 the estimates of COO effects based on the disaggregate model are also presented (columns 3-6). All COO-specific
parameters are highly significant at the 0.01 level and most of them intuitively sized. Furthermore, COO effects differ
significantly across car-type segments. An analysis of the estimated parameters by column reveals the COO-specific price
premiums within each car-type segment, whilst the analysis of the respective parameters by row reveals the patterns of
differential COO-effects across car-type segments. It is important to remember that Table 2 does not reflect nominal product
cost but inferred price premiums that are estimated in a model that controls for functional differences in terms of observable
characteristics.
Certain conclusions suggest themselves from the foregoing analysis. The first and most obvious is that car prices depend on
observable characteristics related to performance, comfort, luxury, and safety. The second conclusion is that COO plays a
role in the determination of price structure. The inclusion of COO-specific parameters provides a statistically significant
improvement to the standard hedonic price model and therefore the respective hypothesis is supported. All 12 COO-specific
parameters are highly significant and most of them intuitively sized. The COO effects detected here reveal the significance of
a brands home country in car choice decisions. It appears, in the light of the entire discussion, that a car is not simply a selfpropelled vehicle used for land transport but a complex bundle of tangible and intangible characteristics. Hedonic coefficients
reflect supply-side resources and demand-side utilities of product characteristics. In this direction, we also examined
differences in attribute coefficients and COO effects across car-type segments. More specifically, we allowed both intercept
and slope coefficients (i.e., key attribute and COO parameters) to vary across car-type segments. This econometric treatment
brings us to our third conclusion that car-type segments are sufficiently heterogeneous to allow discriminatory pricing
strategies. The differential attribute and COO effects detected here, suggest that car characteristics or a brands home country
image can be implicitly priced at a different price-level depending on the targeted car-type segment.
The results presented in this paper have relevance for various players in the auto industry. The hedonic parameters allow
managers to assess the relative value of car attributes and appraise new concepts. A market-driven price for a new car can be
determined and the existing price of a current vehicle can be assessed. We have also shown that COO invariably plays a
significant role in price formation. We provided insights into the extent to which manufacturers may charge (and consumers
would be willing to pay) COO-specific price premiums. These insights are of substantial value to marketing managers
designing a pricing strategy, particularly when the consumer is confronted with product offerings from multiple COOs
differing in their image. The COO premiums illustrate returns to investments, in an era where overall quality has risen and
536
manufacturers rely more heavily on intangible aspects as a means of differentiation. Of equal interest are the differential
effects detected across car-type segments, which are indicative of implicit price discrimination strategies. Findings like these
are particularly important for major car manufacturers that view multi-segment strategy as a means to diversify, increase
profitability and chances of long-term survival. We hope that the ideas presented here will stimulate work in this important
and neglected area of research.
TABLES
Table 1. Coefficients of car characteristics
Variable
Explanation
Engine capacity
Horsepower
Speed
Airbags
Cubic
centimeters
divided by 1000
Engine horsepower
Maximum speed in
Km per hour
Number of airbags
Alloy wheels
Dummy
variable
coded as one if car
has alloy wheels
Air
Dummy
variable
conditioning
coded as one if car
has automatic air
conditioning
ESP TCS
Dummy
variable
coded as one if car
has electronic safety
system ESP-TCS
Leather
Dummy variable with
value one if car has
leather seats
*Significant at the 0.01 level
**Significant at the 0.05 level
Aggregate (2)
Total sample
Disaggregate (3)
Hatchback
Sedan
0.140*
(0.021)
0.003*
(0.000)
0.000
(0.000)
0.028*
(0.005)
0.130*
(0.020)
0.424*
(0.047)
-0.001
(0.001)
0.004*
(0.001)
0.054*
(0.006)
-0.017
(0.023)
0.141*
(0.021)
0.008
(0.040)
0.004*
(0.000)
0.002
(0.001)
0.055*
(0.011)
0.067
(0.039)
MPVSUV-SW
0.152*
(0.032)
0.003*
(0.000)
-0.001
(0.001)
0.012
(0.008)
0.147*
(0.029)
CoupeConvertible
0.047
(0.039)
0.003*
(0.001)
0.002
(0.001)
-0.005
(0.016)
0.155**
(0.066)
0.054**
(0.024)
0.068
(0.045)
0.139*
(0.028)
0.102
(0.081)
0.154*
(0.020)
0.111*
(0.024)
0.167*
(0.040)
0.193*
(0.027)
0.047
(0.070)
0.113*
(0.023)
0.060
(0.046)
0.138*
(0.039)
0.070**
(0.030)
0.148*
(0.055)
(standard error in parenthesis)
Table 2. Country-of-origin and associated effects

COO
Aggregate (2)
Disaggregate (3)
Total sample
Hatchback
Sedan
MPV-SUV-SW Coupe-Convertible
China
8.874*
N/A
N/A
9.160*
N/A
Czech
8.924*
8.018*
8.752*
9.288*
N/A
France
8.847*
7.952*
8.552*
9.338*
9.046*
Germany
9.066*
8.109*
8.826*
9.517*
9.302*
Italy
8.948*
8.067*
8.812*
9.449*
9.140*
Japan
8.978*
8.054*
8.692*
9.464*
9.089*
Korea
8.893*
7.975*
8.687*
9.391*
8.818*
Russia
8.585*
N/A
8.277*
8.967*
N/A
Spain
8.892*
8.042*
8.681*
9.396*
N/A
Sweden
9.137*
8.021*
8.846*
9.649*
9.298*
UK
9.380*
N/A
9.117*
9.738*
9.668*
USA
9.126*
8.214*
8.951*
9.539*
9.149*
*Significant at the 0.01 level
N/A signifies a parameter which was not estimated because the respective combination is unavailable in the market
537
HOW TO MANAGE INFORMATION SHARING IN ONLINE

MARKETPLACES AN EXPLORATORY STUDY
Leyland Pitt, KTH Royal Institute of Technology, Sweden
Esmail Salehi-Sangari, KTH Royal Institute of Technology, Sweden
INTRODUCTION
Online communities offer a lot of value for marketers. They often serve as a reference groups to consumers and influence their
decision-making (De Valck, Van Bruggen and Wierenga 2009); they can be an important sources for marketing research
(Kozinets 1999); they can be used to engage customers in collaborative product innovation (Sawhney, Verona and Prandelli
2005; Fller, Bartl and Mhlbacher 2006); and brand communities can be an important source of loyalty (Muniz and OGuinn
2001; McAlexander, Schouten and Koenig 2002).
For the community as a whole, and for its owners, it is important that members share their knowledge; this increases the quality
of available information and can help attract new visitors. However, members are often reluctant to do so because they consider
their knowledge valuable and personal (Chiu, Hsu and Wang 2006). It is reasonable to argue that this social dilemma (Cabrera
and Cabrera 2002) is even stronger in online marketplaces, where members are in direct competition to attract visitors and sell
their products, and thus knowledge becomes a competitive advantage.
Although the marketplace owner can establish and enforce rules to minimize misuse and blatant free riding, these rules can do
little to stimulate knowledge sharing amongst vendors. However, community-driven social norms can play an important role
in encouraging members to share what they know.
This paper uses game theory as a conceptual framework to examine how vendors in online marketplaces can be stimulated to
share information, when it is in their individual interest to keep knowledge to themselves. Specific questions are: (a) how does
a marketplace become a community, (b) which social norms encourage knowledge sharing, and (c) how can these norms be
created and enforced? A netnographic study was performed of crafting marketplace Etsy.com, to review how its management
and influential community members encourage others to share what they know about crafting and selling their products, and
even to help promote other vendors.
LITERATURE REVIEW
Information sharing as a social dilemma
Using game theory, we follow Gezelius (2007) argument that information sharing in communities can be modeled as a
sequential, non-cooperative game between two members, as shown in figure 1.
In this game, Vendor A is the first to decide whether to share or conceal information. After that, Vendor B makes the same
decision. The scenario where both parties conceal their knowledge can be considered the status-quo: neither party gains or loses
anything so the outcome is (0,0). If one vendor shares while the other doesnt, the non-sharer wins at the expense of the sharer,
so outcomes are (-1,3) and (3,-1) respectively. However, if both parties share their knowledge, they both win, leading to
outcome (2,2). It is important to note that the game does not stop after two moves; and as a result the game can have many
possible outcomes.
Cabrera and Cabrera (2002) suggest that the key to overcoming this social dilemma is changing the pay-offs, i.e. to offer greater
reward to members who share and/or to punish those who dont.
Drivers of information sharing
The literature on information sharing in organizations is extensive, and more recently similar research has been performed
regarding online communities.
A number of factors can be found across literature as important drivers of information sharing between community members.
First, the norm of organizational ownership, or whether the information is believed to be owned by individuals or by the
538
organization, is an important determinant of peoples willingness to share (Constant, Kiesler and Sproull 1994; Jarvenpaa and
Staples 2000). A second norm that is important is reciprocity, the expectation that people will return benefits for benefits (Chiu,
Hsu and Wang 2006; Gezelius 2007; Bock et al. 2005; McLure Wasko and Faraj 2000). Finally, a factor that is often mentioned
is trust, or the belief that the other party will not behave in an opportunistic manner (Ridings, Gefen and Arinze 2002). Since
online communities can rely less on personal relationships (Kozinets 2002), trust is developed between members by confiding
personal information and by showing responsiveness (Ridings, Gefen and Arinze 2002).
Different authors also mention a number of personal characteristics as drivers of information sharing, including propensity to
share, sense of self-worth, innovativeness, and comfort with the computer or software (Jarvenpaa and Staples 2000, Bock et al.
2005). Perhaps surprisingly, extrinsic reward is believed to have an adverse effect on information sharing (Bock et al. 2005).
METHODOLOGY
A netnographic study was performed of the community of vendors/crafters on Etsy.com, and online marketplace for handmade
and vintage products. Netnography is a qualitative research methodology that applies ethnographic research techniques to the
study of online cultures and communities (Etsy 2012).
The study was performed during a period of 3.5 months between August and November 2012. One of the researchers partners
opened a store for handmade jewelry on Etsy in July 2012 (oBo Creations). The researcher gathered information (looking over
the partners shoulder) as she started engaging in the community, initially to learn and later to increase the visibility of her
store, and as she started getting the first results of her effort. The observations were interpreted by the researchers as a team,
and verified by several Etsy community members through short interviews.
RESULTS
Etsy was founded in 2005 as an alternative to EBay, devoted to selling handmade and vintage items. In 2011 its vendor revenues
were $538 million (+71% vs. 2010), and 2012 revenues are expected to be around $900 million. It currently has 800,000 active
shops, lists over 17 million products, and attracts 42 million unique monthly visitors (Craftcount 2012).
Information sharing on Etsy
The heart of Etsys community is formed by its vendors. The Etsy users are on average 32 years old, predominantly female,
mostly college-educated, and comfortable with technology (eMarketer 2012). The vendors organize in teams, groups of 10 to
1000 members with a certain shared interest. This interest may be related to crafting (e.g. technique, materials, themes), selling
(e.g. how to increase visibility or how to start a business), or geography. Each team has its own online forum where it posts
information and has discussions, and some teams organize local events.
In the team forums, people are eager to answer questions from new vendors and to share knowledge about a variety of subjects.
Etsy also offers prominent members (i.e. top sellers) the opportunity to share their knowledge on video through its Etsy Labs
platform. Members who are active in teams are rewarded because it makes them visible to other members and to potential
buyers.
An important activity organized for teams is the organization of treasury games. Treasuries are small collections of items that
are grouped together by individual vendors, which visitors see when they shop on Etsy, and that are occasionally featured on
the front page. Teams create treasuries that consist of members items, and then like and comment on these treasuries to increase
their visibility. Teams may also ask their members to share treasuries on social media (mainly Facebook, Twitter and Pinterest).
Rules and Social norms
There is a comprehensive list of Dos and Donts for Etsy vendors, and individual team leaders set rules for forum behavior
and treasury games.
There are no formal norms or guidelines. However, for community members to be successful on Etsy they rely on the rest of
the community. Whether a vendors page is visible to potential buyers depends on how many likes and comments his items get,
and the only way to get those is by being engaged in the community.
539
How Etsy promotes social norms

The Etsy staff plays an important role in establishing and enforcing social norms. They are swift with sanctions against members
who break the rules, and encourage team leaders to be equally strict. They reward members who are active in the community:
team leaders are offered support and may receive awards; prominent members may be asked to share their knowledge on Etsy
Labs, and interesting stores may be featured on the front page. All these rewards offer members increased exposure to visitors.
Organizational Ownership: It is clear that information on Etsy is owned by the community; not by individuals and not by the
company. Members are encouraged to share their knowledge through team forums, and Etsy staff regularly share their own
knowledge to help vendors.
Reciprocity: Etsy members who received help from others in the past often feel the obligation to return the favor. To be
successful on Etsy members have to play treasury games, which are a form of structured reciprocity.
Trust: Etsy encouraged vendors to share their personal story. Through teams vendors build personal relationships with other
members. In addition, buyers can leave feedback about the vendor. All these things minimize opportunistic behavior, and as a
result build trust in the community.
The Etsy staff has an important role in all this. They encourage, facilitate and reward knowledge sharing, they promote a
community identity through their communication with members, and they support and reward vendors and teams that perform
well.
CONCLUSIONS
The netnography of Etsy shows that it is possible for vendors in online market places to form a community, and to share their
knowledge. Social norms such as reciprocity and trust are essential, and companies can establish and manage these norms
effectively through their platform and their communication. Rather than by establishing rules and sanctioning those who break
them, the key appears to be to find members in the community who are actively sharing their knowledge with others, reward
them by increasing their visibility to potential customers, and making other members aware of this reward structure.
The benefits of this sharing go beyond improving the quality of the products that are sold; because Etsy members are encouraged
to share treasuries (rather than their own stuff) through social media, it results in a collective outreach, which may well be an
explanation for Etsys success.
Several of the limitations related with netnography were minimized by careful interpretation of observed behavior, and with
the follow-up interviews. Nevertheless, by examining a single online marketplace there is a risk that the findings of this study
are not generalizable. Therefore our conclusions should be read as how information sharing in online communities can be
managed, rather than how it should be.
Beyond online market places, our findings may be insightful for other online communities where competition exists between
members, such as start-up networks (e.g. Kickstarter.com) and credit markets. They may even be relevant to offline
communities and organizations where social dilemma on information sharing exists.
FIGURES
Figure 1: Knowledge sharing as a non-cooperative game
540
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Ridings, C. M., Gefen, D., & Arinze, B. (2002). Some antecedents and effects of trust in virtual communities. The Journal of
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COMPETING FOR CONSUMERS ONLINE:

THE ADVERTISING STRATEGIES OF VERTICALLY DIFFERENTIATED FIRMS
Elie Ofek, Harvard University, USA
Taylan Yalcin, Chapman University, USA
ABSTRACT
This paper studies the strategic decisions of vertically differentiated firms that promote their products online utilizing display
or search engine advertising. Our findings indicate that firms' advertising strategies in equilibrium critically depend on the
type of advertising used and the degree of quality differentiation. Firms' decisions may lead to informational disparity in the
marketplace that softens price competition and thus increases both firms' profits. Specifically, a low-quality firm may choose
not to run a display advertising campaign, even when administering such a campaign is costless, if the degree of vertical
differentiation between the goods is small. Moreover, as the degree of advertising effectiveness goes up, resulting in more
customers that only consider the high-quality good, we show that the low-quality firm can be better off (despite not
advertising). In the case of search engine advertising, the high-quality firm acquires the top sponsored link over a large range
of the parameter space, as the value of advertising is typically greater for it. However, if advertising effectiveness is moderate
and vertical differentiation is small, the low-quality firm will win the auction for the top link.
542
ENHANCING ORGANIZATIONAL & MARKETING EFFICIENCY THROUGH ETHICAL DECISION

MAKING: IMPLICATIONS AND PROPOSITIONS FOR STAKEHOLDERS
Sharam Alijani, Reims Management School, France
INTRODUCTION
This paper proposes to investigate the relationship between ethical decision-making and organizational efficiency by focusing
on the objectives of corporate social responsibility (CSR). Most corporations tend to acknowledge the relationship between
the long-term corporate performance and the firms ability to reconceive a corporate social model that promotes social
responsibility and value sharing (Porter and Kramer, 2011). The marketing literature on corporate social responsibility
highlights the importance of ethical marketing practice and its impact on corporate performance (Kotler and Levy, 1969;
Kotler, 2005) and underscores the need for adopting an ethical marketing approach when addressing societal issues
(Maignan and Ferrell, 2004; Hunt and Vitell, 2006). A significant research corpus has brought to the fore the importance of
corporate social responsibility in building organizational capabilities (Carroll, 1991; Donaldson and Preston, 1995). Recent
studies have shed light on the links and circular causalities between responsible marketing actions and the stakeholders
commitment to ethical values, social objectives and value sharing (Bhattacharya and Korschun, 2008; Hult et al., 2011;
Maignan et al., 2011; Ferrell et al., 2010). A similar strand of research has emphasized the relationship between marketing
objectives and corporate sustainability (Lureno et al., 2012; Sheth et al. 2011), and highlighted the links between ethical
values and corporate governance (Spitzeck, 2009; Jo and Harjoto, 2012; White et al., 2012). Placed within the broad canvas
of corporate social responsibility, our research seeks to assess the mediating role of stakeholders in designing and
implementing a sustainable value proposition for the firm. Moreover, by making a case for building a multilayer basis of
productivity, we reckon that ethical attitude constitutes a deliberate attempt to link the firms governance architecture to the
way by which stakeholders decision-making processes can infuse sensemaking and sensegiving across the firms boundary.
(Weick,1995; Balogun and Johnson, 2004). It is further argued that by raising the firms ethical standards, corporations can
enhance transparency and foster trust among stakeholders, a condition that is expected to bring stakeholders together in an
attempt to reduce constraints imposed by stakeholders interest trade-offs (Freeman, 1984, Freeman et al. 2005). A significant
research corpus in social sciences has brought to the fore the mediating role of trust and its impact on market performance
and organizational efficacy. Social exchange theories offer an explanation of how value can be created and captured through
trust and cooperation among stakeholders (Blau, 1964; Sheth and Parvatiyar, 1995; Tynan, 1997; Wagner and Bouteiller,
2002). Despite an abundant literature on the topic of trust, there has been little field research on how trust can be fostered and
sustained within a firms boundary. The question of trust and value creation brings to the fore the ethical role and
responsibility of stakeholders and their value system. This perspective shapes the strategies of firms themselves where value
is no longer bounded by ones personal value but is instead tied to a broader context of stakeholders inter and intra-firm
relationships. As such, a corporate value system emanates from not only personal values but also common organizational
work ethics, morality, and value system. One should be reminded that individual work ethics is associated with ones
cognitive state of self-esteem, work experience, justice and altruistic motivations, as well as self-regarded preferences. In
contrast, organizational ethics encompasses firms choices and dimensions that tie economic and social performance to
corporate governance. The domain, nature, geography and size of operation have a direct bearing on the firms business and
governance models. Corporate social and cultural environments are further shaped by the extent of trust among the firms
stakeholders. One may note that trust and trust reciprocity are likely to affect stakeholders expectations that emanate from
moralistic, materialistic, altruistic, opportunistic motivations of stakeholders (Olson, 1965; Hardin, 1968; Ostrom, 1999). A
contrario, the absence of trust affects the outcome of corporate actions. Arrow (1951) and North (1990) suggest that the
social exchange dynamics depends on the norms and institutions that foster mutual trust and uphold social capacity as a
universal value system.
Ethical decision making models offer an explanation of how individuals and groups are brought to interact with each other
different cultural, social, and business contexts. The contingency model for ethical decision making (Ferrell and Gresham,
1985) provides a conceptual framework for assessing the process of ethical decision-making within organizations. The model
refers to three broad dimensions of ethical decision making: opportunity that consist of policies and codes of ethics,
individual factors that are shaped by ones cultural values and moral philosophy, and significant others that point to the
members of an organization such as managers and employees whose actions and choices have a direct bearing on economic
performance. Similarly, the Person-Situation Interactionist Model (Trevino, 1986) seeks to explicate how personal factors
interact with situational factors every time a decision is taken. According to this model, moral development, individual
cognitive states, external social referents and situational moderators such as job characteristics and organizational culture are
543
among the factors that determine the process and the outcome of decision making. In contrast, the Hunt-Vitell model (Hunt
and Vitell, 1986) takes into consideration both environmental and personal influences on moral and deontological dimensions
that are often associated with ones decisions. The outcome of each action is expected to be evaluated on the basis of the
maximum benefits accrued to the firms stakeholders. The Hunt-Vitell model proceeds by integrating the probabilities of
consequences of each decision carried out by stakeholders. The model can be used to provide a mapping of different types of
externalities (positive, negative, strong, weak) that are associated with individual or combinatory decisions. The Synthesis
Model to ethical decision making (Ferrell et al. 1989) offers a broader perspective of the decision making conundrum by
combining elements of all three models presented earlier. The Synthesis Model has the merit of recognizing the importance
of cognitive, learning, and cultural and social dimensions of ethical decision making. In this paper we will focus
primarily on the learning and social dynamics of decision-making of the Synthesis Model and will investigate the
mechanisms by which the management could seek to enhance the overall organizational capacities by replicating and
reinforcing ethical behavior. More specifically, we aim at providing a framework for studying and measuring the impact of
stakeholders commitment to corporate objectives (e.g. profitability, customer satisfaction, organizational innovation) that
derive from ethical behavior and lead to social and corporate performance. Consequently, two propositions can be made to
three groups of stakeholders, namely, the employees, customers, and managers.
Proposition 1: Decisions and corporate policies that aim to enhance inter-company trust and cooperation among and
between employees and managers will be positively perceived by all stakeholders. This would in turn have a positive impact
on the firms performance-efficiency trajectory.
Proposition 2: Decisions and policies that aim to enhance intra-company trust and cooperation among and between
employees and customers will be positively related to stakeholders perceived value of corporate stewardship. This would in
turn have a positive impact on the firms performance-efficiency trajectory.
One should be reminded that corporations tend to overlook a broad range of soft issues that need to be dealt with over time.
Individuals, communities, and societies show biases toward risk, success, failure, reward, status, sacrifice, tenacity, moral
strength, discipline, and conflict. In particular, decision making involves complex cognitive processes that relate to ones
knowledge and thoughts as well as feelings and moods that affect organizational efficiency. Decision making behavior may
be viewed across different complementary dimensions taking into account a wide array of endogenous and exogenous
organizational and social biases. A significant research corpus has scrutinized the use of mental representations and short-cuts
when making decisions (Simon, 1957; Tverssky & Kahneman 1974; Fishbein and Ajzen, 1975; Shanteau, 1989; Giegerenzer
& Todd 1999; Baron 1998).
METHODOLGY
Building on the Synthesis Model (Ferrell et al. 1989), we have investigated the sources, processes, and outcome of ethical
decision making for a selected group of stakeholders in two different companies. Our study reports on an ongoing survey of
two French companies that have been confronted with a prolonged economic slowdown since 2009. As a result of a serious
economic downturn, the management has been brought to consider different exit and/or restructure scenarios by inviting a
selected group of customers and employees to collaborate on designing a comprehensive cooperative scheme. Extending on
an earlier study on how a selected group of stakeholders can be brought to design different cooperative schemes (Alijani,
2012), our research proposes to build a metric model taking into account different decision options in accordance with their
expected cost and benefit outcomes. The proposed methodology uses an analytic inductive approach that integrates both
qualitative and quantitative data. To supplement the quantitative data, we have conducted 21 semi-structured interviews with
randomly selected managers, employees and customers over a period of 18 months. The qualitative approach provides an
exploratory framework for assessing stakeholders commitment to the proposed plans. It is understood that employees
commitment reciprocates the management efforts to foster and build a transparent and ethical conduct. Employees have been
chosen on the basis of their expertise and functions: HRM, Sales and Marketing VPs, sales directors and account managers,
marketing directors, financial controllers and accountants, supply-chain - IT - technical managers. Customers have been
selected randomly from a list of repeat buyers who expressed satisfaction vis--vis the company and showed willingness to
benefit from targeted promotional campaigns. Both employees and customers have been asked to respond to an online survey
that contains a list of socially responsible plans. A total of 90 respondents composed of 3 groups with each group comprised
of 12 employees and 18 customers were asked to rank the importance of decisions in achieving the main corporate objectives.
Among the most important corporate objectives, economic performance measured through a profitability-productivity index,
organizational efficiency measured by employee and customer satisfaction index, and corporate social responsibility
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measured by a composite index taking into account social and environmental factors. The proposed scheme offers a variety
of incentives, ranging from profit-sharing and bonus options to discounts and product upgrades. Tickets may be issued by the
employees and customers groups in case of any unethical behavior by the management. Both companies have been asked to
conduct a quarterly performance analysis. The preliminary analyses conducted in 2011and 2012 have shown improvement in
key performance ratios including but not limited to sales and productivity as well as customer and employee satisfaction
ratios (see the section on data analysis for further details). By placing different groups of stakeholders within a gametheoretic context whereby each group expects to be offered incentives, the management can show how both employees and
customers may engage in enhancing organizational efficiency. In both companies, employees have accepted to engage
actively in ethical marketing campaigns to support targeted social programs. Likewise, customers were asked to participate in
product selection schemes whereby a greater share of revenues generated would be spent for socially responsible initiatives.
In our survey employees and customers have been invited to make choices that would maximize their expected payoffs
(labeled as success: P1 or no success: P2 with P1 <> P2). One should be reminded that in a multi-stakeholder context Nash
equilibrium is said to exist if all stakeholders participate and cooperate fully with each other with the objective of achieving
corporate economic and social objectives.
Data Analysis
Data analysis involves three different steps. First, selected employees and customers have been asked to participate in a
survey and respond to questions pertaining to performance, efficiency and corporate social responsibility. An index of
1-to-7 Likert scaling method was used to isolate the moderating factors including individual and social referent factors that
are likely to affect corporate performance with or without affecting the firms corporate social responsibility. We have
discarded those items that show a low correlation with the total score across all items. We then used an exploratory factor
analysis and a mean computation analysis to reexamine the underlying assumptions of the model as stated in the above
propositions. We proceeded further by using a PROBIT analysis to investigate the relationship between performance
(measured by quarterly and annual financial and sales ratios) and stakeholders perceived level of satisfaction and compliance
with CSR. The model contains a vector of control variables to account for individual, social, and environmental factors that
affect economic performance and stakeholders satisfaction. The use of conjoint analysis provides further elicitation of
customer and employee preferences for different ethical decisions. Conjoint analysis is used by marketing researchers who
seek to determine what preferred features are retained by customers (Green et al. 2001). In our case, we made a more
expansive use of this technique to account for stakeholders preferences and motivations (Teichert and Shehu, 2010).
In this study we have focused on two companies that have been confronted with a significant drop in their annual sales
following the 2009 financial crisis (21% and 26% drop in revenues respectively by the end of 2011). In 2011, the annual sales
reached 20.3 million dollars for company A with 51 employees. Sales and employee figures for company B were 18.7 million
dollars and 53 respectively. Both companies operate within the IT industry and serve national and international customers.
The choice of companies operating in the same economic sector discards discriminatory factors that may be associated with
the sector, size and location. Following a reorganization phase in early 2010, the author was invited to conduct research at
two distinct intervals. The primary objective of this field research has consisted of mapping corporate performance to
economic and social goals as suggested and measured by the management team. Participants in the survey were reminded
that in a trust-based relationship with the aim of enhancing performance, aggregate decision making may have to be
differentiated on the basis of choice sets and payoffs (Bolton and Ockenfels, 1999; Fehr and Gaechter, 2000; Schelling
2006).
The qualitative analyses corroborated with earlier data samples collected in 2011 and 2012 illustrate that motivation,
creative-thinking, and cooperative schemes foster efficacious managerial practices, good judgment and satisfaction (Amabile,
1998). This is particularly true when stakeholders seek mutual benefits and rewards and are offered the opportunity to express
their expectations in terms of shared corporate goals (Shaver and Scott, 1991; Bernardo and Welch 2001). Empirical
evidence points to improved level of readiness by 80,4% of stakeholders. The majority of participants (less than 20%
expressed little to significant doubt) proposed alternative goals. Participants in the study were particularly keen on explaining
how they expected to use collective actions to enhance the individual and organizational capabilities. Our study has adopted
the five stage approach suggested by the Synthesis Model conceptual framework in an attempt to assess the circular links
between stakeholders choices on the one hand and the outcomes of their decisions on the other. While thinking strategically
brings the executive team to plan, command, and implement decisions to ensure performance and growth, ethical decision
545
making requires an understanding of the potential outcomes within different social and economic contexts. The integration of
awareness and cognitive frames provides the basis for stakeholders moral evaluations as a precondition for sound
management action. Cognitive biases may emanate from over-confidence and over-optimism (Cooper et al. 1998; Bernardo
and Welch, 2001), control and planning fallacy (Keh et al. 2002), mood and affect infusion (Forgas, 1995); overestimation
(Russo and Schomekaer 1992; Busenitz and Barney 1997), and perceived self-efficacy (Chen et al. 1998; Shane, 2003;
Bandura 1995; Gist & Mitchell, 1992). A decision-making structure that is built on stakeholders interpretive schemes
enables the management to better define the scope of a firms CSR objectives. This constitutes an important step toward
assessing the potential social and economic consequences of strategic and organizational decisions.
Social Exchange, Organizational Efficiency, Corporate Social Responsibility,
Opponents to a shareholder based view argue that stakeholders need to adhere to objectives of morality, fairness, and value
sharing. Freeman (1984, 1994, 1999) and Freeman et al. (2010) argue that the firm should not fall prey to the separation
theory since profits result from a collective commitment to pursuing common goals and not the only corporate goal. Freeman
and al. (2010) go further by underscoring the existence of three interconnected challenges, namely how to create and
exchange value, how to operate in the market, and how to reconcile economic and ethical objectives. Mintzberg (2004)
goes into further consideration by stating that a shareholder value maximization view is antisocial dogma that has no place
in a democratic society, and defending a strictly shareholder point of view breeds a society of exploitation of people as well
as of institutions. Consequently, the shareholder value maximization view is unlikely to allow the firm to engage in business
transformation, one that would enable stakeholders to foster cooperation and engage in collective decision making with the
intention of promoting social capital. Fukuyama (1999) defines social capital as an instantiated informal norm that promotes
cooperation between two or more individuals since norms emanate from trust, honesty, and other shared beliefs. As value
creating organizations, innovative firms constitute a repository for a wide array of resources and competences. Organizational
capacity may be viewed as a distinct ability to reconfigure, coordinate, and exploit resources with the objective of creating
superior value (Wernerfelt, 1984; Teece et al. 1997, Augier and Teece, 2006, Helfat et al. 2007). The complex nature of
modern organizations calls for an understanding of the motivations of the stakeholders and requires a careful analysis of the
mechanisms that affect their decision-making process. Porter and Kramer (2011) refer to the concept of shared value as
economically efficient and socially rewarding since value sharing focuses on identifying and expanding the connections
between societal and economic progress. The concept of shared value therefore invites corporation to rethink their value
model by paying close attention to a wide array of social and environmental issues while expanding the boundaries of
corporations, industries, markets, and territories. It follows that companies can achieve more by meeting social needs every
time they try to reconceive new products and services that that takes into account the social dimension of business
development.
The results obtained during different phases of our study have revealed that stakeholders can be brought together through an
integrative process of participation and decision making. Judging from different indicators obtained during the last quarter of
2012, the companies under study were able to strengthen their organizational efficacy while partially reversing the downward
economic trend that began in 2010. The cooperative scheme proposed by the management provided provisions for wage
adjustments, work flexibility, knowledge sharing, cognitive training, effective customer relationship, and resource sharing.
The list is expected to be extended to include specific measures to promote a code of ethical conduct as well as more
transparency. The study further highlighted that different groups of stakeholders and in particular employees, customers, and
middle managers who were brought to play a pivotal role in our benchmark study were provided the opportunity to think not
only strategically but also act ethically by exploring and sharing novel paths to performance. It was further shown that both
companies succeeded in implementing trust-enhancing mechanisms and reducing structural and cultural resistance to
organizational change. Having said this, one should be reminded that the extent to which cooperative schemes can be
effectively implemented will depend on a wide array of market and nonmarket factors. Another problem arises when one
attempts to measure the relative effectiveness of alternative cooperative schemes in terms of social responsibility and
economic performance outcomes. Last but not least, ethical decision making requires adherence to common goals as well as a
willingness to foster long-run societal value. The future axis of research will focus more specifically on the institutional
dimension, corporate contexts and leadership qualities that are required to ensure ethical thinking and decision making.
546
CONSUMER PERCEIVED ETHICALITY OF PRODUCTS, CATEGORIES, BRANDS AND COUNTRIES: A

NETWORKED PERSPECTIVE
Valry Bezenon, University of Neuchtel, Enterprise Institute, Switzerland
ABSTRACT
Consumer perceived ethicality is a new stream of research, which aims at understanding and measuring how consumers
perceive the level of ethicality embodied in objects relevant to their behaviour. This paper builds a conceptual framework that
explains the relationships between different ethicality perceptions such as product, brand, company, product label and country
of origin. The framework also includes the variables that moderate those relationships, such as product category. From a
theoretical perspective, there is a need to better understand the links between the ethical behaviour of organisations and the
purchase of products marketed by those organizations. This framework is an attempt to explain a part of what lies in between,
that is the construction of perceptions relating to ethicality. This framework helps companies to understand product perceived
ethicality and its antecedents, in order to design product offerings which are aligned with consumer expectations with regard
to ethicality. Indeed, companies have limited instruments to analyse and improve the consumer perceived ethicality of their
products. Once the framework is operationalized and tested, companies will be able to evaluate the potential gap between the
positioning of the products when it involves an ethical dimension and the actual consumer perception, understand the reasons
why and undertake corrective actions.
547
ETHICAL CONSUMERISM: MOVEMENT FROM DESIRE TO DECISION TO BUY GREEN
Leslie E. Sekerka, Menlo College, USA

Richard P. Bagozzi, University of Michigan, USA
ABSTRACT
Understanding what spurs consumers to buy environmentally sustainable (ES) or so-called green products can be elusive.
Most people agree that buying green is an attempt to do the right thing. Yet there is variability in individuals adherence to
this espoused belief, as expressed in their overall product choices and purchase decisions. We expect that the decision to buy
green is influenced by both deliberate and automatic cognitive and affective processes that require self-regulatory
management. To add clarity to the literature on ethical consumerism, we present theoretical propositions that add granularity
toward understanding what supports movement from having a desire to buy green to actually making a purchase decision in
an online setting. This area is ripe for inquiry, presenting a lever to affect social change in the virtual marketing domain.
INTRODUCTION
Some people would agree that buying a green product represents an ethically sound choice, and yet many of us do not act on
this belief (Shaw et al. 2005). This incongruence may stem from the view that choosing one product over another will not
make a worthwhile difference. Consumers may be unwilling to spend extra money and time that may be required when
making informed environmentally sustainable (ES) purchases or to change consumption practices (Montgomery and Stone
2009). A lack of commitment to buying green may also be attributable to erroneous, confusing, or conflicting information
about ES issues and green products or the inability to make a connection between a purchase decision and actually resolving
ES problems. The concept of ES associated with a product means that it does no harm, or, in comparison to other similar
products, imposes less harm to the natural environment in its creation, use, and recycling or reuse. The product must also be
on par with other offerings, in terms of quality, usefulness, and appeal. Whatever the rationale in forming a desire to buy
green, the ultimate decision to do so may require additional effort in the consumers decision-making process. As a result, a
person may have some initial desire to buy green, but not possess a strong enough compulsion to make an actual purchase.
Belk and Askegaard (1997) describe consumers desires as belief-based passions that involve fervently wishing for
something. Passion plays an important role and conveys the influence of emotions, with positive and negative experiences
consciously or automatically influencing a desire to proceed with action. The reality is that every purchase is a moral choice,
suggesting that moral emotions are likely involved (Heberlein 1972). This is markedly so with product decisions that involve
ES, which, by definition, have moral and social implications. With the Internet, social implications of ones purchase
decisions are more visible than ever before. While ethical markets possess vast potential (Doane 2001), we know very little
about what fuels purchase decisions for ES (green) products when shopping online. To begin to address ethical consumerism,
we posed this research question: What influences movement from the desire to a decision to buy a green product in an online
shopping context? We begin with an overview of the relevant literature and then present a model to depict the role of selfregulation as an influencer in helping people move beyond desire and into ethical consumer action.
ETHICAL CONSUMERISM ONLINE
The Internet has become a global tool for word-of-mouth recommendations given to family, friends, and others through
social networks. In general, shared information converts lower-order cognition and affect into higher-order information
processes, leading to increased commitment (Bristor 1990). Say that you hear about a green cleaning product from a
community blog. This exposure may initially seem inviting, so you try it out and then share information about the product
online. Gradually your consumption patterns may shift to include the purchase of other eco-friendly household supplies
especially after receiving affirmations from friends and acquaintances, and other social feedback. The credibility of message
source, combined with the potential for consumer involvement in message content contributes to these feelings and higherorder beliefs. Through multiple exchanges and interactions, one message can reach millions of consumers (Lau and Ng
2001). Social media creates an omnipresent form of sustained influence.
Peer influence is a strong predictor of behavior. For moral action this can be even more powerful than ones own belief
system (Zey-Ferrell et al. 1979). Word-of-mouth is a common venue for peer influence. Researchers concur that informal
exchange of information through personal conversations can influence consumer choice and decision-making (Arndt 1967),
548
shape expectations (Zeithaml and Bitner 1996), and influence post-usage perceptions of products and services (Bone 1995).
Prior to the Internet, this form of communication was limited to individuals in a consumers personal network (face-to-face,
mail, telephone, etc.). Advances in online tools and the ways in which people connect in virtual environments have led to
exponential growth in the amount of word-of-mouth information accessible to consumers.
Social media may be a powerful vehicle in guiding collective moral judgment. While there is debate about the relevance of
online groups as communities, Hagel and Armstrong posit that community has been at the heart of the Internet since its
inception (1997, p. 134). Simply labeling individuals as members of a group (e.g., green buyers) can activate a common
identity (Tajfel 1971). Social embeddedness with online contacts, like chat rooms and customer reviews, has the potential to
increase peer influence, as online communication can enhance consumers social identity and their social identification with a
group (Lea et al. 2001). The Internet helps people learn about social causes and facilitates broad social involvement (Lebo
2008). Consumers online conversations contribute to social and economic outcomes, including educating consumers for
environmental awareness (Kozinets et al. 2011).
People relate to one another in online communities in ways that can influence buying decisions (Bagozzi et al. 2007). With
physical/temporal barriers eliminated, novel ways of connecting shifts the meaning of social distance and may expand
consumer agency. The Internet provides a venue for an expanded reach of relationships among people who acknowledge that
they have something in common, with a resultant sense of commonality and solidarity. In many cases, networks replace
locality as the basis for sociability and identity (Castells 2001). Inasmuch as commonality influences how people broach social
issues, such as exercising care for ES, it underscores the need to understand the forces that drive ethical consumer decisionmaking in the computer-mediated domain. Information shared does not have to be disseminated from someone we genuinely
know for it to have an impact. Because social media networks provide a sustained context for ethical consumerism, we use
this platform for our theory-building endeavor.
Ethical Decision-Making
Rests (1986) moral decision-making model explains how people generally arrive at some level of moral behavior. While
scholars target moral judgment as a central point (cf. Hunt and Vitell 1986), research is needed to understand how people
move from having a desire to act, to making a decision to act on that desire. An updated model presents the steps as: (1)
awareness of the ethical issue, (2) desire to act, (3) decision to act, and the (4) ethical action (see Figure 1) (Sekerka and
Bagozzi 2007).
The internal/external factors that influence reasoning strategies and sensemaking, and their impact on ethical decision-making
are well known (cf. Caughron et al. 2011). But the gap between forming an intention and having an opportunity to act on it
can be interrupted and thwart planned behavior (Bagozzi 1992, 2006). Events can occur that block the implementation of
ones plan for action. Such lack in follow-through may be attributed to a combination internal factors, as well as external
situational contingencies that occur earlier in the ethical decision-making process as well as after an intention is formed.
Given the tenuous nature of sustaining consumer desires, we focus on the deliberative and automatic factors that bolster a
decision to buy green. To unpack ethical consumerism in an online environment, a more granular understanding of the
process is needed to advance mindful consumption. Since awareness is a pre-condition for the development of moral norms
for ES actions (Heberlein 1972), consumers need to be informed and reminded that making a purchase decision has ethical
implications and moral repercussions. Once aware that product choice is an ethical issue, the willingness or desire to proceed
with right action is needed. What fuels the decision to buy an ES product once ethical awareness and desire emerge?
ROLE OF SELF-REGULATION
Self-regulation is defined as goal-directed behavior ascribed to a particular timeframe (Baumeister and Heatherton 1996).
This may be the regulation of achievement-related behaviors, personal strivings, and shared goals. Self-control is typically
used to describe a narrower subset of self-regulatory processes i.e., those that aim to override unwanted, impulses or urges
(e.g., buying something you cannot afford). In general, self-regulation entails three elements: (a) standards of thought,
feeling, or behavior that individuals endorse, mentally represent, and monitor, (b) sufficient motivation to invest effort into
reducing discrepancies between standards and actual states, and (c) sufficient capacity to achieve this in light of obstacles and
temptations along the way (Hoffman et al. 2012). People lack self-regulation when standards, motivation, or capacity are not
available.
549
People feel different types of desire when making a purchase decision. Both appetitive and volitive forms of desire can
influence their choice, yet each element of desire is reasoned or felt and expressed in different ways. When referring to
appetitive desires, we think of craving, hungering, or yearning for something; conversely, volitive desires are more about
wishing, liking, or wanting something. The intensity of a volitive desire is a function of subjective and group norms, selfefficacy toward outcome expectancies, and anticipated emotions, as a person moves to fulfill a goal. The intensity of an
appetitive desire is based on internalized factors, often biological, which serve to unleash latent desires. Sometimes a desire
for a certain product leads to an immediate decision to buy it. This constitutes a deterministic outcome of a desire, typically
occurring when primitive habits, urges, compulsion, or impulsivity operate. This can occur when self-regulation is absent or
thwarted, or when first-order desires go unchecked deterministically (Sekerka and Bagozzi 2007). A direct link between
desire and decision to act can be thought of as deterministiceither habitual or compulsive. This path can be interrupted by
self-regulation, where desires become altered in one of two ways. Automatic self-regulation of desires to act occurs as a
consequence of an orientation learned developmentally, often early in life (e.g., Kochanska 1994; Posner and Rothbart 2000),
manifest as certain values, traits, or virtues. Conscious self-regulation of desire occurs through the willful application of
personal standards to ones felt desire (first-order) and exemplifies a second-order desire governing a first-order desire. We
now consider the impact of automatic and conscious regulatory influences that moderate the effect of a first-order desire to
act on the decision to buy an ES product.
Automatic Self-regulation
Personal values or virtues often function as automatic self-regulatory mechanisms, similar to the role of traits. These preestablished guidelines direct our responses. Regardless of their implicit/explicit form, personal values are inherent in our
choices and behaviors, and vary depending upon the person and situation (Konrad 1982). Family and peer influence, religious
values, and personal needs shape each person and contributes to how they act when faced with an ethical issue (Barry 1985).
Scholars agree that personal values influence moral behavior (DiBattista 1989). As adults, we carry a preconditioned set of
values toward the natural environment, which play an important role in guiding our actions. Standards that reside within our
moral fiber, as Rokeach (1977) calls personal values, prove useful in understanding and explaining sensitivity to the ethical
dimensions of consumerism. To learn how values or virtues become lifestyle choices, we reference Aristotle who claimed,
the man who is to be good must be well trained and habituated (2009, NE IX: 9). If we want a sustained value of
environmental care to influence purchase decisions, it needs to become a habit of choice. Daily life requires the ability to
restrain certain impulses and desires, while channeling others in pursuit of valued goals. This is where self-regulation takes
center stage, helping us overcome inertia and promote the desire to do good.
Self-regulation is so central to ethical action that Baumeister and Exline (1999) describe it as the master virtue, inasmuch as
virtues entail overcoming selfish impulses for the sake of others. Responses in the form of thoughts, feelings, and desires can
be regulated. Self-regulation is both key to adaptive success and central to virtuous behavior, especially if the latter requires
setting aside the pursuit of selfish goals (Baumeister and Exline 2000). Deemed a moral muscle and moral competency, selfregulation has been empirically linked to the ability to proceed with a decision to engage in moral courage, reflecting its
value in the ethical decision-making process (Sekerka et al. 2011). Self-regulation may be inculcated in ones personal values
and traits. In an ideal scenario, a person self-regulates in the course of decision-making automatically, without even thinking
about it. When exercised regularly, personal values can ultimately become second nature, evolving into or becoming
ingrained character traits (Rokeach 1977). Personal values serve as guiding principles in ones life. But to be genuine and
efficacious, they need to be applied to everyday thoughts and actions. If individuals exercise self-regulation regularly, in time
they can influence their natural reactions from being less to more inclined to act in environmentally responsible ways.
The moral muscle of self-regulation can strengthen with use. While this capability may be firmly established in some, there is
potential for development in most people. Thus, the likelihood to buy green as an ethical action may be influenced by
increasing the value of ES awareness and self-regulation. Additionally, personal values arise through developmental and
socialization processes and are often exercised as a response to explicit social influences (Schwartz 1996). They can motivate
behavior as well as justify past actions. We see that the operation of personal values as automatic self-regulation has the
potential to moderate the effect of the desire to buy an ES product on the decision to buy it. To the extent a person has
acquired personal values, traits, and virtues to act ethically, these personal factors can augment or attenuate the influence that
a desire to act has on the decision to so act, depending on whether the value, trait, or virtue is consonant or dissonant with this
desire (see Figure 1), stated as:
Proposition 1: Automatic self-regulation (in the form of personal values, traits, and virtues) moderates the
relationship between the desire for and the decision to buy an ES product in a social media context.
550
When influenced by values, traits or virtues, the effects of self-regulation are largely automatic. But what about when selfregulation is consciously controlled? Could this be a way that decision-makers can transform desires into decisions to buy
green?
Conscious Self-regulation
Central to ethical consumerism is the ability to respond to and/or alter ones emotional and motivational states. We need
certain competencies to keep these states in perspective, relative to others (Salovey et al. 1993). People who are aware of
their emotions and motives and use them effectively impose self-regulation to their advantage. To facilitate ethical action, our
emotions and motives must inform but not overwhelm our decision-making efforts. Building on self-regulation theory
(Baumeister and Vohs 2004), emotional and motivational awareness, coupled with self-control, can be used to guide choices
via incorporation of long-range considerations. This is an important component of ethical consumerism. Environmentally
responsible action is expressed in how we select products and make decisions about what we choose to buy. To be more
ethical, people need to practice becoming aware of their automatic responses. Consumers need to acknowledge that
seemingly benign purchase decisions, when repeated, create habits that can be deleterious to the planet. Awareness and use of
emotions and motives, practiced with self-regulation, are important in responding to purchase decisions and becoming an
informed green shopper.
Frankfurt (1971, 1988) explained how people have the capacity for reflective self-evaluation, becoming aware of their
motives, feelings, thoughts, and desires. He proposed that everyone has some capacity to evaluate their desires and decide
whether they want (or do not want) to activate them, referring to this process as second-order desires. Bagozzi (2006)
describes how decision-makers reflect on a felt (first-order) desire to act in a way that overrides or postpones further
consideration or implementation of the desire to act. Thus, when a person is thinking about a first-order desire to act, he poses
reflective questions such as: Am I the kind of person who should have such a desire? Am I the kind of person who acts on this
kind of desire? Is the desire I feel consistent with the kind of person I ought or wish to be? Will acting on this desire lead to
my well-being?
As people reflect on ES in their consumer purchase decisions, they might consider what effect acting on the desire to care for
the environment will have on others, society at large, and the planet, over time. In a parallel manner, the consumer may
reflect upon his lack of felt (first-order) desire to act. Here, the person considers whether to embrace, accept, or construct a
desire to act, and questions analogous to those described may be exercised (e.g., Is my not feeling a desire to act consistent
with the type of person I wish to be?). Given self-reflectivity, expectations are framed as second-order desires and moderate
the effect of the first-order desire to act on the decision to act (see Figure 1), stated as:
Proposition 2: Conscious self-regulation (second-order desires) moderates the relationship between the
desire for and the decision to buy an ES product in a social media context.
Based on recent developments made by emotion psychologists and organizational researchers, second-order desires develop
and are influenced by two processes, self-conscious and moral emotions, along with social identity. We now turn to these
factors as a potential resource for enhanced ethical consumerism related to ES.
SECOND-ORDER DESIRES
Self-conscious and Moral Emotions
Self-conscious emotions (SCEs) help shape second-order desires. When young, we are socialized to different degrees to feel
socially perceived or experienced emotions such as empathy, pride, guilt, shame, embarrassment, envy, and jealousy (Lewis
2000; Tangney 2003). When confronted with an opportunity and desire to act, a decision-maker may experience SCEs,
depending on the nature of previous experiences and ones emotional history (e.g., how a person managed these emotions
previously). Self-conscious emotions have personal and social connotations and bring the person who is experiencing them to
consider the self as object and agent (Barret 1995). Second-order desires are directly dependent on SCEs. In the case of pride,
this helps a person to maintain self-esteem, signals important standards, and facilitated the acquisition of information about
the self (as object and agent). Pride can show others that one has achieved valued outcomes, promoting competitive motives.
Of course, pride must be self-managed, lest it lead to hubris with negative social consequences (Lewis 2000). Excessive pride
can actually cloud peoples judgment and inadvertently support moral myopia. Hubris is considered maladaptive, associated
551
with distortion and self-enhancement. Central to our model, is the notion that second-order desires respond to personal and
social standards for conduct, entailed by positive and negative SCEs.
Relevant to developing a desire to act, SCEs experienced as a result of how others perceive our actions (what we buy), can
elevate our desire to buy green (e.g., shame, embarrassment, guilt, pride and gratitude) (Tangney et al. 2007). Social selfconscious emotions are linked with a persons decision to adhere to moral standards and engage in prosocial behavior (Hart
and Matsuba 2007; McCullough et al. 2001). When a person anticipates or engages in doing something less than their best
self or wrong, adverse feelings may occur (Michie 2009). Conversely, when one anticipates or does something right or good,
self-approval is a likely result. During reflection and evaluation, the concept of self typically becomes the object, prompting
SCEs to serve as internal punishment or reinforcement for ones thoughts, feelings, and behaviors. This internal moral
barometer provides immediate and salient feedback on what one perceives as socially and morally acceptable (McCullough et
al. 2001). Ethical challenges, decisions, and actions evolve in a social milieu. As people make online purchases, they consider
the consequences of how their actions may be viewed by others, which, in turn, may produce emotional experiences to
include general arousal, appraisals, or physiological reactions.
In general, shame results from a negative evaluation of oneself, as it pertains to being in community. It is viewed as the more
public emotion arising from exposure and disapproval of a shortcoming or transgression as others view you (actual or
anticipated) (Tangney 1999). Shame threatens ones place in society or a group. This particular SCE fosters an acceptance of
responsibility, rather than a tendency to point the finger in blame (Tangney et al. 1992). With guilt, feelings are considered
private; hence, they tend to be proportionate with the severity of the situation. People who feel guilt see it as likely justified
and less directed at the core of their person, centering more on the evaluations of ones behavior than on evaluations of self.
A person experiencing guilt is relatively decentered, focusing on a negative behavior somewhat separate from the self. In
focusing on a bad behavior, rather than a bad self, a person feeling guilt is more likely to recognize and be concerned about
the effects of that behavior on others (Tangney 2007, p. 349). Feeling guilty, one is primed to respond to negative cues with
corrective action (e.g., change purchasing behavior to green products). Guilt can remind a person of their duty and upbringing
on how one ought to act in an ethically challenging situation (Bagozzi et al. 2007). People who feel embarrassed are inclined
to behave in conciliatory ways in order to win approval and inclusion (Sharkey and Stafford 1990).
When people experience moral emotions that affirm their actions, the affective experience encourages a sense of pride,
gratitude, or elation. When appropriate and balanced, pride stems from an accomplishment that offers self-confirmation.
Mascolo and Fischer (1995) define pride as an emotion generated by appraisals that one is responsible for a socially-valued
outcome or for being a socially-valued person (p. 66). From this perspective, pride not only enhances self-worth but also
encourages future behavior that conforms to social standards of what is valued or has merit. Appraisals associated with
experiencing authentic pride are based on specific accomplishments and accompanied by feelings of genuine self-worth
(Tracy and Robins 2007). Authentic pride is a powerfully pleasant emotion or prized consequence that individuals experience
when ones actions are valued by other members of their social networks. Scholars suggest that pride is a moral affect
because it has the potential to promote self- and other-directed respect (Hart and Matsuba 2007; Tangney 1999). Gratitude
and elevation are moral affects, usually associated with outcomes of being engaged in prosocial behavior or acts of moral
goodness. People strive to achieve goals and/or to treat others well because of the pride they can experience when they
succeed in these endeavors (Michie 2009). Authentic pride can reinforce both achievement-oriented and prosocial behaviors.
Emotional feedback informs individuals that actions enhance their acceptance among social group members (Tracy and
Robins 2007).
A constellation of SCEs play a role, especially when social media is involved in shaping a purchase decision. Consider
choosing between two products, one is greenthe other is not. You are aware through social interactions that this represents
an ethical issue. When online, you share information about what you buy and look to see what other people recommend (e.g.,
Facebooks like option). By not choosing an ES product, you might be perceived as someone who does not care for the
environment or, worse yet, deemed socially irresponsible. Imagined perceptions may foster SCEs as regulatory queues to
motivate right action (self-monitoring how you see yourself or how others may perceive you). Individuals typically want to
mitigate negative perceptions and prompt positive ones. Avoiding guilt or shame and wanting to feel pride demonstrates how
prefactual SCEs can motivate purchase decisions as a result of attending to internal cues. These suppositions are consistent
with the theoretical and phenomenological literature, showing how SCEs are based on interpersonal contexts, both real and
perceived.
Research on morality has traditionally focused on reasoning (Turiel 1983; Kuhn 1989). In fact, everyday reasoning
previously excluded gut reactions, intuitive responses, and affective elements (Galotti 1989). In the early 1980's a moral-
552
emotional correction began to unfold (Haidt, 2001). As research on moral emotions increased, theorizing about morality
shifted from reasoning and moved towards the affective elements, with an emerging focus associated with decisions to
engage (or not engage) in ethical behavior. Haidt (2003) defines this group of feelings as being linked to the interests or
welfare either of society as a whole or at least of persons other than the judge or agent (p. 276). Moral emotions provide
motivational force to do good and avoid doing bad (Kroll and Egan 2004). While there is some overlap with SCEs, moral
psychologists have demonstrated the unique elicitors and action tendencies that make these particular feelings, directly
associated with moral action. But actual behavior is not necessary for moral emotions to have a demonstrative effect
(Tangney et al. 2007). People anticipate their emotional reactions (e.g., guilt or pride) as they consider their behavioral
alternatives. Thus, moral emotions can exert strong influence on choices and actions by providing feedback regarding both
anticipated and actual (consequential) behavior. When moving from the desire to buy green to a purchase decision, positive
and/or negative emotions can support progress by moderating the effect of the desire to buy on the decision to buy (see
Figure 1), stated as:
Proposition 3: Social or self-conscious and moral emotions activate and/or support second-order desires to
buy an ES product and thereby moderate the effect of first-order desires on the decision to buy an ES
product in a social media context.
Social Identity
Another factor that shapes and constrains second-order desires is social identity (Ashford and Mael 1989; Bergami and
Bagozzi 2000). Membership in a group or organization can promote certain values or standards, used as potential criteria for
second-order desires. Social identity entails self-awareness of group membership, feelings of attachment and belongingness
to a group, and evaluative connotations that one is an important and valued member. As social identity grows, one becomes
depersonalized and group standards become paramount. To the extent that the group instills standards that promote ES, it can
help to shape second-order desires of group members in ways useful for the regulation of desires to act responsibly. When
moving from the desire to be green to an actual purchase decision, social identity can support progress toward an ES product
purchase. Conscious self-regulation, as influenced by second order desires, is influential in moving from the desire to the
decision to act ethically (see Figure 1), stated as:
Proposition 4: Social identity activates and/or supports second-order desires to buy an ES product and
thereby moderates the effect of first-order desires on the decision to buy an ES product in a social media
context.
Under some conditions, self-conscious and moral emotions and social identity might directly influence a desire to buy or not
to buy a product (see dashed arrow in Figure 1).
IMPLICATIONS
For green consumerism to take hold, many people will need to change their buying habits. Behavioral models show that
awareness is not enough to evoke change; people must have the willingness to alter their thoughts and behaviors (Prochaska
et al. 1997). Our work underscores how awareness and desire of an ES product may do little to move people into action.
While the intent to act is essential, if a persons desire to buy a product is not bolstered by self-regulation, the desire can
dissipate. Social media can play a demonstrative role in shaping a desire to buy green, but self-regulation will require
individual personal development.
Given the global reach of the Internet, social media has a transformative element, potentially influencing how shoppers value
green products and the desire to buy them. Segmenting consumers according to their personal social responsibility concerns
and then communicating tailored information to them cultivate ethical consumerism (berseder, Schlegelmilch and Gruber
2011). Social media can be employed to initiate ES campaigns to target markets. Word-of-mouth via website
recommendations, blogs, and tweets can promote additional awareness among friends (e.g., Facebook contacts). The use of
identity descriptors or icons denoting green providers and consumers can be used to promote pride associated with green
purchases. Given the embryonic stage of social media and the appeal of innovation in this realm, new forms of social
marketing provide a frontier for ethical consumer research. The challenge will be to create lasting positive ES change and
actually modify consumers desire and decision to buy green over time, rather than to spark short-term bursts of interest.
553
To move beyond supposition our model needs to be empirically tested in a social media context. Advancing our
understanding of why people choose to buy greenat a time when sustainability is at the forefront of new market creation
is a way to build the global economy. More importantly, ethical consumerism can extend the health and well-being of our
shared existence on the planet. As such, this work is but a nascent step to advance multiple shared goals.
FIGURE
Figure 1. Movement from a Desire to the Decision to Buy Green
Awareness
of
Green
Product
Desire
to Buy
Green
Product
Decision
to Buy
Green
Product
Green
Product
Purchase
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MARGINALIZED MORALITY:
MAKING SENSE OF QUESTIONABLE SPORT FAN BEHAVIORS
John Lord, Saint Josephs University, United States of America
Stephanie Tryce, Saint Josephs University, United States of America
ABSTRACT
Sport is a major force in the world in terms of the commerce it generates and the community that sustains it. Indeed, it plays
a significant role in connecting, and synergizing, the interests of business and society. Spectator sports and sporting events
are now recognized as significant parts of a nations culture and values (Gilbert, 1995; Shank, 1999), often carrying deep
meaning for individuals and society-at-large (Wann et al., 2001). Mainstream competitive sports have attracted the attention
of fan consumers at the collegiate, amateur, and professional levels.
Sport fans play an important role as prosumers (producers and consumers) of the overall sporting experience realized by
athletes, officials, and fellow fans. Societies have expressed concern about the need for sport leagues to manage the character
and climate of the fan environment. While questionable fan behaviors disrupting play, mocking athletes, committing
violent acts, and so forth are not new to the sport community, they could potentially undermine the quality and
attractiveness of the spectator experience for current and prospective sport fans. Acknowledging the potential threats
imposed by fans behaving badly, many sport leagues have responded by developing and enforcing fan codes of conduct.
While officially sanctioned standards are important, it is equally, if not more, important to ascertain how members of sport
fan communities perceive and evaluate the questionable behaviors of their peers.
In this study, we examine how a sport fans ethical position can affect her/his ethical intentions within various situations that
involve questionable fan behavior. We also investigate whether the influence of ethical position on ethical intention is
mediated by the sport fans perception and marginalization of ethical content in these situations. Essentially, this study
attempts to explore the question What makes fans tick? in terms of how individuals view and respond to questionable fan
behaviors.
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MOTIVATING SUSTAINABILITY: EXTENDING THE DECISIONAL BALANCE SCALE

Peter J McGoldrick, University of Manchester, United Kingdom
Kathleen A Keeling, University of Manchester, United Kingdom
ABSTRACT
The decisional balance scale (DBS) has been applied extensively in treating addictive behaviors and in social marketing; so far
it has not been applied widely in environmental contexts. The purpose of this paper is to summarize scale development
procedures to generate and test generic, economic, and specific items applicable to pro-environmental behaviors.
The elicitation process included a largely qualitative Internet survey with 342 respondents in the US and UK. This was followed
by scale testing with a US sample of 779, then main surveys in the US, UK, and Australia involving 7,618 respondents. High
levels of reliability are demonstrated within the generic, economic, and most of the behavior-specific scales. Explanatory power
varied across behaviors, those with a spatial dimension gaining most from addition of the behavior-specific scales.
Examples of mapping the DBS elements onto stages of change in sustainable behavior change are provided, demonstrating
DBS shifts at specific awareness, concern, intention, action, and relapse transition points. These analyses provide valuable
diagnostics for researchers, managers, and policy makers, as well as suggesting themes for communicating sustainability for
different behaviors and under different conditions of awareness and adoption.
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SELF-CONTROL AND SUSTAINABLE CONSUMER BEHAVIOR

Audhesh Paswan, University of North Texas, USA
INTRODUCTION
Recent evidences from popular press and academic journals present a very disturbing picture of our consumption oriented
society. For example, 66% of US population is obese, 25 million people are categorized as binge eaters (Godfrey 2004;
Godfrey and Brownell 2008), and 2.4 million or 5.8% of US adults are compulsive shoppers (Koran et al. 2006). Financially,
a staggering 13.9% of consumers disposable income is spent on interest payments of credit card debts (U.S. Congress Joint
Economic Committee 2009). Approximately, $1 trillion of businesses revenues are lost due to delinquent behaviors
(Association of Certified Fraud Examiners 2012), and 44% of college students in US are classified as binge drinkers
(Wechsler et al. 2002) and so do 16.7% US adults (US Department of Health and Human Services 2012). This picture is not
unique to US. According to World Health Organization (2012), United Nations Office on Drugs and Crime (2011), and
Eleventh UN-CTS (2008) obesity, crimes, substance abuse, consumer debt rates are reaching an all-time high. Most agree
that such excessive consumption behavior is unsustainable (Markkula and Moisander 2012; Sanne 2002; Seyfang 2006) and
something needs to be done. While, some associate such unregulated and impulsive behaviors with human avarice and greed
(Dittmar 2005; Hagedorn and Juhnke 2005; Podoshen 2007); others have alluded to the lack of self-control on the part of
consumers (Baumeister et al. 2008; de Vries et al. 2011; HaeEun et al. 2007; Hofmann et al. 2008; Sultan et al. 2012). This
study focuses on the construct of self-control and its association with sustainable consumption behavior.This study takes the
stance that the rich and complex construct of self-control is central to the sustainable consumption behavior because it helps
consumers control the urge to consume without any considerations for the future consequences.
LITERATURE REVIEW
Sustainability
While several conceptualizations have been proposed for the sustainability, the most widely accepted description seems to be
the one by the Brundtland commission (WCED 1987, p. 43) - development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. Sustainability is generally accepted as a
multidimensional and multidisciplinary in connotation and implications, i.e., environmental, societal, and economical (Ikeme
2000; Barbier 1989; and Pierce 1997). Further, most definitions of sustainability emphasize the notion of intra-generational
equity i.e., due consideration must be given to needs of unborn future generations in the allocation of current resources for
immediate need fulfillments.
This brings the concept of sustainability in conflict with the practices of marketing which encourages unchecked
consumption behavior. At its core, marketing concept emphasizes the identification and fulfillment of the needs and wants of
the society. Taking this to its logical end, given the short term orientation of key stakeholders in the business section of
society, it is not surprising that marketers encourage consumers to consume more without any considerations for the needs of
the future. Dismal per capita savings among US citizens or mass hysteria among shoppers during various shopping events
indicate that these encouragements are working. Moreover, overtime, this has become a cultural element consumerism. We
shop when we are happy, sad, and just about every real and imaginary reason. Taken together, marketing concept seems to
be at odds with the notion of sustainability (Yam-Tang and Chan 1998; Grunert 1993; Jegasothy 1999). Despite this
seemingly hopeless situation, several authors suggest that consumers hold the key to sustainability (Berg 2011; Chan and Lau
2002). Recent look at popular press editorial and economic report indicate that consumers spending seem to be slowing
down, and consumers seem to be exercising some self-control, albeit the trigger may be unemployment and increased living
expenses. The problem is that traditional and simplistic approaches to move consumers towards sustainable behavior have
proven unsuccessful and there is a need for a more holistic and structural approach (Berg 2011; Schafer et al. 2012). Some
argue that this failure is partly due to the weak relationship between knowledge, attitude and sustainable behavior
(Diekemann and Preisendorfer 2003; Kollmuss and Agyeman 2002). Several researchers suggest that self-commitment
strategies may hold the key to sustainable behavior (cf. Abrahamse et al. 2005).
Taking these evidences into account, we argue that the concept of sustainability is contingent upon two critical concepts.
First is the notion of time (Amyx and Mowen 1995; Bergada 1990; Guy et al. 1994). Consumers have to decide to buy and
consume now or save for the future, either their own or future generations. Second is the notion of mental accounting and
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discounting principals (Kahneman and Taversky 1979; Thaler 1980, 1985) which help consumers decide if the total benefit
of consuming now versus saving for future is worth the cost they are incurring in the present time. In other words, a
consumer at any point evaluates the cost and benefit of his/her consumption behavior not just in the present time, but also
does some mental accounting using discounting principles to bring the benefits to the future generation to the present time
i.e., the notion of net present value to compare it to the net benefit or cost in the present time.
Time, Mental Accounting and Sustainability
Time has been acknowledged as an important variable in consumer behavior literature (e.g., Amyx and Mowen 1995;
Bergada 1990; Guy et al. 1994). Time is not perceived in a similar manner by everyone. There is an objective perspective
or an external yardstickseconds, minutes, hours, days, weeks, months, seasons, years, etc. (Shallis 1983). It determines
past, present, and future and everything associated with the passage of timegrowing up, school, college, fashion, marriage,
family, expenditure, savings, to name a few. Then there is the psychological perspective of time which is very different from
the objective view (Guy et al. 1994; Hirschman 1987) and is hypothesized to be a function of the beliefs and standards shared
by a group of people at a given time and context (Graham 1981). Guy, Rittenburg, and Hawes (1994) present three models of
timelinear-separable, circular-traditional, and procedural-traditional. The linear-separable model views time as
stretching from the past, into present, and onward to the future. Time is seen as a commodity whose purpose is investment
for future return this orientation is very future looking and sees the spending of time as a means to an end and not an end
in itself ... time is closely associated with a monetary value (p 40). In the circular-traditional model, time is seen as cyclical
and repetitive. Time is not associated with a money value, because things are not perceived as being worth more in a future
that is not expected to be different from the present or past (p 40). In the procedural-traditional model the focus is on the
task, and time takes a back seat. Social scientists have also used the conceptualization of time orientationpresent and
future time orientation (e.g., Amyx and Mowen 1995; De Volder 1979; Gjesme 1979, 1983). Irrespective of the perspective
taken, we argue that the concept of time is central to the mental accounting that consumers go through before they decide to
engage in sustainable behavior, because of the very definition of sustainability fulfilling current generations needs without
compromising the ability of future generations ability to fulfill their needs.
This mental accounting takes place when consumers are faced with a dilemma on the one hand there is the option of
fulfilling ones here and now needs and paying a price for it, and on the other hand trying to think of possible future
consequences of such behavior and price one has to pay to counter such consequences. A more mundane example would be
using ones entire salary to buy things to fulfill ones here and now needs versus putting aside some as savings to be used for
(not yet born) childrens education or their well-being, e.g., not buying that good looking car and saving it for the benefit of
kids future, or ones retirement fund. This process of not giving in to the urge to buy and consume at the present time or save
the resource for the future either ones own future or the future of the coming generations, involves self-control.
Self-Control
The concept of self-control is perhaps as old as human consciousness. Almost every religion urges its followers to exercise
self-control when faced with temptations. It is supposed to make us better humans, helps create a better society, helps
maintain peace and harmony, and even attains nirvana. As a concept, self-control has been associated with different terms
such as self-regulation, self-discipline, willpower, ego strength, non-impulsivity, and non-compulsiveness (Ainslie 1975;
Baumeister et al. 1998; Baumeister et al. 2008; Hoch and Loewenstein 1991; Metcalfe and Mischel 1999; Wertenbroch et al.
2008). While some use the term self-regulation as synonymous to self-control, Fujitas (2011) conceptualization of selfcontrol clearly differentiates the self-control from self-regulation. Self-control is one form of self-regulation. However, not all
self-regulations refer to self-control (Fujita 2011). Self-regulation can be defined as self-control when there is an additional
element of conflict. According to Fujita (2011), self-control is exercised when there are conflicts between goals and standards
or between thoughts, behaviors, and feelings of the same goals and standards.
Controlling emotions
Relationship between emotion, cognition and behavior has been the focus of debate in the psychology, biology, physiology,
and neurology literature for some time (Fischer 1980; Izard 1992; Phan et al. 2002; Russell 2003). Scholars identify many
different types of emotions which can be grouped into two groups - basis and non-basis emotions. These basis emotions are
non-cognitive, non-memorial, and unconsciously motivated. Sadness, disgust, and fear are examples of basis emotions (Izard
1992). The non-basis emotions are a blend of assortment of distinct emotions and require cognitively structural networks of
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feelings, images, appraisals, thoughts, and goals. The non-basis emotions contain partial and motivational cues for behaviors
and cognitions. Examples of these emotions are fear of dogs (fear alone is basis emotion), and love of dogs (Izard 1992).
Controlling cognitions
Cognition refers to the process by which organism exercises operant control over sources of variation in its own behavior
(p. 479) (Fischer 1980). Theory of cognitive development, also called skill theory, states that thoughts are the results of
behaviors. Thus, cognitive control is the ability to configure itself for the performance of specific tasks through appropriate
adjustments in perceptual selection, response biasing, and the online-maintenance of contextual information (p. 624)
(Botvinick et al. 2001). Botvinick et al. (2001) maintain that in order for cognition control to work effectively, cognition
must have an evaluative component. The evaluative component serves as information processing monitor to assess the
benefits and costs of using cognitive control. The benefits and costs refer to the individuals immediate or delayed
gratifications, cognitive resources, and the well-being of individuals either mental or physical that assist in the social
adaptation and evolution process. These benefits and costs are subjective, environment dependent, and specific to individuals
long- term goals. Cognitive control is often exercised to achieve or align with individual goals and values.
Controlling behaviors
Behavioral self-control is the ability to override or change ones inner responses, as well as to interrupt undesired behavioral
tendencies (such as impulses) and refrain from acting on them (p.273) (Tangney et al. 2004). However, from previous
discussions, we can conclude that behaviors are both antecedents and manifestations of cognitions and emotions (Ainslie
1975; . 2011; Fischer 1980;). Controlling behaviors can be a form of controlling emotions and / or cognitions. However, not
all emotion and cognition control is behavior control and vice versa. For example, ideo-motor principle describes a form of
behavior that occurs without intention or goal (James 1890). These behaviors occur without consuming cognitive resources.
In other words, behaviors can be but are not necessarily linked to emotions and cognitions. Simplistically, individuals employ
three strategies to resist behavioral control problems: (1) rearrange the earlier reward as less attractive, (2) constrain future
behaviors so that the earlier reward cannot be obtained, and (3) redirect attention so that the availability of earlier reward is
not apparent (Ainslie 1975).
Elaboration Likelihood, Sustainability, and Self-Control
Bringing the concept of self-control to bear on sustainable consumer behavior, we argue that when faced with the decision to
engage in sustainable behavior and its cost and benefits, the extent to which people will buy into sustainable consumption
behavior will depend on the extent to which people feel it is important to them or the level of involvement with sustainable
behavior. This is in line with the extant Elaboration Likelihood Model (ELM) (Cacioppo and Petty 1984) which predicts
how message cues (about sustainable behavior), such as central or peripheral, be processed according to the level of
motivation, involvement, cognitive resources, and elaboration likelihood (; Petty et al. 1983). Elaboration likelihood is the
amount of relevant thoughts that occur during the persuasion process. High level of involvement produces higher level of
elaboration likelihood and systematic processing (Petty and Cacioppo 1979; Petty et al. 1983). Central cues are directly and
highly relevant to the arguments, whereas peripheral cues are everything else.
PROPSED FRAMEWORK OF FOR SELF-CONTROL AND SUSTAINABLE BEHAVIOR
Integrating these divergent concepts sustainability, time, mental accounting, and self-control with ELM framework, we
propose a framework for sustainable consumption behavior (Figure 1). The framework consists of four major decision
domains mental accounting, evaluations, control options exercised, and outcome. When consumers are faced with a
situation whether to buy and consume to fulfill here and now needs and pay the here and now cost or engage in a more
sustainable consumption behavior (defer fulfillment of here and now needs and save some of the resources for some future
time or future generation) and perhaps incur a higher cost, consumers will engage in a mental accounting process with
temporal discounting of costs and benefits. During this phase, the mental accounting will not just be a function of simple
costs and benefits, but also include social norms and individual values and goals (Muraven and Baumeister 2000; Pierces
1883). Next, depending on the elaboration likelihood towards sustainability, consumers with opt to exercise self-control at a
very superficial level (i.e., only behavioral control) or at a deeper level (i.e., at emotional, cognitive and behavioral levels),
and this will result in a range of sustainable behaviors with short term sustainable consumption behaviors to be politically and
socially correct at one end of the spectrum and a comprehensive change at emotional, cognition and behavioral levels that is
sustainable and deeper in meaning to the consumers.
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DISCUSSION
In the evolution of mankind, self-control is evolved to manage the clash between natural impulses and cultural demands
(Baumeister and Vohs 2007). Cultural demands are characterized as norms, rules, standards, and morals which are promoted
to benefit the social systems (Hofmann et al. 2009). On top, most cultures promote communal standards and values as
opposed to individuals needs to ensure the continuation of the societies (DeWall et al. 2008). In their studies, Crocker et al.
(2010) find initial evidence of exercising self-control to benefit others is less ego-depleting than to benefit self. To further
illustrate this point, Crocker et al. (2010) propose two motivation systems: egosystem and ecosystem. Egosystem motivation
is the desire to enhance the self, whereas ecosystem motivation prioritizes others needs, support and have compassions for
others. For example, pursuing desired self-esteem in academics motivate individuals to study harder. In this case, desired
self-esteem is the personal goal and the guiding principle of individuals self-control. Interestingly, research has found that
this type of pursuit is costly to other self-regulation goals and can actually undermine individuals general well-being
(Crocker et al. 2010). Since the amount of ego-depletion indicates the degree of struggle (Baumeister and Vohs 2007),
pursuing desired self-esteem to benefit the self is more ego-depletion than to benefit others. This view is further supported by
studies demonstrating that conflict monitoring and cognitive control involves moral reasoning (Eisenberger et al. 2003;
Greene et al. 2004; Luo et al. 2006), and high self-control individuals are more likely to help strangers (DeWall et al. 2008).
This is consistent with Pierces (1883) assertion that Summum Bonum (the supreme good) guides mans logics and ethics.
Thus, moral principles are the guiding principles of self-control when individuals demands conflicting with socials values.
This paper makes a contribution to the sustainability literature and helps develop a comprehensive framework of sustainable
consumption behavior with self-control as key mediating construct. Towards this end, we first delineate the key constructs of
self-control and then argue that self-control is not confined to just behavioral level, but could also be extended to the
emotional and cognitive levels depending on the elaboration likelihood towards sustainability.
Should marketing be concerned with self-control and sustainability? Traditional normative studies focus on micro and profit
oriented businesses, e.g., marketing is thought to contribute to overconsumption of pharmaceutical products (Abramson
2008), general overconsumption (Kjellberg 2008), obesity and food consumption (Seiders and Petty 2004), celebrity
endorsement advertisement and depression in women (Goodman et al. 2011), to name a few. In contrast, the broadened
scope of marketing includes societal issues and social responsibilities (Hunt 2010). Recent economic crisis and social and
political upheavals clearly indicate that the consumption oriented path we have been traveling on is not sustainable even for
the business fraternity. Varey (2010) is calling for a new radical change in marketing, a sustainable and responsible
marketing. Ecological destruction due to overconsumption, obesity, binges eating and drinking, conspicuous and impulsive
consumptions, etc. are the disenchantment of marketing science. We argue that revisiting the concept of self-control is one of
the many first steps in making it right. We hope that the proposed framework provides an impetus for further investigations
into this critical area with significant impacts on the future of humanity.
FIGURES
REFERENCES
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A PREDICTIVE MODEL FOR AFFECTIVE, COGNITIVE AND BEHAVIORAL CONSUMERS REACTIONS TO

PRODUCT-HARM CRISES: APPLYING PRODUCT INVOLVEMENT, PRODUCT TYPE AND CRISIS
RESPONSE STRATEGIES
Chryssoula Rouvaki, Athens University of Economics and Business, Greece
George Siomkos,Athens University of Economics and Business, Greece
ABSTRACT
This study investigates, through the formulation of a conceptual model and its empirical verification, the impact of severity
and attribution of blame on behavioral intentions by examining the direct but also the indirect impacts through an affective
(through anger and disgust) and through a more cognitive route (through trust and reputation). For the purposes of this paper,
an experiment was conducted by using a 2 (Product Involvement: High vs. Low) x 2 (Product Type: Hedonic vs. Utilitarian)
x 4 (Crisis response strategy: Denial, Voluntary Recall, Involuntary Recall & Super Effort) between-subject factorial design.
The vast majority of hypotheses investigated in the basic model were confirmed. Results show that the perceived severity of
the event positively affects blame, consumers negative emotions (anger and disgust) and NWOM and negatively affects
company trust, reputation and purchase intentions. Furthermore, it was shown that blame attribution negatively affects
company reputation and trust and positively affects negative emotions and NWOM. Additionally, results reveal that the
emotional route plays a more important role for hedonic products than for utilitarian. Moreover, it was supported that product
involvement differentiates the intensity of specific relationships and thus can be a key factor for the outcome of a crisis as it
seems to be an important determinant of consumers behavior. Finally, in terms of crisis response strategies, voluntary recall
is the best choice while denial should not be considered as an option. All factors investigated here produced valuable and
attention-grabbing results for crisis management.
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TIME TO BE SLOW? SLOW MOVEMENT IN THE APPAREL BUSINESS

Sojin Jung, University of North Carolina at Greensboro, U.S.A
Byoungho Jin, University of North Carolina at Greensboro, U.S.A
INTRODUCTION
For decades, the dynamics of the apparel industry have been eager to catch volatile consumer demands and trends.
Accordingly the ubiquitous phenomenon allows rapid production, short lead time, increasing number of fashion seasons with
lower cost materials and labor, and large volume production (Bhardwaj and Fairhurst 2010; Fletcher 2010). This is the fast
fashion business model, implemented by ZARA, H&M, and Forever 21. The primary competitive advantage of this fast cycle
in the apparel business is that new styles from high-end designers are copied and introduced every few weeks at affordable
prices. However, the agility of providing up-to-date style facilitates shortening the lifespan of fashion clothes deliberately.
Moreover, rapid production and cheaper clothes are not made without exploiting labor and natural resources (Fletcher 2007),
causing poor quality of fabric and garment construction which fails to resist laundering. Under this practice, garments are
often bought in multiples and discarded quickly with little perceived value (Fletcher 2010). Consequently, the fast business
model generates profit by spurring overconsumption.
Against the fast, cheap, homogenous and quantity-oriented fashion, the slow fashion movement has been recently introduced
in the mainstream fashion industry. Similar to the slow food movement, slow fashion emphasizes quality of products and life,
traditional techniques, craftsmanship and local resources. The brand representing slow fashion concept is North Carolinabased Raleigh Denim. A husband-and-wife designer team produces denim jeans as a piece of art by hand with traditional
techniques using local materials and local people. In other words, pieces of Raleigh Denim jeans are entirely produced in
North Carolina. A pair of jeans is sold for $300 for high-end specialty boutiques such as Barneys New York.
The slow fashion concept emerged as an antithesis of fast fashion, yet it encompasses more than just slowing down the
fashion trends. It is a socially conscious movement as Uniform Project attests launched in 2009. This project has been paid
attention by a number of media since Sheena Matheiken has begun to wear one black dress for an entire year in unique ways
with handmade, recycled or donated accessories against the corporate world where there is lack of creativity, ethic and
sustainability. Similarly, by slowing down the fashion cycle, slow fashion is to shift the mindset from quantity to quality,
supporting surroundings of where the individual lives. However, slow fashion is often confused with or considered part of
environmental sustainability. It is mainly because the slow fashion phenomenon has not been defined in academic areas with
sound theoretical foundations. This study aimed at exploring underlying dimensions of slow fashion through scale generation
and purification procedures. The findings of this study will provide a theoretical definition of slow fashion as well as
practical implications for the apparel business. Since slow fashion is produced with local materials and local people in small
scale, understanding the concept of slow fashion may serve as a way to foster small scale domestic apparel businesses.
SLOW MOVEMENT IN THE APPAREL BUSINESS
As concrete alternatives for threats from the mainstream, slow approaches have been suggested in a few areas such as slow
cities, slow life and slow food. In the same way, against unsustainability of the current mainstream of apparel industry (i.e.,
fast fashion), slow fashion emphasizes designing, producing, consuming and living better by slowing down the fashion cycle.
As more sustainable and ethical ways of being fashionable, it leads to respect for the rights of workers and the environment
by focusing on quality products with local and traditional capabilities. The basic mechanism of slow fashion is to buy less but
in higher value (Fletcher 2007), indicating changing the way of spending money on clothes. Table 1 contrasts characteristics
of fast and slow fashion.
With a specific example of Raleigh Denim, the characteristics of slow fashion are further explained below.
x Sustainable and equitable: With the philosophy buying less, but high quality, the Raleigh Denim brand has grown
gradually since launching in 2008. The brand philosophy encourages consumers to buy one pair of high quality jeans and
wear it more often instead of buying two pairs of lower quality (Hatem 2011). By shifting from quantity to quality, the
brand achieves sustainability. Considering fiber takes the same length of time to grow regardless of production speed,
rapid production of fast fashion is likely to exploit labor and natural resources (Fletcher 2007). However, slow
production is equitable in that it secures regular working hours rather than forcing excessive work to shorten lead time.
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x High quality and authentic: Raleigh Denim provides quality elaborate products. A high quality product is more
durable, and craftsmanship has longer lasting value, compared to easily copied commodities. Each pair of Raleigh Denim
jeans has a unique number by hand stamp, representing authenticity. Without industrial machines, the brand uses original
shuttle looms and traditional construction methods in low speed. Generating far less stress on the yarn, the slow
production makes the fabric-touch softer and more durable. Also, it improves product quality allowing richer interaction
between producers and clothes.
x Idiosyncratic and asset-specific: Rather than hinging on large amounts of copies by machines, Raleigh Denim tries
to produce idiosyncratic piece of clothes based on assets such as contemporary fit and special chain-stitch hemmer.
While stressing each pair is one of a small batch, the brand gives special meaning to the product, in contrast to
standardized and homogenized fast-fashion systems.
x Grassroots and sensitivity to local history and culture: Raleigh Denim is a small team established by a husband and
wife, and employs some local artisans. The brand deals with the whole process, ranging from initial design to finishing,
under one roof. Also, the brand is 98% local by using local material and facilities (Biemann 2009). Since North Carolina
was one of the mainstays for denim production in the past, local mills and artisans still remain. In a 100-year-old local
mill that weaves the fabric on the original shuttle looms, Raleigh Denim achieves the U.S.-made jeans.
METHODOLOGY
The procedure of this study was comprised of two steps: item scale generation and scale purification. First of all, the
conceptual constructs of slow fashion were identified through extensive literature review. An open-ended survey was
conducted with a convenience sample of 31 college students to define slow fashion in their own words. The open-ended
survey provided very short descriptions of slow fashion to avoid any confusion of respondents who were not familiar with the
slow fashion terminology. As a result, their responses were considerably consistent with the concept found in literature.
Based on the common domain, items to measure slow fashion orientation were created as well as modified from relevant
scales (Kim and Damhorst 1998; Tian, Bearden and Hunter 2001). 69 items were initially generated and 43 items were
retained after redundant, vague and misleading items were deleted or modified. Content validity was examined by both nonexperts and experts of apparel and consumer areas. Then, a survey was distributed to a convenience sample of 129 college
students in order to purify the generated scale. The items were measured by a five point-likert scale (1=strongly disagree,
5=strongly agree) and the final 121 responses were analyzed after discarding incomplete responses.
RESULTS
By a principal components method with varimax rotation, exploratory factor analysis was undertaken. After retaining items
having greater than .4 of factor loadings, and deleting cross-loading items, the result revealed that the slow fashion construct
was explained by five factors with a total number of 16 items (67.579% of total variance, =.832). Specifically, the first
factor was referred as Innovativeness (15.548% of variance, =.781) with four items relating to seek differentiation with
others, and the second dimension addressed Equity (14.098% of variance, =.813) concerning about fair trade and
compensation for producers. Three items of the third factor described Authenticity (13.400% of variance, =.763) which
respects craftsmanship and traditional techniques. The fourth dimension, naming Functionality (12.399% of variance,
=.725), was found. This focused on a longer product life cycle and a better use of the product. The final dimension indicated
Localism (12.134% of variance, =.725) preferring domestic businesses.
Confirmatory Factor Analysis
With five factors found in exploratory factor analysis, 16 items were analyzed by confirmatory factor analysis of maximum
likelihood estimation in AMOS 21.0 (Table 2). As results, chi-square value was 117.554 (df=94, p>.05) and overall model fit
was satisfactory according to Hair, Black, Babin and Anderson (2010) (GFI=.900, AGFI=.856, CFI=.961, NFI=.839,
RMSEA=.046). Also, a significant amount of modification indices was not found in this model. Convergent validity was
proved given that all standardized factor loadings were greater than .5 as well as average variance extracted (AVE) values
were proximate or exceed .5 which is an acceptable magnitude (Hair et al. 2010). Composite reliabilities were greater than .7
(Hair et al. 2010), ranging from .747 to .826. In order to test discriminant validity, the average variance extracted for each
566
construct was compared to the squared correlation between the two construct as suggested in Hair et al. (2010) and the result
found all constructs had greater average variance extracted value than the squared correlation of all pairs of constructs.
DISCUSSION
This study explored the five dimensions of the slow fashion model. Similar to the slow food movement, Localism was one of
the dimensions of slow fashion. Corresponding to increased labor costs, U.S. apparel manufacturing has been transferred
overseas, and the imports penetration rate in the U.S. apparel market indicated over 97% (American Apparel & Footwear
Association 2009). In that sense, the slow fashion movement may be one way to help to protect domestic manufacturing by
encouraging localization. For Innovativeness, the desire for fashion diversity by seeking heterogeneous fashion items was
revealed. In the current fast cycle, consumers might feel poverty midst plenty. Even if fast fashion retailers are eager to
introduce a high-end fashion style, they may be not able to reflect individuality. Opposite to these mass produced items with
similar designs, slow fashion seeks innovative and diverse designs. As found in Authenticity, slow production allows each
item to have its own history and show elaborated workmanship with traditional techniques since workers spend longer on
each piece of the garment while slowing down the process. Indeed, being slow is not just the opposite of being fast, but value
is added to the products. With more perceived value, consumers may keep the apparel longer and wear in various ways rather
than discard quickly. Buying quality and authentic products may enable people to keep them longer, and wear them
frequently. Slow production is beneficial to producers by securing regular working hours instead of forcing excessive duty.
Accordingly, Equity of producers can be achieved. Taking all these things into account, this study can conclude that slow
fashion is a way of being sustainable in terms of not only environment but also society as a whole.
Contrary to expectation, recycled, organic material and eco-friendly labeling have not emerged as slow fashion structures as a
result of exploratory factor analysis although slow fashion appears to be strongly associated with sustainability. This implies
that slow fashion consumers may be concerned about the social influence of clothes on producers, consumers and societies as
a whole in a sustainable perspective, rather than focusing on environmentally sustainability itself. That is, slow fashion may
be a broader concept than environmental sustainability encompassing i) caring for producers and local communities for
sustainable life, ii) seeking differentiation in fashion for sustainable fashions, iii) adding authenticity for sustainable
perceived value of the product, and iv) maximizing the utility of a product for a sustainable environment. Currently,
environmental sustainability movement is interested in developing and using of environment-friendly material such as
organic cotton. In that sense, Patagonia is not regarded as a slow fashion brand since the slow values, such as localism and
tradition, were not embedded in the brand and it mainly focuses on the material aspect.
IMPLICATIONS
From a mass retailers dynamic which prioritizes volume and cheap products with speed, it is the time to be slow in fashion.
Of course, it does not mean denying fast fashion because the tremendous influence of the fast fashion business model on
marketing strategy is doubtless. This study insists it is time to consider alternative ways given skepticism of sustainability.
An attempt to grafting slow movement to fashion has contributions in addition to foster not only local economy but also U.S.
domestic apparel manufacturing. Domestic manufacturing is beneficial to meeting sophisticated design taste through flexible
control to supply chain reflecting the latest trend and agile supply in proximity of the market (Dana, Hamilton and Pauwels
2007). With the advantages from domestic manufacturing, quality and craftsmanship oriented production based on asset may
enable the apparel industry to achieve fashion diversity. Also, the slow fashion business model would aid the revival of small
business in the U.S. apparel industry. Since small businesses struggle for survival against mass operations, they need to seek
a distinctive way that large companies cannot achieve. Considering that the slow fashion focuses on value addition from local
resources and tradition by spending more time on pieces of clothes, big companies economy of scale strategy is not fit for
the slow fashion business model. Instead, the slow fashion business model can thrive in the family business like the small
scale business.
The major limitation of this study is to focus only on a body of college students. Young people would prefer buying a number
of low-quality, cheap and fashionable clothes, whereas the older generation would prefer a smaller number of higher quality
clothes. Given that perception toward fashion practice might vary across generations, generation comparisons in terms of the
slow fashion structure will provide a more holistic view, and improve validation of the construct. Nevertheless, this study was
a good start attempting to investigate the slow fashion theoretically.
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TABLES
Table 1. Characteristics of Fast Fashion and Slow Fashion
Fast fashion
Unsustainable
Inequitable
Low quality
Copied
Industrial
Corporate
Standardized
Homogenized
Fast
Replicable
Insensitive to local history and culture
Source: Modified from Mayer and Knox (2006), p.325.
Slow fashion
Sustainable
Equitable
High quality
Authentic
Craft
Grassroots
Customized
Asset-specific
Slow
Idiosyncratic
Sensitive to local history and culture
Table 2. Confirmatory Factor Analysis

Standardized
estimate
Standard
error
Composite
reliability
0.763
Innovativeness
1. I dislike owning products that everyone else has.
.777
2. I like to try new styles and services before others
.716
.107
6.816*
do.
3. I enjoy having clothes that others do not.
.684
.120
6.588*
4. I do not like wearing styles that are similar to
.596
.127
5.821*
others.
0.826
Equity
5. I am concerned about the working conditions of
.846
producers when I buy clothes.
6. I am concerned about fair trade when I buy
.823
.110
8.889*
clothes.
7. Fair compensation for apparel producers is
.654
.086
7.196*
important to me when I buy clothes.
0.765
Authenticity
8. Handcrafted clothes are more valuable than mass.776
produced ones.
9. Craftsmanship is very important in clothes.
.714
.123
6.825*
10. I value clothes made by traditional techniques.
.674
.117
6.524*
0.747
Functionality
11. I try to keep clothes as long as possible.
.811
12. I often enjoy wearing the same clothes in
.686
.167
5.261*
multiple ways.
13. I prefer classic designs.
.582
.156
4.959*
0.750
Localism
14. I believe clothes made of locally produced
.923
materials are more valuable.
15. I prefer buying clothes made in U.S. to clothes
.595
.116
5.733*
manufactured overseas.
16. We need to support U.S. apparel brands.
.567
.104
5.514*
* p < .001, Chi-square= 117.554 (df=94, p>.05); GFI=.900, AGFI=.856, CFI=.961, NFI=.839, RMSEA=.046
REFERENCES
568
AVE
0.485
0.607
0.522
0.489
0.509
MARKETING GOLDEN BYTES: A REVISED ONLINE VALUE CREATION MODEL

Des Laffey, University of Kent, United Kingdom
Deon Nel, Flinders University, Australia
ABSTRACT
The following article revisits Amit and Zotts (2001) online value creation model where four factors: efficiency, lock-in,
novelty, and complementarities are the principle sources of business value on the Internet. From a two-year case analysis of
the Internet Poker Industry, the authors report evidence that suggests that one more value creation source exists: visibility.
Visibility extends the model to consider the additional value that marketing tools provide in a crowded online marketplace.
Through this updated framework, both managers and entrepreneurs can better understand their online market and plan for the
future.
569
ENHANCING CUSTOMER SERVICE THROUGH THEATRE IMPROVISATION: A THEORY

Karen Robson, Simon Fraser University, Canada
INTRODUCTION
Within marketing, customer service and customer satisfaction are key concepts: broadly defined, customer service is an activity
designed to increase customer satisfaction (Innis & La Londe, 1994) and customer satisfaction is a customers judgment about
whether they are pleased or displeased with a product or service (Malik, 2012). Anderson, Fornell, and Lehmann (1994) argue
that customer satisfaction is linked to both market share and profitability. In addition, customer satisfaction is a significant
determinant of in-store (Cronin & Taylor, 1992; Bogomolova, 2011) and mobile repeat sales (Kuo, Wu, & Deng, 2009). As a
result, the importance of customer satisfaction cannot be understated: profits are generated through satisfying customer needs
and wants during service encounters (Churchill & Surprenant, 1982). Overall, customer satisfaction and therefore customer
service is recognized as an important part of corporate strategy (Fornell, 1992).
In customer service encounters, as in life, mistakes happen: despite best efforts to provide consistent and quality customer
service, service failures occur. Mistakes as small as incorrect billings or late deliveries can reduce customer satisfaction, and
organizations must attempt to overcome these failures if they wish to keep the customers business. Service recovery is the way
in which an organization responds in order to rectify service failures (Hart, Heskett, & Sasser, 1990; Sparks & McCollKennedy, 2001). A successful service recovery is one in which an organization recovers the lost customer satisfaction by raising
the performance of the product or service to meet the customers expectations.
Current approaches to customer service often recommend standardization. Indeed, standardization has become increasingly
popular in approaching customer service as it increases predictability and allows for developing fail-safe and idiot proof
strategies for dealing with customer service encounters (Cunha, Rego, & Kamoche, 2009). In addition, developing standardized
service delivery systems ensures that even unmotivated or poorly educated workers are able to deliver quality service (Hart et
al., 1990). However, standardized customer service systems do not prevent service failures from occurring. That is, service
failures inevitably occur because it is not possible to completely identify and fulfill customer expectations, and because
uncontrollable factors (i.e. the weather) can decrease customer satisfaction. In addition, neither customers nor employees are
predictable agents, and even fail-safe strategies will occasionally need to address service mistakes or will need to adapt to
changing customer preferences (Prahalad & Krishnan, 1999).
Especially considering that service recovery often presents an opportunity to increase levels of customer satisfaction relative
to those prior to the service failure, standardized customer service systems are insufficient for organizations that want to deliver
excellent customer service. There remains a need to develop alternative systems for delivering consistently good customer
service that still allows the flexibility needed to accommodate a wide range of service encounters. One potential system entails
the use of improvisation. In the following sections, I introduce this concept and review the literature on the relationship between
improv and customer service. Subsequently, I suggest a theory of how improv training enhances customer service.
Improvisation
There are numerous definitions of improvisation, however as Weick (1998) notes, the roots of the word improvisation are a
useful starting point to understanding the construct. The word improvisation is rooted in the word "proviso", which means to
plan ahead or to do something that is premeditated. The prefix "im" means the opposite. Thus, at its core, improvisation
means the opposite of planning head, or the opposite of taking premeditated action (Weick, 1998). In this paper, I define
improvisation as the conception of action as it (action) unfolds (Crossan & Sorrenti, 1997; Cunha, Cunha, & Kamoche, 1999;
Kamoche, Cunha, & Cunha, 2003).
The cornerstone of theatre improvisation is the concept of Yes, and (Aylesworth, 2008; Crossan, 1997, 1998). The meaning
of this concept is twofold: improvisers must first accept whatever facts or events are offered to them (no matter how bizarre or
absurd they are), and next they must build off of these offers. Apart from the principle of Yes, and, theatre improv has
no rules; however, there are underlying principles that create better performances. Huffaker and West (2005) outline the
underlying principles of improv as: (1) Being Present, or being receptive in the present moment; (2) Being Fit and Well, which
means being willing to take risks with a positive attitude; (3) Listening, or focusing wholly on the speaker; and (4) Willingness
to Change, or being flexible and adaptable.
570
To date, there have only been two papers that directly discuss improvisation in customer service settings. To illustrate the utility
of the jazz metaphor, John, Grove, and Fisk (2006) explain the conceptual similarities between jazz improvisation and customer
service. According to John et al. (2006), customer service employees, customers themselves, and the setting all combine to
create a performance. Consequently, service encounters are conceptually similar to performances themselves. In fact, John et
al. (2006) point out that scholars have argued for some time that services are essentially performances (Berry, 1980; Grove &
Fisk, 1983; Solomon, Surprenant, Czepiel, & Gutman, 1985; Lovelock, 1994). John et al. (2006) also argue that jazz itself can
be used as a metaphor for service delivery. Jazz performances require creativity, much like service delivery requires creativity
in order to generate solutions tailored to customers unique needs. Jazz requires bending the rules and operating without a
script, much like the customer service does. Like jazz, services are complex and require real-time delivery. Like jazz musicians,
service managers must set the pace of the service delivery.
John et al. (2006) conclude with some managerial guidelines for applying jazz improvisation to customer service. Importantly,
these authors make the argument that improvisation will be most applicable to service delivery that is intended to accommodate
individual customers (i.e. highly customized service delivery). For example, improvisation will be more useful in corporate
banking (where customer expectations are high and where there is a need for customized service design) than it will be in a fast
food restaurant (where customer expectations are low and where there is a limited need for customization).
Overall, the main contribution of John et al. (2006) is an explanation of how jazz improv can be a metaphor for understanding
service performances. The work of John et al. (2006) presents both a compelling argument as to the conceptual similarities
between jazz improvisation and customer service, and an interesting theory regarding the types of companies that may benefit
the most from improvisation during service encounters. However, their work stops short of presenting a theory on that explains
the relationship between jazz improvisation and customer service it does not discuss the causal mechanisms by which
improvisation could impact customer service. Ultimately, the authors put forward a call for a more detailed explanation of
improvisation in services contexts.
Subsequently, Cunha, Rego, and Kamoche (2009) partially answered this call via their paper on improvisation in service
recovery encounters. In their work, Cunha Rego, and Kamoche (2009) propose that through a series of steps, improvisation
leads to service recovery. In this theory, the detection of a service failure and the presence of minimal structures cause an
employee to recognize that the service failure may need to be tackled quickly in order to overcome the perception of poor
service. This creates a sense of urgency. In response to the sense of urgency, this theory posits that customer service employees
will improvise by acting on the spot with the available resources (which do not include a script for how to act). According to
this theory, improvisation then leads to a moment of truth in which the customer demands rise in the face of the limitations of
the service. This moment of truth shapes the employees perceptions of the service deviation, as it is in this moment that the
truth of the improvised recovery is judged by the customer. According to Cunha et al. (2009) improvisational recoveries are
especially fragile during the moment of truth, and as a result they are unlikely to rectify the service failure at this time. This
process then repeats, ultimately reducing the service gap; this reduction is the service gap is how Cunha et al. (2009) define
service recovery.
The work presented by Cunha et al. (2009) represents a significant step towards theorizing the relationship between improv
and customer service, however it only partially answers the call put forward by John et al., (2006). First of all, they present a
theory that discusses only service recovery. That is, their theory begins with the detection of a service failure, which is not an
antecedent of all types of customer service encounters. To date, there has been no development of a theory that explains the
relationship between improv and customer service in a broad sense. Secondly, I argue that the theory presented by Cunha et al.
(2009) does not actually explain how improvisation leads to a successful service recovery. Cunha et al. (2009) define the
outcome of improvisation as reducing the service gap. I contend that this is, in fact, different from a successful service
recovery. Thirdly, Cunha et al. (2009) describe the loop in their theory as an ongoing iterative process, but the authors do not
explicitly state the conditions under which this iterative process will end and when a reduction in the service gap will follow
from the moment of truth instead. In fact, if this process repeats itself through a series of failed improvised recoveries, I argue
that the failed recovery attempts may actually increase the service gap. That is, if recoveries fail several times in a row, it is
possible that customers will perceive this to add to the overall service failure, which could reasonably be expected to further
decrease customer satisfaction. Finally, the theory presented by Cunha et al. (2009) implies that improvisation is equally useful
in reducing service gaps in all organizations. That is, there is no information presented regarding boundaries or assumptions.
The authors do not address whether different types of firms may benefit unequally from improvisation when addressing service
failures. As John et al. (2006) note, the opportunity to improvise in service encounters may increase when customer expectations
are high and when there is a need for customized service design. As such, I argue that it is unreasonable to generalize Cunha et
al.s (2009) theory to service recoveries in all types of companies.
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A NEW THEORY: ENHANCING CUSTOMER SERVICE THROUGH IMPROVISATION

In what follows, I present a theory of how improvisation training contributes positively to customer satisfaction. Briefly, my
theory may be stated as: improv training causes customer service professionals to increase the flexibility and the innovation of
their service. This increases the incidence of tailored solution development, which then increases perceived service quality. In
addition, my theory states that improvisation training increases service speed, which also increases perceived service quality.
This theory includes a number of boundary conditions. First of all, this theory applies to organizational settings where customer
expectations are high and where there is a demand for customized service. Second of all, this theory applies to organizations
with a corporate culture of employee empowerment.
Improvisation Training
Improv training entails learning the Yes, and rule, as well as learning the additional guidelines outlined by Huffaker and
West (2005). Thus, improv training involves learning to do the following in real-time, or on the spot: (1) Accept whatever
information is presented and whatever events occur (i.e. the Yes, and rule). When unexpected events occur, improv
performers learn to embrace them and build upon them rather than to reject them; (2) Be receptive to the present moment (i.e.
the Being Present guideline). This means that individuals should be receptive to and fully aware of their surroundings. Being
fully receptive to the present requires that improvisers fully concentrate on the present, instead of concentrating on the future;
(3) Be willing to take risks with a positive attitude (i.e. the Being Fit and Well guideline); (4) Focus wholly on the speaker
(i.e. the Listening guideline). This means that individuals learn how to devote their full attention to listening to the other
person instead of planning ahead while listening. As a result, individuals learn to formulate their response after they have
finished listening to whoever is talking; and (5) Be flexible and adaptable (i.e. the Willingness to Change guideline). As a
result, individuals learn to adapt to any situation by (for example) changing ones routine, breaking rules, or skipping steps. I
propose that this training will have three direct results: this training will increase flexibility, innovation, and service speed.
Flexibility
I posit that improv training will lead to increased flexibility, or an increased ability to adapt to different situations. In a customer
service context, flexibility refers to the ability to adapt to different situations by deviating from ones routine or by pursuing
alternate options. For example, flexibility in customer service may mean being able to break the rules, bypass certain steps, or
depart from a typical routine. Improv training directly teaches people how to adapt in any given situation (via the Willingness
to Change principle), and learning how to be flexible is therefore part of being trained to improvise. In addition, because there
is little formal structure to improvisation, the outcome of improvisation is not significantly constrained. Thus, the outcome of
improvisation is highly flexible.
Innovation
I posit that improv training will lead to innovation, defined as the development of novel cognitive content (Guilford, 1965;
Hirschman, 1980; Amabile, 1996). For example, innovation includes finding alternate uses for objects, or finding substitute
products if usual choices are unavailable (Hirschman, 1980). Similar to how improv training increases flexibility, I argue that
because improv is intended to have little formal structure, improv training prepares individuals to create novel content through
creativity and innovation. That is, the lack of formal structure facilitates developing and implementing innovative ideas as it
prepares individuals do things they normally would not do.
Service Speed
Service speed is defined as how quickly a customer service employee takes action to provide customer service. I argue that
improv training will result in high service speed (i.e. fast service) because improvisation training teaches people how to apply
the improv rules and guidelines on the spot. That is, improvisation training teaches individuals to attend to the present moment
and take action in the present moment, rather than to spend time planning ones course of action. This idea is supported by the
literature.
Tailored Service Development
Tailored service development is service that is tailored to customers unique needs or desires. I posit that delivering tailored
services is facilitated by flexibility and creativity, because these two constructs allow service employees to satisfy customer
expectations through a wide range of actions. The Ritz Carlton, for example, is well known for delivering high quality customer
572
service. In part, this level of customer service comes from treating customers uniquely; for example, the Ritz Carlton
monograms pillows for regular customers (Sucher & McManus, 2005). In my theory, I posit that because improvising leads
customers to feel that they are being treated uniquely, the service delivered will exceed or meet customer expectations, which
will positively impact customer satisfaction.
Perceived Service Quality
Customer satisfaction is typically measured via service quality, or the difference between a customers service expectations
and service performance (Parasuraman, Zeithaml, & Berry 1985; Woodside, Frey, & Daly, 1989). Parasuraman, Zeithaml, and
Berry (1988) developed a 26-item scale known as SERVQUAL that assess service quality. In this scale, service quality
judgments are based on whether expectations regarding the product are confirmed (when the product performs as expected),
positively disconfirmed (when the product exceeds expectations), or negatively disconfirmed (when the product does not meet
expectations) (Churchill & Suprenant, 1982). The theory I present defines service quality as the customers assessment of the
difference between expectations and actual performance, as measured via SERVQUAL.
Boundary Conditions
I argue that minimal structures are a boundary within which improvisation impacts customer service. That is, the minimal
structures that an organization presents do not cause improvisation. Instead, they are the template upon which improvisation
unfolds: an employee improvises bearing in mind the rules and deadlines presented by the minimal structures.
As John et al., (2006) note, improvisation is less important in customer service settings where customer expectations are low
and where there is a limited need to provide customized service. In line with this, I argue that improvisation will only lead to
higher perceived service quality in those service settings where customer expectations are high and where there is a high need
for customization. Thus, in some service settings (i.e. fast food restaurants), improvisation is unlikely to significantly enhance
perceived service quality
DISCUSSION
The theory presented in this paper presents an explanation of the relationship between improvisation and customer satisfaction
that addresses the limitations of previous theories. As such, I contend that this theory more substantially answers the call for a
detailed explications of worker improvisation in services contexts and opens up a research agenda.
As a next step in theoretical development, I propose that an attempt at falsifying the theory presented herein would be useful.
Indeed, an empirical investigation that examines whether improv training does, in fact, increase scores on SERVQUAL would
be helpful.
From a practical standpoint, there are limitations to the application of improv to customer service. Indeed, even those customer
service providers who deliver highly customized products or services may have reservations regarding training their employees
on improvisation. As Weick (1998) notes, the intention of jazz improvisation is to produce something that comes out differently
than it did before, and organizations often pride themselves in predictable performances. As such, managers may be wary of
employing a training method that leads to unpredictable outcomes, even if those outcomes are associated with high levels of
customer satisfaction. Furthermore, it is possible that an average service failure resulting from a customer trained on the
principles of theatre improv could be larger than an average service failure resulting from standardized customer service. That
is, the creativity and flexibility could backfire, and create a situation where a customer is appalled by the service provided.
Another practical concern is it is possible that such training would be prohibitively expensive, even for those firms that would
benefit significantly from training their employees on theatre improvisation.
REFERENCES
573
E-SERVICE TARIFFS: INVESTIGATING THE MODERATING EFFECTS OF EASE OF USE AND

USEFULNESS ON TARIFF CHOICE OF VIDEO ON DEMAND SERVICES
Soeren Koecher, TU Dortmund University, Germany
ABSTRACT
During the last decade, services industries were subject to considerable changes with regard to the way services are provided,
delivered, and conceived. Extensive research has been done on e-services whereas pricing aspects of e-services has been
disregarded so far. Our study examines the moderating effects of ease of use and usefulness on tariff choice in an e-service
context. Empirical examination of the moderating impact of perceived ease of use and usefulness reveals that tariff choice is
principally influenced by usage frequency in case of high perceptions of ease of use and usefulness.
574
The MODERATOR EFFECT OF SWITCHING COSTS DIMEMSIONS ON THE RELATIOSHIPS BETWEEN

CUSTOMER VALUE, TRUST AND LOYALTY
Dahlia El-Manstrly, University of Edinburgh, UK
ABSTRACT
Switching costs have been found to act as a quasi- moderator in loyalty frameworks (Sharma, 2003) and to have a greater
effect on customer loyalty than that of satisfaction (Burnham, Frels, & Mahajan, 2003). However, a review of recent
literature on the moderator effect of switching costs reveals three main gaps. First, most previous research tends to focus on
examining the moderator effect of switching costs as a uni-dimensional rather than as a multi-dimensional construct. A
disadvantage of a uni-dimensional approach is that it may overlook or obscure important theoretical and practical distinctions
across dimensions (Jones, Mothersbaugh & Beatty, 2002). For example, some researchers (e.g. Burnham Frels, & Mahajan,
2003) assert that financial switching costs have the weakest impact on loyalty, while other researchers (e.g. Jones,
Mothersbaugh, & Beatty, 2002; Wang, 2101) argue that financial and procedural switching costs or financial and relational
switching costs (Patterson & Smith 2003) have the strongest impact on loyalty. Second, no empirical study to date has
examined the moderator effect of switching costs dimensions on the relationships between customer-perceived value, trust (as
key antecedents), and loyalty in a single framework. Third, previous research provides mixed results regarding the moderator
effect of switching costs. Switching costs either play a significant negative moderator effect, a significant positive moderator
effect or no moderator effect. This lack of consistency in previous research findings can limit our understanding of the
moderator effect of switching costs on loyalty development (Woisetschlager, Lentz and Evanschitzky, 2011). This paper aims
to propose and empirically test a conceptual framework that considers trust and customer-perceived value as antecedents of
customer loyalty, and switching costs dimensions as moderators. It also assesses whether the moderator effect of switching
costs on the relationships between customer loyalty and its antecedents is contingent on service type. Three hundred and sixty
usable questionnaires were collected from hairdresser and fast-food restaurant customers and the data were analyzed using
multi-group structural equation modeling. The results demonstrate that relational, procedural and financial switching costs
moderate, in different ways, the relationships between customer loyalty, trust and perceived value. Moreover, the strength of
the moderator effect vary according to service type.
575
IF WE BUILD IT THEY WILL COME: UNDERSTANDING SOCIAL NETWORK AFFINITY

Leanne Trembath, Learning Services State Library of Victoria, Australia
Siva Muthaly, RMIT University, Australia
ABSTRACT
The motivations driving individuals to join and subsequently value their involvement in an online social network are an
intriguing consumer behavior phenomenon. The implications for the understanding of such motivations are immense, since
firms are increasing their social media marketing campaigns at remarkable rates (Barnes and Lescault, 2011). Our study aims
to explore the concept of community which forms within these social networks; to do so, we introduce the concept of social
network affinity and explain its roots in social influence theory.
Given the abundance of social networking and social media marketing and the associated social commerce boom (Stephen
and Toubia, 2010), a greater understanding of the motivations behind member loyalty to such communities is warranted. As a
step in that direction, we introduce a social network affinity based model which posits that member loyalty to a social
network will be enhanced by both rational features, i.e. information and system quality, and social influences, i.e. belonging,
interactivity, and emotional connection.
Affinity is defined as a strong connection or relationship between people or things (affinity, American Heritage
Dictionary, Fourth Edition). We bring this concept into the social networking arena by combining sense of belonging,
interactivity, and emotional connection and conceptualizing these as parts of social network affinity. In recent research,
Panigrahy, Najork, and Xie (2012) identify social affinity across multiple online domains and computationally show that
virtual relationships can build it through repetitive and selective connections. Building on the models provided by Lin (2008)
and Zhang (2010), we propose a hybrid model which focuses on developing lasting relationships between consumers and
social networking firms.
Building on existing models and social influence theory, we propose a hybrid social network affinity model which focuses on
developing lasting relationships between consumers and social networking firms. Our model incorporates both rational and
social influence motivations as antecedents to satisfaction and loyalty. Based on 241 adult respondents, we utilize a partial
least squares structural equation method, and find that social network affinity is an important predictor of satisfaction and
loyalty within a social network. In addition to other implications, our study indicates that social networking firms must build
a sense of belonging, encourage interactivity, and offer ways to develop an emotional connection for their consumers.
576
EXPLORING THE ROLE OF SOCIAL MEDIA IN NEWS CONSUMPTION

Iryna Pentina, University of Toledo, USA
Adam Covault, University of Toledo, USA
Monideepa Tarafdar, University of Toledo, USA
ABSTRACT
The amount of time spent by the world population on social media (SM) continues to grow, with 20% of our PC time and 30%
of our mobile time now spent on SM. In addition to sharing personal information, SM users increasingly post links to external
content and express their opinions about the world, national and local news. In fact, in the past two years, the traffic to news
sites from various SM grew 57%. As this trend is expected to continue, a number of questions regarding the role of SM in
democratic societies acquire prominence. Given the length of time spent by SM users with their friend circles that are likely to
reflect their own political and cultural views, there is a concern that the exposure to alternative and challenging views can be
limited. The phenomenon of social filtering may have major implications not only for news, but also for product and brand
information and consumption. Better understanding the role of SM in contemporary information consumption can inform not
only the competitive strategies of news organizations and offer guidelines for internet policy makers, but can also assist content
marketing efforts by advertisers. This pilot study attempts to initiate an academic discussion of the role of social media in news
consumption.
The data and interpretations were derived from 112 interviews with a cross-section of news consumers in the Midwest. The
following questions were asked: How do you receive your personal, local, national and world news? Please describe the role
of newspapers, magazines, radio, TV, email, online search, and other communication media in your news consumption; Please
describe the role of Facebook, Twitter and other social media that you use in getting your news and information. Compare the
importance of the social media to other media for your news consumption. Each interview lasted for 15-20 minutes, and the
transcripts were subsequently analyzed by each author separately, with differences resolved through discussion. Data analysis
consisted of identifying emerging themes by noticing instances and patterns of responses. The majority of respondents preceded
their answers with a general statement about their attitude to news that was subsequently used to substantiate their descriptions
of the preferred media channels and news consumption behavioral patterns. From these attitudinal responses, it was possible
to discern a continuum of attitudes towards the news that affect the news consumers behaviors, from deliberate news avoidance
and news indifference to active news seeking and distribution.
An important issue highlighted by the study is news content personalization. Active news seekers carefully select the topics
they want to follow, the news organizations they want to be updated on, and the personalities they want to hear from. This
functionality is best performed by mobile apps, as well as social media, which provide timeliness and convenience important
for those who want to be current and in the know. Similarly, those who are selectively interested in sports, celebrity news,
and local events, customize their free email portals (MSN, Yahoo etc.) to be effortlessly exposed only to the information they
may be willing to receive. SM can also serve as a surrogate filtering tool by exposing uninvolved SM users only to the content
approved by their trusted friends and/or like-minded others (again limiting the exposure to diverse views, opinions and facts).
This feature of digital information distribution may present a potential problem of limiting the exposure to diverse opinions
and only provide the confirmation of pre-existing views. It may contribute to the filter bubble phenomenon and mitigate
potential advantages of digital communication channels to expose citizens to diverse views.
Contrary to popular assertions that SM have become a news gateway, the majority of our respondents deny its defining role in
their news consumption. While deliberate news seekers utilize Twitter updates as one of their news sources, they limit the
updates they get to certain news providers, and get them regularly: they do not rely on incidental and serendipitous stumbling
upon information as it is usually presented in SM. Both types of news consumers believe that Facebook functionality
predisposes it to be more a discussion and opinion forum than an objective news reporting vehicle. Therefore, its use combines
news consumption with social networking to arrive at social news consumption experience whereas one can see what their
friends read, talk about and are interested in. Based on our findings, interesting questions that deserve further attention include
the role of socio-economic (education, income, occupation), demographic (age, sex, marital status), and/or political (or
religious) characteristics in amplifying or mitigating SM-based information filtering. Another interesting issue is potential
differences in filtering effects between SM that limit the number of friends and exposures by requiring reciprocal relationships
(e.g. Facebook and LinkedIn) and those with open, non-reciprocal following (Twitter).
577
A MODEL FOR THE ADOPTION OF SOCIAL MEDIA BY B2B ORGANIZATIONS

George Christodoulides, Birkbeck College, University of London, UK
Nikoletta-Theofania Siamagka, Henley Business School, University of Reading, UK
INTRODUCTION
The advent of Web 2.0 has created new ways to communicate, collaborate and share content (Enders et al. 2008). Social media
build on the technological and ideological foundations of Web 2.0 (Kaplan and Haenlein 2010) and encompass the activities,
practices, and behaviors among communities of people who gather online to share information, knowledge, and opinions using
conversational media (Safko and Brake 2009: 6).
According to the Internet Advertising Bureau in the UK, social media now account for 25% of all time spent online (IAB UK
2012). An increasing number of organizations therefore offer direct links from their corporate websites to social media
platforms such as Facebook and Twitter, and use these tools to inter alia promote brands and support the creation of brand
communities (Kaplan and Haenlein 2010). Although the benefits of social media in consumer marketing are noteworthy, little
is known about social media in B2B organizations (Brennan and Croft 2012; Michaelidou et al. 2011). Recently, Michaelidou
et al. (2011) examined the usage of social media by B2B SMEs and identified a number of perceived benefits including
attracting new customers, cultivating relationships, increasing awareness, communicating the brand, receiving feedback and
interacting with suppliers. Further, the adoption of social media by B2B sales force has been found to improve sales processes
and relationship sales performance (Rodriguez et al. 2012). Although previous research has found that large B2B companies
were extensive users of almost all mainstream social media channels, the adoption was further conditional on motives to
position themselves as thought leaders, to have a market-driving role in the sector and to build relationships with various
stakeholders (Brennan and Croft 2012).
This research contributes to the emerging but limited research on social media in B2B organizations by developing and testing
a model for understanding B2B organizations adoption of social media. Our model (see figure1) builds on the extended
Technology Acceptance Model (TAM) by Venkatesh and Davis (2000) by including organizational innovativeness as a
determinant of adoption and also perceived barriers as an antecedent of perceived usefulness. This is in line with previous
research outlining the importance of organizational innovativeness for the adoption of new technologies (e.g. Agarwal and
Prasad 1998; Frambach and Schillewaert 2002) as well as the negative effect of perceived barriers on perceived usefulness
(Michaelidou et al. 2011).
METHOD
Data was collected from a sample of 5000 organizations in the UK derived from a permission-based mailing list. A
questionnaire was used and included measures from the extended TAM (Venkatesh and Davis 2000), in addition to measures
of organizational innovativeness (Ellonen et al. 2008) and perceived barriers (Michaelidou et al. 2011). Adoption of social
media was measured through a single item measure. The questionnaire was sent to one marketing executive per targeted
business. Although 148 fully completed questionnaires were returned (3% response rate), 105 were retained as these represented
B2B organizations. Several industries were represented in the sample (e.g., aerospace, manufacturing, healthcare, etc.).
Organizations also varied in terms of their size with an average number of employees of 194. The majority of the marketing
executives in the sample held senior positions. In particular, 65 of them were directors or managers.
Internal consistency reliabilities were first computed for all measures and found to be within acceptable levels, ranging from
.81 to .93. The model was tested on AMOS (version 17.0). Consistent with Anderson and Gerbing (1988), a two-step approach
was adopted. Following satisfactory results indicating a good fit of the measurement model (2 (104)=132.330, CFI= .97, TLI=
.95, RMSEA= .05), the structural model was then tested and a good fit was established; 2 (119)= 170.971 (p< .01), CFI= .94,
TLI= .92, RMSEA= .07. The results of the hypothesis testing are summarized in Table 1.
The findings shed light onto the adoption of social media by B2B organizations. Consistent with previous research on the
adoption of new technologies (other than social media), perceived usefulness is a significant predictor of the adoption of social
media in B2B contexts. Organizational innovativeness is also a significant predictor of social media use. In contrast, perceived
578
ease of use, which according to TAM is a key antecedent to the adoption of new technologies, was found to be insignificant in
predicting both social media adoption and perceived usefulness (p>.05). This may be due to a perception across our sample
that social media are indeed relatively easy to use. Interestingly, perceived usefulness of social media by B2B organizations is
determined by company image enhancement and perceived barriers rather than a belief that social media have demonstrable
results.
The study contributes to the limited knowledge about B2B organizations usage of social media as marketing tools. Our findings
extend existing theories on the adoption of new technologies (e.g. TAM), highlighting the role of perceived barriers and
organizational innovativeness in social media adoption by B2B organizations. Specifically, the study shows that perceived
barriers shape perceptions about the usefulness of social media in marketing practices of B2B organizations. Perceived barriers
such as cost, importance of social media for specific industries and uncertainty about the benefits of social media, deter
companies from using social media as marketing tools. Additionally, findings indicate that image shapes perceived usefulness
of social media, suggesting that image enhancement efforts are associated with a greater appreciation of social media as
effective marketing tools. The findings also show that more innovative organizations such as those adopting new technologies
and new methods of production and service delivery (relative to their competitors) are likely to adopt social media in their
marketing practices. In addition to the theoretical implications, this study is relevant for B2B organizations that do not currently
use social media, but plan to invest in them in the near future. Our results illustrate that overall B2B companies appreciate the
use of social media in enhancing their image, which might suggest that there will be an increase in B2B companies investing
in social media. B2B organizations that intend to adopt social media should seek to enhance their managers perceptions about
the usefulness of social media, and address the perceived barriers through training programs that will enhance employees skills
in social media and identify the importance and relevance of social media within B2B organizations and their industries.
TABLES
Table 1: Model Path Coefficients and t-Values
Effects on Perceived Usefulness (R2=.54)
H1: Results Demonstrability
H2: Image
H3: Perceived Barriers
H4: Perceived Ease of Use
Effects on Adoption (R2=.30)
H5: Perceived Usefulness
H6: Perceived Ease of Use
H7: Organisational Innovativeness
Unstandardized
Coefficients
t-value
p-value
.01
.32
-.38
.15
1.13
4.01
-3.18
1.52
.257
.000
.001
.128
.13
.064
.16
2.93
1.82
3.02
.003
.068
.003
579
FIGURES
Figure 1: A model for the adoption of social media by B2B organizations
Results
Demonstrability
H1: +
Image
H2: +
Perceived
Usefulness
H5: +
H3: Perceived
Barriers
Adoption of
Social Media
H4: +
H6: +
H7: +
Perceived
Ease of Use
Org.
Innovativeness
REFERENCES
Agarwal, R. & Prasad, J. (1998). A conceptual and operational definition of personal innovativeness in the domain of
information technology. Information Systems Research, 9(2), 204215.
Anderson, J.C. & Gerbing, D.W. (1988). Structural equation modeling in practice: A review and recommended two-step
approach. Psychological Bulletin, 103(3), 411-423
Brennan, R. Croft, R. (2012). The use of social media in B2B marketing and branding: An exploratory study. Journal of
Customer Behaviour, 11(2), 101-115.
Ellonen, R., Blomqvist, K. & Puumalainen, K. (2008). The role of trust in organisational innovativeness. European Journal of
Innovation Management, 11(2), 160-181.
Enders, A., Hungenberg, H., Denker, H.-P. & Mauch, S. (2008). The long tail of social networking: Revenue models of social
networking sites. European Management Journal, 26, 199211.
Frambach, R.T. & Schillewaert, N. (2002). Organizational innovation adoption: A multi-level framework of determinants and
opportunities for future research. Journal of Business Research, 55(2), 163176.
IAB UK (2011), Adspend Breaks 4 Billion Milestone, retrieved on 7 May 2012 from: http://www.iabuk.net/news/adspendbreaks-4-billion-milestone
Kaplan, A.M. & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of social media. Business
Horizons, 53(1), 59-68.
Michaelidou, N., Siamagka, N.T. & Christodoulides, G. (2011). Usage, barriers and measurement of social media marketing:
An exploratory investigation of small and medium B2B brands, Industrial Marketing Management, 40(7), 1153-1159.
580
Rodriguez, M., Peterson, R.M. & Krishnan, V. (2012). Social Media's Influence on Business-To-Business Sales Performance,
Journal of Personal Selling & Sales Management, 32(3), 365-378.
Safko, L. & Brake, D. K. (2009). The social media bible: Tactics, tools & strategies for business success, NJ: John Wiley &
Sons.
Venkatesh, V. & Davis, F. (2000). A Theoretical Extension of the Technology Acceptance Model: Four Longitudinal Field
Studies. Management Science. 46(2), 186-204.
581
THE EVOLUTION OF CONSUMER EMPOWERMENT IN THE SOCIAL MEDIA ERA: A CRITICAL REVIEW
Lauren I. Labrecque, Loyola University Chicago, USA
Jonas vor dem Esche, Westflische Wilhelms-Universitt Mnster, Germany
Charla Mathwick, Portland State University, USA
Thomas P. Novak, University of California Riverside, USA
Charles F. Hofacker, Florida State University, USA
ABSTRACT
This paper provides a framework for examining the intersection of consumer behavior and social media to set the agenda for
future research. Through the lens of consumer empowerment, we offer an understanding of value creation through
participation in social media. Using this framework, a review of the literature reveals three broad themes of particular interest
for future research: the power/disempowerment paradox, the impact of social media on consumer behavior, and the
consumers ability to create, co-create or destroy value.
We argue that consumer empowerment and value creation are contingent on the type and level of participation in the
network. Therefore, both the (1) breadth (i.e., consumption, creation, and distribution activities) and (2) intensity (volume,
quality, and frequency) of consumer participation play key roles in the development of value creation and consumer
empowerment. In terms of the balance of power between the firm (e.g., network owners, marketers) and participants, power
is dependent upon the firms reliance on consumer-produced value in terms of volume and quality. This value can be
produced through consumption, co-creation, and distribution activities.
Technology characteristics also impact the empowerment process and affect how consumers create and receive value and also
how this power is distributed among participating companies, and the network owners themselves. These include technical
affordances, such as the availability and restrictions on data types as well as the amounts and directionality of interaction
capabilities and connectivity, varying level of openness, which determine how the message is broadcast, how the network
relationships are structured, and who is able to influence interaction structures, and governance systems, which concerns
establishing and enforcing the networks etiquette, incentives, and sanctions.
The increasingly rapid evolution of social technologies has led to a parallel evolution of consumer empowerment. We
propose and identify five dimensions in the evolution of consumer empowerment beginning with three individual power
sources (demand, information, voice), which then leads to two network-based sources (social and community). We use this
framework to organize the marketing literature on Internet-enabled consumer empowerment and to show how the
empowerment process especially consumers value creation and technology characteristics intertwine.
582
CONSUMER BEHAVIOR: HOW THE "BRAND LOVE" AFFECTS YOU

Isabel Cantista, Universidade Lusada, Portugal
ABSTRACT
The use of the construct "Brand Love" is relatively recent in explaining consumer behavior. However it is pertinent to think
that a stronger consumer connection with a brand influences their behavior, particularly in terms of loyalty and willingness to
pay a higher price for their "Brand Love".
In this sense this paper aims to examine how the antecedents of "Brand Love", brand identification and sense of community
influence loyal behavior and willingness to pay a higher price for "Brand Love".
We used structural equation modeling to analyze data collected for two clothing brands commercialized in Portugal: Zara and
Modalfa. Data collection was done through a survey with a structured questionnaire for each of the brands.
The results show that for the Portuguese consumers the brand Zara is considered a preferred brand and as such consumers
appear to be loyal and willing to pay a higher price compared to those practiced by the brand Modalfa.
The "brand love" is a relatively recent marketing construct that applies to products with a major hedonic component.
However its interest arises not only as concept on its own but also as a dimension within other concepts, such as the
relationship of brand quality and emotional connection (Bergkvist and Bech-Larsen, 2010; Ahuvia, Bagozzi and Batra, 2007;
Carroll and Ahuvia, 2006; Albert, Merunka and Valette-Florence, 2009; Batra, Ahuvia and Bagozzi, 2012), brand attachment
(Hemetsberger et al., 2009), consumer devotion (Pichler and Hemetsberger, 2008), brand commitment (Rossiter and
Bellman, 2012), brand connection and share of heart (Pitta and Franzak, 2008).
Brand emotional attachment leads to similar results as the loved objects, which in turn leads to a higher brand loyalty and
emotional commitment. Several authors also emphasize the importance of brand love within the area of consumer
behaviour and linking this with important concepts such as higher prices, loyalty, communication and word-of-mouth (Batra
et al. (2012), Pitta and Franzak, 2008). The few studies that exist on brand love indicate that it has an important influence
on several marketing variables. In addition, it offers a subtle understanding of the different facets of the other brand-related
constructs, many of them related to social identification and consistency of the image of the self (Park et al., 2010; Escalas
and Bettman, 2003). Ahuvia (2005) also argues that the loved objects have a strong impact in determining the individual self
concept.
There are also a few studies regarding the antecedents of "brand love". Those that exist are linked to a hedonic product
category and brands' self-expression. This research on "brand love" is based on the work of Belk (1988), who suggests that
the possession of an object is an extension of the "self" and also on the work of Fournier (1998), who shows that an
interpersonal relationship can exist between brands and individuals. Early research related to "brand love" developed by
Shimp and Madden (1988) and Ahuvia (1993) studied the definition and measurement of this concept. According to Carroll
and Ahuvia (2006) the concept of "brand love" can be defined as the degree of emotional attachment and love that a satisfied
consumer feels regarding brand. The "brand love" includes the following aspects: passion about the brand, the connection
with the brand, the positive evaluation of the brand, positive emotion in response to the brand and the declaration of love for
the brand.
OBJECTIVES AND RESEARCH HYPOTHESIS
The theoretical structural model explaining the relationship between the variables is illustrated in Figure 1. This Figure shows
the research hypotheses.

583
The sense of community is another element of "brand love" antecedent and can be defined as the affiliation that a consumer
feels with other people associated with the brand (Bergkvist and Bech-Larsen, 2010; Ellemers, Kortekaas and Ouwerkerk,
1999; Bagozzi and Dholakia, 2006). H1: The sense of community is positively related to "Brand love".
Recent studies show that love towards an object is fundamental to the creation of consumer identity (Carroll and Ahuvia,
2006; Ahuvia, 2005). The consumer is more likely to love a brand that he feels strongly identified with. Thus, one can
assume that the identification with the brand is one of the antecedents of the construct "brand love". H2: The identification
with the brand has a positive influence on "Brand love".
Brand identification is defined as the level of how the consumer recognises himself coincides with the image of the brand
(Bergkvist and Bech-Larsen, 2010; Bagozzi and Dholakia, 2006). Following the same idea, Sirgy et al. (1997) considered the
identification with the brand as the degree of congruence between consumer and brand image. The degree to which brands
enable consumers to express their own identity is crucial to the level of identification with the brand. For Hughes and
Ahearne (2010), brand identification is the extent to which an individual defines himself with the same attributes that he
believes the brand has. Therefore, consumers belong to a community that allows them to express their image consumers
freely. H3: The sense of community and identification with the brand are interrelated.
Various authors conclude that the most desirable outcome of marketing strategy is to transform their consumers into loyal
ones (Chaudhuri, 1999; Dick and Basu, 1994). H4: The "Brand love" leads to loyal behavior by consumers.
One of the most common consequences of loyalty is that consumers are less sensitive to price increases, thereby increasing
the effectiveness of the marketing tools and, generally, improving the business performance and results (Kabiraj and
Shanmugan, 2010; Keller, 2003; Oliver, 1997, 1999). H5: A "Brand love" means that consumers are willing to pay a higher
price for the brand.
The premium price has been studied by several authors in the brand literature, such as Kamakura and Russell (1993), Park
and Srinivasan (1994) and Netemeyer et al. (2004). In terms of marketing, it can be considered that the willingness of a
consumer to pay a premium price is defined as the amount that he is willing to pay for his preferred brand when compared to
a similar product of another brand (or unbranded). Several authors agree on the premium price being a basic criterion of
brand loyalty, to indicate how much the buyer is willing to pay for the brand compared to another brand that has a similar
offering. H6: Brand loyalty and willingness to pay a higher price are interrelated.
METHODOLOGY AND MODEL ESTIMATION
Two questionnaires were carried with a sample of 167 students from a university in northern Portugal, regarding two wellknown clothing brands operating in Portugal: Zara and Modalfa. The choice of these two brands is due to the fact that they
are both well represented across the country, selling the same types of product. However, the two brands differ in terms of
pricing policy and design. On one hand, Zara is linked to more fashionable products and higher prices compared to Modalfa.
Both are brands which fall within the category of hedonic products.
Scales were used to measure the sense of community, brand loyalty are from Keller (2003). In order to measure the
willingness to pay a higher price, the scale according to Netemeyer et al. (2004) was employed. Moreover, brand
identification measurement followed the scale of Bergami and Bagozzi (2000). Finally, the "Brand Love" scale uses some
aspects of the work of Carroll and Ahuvia (2006).
Of the 167 respondents, 68 were female and 99 were male. 73.3% of respondents were single, 40.7% receive a monthly
household income between 1000 to 2000, 88.4% are part of a household of two individuals and 54.7% have completed
secondary education. One question was designed to determine whether or not the respondents buy brands, where 77% stated
that they buy the brand Zara, and 37% responded that they purchased the brand Modalfa. Therefore, 14% of the respondents
purchase both brands.
Before carrying out the estimation of the theoretical model of the structural equation analysis, the proposed scales to measure
the constructs in question, for each of the brands were tested. This analysis intended to verify the reliability and validity of
the scale. In order to get the confidence measure it was proposed that the construct should be with a single factor and with an
acceptable reliability coefficient. Taking the scale that measures the degree of identification with the brand, the other
proposed scales present a good reliability value, since the Cronbachs Alpha coefficient is always above 70%. It is important

584
to ensure the validity of the contents of the scales so that the selected items are able to represent the concept on which the
generalization was made. The construct validity determines the extent to which the scale can measure the variable of interest.
For this we performed an analysis of convergent validity and discriminant validity through principal components factor
analysis without rotation. The constructs considered in the theoretical model, namely the sense of community, the "brand
love", brand loyalty and premium price show a "loading factor" greater than 0.7 which indicates a good convergent and
discriminant validity. The results were inconclusive concerning the construct of identification with the brand.
The models were estimated using the covariance matrix. The statistical software used was STATISTICA 6.1. that allowed us
to calculate the variance and covariance matrices (data) and to estimate the structural model. The estimation is performed by
the method of maximum likelihood (ML), since the objective is to develop and test the theory of the importance of the
construct "Brand Love" and its impacts on loyal behavior and willingness to pay a higher price for the brand in question. The
indicators chosen to analyze the goodness of fit are those suggested by Hair et al. (2006) as the best indicators, absolute
Normalized chi-square, RMSEA and GFI. The Chi-Square Normalized presents values acceptable when they are between 1
to 3 (Hair, et al., 2006). It used the RMSEA instead of RMSSR because the models are estimated based on the covariance
matrix of the data. This indicator must be between the values ranging from 0.05 (good fit) to 0.08 (acceptable adjustment).
High values of GFI indicator reflect a good fit, but are not established minimum acceptable levels.
CONCLUSIONS
One of the first conclusions of this study is that the Zara brand can establish a much closer connection with their consumers
than the Modalfa brand. The brand Modalfa fails to create connection with the consumer. Thus, it is not considered a "Brand
Love ", since consumers do not feeld that they belong to a community. Although the connection with the brand is higher than
with Modalfa, the brand Zara also fails regarding the brand identification. Therefore, Zaras consumers do not consider it a
Brand Love. However, it is important to point out that these results may have been influenced by the of measurement scale
of the brand identification, since the results for its validity and reliability are inconclusive.
The results for the identification brands showed to be inconclusive. The authors suspect the existence of problems with the
measurement instrument. Future research should tested alternative models to explain the "brand love" concept further and use
different constructs such as perceived quality, perceived value and brand personality.
ACKNOWLEDGMENTS
*The reported in this paper was co-financed by FCT Fundao para a Cincia e a Tecnologia, Portugal (PestOE/EME/UI4005/2011) and carried out within the research centre Centro Lusada de Investigao e Desenvolvimento em
Engenharia e Gesto Industrial (CLEGI).
Figure 1: Structural Model Proposed

Senseof
Community
H1
BrandLoyalty
BrandLove
H3
Brand
Identification
H4
H6
H5
H2

585
Premium
Price
Table 1: Structural Model Estimated - Zara

Main Hypotheses
Brand Identification o Brand Love (+)
Sense of Community o Brand Love (+)
Sense of Community o Brand Identification (+)
Brand Love o Brand Loyalty (+)
Brand Love o Price Premium (+)
Brand Loyalty o Price Premium (+)
Parameter
Estimated
p-Value
11
12
13
11
21
31
0,108
0,968
0,997
0,892
0,788
1,233
0,230
0,018
0,078
0,000
0,000
0,000
Conclusion
Not Sup.
Supported
Supported
Supported
Supported
Supported
Indicators of Adjustment
F2 Normalised: 2, 179
RMSEA: 0,056
GFI: 0,923
AGFI: 0,912
Table 2 : Structural Model Estimated - Modalfa

Main Hypotheses
Parameter
Estimated
p-Value
Conclusion
Brand Identification o Brand Love (+)

Sense of Community o Brand Love (+)
Sense of Community o Brand Identification (+)
Brand Love o Brand Loyalty (+)
Brand Love o Price Premium (+)
Brand Loyalty o Price Premium (+)
11
12
13
11
21
31
0,108
0,168
0,997
0,892
0,588
0,293
0,713
0,218
0,178
0,230
0,430
0,000
Not Sup.
Not Sup.
Not Sup.
Not Sup.
Not Sup.
Supported
Indicators of Adjustment
F2 Normalised: 2,679
RMSEA: 0,066
GFI: 0,823
AGFI: 0,812
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586
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CO-CREATION AND BRAND LOVE: DEVELOPING A THEORETICAL FRAMEWORK

George Skourtis, University of Piraeus, Greece
ABSTRACT
The objective of this study is to develop a conceptual model of co-creation and brand love. The main contribution of the
present study is that is suggests both a direct impact of co-creation on brand love sub-dimensions as well as an indirect one
through quality. More precisely, the authors explore the influence of co-creation on self-brand integration, passion-driven
behaviors, positive emotional connection, long-term relationship, anticipated separation distress, overall attitude valence, and
attitude strength. It is clearly demonstrated that co-creation is associated or could lead in the aforementioned sub-dimensions
of brand love. Furthermore, it is showed that co-creation has an impact on quality, which is conceptualized as one of the main
antecedents of brand love. As a conclusion the authors suggest that co-creation can lead to brand love.
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THE INFLUENCE OF SPONSORSHIP ON BRAND AND EVENT ATTITUDES:

UNDERSTANDING THE ROLE OF EMOTIONS
Rajdeep Chakraborti, IBS, India
ABSTRACT
Event sponsorship in sport has become one of the most prominent nontraditional components of the marketing
communication mix for many companies across the globe (IEG 2011). Since many companies use sporting events to promote
their brands, studying the effects of event sponsorships on both sponsoring brands and sponsored events has become
increasingly relevant to marketing theory and practice (Sneath et al. 2005, Chien et al. 2011). Sponsoring events which have a
global audience (e.g. FIFA World Cup, Olympics, Wimbledon) offers historically unprecedented reach for corporations and
other organizations seeking to communicate messages worldwide (Farelly et al. 1997).
Sponsorship theory proposes that event sponsorship can lead to increased interest, awareness and intent to purchase the
sponsors products (Meenaghan 1991; Roy and Cornwell 2004). To explain the relationship between sponsorship, attitudes
and ultimately consumer behavior, scholars frequently refer to congruence theory (e.g., Osgood and Tannenbaum 1955; Fleck
and Maille 2010) and the meaning transfer phenomenon (McCracken 1986). However, the mediating roles of event and brand
emotions resulting from the sponsorship relationship and the subsequent impact on consumer attitudes have been largely
ignored. Martensen and colleagues (2007) proposed a model to spark research within this theoretical gap, but testing and
refinement of the model has thus far been limited to a single participant sport (golf) in a Western culture (Denmark). The
purpose of this study is to refine and test a comprehensive model of the influence of sponsorship on consumer behavior in the
Indian subcontinent, where a quarter of the worlds population resides.
Theory suggests that congruence (i.e., fit between the sponsor and sponsored event) first influences consumer emotions
toward the event, which in turn influences emotions regarding the sponsoring brand (Martensen et al. 2007). Specifically, the
effects of a congruent sponsorship are hypothesized to generate a more (less) positive (negative) emotion towards the event
compared to an incongruent sponsor. Martensen and colleagues (2007) propose that a positive (negative) emotional
experience with an event leads to a positive (negative) emotional reaction and attitude towards the sponsoring brand through
a spreading activation process (Anderson 1983). Furthermore, consumers with positive attitudes toward the event and its
sponsors are also more likely to attend the event and purchase the sponsors products and services. Hence, we predict that
event emotions are positively related to brand emotions and consequently lead to a positive relationship between brand
attitudes and event attitudes and ultimately higher purchase intentions.
In order to empirically assess the robustness of the proposed model, structural equation modeling (SEM) was performed on
data collected from a sample (n=289) of consumers from the Indian sub-continent. The findings of this study support the
contention of congruence theory that the fit between the images of the sponsor and the event ultimately enhances positive
attitudes toward both the event and sponsor, but the lack of fit is not inevitably detrimental. However, our studys results
emphasize the mediating role of emotion by demonstrating that greater sponsorship fit elicits positive event emotion, which
influences attitude toward the event and emotion toward the sponsoring brand, which contributes to brand attitude. Though
we did not find sponsorship fit to significantly influence negative emotions, existing negative emotions toward the event did
contribute to negative emotion felt toward the sponsoring brand. Furthermore, we find additional empirical support for the
theory of reverse sponsorship effects proposed by Ruth and Simonin (2003) in that attitude toward the sponsoring brand
affects the attitude toward the sponsored event by virtue of the association (McCracken1986).
These results suggest sponsorship managers should avoid association with teams or events when negative emotions are likely
to be elicited by consumers, such as rivalry exposure (Bee and Dalakas 2012). Additionally, by testing the model using data
gathered from an Indian sample, this study contributes to the burgeoning body of sponsorship research by demonstrating that
fit and the emotions elicited from sponsorship are important for consumers in developing countries. In sum, this paper adds
early evidence of the generalizability of sponsorship effects models, which have primarily been tested in Western context.
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THE EFFECT OF VERTICAL LINE EXTENSIONS ON RECIPROCAL BRAND ASSOCIATIONS STRUCTURE:

AN ACCESSIBILITY-DIAGNOSTICITY PERSPECTIVE
Jean Boisvert, American University of Sharjah, UAE
IINTRODUCTION
In bringing forward the accessibility-diagnosticity theory, Feldman and Lynch (1988) suggested that information influences a
consumers evaluation of a brand extension as long as it is accessible and diagnostic. Accessibility refers to the contextual
ease of retrieving a piece of information from memory for input into a judgment (Feldman and Lynch 1988) and diagnosticity
is the degree to which that piece of information is relevant for that judgment (Meyvis and Janiszewski 2004). Kardes et al.
(2004) argued that products and brands can rarely be described completely by consumers, who mostly form inferences based
on the information available (e.g. recent advertising, point-of-purchase displays) to them at the time of judgment.
In launching a new vertical line extension, an existing parent brands name is used to launch new products or services but at a
different price point and quality level (Xie, 2008; Keller and Aaker, 1998; Kim, Lavack, and Smith, 2001). In the case of an
upward extension, target consumers are likely to invest a significant amount of attention to the new extended brand because
of its inherent involving effect. Initially, Wyer (2008) suggested that when individuals possess previously interpreted
information about an object, on the basis of recently activated knowledge, it tends to persist over time on later judgments.
This remains true even if an interference factor comes to mediate those prior impressions (Yeung and Wyer, 2004). For
instance, in the case of a new extension, recent high accessibility and relevance of information tasks related to an established
parent brand (e.g. rating key brand associations) can potentially balance out the effect of the extension on reciprocal attitude
toward the PB.
H1: For a downward extension, and high parent brand accessibility, the reciprocal structure of a parent brand, after extension,
will not be affected by the presence of the extension.
H2: For a downward extension, and low parent brand accessibility, the reciprocal structure of a parent brand, after extension,
will be affected by the presence of the extension.
Yeung and Wyer (2004) suggested that an induced emotion before product evaluation persist even after introducing an
interfering stimulus such as an attribute related to the product. However, the case of a vertical extension may face a much
different dynamic. Being developed to be distinct from the parent brand (i.e. price point, quality level), consumers are likely
to invest more scrutinizing efforts than for a horizontal extension. Thus, in the case of a highly involving element such as an
upward vertical extension we propose that the reciprocal attitude towards the parent brand will not be affected by the
extension but the reciprocal parent brands association structure should change permanently.
H3: In the presence of upward extension, and high parent brand accessibility, the reciprocal structure of a parent brand, after
extension, will be affected by the presence of the extension.
H4: In the presence of upward extension, and low parent brand accessibility, the reciprocal structure of a parent brand, after
extension, will be affected by the presence of the extension.
It is noteworthy that little evidence exists in the literature supporting the aforementioned proposed effects whether it is for
horizontal or for vertical extensions. The goal of the study was to assess the extent to which the accessibility of a parent brand
associations structure and the opportunity of a cognitive task related to it would influence the reciprocal evaluation and
associations structure of the same parent brand after extension when it is developed upward. In the two previous findings,
levels of motivation towards involving factors were not tested.
METHOD
Before collecting the data, a series of pre-tests were conducted for brand name selection and stimuli development. In order to
test for the differences and variations in levels of accessibility and/or diagnosticity through the mediation of persuasion
appeals of a vertical line extension, four experiments were planned. More specifically, a natural experiment based on a 2 x 2
between-subjects design was conducted with two levels of accessibility (high accessibility/low accessibility) and two levels
of vertical extension (upward/downward).
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For the high accessibility cells, the core brand was rated first before extension, then followed by the extension a week later,
and finally the core brand again (after extension) a week later. For the low accessibility cells, the core brand was not rated
initially (pre extension) but like the other cells, the extension was rated a week later, followed by the core brand (after
extension) a week later. The testing of the hypotheses was done using structural equation modeling with AMOS 19.0. The
measurements of the brand associations were based on a 7-point Bipolar Horizontal scale (1 = not at all representative, 7 =
very representative).
RESULTS
The current study found that in a stimulus-based high accessibility context, the effect of an established parent brand
neutralized the mediating effect of a downward extension on both the extensions and reciprocal parent brand associations
structure. The results support Hypothesis 1. Table 1 shows the resulting factorial structure obtained for the high accessibility
downward extension cell. In three-point-in-time measurements, all reliability coefficients are significant (Cronbachs D >
.70). Variances explained are also quite high (R2 > 69%). In assessing the SEM-CFA for the core brand pre-extension
assessment (n = 165), the normed fit indices (GFI = .91, NFI = .97, CFI = .98, RFI = .96, and RMSEA = .07) suggest a
reasonable model fit (Coker, Ashill, and Hope 2011; Hair et al. 2009; Sharma et al. 2005). For the downward extension
assessment (n = 165), the SEM-CFA also shows a reasonable fit (GFI = .91, NFI = .90, CFI = .93, IFI = .93, and RMSEA =
.07). Finally, for the core brand reciprocal assessment (n = 165), the SEM-CFA also shows a reasonable fit (GFI = .94, NFI =
.95, CFI = .97, IFI = .97, and RMSEA = .06).
In contrast, in a memory-based low accessibility context (no core brand measurement pre extension), the reciprocal effect
of the downward extension on the parent brand is more direct, which supports Hypothesis 2. Table 2 shows the resulting
factorial structure obtained for the low accessibility downward extension cell. In the two-point-in-time measurements, all
reliability coefficients are significant (Cronbachs D > .70). Variances explained are also quite high (R2 > 66%). In assessing
the SEM-CFA for the downward extension assessment (n = 159), the normed fit indices (GFI = .91, NFI = .91, CFI = .95,
RFI = .89, and RMSEA = .068) suggest a reasonable model fit (Coker, Ashill, and Hope 2011; Hair et al. 2009; Sharma et al.
2005). For the core brand reciprocal assessment (n = 159), the SEM-CFA also shows a reasonable fit (GFI = .897, NFI = .91,
CFI = .93, IFI = .93, and RMSEA = .071).
Table 3 shows the resulting factorial structure obtained for the high accessibility upward extension cell. Supporting
Hypothesis 3, the results also show that the presence of a mediating agent such as an upward extension actually fosters a
significant change in terms of parent brand associations reciprocal structure whether the accessibility of key PB information
is high or low. In three-point-in-time measurements, all reliability coefficients are significant (Cronbachs D > .70).
Variances explained are also quite high (R2 > 69%). In assessing the SEM-CFA for the core brand pre-extension assessment
(n = 169), the normed fit indices (GFI = .98, NFI = .96, CFI = .96, RFI = .94, and RMSEA = .074) suggest a reasonable
model fit (Coker, Ashill, and Hope 2011; Hair et al. 2009; Sharma et al. 2005). For the downward extension assessment (n =
169), the SEM-CFA also shows a reasonable fit (GFI = .92, NFI = .90, CFI = .90, IFI = .69, and RMSEA = .069). Finally, for
the core brand reciprocal assessment (n = 169), the SEM-CFA also shows a reasonable fit (GFI = .94, NFI = .94, CFI = .97,
IFI = .97, and RMSEA = .066).
Table 4 shows the resulting factorial structure obtained for the high accessibility upward extension cell. Supporting
Hypothesis 4, the results show that despite the presence of the parent brand, before extension, an upward extension directly
mediate the reciprocal effect on the parent brand (after extension) filtering out the initial diagnostic effect. In the two-pointin-time measurements, all reliability coefficients are significant (Cronbachs D > .70). Variances explained are also quite high
(R2 > 76%). In assessing the SEM-CFA for the downward extension assessment (n = 171), the normed fit indices (GFI = .95,
NFI = .96, CFI = .98, RFI = .94, and RMSEA = .073) suggest a reasonable model fit (Coker, Ashill, and Hope 2011; Hair et
al. 2009; Sharma et al. 2005). For the core brand reciprocal assessment (n = 171), the SEM-CFA also shows a reasonable fit
(GFI = .97, NFI = .98, CFI = .99, IFI = .99, and RMSEA = .058).
The goal of the study was to assess the extent to which the accessibility and diagnosticity of a parent brand associations
structure impacts the reciprocal evaluation and associations structure of the same parent brand after extension. Based on
Wyer (2008), recently induced prior judgments about of an object are suggested to persist over time. This remains true even if
an interference factor comes to mediate those prior impressions (Yeung and Wyer, 2004). In the case of vertical extensions,
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the current study confirms these suggestions but only in the presence of a downward extension. More specifically, the effect
of an established parent brand, before extension, neutralized the mediating effect of a downward extension on the reciprocal
brand associations structure of the parent brand.
In contrast, initial findings in the accessibility-diagnosticity theory (Yeung and Wyer, 2004; Wyer, 2008) are being clarified
as our study brings additional elements extending and/or complementing the theory. We found that the level of motivation
towards the interfering factor was not tested as in the case of an upward extension. In fact, the effect of the upward extension
is quite significant whether the accessibility of diagnostic parent brand information, before extension, is high or low. Here, an
upward extension fosters significant changes in the parent brand associations reciprocal structure.
Our study is important for extension development as it fills an important gap related to the area of vertical extensions and the
influence it has of reciprocal brand associations cognitive structure of the parent brand. In the same way, our paper also
contributes to a better understanding of the accessibility-diagnosticity theory and the effect of prior impressions over time.
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594
PREFERENCES OF YOUNG NEWS CONSUMERS: A CONJOINT ANALYSIS

Setayesh Sattari, Linnaeus University, Sweden
Tim Foster, Lulea University of Technology, Sweden
ABSTRACT
As more people choose to obtain their news online, most notably young people, it became of interest to look at the changing
habits of online news consumers. Using conjoint analysis of Swedish college students, this paper aims to answer the
question, which news attributes within various news categories are most preferred by todays online news consumers?
Results indicate that accuracy and source credibility are the most important attributes across many news categories, followed
by immediacy. Interestingly, interactivity was, overall, the least preferred attribute for young, online news consumers in one
of the most Internet-connected countries in the world.
INTRODUCTION
The varied media environment that now faces todays news consumer provides several choices, most of which are accessible
at all times, day and night (Diddi and LaRose 2006). According to Sagan and Leighton (2010), not only is the Internet more
likely to be the primary source of news, but it has become a primary means for seeking information because of its
accessibility, convenience, amount of data, and the ability for the end user to interact with the news itself. Such new
technologies are changing the nature of news consumption and this in turn is providing new opportunities for studying such
behavior (Tewksbury 2003).
While some studies have investigated the effects between computer-based news and other traditional (offline) media
(Tewksbury and Althaus 2000), few have looked exclusively at online habits of news consumers, even though online news
consumers actually consume more news (Chyi and Lasorsa 2002). In addition, Huang (2009) points out that many of the
studies on news consumption were conducted before or as the Internet news industry became mainstream.
Moreover, research shows that it is young news users who have become experts on seeking and using news in an online
environment, which is notable at a time when other, more traditional, offline media are losing readers (newspapers), viewers
(television), and listeners (radio) (Huang 2009). So what are todays youth looking for when it comes to online media (Huang
2009)? More specifically, what types of news are they reading and what attributes do they find important as they do in this
world where the 24/7 news cycle is revolutionizing the industry? This study seeks to fill in this gap by investigating the
needs of the early 21st century news consumer. As we are researchers at a Swedish university, our focus of this study is
Swedish young people as news consumers. This is further supported by the fact that Swedes have access to many forms of
mass media and rely heavily on it to obtain information (Strmbck and Kiousis 2010) and Swedes are among the highest
users of the Internet in the world (Martin and Robinson 2007).
NEWS CATEGORIES
In looking at online vs. offline newspaper reading, Tewksbury and Althaus (2000) categorized news into Public Affairs
News (National; International; Politics) and Other News (Metro; Business and Technology; Sports, Arts & Technology;
and Editorials, Obits, Etc.). Dutta-Bergman (2004) looks at online news content as being organized into seven categories:
Politics, Sports, Business, Science and Health, International, Government, and Entertainment. Moreover, Tewksbury (2003)
found that online news content selection by News Readers in the U.S. were within the following news categories: Sports;
Business & Money; Arts & Entertainment; Features; U.S. National; Technology & Science; World; Politics; Weather;
Health; Opinion & Editorial; State & Local; Obituary; Other News. More recently, Sagan and Leighton (2010) found that in
terms of online news stories, sporting events generate some of the highest rates of online news traffic, while anticipatory
news such as election returns, court verdicts, and other outcomes involving rapid change or updates also induce higher
online traffic. In addition, De Waal and Schoenbach (2010) placed news categories from Web newspapers into: Politics;
Economy; Local News; Sports; Crime; Culture; and Celebrities.
Based on this review of literature regarding the categories of news, an eclectic approach combining the main categories from
within the studies mentioned was first taken so as to not leave any of the major categories of news out. Furthermore, the
595
categories were pre-tested amongst a group of 20 college students at a Swedish university to find out which news categories
were most relevant for the purpose of this study. In the end, the categories included: Business & Finance, Disaster, Accident
and Crime; Local and Regional News; Sports; Politics & Government; Science and Technology; and Arts & Entertainment.
NEWS ATTRIBUTES
Recent surveys of attitudes toward the press have found that credibility is on the decline (Pew Research center 2004). This is
an uncomfortable finding for journalists, who have long believed that credibility and readership were inextricably linked. The
content of a message is also important. As an example, Dutta-Bergman (2004) reported that more complete messages on a
health website are thought to be more credible. Researchers have found that behavioral differences such as verification of
news sources (Flanagin and Metzger 2000) and the purpose of reading (Dutta-Bergman 2004) can influence perceptions of
credibility.
While studies have shown how individual differences can change perceptions of credibility, they have revealed little about
the other attributes people may like to trade off with credibility. In a pre-commercial Internet era, Bridges (1989) discussed
timeliness, proximity, prominence, impact, conflict, magnitude, oddity and visual as common news attributes. More recently,
Huang (2009) discussed attributes in an online environment that will become increasingly important to todays youth to
include relevancy, customizability, as well as other variables such as time constraints (making immediacy of the news a
factor as well).
From the above, the following research question is stated: Which news attributes within the various news categories are most
preferred by todays young online news consumers?
With the literature review as a guide, in order to decide on the important news attributes that consumers would consider when
deciding on which source to choose, we conducted a focus group among college students at a university in Sweden. Finally,
five main attributes emerged: Source Credibility, Accuracy, Immediacy, Interactivity, and Richness were the result and are
briefly explained below:
x
Source credibility: How expert and skilled do you think the online source of news is? How much do you trust that
source? (e.g. online versions of CNN or BBC, Swedish news sites like DN or TV4, blogs, Twitter, Facebook, etc.)
Accuracy: If source credibility is where you get the news, accuracy is the content of that news and how much you trust
what you are reading or seeing.
Immediacy: How quick is the news reported after its occurrence (e.g. within a few minutes, the next day, etc.)
Interactivity: The degree to which you can influence the form or content of the news in real time (e.g. writing a
comment, sharing it on social media, uploading a video, etc.)
Richness: How much detail does the news contain? (e.g. text only, a mixture of text, pictures and video, etc.)
Considering which research methodology to choose, researchers and practitioners often equate preference measurement with
conjoint analysis (Netzer et al. 2008). This technique is used to assess the different weights individuals place on the features
of a given object by showing them a set of features and asking them to indicate (in a variety of ways) how much they prefer
the different potential attributes of that feature.
Conjoint analysis was used for the purpose of this study by developing an online questionnaire on Qualtrics. A group of
Swedish college students were then asked to answer the questionnaire in order to understand their online news preferences
for which a total of 131 responses were obtained. College students are among the best subjects to study when it comes to
media habits, as news consumption patterns emerge around the time young people leave for college (Diddi & LaRose, 2006).
Vincent and Basil (1997) add that college students make for an important sample for news use because of the important
period of socialization they find themselves in, a time when young adults growing more independent and begin to undertake
important social roles, such as that of voter and entering the workforce.
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College students in Sweden were the focus of this study, due to the level of Internet use being amongst the highest in the
world (Martin and Robinson, 2007). In fact, Sweden has had among the fastest growing rates of Internet use, and today at
nearly 93%, among the highest penetration rates in the world. Furthermore, over 90% of all young people between ages 16
and 24 in Sweden take part in social network sites such as Facebook and Twitter.
Overall, regarding the categories of Business & Finance, Local & Regional, and Politics & Government, the results reveal
that the most preferred attribute is the Accuracy of the news followed by Source credibility. The consumer preference for
Disaster, Accident & Crime, as well as for Sports News was immediacy, followed by Accuracy. Richness was the most
important attribute for Arts & Entertainment, having Source credibility second. However, it was the exact opposite for
Science & Technology: Source credibility was the most preferred, followed by Richness. For all of the categories of news
other than Science & Technology as well as Arts & Entertainment, Interactivity was the least preferred attribute, while for
these last two categories, Immediacy that was the least favorable one. More specifically, lifting out each attribute, the
following results emerge:
Accuracy: This was the most important attribute in Politics & Government, Local & Regional, and Business & Finance.
However its, lowest preference level was within the category of Arts & Entertainment, even though it was still not the least
preferred attribute within that category.
Source credibility: This was the most preferred attribute only in Science & Technology. But its preference level is also
somewhat important and high in the categories of Business & Finance, Local & Regional, and Politics & Government as well
as Arts & Entertainment. This attribute was not the least preferred one in any of the categories.
Immediacy: This attribute was mostly preferred in the categories of Disaster, Accidents & Crime, as well as Sports, while it
was the least preferred in the categories of Science & Technology as well as Arts & Entertainment.
Interactivity: This was not the most preferred in any of the categories. However, it was the least preferred in all categories
other than Science & Technology as well as Arts & Entertainment.
Richness: This was the most preferred in only one category, and that was Arts & Entertainment. It was also important in
Science & Technology. Furthermore, it was never the least preferred in any of the categories.
This study provides many conclusions, as well as implications for practitioners (especially online news providers). If you are
an online news source and are writing about Business & Finance, Politics & Government, or Local & Regional, you need to
pay attention to Accuracy and Source credibility. How Accurate your information is (i.e. is what is being reported true?) is
the most preferred attribute. With Source credibility (i.e. where is the information coming from?) being the second most
important attribute within these three categories of news. So, in order to increase customer trust, online news providers need
to strongly consider the accuracy of the information they are putting out, as well as the image they have among target
audiences for how they are viewed as a source for that information.
If you are providing information online about Disasters, Accidents & Crime or Sports, then what must be considered first is
the Immediacy (speed) with which you get the information out there (and updated), while also making sure it is Accurate.
For those online news sources focusing on (or including) Arts & Entertainment as a category of news, the Richness (i.e.
depth and detail, such as photos, as well as detailed information) of the message is of the upmost importance. This is also
important if you are reporting anything about Science & Technology. However, when it comes to Science & Technology, you
must first pay attention to Source credibility.
Overall, Source credibility and Accuracy must be considered in all categories of news, even if not the most preferred in all of
them. It seems young, online news consumers want to trust what news they are obtaining, but they also want to feel safe with
where they are getting it from. What was surprising among younger news consumers in Sweden was the fact that
Interactivity was not among the most preferred attributes of the news. This of course deserves further research.
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Future research should focus on other segments than only college-educated young people. Investigating these attributes
within these categories of news can be done in a myriad of ways using several demographic factors to better understand how
all news consumers want their news. There are, of course, other attributes and categories that also could be considered.
Using other analytical tools or other techniques within conjoint analysis, such as using scenarios to discover the tradeoffs
between these news attributes is also recommended.
REFERENCES
Bridges, J.A. (1989). News Use on the Front Pages of the American Daily. Journalism Quarterly, 66, 332-37.
Chyi, H.I., & Lasorsa, D.L. (2002). An Explorative Study on the Market Relation between Online and Print Newspapers.
Journal of Media Economics, 15(2), 91106.
De Waal, E., & Schoenbach, K. (2010). News Sites Position in the Mediascape: Uses, Evaluations and Media Displacement
Effects over Time. New Media & Society, 12(3), 477-496.
Diddi, A., & LaRose, R. (2006). Getting Hooked On News: Uses and Gratifications and the Formation of News Habits
among College Students in an Internet Environment. Journal of Broadcasting & Electronic Media, 50, 193211.
Dutta-Bergman, M. (2004). The Impact of Completeness and Web Use Motivation on the Credibility of E-Health
Information. Journal of Communication, 54(2), 253-269.
Flanagin, A., & Metzger, M. (2000). Perceptions of Internet information credibility. Journalism and Mass Communication
Quarterly, 77(3), 515-540.
Huang, E. (2009). The Causes of Youths Low News Consumption and Strategies for Making Youths Happy News
Consumers. Convergence, 15(1), 105-122.
Martin, S.P., & Robinson, J.P. (2007), The income digital divide: trends and predictions for levels of Internet use. Social
Problems, 54, 1-22.
Netzer, O., & Srinivasan, V. (2011). Adaptive Self-Explication of Multi-Attribute Preferences. Journal of Marketing
Research, 48 February (1).
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J.C., Orlin, J.B., & Rao, V.R. (2008). Beyond Conjoint Analysis: Advances in Preference Measurement. Marketing Letters,
19, 337-354.
Pew Research Center. (2004). Bottom Line Pressures Now Hurting Coverage, Journalists Say. Available at http://peoplepress.org/reports/print.php3?ReportID=214.
Sagan, P., & Leighton, T. (2010). The Internet and the Future of News. Daedalus, 139(2), 119-125.
Stromback, J., & Kiousis, S. (2010). A New Look At Agenda-Setting Effects Comparing the Predictive Power of Overall
Political News Consumption and Specific News Media Consumption across Different Media Channels and Media Types.
Journal of Communication, 60, 271-292.
Tewksbury, D.H., & Althaus, S.L. (2000). Differences in Knowledge Acquisition among Readers of the Paper and Online
Versions of A National Newspaper. Journalism & Mass Communication Quarterly, 77, 457-479.
Tewksbury, D. (2003). What Do Americans Really Want to Know? Tracking the Behavior of News Readers on the Internet.
Journal of Communication, 53, 694-710.
Vincent, R.C., & Basil, M.D. (1997). College Students News Gratifications, Media Use and Current Events Knowledge.
Journal of Broadcasting and Electronic Media, 41, 380392.
598
THE COLLECTIVE COPING STRATEGIES OF VULNERABLE CONSUMERS

Peter Nuttall, University of Bath, UK
Julie Tinson, University of Stirling, UK
Maria Piacentini, University of Lancaster, UK
Hayley Cocker, University of Lancaster, UK
ABSTRACT
The purpose of this study was to develop a broad understanding of how those who are vulnerable can gain access in their
marketplace dealings; to explore the consumer coping strategies of adolescents in low-income families in relation to a
specific consumption ritual and to ascertain the extent to which adolescents perceived their situation as disadvantaged. The
method used here was a qualitative approach employing 40 in-depth interviews with 16 year olds (20 males and 20 females)
who were planning to attend their high-school prom in the UK. The findings illustrate that both individual and collective
coping strategies were employed (e.g. problem solving and emotional techniques). Confrontive strategies illustrated less
perceived vulnerability than emotional techniques (e.g. venting and denial). As the high-school prom is a growth market in
the UK, businesses should be aware of increasing vulnerability by promoting excess and should be cognizant of supporting
collective strategies employed within communities.
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PESTER POWER IN LOW INCOME FAMILIES

Taryn ONeill, University of KwaZulu-Natal, South Africa
Debbie Vigar-Ellis, University of KwaZulu-Natal, South Africa
Samantha Paterson, University of KwaZulu-Natal, South Africa
ABSTRACT
Pester power is then the ability of a child to influence the purchasing choice of an adult using various tactics, the most
common of which is repetitive nagging. There is a considerable amount of literature on pester power in western societies,
where children have been documented to be responsible for significant expenditure each. Western societies are assumed to
have a higher level of disposable income, although even in these societies concern has been raised about the financial strain
that families place themselves under in order to avoid conflict with their child. This exertion of power, by the child, often
results in confrontations with parents but has also been found to be a successful influence strategy. In order to avoid conflict
and or embarrassment the adult will often give in to the childs requests. Parents willingness to purchase requested products
is driven by the type of product requested by the child and the expense involved, and this has been shown to be understood by
children. Children have been found to exert pester power on decisions and purchases relating to a wide variety of products,
from relatively inexpensive purchases such as food to far more expensive items, such as a family car. Food has been
described as the main battleground for pester power. Persistent nagging, bribery, trolley loading and psychological tactics
have all been identified as pester power strategies.
Consistent with the call for research in the African context by the World Health Organisation, this paper sought to investigate
whether pester power exists in third world communities which are perceived to have considerably less disposable income.
Specifically, would children living in semi-rural, relatively low income areas exert an influence over the purchasing decisions
of their parents or guardians? Would the children pester for the same types of products as their Western counterparts and
would they use the same tactics? A questionnaire was developed based on similar studies done in Western societies so as to
compare the data. A sample of children from a school situated in a farming community within a 20-60 minute drive from
retail environments, was used as the sampling frame. In accordance with the required Ethical clearance procedures of the
university, the Depart of Education for the region, the school principal and the childrens parents were first approached to
give consent for the children to participate in the study. The final sample was made up of 142 children ranging in age from 5
years old (Grade 0) to 13 years old (Grade 7). Care was taken to translate questionnaires and check back translations.
Younger children were assisted in completing the questionnaire. A parent survey was also done but is not reported on in this
paper except to describe the family circumstances. The families fell predominantly into a low income bracket. Over half the
parent respondents (58.8 %) had a household after tax income of R2 999 or less per month (approximately $350pm). The
sample lived mainly in the farming areas, towns and villages surrounding the school (94.2%).
The children identified the mother of their household as the main purchaser of grocery items and clothes and the person who
spoilt them most, thus the most likely target for pestering strategies. This is similar to Western families. Children who live in
low income households exert influence over the purchasing decisions of those households. The products over which these
children exert the most influence are fast moving consumer goods and goods which can be termed instant gratification
products. Such products include hot food, sweets, crisps, chocolates, etc. These products are probably seen while in the
purchase situation, which then stimulates an I see it or smell it and I want it reaction from the child. Significant differences
were found between younger and older children with a greater focus on branded clothing product requests amongst older
children. However children reported less success with pestering when it came to branded clothing compared to food most
likely due to the costs involved. Children employed crying, begging or sulking as pestering strategies. Also identified was
asking when the child is alone with the parent and 76.6% of children admitted to making requests when they know that there
is money. Surprisingly, a number of children (38.7%) indicated sympathy or awareness for their parents financial positions
and indicated that they reacted passively. That said, 75.9% of children said that they make requests until they are granted.
Thus pester power exists and while displaying similar characteristics to pester power launched by children in the Western
world, it appears to differs in intensity due to several factors. Transportation and distance from retail settings is an obvious set
back, while a child might frequent local convenience shops on their own or with a parent, the larger retail areas are
frequented only when the child is not at school (i.e. holidays or weekends, or when the parent can afford the transport). There
does seem to be awareness of financial matters, as the children could clearly identify that paydays were a good time to make
requests. Limitations include the sample size and possible social desirability responses. These are discussed and
recommendations for future research made.
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IM LOVIN IT: THE SALIENCE OF MCDONALDS LOGO, SLOGANS AND COLORS ON CHILDREN
Amanda J. Allen, Mt. Saint Marys College, USA
Leyland F. Pitt, Simon Fraser University, USA
Pierre Berthon, Bentley College, USA
ABSTRACT
This article examines the salience of the McDonalds brand on children in elementary school. Students were asked to create
an advertisement for McDonalds in one of three conditions: for themselves, a friend, or a parent. Differences were found in
how students expressed themselves based on age and their perceived audience.
601
THE EFFECT OF CULTURE ON PECEPTION: A CRITICAL REVIEW AND RESEARCH AGENDA FOR
CONSUMER RESEARCH
Minas N. Kastanakis, ESCP Europe, United Kingdom
Ben Voyer, ESCP Europe, United Kingdom
ABSTRACT
It is becoming increasingly recognised that culture may be a source of variation in many phenomena of central importance to
consumer research. The present paper addresses a gap in cross-cultural consumer behaviour literature by offering a review
and conceptual analysis of the effects of culture on perception.
We highlight and discuss a series of important perceptual differences across cultures (such as such as differences in terms of
self vs. others perceptions, perception of emotions, as well as environmental and aesthetic, sensory and temporal
perceptions).
We address a number of theoretical issues and suggest avenues for future research. Importantly, we offer a new perspective
of framing perceptual differences among cultures, developed from our review that of the culturally-conditioned
perceptual orientation. Finally we conclude with highlighting the managerial implications of our findings.
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LOCAL OR GLOBAL: THE EFFECTS OF GENERATION YETHNIC STRUGGLES AND CULTURAL VALUES
Lou E. Pelton, University of North Texas, USA
INTRODUCTION
Named as a melting pot, the United States is known for its diversity. People of different colors, languages, heritages, and
lifestyles are constantly constituting and constitutive of this multicultural society. Most studies have focused on how people
from minor ethnic cultures adapt to the host society or Anglo-Saxon/Whites dominant culture. However, in the year 2050,
the Anglo-Saxon/White population will quickly become a minority within the U.S. (Kelly 2008). In fact, U.S. Census data
(2005) reveals that more than 50 million U.S. households speak a language other than English at home, and the recent U.S.
Census projects that number to increase significantly by the Year 2020. Perhaps, college students are more sensitive to those
changes since the majority of their ethnic identity exploration project happens during college years (Syed and Azmitia 2010).
In addition, through ethnic experiences, they also encounter the sense of (non) belongingness. It is found that non-White
students are generally more susceptible to fluctuations in belonging uncertainty than White students (Mallett et al. 2011).
College students or Generation Y (Gen Y) is the most culturally diverse generation in U.S. history, given that 35% of the
U.S. population is identified as minority (Kelly 2008). This generation was born between the years 1975 and 1990. Together,
they comprise of 76 million consumers (Kennedy 2001), with unprecedented purchasing power of $200 billion a year
(Gardyn 2002) and they have had an unparalleled impact on the U.S. economy (Noble et al. 2009).
Given Gen Ys diverse and uncertain ethnic experiences, internal cultural valuation attributions (Yang 2004), and significant
purchasing power, the present research attempts to understand Gen Ys attitudes toward local products and global products at
the individual level. This study hopes to assist marketers and practitioners in their marketing and positioning strategies
focusing on Gen Y consumers. Recent research attention has been focused on attitudes towards globalization,
cosmopolitanism, consumer affinity, country-of-origin effects, bi-national brands, market attitudes toward global and local
products, and international segmentation (Oberecker et al. 2008; Woodward et al. 2008). However, there have been limited
studies investigating how individuals struggle with ethnic experiences and internal cultural values affect attitudes toward
local and global products. In other words, the study seeks to understand both how college students external experiences and
internal values affect their attitudes toward products.
LITERATURE REVIEW
U.S. Cultural Environment and Conceptualizing Local and Global Products
The context of the cultural environment inevitably impacts individuals choices, attitudes, and behaviors. Therefore, it is
important to understand the U.S. cultural environment before examining individual cultural values and attributions. After all,
it is consistent with Etzionis (1968) classical contention regarding the social being:
Man is not unless he is social; what he is depends on his social being and what he makes of his social
being is irrevocably bound to what he makes of himself. He has the ability to master his internal being, and
the main way to self-mastery leads to his joining with others like himself in social acts. (1968, p.2)
In this article, clothing, entertainment (music and movies), and foods are selected as anchors for attitudes toward local versus
global products (Steenkamp and de Jong 2010). Ethnic food is often called cultural practice and choice of minority groups in
the US (Chez 2011). Local products are defined as products produced or resembled an ethnic group as opposed to global
products (Anderson 2008; Branstetter 1975; Dormon 1985). Thus, ethnic foods, ethnic clothing, and ethnic entertainment that
are imported from the country of origin of the specific ethnic group or produced in the country of residence are classified as
local products.
Ethnic Experience
Ethnic experience describes the cognitive aspect as opposed to behavioral aspect of acculturation. Acculturation is the
multifaceted process of changing cultural attitudinal, value and behavioral norms that occurs when people from different
cultural backgrounds come into contact with one another (Berry et al. 2006). Cultural adaptation or cross-cultural adaption is
603
the process of sociocultural change that may increase social compatibility between ethnically different peoples in the new
cultural environment (Sam and Berry 2010). Thus, cross-cultural adaptation is a vehicle of acculturation at the behavioral
level. At the cognitive level, Malcarne et al. (2008) posit that ethnic experience is a central and relevant cognitive construct
that describes an individuals acculturation process. The construct addresses four measurable dimensions of ethnic
experience: (1) ethnic identity, (2) perceived discrimination, (3) mainstream conflict, and (4) social affiliation.
Ethnic identity
Ethnic identity reflects an individuals attitude toward being a member of an ethnic group, including items pertaining to
ethnic pride and participation in cultural activities (Malcarne et al. 2006). Ethnic identity exploration and commitment of
Gen Y strengthens throughout college (Syed and Azmitia 2009). One of the most extant findings conducted by Xu et al.
(2004) found that Asian American young adults who have a stronger sense of ethnic identity are more likely to consume
ethnic food and attend ethnic entertainment activities.
In addition, African Americans and Hispanics show more
appreciation for global brands than Caucasians consumers (Dimofte et al. 2010). From those findings, the following
hypotheses are proposed.
H1a: Ethnic identity is positively related to consumers attitudes toward local products.
H1b: Ethnic identity is negatively related to consumers attitudes toward global products.
Perceived discrimination
Perceived discrimination reflects an individuals perceptions of how ones ethnic group has been treated in the U.S (Malcarne
et al. 2006). Perceived discrimination has been found to influence consumption behaviors. In an empirical paper written by
Borrell et al., perceived discrimination was found to positively related with smoking and alcohol consumption among blacks
and Hispanics, and positively related with smoking among Whites (Borrell et al. 2010). On the other hand, students who
perceive discrimination have a reduced sense of belonging (Levin et al. 2006). Perceived ethnic discrimination is resulted in
national dis-identification, which in turns increased hostile attitudes towards the national out-group (Jasinskaja-Lahti et al.
2009). The national out-group is where the local products are; thus, the following hypotheses are proposed:
H2a: Perceived discrimination is negatively related to consumers attitudes toward local products.
H2b: Perceived discrimination is positively related to consumers attitudes toward global products.
Mainstream comfort
Mainstream comfort is defined as individuals perception that he or she is comfortable with American culture and represents
a typical American (Malcarne et al. 2006). Mainstream comfort refers to the sense of belonging to the mainstream
American culture. People with high level of mainstream comfort get along well with general social surroundings. Drivers of
brand choice were found to be moderated by the strength of consumers social identification with a scene, or the mainstream
(Prykop et al. 2007). Mainstream consumers are also found to favor global brands less than minority groups (Dimofte et al.
2010). Conversely, mainstream comfort is inversely related to perceived discrimination.
H3a: Mainstream comfort is positively related to consumers attitudes toward local products.
H3b: Mainstream comfort is negatively related to consumers attitudes toward global products.
Social affiliation
Social affiliation reflects an individuals preference and comfort regarding interactions with members of their own ethnic
groups versus other groups, both in friendship and romantic relationships. Students affiliate with others who were similar to
them in terms of salient personal or social characteristics (Farmer and Farmer 1996). Social affiliation measures the degree
of comfort people feel within their own ethnic groups. Xu et al. (2004) found that ethnic-friendship orientation has a direct
positive effect on the Asian American young adults culture-specific consumption behavior (Xu et al. 2004). As a result,
social affiliation would probably have the same impact on attitudes toward local and global products as ethnic identity.
H4a: Social affiliation is positively related to consumers attitudes toward local products.
H4b: Social affiliation is negatively related to consumers attitudes toward global products.
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Cultural valuation attributions

The writings on individualism-collectivism constructs have proliferated in the social sciences literature for more than onequart century (Hofstede 1983). Since individualism and collectivism are recognized as multidimensional constructs at both
the cultural and individual level, Triandis (1989) and others proposed the term idiocentrism (based on individualism) and
allocentrism (based on collectivism) to describe these individual-level differences (Lee et al. 2010; Triandis 1989) . Yang
(2004) used the term cultural valuation orientation to describe individuals idiocentric and allocentric tendencies.
Consumers cultural valuation orientation attributions are recognized to influence consumers attitudes toward products (Lee
et al. 2010; Yang 2004; Yoo and Donthu 2005). In addition, cultural orientation also has been discussed as a portentous
factor on persuasion, consumer revenge behaviors, leadership, job design, rewards, conflict, and communication (Aaker and
Maheswaran 1997; Christopher Earley and Gibson 1998; Zourrig et al. 2009). Moreover, among the limited extant studies
investigating lifestyles, values, brand choices, and preferences of individualism and collectivism, findings also have been
mixed. As a result, there is a paucity of research attention afforded to the impact of Gen Y consumers cultural valuation on
their attitudes toward domestic or global products.
Vertical and horizontal idiocentrism
Horizontal idiocentrism measures the level of an individuals view of independence from others, whereas vertical
idiocentrism reflects an individuals competitiveness. Idiocentrics or individualists have less social support networks, and
less likely to gain a sense of meaning through identifying with groups (ethnic groups or family) (Scott et al. 2004). In
addition, idiocentric individual wanted to look different from others, and they tend to stick to well-known brand names
(Dutta-Bergman and Wells 2002). Idiocentric consumers value innovative product attributes, fashion conscious, prefer
variety, novelty, and individual gratifications more than allocentrics (Dutta-Bergman and Wells 2002; Yang 2004). On the
other hand, globalization brings new changes to existing social structure and to local consumption spaces as well as increase
level of competition and variety (Spierings and Van Houtum 2008). This notion implies that the introduction of global
products brings variety, changes, and competition to local consumption. On this basis, regardless of the vertical or horizontal
orientations of idiocentrism, one can reason that both vertical and horizontal idiocentrism are more likely to have positive
attitudes toward global products.
H5a: Both vertical and horizontal idiocentrism are positively related to consumers attitudes toward global products.
H5b: Both vertical and horizontal idiocentrism are negatively related to consumers attitudes toward local products.
Vertical and horizontal allocentrism
Idiocentrics and allocentrics are vastly different in their values and lifestyles. Their differences in values and lifestyles range
from life contentment, health conscious, traveling, entertainment, socializing, fashion consciousness, media usage, etc.
(Dutta-Bergman and Wells 2002). Specifically, horizontal allocentrism exhibits an individuals sociability, and vertical
allocentrism suggests an individuals commitment to familism (Lee 2000; Triandis et al. 1995). Being social means that
expressing warmth to family, doing exciting things with friends, or engaging in social interactions or mainstream society
(Lucas et al. 2008). Individuals, who place high value on familism, believe that family members are sources of help, their
behaviors should meet with familial expectations, and their attitudes and values reflect their families (Sabogal et al., 1987).
Allocentrics were found to have preference toward well-known products. This behavior is due to in-group influence (Lee
2000). In addition, allocentric behaviors are shaped by the preferences and needs of close others (Aaker and Maheswaran
1997). They have strong desires for simplicity versus complexity and harmony versus competition. These desires are
contrasting with the influx of global products, where increased variety, complexity, and competition take place. From this
basis, the following hypotheses are proposed:
H6a: Both vertical and horizontal allocentrism are positively related to attitudes toward local products.
H6b: Both vertical and horizontal allocentrism are negatively related to attitudes toward global products.
METHODOLOGY
Sample and Procedure
A self-administered, on-line survey is distributed to students at a large higher education institution located in Southwestern
region of the U.S. In addition, the survey is programmed to rule out missing values and distributed to 520 students. Four
hundred and ten surveys are returned, yielding a response rate of 78%. Only responses indicating age from 18 to 34 are
605
retained for analysis. The final sample comprises of 369 usable responses. Sampling college students is appropriate for this
survey because they fit the criteria of being born between 1975 and 1990, representing Gen Y (Noble et al. 2009). Cases with
respondents ages above 35 years old were removed from the study to ensure sample representation of Gen Y. Demographics
of the sample are: gender (females is 58.6%), age (from18 to 24 is 70%), annual family income (less than $39,999 is 50%),
ethnic identity (Whites is 54%), and marital status (single/never married is 82%).
Ethnic experience scale is adapted from Marcarne et al. (2008). Individual cultural valuation attribution is adapted from
Triandis and Gelfand (1998) and Lee (2000). Attitudes toward local and global products are adapted from Steenkamp and de
Jong (2010). Item relates to attitudes toward furniture is omitted based on researchers judgment of students lack of
involvement in this product category. All responses are measured using 6 point Likert scale (1 = strongly disagree to 6 =
strongly agree). The use of 6-point Likert scale is intended to reduce the effect of neutrality from increasingly ignorant
college graduate population (Bahr 2003).
All items are examined using Principal component analysis and Varimax rotation. Cronbachs of ethnic experience and
cultural valuation are acceptable ( > .7) (Nunnally, 1978), except global and local products, = .614 and = .587
respectively. Since this is an exploratory study, these Cronbachs alphas are acceptable as suggested by Nunnally (1978).
All the items are averaged for each factor structure, and the composite scores are used in regression analyses. Ethnic identity
construct is loaded into two different variables. However, after close examination, the two variables, named low ethnic
identity (LEI) and high ethnic identity (HEI) actually measure the same dimension from different perspective, ethnic identity,
but in opposing manner. Thus, discussion of high ethnic identity (HEI) is consistent with intended hypotheses.
Discriminate and convergent validity are assessed by measuring items and construct correlations. For the most part, items
within constructs have the highest correlations among them. In addition, within constructs correlations are higher than across
constructs correlations. Therefore, these constructs in this study have acceptable convergent and discriminate validity
(Churchill Jr 1979). Please see table 3 for detailed correlations.
The results of ethnic experience and cultural valuations effects on Gen Ys attitudes toward global and local products are
provided in Table 4. H1a is not supported, but H1b is supported, suggesting ethnic identity is inversely related to consumers
attitudes toward global products (-2.723, p < .01). H2a is supported (-1.787, p < .1) and H2b is not supported, indicating that
perceived discrimination does not relate to attitudes toward global products, but negatively relate to attitudes toward local
products. However, both H3a and H3b are strongly supported (-3.732, p < .01) and (4.913, p < .01) respectively. Mainstream
comfort is perhaps the most determining factor in Gen Ys attitudes toward global and local products. Similar to ethnic
identity, H4a is not supported, but H4b is strongly supported (6.706, p < .01), specifying that students who associate well with
others in their ethnic groups tend to favor local products.
Regarding cultural value attributions, the results for H5a and H5b are quite interesting. Vertical idiocentrism are both positively
related to consumers attitudes toward global products (3.043, p < .01) and local products (3.486, p < .01), providing partial
support for these two hypotheses. Horizontal idiocentrism and vertical allocentrism are not related to consumers attitudes
toward global and local products. Similar to H5a, H6a is also partially supported. Horizontal allocentrism is positively related
to attitudes toward local products (2.698, p < .01), but not related to global products. Finally, H6b is not supported.
Managers and practitioners are encouraged to review and incorporate the results in their marketing strategies. Specifically,
segmenting their target markets based on different dimensions of ethnic experiences can provide additional insights in
positioning and sourcing strategies. Promotional messages can be tailored toward socioability or competitiveness values.
Understanding individuals ethnic experiences, cultural valuation attributions, and attitudes toward local and global products
undoubtedly enhance practitioners knowledge of their target markets.
REFERENCES
606
SUBSISTENCE CONSUMER-MERCHANT DEVIANCE: A CONCEPTUAL FOUNDATION

R. Bret Leary, University of Wyoming, USA
Shikha Upadhyaya, University of Wyoming, USA
Sonia Camacho, Universidad de los Andes, Colombia
Courtney Nations Baker, University of Wyoming, USA
Jos Antonio Rosa, University of Wyoming, USA
INTRODUCTION
Recent research in the subsistence consumer domain has focused on an array of topics, including understanding relationships
within social and kinship communities (Viswanathan, Gajendiran, and Venkatesan 2008), the influence of subsistence
consumption culture on marketing systems (Eckhardt and Mahi 2012) and business functions (Viswanathan et al. 2009), the
influence of economic liberalization on subsistence economies on strategic and organizational change (Carman and
Dominguez 2001) and social marketing for improved economic well-being (Kotler, Roberto, and Leisner 2006). These and
similar studies effectively identify some of the underlying cognitive, behavioral, social and physiological complexities of
subsistence markets and their subsequent influence on marketing strategies and tactics. There has been limited study,
however, into how these complex factors drive subsistence consumer-merchant misbehavior. Subsistence consumermerchants (SCMs) are defined as consumers who provide for themselves and their families by managing microenterprises
that serve as important final links in the supply chain for major companies (Viswanathan, Rosa and Ruth 2010). Their
misbehavior, also called deviant behavior (Merton 1949), influences the relationships that subsistence consumer-merchants
have with different actors within their social system, and on the social image of companies and their products. Deviant
behavior exists whenever individuals, in this case SCMs, violate prevailing norms for their social groups or communities
(Warren 2003). This paper focuses on the pervasiveness of deviant behavior among SCMs and some of the social and
cognitive factors that lead to such behaviors. Its underlying thesis is that deviant behavior among SCMs is unavoidable, and
that companies and marketing systems seeking to do businesses in emerging markets need to develop plans and procedures to
deal with it. The paper contributes to the fields knowledge of SCM behaviors.
CONFLICTING NORMS
Subsistence consumer-merchants face significant challenges in their everyday lives. Many live at the margins of society, both
physically and emotionally. Homes are often built from scavenged materials, and on land they do not own and from which
they can be driven at any time. Moreover, many have been forced to relocate from ancestral villages to complex urban
environments by war, ethnic conflict, indiscriminate violence, and deprivation, suggesting that they exist outside the societal
network where they seek to survive. They live in geographic areas poorly served by government institutions, where
conflicting sets of religious and cultural values strive for dominance, and where the rule of law does not apply.
Many of the subsistence consumer-merchants who contributed to Viswanathan, Rosa and Ruth (2010) for example, had
moved to Chennai from rural villages where their extended families remained and continued to worship at a local temple,
which remained a spiritual anchor for the refugees as well. They still belonged to that family and village, but could no longer
uphold all its norms. At the same time, they were imperfect members of social groups within their slum neighborhoods
imperfect because of the rapid turnover in slum populations and their otherwise unstable nature. Further, they contended with
in-group boundaries shifting with the issues involved. When it came to selling cooked food, for example, the relevant social
group from which to draw norms seemed to be the people living on the same city block. When the task was selling flowers
for temple worship, however, the relevant social group was composed of temple worshippers and vendors with a designated
selling space adjacent to the temple and rented from local landowner. Further, within these groups there existed sub-groups
based on ancestry, and ethnic or religious minorities had to deal with social groups defined by caste and theological
distinctions. In most instances, membership was made fragile by uncertainty and change, with possibly only ethnic and
religious membership achieving some level of permanence. Sellin (1938) labeled such situations conflicts of conduct norms,
which arise when individuals identify with multiple social groups that have alternative norms for given situations, but did not
address fragility in group membership as a factor.
Although being involved with multiple social groups with conflicting norms is not uncommon, the tenuous membership with
which subsistence consumer-merchants must contend distinguish them from what is commonly seen. Around the world,
subsistence consumer-merchants are affected by religious persecution, sectarian violence, capricious law enforcement,
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extortion, and unpredictable earnings and purchasing power which engender high levels of uncertainty among the poor
consumers (Viswanathan, Rosa, and Ruth 2008). Further, they are seldom considered full members of their new
communities, giving them a limited voice in the shaping of societally-determined goals and means with which they are
expected to comply. Imperfect membership, high environmental uncertainty, and possibly other factors combine to produce
the fluid commitment to different sets of norms discussed thus far, and which seem to characterize subsistence consumers in
general. It is a phenomenon that companies and marketing systems seeking to partner with subsistence consumer merchants
must address.
A pertinent question to be considered is how do subsistence consumer-merchants choose which set of norm to follow. One
likely factor is group identification, which has been shown to affect conformance with prevailing norms (e.g. White, Hogg
and Terry 2002). Building on social identity theory (Tajfel and Turner 1985) it has been argued that group norms mediate the
relationship between identity and behavior (White, Hogg and Terry 2002). In situations where individuals belong to more
than one social group, it is the norms of the group with which highest identification is attained that the individual will
observe.
The implications of tenuous group membership and group identification for shifting norms being observed by subsistence
consumer merchants are straight forward. In situations in which more than one of their imperfect social group memberships
are relevant, context is likely to determine with which group identification is most likely. On a particular day in a Brazilian
favela, therefore, it may be gang membership that is most salient, and the Casas Bahia truck driver may be allowed to proceed
with deliveries because of the gangs tacit agreement with the local store manager. If family or ancestral ties were to become
dominant, however, as would be the case if a younger brother needed to pull off a heist as a requirement for gang
membership, a gang member may be tempted to allow the Casas Bahia driver to be robbed, because family membership is
less fragile than gang membership, and family identification would consequently trump gang identification. Similarly, Hindu
SCMs selling flowers by a temple in Chennai may be faithful to a Muslim flower vendor because of a long-standing
exchange history and do business in accordance with Islamic norms, until a Hindu flower vendor enters the market and
imposes Hindu norms. In such a situation, ethnic and religious group membership being less tenuous than local market
membership, Hindu norms will prevail among the SCMs because religious and ethnic identification determine which norms
are observed.
Companies and marketing systems in partnership with SCMs need to build social groups in which SCMs feel confident and
secure, and to understand the multiple social groups in which particular SCMs have imperfect memberships. Further, it seems
important that close attention be given to changing environmental factors such as shifts in the ethnic and religious
composition of the neighborhoods where SCMs do business, changes in local government officials that may signal new
priorities in law enforcement, increased or reduced threat of relocation brought about by economic and political
developments, and the changing needs of SCM families. Partnerships with SCMs cannot be strictly transactional. They must
take into account the physiological and emotional factors that impinge on SCMs and affect their sense of belonging in
different social groups, do whatever possible to maximize the influence of the social norms most advantageous to the
business partnership, and allow for violations in norm compliance that may arise because of shifts in identification without
terminating the partnership.
TEMPORAL CONSTRUAL
In economics, empirical evidence calls attention to disparities in rate of time preferences (RTP) between wealthy and
impoverished consumers, driven by differences in the discount rates applied to future events (Lawrance 1991). The poor
exhibit steeper discounts rates for future events than the wealthy. Such as short term orientation was also documented by
(Viswanathan, Rosa and Ruth 2010), who noted that SCMs have short-term decision horizons focused on immediate needs
such as food, shelter, and day-to-day purchases of other necessities, and relegate longer term needs such as saving for their
childrens education and eventual marriage to a class of goals that are desirable but not attainable in the short-run. They
attributed these tendencies to the high levels of uncertainty in SCM environments. All other things being equal, therefore,
SCMs are likely to show higher rate of time preference and steeper discounting of future events than company partners.
Further building support for this phenomena, Holden, Shiferaw, and Wik (1998) demonstrate a direct link between
subsistence poverty (lower assets and cash liquidity) and higher rate of time preferences for rural consumers in Zambia,
Indonesia, and Ethiopia. Returning to the earlier example from Viswanathan, Rosa, and Ruth (2010), a higher rate of time
preference would manifest itself in subsistence consumer-merchants choosing strategies such as day-to-day purchasing to
manage higher uncertainty (steeper discounting) in future demand, supply, and purchasing power. Responding to the
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challenge of uncertainty in their environment, subsistence consumer-merchants concentrate on shorter time horizons where
fluctuations in risk are less extreme.
When forming partnerships with companies and marketing systems, SCMs are likely to operate on shorter time horizons than
their relationship partners. When viewed through the lens of temporal construal (Liberman and Trope 1998), such temporal
misalignment can easily engender conflict that creates deviance. Liberman and Trope (1998) propose that individuals
mentally represent situations along a continuum of temporal psychological distance. More immediate situations are
represented concretely and dominated by feasibility (how-to-do-it) beliefs. More distant situations, in contrast, are
characterized by abstract mental representations composed of primarily desirability (why-to-do-it) beliefs. Not surprisingly,
in partnerships between companies and SCMs, differing time horizons can lead to conflicts in expectations and execution.
As a tragic example of this breakdown, a rising tide of suicides in the Indian state of Andhra Pradesh has been attributed in
part to troubling aspects of the relationship between SCMs and micro-finance lenders (Biswas 2010; Burke 2011). Since
many SCMs operate within a day-to-day time horizon, they are most likely to construe micro-loans abstractly in terms of the
desirability of what can be purchased with the borrowed funds, rather than in terms of concrete details of repayment
feasibility. The problem is compounded by most microloans having a 30-60 day maturity, which would seem short by
traditional banking standards, but are much longer than the day-to-day decision horizon that characterizes SCMs. Microfinance lenders operate with a longer time horizon and expect SCMs to construe the offer of a microloan concretely in terms
of how they will repay the lender. SCMs, in contrast, construe a 60-day loan as free money, and feel tricked when repayment
deadlines draw near and the impossibility of repayment looms large. Conflicts and accusations have been common.
Another temporal breakdown between the SCMs and the micro-lenders relates to actual use of micro-loan funds. While
micro-finance loans are often intended for investment in micro-entrepreneurial activity, the immediate needs of SCMs and
their family/kinship group may require use of the funds for unanticipated healthcare crises, housing expenses, or even small
debts to neighbors. With immediate needs construed in more concrete terms than loan repayments, SCMs are more likely to
violate the agreed-to norm of investing the micro-loan funds (Eyal, Liberman, and Trope 2008). For SCMs with limited
capacity to repay even when micro-loan funds are invested as intended, a decision to meet immediate needs with borrowed
funds often leads to default. The end result of such temporal construal misalignments has all too often been tragic. In a
country like India, where loan default brings stigma and dishonor, suicide has been how SCMS have terminated the
partnerships, leaving families and other dependents destitute and costing the lender as well.
Three different aspects of concrete mental construal can help reduce the incidence of temporal construal misalignments and
the possibility of a tragic end to a partnership. First, concrete mental representations are primarily composed of means-related
associations (Liberman et al. 2007), which suggests that an SCM acting on a concrete mental construal will focus on
alternative means of handling resources such as microloans or inventory to be sold door-to-door. Second, people are less
susceptible to norm interference in their decision process when they focus on concrete representations of a situation (Eyal,
Liberman, and Trope 2008). While focused on means of satisfactorily achieving business goals, therefore, SCMs will be
more likely to seek creative solutions to comply with business goals and extend the relationship than to seek to escape the
partnership. Finally, concrete representations tend to give rise to increased perceptions of subjective probability (Wakslak and
Trope 2009). With norm-resistance attenuated and a clear emphasis on means, SCMs are more likely to view novel and
deviant means of resolving partnership conflicts as having a higher chance of success, and hence more likely to be pursued.
When concrete construal prevails, SCMs will most likely generate more possible means, more creative alternatives, and
higher subjective assessments of the likelihood of success for creatively deviant solutions.
Divergent temporal construal are very likely in partnerships between companies and SCMs, and the burden of avoiding them
must be assumed by marketing managers who are able to adopt either abstract (desirability driven) or concrete (feasibilitydriven) construal of goals and means, and hence understand the likely and potentially detrimental mental model that are
unknowingly adopted by SCMs. Misunderstandings such as those that led to suicides among SCMs in India over unpaid
loans can be avoided easily by managing the focus of SCM attention at the time that business partnerships are established and
goals determined.
DISCUSSION AND IMPLICATIONS
This paper argues for pervasive deviance among subsistence consumer merchants. It also discusses some social and cognitive
antecedents of such deviance aimed at increasing the fields knowledge of deviance among SCMs and marketing practices.
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Conflicting social norms and misaligned temporal construals are the antecedents of SCM deviance discussed. Anchored by
strong motivation to attain uncertain possible futures, SCMs, implicitly in many occasions, commit to goals and performance
levels that are either impractical given their current socio-economic situation or simply unattainable. Furthermore, disposition
towards decisions, behaviors and intentions that develop, preserve, and strengthen the relationship with society, family and
business partners increases SCMs susceptibility to engage in deviant behaviors. Short term orientation and competing social
groups norms makes deviant behaviors integral aspect of SCMs social and business relationships. Companies and marketing
systems seeking to establish and expand business and economic partnerships in emerging markets would be well served to
design and develop policies, plans, and procedures responsive to both the needs of SCMs and their penchant for deviant
behavior.
REFERENCES
610
IMMIGRANT CONSUMERS: ETHNIC IDENTITY, RELIGIOSITY, MATERIALISM

Mohammadali Zolfagharian, University of TexasPan American, USA
Hedie Azarpajooh, University of North Texas, USA
Yasemin Tenger-Soydemir, University of TexasPan American, USA
ABSTRACT
This study explores three key psychological and behavioral characteristics of immigrant consumers: EID, MAT, and REL. Two
immigrant communities were considered, one representing a home country (i.e., Germany) that is highly similar to the US, and
the other representing a home country that is highly different from the US (I.e., China). The survey was completed by first,
second, and third generation German Americans and Chinese Americans. The results show that EID is a multi-dimensional
construct consisting of four factors, MAT is a multi-dimensional construct consisting of three factors, and REL is a
unidimensional construct.
The interplay among the three focal constructs is intriguing. While all of the paths were significant using the GAs dataset or
the pooled dataset, EID was not significantly associated with REL among CAs. Therefore, REL appears to be a partial mediator
of the relationship between EID and MAT among the GAs and within the pooled dataset, but not among CAs. In the latter
group, EID and REL comprise the two significant predictors of MAT. These findings add to existing knowledge in two ways.
First, the partial mediatory role of REL was not reported or supported previously. For example, while EID and REL emerged
as important predictors of MAT in Cleveland and Changs (2009) study of first- and second-generation Korean Canadians, EID
was not significantly associated with REL in that work. Moreover, Cleveland and Chang (2009) report negative but not
significant associations between EID and REL, whereas we find this link to be positive and significant among GAs and within
the pooled dataset, and positive but not significant among CAs.
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FASHIONABLE FOOD: WHEN THE SLEEPER EFFECT TURNS NEGATIVE INFORMATION INTO POSITIVE
ATTITUDES
Adrienne Foos, University of Manchester, United Kingdom
Kathy Keeling, University of Manchester, United Kingdom
Debbie Keeling, University of Manchester, United Kingdom
INTRODUCTION
Marketers promoting new products online are often faced with the ubiquity of information discounting their marketing
messages (e.g. critical responses). However, the counterintuitive sleeper effect posits that negative information can positively
impact attitudes under certain conditions (Gruder et al. 1978). Elaborative encoding is expected to modify the sleeper effect
by enhancing the persuasiveness of marketing messages accompanied by discounting cues (Mazursky and Schul 1988). The
current study investigates the conditions necessary for negative information to have a positive impact on attitudes.
Early studies found that participants can become more favorable over time toward messages paired with discounting cues,
such as disclaimers or low source credibility (Hovland et al. 1949). Termed the sleeper effect, researchers hypothesize that
individuals dissociate the cue that suppressed the initial impact of the persuasive message, making the message more
acceptable over time (Kumkale and Albarracn 2004). Despite its early promise, interest in the sleeper effect has largely
waned since the 1970s and 1980s due to heavy criticism aimed at its reliability and validity. Difficulty replicating the effect
even led some researchers to propose to lay the sleeper effect to rest (Gillig and Greenwald 1974). While the effects
theoretical constructs have been refined since this denunciation (Cook et al. 1979), the sleeper effect has been consigned to
irrelevance. In order to reawaken the sleeper effect for marketing research, this study tests for the conditions necessary to
produce the sleeper effect. The four conditions necessary for the sleeper effect to occur are as follows:
(a) the message must have a significant initial impact on attitudes; (b) the discounting cue must be powerful enough
to significantly inhibit the attitude change that the message would otherwise have caused; (c) the discounting cue
and message must become dissociated before the delayed measurement takes place; and (d) the level of attitude in a
message-only group at the time of delayed measurement must be higher than the level that is found in the
discounting cue group immediately after exposure to the message (Gruder et al. 1978, p. 1063)
While previous research focused on the differential impacts of the message and discounting cue necessary to generate the
sleeper effect, they do not explore the conditions under which the message can have the most influence on peoples attitudes
(Kumkale and Albarracin 2004). Elaborative encoding may be a factor that enhances the persuasiveness of a message,
because it is expected to increase the availability of memory associations people have with the message (Mazursky and Schul
1988). Increasing associations with the message improves the likelihood that the impact of the message will last over time,
giving the message the persistent impact necessary for the sleeper effect. Thus, in addition to testing for the sleeper effect,
this study investigates elaborative encoding as a modifying factor that enhances the persuasiveness of marketing messages
over time.
The accessibility of negative information discounting marketing messages in an online setting initiates renewed relevance of
the sleeper effect. The purpose of this study is to replicate the sleeper effect using a contemporary context (the internet) and
more robust operationalization of theoretical constructs, applied to a compelling marketing situation. Direct marketing via the
internet of new features of food products (deemed fashion foods) has led to a vast amount of conflicting information
available to consumers. The presence of negative information about products poses challenges for marketers advertising their
products online. An experiment measured participants attitudes towards a gluten-free frozen pizza product when an online
advertisement for the product was accompanied by a negative response from a consumer protection group, and compared the
attitudes to those induced to encode the message elaborately. It is hypothesized that the general conditions necessary for the
sleeper effect to occur are met in an online setting with an advertisement for a fashion food as the message and a negative
response from a consumer protection group as the discounting cue. It is also hypothesized that individuals who elaborately
encode messages are more favorable towards the ad. The research is expected to offer marketers a way to leverage criticism
of their products into positive attitudes.
METHODOLOGY
A sample of 134 US adults were recruited to participate in an online consumer response survey using the Amazon
Mechanical Turk platform at $1.00 per response. Of the 134, 7 responses were discarded due to incompleteness, resulting in a
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total of 127 usable responses. The experiment consisted of four, randomly assigned, between-subjects conditions created by
crossing the discounting cue condition (discounting cue vs. no discounting cue) and an elaborative encoding condition
(elaborative vs. non-elaborative encoding), plus a control group not exposed to the advertisement used to test baseline
measures. Frozen pizza was chosen based on responses to an earlier pretest indicating the relevance of the product to people.
The gluten-free feature was selected for this experiment due to its increasing popularity as well as the glut of conflicting
information as to its health claims.
Respondents were first asked to read an online direct marketing advertisement promoting a (fictitious) brand of gluten-free
pizza. The ad consisted of a color picture accompanied by a verbal message. The message advocated the pizza by describing
three attributes (relevant attributes of frozen pizza determined by a pretest) pertaining to the health of gluten-free food, the
flavor of the pizza, and the varieties of topping available. Those in the elaborative encoding condition were asked to
imagine themselves eating the pizza and to list ways in which the gluten-free feature of the pizza contributes to its
healthiness (similar to the procedure used by Mazursky and Schul 1988). Those in the discounting cue condition read a
response from a (fictitious) consumer response group claiming that the health claims in the ad were unsubstantiated and that
consumers have complained about the flavor of the pizza. After the manipulations were delivered, respondents answered
several filler questions relating to their familiarity with gluten-free food and frequency of purchasing frozen pizza, followed
by the primary measurement of immediate attitudes. Purchase intentions, beliefs about gluten-free food, and ad credibility
were measured as factors potentially influencing the effect. Finally, respondents were asked to recall the information in the
advertisement, checking that those induced to elaborately encode had an increased availability of information. Upon
completing the experiment, participants were debriefed and thanked for their time.
Necessary Conditions for the Sleeper Effect
A test of the conditions necessary for the sleeper effect to occur revealed that participants who read the advertisement had
more favorable attitudes towards gluten-free pizza (M= 7.19) than those who did not read the advertisement (M= 4.83). This
difference was significant (t (48) = -4.56, p <. 001), meaning that the ad has the high initial impact on attitudes necessary to
facilitate a potential change in attitudes over time (satisfies condition (a)). This impact was completely suppressed by the
discounting cue (t (49) = -.19, p= n.s.), meaning that the group that read the discounting cue had similar neutral attitudes (M=
4.93) to the group that did not read the ad (M= 4.83) (satisfies condition (b)). The experiment meets the first two necessary
requirements for the sleeper effect, indicating that it is a good predictor of the potential for the sleeper effect to occur if
delayed measures were taken. This means that marketers advertising products online that are discounted by negative
information have the potential to overcome this negative information over time.
Elaborative Encoding
Elaborative encoding was expected to increase the availability of message associations, manifested by better recall. While
recall was significantly better for elaborative encoding groups than non-elaborative encoding groups (F (3, 97) = 19.48, p <
.001), a two-way ANOVA revealed that elaborative encoding did not significantly improve attitudes (F (3, 97) = .204, p =
n.s.), and no interaction effects were found. Consistent with a previous study by Mazursky and Schul in 1988, these results
suggest that elaborative encoding likely does not have an immediate effect on attitudes. A further experiment adding a
delayed within-participants measure of attitudes, for which data is currently being collected, is predicted to reveal a change in
attitudes augmented by elaborative encoding (satisfying conditions (c) and (d)).
Covariates
Beliefs about gluten-free food and credibility of the message source were predicted to be related to attitudes. Beliefs about
gluten-free food was positively correlated with the attitudinal measure (r (.56) = 127, p < .01), suggesting that beliefs about a
gluten-free lifestyle may mediate attitudes about gluten-free products. Purchase intentions also significantly increased with
attitudes (r (.642) = 127, p < .01). The credibility of the message source was significantly correlated with attitude (r (.68) =
101, p < .01), suggesting that as source credibility increases, attitudes toward the ad increases. Further analysis of these
covariates is planned for presentation and to prepare for future manipulation of these variables.
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The purpose of this study was to test the potential for online advertisements to meet the requirements for conditions necessary
to generate the sleeper effect, manifested by the discounting cue suppressing the initial impact of the persuasive message on
attitudes. The findings of the experiment show that the ad and discounting cue used met the requirements necessary for the
sleeper effect to occur. This suggests the sleeper effect has the potential to occur under contemporarily relevant conditions.
The non-significance of elaborative encoding on attitudes shows elaborative appeals are unlikely to improve the immediate
persuasiveness of discounted ads, however sleeper effect literature suggests elaboration affects attitudes temporally. This
experiment lays the foundation for an additional experiment adding a within-subjects measure of delayed attitudes to test
sleeper effect. Data is currently being collected for this additional experiment, with results ready to report within the month.
Further future experiments testing mediators and moderators of the sleeper effect are also planned.
Marketers utilizing dynamic media to communicate information to consumers, such as direct marketing via the internet,
inevitably face the availability of competing negative information to their target audience (Ein-Gar et al. 2012). Rather than
rejecting this reality, this research suggests the potential for negative information to be capitalized to marketers advantage. If
the sleeper effect occurs, then the negative information is forgotten by consumers, and the persuasiveness of marketing
messages improves. This study points not only to the renewed relevance of the sleeper effect in marketing research, but the
potential for marketers to use elaborative appeals to lessen the impact of negative information and bolster positive attitudes
towards their products over time. For example, asking people to imagine themselves consuming the product may cause them
to focus more on the arguments for the product, thereby giving the ad, rather than the negative information, a more persistent
impact on attitudes. Furthermore, this research stresses the need for marketers to consider the timing of their measurements as
an important factor in gauging attitudes towards their ads when those ads are coupled with discounting information. Since
attitudes measured directly after exposure to the ad and negative information reveal no increase in favorability, it is likely
more prudent to measure attitudes after a time delay in order to determine the effectiveness of the ad.
REFERENCES
Cook, T., Gruder, C., Hennigan, K., & Flay, B. (1979). History of the Sleeper Effect: Some Logical Pitfalls in Accepting the
Null Hypothesis. Psychological Bulletin, 86(4), 662679.
Ein-Gar, D., Shiv, B., & Tormala, Z. L. (2012). When Blemishing Leads to Blossoming: The Positive Effect of Negative
Information. Journal of Consumer Research, 38(5), 846859.
Gillig, P., & Greenwald, A. (1974). Is it Time to Lay the Sleeper Effect to Rest? Journal of Personality and Social
Psychology, 29(1), 132139.
Gruder, C., Cook, T., Hennigan, K., Flay, B., Alessis, C., & Halamaj, J. (1978). Empirical Tests of the Absolute Sleeper
Effect Predicted from the Discounting Cue Hypothesis. Journal of Personality and Social Psychology, 36(10), 1061-1074.
Hovland, C., Lumsdaine, A., & Sheffield, F. (1949). Experiments in Mass Communication. New York: Wiley.
Kumkale, G. T., & Albarracn, D. (2004). The Sleeper Effect in Persuasion: A Meta-Analytic Review. Psychological
Bulletin, 130(1), 14372.
Mazursky, D., & Schul, Y. (1988). The Effects of Advertisement Encoding on the Failure to Discount Information:
Implications for the Sleeper Effect. Journal of Consumer Research, 15(1), 2436.
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INVESTIGATING THE USE OF SCENT IN A MEDICAL SERVICE ENVIRONMENT

Maya Naja, University of Caen Lower Normandy, IAE, NIMEC (EA969), France and Lebanese French University, Lebanon
Judith Lynne Zaichkowsky, Simon Fraser University, Canada
Art Dykstra, St Petersburg, U.S.A.
Jol Bre, University of Caen Lower Normandy, IAE, NIMEC (EA969), and Normandy Business School, France
INTRODUCTION
The purpose of this research is to investigate if introducing ambient scents to health care facilities will enhance patient
experience. In order to broaden and develop the focus on previous research, this paper presents two separate but related studies.
The first one investigates the impact of the fragrances on children in a public hospital through a qualitative study. The second
study occurs in a dental office and is quantitative in nature. The dental service experience is often associated with fear and
anxiety (Lehrner et al. (2000), while hospitalization is a stressful and painful experience for the child, the family, as well as for
the hospital staff. Two different types of patients and situations are examined through these field studies.
Researchers advocate the humanization of the pediatric service to limit the negative effects of the hospitalization on children
(Poutot 1991). Steps taken in hospitals to improve the childs stay include adjusting the sensory factors by using bright colors
in the decoration; diffusing music in corridors; installing televisions in each room; and organizing play. However, the use of
scent within a pediatric ward has yet to be investigated. By collecting data for three treatment levels (control, relaxing and
stimulating conditions), the differences or similitude among the perception and the assessment of the hospitalization
experienced by young patients can be examined. The aim of this study is to understand the experience, interests, behavior and
views of the child population researched, through their own expressions and actions (Marshall &Rossman 1999; Andronikidis
and Lambrianidou 2010).
The dental office may or may not represent a second type of stressful health situation depending upon the reason for the visit
and patient history. Dental anxiety may be due to a previous traumatic experience, to the social-learning modeling of fearful
behaviors, or to the anesthetic needle and the drill (Berggren et al. 1997; Kleinknecht et al. 1973). Robin et al. (1999) claimed
that the odor of the dental office, due to the eugenol, can be another conditioning dental fearful stimulus. Therefore the dental
office is a prime place to address the question of how the introduction of fragrances could lead the individual to perceive
positively his or her experience.
RESEARCH METHODS
For the hospital situation, in-depth interviews were conducted in a pediatric department of a public hospital. The qualitative
interviews allow for some personal contact between the interviewer and the respondents. They also provide a sensible way to
improve our understanding of the childrens hospitalization experience. The main research questions were 1) How the child
evaluates his/her hospitalization experience; and 2) How the sense of smell impacts the evaluation of that service. The objective
was to identify the attributes related to the assessment of the hospitalization experience before and after the release of
fragrances. For all the interviews, it was necessary to get the parents approval before interviewing the children, especially in
the cases related to the addition of scent. The environment was scented using electric diffusers for area coverage up to 323
square feet per diffuser. One diffuser was placed in the room of the hospitalized child.
For the dental office, three conditions were used: control, relaxing and stimulating scents. Diffusers were placed in the waiting
room and the patients and staff filled out questionnaires on their perceptions and mood. Seven point likert scales were used to
measure the dependent variables (1= Strongly disagree to 7= Strongly agree). Subjects were presented three statements relating
to their personal wellness: the clients were first asked if they were in a happy mood; if they were feeling healthy; and if there
were feeling stressed or anxious. Other questions were used to evaluate the dental experience: consumers attitude to the level
service and the office environment; perceived levels of time spent in the appointment; and the over-all evaluations regarding
the appointment and service.
RESULTS
In the pediatric service, both a relaxant and a stimulating odor were found to improve the evaluation of the service experience.
The use of scent was helpful in creating an experiential context which allowed the children to be more positive about their
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hospital stay. In the dental office, the introduction of a relaxing odor increased approach behavior toward the service for
females, but did not change overall levels of health, mood and stress/anxiety.
The first study shows that ambient scent can play an important role in the formation of emotional reactions of children, and
subsequently impact their evaluation toward the service experience. Thus, diffusion of a pleasant and low intense odor helps to
humanize the hospital by evoking emotional reactions and positively impacting the service experience of young patients.
However, we should highlight the subjective responses to odors given the individual differences of children. As we have seen
through various interviews, the reactions to the scents were varied by the patient. It may be important to personalize the scent
of the hospital room. Samples of smell may be available upon the admission of the child, he or she chooses the smell that he or
she prefers the most. To conclude, the hospital atmosphere and the olfaction dimension particularly can be used as a marketing
tool to consider the health care establishment as a space where original and unusual experiences can be lived. The consultant
firms working in the sensorial field must take into consideration the atmosphere of the pediatric service.
The second study will be of interest first and foremost to owners or managers in the service industry. Based on the evidence
that scent can be used to reduce anxiety levels, health care professionals can use the results to create a better atmosphere for
their clients, thereby increasing customer goodwill. As well, based on the premise that perceptions of service quality can be
enhanced using ambient odor, other service providers can create a competitive advantage over competitors. For example,
private medical clinic can readily transfer this research to generate better client appointments, which means higher client
satisfaction. Not only can service providers benefit from this research but marketers of high stress purchases (usually due to
high costs), such as car dealers or jewelry stores can also benefit from a better-perceived environment.
Due to high competition, dental practitioners are focusing on marketing their service in order to gain and retain clients. The
dental office where the second study was conducted spends a lot of time and energy in this respect (as evidenced in their
willingness to participate in such a study). Due to the various limitations and the inconclusive evidence, how scent affects a
service environment remains a worthy area for future research. One unexpected finding was the perceived level of noise in the
office was significantly lower in the Lemon scented environment. Although unlikely, this could possibly be a result of a noisier
than normal environment on the control treatment days, however, the findings do suggest future research might be worthwhile.
Does the sense of smell impact other senses like hearing?
REFERENCES
Andronikidis, A. and Lambrianidou M. (2010). Childrens Understanding of Television Advertising: A grounded theory
approach, Psychology& Marketing, 27 (4), 299-322.
Berggren U., Carlsson S.G., Hgglin C., Hakeberg M and Samsonowitz V., (1997). Assessment of patients with direct
conditioned and indirect cognitive reported origin of dental fear, European Journal of Oral Sciences, 105(3), 213
-220.
Kleinknecht R.A., Klepac, R.K. and Alexander L.D. (1973). Origins and characteristics of fear of dentistry. J. Am. Dent.Assoc.,
86, 842-848.
Lehrner J., Eckersberger Christine., Walla P., Ptsch G. and Deecke L. (2000). Ambient odor of orange in a dental office
reduces anxiety and improves mood in female patients, Physiology and Behavior, 71, 83-89.
Poutot C. (1991) Lenfant et lhpital : A travers des dessins denfants de 7 et 8 ans, thse soutenue pour obtenir le grade de
docteur en mdecine, Universit de Nancy I.
Robin O., Alaoui-Ismali O., Dittmar A. and Vernet-Maury E. (1999). Basic Emotions evoked buy eugenol odor differ
according to the dental experience. A neurovegetative analysis, Chemical senses, 24(3), 327-335.
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OLFACTORY IMAGERY AND EMOTIONS: NEUROSCIENTIFIC EVIDENCE

Meng-Hsien (Jenny) Lin, Iowa State University, USA
Samantha N. N. Cross, Iowa State University, USA
Terry L. Childers, Iowa State University, USA
INTRODUCTION
Stevenson and Case (2005) define olfactory imagery as being able to experience the sensation of smell when an appropriate
stimulus is absent. Olfactory imagery is a form of odor presentation in addition to actual odors. In some cases, odors
associated with a product are not necessarily accessible in the marketplace. For example, products are packaged or boxed and
shown visually through pictures or ads. Online stores and e-commerce are also marketplaces generally restricted to the
possible presentation of sensory information, including odor/scent. However, the relationship and performance between
olfactory imagery and real odors have been shown to be very similar (Carrasco and Ridout 1993; Lyman 1988). These studies
used multidimensional scaling (MDS) to identify the qualitative dimensions that underlie similarity judgments between real
and imagined odors. Mental imagery literature has also provided evidence that odor imagery, along with visual imagery, can
be developed and processed in the brain similarly to sensory processing occurring during actual stimuli. This is shown using
fMRI and PET (Djordjevic et al. 2005). These authors discovered that olfactory imagery can affect the perception of odor.
What has not been explicitly examined is whether odor imagery can also affect the emotions of individuals.
Neuroimaging studies show further evidence for embodied cognition, where reading scent-associated words such as
cinnamon is associated with increased activity in the primary olfactory cortex (Gonzalez et al. 2006). Other brain imaging
studies showed substantial overlap in areas activated by real odors and imagined odors (Levy et al. 1999; Henkin and Levy
2002). However, the activations were reduced in the imagery condition. Past research has relied on words as stimuli when
studying olfactory imagery (Royet et al. 2003). We argue that text and words are more abstract or less concrete in terms of
eliciting olfactory imagery. In our study, olfactory imagery is cued by odor-associated pictures. We expect the intensity of
emotions to be stronger when elicited by picture rather than word presentations (Holmes et al. 2008). We know that the
emotion systems in the brain evolved earlier than language systems, which suggests images may more readily trigger
emotions than language (Ohman and Mineka 2001). In addition, mental imagery shares the neural process involved in
perceiving real events (Kosslyn, Granis and Thompson 2001).
In this study, we also investigate the individual differences in sense of smell. We hypothesize that differences in ability to
smell will influence the magnitude of emotions elicited from the process of odor imagery. Specifically, the effect of olfactory
imagery induced emotion is expected to be stronger in hyperosmics (individuals with a high sensitivity to smell) compared to
individuals with a normal sense of smell. Our preliminary data show that there is a positive correlation between olfactory
imagery, measured with the vividness of olfactory imagery questionnaire (VOIQ; Gilbert, Crouch and Kemp 1998) and levels
of sensitivity to smell. Individuals with higher sensitivity to smell tend to have better olfactory imagery scores than normal
average individuals. Additionally, both groups scored higher in olfactory imagery than hyposmic (individuals with a
decreased sense of smell) individuals. In a fMRI study (Henkin and Levy 2002), the authors compared congenital anosmicsindividuals who are born with no sense of smell- with normal participants, and found that attempts for olfactory imagery in
the former group produced little activity. This supports the argument that stronger odor memories and experiences are
associated with successful generation of vivid olfactory imagery.
METHOD
An Event-Related-Potential (ERP) experiment is designed and encephalography (EEG) method is used to detect the emotions
associated with viewing of odor-eliciting images compared to non-odor associated images. In addition, the impact of
olfactory imagery on emotions is examined through participant generation of olfactory imagery.
Stimuli and pretest
A pool of 90 odor-associated pictures was constructed, including non-odor associated pictures of items as well as images of
pleasant or unpleasant odor associated items. Objects associated with pleasant odors include items from categories such as
food, flowers and fruits. Items associated with unpleasant odors include cigarette smoke, farm animals and dirty socks. Nonodor associated images include items from categories such as furniture, kitchenware and electronics. Pictures were pretested
for their association with smell by asking the question, Do you associate this item in the picture with a smell? Items
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associated with an odor are further rated on the dimensions of familiarity, pleasantness and intensity on a 7-point scale.
Stimuli with mean ratings of 5.5 were included in the pleasant odor category, and mean ratings below 2.5 were categorized as
unpleasant. Agreement of 85% or above is required for inclusion in the stimuli. Eighty images, encompassing 30 each for
pleasant and unpleasant odor and 20 for no odor associations, were included in the final stimuli set.
Study design and participants
This is a 3 (associated odor valence: neutral vs. pleasant vs. unpleasant) 2 (tasks: view vs. olfactory mental imagery) within
subject 2 (sense of smell: normal vs. hyperosmics) mixed design study. Undergraduates and graduate students at a
Midwestern university are recruited for participation in the study. Twenty participants are recruited for each of two groups
based on sensitivity to smell, resulting in a total of 40 participants. These groups include participants with a normal sense of
smell and hyperosmics, who are sensitive to smell. The individual difference groups are prescreened with a self-reported
question which asks them to select the category that best characterizes their sense of smell: normal, sensitive to smell,
decreased sense of smell or no sense of smell.
Procedures and scales
There are two tasks in this study, the passive view task and imagery task. In the passive view task, participants are asked to
passively view the images. In the second task, the participants are instructed to perform olfactory mental imagery where they
mentally form images of the odor associated with the object presented in the image. Each picture is presented on the screen
for 1500ms. Thirty trials for each odor valence category (pleasant vs. unpleasant) are presented in random order along with
20 trials in the control condition. A total of 80 trials are presented in two blocks of 40 trials for each task.
ERP results in emotion studies are interpreted and analyzed based on two primary parameters of emotions (Hajcak et al.
2012): 1) direction (movement toward or away from a stimulus) and 2) intensity (strength, speed or vigor of the movement).
Based on the assumption of automaticity of emotions is associated with the unconscious formation of emotions, ERP
methods have gain a lot of attention as a means for objective measurement of emotions. Late positive potential (LPP) is
commonly identified as a midline centroparietal occurring after 300ms and may last up to 1500ms. LPP has been used to
study emotion-relevant stimuli compared to neutral stimuli (Lang, Bradley and Cuthbert 1998).
The initial analyses include data collected from 11 participants. These individuals self-reported themselves as normal. We
analyzed LPP at the electrode site Pz, in the window of 500 to 700ms. Our results show that in the view condition,
unpleasant odor-associated pictures appear to generate a higher level of LPP compared to pleasant and neutral (Fig. 1a). This
is also present in the imagery condition (Fig.1b). Directly comparing the pleasant tasks, the imagery condition appears to
generate a stronger LPP than the view condition (Fig. 2a). However, in the unpleasant asks, the view condition appears to
generate a stronger LPP compared to the imagery condition (Fig. 2b). These results suggest an interaction between the effect
of visual and olfactory information on emotion processing, which is moderated by the valence of the stimuli. Under the
pleasant condition, olfactory imagery increases LPP compared to view only. This suggests olfactory imagery can enhance
emotion processing of positive odor-associated pictures. On the other hand, under the unpleasant condition, visual processing
of unpleasant odor-associated pictures may dominate and drive the emotional processing reaching a ceiling effect, exceeding
the imagery condition.
The impact of visual imagery on individuals behavior has been explored and discussed in consumer research (MacInnis and
Price 1987) and advertising (Burns, Biswas and Babin 1993). However, other types of sensory imagery such as olfactory
imagery have not been investigated in consumer research. Olfactory imagery is relevant to marketing as consumers in
situation where the actual scent or odor is not present or accessible. Sensory information such as olfactory cues is limited to
visual cues in packaged goods or online shopping environments. Through practice of olfactory imagery, consumers can
mentally experience emotions similar to real odors. Our results suggest olfactory imagery can enhance the level of emotions
experienced when viewing a pleasant odor-associated picture. This provides evidence for the impact of olfactory imagery on
generating emotions. This finding can be applied in consumer settings where visual information such as ads or pictures
presented on a package is presented. The act of performing olfactory imagery can be induced to trigger emotions that are
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associated with odor cues. This research contributes to our knowledge of sensory and mental imagery in consumer research,
providing evidence and insight into the role of olfactory imagery in consumers.
Chebat and Michon (2003) showed that the effects of ambient scented cues on emotions and spending behaviors of mall
shoppers were regulated by the perception of product and environment quality. A field study found that contemplative
shoppers are found to be affected by ambient scent while impulsive shoppers are affected by atmospheric music (Morrin and
Chebat 2005). However, the measurement of emotions in these studies are loosely defined and operationalized. The authors
used explicit perception and self-reported evaluation of shopping experience as proxies for emotions.
Accumulating evidence in neuroscience has also suggested a strong relationship between olfaction and emotions (Zald and
Pardo 1997; Royet et al. 2000). Our study shows implicit associations between odors and emotions, with a more objective
measurement of emotions using neuroscientific methods. The implementation of neuroscientific methods thus provides direct
and objective evidence for odor elicited emotions and supplements our understanding of the role of odor-elicited emotions in
consumers.
FIGURES
Figure 1. Emotional responses in view (a) versus imagery (b) tasks reflected by the Late Positive Potential (LPP) in an ERP
study. Pz electrode site is shown. View/neutral (VN); view/pleasant (VP); view/unpleasant (VU); imagine/neutral (IN);
imagery/pleasant (IP); imagery/unpleasant (IU).
(a)
(b)
Figure 2. Emotional responses in pleasant (a) versus unpleasant (b) conditions reflected by the Late Positive Potential (LPP)
in an ERP study. Pz electrode site is shown.
(a)
(b)
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Imagination of Odors and Tastes. Journal of Computer Assisted Tomography, 26(January), 39-61.
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Imagery? Psychological Bulletin, 129(September), 723-746.
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Perception. Journal of Clinical Neurophysiology, 15(September), 397-408.
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Morrin, Maureen., and Jean-Charles Chebat. (2005). Person-Place Congruency the Interactive Effects of Shopper Style and
Atmospherics on Consumer Expenditures. Journal of Service Research, 8(November), 181-191.
Royet, Jean. P., David Zald, Remy Versace, Nicolas Costes, Frank Lavenne, Olivier Koenig, Remi Gervais. (2000).
Emotional Responses to Pleasant and Unpleasant Olfactory, Visual, and Auditory Stimuli: A Positron Emission Tomography
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Stevenson, Richard. J. and Trevor I. Case. (2005). Olfactory Imagery: A review. Psychonomic Bulletin & Review, 12(2), 244264.
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4119-4124.
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THE EFFECT OF SPICY VERSUS BLAND GUSTATORY SENSATIONS ON VARIETY-SEEKING

Sayantani Mukherjee, California State University, Long Beach, USA
Thomas Kramer, University of South Carolina, USA
Katina Kulow, University of South Carolina, USA
ABSTRACT
Can spicy gustatory sensations increase variety-seeking? The present research explores this question. Based on the idiom
variety is the spice of life, and drawing on research on embodied cognition and conceptual metaphors, we propose that
spicy gustatory sensations can lead to increased variety in consumers subsequent choices because spiciness activates the
desire to appear interesting by seeking variety. Our studies demonstrate that tasting spicy versus bland tortilla chips results in
greater variety-seeking in highlighter colors, candy bars, and ice cream flavors, unless one has established ones
interestingness in a prior task (study 2) or ones chosen variety is perceived to remain private (study 3). Alternative
explanations based on arousal, positive affect, and expectation disconfirmation are tested and ruled out.
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SEMANTIC CONGRUENCE EFFECTS ACROSS TWO SENSORY MODALITIES: AN IMPLICIT

ASSOCIATION PERSPECTIVE
Nathalie Nibbe, Odournet GmbH Kiel, Germany
Ulrich R. Orth, Christian-Albrechts-University Kiel, Germany
ABSTRACT
Sensory branding offers managers new ways for positioning and promoting their brands. While vision appears to be
the key modality stimulating additional senses can enhance the overall evaluation of products, leading to more
favorable consumer response. Contrasting the almost exclusive use of explicit measures for assessing consumer
response to sensory stimulation, extant research shows that implicit measures can yield divergent results due to
reducing individuals capacity for mental control and thus a less prominent role of conscious interference and strategic
response.
The present study extends research by developing and testing a custom-made IAT for assessing consumer response to
visual and olfactory stimuli high versus low in semantic congruence across three product categories. Seventy-two
participants took part in a 2 (olfaction vs vision) x 2 (congruent vs incongruent) x 3 (pillows vs tooth paste vs.
chocolate) repeated measures experiment with response latenciy as the kex dependent variable.
Results indicated significant main effects of the category, the sensory mode, and the congruence. They also indicate
an interaction effect of these variables. Generally, the subjects not only responded faster in the congruent conditions
but also made fewer mistakes. In addition, participants reacted faster for stimuli congruent on the visual rather than
on the olfactory dimension.
Given the widespread use of psychometric measures in marketing research, this experiment highlights the capability
of implicit methods (such as the IAT) to provide valuable insights. The results confirm the primacy of vision over
olfaction and the need to account for differences between categories. Limitations and avenues for future research are
discussed.
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REVISITING THE MYTHS: SEX SELLS!

Obinna Obilo, Louisiana Tech University, USA
ABSTRACT
Sex sells! This phrase has pervaded the English language, and has become as commonplace as no pain, no gain. In everyday
use, the phrase has been accepted by marketing practitioners; thus sex or sexiness is continually used in promotional
campaigns in order to induce purchase. Previous marketing research endeavors have attempted to test the sex sells notion, but
have instead focused on whether using sex in advertisements induces higher recall for the advertisement, or affects consumer
attitudes towards the advertisement.
While both research endeavors are to be commended, neither really shows whether sex can be used to induce consumers
purchase intent. This author analyzes the sex sells notion on the process level, by employing the concepts of the Elaboration
Likelihood Model (ELM). The ELM is a dual-process model that postulates that consumers process information using one of
the two possible routes; the central or the peripheral route. Consumers that process message information via the central route
are hypothesized to focus on the central theme of the message; whereas those that process the message via the peripheral
route are hypothesized to focus on the peripheral cues such as the accompanying music, attractiveness of the spokesperson
etc.
Both ELM routes are predicted to produce attitude change, but while the attitude change induced by the peripheral route is
purported to be short-lived, attitude change induced by the central route is predicted to be more long-lasting, and more
predictive of consumers purchase intent. This author thus postulates that consumers will focus on the peripheral sexual cues
and not the central theme of such positioned messages. Thus, messages that use sex are hypothesized not to induce attitude
change ergo behavioral intent. A caveat exists however, as consumers who are highly involved with the product being
advertised are hypothesized to focus on the central theme of the message and not the peripheral sexual cues. Hence, even though
exposed to the sexual message, highly involved consumers attitude change is a consequence of their high-involvement and not
the sexual content.
In summary, this research is an attempt to show that sex does not in fact sell!
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SOCIAL MEDIA REVIEW: THE IMPACT OF SOCIAL ON BRAND-CONSUMER RELATIONSHIPS

Yueming Zou, Old Dominion University, USA
ABSTRACT
Social media has been actively used by companies to engage with online communities for building brands and establishing
relationships with consumers since the major online social networks came into being. Because of its importance for promoting
business, how the social media impact the relationships between brands and customers has been intensively discussed by
numerous researchers. This paper reviews the existing publication in two perspectives. First, from the consumers perspective,
we investigate the motivation, social interaction and social network of social media and virtual community. Second, from the
strategy perspective, we review how companies use social media and virtual communication to develop and maintain the
relationships with consumers and benefit from these relationships.
Before, the reputations of companies are mainly built and maintained through traditional media, where consumers barely have
control. However, the social media has changes that. Allowing bi-directional communication among masses of people who
would never have had the capability of interacting previously, the social media has changed the way that reputation develops.
Consumers use social media to correcting the traditional imbalance of power between them and the companies. It illustrates
that the social media require a shift in marketing thinkingconsumers have become highly active partners in developing the
brands by strongly connecting with a network of other consumers. Managing this relationship under social media is important.
How to develop and maintain this relationship in a long-term will be the future research focus.
The ongoing research will investigate the following research questions. Is it possible for social and monetary incentives to
coexist? What is the best strategy for companies to apply these two incentives for the best marketing results and to win the
loyalty from their customers?
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BARRIERS TO THE USE OF MOBILE SALES FORCE AUTOMATION SYSTEMS. A SALESPERSONS

PERSPECTIVE
Jaakko Sinisalo, Oulu University of Applied Sciences, Finland
Saila Saraniemi, University of Oulu, Finland
ABSTRACT
Ever increasing mobility led to a rise in the use of smartphones and tablet PCs (tablets) in business and consequently there
has been a growth in the use of sales force automation (SFA) systems. Although sales force automation systems have been
studied for roughly thirty years, little is known of the impact newly-developed mobile devices, namely smartphones and
tablets will have on sales management. The objective of this study is to examine this under-researched issue by looking at the
barriers to mobile SFA system use from a salespersons perspective. In the light of the relevant literature, the authors develop
and test three propositions on mobile SFA system use from that perspective. The study uses a multiple case study to test the
assumptions and finds support for all of them and reveals two additional barriers to mobile SFA system use.
INTRODUCTION
The sales function is viewed as being a part of conceiving, producing, and delivering customer value by understanding
customer needs and meeting them by supplying goods and services appropriate to those needs (e.g., Jones et al. 2005; Weitz
and Bradford 1999). Accordingly, sales is a boundary-spanning function with a more or less explicit role to produce value in
business relationships with customers (Haas et al. 2012). The emerging use of technology by salespeople is clearly evident
through the growing use of sales force automation (SFA) products and cutting-edge communication technology deployed in
the field (Clark et al. 2007).
The main changes affecting the sales function are globalization, increased customer focus, and increasing use of SFA systems
(Sheth and Sharma 2008). Although SFA has been defined in various ways, all the scholarly definitions relate to the
application of information technology to support the sales function in an organization (Buttle et al. 2006). SFA helps
organizations to manage their sales pipelines by collecting and storing customer data like their demographics, purchasing
history, preferences, and situation in the sales pipeline in the system. SFA is thus part of a companys CRM system and
typically the first function, (others being marketing and customer service) that is automated with the help of CRM
technology. Academic research on SFA started in the early 1980s and is categorized under four themes: adoption of SFA by
organizations, the impact of SFA on an organization, success, or failure of SFA projects, and sales force adoption of SFA
(Buttle et al. 2006).
From a practical viewpoint, implementation of mobile SFA is found to improve sales force productivity by up to 150%
(Aberdeen Group 2007). Sales force productivity is increased by allowing sales representatives real-time access to enterprise
data like customer contact information, sales history, pricing, and products on mobile devices. The increasing spread of new
mobile devices, specifically smart phones and tablets, is generating growing interest in SFA systems, allowing sales teams to
sell more efficiently by replacing heavier, larger, and lower mobility devices such as laptops, and reducing the need to print
and carry sales support materials. According to Gartner (2011a), sales force automation, sales presentations, and sales
ordering systems are the top commercial business applications for tablets. As the combined sales of tablets and smartphones
were 44 % higher in 2011 than the desktop PC market, and by 2016 there will be over 900 million tablets in use (Gartner
2011b), more and more industries are investing in these new technologies. In addition, the consumerization trend related to
mobile devices, meaning people bring their own devices to work, has resulted in companies rethinking their mobile SFA
strategy.
This study attempts to contribute to the discussion of sales staff adoption of SFA by examining the barriers to mobile SFA
found among sales managers in B2B firms. The study expects to contribute to the literature in two main ways. First, it
introduces the concept of mobile SFA relating to the use of mobile devices, namely smart phones and tablets, in accessing an
SFA system, and presents a conceptualization of the key elements of mobile SFA from a salespersons perspective via a
multiple case study approach. There is no prior research specifically on sales staff perceptions of using smartphones and/or
tablets to access an SFA system.
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Second, we endeavor to increase understanding of the barriers perceived by the sales force when using a mobile SFA system.
Prior research argues that SFA technology adoption is a two-stage process starting from an organizations decision to adopt
an SFA system, and ending up with the choice of the individual salesperson to adopt the technology or not (Buehrer et al.
2005; Parthasarathy and Sohi 1997). Although many benefits of using SFA systems among sales people have been identified
(e.g., Boujena et al. 2009; Ingram et al. 2002; Rogers et al. 2008) this study sheds more light on the potential barriers to using
a mobile SFA system from a salespersons perspective.
The next section provides a conceptualization of mobile SFA, and the study then moves on to present the facilitators of and
barriers to mobile SFA system use, as informed by the relevant literature. This is followed by a description of the case study
methodology and the results. The article ends by discussing the theoretical and managerial implications and outlining the
limitations of the study and future research directions.
Conceptualization of mobile SFA
In this study, mobile SFA is considered as a system that enables company staff to retrieve data while being on the road
through the use of mobile devices (i.e., smart phones and tablets) to support the sales function (e.g., Buttle et al. 2006;
Nguyen et al. 2007; Ranjan and Bhatnagar 2009). Accordingly, mobile SFA refers to providing the sales force with access to
enterprise data such as customer and product information, orders and sales pipeline information, and updating it frequently
via a mobile device, regardless of the location of the sales person
In order to ensure the discussion on mobile SFA is coherent, we will elaborate the conceptualization more profoundly as
follows. As various established definitions have been provided for SFA, all sharing the view that SFA relates to using
technology and a specific software to manage the sales pipeline and related activities, the conceptualization of mobile SFA
should focus on the term mobile and what new aspects arise from its inclusion. However, academic literature has not
provided a universally accepted definition for mobile or mobile devices. Thus, there is a need for a discussion of what devices
can appropriately be categorized as mobile. Accordingly, mobile devices can be classified in four categories; mobile phones,
smart phones, tablets and laptops. However, the level of mobility of these devices varies due to the size of the devices.
Additionally, with respect to the conceptualization of mobile SFA, it is important to distinguish 1) forms of mobile access to
SFA and 2) forms of keyboards on the mobile devices. First, if a salesperson uses a laptop in accessing SFA, the process is
similar to that of using a desktop PC, whereas when a salesperson accesses an SFA system either through a mobile device or
tablet, the SFA system needs to support mobile use and its information needs to be optimized for mobile devices. Secondly,
the (near) full sized QWERTY keyboard of a laptop makes for better and faster information processing. The virtual
keyboards of mobile devices and tablets limit the remote use of an SFA system (although external keyboards can be added).
There is evidently a considerable difference in accessing an SFA system through a laptop and doing so via a smart phone or
tablet. Therefore, the mobile SFA conceptualization in its ultimate sense should focus on using the system with smart phones
and tablets.
In theory, staff can perform essentially the same functions through the mobile devices as through any other channel providing
access to a CRM system. However, the mobile devices have certain distinguishing characteristics that present unique
opportunities and challenges to the use of the system. The most important characteristic for mobile access is the flexibility of
communication provided by mobile technology. Since mobile users always carry their highly portable devices like smart
phones with them, they are always accessible. Consequently, this means that the mobile medium allows access to an
individual virtually anytime and anywhere, whereas all other channels, even laptops, used within CRM are to some degree
restrictive in this respect.
Barriers to mobile SFA use
On a general level, there are many barriers restricting the use of SFA systems. The literature (see Table 1) suggests three
different levels at which SFA may hinder the sales function.
Many studies have acknowledged that SFA system facilitates the sales force to understand customers and their businesses
more profoundly (Srivastava et al. 1999, Speier & Venkatesh 2002, Boujena et al. 2009). Furthermore, this improves the
sales forces responsiveness and the capacity to fit customer needs (Ahearne et al. 2008). However, SFA just facilitates the
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management of customer relationships. To be more specific, automating sales processes will not help if the sales force is not
performing well. The expertise and personality of the sales personnel are far more important to the customer experience and
relationships than any system. This is largely because a salesperson is knowledgeable in areas related to the products,
customer needs, and market intelligence (Keillor et al. 1997). Additionally, Scornavacca and Sutherland (2008) identified
mobile SFA as not impacting on sales performance from the sales forces perspective. Instead, the sales force considered that
the qualities of a salesperson could not be changed or assisted by the application of mobile technologies. Thus, we propose
that:
P1. Relying merely on information provided by an SFA system as such does not enhance or could even weaken the
salespersons understanding of a customer.
As noted, the different channels have certain distinguishing characteristics which largely determine which activities can be
serviced by a specific channel (Sinisalo, 2011). Accordingly, mobile SFA has its own associated barriers, mostly stemming
from the characteristics of the mobile devices themselves (e.g., smart phones and tablets). Although mobile devices are
constantly evolving, they are still adversely affected by a limited set of visual and functional capabilities connected to issues
like small screen size and the lack of a physical keyboard (Jelassi & Enders 2006, Shankar & Balasubramanian 2009).
Therefore, the mobile medium lacks the ability to carry out a complete range of activities for the companies (Nysveen et al.
2005). Therefore, we propose that:
P2. The characteristics of the mobile device determines and limits activities in the mobile SFA context
An SFA system improves the speed and quality of information flow between the sales force, customers and the organization
(Bush et al. 2005, Speier and Venkatesh 2002). This is the result of an SFA system providing access to a massive amount of
information and improving the ability of the sales force to gather, analyze, and disseminate vital information at the point of
need (Boujena et al. 2009; Jayachandran et al. 2005). By using mobile SFA systems, the sales force can initiate a contact in
real-time with the system wherever they are (Nguyen et al. 2007). Basically, this means that the sales force can answer most
of their customers questions immediately in the field. On the other hand, the customers expect that salespeople provide
timely and accurate information, prompt answers to requests, personalized offers and market expertise (Atkinson and
Koprowski 2006). The information needs of individual sales people differ, however, they all have to be satisfied with the
information provided by the SFA system. If the information is inaccurate or outdated to any significant degree, the whole
basis for using an SFA system will be undermined. Against this backdrop, we propose that:
P3. Poor quality information is a barrier to using mobile SFA
METHODOLOGY
The empirical part of this study relies on a multiple case study approach in order to deepen the theoretical framework of
mobile CRM, as approached from the perspective of a sales person. The case study is particularly strong in providing new
insights into a phenomenon of which very little is known (Eisenhardt 1989) and where the researcher has little or no control
over events that occur in a real-life context (Stake 2000). Case study research is particularly relevant in the study setting
where the interviewed organizations operate in a business-to-business environment and where survey research might suffer
from the large number of contextual variables influencing organizational behavior (Johnston,et al.1999). Case selection is of
course a crucial phase of case research (Eisenhardt 1989; Perry 1998; Pettigrew 1989; Stake 1995).
In this study, the primary data were collected mainly through semi-structured interviews (Arksey and Knight 1999; Kumar et
al. 1993). The choice of informants was based on the principle that information is best gained through the people involved
with the phenomenon under investigation. Therefore, many sales force representatives from different industries and countries
were interviewed in order to gain a holistic view of subject phenomenon (see Table 2). The ten interviewed people are
representative of the case firms sales personnel. All of the interviewees have many years of experience of sales in different
roles within the same company or in other companies. Therefore, the interviewees have a unique understanding of and
expertise in the subjects under investigation. Despite their long experience of sales work, the interviewees had not used an
SFA system through a smart phone or tablet instead they had experience of using it with a laptop. Accordingly, these
interviews provided researchers with valuable insights into the barriers to mobile SFA use from the sales persons
perspective.
The interviewees were encouraged to discuss changes occurring within the sales field and the technology related to it. In
addition, the interviewees pinpointed advantages and disadvantages of using mobile SFA. The interviewees provided insights
into: 1) the general changes in sales occurring over the last decade, 2) the role of technology and systems in those changes,
and 3) the role mobile CRM could perform in the sales function.
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All the interviews were recorded to ensure the responses were captured accurately. In addition, the researchers took notes
during the interviews. The recordings were subsequently transcribed for analysis. The analysis phase followed Miles and
Hubermans (1994) framework, in which the author notes patterns and themes from the data, makes links with previous
literature, and identifies areas of contribution to the existing knowledge. In the analysis phase, the researcher analyzed the
data afresh as the focus of the study was sharpened. Furthermore, several additional questions emerged following the
transcription process, leading the author to contact selected informants by e-mail and telephone to clarify those issues.
RESULTS
The current nature of selling
Before detailing the barriers to using mobile SFA, it is important to describe how sales work has changed over the last
decade. The number of technologies (i.e., systems, solutions, devices etc.) available to support sales staff in their work has
increased rapidly. Although there are currently very many different technological solutions supporting the function, sales
work itself has remained largely unchanged in the field. Some interviewees even reported that the technology does not really
facilitate sales work:
Hmmm, well Facilitate may not be the right word. The sales job is easy without any applications when the sales skills
are your backbone.From the sales personnels perspective, these are mainly reporting systems, so they dont really
facilitate the sales work (Kendall, Paper Industry)
Thus, sales technology itself does not help achieve sales objectives if the salesperson underperforms. However, the number of
tools designed specifically to support the sales task has increased enormously:
The process is still there but there is more that backs up that process like presentations etc. and technical information.
(John, Paper Industry)
This finding is in line with that of Scornavacca and Sutherland (2008) who argued that technology can support the sales
forces tasks, such as the sales pitch. With regard to mobile devices, the majority of interviewees agreed that both smart
phones and laptops currently play a very important role in their work, as the following quotes indicate:
Hmm, well actually I guess its the mobile phone that is becoming the most important device. Although I personally like to
use the computer a lot because you can see things better from the computer screen than from the mobile phone screen
But I would say that the mobile phone is more important (Katie, Paper Industry)
Although the motivation to use the mobile devices in sales environment undoubtedly differs among different persons, the
mobile phones have become constant companion of the people (Shankar et al. 2010). In parallel, this advancement has led to
situation that sales forces are increasingly utilizing mobile devices to support different sales activities (Sheth & Sharma
2008). However, the proliferation of technology has not had much influence on the selling process itself. The sales force still
relies on personal characteristics and interactive communication to conclude deals. In this sense, nothing has changed, since
interactive communication has always been at the core of selling. Instead, the role of mobile devices and applications is to
support the selling process, for instance, by making additional information available instantly to both parties.
Barriers to using mobile devices in sales
The use of mobile SFA is not without its drawbacks from the sales force perspective. It is worth noting that the drawbacks are
not things that will prevent the use of mobile SFA, but are considered obstacles that can be overcome, some easily and some
less easily. The data analysis isolated five barriers (see Table 3): customer knowledge, poor information quality, lack of time,
functionality of mobile devices, and SFA backup systems.
Customer knowledge/understanding
Technological development has led to a situation where the sales force can have access to an enormous amount of customer
related information at great speed. In ideal circumstances, this means that the sales people acquire better customer knowledge
and, accordingly, offer customers a more personal service. In promoting personal service, the available information should
generate enhanced customer satisfaction and closer customer relationships. Interestingly, in this study some interviewees
suggested that, contrary to the suggestions of current literature, the increase in technology has, in parallel, reduced the levels
of customer knowledge among the sales force. The next excerpt illustrates the situation:
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What I have noticed, and I have worked for many years in sales now, is that in the past you could know all your customers
by heart but this is impossible these days, everything is changing so fast. (Wesley, Paper Industry)
The quotation indicates that the increasing use of technology may have negative consequences. This is somewhat contrary to
previous literature that paints mobile SFA as improving customer / sales force relationships. The technology has enabled
more efficient time management, for example, meaning the sales force can manage more customer relationships
simultaneously, but that can mean that a sales person has less time for personal contact with each customer. That reduction in
personal contact may result in the personal ties and emotional side of relationships being diminished and, consequently,
customers being known only as numbers and in terms of figures. Therefore, the growth of the customer base is not
necessarily a wholly positive development for either the individual salesperson or for their customer.
Poor quality of information
Sophisticated mobile technologies enable the sales force to retrieve information at the point of need. The interviewees saw
the quality of that information to be a very important element of mobile SFA. To be more specific, good quality information
was seen as a foundation for activities related to managing customer relationships, making it critically important that the
information within the systems is relevant and current:
We cant do anything with the terminal or mobile device if the backup systems are not functioning and updated (Justin,
Software Industry)
The starting point for using any SFA system should be that the information within it is always available to use and of use to
all the parties involved. In many cases, the information retrieved is not current enough. There is no use for any technology,
application or system, if it is not updated constantly by all relevant personnel. In the best case, an SFA system fosters
transparency of all past sales force activity and of scheduled activity. Responsibility for updating information into the system
rests not only with sophisticated information gathering tools, but with all parties involved.
Lack of time
From the sales force perspective, one major barrier to doing sales work currently is the lack of time. Although mobile SFA
provides remote access to a large amount of information and enables sales staff to take care of more customers over a shorter
period, mobility itself has also increased the level of activity expected. The sales force is always reachable and both
customers and other stakeholders expect to be able to reach a salesperson whenever they have a need to. In many cases,
customers also expect a quick response whatever the time of day, and some interviewees reported this development to be a
problem:
When youre on the road the telephone is disturbing when youre driving you have to concentrate on the road and the
traffic and think about the customer that youre driving to, and then suddenly you get a phone call from another customer
and that already disturbs you and during this time you dont have time to respond any e-mails either. This is also a
problem. (Wesley, Paper Industry)
Although their conferring of reachability is one of the key characteristics making mobile devices unique, this characteristic
also has a dark side in terms of sales work, as it is that constant reachability of the sales force that can make sales work more
onerous, because it can affect their concentration on their scheduled workload. If a sales person cannot direct their limited
resources efficiently enough to achieve tasks or satisfy the needs of all customers, it can affect the efficiency of the sales
force as a whole. Time is limited for everyone and sales people would rather not be permanently reachable if that were
possible. It was an aspect of their jobs they found very disturbing.
Finally, for an SFA system to function efficiently requires constant reporting by the sales force. Formalized and frequent
reporting brings explicit advantages for the organization as individual sales performance becomes more transparent and is
fully documented. However, the downside of constant reporting can be seen in the following excerpt:
To my mind, sales managers have more and more workload; that includes writing and reporting of numbers and
turnovers etc. So you must imagine, the sales manager has to set aside one day to make telephone calls for new
appointments to plan the week. You need one day, after a week of travelling, to write reports to organize everything what
you have promised for the customers during the week. (Wesley, Paper Industry)
Accordingly, the interviewees perceive reporting, while being understandable, as very time consuming. This finding confirms
that the current proliferation of technology has decreased the time the sales force can use to interact personally with its
customers. There is already evidence in the field that instead of responding to e-mail throughout the day, staff might increase
productivity by setting specific times (perhaps twice a day) to deal with e-mail (Wilson 2012).
629
Characteristics of mobile devices

As noted, mobile devices, especially mobile phones, have certain distinguishing characteristics which largely determine
which activities they best serve. Mobile phones may not have the capacity to deal remotely with SFA systems, especially if
those systems are not optimized for mobile devices:
But, for instance, our sales management system includes so much information on one screen. So I have not really felt that
comfortable with it that I would operate through the mobile phone to find information quickly if I had to. (Katie, Paper
Industry)
In practice, this means that the activities made possible by the SFA system are not fully available to the sales person
connecting via mobile phone. Furthermore, some interviewees thought utilizing some of the information delivered via a
mobile phone was very inconvenient. Although the sales force has access to information during the customer visit, they
cannot utilize the information to support the sale:
Usually forming or revising of anything through mobile devices is very difficult. Basically, they [mobile devices] are
meant for very simple things and you cannot show anything from the mobile devices (Murray, Software Industry)
As noted, the characteristics of the mobile device to hand limits the activities on which an SFA system can be used by the
sales force. On some occasions, the use of a tablet or laptop is preferable both for the customers and sales force when
accessing an SFA system.
SFA system
In mobile SFA, it is vital that the backup system functions and supports the use of mobile devices. However, the interviews
revealed that, contrary to theory, mobile devices are not always synchronized and integrated into SFA systems. This seemed
to be a challenge in one organization as the following excerpt indicates:
At the moment our SFA data application cannot be accessed through mobile devices. So, we are thinking about how to
change the situation because it would simplify the sales personnels job and information retrieval. (Robert, Software
Industry)
In a nutshell, the sales force has not only to be able to access the information via a mobile device, but the SFA system also
needs to have customized solutions for those devices. It would particularly benefit the sales force if they could determine the
kind of information they access. In some cases, finding a simple piece of information, such as the contact details of a
customer, may be very complex. In that case, the sales force would benefit from the mobile solution having a simple site for
each customer presenting the key customer data the sales person requires. Naturally, the SFA system also has to support the
reporting and updating of information through the mobile devices. This would be a very practical quality from the sales force
perspective, and would accelerate and enhance the dissemination of information within the organization. Overall, while
acknowledging the potential of mobile SFA, it should be understood that the excessive use of technology can be a doubleedged sword. While the technology fosters new activities, such as instant information retrieval, the customer experience is not
necessarily enhanced by CRM. For instance, the technology can malfunction or the sales force may perceive its use as a
threat. Regardless of the technologies, the major responsibility of the sales people involved is the success of inter-personal
relationships. Consequently, customer relationships are always developed and maintained by people, not systems or
solutions.
CONCLUSION
The objective of the study was twofold. First, to offer a conceptualization of mobile SFA, and second, to examine the barriers
to mobile SFA system use from a sales persons perspective. Mobile SFA was defined as a system that enables the company
personnel to retrieve data to support the sales function while being on the road by use of mobile devices, namely smart
phones and tablets (e.g., Buttle et al. 2006; Nguyen et al. 2007; Ranjan and Bhatnagar 2009). Thus, mobile SFA refers to
giving the sales force access to enterprise data regardless of the location of the sales person by using a smart phone or tablet.
In the light of the literature on SFA (Boujena et al. 2009; Bush et al. 2005; Jayachandran et al. 2005; Jelassi and Enders 2006;
Nguyen et al. 2007; Scornavacca and Sutherland, 2008; Speier and Venkatesh 2002): the authors identified three barriers to
mobile SFA system use; customer knowledge, quality of information and the characteristics of mobile devices. Literature
suggests that the inability to use mobile applications stems from either the lack of commitment of the sales force to using
them or a lack of training in doing so. The empirical data supports these identified barriers and additionally identified two
more, namely lack of time and an SFA system not optimized for mobile use. The first, lack of time refers to the increased
utilization of new technology in sales, which means more reporting and monitoring activities for the sales person. This can
630
lead to sales staff allocating most of their time to back-up tasks such as reporting and monitoring to the detriment of their
core tasks, organizing visits and visiting customers. The second, some SFA systems not fully supporting the use of mobile
devices, is largely due to the lack of capacity of mobile devices and the complexity of information retrieval.
Theoretical contributions
The study makes two important theoretical contributions. First, the authors contribute to the literature by conceptualizing the
term mobile SFA and add to the literature a definition that includes only smart phones and laptops under the term, although
there are various other devices that fall into the category of mobile device, such as laptops and notebooks. However, from an
SFA usage viewpoint, the usage situation does not differ whether using a notebook/laptop or desktop computer. Therefore it
is important to distinguish between smaller devices offering real mobility and larger devices such as laptops and notebooks.
The second contribution the study attempts to make is to add to the discussion of SFA system use by investigating the
barriers of use from the sales persons perspective. Additionally, as our discussion focused on the barriers related to mobile
access and use of SFA, the paper breaks new ground by being the first, to the authors knowledge, that examines such
barriers from the sales persons perspective.
Managerial contributions
The use of mobile devices within SFA has undoubtedly made an important contribution to the work of sales personnel. Yet
while the development of SFA systems can be seen to have affected sales practice, the findings of this study suggest there is
still some room for further development. Accordingly, it is important for SFA system manufacturers to focus on developing
systems that can take advantage of the different characteristics of each channel and, in parallel, to overcome the inherent
limitations of any single channel. Furthermore, the content of the SFA systems should be customizable for each mobile
device.
Limitations and future research
There are two main limitations of the study. First, the study is explorative in nature as no existing study had looked at the
barriers to mobile SFA system use. Thus, theoretically the paper attempted to combine literatures on SFA adoption and
mobile adoption in order to develop and test the propositions. Second, the main empirical data for the paper consisted of ten
interviews from just two companies representing two different industries. Thus, future studies should collect wider empirical
data to test the propositions offered in the study. Additionally, we call for further research from perspectives other than the
sales persons on the adoption and utilization of mobile SFA systems in organizations.
TABLES
Table 1: Barriers to using mobile SFA
Function
Description
Customer knowledge
SFA system improves effectiveness and efficiency of sales force in their daily activities. In
parallel, the level of individual customer knowledge among sales person can decrease since
they have less time for personal contact with each customer.
Quality of information
An SFA system provides access to a massive amount of information and improves the ability
of a sales force to gather, analyze, and disseminate vital information at the point of need.
Additionally it enhances the ability of a sales force to react and respond faster to customer
needs. Therefore, it is of critical importance, especially, for the use of mobile SFA that the
information in an SFA system is updated and relevant.
Characteristics of mobile The mobile devices have inherent characteristics, such as reachability and interactivity,
devices
making it unique for mediated-communication purposes. However, there are also
characteristics that limit the use of mobile devices for the whole range of activities provided
by SFA systems.
Table 2. Interview data (original names altered)
Industry Name
Sales Experience
Paper
Jack
8 years
Paper
Raymond
10 years
Region
North
America
Global
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Position
Vice President
Date
20 April 2012
Senior Vice President
25 April, 2012
Software
Software
Paper
Justin
Murray
Kendall
22 years
13 years
6 months
Finland
Finland
Scandinavia
Director
N/A
Director
27 March 2012
2 May 2012
20 April 2012
Software
Paper
Paper
Robert
Katie
Wesley
10 and a half years

12 years
4 years
Global
Benelux
Germany
N/A
Sales Director
Sales Manager
27 May 2012
20 April 2012
16 April 2012
Paper
Paper
Lewis
Emily
14 years
8 months
Germany
Finland
Sales Manager
Sales Director
16 April 2012
17 April 2012
Table 3. Case study results: Barriers of mobile SFA

Factor
Description
SFA system supports the sales
Customer
knowledge
/ force by creating a holistic
view of individual customers.
understanding
Additionally, SFA allows more
efficient use of information and
handling of more customers at
the same time
Poor Information
Quality
Lack of Time
Functionality of
Mobile Devices
SFA Systems
Possible Barrier
Excessive use of an SFA
system can lead to a sales
force relying merely on
information provided by the
system and knowing their
customers only as figures and
numbers
The quality of information is a

prerequisite of using mobile
SFA. An SFA system provides
access to a massive amount of
information and improves the
ability of the sales force to
gather,
analyze,
and
disseminate vital information
Increased utilization of the
technology has also increased
the activities of the sales force
on, for instance, reporting and
monitoring. Mobility also
makes the sales force always
reachable
Mobile devices, especially the
mobile phones, have certain
distinguishing characteristics
which limit the remote use of
an SFA system on occasion
The information in the SFA

system can be dated or
inaccurate. In this case, the
sales force cannot retrieve the
required information at the
point of need and is not able to
guarantee
the
customer
experience and satisfaction
The lack of time can lead to
the sales force having to focus
on irrelevant activities instead
of their core tasks
Some SFA systems do not

support remote use of mobile
devices or the information
within the SFA is not
optimized for mobile devices
Mobile devices cannot be

utilized for sales force support
if the SFA does not support
mobile devices
Mobile devices cannot be used

for all the activities inherent in
the SFA systems
Sales Force Perspective

Relationships are built and
managed during inter-personal
contacts between sales persons
and customers. Therefore, the
sales force is responsible for
building personal relationships
with customers as the SFA system
has just a facilitating role to make
customer information available
Relevant and updated information
is fed into the SFA system by
sophisticated data gathering tools
and the sales force who are
responsible for the quality of the
information
Activities demanded of the sales
force have increased due to the
advances in technology. The sales
force now need time management
and prioritizing skills to mitigate
the effect on time
Mobile devices can be used for
certain activities in the SFA
context. The sales force is
responsible
for
delivering
information required by the
customers using all means
necessary
The sales force is responsible for
ensuring they have access to the
SFA system by using other
devices at the point of need
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EXPLORING THE DELIBERATE AND CREATIVE PROBLEM SOLVING ROUTINES OF BUSINESS-TOBUSINESS SALESPEOPLE IN THE CONTEXT OF SOLUTION SELLING: A CONCEPTUAL FRAMEWORK
Sreedhar Madhavaram, Cleveland State University, USA
Vishag Badrinarayanan, Texas State University, USA
ABSTRACT
The provision of innovative solutions has been recently identified as one of the five under-researched areas that are vital to
sales performance. Specifically in business-to-business markets, very little research exists on the mechanisms employed by
salespeople in solving customer problems and providing appropriate solutions. Although management and marketing
academics have long been studying the problem solving skills of managers that can help in facilitating specific managerial
activities, research efforts with reference to problem solving and personal selling and sales management are very limited. In
recent times, sales researchers have begun to introduce the concept of problem solving into sales literature. However, in the
context of business-to-business salespeople, there is no systematic research on creative and deliberate problem solving. That
is, there is no research that addresses the potential firm-level and individual-level antecedents of creative and deliberate problem
solving routines of business-to-business salespeople. Similarly, there is no research that addresses the issue of potential
consequences of creative and deliberate problem solving routines. Therefore, in this paper, we develop a conceptual framework
and corresponding propositions that detail the potential antecedents and consequences of the creative and deliberate problem
solving routines of business-to-business salespeople in the context of solution selling. This is an important research topic that
can inform business-to-business organizations on how they can improve the creative and deliberate problem solving routines
of salespeople and firm performance in the context of solution selling.
635
CRM/SOCIAL MEDIA TECHNOLOGY: IMPACT ON CUSTOMER ORIENTATION PROCESS AND

ORGANIZATIONAL SALES PERFORMANCE
Michael Rodriguez, Elon University, USA
Robert M. Peterson, Northern Illinois University, USA
Haya Ajjan, Elon University, USA
INTRODUCTION
The importance of technology in managing relationships with customers has grown significantly, especially with the advent
of innovations such as cloud computing and web-based technology. One of the more popular topics in both academic
research and business discussions has been the use of Customer Relationship Management (CRM) technology to increase
business and sales productivity through the ongoing development of relationships with buyers. A new phenomenon in
understanding buyers needs and reaching new customers is social media. Organizations are capturing data from tools such as
LinkedIn, Facebook and blogs, and attempting to integrate this information into their sales process. In order to extract value
from technology, organizations need to build a framework and processes to deliver value to the customer.
The purpose of this research study is to ascertain how customer-oriented technology, CRM and social media, might impact
sales performance. In this exploratory paper, we attempt to understand the impact of technology on performance through the
use of customer-oriented processes. Customer orientation refers to the extent an organization focuses its efforts in
understanding and satisfying its customers needs for quality and timeliness and building long-term relationships (Deshpande,
Farley, and Webster, 1993; Strong, 2006; Luo, Hsu, and Liu, 2008; Jun and Cai, 2010; Li, Chau, and Lai, 2010). Customeroriented processes facilitated by CRM and social media should enable a firm to improve its sales performance. The research
model is shown in Figure 1.
Organizations should be equipped with strong customer-oriented technologies (CRM and social media) to effectively employ
customer-oriented processes for optimal level marketing and sales activities, which eventually may result in higher
performance. Hence, we hypothesize that:
H1: CRM use improves sales performance via customer-oriented processes.
H2: Social media use improves sales performance via customer-oriented processes
RESEARCH RESULTS AND DISCUSSION
In order to examine the research questions, data was gathered in conjunction with Miller Heiman, a global leader in sales
performance consulting. The study surveyed 1,425 business executives in revenue-generating roles across job functions. To
test the hypotheses in the proposed research model and take advantage of the benefits offered by structural equation
modeling, Partial Least Squares (PLS) regression was employed. PLS is similar to LISREL in that both techniques model the
structural relations in a set of constructs (Lee, 1997). A bootstrapping resampling method was used to assess the structural
model. The R2 values in the model range from 0.115 to 0.318. Additionally, all paths are statistically significant at the 0.05
level and are in the expected direction. Therefore, the proposed model is considered to have good predictive power. The path
coefficient of each hypothesized relationship and its statistical significance was examined to determine the support for the
hypothesis. The PLS structural model results are shown in Figure 2. In order to test the mediating effect of customer
orientation between technology use and sales performance, two models were compared- one model includes a direct link
between technology and sales performance without including the mediating variable customer orientation, and the second
model includes customer orientation as a mediating variable. Thus, we conclude that customer orientation construct mediates
the relationship between CRM effectiveness and social media use and eventually sales performance, as hypothesized.
DISCUSSION AND MANAGERIAL IMPLICATIONS
This study delivers several contributions. First, it provides evidence that customer technology, such as CRM and social
media, links to sales performance in an indirect manner. CRM and social media technologies contribute to improved sales
performance through customer-oriented processes. Second, the findings provide justification for investing in both CRM and
social media technology as it leads to improved sales performance. Business-to-business organizations need to implement
both CRM technology and social media and ensure the technologies integrate well with one another. Integration of both CRM
and social media may lead to a number of benefits: improved sales and marketing alignment, access to decision makers,
636
shorter sales cycles, and better collaboration with customers. This type of integration will more effectively capture
conversations and truly provide a 360-degree view of the client. Third, effective utilization of sales-focused technology, in
the form of CRM and social media, starts with understanding customer processes. Firms with higher customer orientation are
more competitive due to the level of understanding of their clients needs and buying habits. This understanding combined
with integration of CRM and social media results in more successful firm performance. The study also makes a pioneering
contribution to the existing research that has mostly been focused on sales force automation technology. In todays
competitive environment, organizations need to focus on delivering high value to their customers through focused, customeroriented business processes. New CRM and social media technologies have changed the way organizations interact with
customers and have allowed enhanced understanding of customers needs and concerns (Marshall, Moncrief, Rudd, and Lee
2012; Rodriguez, Peterson, and Krishnan, 2012). These new technologies have enabled customers to communicate effectively
with organizations and to improve the relationships between the buyer and seller. In this research, we assessed the positive
impact of CRM and social media on customer orientation processes (i.e., processes focused on customer satisfaction and
commitment) which, in turn, positively impacts sales performance. Traditional and Social CRM should be tightly integrated
into both marketing and sales strategy, in order gain a deeper understanding of customers, develop further commitment and
loyalty, which in time will increase overall sales performance.
FUTURE RESEARCH
The findings also suggest various avenues for future research. Scholars may wish to take a deeper look into potential
moderating effects, such as the technical competency of the firm, sales personnel capability, size of the firm, level of the
respondent within the company, or other context variables. Another area of future research would be to examine the rate of
adoption and proficiency in various industries. Certainly, given the importance of revenue generation, longitudinal studies
should be a priority for future researchers.
FIGURES
Figure 1 - Customer Orientation Mediation Model
Figure 2 - Customer Orientation Mediation Model Results
637
REFERENCES
Hunter, G. K. & Perreault., W. D. (2007). Making Sales Technology Effective. Journal of Marketing, 71(1), 16-34.
Jun, M. & Cai, S. (2010). Examining the Relationships between Internal Service Quality and its Dimensions, and Internal
Customer Satisfaction. Total Quality Management and Business Excellence, 21(2), 205-223.
Li, D., Chau, P. Y. K. & Lai, F. (2010). Market Orientation, Ownership Type, and E-Business Assimilation: Evidence from
Chinese Firms Decision Sciences, 41(1), 115-145.
Marshall, Greg W., Moncrief, William C., Rudd, John M., and Lee, Nick (2012), Revolution in Sales: The Impact of Social
Media and Related Technology on the Selling Environment. Journal of Personal Selling & Sales Management, 32(3), 349363.
Panagopoulos, N. (2010). Sales Technology: Making the Most of Your Investment. New York: Business Expert.
Rapp, A., Agnihotri, R. & Forbes, L. P. (2008). The Sales Force Technology Performance Chain: The Role of Adaptive
Selling and Effort. Journal of Personal Selling & Sales Management, 28(4), 335-350.
Rodriguez, M. & Honeycutt, E. (2011). CRMs Impact on B2B Sales Professionals Collaboration and Sales Performance.
Journal of Business-to-Business Marketing, 18(4), 335-356.
Rodriguez, M., Peterson, R. M. & Krishnan, V. (2012). Social Media's Influence on Business-to-Business Sales Performance.
Journal of Personal Selling and Sales Management, 32(3), 365-378.
Schiff, J. L. (2012) CIO Magazine, 8 CRM Trends You Need to Watch, retrieved January 28, 2013,
http://www.cio.com/article/print/699311
Woodcock, N., Green, A. & Starkey, M. (2011). Social CRM as a business strategy. Journal of Database Marketing &
Customer Strategy Management, 18(March), 50-64.
638
A TWO-STAGE MODEL OF SALES OPPORTUNITY OUTCOMES

Dimitri Kapelianis, University of New Mexico, U.S.A.
Rodrigo Guesalaga, Pontificia Universidad Catlica de Chile, Chile
The authors gratefully acknowledge Michael Webb, President of Sales Performance Consultants, Inc. for providing the data
for this study.
INTRODUCTION
Salesperson performance is one of the most importantand, concomitantly, one of the most researchedissues in the sales
literature. A search of Google Scholar reveals nearly one thousand academic articles with the phrase salesperson
performance or sales performance in the title. This area of inquiry is now sufficiently mature that several meta-analyses
have been published examining aspects of salesperson performance (see, for example, Churchill et al. 1985; Rich et al. 1999;
Verbeke, Dietz and Verwaal, 2011). Yet, at the operational level, salesperson performance is an aggregate construct;
salespeople achieve high performance over time by accumulating a number of wins over a series of discrete sales
opportunities. And it is at this discrete, transactional level that our understanding of the determinants of the outcomes of sales
opportunities remains incomplete.
Thus, while a rich research tradition has centered on understanding sales success developed over time, this research stream
has focused on isolating the characteristics that distinguish high-performing salespeople from their lower-performing
counterparts. However, holding salesperson performance-level constant, what determines the outcome of an individual sales
opportunity? Why does a salesperson win one engagement but lose another? Considerably less research has attempted to
address this question. To the extant that it has been studied at all, prior research has focused on identifying post hoc
attributions for success and failure (Dixon, Spiro, and Jamil 2001; Johnston and Kim 1994) rather than a priori determinants
of sales opportunity outcomes.
Our research addresses this gap in the literature by conceptually developing and empirically testing a two-stage model of
sales opportunity outcomes. In the first stage of our model, salespeople must determine whether or not to pursue or ignore a
sales opportunity. Given that salespeople have limited time and resources and given that there are multiple opportunities
available, they need to decide which opportunities are most attractive. In the second stage of our model, conditioning upon
the salesperson having decided to pursue the opportunity, what are the determinants of the outcome of the opportunity;
namely, whether the salesperson wins or looses the deal?
RESEARCH QUESTION AND HYPOTHESES:
Our research question is in two parts:
1.
2.
What determines whether or not a salesperson pursues an opportunity?

Having decided to pursue an opportunity, what determines whether the salesperson wins or loses the deal?
More specifically, our research hypotheses are:

H1:
H2:
H3:
H4:
H5:
H6:
The greater the strategic value of the clients business, the greater the likelihood that the salesperson will pursue the
opportunity.
The greater the urgency of the clients business need, the greater the likelihood that the salesperson will pursue the
opportunity.
The greater the concreteness of the opportunity, the greater the likelihood that the salesperson will pursue the
opportunity.
The greater the extent of the salespersons specialization, the greater the likelihood that the salesperson will win the
opportunity.
The greater the salespersons closeness to the buying center, the greater the likelihood that the salesperson will win
the opportunity.
The better the salespersons competitive position, the greater the likelihood that the salesperson will win the
opportunity.
639
H7:
The greater the fit with the clients value orientation, the greater the likelihood that the salesperson will win the
opportunity.
To test our two-stage model empirically, we obtained access to an American medical supplies company and its entire sales
force. Over a four-month period, each salesperson evaluated every single sales opportunity as soon as it arose using a brief
questionnaire with multi-item scales measuring (1) the strategic value of the clients business; (2) urgency of clients business
need; (3) concreteness of the opportunity; (4) closeness to the buying center; (5) strength of competitive position; and (6) fit
with clients value orientation. The salesperson was also requested to estimate a dollar amount for the size of the opportunity.
Importantly, all of these measures were obtained right at the start of the opportunity, before the salesperson had made a
decision whether or not to pursue the deal. In total, we obtained usable data on 330 sales opportunities. Later, we returned to
the companys sales opportunity database to determine: (1) whether or not the salesperson had decided to pursue the
opportunity; (2) for those opportunities that were pursued, whether the salesperson had won or lost the deal; and (3) an
estimate of the salespersons specialization by product line. Importantly, this rare longitudinal access to sales opportunities
and their outcomes eliminates any concern about attribution bias, hindsight bias, or bias arising from common method
variance.
RESULTS
Descriptive statistics and correlations for the full dataset of 330 sales opportunities are presented in Table 1. Results of a twolevel HLM binary logistic regression estimating whether or not a salesperson decides to pursue an opportunity are presented
in Table 2. Descriptive statistics and correlations for the subset of 200 sales opportunities that were pursued are presented in
Table 3. Results of a two-level HLM multinomial logistic regression estimating whether a salesperson wins or loses a
pursued opportunity are presented in Table 4.
TABLES
Table 1: Stage 1: Descriptive Statistics and Correlations (n = 330 sales opportunities)
Variable
Mean
S.D.
1
2
3
4
5
6
7
8
9
1. Strategic value of clients business
2.62
0.83
2. Urgency of clients business need
3.09
0.99 .11
3. Concreteness of opportunity
3.63
1.07 -.01 .03
4. Closeness to buying center
3.68
0.94 .08 .01 .14
5. Strength of competitive position
3.55
0.95 .13 -.02 .20 .63
6. Fit with clients value orientation
3.79
0.87 .35 .02 .03 .64 .53
7. Opportunity size ($000)
146.28 160.99 .63 .10 .07 -.07 .06 .09
8. Salesperson specialization
0.34
0.17 .05 -.05 .13 .02 .09 .02 .13
9. Pursue opportunity
0.61
0.49 .12 .06 .22 .10 .05 .14 .01 .05
10.Win opportunity
0.23
0.42 .03 .07 .24 .31 .29 .21 -.08 -.03 .44
Note: With a sample size of n = 330, correlation coefficients larger than U = 0.10 are statistically significant =0.05.
Table 2: Stage 1 Model: Estimation Results for Pursue Opportunity (n = 330 sales opportunities)
H
Model
1.1
1.2
1.3
1.4
0
Intercept
.43 ***
.43 ***
.47 ***
.55***
Stage 1 Predictors
H1
Strategic value of clients business
.56 **
H2
Urgency of clients business need
.11
.12
H3
Concreteness of opportunity
.46 ***
.47***
Stage 2 Predictors
640
.44*
Salesperson specialization
.46
Closeness to buying center
.09
Strength of competitive position
-.24
Fit with clients value orientation
.30
Control
8
Opportunity size
.00
-.00 *
-.00
Summary Statistics
Sigma-Squared
2.85
2.90
3.12
3.28
00
Tau
3.24
3.37
4.29
4.82
Degrees of Freedom
327
326
323
319
Deviance
442.48
442.45
417.11
412.40
Pseudo R-Squared
N/A
.00
.10
.12
Notes: * p < .05; ** p < .01; *** p < .001 (two-sided tests).
The dependent variable is the outcome of the salespersons evaluation of whether or not to pursue
the opportunity, where 1 indicates that the salesperson decides to pursue the opportunity and 0
indicates that the salesperson decides not to pursue the opportunity.
2
Table 3: Stage 2: Descriptive Statistics and Correlations (n = 200 sales opportunities)

Variable
Mean
S.D.
1
2
3
4
5
6
7
8
9
1. Strategic value of clients business
2.70
0.85
2. Urgency of clients business need
3.15
1.01
.08
3. Concreteness of opportunity
3.82
0.99
.01 -.07
4. Closeness to buying center
3.76
0.93
.03
.05
.11
5. Strength of competitive position
3.59
0.95
.12 -.02
.21
.67
6. Fit with clients value orientation
3.89
0.79
.31
.06 -.04
.59
.53
7. Opportunity size ($000)
148.06 164.34
.59
.08
.09 -.13
.05
.07
8. Salesperson specialization
0.34
0.23
.02 -.09
.14
.09
.15
.12
.12
9. Pursue opportunity
1.00
0.00 N/A N/A N/A N/A N/A N/A N/A N/A
10. Win opportunity
0.38
0.49 -.03
.06
.22
.39
.38
.23 -.11 -.13 N/A
Note: With a sample size of n = 200, correlation coefficients larger than U = 0.13 are statistically significant =0.05.
Table 4: Stage 2 Model: Estimation Results for Win Opportunity (n = 200 sales opportunities)
H
Model
2.1
2.2
2.3
Cancel
3.45***
.32
.67
Stage 1 Predictors
Strategic value of clients
business
Urgency of clients business need
-.04
-.39
Concreteness of opportunity
-.19
-.95**
H4
Stage 2 Predictors
Salesperson specialization
4.05*
6.87***
4.42*
7.89***
H5
Closeness to buying center
1.64***
1.28**
1.65***
1.57***
H6
Strength of competitive position
1.13**
.43
1.37**
.82
H7
Fit with clients value orientation
1.56***
.94*
1.42**
.57
Win
.33
Cancel
.27
641
Win
.31
Cancel
.27
Win
2.31**
Cancel
3.26***
2.4
Win
2.47**
Opportunity Outcome
Intercept
Control
8
Opportunity size
-.00
.00
-.00
-.00
-.00
-.00
Summary Statistics
Sigma-Squared
.26
.27
3.01
2.96
00 Tau
.30
.29
2.75
2.84
Degrees of Freedom
196
194
186
180
Deviance
365.66
362.75
301.99
279.95
Pseudo R-Squared
N/A
.02
.55
.61
Notes: * p < .05; ** p < .01; *** p < .001 (two-sided tests).
The dependent variable is the outcome of those opportunities that the salesperson decides to pursue, where the reference
category is that the opportunity is lost. Namely, for each model, the Win column compares wins versus losses, and
Cancel column compare the opportunities canceled by the client versus losses.
2
REFERENCES
Churchill, G. A., Ford, N. M., Hartley, S. W., & Walker, O. C. (1985). The Determinants of Salesperson Performance: A
Meta-Analysis. Journal of Marketing Research, 22(2), 103-118.
Dixon, A. L., Spiro, R. L., & Jamil, M. (2001). Successful and unsuccessful sales calls: Measuring salesperson attributions
and behavioral intentions. Journal of Marketing, 65(3), 64-78.
Johnston, W. J., & Kim, K. (1994). Performance, Attribution, and Expectancy Linkages in Personal Selling. Journal of
Marketing, 58(4), 68-81.
Rich, G. A., Bommer, W. H., MacKenzie, S. B., Podsakoff, P. M., & Johnson, J. L. (1999). Apples and apples or apples and
oranges? A meta-analysis of objective and subjective measures of salesperson performance. The Journal of Personal Selling
and Sales Management, 19(4), 41-52.
Verbeke, W., Dietz, B., & Verwaal, E. (2011). Drivers of sales performance: a contemporary meta-analysis. Have salespeople
become knowledge brokers? Journal of the Academy of Marketing Science, 39(3), 407-428.
642
A TOWN HALL MEETING WITH EDITORIAL REVIEWERS: INTERACTIVE DISCUSSION ON THE ISSUES
THAT CREATE A REJECTION ASSESSMENT IN THE JOURNAL REVIEW PROCESS
David J. Ortinau, University of South Florida, USA
Charles Ingene, University of Mississippi, USA
Jeannette A. Mena, University of South Florida, USA
James S. Boles, Georgia State University, USA
Mitch Griffin, Bradley University, USA
ABSTRACT
With the existing insights on writing and publishing marketing journal articles and the disciplines rapid expansion of
publishing opportunities in new U.S. and international marketing journals, one intuitive prediction is marketing scholars
publishing success of important scientific articles is rapidly becoming a more common occurrence. Yet, this trend prediction
is perplexing and contradictive because the prestigious and top 25 ranked marketing-oriented journals consistently report
annual acceptance rates ranging between 7 and 18%. The low acceptance suggest a disconnect gap between conducting
important, relevant quality research and ultimately publishing that research in quality journals.
In an effort to begin closing this disconnect gap, the primary objective underlying this special session is one of generating
meaningful discussions between journal editorial board reviewers, acknowledged as outstanding reviewers, and the audience
on critical questions and elements about the development of manuscripts submitted to high quality journal review processes.
One of the unique elements of the session is the interactive framework of using the town hall question and answer format
between panel members and the audience to create a meaningful dialogue and opportunities of exchanging invaluable
writing, organizing, and publishing insights toward improving the journal quality factor of manuscripts submitted to journal
review processes. In addition, the interactive dialogue provides invaluable insights to main as well as specific components of
a manuscript that editorial reviewers use in evaluating a manuscripts value and contribution to the body of marketing
knowledge (or the literature).
Current doctorate students, young scholars, and older authors who are finding difficulties in getting their research
successfully through journal review processes and a positive publication outcome in high quality marketing journal outlets
can gain better understanding of the role, responsibilities, and expectations of editorial reviewers. The expert reviewers will
discuss a variety of issues that are classified as fixable manuscript problems such as: (1) general manuscript sloppiness
including grammar, style, syntax, spelling errors as well as failure to follow the target journals style guidelines; (2)
development of hypotheses that are illogical and/or poorly supported by theory or extant literatures; (3) attempts at trying to
analyze too many variables, test too many hypotheses, and/or ineffectiveness in presenting a coherent set of findings; (4)
using a well written literature review that does not present the right development background for supporting the manuscripts
main story line; (5) ignoring alternative theoretical explanations for unsupported relationships; (6) using the lack of support
of hypothesized relationships as the only contribution to the literature. Manuscript problems that are very difficult, if not
impossible, to successfully fix (possibly fatal flaws) consists of such issue as: (1) inadequate post hoc explanation of
unsupported hypotheses or unexpected findings; (2) poor development of construct measures and/or pretesting procedures;
(3) questions of whether the measures really tap (or correctly) capture the construct (s) of interest; (4) serious errors in the
analysis use to test the hypothesized relationships; (5) judgments that the topic is too narrow in scope to be of interest and
benefit to the target journals readership from either an academic and/or practitioner perspective; and (6) findings fail to make
an incremental or substantial contribution (theoretical, methodological, managerial) to the marketing literature.
The discussions of the above topics/issues, from editorial reviewers perspective, will provide insights to establishing and
understanding both the dos and donts in successfully preparing manuscripts for submission to journals review processes.
Leaving this session, researchers will have a better understanding that writing important scientific articles for prestigious and
high-quality marketing journals entails a variety of complex and interrelated journal quality image issues which mediate
journal reviewers judgments of the articles importance and value to the literature and ultimately editors acceptance/
rejection decisions. Gaining awareness and understanding of the important elements of a manuscript, from a reviewers
perspective, provide insight and knowledge about the expectations and standards authors must meet or exceed in order to
maximize the likelihood of an acceptance decision. Authors must provide a convincing argument to the importance and
relevancy of the research topic and questions driving the research endeavor as well as evidence of scientific rigorousness in
the methodology, measurements and analysis procedures. Finally, authors must provide support that the findings make
substantial (absolute) and/or relative (incremental) contributions to the literature (or the body of marketing knowledge).
643
THE ESSENTIAL ROLE OF SENSE OF COMMUNITY IN A HIGH CUSTOMER-TO-CUSTOMER

INTERACTION SERVICE SETTING
Matthew P. Bunker, University of Northern Iowa, USA
INTRODUCTION
It is well established in the literature that sense of community within a service setting contributes to customers feelings of
commitment toward a brand (Fraering and Minor 2006). For example activities related to brand communities have increased
loyalty intentions among small groups of Harley riders (Bagozzi and Dholakia 2006) and Jeep owners (McAlexander, Schouten,
and Koenig 2002). Communities theoretically are instrumental in human well-being(McAlexander et al. 2002), due to the
desire to belong to a group. So consequently feelings of community have a strong influence on customers intentions to
continue patronizing a firm in the future (Drengner, Jahn and Gaus 2012).
Furthermore, sense of community also enhances consumers perceptions of service quality (Wooldridge 1999). Many
consumers have come to expect social support within service settings (Adelman, Ahuvia and Goodwin 1994), thus when social
support is absent or low, service quality as judged by consumers, may also decrease. Social support is more than just service
employees fulfilling interpersonal needs with customers, but also extends to customers fulfilling interpersonal needs with other
customers (Adelman et al. 1994). If customer-to-customer social support is inherently high within a service setting, then that
social support may have a much larger impact on service quality and commitment than expected.
The literature has rarely explored the effect of sense of community in service scenarios in which customer-to-customer
interaction is integral to the service and therefore a sense of community is inherently expected by the consumers. The purpose
of this paper is to demonstrate that in a high customer-to-customer setting; sense of community is an extremely important
antecedent to commitment and also affects individual quality dimensions. When high customer-to-customer interaction exists
in a service setting, a sense of community among the customers is absolutely essential if that service provider desires to maintain
high quality perceptions and thus maintain commitment among its customers.
Customer-to-customer interaction (CCI) has received increased attention over the last two decades (Nicholls 2010) and is an
important aspect of the service experience due to its effect on satisfaction and loyalty (Moore, Moore, and Capella 2005). In
certain service settings other customers are considered essential inputs to the service experience (Moore et al. 2005). So in
these service settings, CCI is an integral and even planned component of the service offering (Parker and Ward 2000). Positive
CCI is especially important if the service is extended over time, has an affective component, and chances for intimate encounters
are experienced by the customers (Price, Arnould, and Tierney 1995). Customers that are satisfied in extended service
situations characterized by CCI may also feel a sense of community or belongingness.
Customers who felt a stronger sense of community in CCI situations were more satisfied and loyal towards the service provider
(Rosenbaum 2008). But negative social encounters in high CCI service settings lead to lower satisfaction and lower intentions
to continue patronizing the organization (Raajpoot and Sharma 2006). More specifically, social ostracism by other customers
in a high CCI situation results in less commitment towards the service provider in which that behavior occurred (Hitlan et al.
2006).
Consequently, sense of community may even have a much bigger impact when there is high CCI within a service setting.
Consumers who have high sense of community in a CCI setting may judge the organization as high quality for individual
components of the service and indicate higher levels of commitment towards that organization. Currently there is a gap
regarding the importance of the sense of community in a CCI setting and its effect on individual quality perceptions and
commitment. This study not only shows the importance of commitment on quality perceptions, but in a CCI setting, sense of
community has a stronger effect on commitment than the individual components of quality.
H1: Sense of community has a strong positive effect on individual components of quality (quality teaching, academics, sports,
music, clubs, and Advanced Placement Courses (APC))
H2: Sense of community has the strongest correlation with commitment when compared with the components of quality
mentioned in Hypothesis 1.
644
METHODOLOGY
Sample
1500 surveys were mailed to parents that either currently send or have sent their children to a Catholic school located in the
upper Midwest. A total of 500 surveys were returned thus resulting in a 30% response rate. CCI is assumed to be high in a
catholic school setting.
Construct Measurement
Seven point Likert scales were created to test sense of community and were partially derived from McAlexander, Schouten,
and Koenig (2002). Scale reliability of the community items was tested using Cronbachs Alpha resulting in alpha = .893. The
commitment scales were adapted from Harrison-Walker (2001) and scale reliability testing resulted in alpha = .883.
The components of quality were: quality teaching, academic quality, sports, music, clubs, advance placement courses, and
discipline. Each component was tested as a single item scale using a zero to ten graphic rating scale anchored by the words
public schools and parochial schools. The question asked the respondents to mark the scale indicating their perceptions of
quality between public schools and parochial schools relative to each dimension.
To test hypothesis 1 the zero order correlations between sense of community and commitment were compared with the
individual components of quality. All of the zero order correlations were significant at p < .001. To test hypothesis 2 a multiple
regression was used with sense of community along with the individual components of quality as the independent variables
and commitment as the dependent variable. The only significant independent variable was sense of community with beta =
.610. None of the elements of quality tested significant at p = .05. This might be due to the multicolinearity of community
with the other independent variables, which shows that the correlations among the individual components of quality and sense
of community were large enough to affect the relationship between the individual components of quality with commitment.
Consequently community had a large influence on commitment as well as influenced the other components of quality. The
table below shows the single order correlations between the variables as well as the result of the multiple regression.
In order to further test the relationship between sense of community and quality with commitment, a quality construct was
created using the independent items tested in the table shown above. Cronbachs alpha was used to test construct reliability
which resulted in alpha = .859. Discriminant validity was assessed between the independent variables quality and sense of
community. A regression analysis was used to test for an interaction between sense of community and quality with the
commitment dependent variable. The model showed a significant interaction between sense of community and quality (R2 =
.739, F = 467.000, F-change = 11.338, P < .001)
As the results indicated, sense of community had a strong correlation with all of the individual components of quality. So
consumers who feel a strong sense of community would judge the individual components of a service as high quality.
Customers experience a sense of community when there is social support from other customers. Consequently the social
support of other customers within a service setting is sometimes more important than social support from employees (Adelman
et al. 1994). Service settings become meaningful to customers because of their relationships with the people in those settings.
People who continue to patronize a service provider because of the social support they receive, perceive the service provider
as a home away from home, or in other words, the service provider becomes a third place in consumers lives, where
consumers can satisfy companionship and emotional needs as well as consumption needs (Rosenbaum 2006). The results of
this research carry the notion of third places, a step further by showing that people who feel a strong sense of community within
third places will also positively judge the service quality offered by that service provider.
Creating a sense of community has many positive outcomes, such as exhibiting more loyalty to the brand (Muniz and OGuinn
2001). So if a service has a strong customer-to-customer social component it is important to engage in strategies that would
strengthen feelings of community among the members. As the results of this research show, strengthening a sense of
community not only improves the perception of the service offerings, but also has a strong influence on customer commitment
to the service provider. The influence of sense of community on commitment may even be stronger than the influence of
quality perceptions on commitment. Although there is evidence of mulicolinearity effects between community and the
individual components of quality, this effect highlights the importance of the sense of community within a high customer-to-
645
customer interaction setting. These results can be further tested in other contexts such as neighborhood associations, country
clubs, and university settings
Although not directly tested, the results indicate that customers who do not feel a sense of community in an extended service
situation would judge the components of the service as low quality. But research in school settings has found that sense of
community was related to students engagement in school and thoughts of dropping out of school. (Royal and Rossi 1996).
So sense of community has the potential of influencing every aspect of a consumers experience. But lack of community may
completely distort a consumers perception of that brand in a negative manner.
TABLES
Table 1: Zero order correlations between community, commitment and elements of quality.
Multiple regression results with commitment as DV; community and elements of quality as IVs.
Quality
Teaching
Academics
Sports
Music
Zero Order
Sense of Community .412*
.434*
.370*
.275*
Correlations
Commitment
.411*
.444*
.328*
.262*
Multiple
Regression
DV=Commitment
.088
.090
.014
-.030
* p<.001
Clubs
.324*
.342*
APC
.349*
.338*
Sense of
Community
1
.707*
.068
-.011
.610*
Commitment
.707*
1
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647
STRESSFUL LIFE EVENTS AND INTER-CUSTOMER SOCIAL SUPPORT

Vassiliki Grougiou, International Hellenic University, Greece
INTRODUCTION
The majority of studies in services deal predominantly with the dyadic employee-customer interaction and its resulting effects upon
perceived service quality, customer satisfaction, and post-purchase intentions (Bove et al. 2009). However, services literature appears
to neglect the value of the customers presence and interactions in the creation and evaluation of service delivery (Verhoef et al.
2009). Although not all interactions between customers may be positive (e.g., Aronoff et al. 1992), services could benefit by fostering
relationships among their customers.
Wirtz and Bateson (1999) proposed inter-customer interactions as a potential contributor to customers affective evaluation of the
service experience. Indeed, customers may well enter the market place for the emotional benefits they can accrue there (Grougiou
& Pettigrew 2011). While people usually rely upon their family and friends for emotional support (e.g., House 1981), a by-product
of modern living which involves daily commuting, double wage earning or sacrificing family time for career development may
impose restrictions on getting social support from traditionally expected sources such as family and friends (Miller 2002). It could
be expected that this phenomenon of estrangement would be more intense in the older population due to diminished social contacts
resulting from retirement and empty nests (Grougiou & Pettigrew 2011). However, we postulate that this need for social support
would also be common to other population segments, particularly those who encounter critical life events (e.g., death in the family,
separation etc.). While previous studies have mostly linked the presence of critical life events with compulsive consumptions such
as binge eating or drinking (e.g., Simons et al. 2002), to the best of our knowledge there is no other study that investigates critical
life incidents with inter-customer social support in service settings.
The purpose of this research is twofold and is driven by the life course paradigm which merges diverse theoretical perspectives from
various fields of social and behavioural sciences and attempts to explain the impact of life experiences on consumer behaviour (Elder
et al. 2003). Firstly, we postulate that critical life events could work as antecedents to inter-customer social support. Social support
could be provided by customer contact with employees or from friends who do their shopping together, however our focus here is
solely on customers who interact with each other in service establishments. The role and impact of purchase pals (Woodside &
Sims 1976) has been excluded from the current study, as this type of friendship and its resulting social support may have been shaped
outside of the service establishment and the interaction is less likely to include anonymity and neutrality (Cowen 1982). Secondly,
we examine whether the inter-customer social support provided in service settings, such as beauty salons and gyms, enriches the
service encounter experience and leads customers to engage in customer citizenship acts. Such acts could range from customers
initiation of positive word of mouth, less sensitivity to price increases and reduced complaining (e.g., Groth 2005). These actions
are always voluntary and outside of the customer service script (Bove et al. 2009) and may even entail some sacrifices in terms of
the customers time and effort (Staub 1978). The service establishments selected for this study (gyms and beauty salons) are ideal
for investigating the role, importance and impact of inter-customer relationships on customer citizenship acts as they provide rich
opportunities for inter-customer interactions. Taking into account both the feminist perspective of the ethics of care (Gilligan 1982),
which posits women as more prone to caring and connecting with others, and also recent evidence demonstrating that females
experience public encounters differently from men by exhibiting empathy and concern regarding social support (Rosenbaum 2008),
our sample consists solely of female customers.
THEORETICAL FRAMEWORK AND HYPOTHESES
While some researchers postulate that many customers find it difficult to engage in social interactions in the market place (e.g.,
Aubert-Gamet & Cova 1999), others recognise the importance of third places such as cafs, restaurants (Rosenbaum 2006) and
beauty salons (Price & Arnould 1999) as hubs that foster sociability and subsequently social support. However, in the literature,
social support in the service encounter has mostly been related to service providers verbal and nonverbal communication, leaving
the value and importance of inter-customer social support largely unexplored (Guenzi & Pelloni 2004).
Although various classifications have been suggested for the social supportive resources people exchange (Crase et al. 2007), the
most important ones for the individuals wellbeing can be clustered into three main groupings, namely: emotional, companionship,
and instrumental support (e.g., Helgeson 2003). Emotional support gives people the opportunity to express their feelings and
emotions, while companionship provides human contact during activities. Instrumental support provides people with assistance on
practical issues involving ordinary activities such as a lift home or making use of someones mobile phone etc. Drawing on resource
exchange theory and reciprocity theory, where kind actions are rewarded (Regan 1971), we postulate that customers benefitting from
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supportive resources from other customers will try to reciprocate by showing appreciation for the service setting which has provided
them with this opportunity for social support and exchange. According to the life course theory, we also expect that customers
experiencing critical life events would be more open to social supportive resources in an attempt to offset their need for social
support. In turn, we would expect these customers to demonstrate their appreciation to the service provider by performing customer
citizenship acts such as positive word of mouth publicity, a lesser propensity to complain and less sensitivity to price increases. Such
speculation is also congruent with compatibility management (Martin & Pranter 1991), since compatible customers such as older
people who may face similar life situations (i.e., being widowed, retired, and/or empty nesters) may spark up friendships within the
service setting that will bring them closer to each other. As result of the above discussion, the following hypotheses are formulated:
H1: Critical life events are positively associated with the need for inter-customer social support.
H2: Age is more likely to trigger the need for inter-customer social support.
H3: The social support customers receive positively influences customers willingness to perform customer citizenship acts including
(a) positive word of mouth, (b) lesser propensity to complain, and (c) less sensitivity to price increases.
METHODOLOGY
Data were obtained through self-administered questionnaires from a sample of 248 female customers from 10 service establishments
(4 gyms and 6 beauty salons). The locations were selected in order to represent customers from all socioeconomic backgrounds in a
major metropolitan city in Greece. All respondents volunteered to participate in the study and submitted their responses anonymously
to a secure location. The average age of the respondents was 37.4 and SD 11.4 years.
Measures
All measures used were based on prior studies and were assessed for reliability using composite reliability (CR), and for validity
using factor loadings and average variance extracted (AVE). To measure inter-customer social support we adopted the Social Support
Questionnaire for Transactions (SSQT) that is consisted of 23 questions covering the frequency (1=seldom or never, up to 4=often)
of emotional, companionship and intangible support someone receives from their inter-customer contacts (Suurmeijer et al. 1995).
The loadings for the inter-customer social support groupings (i.e., emotional, companionship, and intangible) were all above <.4
while the composite reliability (CR) for this measure was .73 and the average variance extracted (AVE) was .50. For customer
citizenship behaviours we relied upon customer behavioural intentions. Thus, we utilised the 13 item scale established by Zeithaml
et al. (1996). Principal factor analysis was performed and three groupings were produced with satisfactory factor loadings, namely:
word of mouth, complaining, and willingness to pay higher prices. Nine items from the initial scale were retained while four were
dropped due to poor factor loadings (<.40). The composite reliability (CR) and the average variance extracted (AVE) for (i) word of
mouth, (ii) complaining, and (iii) willingness to pay higher prices were: (i) AVE=.70, CR=.87; (ii) AVE=.55, CR=.71; (iii) AVE=.5,
CR=.7.
Although listing and accumulating critical life events (CLEs) and producing life event indexes may provide little information
regarding everyday living, they nevertheless remain very useful ways of assessing stress as a contributing proxy in the understanding
of market-based adaptation processes (Kanner et al. 1981). Four CLEs (i.e., loneliness due to death or divorce, and the existence of
serious financial or health constraints) derived from the Social Readjustment Rating Scale (SRRS) were used, with the objective of
aiming to cover incidents from all age groupings (Holmes & Rahe 1967). The CLEs refer solely to undesirable life events since
these are more likely to induce stress and emotional coping strategies compared with desirable states. The recalled events had to
have occurred within the previous six months, since longer periods may decrease the impact of such events and may influence
memory recall. Each event was assigned the value of (1) if it had been experienced by the respondent and (0) otherwise. The four
events created a 0-to-4 point disruptive critical life event index, a formative measure that works as an objective definition of stress
experienced in the recent past. On psychometric grounds the selected life events do not measure a single primary construct and thus
it is not likely that the presence of one would bring about the others (Herbert & Cohen 1996).
ANALYSIS
To test the hypothesised model, we used a two-step modeling approach, as per Anderson and Gerbings (1988) suggestions. Firstly,
we conducted a confirmatory factor analysis (CFA) to establish the validity of the model. The CFA produced a satisfactory fit (x
(df)=78.26 (35), p<.000) and the items fitted the data well in their corresponding constructs (CFI=0.942; SRMR=0.054;
RMSEA=0.071; TLI=0.909). Secondly, the structural model fit statistics indicated an acceptable fit (x (df)=131.19 (52), p<.000);
CFI=0.918; SRMR=0.064; RMSEA=0.078; TLI=0.877) given the models complexity and relatively small sample. All models were
tested using STATA.
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FINDINGS AND DISCUSSION

Results show that critical life events appear to contribute towards individuals need for inter-customer social support in service
encounters (=.18, p<.01). Thus, H1 is accepted. While age has been proposed by prior studies as being influential in terms of
customers seeking social support (e.g., Grougiou & Pettigrew 2011), our findings do not support this assertion (=-.03, ns). This is
probably because life incidents, regardless of the individuals age, trigger the need for inter-customer social support in services.
Thus, H2 is not supported. Additionally, the findings indicate that when customers benefit from inter-customer social support they
tend to reciprocate by engaging in positive word of mouth publicity (= .36, p<.001), less complaining (=-.21, p<.01), and display
a greater tolerance to the likelihood of higher prices for the service (= .41, p<.001). Thus, H3a, H3b and H3c are accepted providing
support to the resource exchange and reciprocity theories.
Furthermore, this study adheres to the life course paradigm which suggests life events and experiences have an impact upon customer
behaviour. While prior studies have retrospectively examined the impact of life events on customer behaviour primarily with regard
to young individuals materialism and compulsiveness (Moschis 2007), this study overcomes assorted memory limitations by
examining the theoretical paradigm in a different setting (i.e., service encounter interactions) with a wider spectrum of the population.
Though only negative critical life events were examined, since they are more likely to induce the need for inter-customer social
support, future studies may benefit by including a greater number of critical life events and examining both negative and positive
life incidents.
The studys findings could have significant implications for services and society in general. Receiving social support from other
customers within a service establishment may also enhance customer wellbeing. As the findings indicate, service providers that
encourage inter-customer interactions could reap considerable business benefits. Considering customers altruistic motives for
performing customer citizenship acts, it could be postulated that this may prove more effective than other marketing efforts such as
advertising or personal selling. To this end, maximising opportunities for interactions between customers by carefully blueprinting
the service setting or coordinating deliberately organised activities (e.g., member introductions or organising social events such as
contests and galas) should be considered. While this study examines inter-customer relationships and their impact on customer
citizenship behaviours, since they are on the whole more genuine compared to those exhibited by service employees (e.g., in order
to secure a sale or service tip), further research could benefit by also including customer-employee interactions in the research design.
In addition, since this study is solely based on female responses, future studies may need to include an examination of the male
perspective as well.
REFERENCES
650
MEASUREMENT OF VALUE CO-CREATION: A FORMATIVE APPROACH

Kumar Rakesh Ranjan, Indian Institute of Management, India
ABSTRACT
The concept of value co-creation has attracted a lot of research in the last ten years. But the understanding of the construct is
still at best equivocal, resulting in a slow progression of the field. Using evidences from the review of extant literature and an
exploratory study, we conceptualize value co-creation. Subsequently, using data from two cross-sectional large sample
surveys, we measure and validate an index for value co-creation.
We illustrate that value co-creation is theoretically rooted in the service dominant logic and has two sub-dimensions, namely,
co-production and value-in-use (ViU). Each of these sub-dimensions has three distinct facets. While co-production is
comprised of interaction, ideas (knowledge sharing), and equity; value-in-use is constituted by experience, personalization,
and relationship. Thus, value co-creation has been conceptualized as a third-order formative construct, for the measurement
of which we develop a multi-item index. This study contributes to extant research in service dominant logic by opening up
new grounds for quantitative studies related to value co-creation. There are three distinct contributions of this study. First,
integrating evidence from extant literature and qualitative data, we expose the two dimensions of VCC, co-production and
ViU, and describe each as composed of three distinct facets. Second, we operationalize these dimensions and facets with
measures that present both face validity and construct validity. And third, we illustrate the predictive validity of our
measurement index in an investigation with consumer satisfaction.
651
SAVING TIME, MONEY, OR THE ENVIRONMENT?

CONSUMERS MOTIVES OF ACCESS-BASED SERVICE USE
ABSTRACT
Services that give customers access to goods, such as car sharing, bike sharing, or rental platforms for fashion items or tools,
are gaining increasing relevance as an alternative to sole ownership. While the general idea of such business models is not
new, as various forms of rental and leasing services have existed for a long time, internet technologies simplify such services
for both, lessor and lessee, and enable a greater reach. According to US Census Bureau data, revenues of rental and leasing
services have increased from $90 bn in 1998 by more than 22 % to over $111 bn in 2010. Societal trends such as a
habituation of online sharing behavior via social media are thus considered to have spawned a sharing revolution. While
previous research has conceptualized access-based consumption, and has investigated determinants of consumers intention
to rent goods or their participation in commercial sharing systems, little has been known about consumers different motives
of using such access-based services. This study therefore addresses two research gaps: First, it explores distinct motives that
underlie consumers use of access-based services; second, the influence of these motives on consumers actual usage
behavior of access-based services are quantitatively investigated.
In a first step, the results of a series of qualitative interviews to explore usage motives are presented. Using the laddering
technique and means-end chain analytical procedures, four motivational patterns are identified: value-seeking (i.e., the desire
to save money by using access-based services); convenience (i.e., the desire of saving time and effort by using access-based
services); lifestyle (i.e., the desire for self-expression and community participation through using access-based services);
environmental (i.e., achieve a more sustainable lifestyle by using access-based services).
The second step consists of a quantitative investigation of the influence of these four motivational patterns on actual accessbased service use. Drawing from existing literature and based on insights from the qualitative interviews, a total of eleven
hypotheses are derived. Hypothesis testing is based on a unique data set that combines survey responses and actual usage data
of more than one thousand users of a U.S. carsharing service. Data analysis with structural equation modeling validates the
identified motives and reveals that those motives related to personal utilitarian benefits (i.e., value-seeking, convenience)
have the strongest positive influence on access-based service use, whereas a pronounced environmental motive exerts a
negative influence. Moreover, the utilitarian motive related to monetary benefits (i.e., value-seeking) has a stronger positive
influence on customers access-based service use than the utilitarian motive related to non-monetary benefits (i.e.,
convenience). The lifestyle motive, on the other hand, was not found to significantly influence service use.
Several insights for marketing research and implications for access-based service providers can be derived from the study
results. For instance, the results suggest that managers should highlight that customers can save money as well as time and
effort by using access-based services compared to ownership. Activities to create a customer community, however, are not
likely to increase service use. Additionally, managers are faced with the dilemma that on the one hand, access-based services
are perceived as a more environmentally friendly alternative to ownership; on the other hand, however, customers with a
pronounced environmental motive will decrease their overall use of the accessed object.
652
TASTING & EVALUATING AROMA OF WINE: FRONTAL LOBE MEASUREMENT USING NEAR INFRARED
Shannon B. Rinaldo, Texas Tech University Rawls College of Business, USA
Dale F. Duhan, Texas Tech University Rawls College of Business, USA
Kathryn King, Texas Tech University Rawls College of Business, USA
Brent C. Trela, Texas Tech University Department of Plant and Soil Science, USA
Tim H. Dodd, Texas Wine Marketing Research Institute, Texas Tech University, USA
ABSTRACT
Wine has proven itself a complex consumer product for researchers. Although a commonly consumed product, preference for
wine depends on both intrinsic and extrinsic attributes (Espejel and Fandos 2009), providing researchers with a vast area of
study. Consumers base wine choices and perceptions of wine quality on country of origin (Guidry, Babin, Graziano, and
Schneider 2009), label information (Boudreaux and Palmer 2007), price (Lockshin and Rhodus 1993), and taste (Dodd 1995).
Wine tasting is an integral method for engaging consumers, whether a sip in the retail store or a glass in the tasting room.
Wine producers go to great lengths to educate consumers on evaluating wine quality based on taste and aroma but have no
feasible method to test the effectiveness of this type of instruction. Understanding the sensory and perceptual processes of
wine tasting may offer insight into how consumers at different levels of wine expertise use their senses to evaluate wine.
Previous literature examining neural processing of taste has found activation in the orbitofrontal cortex of the frontal lobes
(Kringelbach, ODoherty, Rolls, and Andrews 2003). These studies have shown both sweet and salty tastes are processed in
the orbitofrontal cortex but in slightly different areas of this region (ODoherty, Rolls, Francis, Bowtell, and McGlone 2001).
Like pleasant tastes, pleasant olfactory stimuli have been shown to activate the orbitofrontal cortex as well (Grabenhorst,
Rolls, Margot, da Silva, and Velazco 2007). The current study uses functional near-infrared spectroscopy to examine
processing in the frontal lobe during wine tasting and aroma evaluation.
Functional Near-Infrared (fNIR) utilizes light on the near infrared spectrum (700 900 nm), which is relatively transparent to
biological tissue. Oxygenated and de-oxygenated hemoglobin in the blood reflects this light, producing scattering of light that
can be picked up by photosensitive detectors. Higher rates of change in oxygenation indicate higher activation in the brain
during a task. Light scatter is measured and calculated with a modification of Beer-Lamberts Law (for more on this equation
see Ayaz 2010), one can draw conclusions about the change in oxygenated and deoxygenated blood over time in a local area
of the brain, inferring increased or decreased cerebral activity (Izzetoglu, Izzetoglu, Bunce, Ayaz, Devaraj, and Onaral 2005).
The light-scattering regions measured lie between near-infrared light sources and the detectors both on a sensor pad, leading
to sixteen measurement locations. The sensor pad is normally placed on the forehead because this region easily allows for
unimpeded skin contact and can detect cerebral activity in the frontal cortex. Activation during each task is measured and a
rate of change is calculated from the baseline measurement.
Sixty (N = 60) undergraduate students tasted and smelled both sweet and dry wines while sixteen defined areas of their
frontal lobes were measured with fNIR. Orbitofrontal activation was significantly activated in the wine tasting condition. In
the olfactory task, larger areas of the frontal lobes showed significant rates of activation change than when participants tasted
wine. Medial lateral prefrontal and orbitofrontal cortices were both implicated, however, activation was significantly higher
in the orbitofrontal cortex. Knowledge level of wine did not predict neural processing when participants evaluated aroma of
wine, however, those with higher wine knowledge did show significantly higher activation in specific frontal lobe regions
when tasting. These differences were pronounced in several regions during dry wine tasting. When tasting high sweet wine,
those with more wine knowledge showed significantly higher activation in the left orbitofrontal cortex; when tasting dry
wine, the following three areas showed significantly higher activation: left orbitofrontal, right orbitofrontal, left medial
lateral.
Developing a better understanding of the biological processes involved in tasting may lead to understanding the differences in
consumer preferences for wine. This study represents one step toward discovering the neurological processes that lead
consumers to purchase specific types of wine.
653
POSITIVE INFLUENCE OF M-COMMERCE ON THE GROUP PURCHASE OF WINE FOR Y-GENERATION

Jean-Eric Pelet, IDRAC, LEMNA, IAE-IEMN Nantes University, France
Benoit Lecat, Burgundy School of Business, Dijon, France
ABSTRACT
The ability to identify and evaluate the opportunities to reach distinctive customer segments is a fundamental challenge faced
by the wine industry operating in a global environment. Differences about access to information and shopping habits on the
Internet seem to exist according to the cohorts users belong to. Following a confirmatory study of 190 respondents, this paper
describes the consumer behavior of the Y generation regarding several variables: level of Internet sophistication and
orientation, brand loyalty, risk aversion, involvement, shopping behavior and perception of authenticity. Results of a
confirmatory study show that m-commerce and e-commerce applications using Social Networks Systems (SNS) platforms
may in the foreseeable future, offer wine growers greater efficiency to expand their selling opportunities and reach a wider
audience. Early adopters have the potential to be richly rewarded.
INTRODUCTION
The Internet has disrupted several industries over the past few years. It has changed the way we do business and how
consumers behave and interact with each other. The wine industry is not excluded from this phenomenon; this is the problem
we focus on in this study. The state of the art in the literature regarding wine industry during the last decade has seen an
increasing series of studies of wine consumption behavior (Celhay, 2008; Nowak et al., 2006; Ritchie et al., 2009; Thach and
Olsen, 2004, 2006) but none of them has so far been interested in exploring the potential of mobile commerce (m-commerce)
at it relates to the wine industry. Among the elements that contribute to this massive use of Internet devices, let us cite the
growth in social media usage in recent years (Facebook, Twitter, and so on). The instantaneous insights on consumer profiles,
m-commerce and the development of mobile tools (smartphones, tablets, etc.) reinforce the appetite consumers have for this
Communicating Swiss-knife style, also considered sometimes as habit forming. Today consumers are not passive
shoppers. They seek out and disseminate information about a product using social media and are not shy about providing
their views and opinions and will abandon any company that does not serve their needs or are perceived as not giving value.
The question we today pose relies on the coming of age of the so-called Generation Y (Y-Gen 1980-1991). This paper aims
to provide insights on the perception of Y-Gen customers and their use of Social Networks Systems (SNS) and the potential
challenges and opportunities in terms of shopping behavior when considering m-commerce and how it applies to the wine
industry. Our research question is: To what extent are the trends of consumer behavior shaped by the Y-Gen cohort and
what are their expectations regarding the potential use of smartphones when they think about shopping for wine?
In order to answer these questions, a confirmatory study has been conducted. The latter relates to the interest Y-Gen
consumers have when considering buying wine on the Internet. Our research enabled us to highlight the importance of the
effects of the design interface used on m-commerce websites on consumers buying intention. It also shows that wine
growers will need to adapt, respond and grow their digital business to suit their customers who live in a state of constant
interconnectedness and design strategies to fit the mobile contexts to sell more on these types of devices. We present the
results of this study before concluding and presenting limits as well as future ways of research.
BRIEF PRESENTATION OF GENERATION YS USAGE OF SOCIAL NETWORK SYSTEMS EMBEDDED ON
SMARTPHONES
Who is the Generation Y?
Y-Gen is defined as those born between 1980 and 1991 (Chowdhury and Coulter 2006; Lescohier 2006). It is believed that
Y-Gen has the potential of forming long-term loyalties with products which satisfy them at this vital stage (Paul, 2001). YGen, the largest generation since the Baby Boomers (Neuborne 1999), spans in age from fourteen to thirty-two (Norum,
2008). For the purposes of this study, the age range of Y-Gen has been narrowed to ages eighteen to thirty-two because
increased financial independence is gained at the age of 18 according to Djamasbi et al. (2008) and because drinking alcohol
is prohibited before the age of 18.
Y-Gen was socialized in a digital world. It is technically literate and continually wired, plugged in, and connected to digitally
streaming information, entertainment, and contacts. It has so mastered technology in such a way that multitasking is a habit it
takes into the workplace, where it tends to instant message its contacts while working (Lewis, 2003).
654
Although studies into the general characteristics of this market are limited, and none have been conducted related to wine
consumption, most findings consistently highlight similar attributes for psychographics and purchase behavior across wellresearched industries such as fashion related items (Dias, 2003 ; Paul, 2001) or more generally industries related to these five
meaningful and distinct decision-making groups, namely: recreational quality seekers, recreational discount seekers,
trend setting loyals, shopping and fashion uninterested and confused time/money conserving (see Bakewell and
Mitchell, 2003). Regarding the wine industry, attitude to wine and consumption behavior may vary, according to Fountain
and Lamb (2011). Authors found that Y-Gen consumers drink more wine than Gen-X did at a similar age and behavioral
differences between both age cohorts are likely to be considerably smaller than differentials in their attitudes. Y-Gen is not a
homogeneous cohort according to Mueller et al. (2011) and de Magistris et al. (2011). By comparing views and behaviors of
Y-Gen wine consumers in a number of countries, authors point to substantial cultural differences. Despite certain similarities
between Y-Gen cohorts across a range of countries, it is very hard to generalize about the wine consumption behavior of the
cohort across a range of countries (Mueller and Charter, 2011).
M-Commerce Habits
The potential benefits of m-commerce for generating sustainable profits need further demonstration when used in conjunction
with SNS. To succeed in producing profits in the highly competitive m-commerce environment, organizations must not only
develop the technical expertise and business strategy necessary for the creation of an effective SNS-m-commerce website
tandem/partnership but also create a satisfying user experience (Pelet and Lecat, 2011; Lecat and Pelet, 2011). In todays
competitive environment companies must quickly evolve and understand that the consumer shopping in a digital world is not
bound by the old buying habits, and so a new kind of collaboration between sellers and buyers needs to happen.
The speed of evolution of the Internet does not always allow companies to realize the implications of new consumer behavior
trends or understand the value they expect to realize from investing in digital technologies. Indeed, the digital world has
modified the way brands look at customers. Recent figures show an impressing growth of mobile use. Cell phone adoption is
widespread especially in young population, with 75% of teenagers and 93% of adults aged 18-29 having a cell phone, with
55% of the latter group accessing the internet wirelessly from their cell phone (Lenhart et al., 2011). The evolution of mobile
communications has triggered an increase in the use of mobile devices, such as mobile phones, to conduct mobile commerce
on the mobile Web (Venkatesh et al. 2003, Ngai and Gunasekaran 2007). Creating a well-conceived and executed digital
marketing strategy requires clarity of concept and goals that few companies are willing or able to invest in, in order to support
their digital business. However, the value of such advertising is yet to be realized and is currently the challenge faced by such
giants as Google, Facebook and Amazon, as many consumers do not wish to be exposed to advertising on their smart phones.
Buying a product and sharing information in real time are two inherent aspects of the new consumption experience.
Behaviors are increasingly affected by the way we use the web to make our purchasing decisions, and how we influence, test,
protest, praise, share, recommend or learn about products or services. As more consumers access social media via mobile
devices, it changes the way they research and shop for products and services. M-commerce hasnt surpassed e-commerce yet,
but the rapid growth of mobile telephony has fuelled the expansion of the mobile Internet as a foundation for mobile
commerce (Lee and Benbasat, 2004). The mobile Internet has unique strengths because users can connect to it wherever and
whenever they want (Kakihara and Sorensen, 2001).
The ability of the wine industry to attract a new customer base (Thach, 2005) requires a thorough understanding of the needs
and wants of that group (Kotler, 2003). This seems even more important despite certain superficial similarities between YGen cohorts across a range of countries, the most significant conclusion is that it is very hard to generalize about the wine
consumption behavior of the cohort across a range of countries, as there are distinct cultural and market developmental
differences that are much more significant than the age-related similarities according to Mueller and Charters (2011). As
novice or potential wine consumers, they are becoming increasingly significant targets for wine marketeers (Mueller and
Charters, 2011), especially since they are very adept at using relatively new technologies such as smartphones.
By providing a reliable location anywhere, anytime, mobile devices offer companies the opportunity to conduct marketing
campaigns that aim to drive both the companys mobile, in-store traffic and sales in ever expanding possibilities.
Applications (especially when they are free) have become a way of life for consumers and are in a position to address each
stage of the consumer purchase funnel - awareness, engagement, consideration, conversion and loyalty. Smartphones
penetration could definitely favor the surge in mobile shopping of wine. Owners of such devices are more or less connected
to social networks with embedded location-based applications. It helps a brand to locate their fans, and target their mobile
strategy to quickly interact with shoppers. Today, someone walking on a street can receive an SMS on her/his mobile phone,
655
indicating that the restaurant of the X brand in the same street is offering her/him a free aperitif if s/he turns up within the
next hour. The person who receives this alert is fan of the X brand on a SNS such as Facebook. S/he may have left the
location based application of her/his favorite digital social network activated, in order to locate her/him anywhere anytime. At
the same time, the restaurant has learned that this person is also fan of this particular wine, and has friends who also seem to
be fans of the food they cook, and the wine they serve, so invitations are sent to these people as well.
It has been shown that 90% of shoppers prefer to communicate in real time while shopping according to Schummer (2001).
Consumer recommendations are the most trusted form of advertising around the world. Although this is true, it is also a
double edge sword, with consumers trashing a restaurant or store for personal reasons, thus causing much damage to a stores
reputation. Over 75% of respondents from 47 markets across the world rated recommendations from consumers as a trusted
form of advertising. This is to compare to 63% for newspapers, 56% for TV and magazines, and 34% for search engine ads
(Nielsen, 2007). This underscores the notion that people trust people with similar experiences.
Thanks to their ease of use, SNS can help shoppers provide positive ratings and recommendations about the goods of a
vendor on its public SNSs page, an action which would be rewarded of course. These interrogations reinforce the importance
to investigate thoroughly how consumers posit themselves on this aspect.
CONFIRMATORY STUDY OF Y-GEN BEHAVIOR IN RELATION TO WITH SNS AND M-COMMERCE USE
Research Method
The confirmatory study was implemented on the Internet using a questionnaire. Each participant has visited and completed it.
By asking French and international consumers coming from more than 10 countries how they did perceive SNS and mcommerce embodying the later, we gathered the data to obtain results.
Participants
The sample is composed of 190 valid questionnaires of international Y-Gen consumers born after 1980. It was selected to
achieve a balance in terms of age and socio-professional background. We worked mainly with students (114/190) for this
analysis since they are deemed suitable as a sample even if their use has often been questioned in terms of their
appropriateness. They share many characteristics with the profile of mobile and Internet users population, such as age. As
shown by several studies, Internet users tend to be young adults, while the Internet usage penetration within the age groups of
1829 years reaches 95% (Zickuhr, 2010; Pew Research Center, 2010). Hence, although our sample presents a bias towards
younger subjects, it can arguably be acceptable as representative of Internet and mobile users. In addition, our study benefits
from the use of students since they are considered as an important group of online consumers (Delafrooz et al., 2010) and are
useful as a sample for empirical studies in m-commerce, in line with previous research (e.g. Kim et al, 2008). The detailed
sample characteristics are presented in Appendix. The questionnaire was structured in nine topics and presented in terms of
sequence as follows: (1) usage of the Internet and characteristics, (2) Digital Social Networks and (3) new technologies; (4)
wine purchase and consumption; (5) access satisfaction regarding wine purchase; (6) Internet access through mobile
regarding wine; (7) use of mobile phone; (8) wine and mobile; (9) involvement and expertise to buy wine through a mobile
phone.
RESULTS
Time and Access to the Internet
Among the 190 respondents, 68% of them connect to the Internet using their mobile and 38% spend between 10 and 19 hours
a week on the Internet whereas 41% spend more than 20 hours a week. Nearly all of them (95%) access the Internet every
day
Purchase Behavior and Influence of PeersRecommendations
Only 43% purchase on the Internet at least once a month. They mainly use Internet to stay in touch with friends and relatives
(95%) but also to look for information on a product (69%). They also access discussion groups (29%) and 21% access chat
rooms.
In terms of DSN, they nearly all use Facebook (93.2%), then Twitter (32.6%), then Groupon (18.9%), and then Google+
(15.3%). They are on DSN mainly to visit friends' pages (88.4%) and have been in touch with DSN through their friends
656
(90.5%) and through their class mates (50%). When they are connected, most of them spend one hour or more on SNS
(67.9%).Ssince most of them connect everyday (77.4%) to DSN. 26.8% declared they have already bought a good or a
service based on friends' recommendations issued from DSN (in order of importance, clothes, transport ticket, CD, and then
books). Regarding wine, only 5 of them were influenced by friends recommendations.
Wine Purchase and Consumption
Regarding the wine consumption and habits, 7.4% of our respondents are members of a group dedicated to wine. Wine
purchases range from don't buy wine (32.6%) to 36.8% buy wine several times a year. With regards to wine buyers only,
they mainly buy it in supermarkets (56.3%) and hypermarkets (19.5%) but also in wine shop (19.5%). They rather consume
good wines: 22.7% buy wine below 5 but 43.8% buy wine between 5 and 10 ; 26% between 11 and 20 and 17% more
than 20. They mainly buy (moderately) between half a bottle (32.8%) and one bottle (23.4%)
Among the whole respondents, 27.4% drink one glass of wine every day; 3.2% half a bottle while 64.2% consume
occasionally (not every day). They mainly consume wine at home (26.3%) or at friends' place (32.1%). Most of them never
go to the Internet to look for information on wine (82.1%). 5.8% of them were able to quote one website only
For 72.6% of them, on time delivery builds trust when they are buying wine through their mobile phone and is viewed as an
important feature. The fact that the wine is delivered in good condition is an important aspect with 76% of respondents
expecting it.
Wine Purchase and M-Commerce
The Y-consumers (56/190) who frequently buy wine (several times a month or more) consider the usefulness of the
information regarding a specific wine (3.2/5) as important when looking up information through their mobile. This generation
also rates well 1) The overall satisfaction regarding their ability to use a mobile (4/5); 2) Their learning about the use of a
mobile (3.8/5); 3) The positive experience linked to the use of the mobile (3.4/5); 4) Their level of happiness to be able to use
a mobile (3.4).
Out of those 29% who do buy often wine (56/190), 36 use their mobile to go to SNS and 34 look for information on the
Internet. On the other hand, only 10 buy products through the Internet. Furthermore, 25 of them spend more than one hour
per day on their mobile and 17 spend more than 2 hours a month (but it might mean anything since they are students with a
lot of time to spare). Lets also note that 52 access the Internet daily, 38 look for information on the Internet and 22 spend
more than 20 hours a week.
In terms of projection, if they had to buy some wine through their mobile, they respectively would consider the following
factors as important: the delivery on time (3.6), the cost of transportation (3.6), the delivery in good condition (3.5) and the
follow-up of the transaction (3.5).
Finally, the following factors were ranked important when buying wine through the Internet and promote overall satisfaction
and develop, the underlying loyalty (Table 1).
CONCLUSION, LIMITATIONS AND FUTURE RESEARCH
Designing m-commerce websites and applications based on SNS that stimulate the feeling of being in a real market or in a
real store can give more confidence to users in carrying out commercial transactions issued from peer advice on a SNS for
example. It can favor m-commerce loyalty, as far as privacy is preserved.
It appears useful to use different channels to generate interest from the use of SNS, without hurting customers trust towards
the brand, by protecting data related to his privacy. Based on the assumption that when the user is online, vendors can know
where the customer is if the latter opted in for this, what he does, when he visits the website etc., which is not possible with
traditional channels (Television, Radio, Newspapers), or only for catch-TV when connected on the Internet, one can
imagine what will now be possible thanks to mobiles. A company can get data and use these as long as it is careful with
wording. It has to make sure that it can fully use the collected data by asking things in a transparent manner, stating the real
intended use of the disclosed data. Customers will have the ability to choose themselves, and not feel tracked by the
company. This will help companies to be honest and transparent about what they do with customers data and how they
657
intend to use them. Companies will then stay in line with laws and make sure customers realize how much information they
really give away. As an example, Blackberry doesnt ask for authorization when using information, whereas Iphone always
asks.
The infancy of m-commerce implies a relative difficulty to gather data about m-consumption. Active users on m-commerce
browse and purchase a few items on the mobile web and many brands still dont have the proper interface on their websites to
fit with mobile screens. As a result, it is not easy to find users with similar interests on the mobile web based on product
preferences, directly linked to their browsing and purchasing history.
More than doing commerce, wine growers will need to develop entirely new and effective ways for people to share and
communicate information. In this regard, other SNS alternatives to Facebook such as Twitter, could contribute to improved
sales. As a communications platform, Twitter is only slightly younger than Facebook, starting in 2007 compared to
Facebooks 2004 (Carlson, 2010). Twitter was conceived as a network of SMS messages similar in some ways to the news
feed function of Facebook (Pelet and Lecat, 2011; Lecat and Pelet, 2011). It is also used in case of crisis where instantaneity
reveals very important (Latonero and Shklovski, 2011). Twitter represents an alternative marketing communication and
networking channel with a range of practical applications, including an extending reach of existing blog or other
communications as with mashable.com, an online communications blog. It can be used to announce events and deals such as
Dell and Amazon already use it, as well as @fledgling, a Twitter wine project that promotes literacy around the world. This
SNS could also improve the frequency of updating websites and blogs, build consensus and communities of supporters.
Twitter can help to build word of mouth buzz around ones product or brand and update breaking news at conferences or
events. Finally, this SNS can help wine growers to update networks for personal branding (Handley, 2007).
Coming from the assumption that 3D is becoming the centerpiece of the next generation of mobiles, it is possible to imagine
that users will interact more and more with their devices. Especially if bots, intelligent virtual agents or intelligent
components arise on our screens like it seems to be the case. These two predictions, in addition to a mature use of SNS
could offer customers an exciting experience of shopping that brands could leverage to maintain or improve their image and
probably inspire greater loyalty with their customer. We can imagine a virtual wine-maker offering advices on the mobile,
after detecting that the mobile user was in an area with vineyards around. This would enhance customers shopping
experiences by allowing them to move anywhere they enjoy, visit wineries around them while chatting and exchanging
information about wines or dishes to be served with particular wines thanks to their friends on a SNS, without having to go to
the actual store. All this represents another research opportunity which has to be taken into account and investigated. We are
in the process of preparing the article providing the results of the quantitative analysis relative to this research. In addition,
wine growers will have to find new partners to reach a wider audience of potential users. It is possible to imagine vineyards
partnering with restaurants, retail chains, cooking enthusiasts etc. Also important will be the need to simplify, optimize and
streamline the design of the digital marketing strategy to create new experiences and behaviors.
Limits and Future Research
The infancy of m-commerce implies that a solution to gather and mine data about m-consumption is still yet to be found.
Active users on m-commerce browse and purchase a few items on the mobile web and many brands still dont have the
proper interface on their websites to fit with mobile screens and many consumers still prefer a bigger screen. As a result, it is
not easy to find users with similar interests on the mobile web based on product preferences, directly linked to their browsing
and purchasing history.
This topic is promising since various data show that wine consumption is composed of 45% of occasional drinkers (once or
twice a week); and between 25 and 34 years old, 50% are occasional drinkers (FranceAgriMer, 2012). The Wine Market
Council has also published that the millennials were consuming 24% of the total volume. Finally, based on AC Nielsen in
March (2011), Internet and mail-order are representing 10% of the total sales in UK. Those data show that Internet is more
and more important, that the millennials are occasional drinkers and therefore, to link those occasional drinkers with wine, it
is important to use SNS as a communication tool and maybe a distribution channel to better reach this growing market of
potential users. The advantage of providing good service on an m-commerce website translates into satisfied customers who
will become brand advocates: they can refer other people to the wine grower. Internet consumers talk to other consumers
about a good customer service experience. For a service such as the purchase of wine from a particular wine grower selling
online and thinking mobile, providing good customer service is a must. When customers tell other people about a bad
experience, they do it on social networks in order to reach a large audience. This is why social networks must also be taken
658
into account when planning an m-commerce strategy, in order to avoid any negative buzz and therefore leverage a good ereputation.
Indeed, wine growers now must navigate a very complex customer service landscape, and the stakes are high. Consumers can
be quick to punish those who are slow to respond to their questions or fail to deliver their purchases on time, for example.
They could also offer unsatisfactory answers or ignore them altogether thus making the customer mad and eager to exact
revenge by writing negative reviews. Wine growers that stumble stand to lose business to rivals and become vulnerable to
negative social buzz. Customer service is one of the few remaining sources of competitive differentiation for this type of
business, especially in direction to Y-Gen consumers. Those wine growers that understand how to use the latest digital
channels to reach new customers and help them find, buy and consume the products they sell will be rewarded with loyal
customers willing to spend more and advocate for the brand. Customers are loyal to businesses that provide good customer
service in the brick and mortar world. This shouldnt be different in the m-commerce environment.
TABELS
Table 1: Necessary Factors for Y-Gen Consumers to Develop Satisfaction and Loyalty when Buying Wine Online
Factors Promoting Satisfaction and Loyalty:
Score (out of 5)
Quickness
3.2
Reducing cost
2.9
Efficiency
2.8
Internet is a complementary channel to wine shop
2.4
Preference for using technology to purchase
2
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APPENDIX
Characteristics of the Sample of Respondents
Demographic
Category
characteristics
Gender
Age
Smartphone possession
Female
49%
Male
51%
1997
1%
1988
5%
1996
1%
1987
7%
1994
1%
1986
1%
1993
21%
1985
3%
1992
19%
1983
2%
1991
10%
1982
1%
1990
13%
1981
3%
1989
11%
1980
2%
Own a Smartphone
57%
I-phone
28%
Blackberry
25%
Android
18%
Own a classic phone
32%
Activities practiced on their

Visit SNS
mobile
Education level
Category
62%
Make picture
74%
Books
3%
GPS
40%
CD
3%
Skype
10%
Clothes
4%
Youtube
38%
Transport ticket
4%
Look for information on the Internet
55%
FMCG (Fast Moving Consumer Goods)
1%
Buy products
17%
Wine
1%
Elementary
4%
University
87%
661
Profession
Income per month
Expertise
Country of residence
Nationality
High School
9%
Farmer
1%
Liberal profession
2%
Craftsman, shopkeeper
2%
Employee
10%
Entrepreneur
2%
Worker
3%
Executive, engineer, professor
1%
Unemployed
1%
Technician
2%
Student
60%
0-10.000 USD
69%
50.001-70.000 USD
2%
10.001-30.000 USD
15%
Above 70.000 USD
30.001-50.000 USD
3%
Work in the wine sector
5%
USA
2%
Germany
3%
UK
6%
France
80%
Sweden
3%
China
1%
SA
1%
Canada
1%
Lituania
5%
France
77%
China
2%
Lituanian
5%
UK
2%
Swedish
3%
US
3%
Germany
4%
Brazil, Greece, India,

Roumania, Slovakia, Spain
662
Japan,
Portugal,
1%
UNVEILING THE INFLUENCE OF THE CONSUMER WINE APPRECIATION DIMENSION ON PURCHASING

BEHAVIOR
Pinar Kekec, Brock University, Canada
Narongsak (Tek) Thongpapanl, Brock University, Canada
Seigyoung Auh, Thunderbird School of Global Management, USA
ABSTRACT
Probably the most challenging task for marketers is to understand why consumers buy what they buy and avoid other purchases.
To understand consumers predictions, judgments, and choice outcomes, researchers must first determine which inputs are
required and what determines the weight of those inputs in the decision-making process (Lynch Jr. & Zauberman, 2007). The
concept of perceived value has been studied by many scholars in the past and is still receiving extensive research interest at
present (Sanchez-Fernandez & Iniesta-Bonillo, 2007). Some have suggested that the perceived value was just a trade-off
between give and get (Zeithaml, 1988, Tellis & Gaeth, 1990), whereas others considered this view as too narrow to explain
the complexities of consumer purchasing decisions (Sheth, Newman, & Gross, 1991; Babin et al., 1994; Woodruff & Gardial,
1996; Lapierre, 2000; Parasuraman & Grewal, 2000). Our paper takes the multi-dimensional approach to the perceived value
concept, which describes the more complex perspective of what a consumer may think of how others perceive the product,
whether the product reminds the person of a memory or whether the product is considered unique. This study extends Sheth,
Newman, and Gross (1991) model of perceived consumption values by also integrating the unique consumption situations by
the level of formalization. A sample of 202 consumers participated in the survey study. The age range of the participants was
between 20 and 75, and there were 83 male respondents and 119 female respondents, which represents 41.1% and 58.9% of
our total sample, respectively. In line with Anderson and Gerbing (1988), we estimated both the measurement model and the
structural model using AMOS 6.0, and found that both models had surpassed all the goodness-of-fit thresholds. The results and
findings of this research help determine precisely the intricate relationships between consumption values, consumption
situations, and purchasing decisions, thus allowing marketers to better position the products and communicate the right message
through the products. Essentially, our findings show that consumption values and consumption situations determine how
consumers decide on a certain purchase simultaneously. Being knowledgeable on how consumers perceive value and how their
perception is affected by different context cues will help marketers to effectively communicate and position their products. By
understanding the importance of consumption values and how they could lead to potential sales would be very beneficial for
marketers so that they can easily achieve their goal; serving the consumers in the best way and making profit for the firm.
Additionally, it is very important for companies to deliver the intended message and help consumers perceive the value of the
product easily so that their willingness to pay and purchase quantity increase.
663
FOSTERING BRAND COMMUNITY THROUGH SOCIAL MEDIA: A NEW RELATIONAL FRAMEWORK FOR
TARGETING CONNECTED CONSUMERS
William F. Humphrey, Jr., Texas Tech University
Debra A. Laverie, Texas Tech University
Shannon B. Rinaldo, Texas Tech University
ABSTRACT
Traditionally wine marketers have used advertising to inform and persuade. However, wine marketers are realizing that
relational and experiential aspects of wine consumption are important to understand. One way to develop brand loyalty is by
building brand community. Online communities, such as those facilitated via social media sites, are now used to build
relationship though customer interactions. Online community members share product information, knowledge, product
experience, and identity. We argue that the next step in this progression is the use of social media to build brand community.
Despite the strong emphasis in the marketplace today on the importance of social media, there has not been an examination of
how social media can be used to build brand community. This seems a logical progression, as social media is now as
influential if not more influential, than conventional media. An emerging method to achieve the Holy Grail of brand loyalty
is through the use of social media to build brand communities.
We develop a conceptual model to explore how social media can be used to build brand communities for wineries. This
model includes brand characteristics, relational factors, and community characteristics that will inform those in the wine
industry and in academic wine research as to the necessary steps to use social media to build a brand community and builds
upon the brand/customer literature where traditionally researchers explored the customer-brand relationship. Once consumers
identify with a wine brand, they will have brand experiences and can be exposed to social media about the brand. The
relevance of the reference group and the relevance of the message will influence identification with owners and identity
importance, which in turn build brand community. We offer a theoretically grounded model that depicts how identification
with the winery leads to brand identification as mediated through social media participation; in turn, this participation in
social media enhances and broadens the context of brand community for the wine industry. We advance the necessary
characteristics a winery must possess to cultivate brand identification.
664
ONE SIZE DOES NOT FIT ALL: A CLOSER LOOK AT BRANDS IN THE HIGH NET WORTH MARKET OF
THE SOUTH AFRICAN EMERGING ECONOMY
Elsamari Botha, University of Cape Town, South Africa
Mignon Reyneke, University of Cape Town, South Africa
ABSTRACT
This paper aims to contribute towards answering a question that has plagued marketing managers: What do consumers in the
African market look like? South Africa has often been seen as the gateway to Africa, and very little is known about these
emerging market consumers. Even less is known of the consumers who drive consumption in these markets: the high net
worth (HNW) consumer market, which was consequently the focus of our study. We conducted a large-scale survey of this
market in South Africa, resulting in over 20 000 respondents. This paper reports on these findings, but also takes a closer
look at how these consumers view and consume brands. We find that there are three distinct segments within this market, and
that they consume brands in fundamentally different ways. Consequently, a one size fits all approach to marketing would not
be effective in this market.
BACKGROUND AND CONTEXT OF THE STUDY
Emerging markets have seen promising growth in recent years and marketers are increasingly focusing on establishing their
brands in these markets. Similarly, academic research on these markets has burgeoned. Steenkamp (2005) encourages
emerging market research as he argues that theories, which were developed in Western economies, and the empirical
generalization thereof, are not necessarily applicable to these markets. Furthermore, Burgess and Steenkamp (2006) posit
emerging market research has great practical importance in that success in emerging markets is of the utmost importance to
the future of many international companies. Development of theory in these contexts is also needed to further advance
marketing as an academic discipline and maintain its managerial relevance (Burges & Steenkamp, 2006:338).
Chironga, Leke, Lund and Van Wamelen (2011) recently considered Africa as being the home of some of the worlds biggest
opportunities and they believe that companies on the lookout for revenues and profits cannot ignore the opportunities in
Africa. Based on a report conducted by McKinsey Global Institute (2010) Africas GDP in the last few years has grown by
4.7% per annum on average, which is double the growth shown by the continent in the 1980s and 90s. Africa and Asia were
also the only two continents to show economic growth during the recent recession. The report projects that if the current
growth continues, that African consumers will spend $1.4 trillion on goods and services in 2020 (only slightly less that the
$1.7 trillion projection for India) (McKinsey Global Institute, 2010).
Currently, however, very little is known about consumers in this lucrative market. The focus of this study is South Africa, as
this country is often seen as the gateway to the African continent as a result of its degree of economic growth and relative
economic stability in comparison to the rest of Africa. Boosted by democratization in South Africa, the landscape in this
country has changed significantly in the past two decades, especially in terms of increased foreign investment (Walmarts
$2.4 billion acquisition of Massmart to name but one), access to education for all South Africans and significant cultural
change. Consequently, there are massive growth opportunities in South Africa. As a result of their spending power, HNW
consumers have been a major driver of this economic growth and our study hence focuses on this segment of this market.
HNW consumers have massive spending power (over $34 billion annually, which is 33% of the annual consumer spend in
South Africa) and also contribute nearly half of all personal tax revenue, despite making up less than 10% of South African
tax payers. The purpose of this study was to take an in-depth look at the HNW consumers in this market and we propose that
the Means-End Model as developed by Zeithaml (1988) could be used as a basis for better understanding luxury consumer
segments in emerging markets. The primary research question is therefore:
What does the South African HNW market look like? And how should brand managers position their brands to enter the
South African market?
We believe that by answering the above two questions, brand managers will also get a better idea as to how to enter the
African market. The contribution of this study lies in the explication of the HNW market of South Africa, specifically with a
focus on the role of brands in this market. We look at the interplay between product quality, price and brand value, to assist
brand managers in the development of their marketing strategies. Consumers often use brand name and price as an indicator
of quality (Dawar and Parker, 1994) and the relationship between price and quality in turn leads to the degree of value the
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customer receives. A key study that discusses the role of these three constructs (quality, price and value in branding), is that
of Zeithaml (1988) and her Means-End Model.
THE MEANS-END MODEL
The Means-End model was developed by Zeithaml to gain an understanding of how consumers relate price, quality and value
in their decision-making about products and services (Zeithaml, 1988) (see figure 1).
Perceived quality, for the purpose of this study, can be defined as the consumers judgment about a products overall
excellence or superiority (Zeithaml, 1988:3). Price is often used as an indicator of quality (Vigneron & Johnson, 1999;
Zeithaml, 1988) and a relationship between perceived price and perceived quality therefore exists. Brand value, on the other
hand, is defined as (1) whatever the consumer wants in a product and (2) the quality the consumer gets for the price they paid.
Hence in the model a relationship exists between the perceived sacrifice (i.e. what the consumer had to give up to get the
product) and the perceived value as well as between the perceived quality of the product and the perceived value received.
Extrinsic attributes act as general indicators of value and quality across a range of brand and product categories where the
intrinsic attributes are product specific cues that signal quality and value (Zeithaml, 1988). These factors then all contribute
towards consumers decision to purchase the brand. In the survey, we looked at how these three key factors, namely price,
quality and brand value described by Zeithaml (1988) influenced the South African HNW markets purchasing behavior.
Consequently, a brief review of the South African market is provided.
THE SOUTH AFRICAN MARKET
Within the African continent, South Africa is the economic leader with the highest GDP per capita among the African
nations. Chironga et al. (2011), identify South Africa as a diversified economy, along with Morocco, Egypt and Tunisia
(Africas four most advanced economies). They describe these economies as having well-developed manufacturing and
service industries, more stable GDP and higher per capita income relative to most of their African counterparts. Among
these economies South Africa has the benefit of having less political risk than its counterparts in North Africa. Chevalier, Lu
and Toledano (2009) posit that high rises in commodity prices, opening up of emerging markets and strong financial market
performance of the last two decades (preceding the recession) has created extraordinary potential for the growth in wealth of
HNW consumers across the globe. They argue that this is particularly true for self-made millionaires and billionaires who
have created their wealth from new sources of money due to economic growth. This is evident in the ranks of the South
African HNWIs as 25% of this consumer segment is made up of black South Africans, illustrating the rise in HNW
consumers as well as new wealth in the country. The HNW consumers in South Africa now hold a third of South Africas
consumer spend and members of the top income tax bracket have increased by 25% per annum over the past four years
(Unilever Institute, of Strategic Marketing, 2011).
METHODOLOGY
The HNW segment in the South African market for the purpose of this research were selected as those consumers who live in
households with a minimum household income of around R30 000 ( $3 500 per month) i.e. the top 13% of the South
African population in terms of income. This segment holds great promise for marketers in terms of their spending power (as
discussed above), while they also typically influence other South African consumer purchases through aspirational behavior
from other income groups.
An electronic survey was used to access respondents. As the majority of these respondents are well educated and also
difficult to get hold of (Unilever Institute of Strategic Marketing, 2011), this survey method seemed most appropriate. For the
survey, a snowball approach was used as this target market is difficult to get hold of. Twenty thousand respondents were
surveyed including 7420 respondents living in households with income of approximately R30 000+ per month ( $3 500) and
1200 respondents in households with monthly income of R100 000+ per month ( $11500). We controlled for sampling bias
by enforcing quotas on the fieldworkers: A relatively equal spread was obtained according to gender, age, and geographical
location. Data was collected across the whole of South Africa. As very few studies have accessed these consumers, an
exploratory research design was followed where respondents were asked about their purchasing and consumption behavior in
general.
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RESULTS
The HNW consumers are highly educated, with 74% holding tertiary qualifications and a large proportion of these consumers
are self-employed. Similar to the observation by Chironga et al. (2011) that the African population is young, this consumer
segment supports that in that the majority (35%) of these wealthy consumers are aged between 35 and 49 years, followed by
34% aged between 25 and 49 years, 14% between 50 and 59, and 10% over 60 years old. Sixty percent of this market is
white, followed by 25% black and 13% from other ethnic groups. The large majority of HNW individuals are male (65%) and
most (48%) of them are situated in the economic hub of South Africa (Johannesburg). The HNW market did not comprise of
one homogenous target market: Three distinct clusters emerged in the South African HNW market. Based on their
demographic statistics, we decided to call these segments Drivers, High Flyers and Astronauts.
Drivers are consumers who have a net asset value of between R100 000 ( $11 500) and R1 million ( $114 000), they form
20 % of the HNW market and 17 % of this markets spend. Sixty percent of this market is under 35 years old, 49% are black,
and consumers in this segment have an average debt of around R350 000 ( $40 000). The majority of their spend goes to
food (20%), education (16%) and health (14%). This segment of the market is seen as the new rich: consumers who have
relatively recently obtained wealth, primarily through changes in the economy and changes in the political landscape of South
Africa. These consumers still have family in poorer areas of the country, and may even support a number of family members.
Many of them stated that they dreamed of travelling (70%), being debt free (45%) but also owning more assets like cars
(39%) and houses (35%).
High Flyers, on the other hand, are worth between R1 million ( $114 000) and R5 million ( $570 000) and constitute the
largest (51%) of the HNW market. They are also responsible for 46% of spend within this market segment where the majority
(43%) of these consumers are aged between 35 and 49 years. Thirty three percent of this market is black. This segment
appears to represent the typical HNW market segment for premium brands i.e. brand sensitive, aspirational consumers who
are concerned with status and luxury.
Lastly, Astronauts form the upper-most end of this consumer segment. These super rich individuals form 28% of the HNW
market (and 38% of its spend). The majority (44%) of these consumers are over 50 years old and only 27% are black. In the
South African context, these consumers typically have a history of wealth and their wealth has only grown in the past two
decades. These consumers are seen to have financial freedom and their consumption is typically experience (as opposed to
product) based. They dream of having a comfortable retirement, travelling, having successful children and feeling healthier.
The research revealed that they have a strong reliance on their personal networks.
We also asked respondents what the main reasons were that they bought branded products, by asking them what drives you
to choose one brand over another? and the above three segments behaved distinctively different when it came to brands (see
figure 2 at end). Correspondence analysis was used to investigate the interaction between expenditure (and income) and the
brand attributes that HNW consumers valued. When looking at net worth graph of these consumers, it is clear the three
segments within the HNW market focus on different aspects related to brands. Drivers were still typically driven by price,
High Flyers were driven by quality, and Astronauts were driven by brand promise (or the brand value and intrinsic and
extrinsic aspects related to the brand).
DISCUSSION
These findings can be interpreted under the lens of Zeithamls (1988) Means-End Model. It appears that, even though Drivers
commented on value and quality aspects, their main focus was still on the price of branded goods. High Flyers, on the other
hand, emphasized the quality aspects related to brands.
Drivers are much more indebted than High Flyers or Astronauts and hence are more sensitive to price. They do however use
price of products to signal their HNW status. High Flyers, on the other hand, are more concerned with the quality of products.
They have more disposable income than Drivers and are therefore less price sensitive, but more concerned with quality.
Astronauts differ from the previous two segments in that they have a more holistic and multidimensional view of brands. Not
one of these individual factors single-handedly drives brands in this market segment, but all the factors contribute to the
perceived value of the product (i.e. what the brand promises to deliver in terms of quality vs. what they sacrifice to attain the
product). These differences in the HNW market have various managerial implications for brand managers wanting to enter
into the South African (and later possibly the African) market.
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In focusing marketing efforts in the HNW market in South Africa, brand managers would do well to target the three different
HNW segments in this market with a slightly different brand offering.
In marketing to the Driver segment, which is highly indebted in comparison to the other segments, but are keen to show their
mostly newly acquired economic status, brand managers could focus their offering around perceived price. While these
consumers are more price-sensitive than the other two segments, they also use the perceived price of the products and brands
they purchase as a status symbol. It would be wise for brand managers to focus communication and branding efforts around
the conspicuous nature of the brand and the status that it would afford the user such as visibly branded clothing, vehicles or
accessories through which the Driver consumer could flaunt their economic status as a result of the price they paid for the
product.
The High Flyer segment are more typical of a HNW consumer in that they are not only concerned with status and luxury but
rather by how this is delivered through the quality of the brands they purchase. Marketing managers should therefore tailor
their communication and branding efforts around the quality of their products and services. For example, the luxurious nature
of a vacation as a result of the quality of the hotel or resort or in terms of fashion products, managers could focus the attention
around the quality of tailoring and fabric of a Hugo Boss suit rather than the price tag.
The Astronaut segment is the least price sensitive of the three segments but is concerned with a more holistic view of the
brand i.e. the price (possibly more as an indicator of quality) the quality and value that the brand offers i.e. the brand promise.
Since many of these consumers typically have a history of wealth, they are less concerned with the conspicuous nature of the
brand, but rather with the quality and the brands unique offering in terms of their needs. Brand managers should therefore
ensure that visible branding is very subtle and focus their marketing efforts on the uniqueness of the offering to these
consumers. Luxury vacations to exotic locations rather than Paris or New York have become popular among this segment.
This would afford these consumers the opportunity to feel that they have a quality service that is also unique as it moves
away from what they see as the main stream. There is also an opportunity for bespoke services such as luxury lifestyle
management, which focuses on the quality as well as the value and uniqueness of the customer. Consumers in the Astronaut
segment are strongly reliant on their personal networks and marketing managers would do well to encourage referral of their
brands within these networks.
Since premium and luxury product are relatively expensive and hold a higher profit margin, it makes sense to target
consumers with a higher economic status. We therefore believe that this paper assists brand managers in tailoring their
marketing efforts based on the Means-End model most effectively to the HNW individuals in emerging markets.
FIGURES
Figure 1: Means-End Model Relating Price, Quality and Value (Zeithaml, 1988)
Extrinsic
attributes
Perceived
quality
Perceived monetary
price

Intrinsic
attributes
Purchase
Perceived
value
Perceived sacrifice

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Figure 2: Net worth and brand drivers
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REFERENCES
Burgess, S. M. and Steenkamp, J.E.M. 2006. "Marketing renaissance: How research in emerging markets advances marketing
science and practice." International Journal of Research in Marketing 23(4): 337-356.
Chevalier, M., Lu, P. X. and Toledano, S. 2009. Luxury China: Market opportunities and potential. John Wiley & Sons.
Chironga, M., Leke, A., van Wamelen, A. and Lund, S. 2011. "The globe: Cracking the next growth market: Africa."
Harvard Business Review 89: 117-122.
Dawar, N. and Parker, P. 1994. Marketing universals: consumers' use of brand name, price, physical appearance, and retailer
reputation as signals of product quality. The Journal of Marketing: 81-95.
Roxburgh, C. 2010. Lions on the move: The progress and potential of African economies. McKinsey Global Institute.
Steenkamp, J.E.M. 2005. Moving out of the U.S. Silo: A call to arms for conducting international marketing research.
Journal of Marketing, 69 (October): 68.
Unilever Institute for Strategic Marketing. 2011. Top End: A Wealth of Potential. Unpublished. Cape Town. University of
Cape Town.
Vigneron, F. and Johnson, L. W. 1999. A review and a conceptual framework of prestige-seeking consumer behavior.
Academy of Marketing Science Review, 1(1): 1-15.
Zeithaml, V. A. 1988. Consumer perceptions of price, quality, and value: a means-end model and synthesis of evidence.:
The Journal of Marketing: 2-22.
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THE MARKETING OF START-UP CAPITAL TO WOMEN ENTREPRENEURS IN SOUTH AFRICA

Evelyn Derera, University of KwaZulu Natal, South Africa.
Charles ONeill, University of KwaZulu-Natal, South Africa.
Amandeep Takhar, University of Bedfordshire, United Kingdom.
Pepukayi Chitakunye, University of KwaZulu-Natal, South Africa.
INTRODUCTION
Women entrepreneurship plays a critical role in economic growth and development (Mitchelmore and Rowley 2013; Still and
Timms 2000). In fact, research on economic growth is incomplete without recognising the contribution of women
entrepreneurship. Whilst the participation of women in the small business sector is growing rapidly (McGregor and Tweed
2002), there is a dearth of research on this subject within developing countries (Roomi and Parrott 2008) as most studies have
focused on women entrepreneurship in developed countries (Bhatt-Datta and Gaily 2012). This is largely attributed to the fact
that entrepreneurial efforts by women have gone unnoticed and their contributions have been under appreciated (Bhatt-Datta
and Gailey 2012). In Sub-Saharan Africa for example, women owned small businesses produce more than eighty per cent of
food production (Woldie and Adersua 2004). Previous studies have focused on how females are choosing entrepreneurship in
favour of the corporate ladder (Kephart and Schumacher 2005); the lack of public policy and programmes relating to women
entrepreneurs in India (Chandra 1991); the entry and performance barriers for women entrepreneurs in Tanzania taking a
governmental perspective (Rutashobya 1998). However, research relating to the marketing of start-up capital targeting
women entrepreneurs within developing countries is scarce (Carter and Peter 1998; Nichter and Goldmark 2009).
In South Africa, the rate of entrepreneurial activity has not been encouraging. According to the GEM report (2012), the total
early-stage entrepreneurial activity (TEA) for 2010 was 8.9%, and has almost remained constant (9.1%) in 2011. These rates
are below comparable economies like Brazil whose TEA increased by 28% between 2006 and 2011 (Simrie et al. 2012). This
issue is of concern considering the socio economic challenges that South Africa is facing, with high levels of unemployment
(25.5%), sluggish economic growth and high levels of poverty (Moodley 2002; Stats SA 2012). Furthermore, the rate of
female entrepreneurship has remained significantly low, compared to their male counterparts. According to the GEM surveys
conducted before 2010, South African men are 1.5 to 1.6 times more likely to be involved in entrepreneurial activities than
their female counterparts (Simrie et al. 2012) due to different gender based obstacles (Sara and Peter 1998) that females
within South Africa face. Nonetheless, women entrepreneurs in South Africa have remained at the periphery of the national
economy as most small businesses are concentrated in craft, hawking, personal services and the retail sector (Tillmar 2007;
Morgan and Ojo 2008).
Interestingly, women entrepreneurs are actively involved in poverty alleviation and job creation (Welter et al. 2004).
However, despite these contributions, women face a multiplicity of gendered challenges in the small business sector. For
example, access to start-up capital has been regarded by Nieman et al. (2007) as a minefield for women entrepreneurs. This
challenge takes a different dimension for women due to gender discrimination that is embedded in the lending models that are
used by financiers for small business loans. Hence, the need to develop and market more customised financial products for
women entrepreneurs in South Africa in order to assist them to overcome the challenges of accessing start-up capital. Apart
from lack of start-up capital, women also experience other setbacks in the small business sector. Some of these barriers are
related to; limited access to networks, market information, technology and poor educational background and lack of business
training (Stevenson and St-Onge 2005). Given that women entrepreneurs encounter gendered barriers in entrepreneurship
relating to a lack of marketing, and a lack of knowledge in terms of what is available to them as a female entrepreneur, there
is need to explore gendered marketing solutions to these problems. Thus, solutions to the challenges need to be customised
and tailored to meet the needs of women entrepreneurs.
The literature on women entrepreneurship in developing economies fails to capture the important intricacies of access to
start-up capital (Cetindamar et al. 2012). For example lack of marketing of financial products that target women in
developing countries. Yet, financial liberalisation around the world has led to the introduction and marketing of new financial
products (Dodd 2010), which provide an opportunity for small businesses, and entrepreneurs, to venture into projects that
promote economic growth. The marketing of these financial products are a cause for concern (Lusardi et al. 2007; Moore,
2003). Recent research has examined how consumers subjective product knowledge affects the way they interpret
salesperson compensation within the financial services industry (De Carlo et al. 2012). Hoffmann and Broekhuizen (2009)
found that consumers vary considerably in terms of their financial services usage and experience and, hence, their product
knowledge. Despite such advances, there is a dearth of research focusing on the marketing of financial products targeting
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indigenous women owned small businesses in South Africa. The academic or societal recognition does not counteract the
significant impact that womens entrepreneurial efforts have had on wealth creation globally (Bhatt-Datta and Gaily 2012).
What is required is a deeper comprehension of the nexus between marketing of these financial products and women
entrepreneurs, particularly in growing economies like South Africa. This could help us to understand the deep-rooted
discriminatory practices that are embedded in lending practices, which impact on the ability of women to unleash their
entrepreneurial potential.
Given this background, the purpose of this study is to explore the marketing of financial products to women entrepreneurs.
Here, we focus on the marketing of start-up capital to develop a deeper understanding the marketing challenges faced by
women entrepreneurs. To address these objectives, a multi-method research design was implemented and data was collected
from fifty (50) women entrepreneurs and six (6) experts in the field of entrepreneurship. This study adds fresh insights that
will help to develop successful marketing communications initiatives for financial products that would reach women
entrenched in traditional business areas, and located in remote areas. This study used non-probability sampling techniques
(snowball and convenience). Given this, the research findings are not generalised to the entire population, but help to set the
groundwork for future studies surrounding the marketing of financial products by banks, and other financial providers. The
paper is organised as follows; (1) extant literature on gender discrimination in lending models is discussed; (2) the research
methodology is outlined; (3) the results are presented and discussed. The paper concludes by highlighting the study
implications and areas of future research.
Gendered Lending Practices
For an organising theoretical framework, we turn to the literature on the nature of scoring models for accessing financial
products in the form of bank loans (Beck et al. 2008). Although marketing activities have focused on creating awareness of
these financial products, the literature suggests that women are perceived as high risk borrowers (Rouse and Jayawarna
2006). Hence, the marketing communication mix for these products tends to be more appealing to the male entrepreneur than
the female entrepreneur (Roomi and Parrott 2008). Given this, we concur with Bhatt-Datta and Gailey (2012, p. 570) who
suggest that marketers should change their focus, in that rather think of entrepreneurship as primarily an economic engine
with potential social impact, and should also be considered as a social change activity with a variety of possible outcomes
that may or may not be beneficial for women.
The marketing of financial products to women entrepreneurs in South Africa reflect system wide gender discrimination. For
example, females may not have the same educational opportunities as their male counterparts to access market information,
interpret it, and take the necessary action to access financial products such as start-up capital. Researchers have found that
women entrepreneurs may lack vocational and technical skills (Ghosh 2002), thereby affecting their ability to understand
financial products information disseminated by the financial providers. This is partially the reason why women entrepreneurs
resort to using their personal investment as a source of start-up capital (Nieman et al. 2007). Despite such advances, prior
research lacks deeper perspectives from a developing economies point of view. The only point of comparison is a developing
economy such as India, which is seen to be culturally comparable. However, if a woman initiates an individual
entrepreneurial activity in India it is highly likely that she will not be allowed to acquire financial resources without a mans
approval (Cals et al. 2009). In response to this theoretical gap in knowledge our research presents a deeper understanding of
the dynamics between the marketing of start-up capital and women entrepreneurs in South Africa. Start-up capital is required
to establish entrepreneurial projects that are central to alleviating poverty, creating employment, and driving economic
growth. Given that women are now at the forefront of economic change (Underwood 2009), failure to get access to bank
loans due to lack of collateral and track record, is a key limiting factor in terms of economic development. In a similar vein,
the lack of marketing of start-up capital and financial products that target women entrepreneurs is also a key limiting factor
towards driving economic growth in South Africa. In fact, Rouse and Jayawarna (2006) document how upcoming female
entrepreneurs struggle to prove their financial credibility to private financiers due to lack of track record and failure to have
assets and properties that can be ceded as security or collateral for the loans. Similarly, Kuzilwa (2005) suggests that finance
through credit has been observed to be one of the important determinants of small business success. However, previous
research demonstrates that women entrepreneurs are not aware of the credit or financial products that are available to them
due to a lack of marketing that targets them as female entrepreneurs.
METHODOLOGY
The study adopted a mixed methods approach, using methods that emerged from the positivist and interpretive paradigm. The
research design combined quantitative and qualitative methods within a single study (Creswell and Clark 2007) which is

672
consistent with calls for the use of multi methods research designs in the field of entrepreneurship (Coviello and Jones 2004;
Ritchie and Lam 2006). A snowball sampling technique was used to identify fifty (50) women entrepreneurs, while
convenience sampling was used to identify the six (6) experts drawn from Pietermaritzburg in South Africa. Data generating
efforts were concentrated in two phases as a means to gaining richer data and contributing to data validity. The first phase
focused on obtaining insights from experts in the field of entrepreneurship through a questionnaire response, which was
followed up by semi-structured interviews to get a deeper understanding of their perspectives. Secondly, a survey and semistructured interviews were conducted to solicit the views of fifty women entrepreneurs. This diversity of data sources was
used to produce multiple voices about gendered start-up capital for women entrepreneurs in South Africa. This approach is in
sync with a growing trend in marketing and consumer research that use multiple methods to understand the phenomena under
investigation (Arnould and Wallendorf 1994; Kozinets 2012; Takhar and Chitakunye 2012). Our interpretation is grounded in
the data gathered at each stage of the research process.
Our findings reveal two key themes that help us to develop a deeper understanding of the nexus between marketing activities
and access to start-up capital among women entrepreneurs in South Africa. These are: (1) the marketing of financial products
to consumers who are entrenched in specific industries; and (2) the marketing of gendered start-up capital.
Firstly, we found that that 92% of the businesses operated by the sampled women were found in the retail and service
industry. Only 8% of the businesses were found in non-traditional areas such as manufacturing, construction and engineering.
This was supported by insights from our qualitative findings which support the findings of Bhatt-Datta and Gailey (2012) and
revealed that, for the most part, entrepreneurship for women in South Africa tends to be an extension of their hobbies. This is
in line with their domestic roles, demonstrating the social enforcement of stereotypical gendered roles that are deeply
entrenched within the gendered South African culture. Qualitative accounts provided by the sampled women demonstrate that
their entrepreneurial activities are confined within traditional business areas such as dcor, knitting and sewing, which require
lower capital investments and can be initiated with own personal investments. The challenge for financial providers is how to
market their products (such as start-up capital), to consumers located in traditional business sectors, some of which are hard
to reach, and are subject to gender based cultural constraints.
Second, we found that the majority (62%) of the sampled women entrepreneurs used personal investments to establish their
own businesses. This demonstrates that start-up capital is not easily accessible to female entrepreneurs. Twenty two percent
(22%) used short term bank loans (in this case, bank overdraft facility) as a source of start-up capital. Ten percent (10%) of
the women entrepreneurs acquired loans from family and friends and the other six percent (6%) used a combination of
personal investments and bank overdraft facilities for them to establish their small businesses. Although women
entrepreneurs clearly have access to a wide range of sources of personal finance, access to bank loans (bank overdraft
facilities) stands at twenty two percent (22%). We interpret this as a sign of disconnection between the marketing of the
financial product, and the decoding thereof, by the targeted audience. This is also worrying particularly in view of the fact
that women need bank loans to venture into non-traditional business areas. Similarly, insights shared by one female expert
revealed that cultural stereotyping in South Africa is still transparent. She suggested that people are still undermining women
in small businesses such that even banks do not take women seriously. This demonstrates that banks may not be targeting
women entrepreneurs in South Africa when marketing start-up capital or similar financial products. Qualitative insights from
the sampled women also revealed that it is an ordeal to access bank loans, and as such, they end up using a mix of
personal financial resources to establish their businesses. To the contrary, one expert opinion revealed that while women
experience numerous entrepreneurial obstacles in accessing start-up capital, finance is available, what is lacking is business
opportunities and business plans that are capable of attracting funding. This raises questions about the way in which financial
products have been marketed, and the existing widespread gender constraints that exist within the banking sector for female
entrepreneurs. For example, it is common practice for bank managers to assist with knowledge about the available sources of
business funding, and women entrepreneurs should be aware that they too can approach their bank manager for this service.
In fact our data suggests that these boundaries should be loosened for women entrepreneurs within South Africa to allow
them the freedom to be innovative and bolster the economy.
Previous research has focused on the objective nature of scoring models for bank loan approval (Beck et al. 2008). This
implies that when bank loans are marketed, embedded within marketing communication activity are specific requirements
that are in sync with bank loan approval criteria. However, women are perceived as high risk borrowers by banks. This may
explain why banks tend to focus the marketing of their products to male entrepreneurs. In other words, this study is
advocating for the introduction of customised lending products for women entrepreneurs. This is in line with other countries

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(like Uganda, Kenya, Brazil, etc.) that have taken women entrepreneurship to a higher level by establishing a financial
institution that provides tailored financial products to meet the unique needs of women in their countries. This micro lending
financial institution is known as Womens World Banking which has a network of 39 organizations in 28 countries that
provides small loans from as little as US$100 to enable them to establish their small businesses (Womens World Banking
2013). This would go a long way in closing the gap between access to start-up capital in women owned small businesses.
Our empirical findings also revealed that women make sacrifices, such as using personal savings, or going without a salary to
cope with insufficient start-up capital. Yet, in South Africa, there are a number of funding opportunities earmarked for
women entrepreneurs such as Isivande Women's Fund among others. Some of these risks and sacrifices are taken in part
because of the lack of marketing of this information.
Given that entrepreneurship is the engine that pushes the emerging economies forward to a higher level (Bruton et al. 2008),
it is imperative to comprehend the nexus between the marketing of financial products and how they are accessible or
inaccessible to women entrepreneurs. This study reveals the challenges faced by women entrepreneurs within South Africa
as a consequence of minute marketing communications messages targeted at women entrepreneurs. We encourage similar
exploratory research to be undertaken in similar emerging economies, in order to comprehend the lack of marketing
communications experienced by female entrepreneurs. Future studies could look at the feasibility of marketing financial
products to women entrepreneurs operating in rural areas that are not easily accessible, and most of whom can neither read
nor write. In South Africa, some women take risks in starting their businesses with personal savings, and forgoing a salary
because of gendered institutional barriers to accessing information about start-up capital. The challenge for financial
providers is how to market to this group of women entrepreneurs, due to a combination of a lack of gender based
comprehension and deeply embedded societal stereotypes.
Within the literature, the financial services industry has been negatively associated with a lack of transparency with regard to
risks, fees, and the general opaqueness of the information supplied to customers, particularly females, therefore
demonstrating associations with gender bias (Dodd 2010; De Carlo et al. 2012). Whilst financial providers may know their
products well, many emerging women entrepreneurs in South Africa may find it difficult or costly to obtain information on
the thousands of financial products available, from the government, NGOs (non-governmental organisations) and financial
service providers. Hence, women entrepreneurs have to resort to taking risks to get their businesses off the ground. These
findings provide insight into the challenges faced when marketing financial products such as start-up capital to women
entrepreneurs, and calls for consumer education particularly targeted at those women whose literacy levels are low, and
operating in remote areas which cannot be reached by some promotional activities.
Future studies could also look at the feasibility of revising bank lending models to ensure that women entrepreneurs access
start-up finance for their businesses because this is critical for small business development in developing countries. On the
other hand, it is also important to understand banking models from the service providers point of view and how women
entrepreneurs could access loans without much difficulty. The sacrifices taken by women entrepreneurs also need further
investigation, as this could significantly impact the success of the business. Educating women on financial matters is also
extremely important if the South African government is to benefit fully from the untapped entrepreneurial talent that women
possess. Lastly and most importantly, future research could explore the viability of establishing a financial institution which
caters for the needs of women. Thus, a Womens World Banking could be established in Southern Africa to cater for the
needs of women.
REFERENCES

674
BRAND ALIGNMENT:DEVELOPING A MODEL FOR COMPETITIVE ADVANTAGE

Sean McCoy, University of South Africa, South Africa
Peet Venter, University of South Africa, South Africa
INTRODUCTION
The role of brand has evolved considerably and has attracted increasing attention in the 21st century as a key component for
the development of competitive advantage. This research evaluated the extent to which brand is being adopted as a
mechanism to align with corporate strategy, internal culture and supporting behaviours and external delivery or organisational
performance: in essence, the concept of a brand-driven organisation that deploys brand as a core capability in pursuit of
competitive advantage.
Internal marketing is seen as evolving and Varey (1996:44) suggests that it can play a greater role within the organisation.
Sartain and Schumann (2006; 2009) have demonstrated that the internal focus of marketing and branding can transform the
organisation and drive gains in employee understanding of corporate values, employee commitment, customer satisfaction
and loyalty. This points to potential limitations in the manner in which internal marketing has been adopted traditionally and
highlights new possibilities in approach.
Doyle (2001:258) makes the connection between the resource-based theory and brand on the basis that brands form part of
the intangible asset base that drives the organisations core business processes, and the ultimate link with the creation of
shareholder value. This ties resource-based theory together with brand as a strategic resource, in much the same manner that
Grant (2002:16) suggests, thus facilitating the notion of brand alignment as a possible capability within the organisation.
METHOD
The research problem therefore centred on the investigation of the phenomenon of a brand-led approach to corporate strategy,
involving a high degree of executive integration and a strong alignment of brand philosophy within the organisation, in
support of the external messaging and offering and the operational performance of the business, ultimately deriving
competitive advantage.
The research objective was to develop a model that aligns brand behaviour throughout the organisation in a manner that
drives competitive advantage. This organisational phenomenon is influenced by a range of elements which were tested for
relevance and validity in the course of the process in organisations that achieve a high degree of brand alignment and use
brand as a primary source of competitive advantage, as well as in those who do not and those who use a contrasting approach.
The primary research question of the study was therefore:
x How do companies achieve brand alignment to optimise business performance and obtain competitive advantage?
x
Secondary research questions linked to this were:
x
x
x
How do organisations ensure synergy between brand and the corporate strategy?
How do organisations ensure that the internal brand is synchronised with the external brand?
What methods and approach will enable the alignment of internal and external brands and the achievement of the
strategy?
Why should existing brand equity theory and practice incorporate the brand alignment measure?
x
x
An assessment of the above allowed for the extraction of new ideas through theory triangulation and an innovative approach
to the development of new theory in this area, with the formation of appropriate management models.
A case research approach was adopted and examined four South African companies, some of which had international ties.
Two were support cases and two were contrast cases. Similarly, two cases were from the manufacturing and resources sector,
whereas the other two were services organisations. Both within case and cross case analysis was conducted (Yin 2003:13)
spanning a total of 69 individual interviews across the four cases.
675
Respondents at each site were selected by means of purposive sampling, along with snowball sampling. Site-specific
respondents varied across the cases in terms of organisational roles, but generally stemmed from a wide range of disciplines
and from senior management to executive level. Semi-structured in-depth interviews were conducted in order to collect direct
accounts of brand alignment experiences from the respondents.
Observation at each case site also enabled context in the writing up of cases. The triangulation made possible by multiple data
collection methods provides stronger substantiation of constructs and hypotheses (Yin 2003:14) and a series of analytical
methods were considered across the qualitative research process (Miles and Huberman 1994:9). Instruments included an
interview guide and schedule of questions emerging from the brand alignment thinking. A contact summary form was used as
a practical means of performing a first run data reduction and enabling the capture of thoughtful impressions and reflections.
The focus in the contact summary fell on the primary concepts, questions and issues emerging from each interview at the
respective case site. A document summary form was used in instances where documents such as brochures, annual reports
and strategy presentations were gathered from the site. These forms placed the document in context, indicated its significance
and provided a summary of it. A case analysis form was utilised to record salient impressions at each site, supporting or
alternative explanations, the determination of next steps in the data collection process, and implications for coding. Atlas.ti
software was utilised for analysis of within-case and cross-case assessment.
The business architecture model posited by Venter (2006:396) describes organisational architecture as an integrated strategic
response which draws together key dimensions of the organisation and facilitates the formulation, alignment and
implementation thereof. This served as a useful framework against which to evaluate the various dimensions of a possible
brand alignment conceptual model and thus as a basis for critical review across the cases.
The support cases yielded strong evidence of the impact of leadership in the brand aligned organisation and highlighted the
intersection between brand, values and culture. The adoption of an internal branding approach appears to constitute a clear
function of leadership and executive philosophy, and a strategic framework. Knowledge, skills and abilities (KSAs) were
compared on a case by case basis and supported the notion that good internal brand knowledge underpins the external brand
delivery. Structure was seen as an enabler but not as a direct component of the brand aligned approach. Evidence existed
within cases that brand can be built as capability within the organisation and ultimately impact delivery to external
stakeholders and the performance of the business, supporting the view of Doyle (2001:258) and enhancing the building of
theory in this area of business.
Keller and Lehmann (2006:753) suggest that for branding research to be scientifically rigorous, it is important to develop
comprehensive models of how the concept of brand operates and to develop estimates of the various cause and effect links
within it. This was mapped out during the research and a brand alignment model was offered for consideration. The research
argued that brand extends beyond the marketing function or the end-point of organisational systems and delivery and the
organisational architecture model was adapted to suit this research and offer a brand alignment framework that facilitates the
effective and efficient implementation and realisation of strategic intent. This links brand alignment to resource-based theory
and posits that it is considered as a core capability within the organisation, enabling the attainment of competitive advantage.
This research concluded that brand is not confined to an aspect of marketing, but should be deployed holistically in the
organisation as a core capability and opportunity for competitive advantage and seeks to demonstrate an emerging body of
thought that advances theory and practice in this area of business. This research further highlighted the fact that the notion of
internal branding is an evolving sphere of the overall branding and marketing discipline. This study revealed gaps in the
current thinking with regards to a holistic approach to aligning the internal and external efforts of brand building within the
organisation and a new model and approach was offered, supporting the notion of brand alignment as an organisational
capability that can derive competitive advantage for the organisation. The brand alignment model which was developed is
depicted below in Figure 1.
Keller and Lehmann (2006:753) suggest that for branding research to be scientifically rigorous, it is important to develop
comprehensive models of how the concept of brand operates and to develop estimates of the various cause and effect links
within it. It is the wholeness of approach to this study that highlights its contribution to the existing theory and addresses the
gaps identified in the approach to internal branding and the determination of brand equity. It coincides with related studies
probing cause and effect relationships surrounding the area of internal brand equity and offers a model and approach which
seeks to address the matter holistically, in the quest to enhance the understanding and management practice in this important
emerging school of management thinking.
676

The examination of literature during this study has highlighted the fact that the notion of internal branding is an evolving
sphere of the overall branding and marketing discipline. While myriad aspects of this emerging phenomenon have been
considered in recent research, this study has revealed gaps in the current thinking with regards to a holistic approach to
aligning the internal and external efforts of brand building within the organisation. The authors have addressed specific
aspects of a new model and approach, supporting the notion of brand alignment as an organisational capability that can derive
competitive advantage for the firm.
Detailed implications of the research are posited from both a theoretical perspective and the development of a new model in
the brand alignment approach. Theoretical implications are covered in the results and discussion section above while practical
implications and observations highlight areas that are common and supportive of the brand alignment approach as well as
those that detract from it. The model and empirical results suggest several important implications for how organisations build
a brand aligned approach, notably how they integrate brand and strategy as part of deriving competitive advantage by
ensuring that the internal and external efforts of the brand are synchronised and supportive of organisational strategy.
Useful research is that which demonstrates an ability to generate new knowledge and understanding as well as stimulate areas
for further research (Vallaster, 2004:110). The research suggested that brand as an important part of an organisations
business strategy requires adoption of branding at a strategic level. It was found that brand as a business and strategic priority
is directly influenced by leadership and the connection between brand, culture, values and behaviours within the organisation
surfaced as an area that warrants the attention of management and the practitioner, which also supports further research.
Other areas for further research are the notion of business performance and how this intersects with a measure of internal
brand equity, as part of the brand equity thinking and methodology that exists. The issue of brand and culture also gives rise
to another research possibility in exploring the connection between strategy, values and brand and a final research possibility
is to build on the case research conducted and further expand its generality across a broader spectrum of cases.
FIGURES
Figure 1: The brand alignment conceptual model
Source: Adapted from Venter (2006:397)

REFERENCES
Aaker, D. A. (2004) Leveraging the Corporate Brand. California Management Review, 46(3), 6 18.
Aaker, D.A. & Joachimsthaler, E. (2000). Brand Leadership. London: Simon & Schuster.
677
Barney, JB. (2001) Resource-based Theories of Competitive Advantage: A Ten-year Retrospective on the Resource-based
View. Journal of Management, 27, 643 650.
Barrett, R. (2006) Building a ValuesDriven Organisation: A Whole System Approach to Cultural Transformation. Oxford:
Elsevier.
Doyle, P. (2001) Building Value-Based Branding Strategies. Journal of Strategic Marketing, 9, 255 268.
Eisenhardt, K. M. (1989) Building Theories from Case Study Research. Academy of Management Review, 14(4), 532 550.
Grant, R. M. (2002) Contemporary Strategy Analysis: Concept, Techniques, Applications. Oxford: Blackwell.
Ind N. (2003) Inside Out: How Employees Build Value. Journal of Brand Management, 10 (6), 393 402.
Kapferer, J.N. (2008) Strategic Brand Management: Creating and Sustaining Brand Equity Long Term. Philadelphia: Kogan
Page.
Keller, K.L. (2008) Strategic Brand Management: Building, Measuring and Managing Brand Equity. New Jersey: Prentice
Hall.
Keller, K.L. & Lehman, D.R. (2006) Brands and Branding: Research Findings and Future Priorities. Marketing Science,
25(6), 740 759.
Miles, M.B. & Huberman, A.M. (1994) Qualitative Data Analysis: An Expanded Sourcebook. California: Sage.
Peteraf, M.A. & Barney, J.B. (2003) Unravelling the Resource-Based Tangle. Managerial and Decision Economics, 24, 309
323.
Sartain, L. (2005) Branding From the Inside Out at Yahoo!: HRs Role as Brand Builder. Human Resources Management, 44
(1), 89 93.
Sartain, L. & Schumann, M. (2006) Brand From the Inside. San Francisco: Jossey-Bass.
Sartain, L. & Schumann, M. (2009) Brand For Talent. San Francisco: Jossey-Bass.
Vallaster, C. (2004) Internal Brand Building in Multicultural Organisations: A Roadmap Towards Action Research.
Qualitative Market Research, 7(2) 100 113.
Vallaster, C, & de Chernatony, L. (2006) Internal Brand Building and Structuration: The Role of Leadership. European
Journal of Marketing, 40(7), 761 784.
Varey, R.J. (1996) Internal marketing: A Review and Some Interdisciplinary Research Challenges. International Journal of
Service Industry Management, 6(1), 40 - 63.
Venter, R. (2006) Strategic Management: Winning in the Southern African Workplace (Chapter 12). Louw L. & Venter P.
(eds.) Cape Town: Oxford University Press.
Venter, P. & Jansen, van Rensburg M. (2009) Strategic Marketing: Theory and Applications for Competitive Advantage.
Cape Town: Oxford University Press.
Yin, R.K. (2003) Case Study Research: Design and Methods. California: Sage.
678
APPROPRIATION OF TRADITIONAL KNOWLEDGE IN THE BASE OF THE PYRAMID

Stefanie Beninger, Simon Fraser University, Canada
ABSTRACT
The Base of the Pyramid theory was first articulated in 2002. The theory argues that poverty could be alleviated and profits
could be made if multinationals marketed and sold cheap and high-quality products and services to the world's underserved
poor. The theory developed into 'BoP 2.0', which argues that MNEs can work together with the poor towards creating povertyrelieving and profit-generating solutions for the BoP markets through a process of social embeddedness. This article theorizes
that when multinationals socially embed themselves in the BoP through the process outlined in BoP 2.0, there is an increased
likelihood that they will knowingly or unwittingly appropriate traditional knowledge. It is argued that this leads to an increased
likelihood of displacement of traditional knowledge, thus leading to a social loss in the BoP community.
679
DIFFERENTIATION BETWEEN BUSINESS SCHOOL RESPONSIBILITY EFFORTS ACROSS REGIONS:

A CONTENT ANALYSIS OF PRME SHARING INFORMATION ON PROGRESS REPORTS
Olga Veligurska, KTH Royal Institute of Technology, Sweden
INTRODUCTION
Over the last decade, a string of corporate scandals followed by the 2007-2008 banking crisis have placed corporations and
financial institutions under increased scrutiny by media, government and the general public. Concerns about irresponsible
business practices have extended to management education, in particular MBA programs, which are seen as the primary
suppliers of corporate staff (Cornuel 2010). Universities have responded by increasing the emphasis on responsibility and
sustainability in their education programs, research, and operations.
In 2007, in acknowledgement of the issues global importance, the United Nations introduced the Principles of Responsible
Management Education (PRME) initiative. The PRME has the mission to inspire and champion responsible management
education, research, and thought leadership globally. Currently (in July 2012) PRME has 463 signatories; business schools
and universities from close to 80 countries across the world. Besides the organization of conferences and joint research, the
primary method of collaborative learning is through the Sharing Information on Progress (SIP) reports that universities are
required to prepare (Escudero 2010).
In this study we perform a text analysis of the SIP reports that were available on the UN PRME website in July 2012. Our
objective it to evaluate whether there is a meaningful level of differentiation between reports from different regions and
countries. Our reasoning is that the level of differentiation between reports shows us whether business schools
responsibility-related programs and activities are specific to their regions issues and challenges.
METHODOLOGY
A text analysis (Krippendorff 1980, Weber 1990) was performed with the open-source program RapidMiner. Although there
are many data/text analysis packages available with a range of capabilities and prices, RapidMiner offered us sufficient
capacity and versatility to conduct our research, for free. The analysis we performed for each SIP report was as follows. First,
non-letter characters were removed, all letters were transformed to lower case, and English stop words (common words
without particular relevance) were removed. Second, the words were stemmed, which means that for example the words
education, educate and educational are grouped under the stem educat-, and counted as a single entity (note: in this paper we
will refer to a stem by its highest-counted word, e.g. education instead of educat-). Finally, RapidMiner produced a list of
words, ranked by the number of total occurrences per stem, and also showing the number of documents that each stem
occurred in.
Of the 324 SIP reports that were available on the UN PRME website, we only used the 220 that were most recent versions for
each business school. The SIPs varied greatly in length, from a single-page letter from a university dean to a 120-page
detailed report. Out of those 220, some could not be converted to a text-file (which is a requirement for RapidMiner) and a
few were not in English. Therefore we conducted our analysis with 193 reports. The reports were divided into categories
based on the business schools country/region.
RESULTS
Study 1: Overall ranking per region/country
Our initial study produced a list of 76,985 stems, of which we only used the top 1,000 for further analysis. Table 1 shows the
top 20 stems, with the rank that each words has in individual regions/countries.
Probably unsurprisingly, this list is rather generic and does not give us much insight about the level of differentiation between
regions. Nevertheless a number of things are noteworthy: Student has a lower ranking (#13) in Latin America than elsewhere;
Development is very important for Africa and the Middle East (#2); and the word International is most important in Central
and Eastern Europe (#8).
680
Study 2: Per region/country, clustered by theme

As a follow-up study we did the following: we grouped the 100 highest-ranking words into clusters of words with the same
theme. For example, the theme Education consisted of the following words: Student, Education, Course, Studies, Teaching,
Case.
Twelve clusters were created, using 69 out of 100 words (the others did not fit a particular cluster and remained
uncategorized). Table 2 presents the result of a cross-tabulation, and shows an index for each cluster and region.
There are several useful observations that can be made from the cross-tabulation results. Perhaps the most interesting starting
point is a comparison between North America and Europe. It appears that in particular business schools in the US have a
strong emphasis on Education (US: 112, which is only exceeded by Central and Eastern Europe (CEE: 116). In comparison,
Europe seems to focus more on Development (Western Europe: 110, UK: 125). Whereas European schools talk more about
Activity (Western Europe: 107, Central/Eastern Europe: 116), North American universities seem more concerned with
Effectiveness (US: 118, Canada: 127).
Unsurprisingly, there is little similarity between other regions (Asia, Latin America, Australia and New Zealand, Africa).
Latin America shows a strong International focus, which they share with Central and Eastern Europe (Latin America: 113,
CEE: 114), there is a strong interest in Development in Africa and the Middle East (145) and Australia (123). Asian and Latin
American SIP reports had a low emphasis on both Effectiveness and Challenges.
Study 3: Qualitative analysis
In our last study, we performed a number of short analyses of the ranked word list, to get a clearer indication of the level of
differentiation that exists between SIP reports from different regions. First, we reviewed the number of documents that each
stem occurred in. We found that none of the top-100 words appeared in fewer than 70% of the documents. In fact, even
within the top-500 most of the words appeared in over 50% of the documents. Many of the exceptions could be explained by
language (e.g. organization vs. organisation, centre vs. center) or indicated a region (e.g. Africa), and very few words
indicated that the reports of different regions did indeed have a different emphasis.
As a final step, we looked for specific words that would indicate that differentiation between reports from different regions
existed. Table 3 shows the words we found in the top-500 that were directly related to specific environmental or social issues,
and the ranking that these words had for each country/region. It shows a number of interesting differences. For example, the
word women was ranked much lower in the US and Latin America, which indicates that women issues are more relevant
for business schools located there. Similarly, the word water has a very high ranking in Australia and (less explicably) the
US. Other noticeable high rankings are Health for Canada and Asia, Carbon for the UK, and Family for Latin America.
CONCLUSIONS
Our overwhelming assessment is that the SIP reports are all very similar, both in language and in content. Nevertheless we
did find some differentiation by looking at words related to social and environmental issues, such as Health and
Recycling.
There are strong arguments both for and against differentiation in the approach that business schools have toward responsible
management education. On the one hand, business schools often have a strong international focus, with students and faculty
from across the world. It is in their interest to learn about a wide range of issues regarding management, that shouldnt
necessarily be linked to the location of their university.
On the other hand, and this is the side that the authors favor, for any of the business schools stakeholders to relate to the SIP
report, it needs to be concrete and action-based, so it cannot be generic. The primary objective of PRME is to inspire and
champion responsible management education, in other words to share best practices. For SIP reports to fulfill that role, they
need to describe concrete policy measures that are taken and projects that are organized. If the report also serves an internal
function, to inform staff, faculty and students of the activities that the university organizes and to encourage participation,
that is another reason for it to be concrete rather than abstract.
681
Naturally there are certain limitations to our methodology. RapidMiner eliminates most reliability issues that are normally
associated with manual coding, but validity is a relevant concern. Issues with validity in text analysis are typically associated
with two factors: the ambiguity related to the interpretation of certain words, and the chosen method for clustering words to
create categories (in our case the 12 themes). Although we took measures to reduce this issue (by clarifying word meanings
when necessary and by working with two separate researchers), we cannot remove the risk entirely. A second limitation
relates to the SIP reports that were available for our study; a selection bias may have occurred since business schools who are
already more engaged in responsibility education will also be more likely to submit a report to PRME.
We believe that the research we present here will encourage business school administrators to look at responsible
management education in a new light. Creating a SIP report is not a goal by itself. The purpose is to inspire faculty and
students to become engaged in responsible management education, and for universities to share best practices through
PRME. The SIP report should be created with this purpose in mind. A single-page letter from the dean, assuring PRME that
responsibility is on the agenda, will not do. Nor will a 120-page report. To use a mnemonic for goal-setting that many MBA
students should be aware of, the SIP report should be SMART: Specific, Measurable, Achievable, Relevant, and Timespecific.
TABLES
Table 1 - RapidMiner stem counts and regional ranks
All 193 documents
# Stem
Coun
US
CA
t
1
11,27
Business
7
1
2
2 Management
8,182
4
3
3 Student
7,659
2
5
4 Sustainability
7,371
3
1
5 Social
6,563
5
4
6 Responsibility
6,159
8
8
7 Development
5,605
11
6
8 School
4,784
13
9
9 Research
4,349
22
11
10 Global
4,291
7
10
11 Education
3,861
15
14
12 University
3,835
12
7
13 Ethics
3,810
6
64
14 Principles
3,483
17
26
15 Program
3,472
9
17
16 Corporate
3,469
16
21
17 Course
3,146
10
24
18 International
2,970
25
23
19 Project
2,799
32
35
20 Community
2,687
14
15
Documents
in
region/country
55
6
Regional breakdown Ranks

WE
UK
CEE
AS
LA
AU
AF
1
2
6
4
5
3
7
9
8
10
12
19
17
16
33
13
18
15
14
40
1
2
4
3
10
9
7
5
6
19
14
8
13
15
764
20
110
26
22
25
1
5
4
6
3
2
7
22
10
19
11
16
24
13
30
9
15
8
17
41
2
1
4
5
7
8
6
10
15
14
9
20
16
18
3
11
24
22
30
34
4
7
13
5
1
2
6
12
25
8
9
34
46
10
11
31
27
19
16
15
1
4
2
3
10
9
6
7
5
16
18
8
25
14
11
21
23
34
24
15
1
3
4
7
5
6
2
10
8
20
23
16
68
18
155
12
11
28
29
61
51
17
14
19
17
The first 3 columns show the top-20 words/stems that were found across all documents and its number of occurrences
(count). The right-hand side of the table shows the ranks that each word had for individual countries or regions.
US = United States, CA = Canada, WE=Western Europe, UK = United Kingdom, CEE = Central and Eastern Europe, AS
= Asia, LA = Latin America, AU = Australia, AF = Africa and the Middle East.
682
Table 2 - RapidMiner cross-tabulation indices for each cluster and country/region

Regional breakdown Cross-Tabulation indices
Cluster
US
CA
WE
UK
CEE
AS
LA
Business
102
97
103
102
96
106
79
Education
112
89
94
84
116
106
77
Responsibility
101
119
101
104
103
87
101
Social
96
105
100
90
95
95
133
Development
82
99
110
125
91
96
91
University
110
93
90
108
92
103
84
International
104
99
103
78
114
101
113
Activity
92
91
107
85
116
113
118
Challenges
111
122
97
115
86
63
76
Leadership
135
89
61
103
45
122
98
Effectiveness
118
127
101
92
75
71
70
Knowledge
94
99
100
113
115
97
92
AU
94
108
93
106
123
110
76
91
114
93
86
122
AF
104
96
90
108
145
90
81
89
102
104
106
108
To allow for comparison between regions, the values in this table are cross-tabulation indices, i.e. they are based on the
total number of terms within each cluster and region. A value above 100 indicates that the words in that cluster are used
more often in a particular region, a value below 100 means that this cluster is less prominent for that region.
US = United States, CA = Canada, NWE=Western Europe, UK = United Kingdom, CEE = Central and Eastern Europe,
AS = Asia, LA = Latin America, AU = Australia and New Zealand, AF = Africa and the Middle East.
TDEOH 3 - Cause-related word stems in top-500 ranking, across regions
Regional breakdown Ranks (selected)
# Stem
Docs
US
CA
WE
UK
CEE
AS
LA
251 Health
49%
251
106
576
211
749
76
222
272 Women
39%
174
336
395
330
634
586
180
311 Water
44%
212
670
667
289
670
259
501
338 Carbon
40%
444
300
375
96
564
415
850
360 Family
39%
397
499
283
828
397
506
185
372 Food
41%
284
427
440
332
476
341
734
397 Recycling
44%
314
456
560
364
429
472
453
Climate
431
37%
642
184
426
331
666
217
831
change
438 Waste
40%
490
455
529
236
535
493
507
AU
295
427
139
289
393
516
277
AF
834
701
354
830
409
610
694
353
603
264
470
This table shows words within the highest-ranking 500, that are related to specific causes and are therefore meaningful
points of differentiation between the reports. It shows the percentage of documents (overall) that the word occurs in, and
the ranking for each word in the countries/regions that gave it the strongest emphasis.
US = United States, CA = Canada, WE=Western Europe, UK = United Kingdom, CEE = Central and Eastern Europe, AS
= Asia, LA = Latin America, AU = Australia, AF = Africa and the Middle East.
REFERENCES
Cornuel, E. (2010). Are Business Schools to Blame for the Current Economic Crisis? From Challenge to Change: Business
Schools in the Wake of Financial Crisis. Emerald Group Publishing, 31-32
Escudero, M. (2010). An Interview With Manuel Escudero: The United Nations' Principles for Responsible Management
Education: A Global Call for Sustainability. Academy of Management Learning & Education, 9(3), 542-550
Krippendorff, K. (2012). Content analysis: An introduction to its methodology. Sage Publications, Incorporated.
Weber, R. P. (1990). Basic content analysis (Vol. 49). Sage Publications, Incorporated.
683
SOCIAL RESPONSIBILITY IN HIGHER EDUCATION: STUDENTS PERCEPTIONS

Moritz von Schwedler, Universidade Lusada, Portugal
Elizabeth Real de Oliveira, Universidade Lusada, Portugal
ABSTRACT
This working paper analyses students perceptions on issues related to Social Responsibility in relation to marketing and
management students of Portuguese universities. The aim of this paper is to understand how students perceive the Social
Responsibility related concepts. It is of interest how they make sense of it when these topics are discussed within the confines
of the marketing discipline and how they understand the conceptualisation and operationalisation.
Secondly, a quantitative study has been conducted, including 118 students, aimed at verifying the students perceptions on
Social Responsibility identified in the first study and its impact in terms of consumer choices. It was confirmed that the students
do prefer and choose products from companies that concern themselves more with Social Responsibility.
INTRODUCTION
This paper analyses students perceptions on issues related to Social Responsibility (SR) in relation to a Marketing degree in
Portuguese universities. The aim of this paper is to understand how students perceive the SR related concepts. It is of interest,
how they make sense of it when these topics are discussed within the confines of the marketing discipline and how they
understand the conceptualisation and operationalisation. Moreover, the paper seeks to gain insights into the effectiveness of
embedded SR teaching, which in turn will facilitate integrating SR principles in the wider curriculum.
This research consists of two phases in order to triangulate the results. In the first phase, focus groups have been carried out
with students that attend a three year Marketing degree. While there are one mandatory and one optional discipline that
specifically deal with ethical implication of marketing, other disciplines such as Advertising, Communication and Operational
Marketing deal with SR on an implicit level.
In addition, the paper looks at these aspects in the context of social responsibility campaigns that were implemented by the
students. Specifically, a Christmas campaign collecting goods for families in need and another one to gather bone marrow
donors. The students tasks for these projects ranged from the design of the campaigns and critically reflecting on the academic
theory, strategy, developing the promotional material like posters, flyers, displays, social networking campaigns and videos.
Moreover, the students were also responsible to distribute the flyers and present the campaigns in classes, selling the ideas
to other students, lecturers and members of staff.
In the second phase a quantitative questionnaire was sent to a larger sample with the aim to verify whether management students
are aware of the SR concepts and to what extent these affect their consumption behaviour.
It is relevant to notice that these campaigns helped students to link the different aspects of the theoretical concepts of SR with
its implementation. Hence, this research contributes to the growing body of knowledge on SR education of management
students with a critical reflection based on the students experiences on the effectiveness of these teaching methods.
Furthermore, there is the potential of sensitising students to turn them into drivers of sustainability by teaching the competencies
to link various aspects of SR.
LITERATURE REVIEW
Naturally, with the increasing realisation for more embedded approaches for sustainable business, the focus moves towards
business schools for producing the graduates that possess the skills and the vision.
According to Windsor (2008) responsible management is the most important theory-development and educational issue that
business schools and businesses alike are facing. Business schools are increasingly called upon to play their role in advancing
the agenda by further including and integrating Business Ethics, (Corporate) Social Responsibility (CSR/SR) and
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Sustainability. Particularly because of the corporate malfeasance linked with the financial crisis, it needs to be discussed what
role business schools should play (Matten and Moon, 2004; Ghoshal, 2005).
In the light of this, universities are required to change the traditional syllabus and acknowledge the role and importance of
education in creating more sustainable businesses. For this, two strategies in particular are necessary. Firstly, the principles of
SR have to be integrated throughout the entire curriculum instead of merely being limited to separate disciplines. Otherwise it
would prevent students from understanding the complexity of SR and it is necessary to highlight the interconnection between
the different business aspects (Brown 2009). Moreover, it is crucial to encourage students to link the different aspects of SR
among the various business areas, giving justice to the multi-disciplinary nature of SR. It is particularly important to include
practical examples and refrain from theorising the issue too much (Bennis and O'Toole, 2005; Gardiner and Lacy, 2005). In
addition, Matten and Moon (2004) identify the following objective that business schools should pursue (p. 324):
(1) provision of graduates with SR skills
(2) supply of SR education for practitioners
(3) specialist SR education for industries
(4) research to advance knowledge in SR.
This study contributes to the body of knowledge by collecting empirical data on what the best strategies are in order to educate
management students to be future drivers of sustainability and promote a more effective cooperation between academia and
practice (Gardiner and Lacy, 2005; Owen, 2008). Currently, research exists on how CSR and ethics are being taught at
universities, but little is known about how students perceive these issues. Previous studies predominantly adopt surveys in order
to provide a broad overview on what courses and subjects are being offered by business schools (Macfarlane and Ottewill,
2004) or analyse the conceptual aspects of the curriculum (Spence, 2000). Rarely do studies analyse and engage with the
students.
Ultimately, the critical evaluation of the businesses curriculum regarding SR and sustainability raises a number of important
questions, which certainly also apply to business education in general. For instance, it needs to be questioned if and how ethics
should be taught, how to link basic awareness and decision-making, how to avoid repetitions and, most importantly, how to
embed ethics and SR throughout the entire curriculum (McDonald, 2004).
Currently, a promising strategy to incorporate SR and business ethics in the curriculum is the use of the various accreditation
schemes. With the increased importance of rankings and accreditations, this will be a significant driver in the future and all
major schemes have started to address these issues (EQUIS, AACSB, AMBA) (Gardiner and Lacy, 2005). In Portugal, the
accreditation scheme A3ES is a major influence and currently does not explicitly cover criteria related to SR, failing to promote
institutionalising the teaching of SR.
METHODOLOGY
In order to understand the students perceptions, opinions and experience regarding SR incorporated in marketing degrees, two
focus groups (FG) were carried out with students of two different years of a marketing degree (3-year course). These FG were
conducted in a Portuguese university in June 2012 and lasted around 50 minutes each. The sample consisted of students of
different years, one finishing the second year (23 students), the other finishing the last year of the course (27 students). Finally,
the seven stages grounded analysis approach of Easterby-Smith, Thorpe and Lowe (2002) was employed in the data analysis, ,
namely: (1) Familiarisation with data; (2) Reflection on the interview data; (3) Conceptualisation; (4) Cataloguing concepts;
(5) Re-coding; (6) Linking; and (7) Re-evaluation. The choice of grounded theory was made since the aim was to have an open
approach in to order collect these students perceptions towards CRS embedded in marketing degrees and therefore to create
new theory from data (Glaser and Strauss, 1967).
The second study intended to verify the concern for SR among the students, using quantitative data.118 responses were obtained
from students, of different years of the Management degree, in two Universities in the Northern region of Portugal during
November 2012. The data collection was carried out using the scale of Roberts (1996) (Appendix). The quantitative data
collection seeks to answer the following hypotheses:
H1: University students have a correct understanding of the concepts related to SR;
H2: University students opt for products of companies that show a concern for SR.
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RESULTS
Focus groups: qualitative analysis
Considering that the two focus groups were conducted in the end of June 2012, this section will present some preliminary
results. Grounded theory is a very time-consuming process and therefore the data is still being analysed. Moreover, it is intended
to continue this research project with more focus groups. Emerging themes will be developed in the following sections.
SR and sustainability
Some confusion is noticeable regarding the terms SR and sustainability. The majority of students consider that SR is aimed at
helping people in need and to increase social conscience regarding issues such as climate changes, environment and social
equity. Several students emphasise the need of future generations having the same resources they have at the moment. Thus,
there is a close connection between SR and sustainability, as if they are almost the same thing.
Moreover, some students make an immediate association between the need of more SR and the most recent definition of
marketing, that of being to create value for customers, clients, partners and society at large (American Marketing
Association, 2007). This seems an interesting aspect, their knowledge that SR is a fundamental part of the marketing subject.
It seems that some students are more skeptical and critical towards companies who carry out SR actions considering that some
just want to show off and to create an image that they are responsible and concerned with the society when in fact it is all
about strategic positioning. Yet some other students argue that there are a few companies who are genuine in their SR actions
giving some examples they know of. Moreover, students speak about the green customers segment as an opportunity for
companies, this way being again more strategic marketers (rather than ethical).
Many students consider that SR should be part of the organisational culture, criticising companies that only do some occasional
and periodical SR activities. Once again, there are some students arguing that it is important to start and that it is better to do
SR occasionally than never.
SR campaigns
It is important to start contextualising the campaigns the students carried out. The 2nd year class developed, in the Advertising
module, a Christmas campaign, in all its stages since defining aims, strategies, media operational plans, evaluation and control,
aimed to gather essential goods for families in need. This campaign did not achieve the expected results. The class of the 3rd
year developed, in the same module but in the academic year before, two advertising campaigns, also the Christmas campaign,
which is already a tradition at the marketing degree of this University, and another one aiming to gather bone marrow donors.
Both were considered successful although the latter had three times more donors than the defined aim. Moreover, it is relevant
to state that the campaign had a real life case, a 5 year old boy (J), who urgently needed a bone marrow transplant.
Some strong differences between both classes emerged regarding SR. It is noticeable that students of the 3rd year speak in a
very emotional way about the campaign to gather bone marrow donors. Although they consider the Christmas campaign very
important, the bone marrow campaign prevails in their minds. It seems as if it was something that deeply touched them
emotionally. It is also clear that personally knowing J and his family was a strong motivator for the students to implement
campaign with maximum effort, so their involvement was very high. The aim of this campaign was to gather 100 people to
come to the University to become bone marrow donors, filling in a form and give a small blood sample, becoming part of the
international database of bone marrow donors. The fact is that the campaign resulted in 300 people becoming donors. These
students show a solid sense of social conscience and also a sense of pride for what they have accomplished. Interestingly, they
also show some surprise in how it was so successful, stating how insecure they felt in the beginning, all the excitement, anxiety
they went through. It is clear that this success increased their confidence levels and all of them argue that, in the future, they
could, individually, carry out a similar campaign in a company. This is an extremely important finding, the capacities they
gained doing this real advertising campaign and its effects on society. It seems that there is a role for universities in increasing
the students SR conscience and to contribute to the development of society in terms of the importance of social and
environmental aspects.
Regarding the 2nd year students, a sense of self-realisation for helping people in need was also visible. However, some
frustration emerged since the defined aim and expectation were not achieved. It is also noticeable a critical view in the sense
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that students consider that people are selfish and they just dont care. They also mention the economic crisis as a possible
reason for the lack of contribution compared to the previous year. Moreover, most of the students point out that their first
motivation for doing the campaign/assignment was the mark they could have. This aspect of academic performance did not
emerge in the FG with the 3rd year class, the word mark not being mentioned at any time. Some doubt remains regarding the
impact of the students own motivations in the campaign results. However, several students state how happy they felt to know
that they were doing something to help other people despise the results not having been the ones they wanted.
Attitudes towards SR
All the students consider that something changed after doing these campaigns, mainly their need to spread the word about what
they did. Furthermore, many of them state that before the campaign they did not know what SR actually was, even if some
argue that they had already some knowledge on SR. It is clear that they tell friends and family about these campaigns and even
try to motivate others to do the same. This increase in the students social conscience seems a relevant finding.
Another important aspect emerging from data is the emphasis students give to having done a real campaign. They show that
many subjects are too theoretical and one thing is to learn how to do it and another is to really do it. There is a consensus that
they feel capable to do another advertising campaign since they already did it in all its stages, since doing the creative briefing,
defining aims, strategies, media operational plans, maps of control and evaluation. Thus, students clearly consider that they
increased their competences and skills. There is a sense of confidence noticed in all of them and the idea that only doing you
learn. This balance between theory and practice in the marketing degree or even degrees in general seems a relevant aspect to
explore.
Questionnaire: quantitative results
The SR scale employed in this study has 18 items in order to measure the students perceptions on SR. Furthermore, it is known
that SR politics are applied in three key areas: environment, economy and society. Thus, the factorial analysis intends to confirm
the management students perceptions on the existence of these three areas. In a first analysis, the 18 items were reduced to 5
factors. The method used was the Principal Component Analysis without Rotation. The selection of these factors had in mind
an eigenvalues higher than 1. Therefore, it is verified that from the 18 initial items, the information may be reduced to 5 factors,
which explain 72,65% of the total variance of data. With the Component Matrix analysis it was concluded that some of the
items are not to be considered. Hence, several items were deleted and a new factorial analysis was carried out. It was found
that three factors explain 70,441% of the data variance. These three factors correspond to the three dimensions of the SR
concept: environment, economy and society.
Thus, from the Component Matrix analysis, it is verified that factor 1 corresponds to the items RS1, RS3, RS4, RS5, RS9 and
RS11 (environmental dimension); factor 2 corresponds to the items RS15, RS16 and RS17 (social dimension); and factor 3
corresponds only to the item RS10 linked to recycling aspects. Finally, it was conducted a reliability analysis of the scale
through a Cronbachs Alpha for the 10 final items, its value being 0,836. From the results found it may be concluded that
students have a correct perception on SR concepts. Moreover, they are willing to purchase products of companies with SR
practices.
CONCLUSIONS
This paper explores the students perceptions on SR embedded in marketing degrees in the example of two Portuguese
universities. It is considered that some novel and interesting themes emerged.
Firstly, business education is often the first stage in which students deal critically with these issues. This is important to both
enable these future managers/marketers, but also to continue to question the status quo. Academics have the possibility to help
breaking down the barriers that exist between business, academia and other stakeholder groups (Gardiner and Lacy, 2005) and
future managers should be included in this too. While the fact that SR should be part of the curriculum is less controversial, it
is more debatable how this should actually be implemented. The issues that this paper is raising are that there needs to be a
coherent conceptual plan throughout the entire curriculum, so that students can make the links between the different disciplines.
This is necessary to facilitate the holistic transformation towards more responsible and sustainable business.
Secondly, it is vital to de-theorise SR teaching by employing the use of case studies and practical exercises that help students
to understand the practical implementation and application of the theoretical concepts that in its essence tend to be often
687
abstract. After all, the theoretical discussion has already been ongoing for decades, while failing to initiate more wide-spread
radical changes of business practice.
Thirdly, while the focus groups showed a concern among the students about Social Responsibility issues and the need for
further adapting the curriculum to accommodate these concerns, the quantitative research verified that there is a widespread
influence among the students in terms of their consumer behaviour.
Finally, as a happy end to this paper is to state that J, the five year old boy needing a transplant, found a compatible bone
marrow donor precisely in the week that the bone marrow campaign had started.
TABLES
Table1: Total Variance Explained
Component
Initial Eigenvalues
1
2
3
Total
3,860
2,430
1,458
% of Variance
35,093
22,093
13,256
Extraction Sums of Squared Loadings

Cumulative %
35,093
57,186
70,441
Total
3,860
2,430
1,458
% of Variance
35,093
22,093
13,256
ACKNOWLEDGMENTS
The work reported in this paper was co-financed by FCT - Fundao para a Cincia e a Tecnologia, Portugal (PEstOE/EME/UI4005/2011) and carried out within the research centre Centro Lusada de Investigao e Desenvolvimento em
Engenharia e Gesto Industrial (CLEGI).
REFERENCES
Bennis, W. G. and O'Toole, J. 2005. How Business Schools Lost Their Way. Harvard Business Review 83(5) : 96-104.
Brown , E. 2009. Corporate Social Responsibility in Higher Education. ACME: An International E-Journal for Critical
Geographies 8: 474-483.
Easterby-Smith, M., Thorpe, R. and Lowe, A. 2002. Management Research - An Introduction. London: Sage.
Gardiner, L. and Lacy, P. 2005. Lead, respond, partner or ignore: the role of business schools on corporate responsibility.
Corporate Governance 5: 174-185.
Ghoshal, S. 2005. Bad Management Theories are Destroying Good Management Practices. Academy of Management
Learning & Education 4: 75-91.
Macfarlane, B. and Ottewill, R. 2004. Business Ethics in the Curriculum: Assessing the Evidence from U.K. Subject Review.
Journal of Business Ethics 54: 339-347.
Matten, D. and Moon, J. 2004. Corporate Social Responsibility Education in Europe. Journal of Business Ethics 54: 323337.
McDonald, G. M. 2004. A Case Example: Integrating Ethics into the Academic Business Curriculum. Journal of Business
Ethics 54: 371-384.
Owen, D. 2008. Chronicles of wasted time? A personal reflection on the current state of, and future prospects for, social and
environmental accounting research. Accounting, Auditing & Accountability Journal 21: 240-267.
Roberts, J. A. 1996. Will the Real Socially Responsible Consumer Please Step Forward?. Business Horizon 39: 79-83.
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Spence, L. J. 2000. Teaching business ethics: are there differences between Europe, and is there a European difference?
Business Ethics: A European Review 9: 58-64.
Windsor, D. 2008. Educating for Responsible Management. In The Oxford handbook of corporate social responsibility. Eds.
Crane, A., McWilliams, A., Matten, D., Moon, J. and Siegel, D. S. Oxford: Oxford University Press Inc.
APPENDIX
RS1. I have purchased products because they cause less pollution.
RS2. When there is a choice, I always choose the product that contributes to the least amount of pollution.
RS 3. When I have a choice between two equal products, I always purchase the one that is less harmful to other people and the
environment.
RS4. When I purchase products, I always make a conscious effort to buy those products that are low in pollutants.
RS5. I have switched products for ecological reasons.
RS6. If I understand the potential damage to the environment that some products can cause, I do not purchase those products.
RS7. I do not buy household products that harm the environment.
RS8. Whenever possible, I buy products that harm the environment.
RS9. I make every effort to buy paper products made from recycled paper.
RS10. I use a recycling center or in some way recycle some of my household trash.
RS11. I only try to buy products that can be harmful to other people.
RS12. If possible, I will not use a product that can be harmful to other people.
RS13. I do not buy products that use advertising depicting minority groups in a negative way.
RS14. In the past I have not purchased a product because its advertising depicted woman in a negative way.
RS15. I do not buy products from companies that have investments in South Africa.
RS16. I do not buy products from companies that discriminate against minorities.
RS17. I do not buy table grapes because of the conditions under which the workers who pick them must live and work.
RS18. I will not buy a product if the company that sells it is socially irresponsible.
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IF STUDENTS ARE CUSTOMERS, THEN WHICH ONES CAN BE LET GO?

REACTIONS TO A PROPOSAL FOR BREAKING UP WITH UNDERPERFORMING STUDENTS
ABSTRACT
Many people argue that colleges and universities are in the business of educating students. Yet, serious debate exists about
whether students are to be treat as customers, or even like customers. While this view is not held unanimously, it does
conjure a potentially significant paradigm for how educational institutions should perceive and respond to students.
Proponents of the paradigm suggest that students are endowed with certain rights, privileges, and expectations, which are
attached to their status as paying consumers. At present, many students at US colleges and universities have the privilege of
registering for their own courses and classes. That is, they can choose which courses, professors, days, and times they would
prefer to have for each academic semester. Furthermore, they generally have the freedom to attend, miss, and/or participate in
class meetings.
Nevertheless, that debate must consider how broadly the student-as-customer concept should be applied. In this study,
students were asked their opinions about (1) customers in general, (2) whether students are customers, and (3) how customers
should be dealt with in academic and business settings. They were challenged to consider and evaluate a proposal mutual
drop/add that mirrors real-world business practices where both service providers (faculty) and customers (students) have
the right/privilege to enter, continue, or terminate their business relationship with one another. Under the proposal, faculty
would be empowered to release, or dismiss, underperforming students from their class(es).
Informed by customer service and evaluation practices in the real world, the proposal essentially begs the question: If
students are customers, then which ones can be let go? Data indicate that students generally support the proposal, perceiving
that it would hypothetically improve the quality of student engagement, classroom experience, and school reputation.
690
MESSAGE FRAMING IN HEALTHCARE MARKETING

Miwa Y. Merz, San Jos State University, United States
ABSTRACT
Healthcare marketers have long examined ways to effectively frame disease prevention messages that help consumers obtain
healthier lifestyles. However, they have not yet examined the effect of message framing on Diabetes Mellitus Type 2 (DM2)
prevention, despite the disease being the seventh leading cause of death in the U.S. Therefore, the purpose of this research is
to investigate the effect of message framing on consumers attitude and intentions toward DM2 prevention. Specifically, this
research investigates the attitudes and intentions toward DM2 prevention of young adult consumers who have not yet
developed diabetes. Hence, the focus is on the effect of message framing on DM2 prevention, rather than on DM2
complication prevention. Second, this research investigates the effect of messages that highlight why, rather than how, to
prevent DM2 and emphasize highly relevant and personal consequences (i.e., sexual dysfunction). Finally, this research
investigates whether a message that is framed in terms of gains versus losses affects both genders similarly regarding their
attitudes and intensions when the message targets their own versus the opposite gender. Empirical results are presented to
provide answers to these questions. Healthcare implications are also discussed along with future research directions.
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FINANCIAL SERVICES ADVERTISING: COMPARING BUSINESS-TO-BUSINESS AND BUSINESS-TOCONSUMER CONTEXTS

Kunal Swani, University of Massachusetts Amherst, USA
Easwar S. Iyer, University of Massachusetts Amherst, USA
ABSTRACT
The distinction between services and goods marketing as also the differences between B2B and B2C marketing are well
accepted by scholars and practitioners. Turley and Kelley (1997) content analyzed print ads for services in the B2B and B2C
domains, but there has been no update in the intervening fifteen years in spite of a spurt in the advertising volume as also the
birth of social media. Our research intends to fill that void and provide an update. Specifically we focused on financial services
ads because they are targeted to both B2B buyers and B2C consumers. We analyzed 755 ads that appeared in 6 magazines in
2005 and 2010. We found that financial service ads used different appeals in the two sectors. We also found that websites
promoted active involvement more in the B2B sectors. We saw that there was a slight bias towards females in the B2B sector.
Lastly the ads were tangibalized differently in the two markets.
692
BRAND REPUTATION: DOES IT HELP CUSTOMERS COPE WITH SERVICE FAILURE?

Aditi Sarkar, University of Memphis, United States
Balaji C. Krishnan, University of Memphis, United States
Makam S. Balaji, IFHE University, India
INTRODUCTION
When service failure occurs, customers experience disconfirmation and feel displeased (Smith, Bolton and Wagner, 1999).
Prior studies indicate that customers maintain different levels of service expectations for high and low reputed brands
(Roggeveen, Bharadwaj, and Hoyer. 2007). For high reputed brands, customers have high expectations, and view them as
delivering superior services. The brand name acts as a predictive cue enabling customers to anticipate more accurately the
service delivery process and outcome (Selnes, 1998). Research findings have confirmed that customers positively relate to
brand reputation affecting the perceptions of service performance and benefits (Brodie, Whittome and Brush, 2009).
Customers evaluate the characteristics of the service failure and assess the perceived stress in the given situation (Lazarus and
Folkman, 1984; Gabbott, Tsarenko and Mok, 2011). This appraisal process influences the use of different coping strategies in
managing the negative emotions. The stress encountered is contingent upon the expectations one has from the service
provider. This indicates that customers might use different coping strategies depending upon the expectation associated with
the brand that fails to serve appropriately. However, there is little systematic research on the linkages between brand
reputation, customer coping strategies and failure outcomes. The primary goal of this study is to conceptualize the different
coping strategies that customers use in managing service failures and to determine the role of brand reputation in determining
the coping strategies and service failure outcomes. The current study uses expectancy-disconfirmation and uncertainty
management theory to build the conceptual model of customers coping strategy to deal with the service failure. More
specifically, the present study highlights the presence of buffering effect of brand reputation following the service failure.
This study uses coping mechanism to propose that brand reputation reduces the negative effects of failure severity on
customer satisfaction. Finally, the study proposes that coping mediates the relationship between failure severity and customer
satisfaction.
THEORETICAL BACKGROUND AND PROPOSITIONS
This research investigates the role of brand reputation in coping with service failures and the mediating role of coping
strategies in influencing satisfaction and behavioral intentions. The study proposes that coping strategies customers use to
manage service failures occurring in high reputed brands and low reputed brands are different.
Consumer Coping Strategies
Coping refers to the actions or thoughts that people use in dealing with stressful encounters. As Lazarus and Folkman (1984)
point out, coping is the constantly changing cognitive and behavioral efforts to manage specific external and/or internal
demands that are appraised as taxing or exceeding the resources of the person. customers have coping preferences and
engage in specific coping strategies across different situations (Endler and Parker, 1990; Yi and Baumgartner, 2004;
Duhachek and Kelting, 2009; Carver and Connor-Smith, 2010). Thus, in this study we propose a multidimensional measure
consisting of eight coping strategies that are described below.
Action coping (AC): Consumers who cope with stressful encounters through action coping think about ways to make things
better, devise a plan of action, and try to resolve the problem (Duhachek, 2005).
Rational thinking (RT): Consumers who experience stress may try to step back from the encounter and cope by keeping their
feelings to themselves (Duhachek, 2005).
Positive thinking (PT): Consumers may try to cope by identifying and focusing on the positive aspects of the stressful
encounter (McCrae, 1984). Positive thinking is a constructive coping response where the consumers see an opportunity to
learn from the stressful encounters.
Emotional venting (EV): Consumers who experience a stressful encounter may try to vent their feelings to get the attention of
the service provider(Duhachek, 2005).
Instrumental-support seeking (IS): Consumers who cope with instrumental-support seeking try to seek advice from friends or
acquaintances with similar experience(Duhachek, 2005).
Emotional-support seeking (ES): Consumers aim at managing stressful encounters by expressing their feelings to others to
seek comfort(Duhachek, 2005).
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Avoidance (AV): Consumers cope with negative experiences by doing other things to distract from the problem (Duhachek,
2005).
Denial (DEN): Consumers may cope by pretending that the stressful encounter never happened. Denial serves the function of
managing ones emotions (Duhachek, 2005).
Impact of Failure Severity on Consumer Coping Strategies
The perceived severity of failure is a key determinant in forming post-failure attitudes and intentions. According to Duhachek
and Kelting (2009), customers use a repertoire of coping strategies in managing the stressful encounter. The failure severity
might affect the assessment of the encounter and the subsequent use of coping strategies (Gabbott et al. 2011). When
customers perceive the service failure as severe, they may consciously take efforts to reduce the greater perceived loss and
negative emotions. They ponder on the causes and consequences of the failure and actively engage in effortful actions to
resolve the situation. Further, severe failure evokes anger which intensifies expressive tendencies and retaliatory behaviors
(Bonefield and Cole, 2007). Thus, we expect customers to use action, emotional venting and instrumental-support seeking to
manage severe failures. On the contrary, when customers experience less severe failures, they evaluate the potential loss as
low and might ignore the negative emotions.
Proposition 1: Satisfaction and behavioral intentions are determined by the severity of failure
Proposition 2: Use of coping strategies of (a) action coping, (b) rational thinking, (c) positive thinking, (d) emotional venting,
(e) instrumental-support seeking, (f) emotional-support seeking, (g) avoidance and (h) denial are determined by the severity
of the service failure.
Mediation Effect of Coping Strategies
In the present study, we propose that when service failure occurs, the perceived stress triggers different coping strategies that
affect the customer evaluation of service encounter. In case of coping strategies such as action and instrumental-support
seeking, customers appraise the stressful encounter as severe and unalterable (Oakland and Ostell, 1996). This results in
unfavourable evaluation of customer satisfaction. Thus, it is proposed that action and instrumental-support seeking coping
strategies will be negatively associated with evaluation of customer outcomes following a service failure. On the other hand,
the use of coping strategies such as positive thinking, rational thinking, emotional venting and emotional-support seeking
results in reinterpretation of the stressful encounter (Gabbott et al. 2011). This results in more favorable evaluation of
customer satisfaction and behavioral intentions.
Proposition 3: The coping strategies mediate the relationship between failure severity and customer outcomes.
Moderating Role of Brand Reputation on Coping Strategies And Customer Outcomes
Brand reputation refers to the customers perception of service quality associated with the brand name (Selnes, 1998). Brands
with high reputation reduce the perceived risk resulting in favourable evaluations. More importantly, brand reputation affects
customer perceptions, preferences and behaviors as they are viewed as valuable and intangible assets (Erdem and Swait,
1998). Prior studies indicate that favorable brand reputation protects the firm during the crisis by creating a buffer or shield
(Dawar and Pillutla, 2000; Greyser, 2009). Customers attribute the firm to be less responsible for the crisis and give the
benefit of doubt to the organization. They discount the negative information and focus on the positive aspects associated with
the firm (Coombs and Holladay, 2006). The present study uses key insights from expectancy-disconfirmation theory and
uncertainty management theory in hypothesizing the role of brand reputation on service failure outcomes. The expectancydisconfirmation theory suggests that when customers encounter failure, negative disconfirmation occurs as product
performance fails to meet the expectations (Oliver and Burke, 1999). For high reputed brands, customers have high
expectations that result in greater negative disconfirmation and dissatisfaction with the service failures. They might
experience shock or betrayal on encountering service failures in high reputed brands (Brady et al. 2008). This betrayal or
shock could displace the positive attitudes and beliefs associated with the brands resulting in unfavourable evaluation of
service failure (Mattila, 2004). Similarly, uncertainty management theory posits that people tend to react more unfavourably
when they face uncertainty in the environment. They feel anxious and distressed and might try to find comfort in related or
unrelated experiences (Van den Bos and Lind and 2002; Thau, Aquino and Wittek, 2007). Consequently, when service
failures occur in high reputed brands, customers experience greater uncertainty motivating them to cope by seeking salient
information to reduce anxiety and distress. Thus, brand reputation might impede the evaluation of service failure and its
694
effect on customer outcomes. Thus, when customers experience high severe failures in high reputed brands, they evaluate the
negative experience as novel resulting in greater disconfirmation and lower satisfaction. For less severe failures, we propose
that customers might ignore the negative information as they expect occasional mild failures to occur (Hess, 2008). This
results in greater satisfaction for less severe failures in high reputed brands than less reputed brands.
Proposition 4: Brand reputation moderates the relationship between failure severity and coping strategies
Proposition 5: Brand reputation moderates the relationship between failure severity and customer satisfaction and behavioural
intentions.
The present study shows that customers use a repertoire of coping strategies in managing service failure. Understanding what
coping strategies customers use would assist service managers in adapting the recovery strategies that match the customer
coping process. Also, understanding the role of brand reputation is important given its influence on evaluation of service
failure and recovery. Our proposition indicates that brand reputation has an important role to determine customer satisfaction
for varied degree of failures. The prediction that brand reputation could shield or buffers the negative outcomes of service
failure suggest that customer would like to give another chance to the highly reputed brands. However, considering that
customers would employ different types of coping strategies to deal with the failure, service managers should devise recovery
strategies that would help the customers cope better. `
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responses. Marketing Letters, 18(1), 85-99.
Brady, M. K., Cronin, J. J., Fox, G. L., & Roehm, M. L. (2008). Strategies to offset performance failures: The role of brand
equity. Journal of Retailing, 84(2), 151-164.
Brodie, R. J., Whittome, J. R. M., & Brush, G. J. (2009). Investigating the service brand: A customer value perspective.
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Carver, C. S., & Connor-Smith, J. (2010). Personality and coping. Annual Review of Psychology, 61, 679-704.
Coombs, W. T., & Holladay, S. J. (2006). Unpacking the halo effect: Reputation and crisis management. Journal of
Communication Management, 10(2), 123-137.
Dawar, N., & Pillutla, M. M. (2000). Impact of product-harm crises on brand equity: The moderating role of consumer
expectations. Journal of Marketing Research, 37(2), 215-226.
Duhachek, A. (2005). Coping: A multidimensional, hierarchical framework of responses to stressful consumption episodes.
Duhachek, A., & Kelting, K. (2009). Coping repertoire: Integrating a new conceptualization of coping with transactional
theory. Journal of Consumer Psychology, 19(3), 473-485.
Endler, N. S., & Parker, J. D. (1990). Multidimensional assessment of coping: A critical evaluation. Journal of Personality
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Erdem, T., & Swait, J. (1998). Brand equity as a signaling phenomenon. Journal of Consumer Psychology, 7(2), 131-157.
Gabbott, M., Tsarenko, Y., & Mok, W. H. (2011). Emotional intelligence as a moderator of coping strategies and service
outcomes in circumstances of service failure. Journal of Service Research, 14(2), 234-248.
Greyser, S. A. (2009). Corporate brand reputation and brand crisis management. Management Decision, 47(4), 590-602.
Hess Jr, R. L. (2008). The impact of firm reputation and failure severity on customers' responses to service failures. Journal
of Services Marketing, 22(5), 385-398.
695
Lazarus, R. S., & Folkman, S. (1984). Stress, appraisal, and coping. New York: Springer Publishing Company.
Mattila, A. S. (2004). The impact of service failures on customer loyalty: The moderating role of affective commitment.
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McCrae, R. R. (1984). Situational determinants of coping responses: Loss, threat, and challenge. Journal of Personality and
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Oakland, S., & Ostell, A. (1996). Measuring coping: A review and critique. Human Relations, 49(2), 133-155.
Oliver, R. L., & Burke, R. R. (1999). Expectation processes in satisfaction formation. Journal of Service Research, 1(3), 196214.
Roggeveen, A. L., Bharadwaj, N., & Hoyer, W. D. (2007). How call center location impacts expectations of service from
reputable versus lesser known firms. Journal of Retailing, 83(4), 403-410.
Selnes, F. (1998). Antecedents and consequences of trust and satisfaction in buyer-seller relationships. European Journal of
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Smith, A. K., Bolton, R. N., & Wagner, J. (1999). A model of customer satisfaction with service encounters involving failure
and recovery. Journal of Marketing Research, 36(3), 356-372.
Thau, S., Aquino, K., & Wittek, R. (2007). An extension of uncertainty management theory to the self: The relationship
between justice, social comparison orientation, and antisocial work behaviors. Journal of Applied Psychology, 92(1), 250258.
Van den Bos, K., & Lind, E. A. (2002). Uncertainty management by means of fairness judgments. Advances in Experimental
Social Psychology, 34, 1-60.
Yi, S., & Baumgartner, H. (2004). Coping with negative emotions in purchase-related situations. Journal of Consumer
Psychology, 14(3), 303-317.
696
HOW SERVICE BUNDLING MODERATES THE FORMATION OF ATTITUDES TOWARDS SERVICE

PROVIDERS?
Chatura Ranaweera, Wilfrid Laurier University, Canada
Ville Fredrikson, University of Jyvskyl, Finland
ABSTRACT
The authors investigate the role of service bundling in the formation of consumer attitudes toward service providers. Drawing
upon theory on service bundling and customers perceived risk and value, the authors develop and test the moderating effect
of service bundling on attitude and its antecedents based on a sample of 1152 telecommunication subscribers of a Northern
European mobile carrier. The research reveals among other things that service bundling moderates the links between perceived
risk and price value as well as between functional value and attitude. Specifically, we find that 1) the effect of risk perceptions
on price value is less for those who subscribe to bundles, and that 2) the effect of perceived functional value on attitude towards
a service provider is also less for those subscribing to a bundle, vis--vis those who do not.
697
ENHANCING SALES FORCE PERFORMANCE

THE IMPACT OF LEARNING AND LEADERSHIP
ABSTRACT
The present paper provides the theoretical foundation of an exploratory study currently undertaken in France. Sales managers
and salespeople from different industries are going to participate in dyads providing fruitful feedback concerning the relevant
constructs discussed above. The focus of this study will be to demonstrate the impact of various antecedents on sale force
performance. The importance of learning orientation is a central key issue influencing the formation of salespersons goal
orientation and the quality of sales manager-salespeople relationships. The mediating role of the absorptive capacity construct
is of particular interest as it seems to influence both learning orientation and sales force performance. We expect that research
findings will support the mentioned hypothesis in a way that useful conclusions can be extracted concerning the mechanisms
that affect trust building and goal commitment and the impact these important variables have on sales force performance. The
present framework will be pre-tested by a number of interviews with both members of the dyad.
698
MANAGERIAL POWER-BASE EFFECTS ON SALES PERSON INTRINSIC MOTIVATION AND

PERFORMANCE: A CONSERVATION OF RESOURCES VIEW
Michael L. Mallin, University of Toledo, USA
ABSTRACT
Our research used conservation of resources (COR) as a theoretical lens to explore the relationships between managerial bases
of power (reward, coercive, legitimate, referent, and expert) as objects and energy resources, sales person intrinsic motivation
as a personal characteristic resource, and sales performance as a conditions resource. Conservation of resources (COR) as an
underlying framework (Hobfall 1989) is a useful application here in that it is a general motivation theory that has applications
to exchange based relationships found in the organizational setting.
Seven hypotheses were developed and tested using a sample of 150 sales people. SmartPLS was used to test and analyze the
results. The results supported a mediating role of intrinsic motivation on the relationship between various bases of sales manager
power and sales person performance. More specifically, intrinsic motivation positively mediated the relationship between
managerial power (reward, referent, expert) and sales person (outcome and behavior) performance.
Relative to the theory of conservation of resources (COR) these results support the notion that salespeople seek to acquire
valued conditions (e.g., the rewards they achieve by achieving high levels of performance) resources by drawing upon
objects (e.g., a managers expertise) and energies (e.g., financial incentive) resources that may be gained by preferred
forms of sales managerial power. While doing this, they seek to protect certain personal characteristic resources (e.g.,
motivational states) in that they view these as important means to help them achieve their goals. For managerial power to
influence the sales persons attainment of performance goals, the sales person should be driven to put forth effort because of
his/her intrinsic drive to succeed. Thus intrinsic motivation as a personal characteristic resource becomes an important driver
of the managerial power sales person performance relationship.
699
LEADING SALES IN THE 21st CENTURY: THE AMBIDEXTROUS SALES ORGANIZATION

Lynette J. Ryals, School of Management, Cranfield University, UK
Daniel M. Ladik, Stillman School of Business, Seton Hall University USA
ABSTRACT
Over the last decades, the changing role of the sales function has attracted a rich debate within academic and practitioner
communities. In this paper, we aim to contribute to the ongoing dialogue about how sales organizations are changing and its
implications for sales leaders. Based on a set of sixty six interviews with thought leaders from academia, sales consultancy
and industry across the US, UK and central Europe we argue that globalization, technology, changes in buying behavior and
unprecedented levels of external and internal pressures are forcing sales organizations to revisit sales strategies, structures
and practices in a fundamental way. We claim that selling has been polarized between transactional and strategic, having
profound effects into the role and profile of the future sales professional. The ambidextrous sales organization is presented as
an approach to reconcile and orchestrate disparate but needed sales strategies, together with a discussion of the challenge a
sales leader has in managing such organization.
700
WHO DRIVES SALES AND SERVICE PERSONS JOB PERFORMANCE-A LEADER OR A ROLE MODEL?
Gen Fukutomi, Kyoto Sangyo University, Japan
ABSTRACT
When an organization avoids employee turnover, it benefits by reducing training costs and enriching its employees knowledge
of the organization and its brand. Therefore, it is crucial to foster employee satisfaction and loyalty (Heskett et al. 2008).
Rutherford and his colleagues (2011) created a model focusing on the employees organizational commitment, which is affected
by organizational support and employee satisfaction. Commitment increases the level of job performance and decreases
salespersons propensity to leave. But our previous research (2012) indicates that mere satisfaction does not bring with it
desirable salesperson behavior and attitude. Employees who do not have to work hard may be satisfied with their jobs. There
should be some types of satisfaction that lead to particular consequences. Organizational support can also be defined at various
layers (Boles et al. 2012) and salespersons individual attributes must not be ignored.
Our challenge is to integrate various organizational and individual factors affecting two types of satisfaction. Satisfaction with
motivators and hygiene factors discourage turnover, whereas only the former improves sales and service persons job
performance. Responding to a call by Krafft et al. (2012) we employ informal and interpersonal mechanisms of sales force
control together with formal and organizational mechanisms in our model. For our study, responses from 562 frontline sales
and service people in Japan were collected through an internet questionnaire from November 20 to 22, 2012. We direct our
attention to transformational leadership and reference groups as the determinants of satisfaction. According to our examination,
a transformational leader fails to motivate sales and service people, while role models increase both types of satisfaction.
701
THE IMPACT OF CONSUMER INNOVATIVENESS, PRESTIGE PRICE SENSITIVITY AND NEED FOR
EMOTION ON IMPULSE BUYING AND SATISFACTION
INTRODUCTION
Impulse buying (IB) refers to unplanned purchases without much reflection (Bellenger et al. 1978; Youn and Faber 2000;
Beatty and Ferrell, 1998) and it is defined by Rock (1987: 191) as a state of sudden, often powerful and persistent urge to
buying something immediately. Commonly conceptualized and measured in the literature as a tendency to buy things on
impulse (Rook and Fisher 1995; Peck and Childers 2006), IB is inconsistent with rational choice models (Silvera, et al. 2008:
23) and has been linked to affect and emotion, specifically excitement, pleasure and an urge to buy (Rook 1987). Silvera et al.
(2008) argue that there is relatively little research on IB from a psychological perspective and hence a lack of understanding of
the psychological constructs underpinning this behavioral tendency. Earlier research failed to provide personality-grounded
explanations of IB (e.g. d Antoni and Shenson, 1973; Cobb and Hoyer 1986; Youn and Faber 2000) suggesting that this stream
of research may have focused on relationships between IB and irrelevant personality traits (Youn and Faber 2000). Later
research has, however, linked IB to a number of personality traits, specifically, lack of control, stress reaction, absorption (Youn
and Faber 2000) as well as the Big 5 (Verplanken and Herabadi 2001). Additionally, Silvera et al.s (2008) research attempts
to validate Verplanken et al.s (2005) contribution on the psychological states underlying IB, highlighting the relationship
between IB and subjective wellbeing, affect, self-esteem and social influence. Lately, research has examined IB in relation to
variety seeking tendencies, optimal stimulation level and price consciousness/sensitivity (Sharma et al. 2010; Liang 2012), and
to other factors, such as product involvement and product knowledge, (Sharma et al. 2010), store promotions and environmental
cues (Kacen et al. 2012; Peck and Childers 2006). IB has also been linked to satisfaction in the sense that consumers do not
necessarily view IB as normatively wrong; but use IB as a means of satisfying certain needs, in addition to the need for the
product (e.g. Hausman 2000) such as hedonic desires, novelty, variety, social interaction and self-esteem needs (Piron 1991;
Rook 1987; Hausman 2000). This study seeks to extend the current understanding of the underpinnings of IB and satisfaction
by focusing on specific personality traits that seem more relevant for marketers, including consumer innovativeness, prestige
price sensitivity and need for emotion.
BACKGROUND AND THEORETICAL MODEL
Consumer innovativeness (CI) is a personality trait involving individual differences in response to new products (Goldsmith
and Hofacker 1991; Midgley and Dowling 1978), and defined as a tendency or disposition to buy new products faster than
other consumers (Midgley and Dowling 1978). CI is linked to cognition and sensation seeking (Venkatraman and Price 1990)
suggesting that cognitive innovators prefer a greater amount of information and are price-sensitive, while sensory (or emotional)
innovators are more interested in pleasure and novelty (Park et al. 2010). Roehrich (2004) suggests that a number of underlying
needs explain consumer innate innovativeness such as the need for stimulation, variety seeking tendency (Raju 1980), novelty
seeking and creativity (Hirschman 1980) as well as the need for uniqueness (Gatignon and Robertson 1985), indicating that CI
and IB have a common underlying theoretical platform, and suggesting that the two concept maybe related.
Further, previous work suggests that emotional states (e.g. need for emotion), with a varied degree between individuals, may
have behavioral consequences such as IB (Cohen and Andrade 2004; Weinberg and Gottwald 1982) and consumers seem to be
aware of this motivational effect (Rook and Gardner 1993). Need for emotion (NFE) is an enduring trait (Lee et al 2009; Roehm
Jr. and Roehm 2005), that refers to the tendency or disposition to see affective stimuli and enjoy emotionally-laden situations
(Raman et al 1995), irrespective of the strength of the experiential emotion per se. NFE is relevant to the sensory element of
CI (Venkatraman and Price, 1990; Park et al. 2010) suggesting that innovative individuals are disposed to experience emotions
in their interactions with marketing stimuli including new stimuli (Raman et al 1995). Similarly, NFE could be related to IB
since, in line with literature, IB is linked to affect and emotions such as pleasure and excitement (Rook 1987). It is therefore
suggested that NFE may underpin IB, and that consumers act on impulse in their purchases in order to also satisfy their NFE.
Another construct relevant to IB is prestige price sensitivity (PPS), which refers to consumers belief that the purchase of the
most expensive brand is a positive experience (Lichtenstein et al. 1993) that impresses others (Lichtenstein et al 1993;
Netemeyer et al 1995). Lichtenstein et al. (1993) view PPS as a favorable perception of the price cue based on feelings of
prominence and status that higher prices signal to other people about the purchaser (p. 236). Previous, yet limited, research
has linked IB to sensitivity to price (e.g. Liang 2012), without discriminating between price cues (e.g. prestige, value etc.),
702
suggesting that price sensitivity impacts the relationship between product involvement and IB. Price sensitivity is also linked
to CI, with Goldsmith and Newell (1997) suggesting that innovative consumers are price insensitive; while Park et al. (2010)
argue that cognitive innovative consumers are price conscious as opposed to sensory innovative consumers. This study focuses
on the prestige element of price (see Lichtenstein et al. 1993) and argues that PPS impacts IB. On this basis, consumers act
on impulse in their purchases to satisfy their need to impress others.
Based on the extant literature, a model has been developed (figure 1) showing the relationships among NFE, PPS and CI with
IB and satisfaction.
METHOD
A questionnaire was used to collect data from a sample of 304 respondents in a metropolitan city in the UK. Respondents were
asked to complete a set of questions measuring the models constructs. In doing so, respondents were instructed to choose a
product of interest for which IB is likely to occur. The products selected by the participants ranged from electronic items (e.g.
games machines/consoles, mobile phones, mp3 and music players, computers, and digital cameras) to non-entertainment
household products, sporting goods, clothing, accessories, food and newspapers. Existing measures were used to capture
product category specific CI (Goldsmith and Hofacker 1991) and product category specific IB (Donthu and Gilliland 1996).
PPS was measured by a nine-item scale from Lichtenstein et al. (1993), while a twelve-item scale from Raman et al. (1995)
was used to measure NFE. Finally, satisfaction was measured using a four-item scale developed by Spreng, et al. (1996).
RESULTS
We used AMOS 19 to run CFA to assess the reliability and validity of the scales. The overall fit of the CFA is good: 2(395) =
807.1; rmsea = .059; TLI = .92; CFI = .92 (Hu and Bentler 1999). All constructs have both alpha and construct reliability (CR)
values above .7, and most are with AVE .5 or above, with the lowest AVE very close to .5. Also, all items loading are
significant (p< .001) and substantive (standardized loading .5 or above, Hair et al 2010: 709) demonstrating the convergent
validity of the measures. All AVEs are greater than the squared correlation coefficients between corresponding constructs,
providing good evidence of discriminant validity of the measurements (Hair et al 2010). The SEM analysis produced good fit
results: 2(400) = 872.0; rmsea = .062; TLI = .91; CFI = .91 (Hu and Bentler 1999). The results give support for 4 of the 9
hypotheses (table 1). NFE only influences CI (H3: =.14, p<.05), and does no predict PPS (H1) and IB (H3). PPS positively
influences CI (H4: =.32, p<.001), and positively influences IB (H5: =.25, p<.001), but does not predict Satisfaction (H9).
Only CI positively influences satisfaction (H8: =.30, p<.001), while PPS (H6) and IB (H9) do not.
A re-specified model (removing non-significant paths) was run with the insignificant path coefficients removed, shows good
fit: 2(405) = 879.0; rmsea = .062; TLI = .91; CFI = .91. The significant path coefficients are steady for both the original and the
re-specified model. The results show that CI is the only predictor of satisfaction and that the construct is well explained by CI
with a medium effect size. The results also suggest that CI mediates NFE and PPS influence on satisfaction. Mathematically,
the effect of NFE and PPS over satisfaction is .042 and .096 respectively (Satisfaction = .30 Innovativeness = .30 * (.14 NFE
+ .32 PPS) = .042 NFE + .096 PPS). While other constructs in our model (NFE, PPS and CI) explain satisfaction either directly
or indirectly, IB does not, implying that IB does not lead to satisfaction. Further, PPS in is the only construct that explains IB
well with a medium effect size. This finding expands our knowledge of the role of prestige, particularly in activating impulse
buying.
The study reveals the impact of PPS on IB, while NFE and CI do not influence IB. This finding indicates that within the context
of individual consumers product of interest, IB is related to prestige, but not to general affective stimuli, and not to the tendency
to buy new products faster than other consumers. Therefore, when it comes to impulsively buying a product of interest, an
individual tends to be sensitive to the prestige cue of product prices; and is not driven by the need for emotive stimuli nor
innovativeness. This finding subtly implies that while IB is inconsistent with rational choices (Silvera et al. 2008) and therefore
linked to emotion, the individual engaging in impulse buying neither does so out of emotion, nor his/her decision is based on
emotion or affect. Likewise, while IB reflects a rushed act of buying, the individual is not necessarily innovative within a
specific product domain.
703
Further, the study shows that IB does not necessarily lead to satisfaction, a finding that refutes previous research (Hausman
2000). In contrast, findings show that satisfaction is determined by CI, with CI also mediating the impact of PPS on satisfaction
and NFE enhancing CI with low effect. This finding further contributes to our understanding of the direct and indirect influences
of CI, PPS and NFE on satisfaction.
The above findings and implications need to be carefully considered, as the context of the study is concerned with respondents
own product of interest, which signify the likelihood of IB to occur. Future research may apply the research model for a specific
product category, with contrasting specific prestigious and emotive stimuli.
TABLES
Table 1: SEM results
Standardized
Hypothesis
path coefficient
supported?
()a
H1: NFE PPS
.10
No
H2: NFE CI
.14*
Yes
H3: NFE IB
.12
No
H4: PPS CI
.32***
Yes
H5: PPS IB
.25***
Yes
H6: PPS Satisfaction
.07
No
H7: CI IB
.08
No
H8: CI Satisfaction
.30***
Yes
H9: IB Satisfaction
.05
No
*** p< .001; ** p< .01; * p<.05 a Full model b Re-specified model
Hypotheses
Standardized
path coefficient
()b
---------------.13*
---------------.31***
.26***
------------------------------.27***
----------------
FIGURES
Figure 1: A model of personality traits, impulse buying and satisfaction
H5
PPS
H1
H3
NFE
IB
H6
H9
H4
H7
H2
CI
H8
REFERENCES
704
Satisfaction
TIE-IN PROMOTIONS IN THE MOTION PICTURE INDUSTRY: AN EMPIRICAL STUDY

Salma Karray, University of Ontario Institute of Technology, Canada
Kamal Smimou, University of Ontario Institute of Technology, Canada
Bharat L. Sud, University of Guelph, Canada
INTRODUCTION
Motion picture studios spend substantial budgets to promote the release of new movies. While advertising represents a
significant part of the movies' marketing campaign, it is very expensive and studios are using other promotional tools like
product placements, spin-off merchandise, and tie-in promotions to attract moviegoers at lower costs (Lubbers and Adams
2001). Increasingly, Hollywood marketers are using more tie-in promotions in order to make better use of their stretched
budgets. Tie-ins are cross promotions by which the parties agree to share their promotional costs for specific campaigns. The
studios' partnering firms are from different industries like fast food restaurants, retailing and online services.
Tie-in promotions can benefit the participating firms in various ways. They help create buzz and attract viewers' attention
amid advertising clutter and intense competition among movies (Marich 2010). They are attractive marketing tools because
they allow studios to promote the movie, and reach wider audiences without paying the full cost of heavy promotional
campaigns (Varadarajan 1986). Wiles and Danielova (2009) showed that product placements in successful movies can
enhance the returns of the sponsoring firms.
Since a tie-in is an alliance between a movie the brand promoted by the motion picture company, and the brand(s) of the
partnering firms, we use the brand alliance literature as a theoretical framework to understand the effects and characteristics
of this marketing tool. The related literature in marketing has mostly focused on the benefits gained by a focal, usually
unknown brand through its alliance with an established partner. The key findings from this literature indicate that such
alliances can benefit the focal brand in terms of improved consumer attitudes (Gammoh et al. 2006, Simonin and Ruth 1998),
and higher likelihood of success (Rao and Ruekert 1994).
Brand alliances impact the participating brands mainly through spillover effects. For the focal brand, such alliances help
signal the products quality to consumers and can reduce the risk associated with the purchase by acting as a bond for the
quality of the product (Rao and Ruekert 1994, Rao et al. 1999, Shocker et al. 1994, Agrawal and Rao 1996).
Further, joint marketing activities have been found to be more effective than sole brand campaigns (Simonin and Ruth 1998,
Varadarajan 1986). Considering that jointly promoted brands make more efficient use of their promotional dollars, they can
better attract consumer attention and may be able to transfer attitudes more effectively to the jointly promoted brands (Son et
al. 2006). Therefore, tie-in promotions are likely to benefit the promoted movie by transferring positive attitudes and beliefs
from the partnering brands. They can also increase awareness for the movie, and enhance its perceived quality.
Tie-in promotions with familiar and popular brands should have a positive impact on the movie's revenues. This is because
well-known, and positively perceived brands generally benefit from high brand familiarity (Keller 1993), and an alliance with
such highly regarded brands might generate positive associations for the movie. Hence, the brand familiarity of the movie's
partnering firms in the tie-in is expected to positively influence box office sales.
Further, research in the brand alliance field has looked at the effects of such alliances for brands with asymmetric familiarity.
For example, an alliance between an established brand and a relatively unknown ally benefits mostly the weaker brand and
much less so the established one (Gammoh et al. 2006, Rao and Ruekert 1994, Simonin and Ruth 1998). This is because
consumers attitudes and beliefs are usually more stable for familiar brands with higher familiarity levels (Alba and
Hutchinson 1987). For our context, this suggests that tie-in promotions are more likely to benefit movies that are completely
unknown to viewers than movies with existing brand familiarity prior to their release. The latter case is most apparent when
the movie is part of a sequel series (Hennig-Thurau et al. 2006). Hence, we hypothesize that non-sequel movies do not benefit
from familiarity, and are more likely to benefit from a tie-in promotion than sequel movies.
The brand alliance literature also points to the importance of brand fit in influencing consumers' responses to the alliance. A
poor fit may encourage undesirable or negative associations and beliefs towards the allying brands (Aaker and Keller 1990,
Simonin and Ruth 1998, Samu et al. 1999). Conversely, a strong fit can improve consumer awareness, beliefs and attitudes
towards the partnering brands (Simonin and Ruth 1999, Samu et al. 1999). The fit between the movie and the partnering
705
brand in the tie-in is mainly the similarity of the jointly promoted brands in terms of the product usage occasion and target
segments. Since the movie's plot is regarded as the most important determinant of viewers attendance decision (Eliashberg et
al. 2000), similarities between the plot (main characters, settings, storyline, etc.), and the product category of the partnering
brand promoted in the tie-in can reinforce positive attitude transfer from the partnering brand. This, in turn, creates positive
brand associations for the movie. Therefore, a strong fit can enhance the impact of the tie-in promotion by effectively
reaching the target audience, building awareness for the movie and ultimately inciting viewers' visits to theatres. For brand
alliances, Simonin and Ruth (1998) found that for unknown brands, consumers did not develop an extended network of brand
associations, and thereby have difficulty forming judgments about the fit of the allying brands. The results of their
experimental studies showed that brand fit has a stronger impact on the brand attitude towards the brand and the alliance in
conditions of high brand familiarity. This means that for movies that are unknown to the audiences, the fit with the allying
brands will play a less important role in generating movie revenues than for movies that are known to the audiences and for
which a fit judgment can be easily done by viewers.
Finally, research in the motion picture industry suggests that drivers of a movies success differ in the periods preceding and
following its release (Elberse and Eliashberg 2003). Before the films release, moviegoers rely on limited external
information available to them to form expectations about the movie's quality such as genre and MPAA ratings, and
promotions and advertising for the movie are important information sources to infer the movies quality. However, in the
post-release period, viewers' word-of-mouth is the main influencer for moviegoers (Yong 2006). This suggests that tie-in
promotions that are launched before the release of the movie will be more effective than tie-ins implemented after the movie
release.
METHODOLOGY
We collected secondary data about U.S. total box office revenues and opening weekend revenues using the-numbers.com and
IMDB.com for a two year period. We obtained information about tie-in announcements for each movie number of tie-ins
for each movie, the names of the partnering firms, the tie-in timing, fit, duration of the tie-in, and whether the tie-in was
launched before or after the movie release from the comprehensive Promotion Tracking Database of a marketing research
firm. We used sales in US dollars in the year preceding the release of the movie to estimate the brand familiarity of each
partnering firm. We also collected data about the movie characteristics to control for differences across factors that can
influence the movie's success at the box office (genre, rating, star power, advertising budget, etc.). We used a cross sectional
analysis to test our research hypotheses. We performed four regressions using the full sample (193 movies) and the sample of
movies promoted with tie-in promotions (69 movies), considering two dependent variables; the total box office and opening
week-end sales.
We also find a strong correlation between the dependent variables and the number of screens (over 0.86), in line with
previous research (Elberse and Eliashberg 2003). To rule out endogeneity effects of the screens variable, we run a Hausman
specification test to ensure proper model specification (Hausman 1978). The results indicate that OLS estimators are
consistent, unbiased, and more efficient than an alternative hierarchical specification (5% critical value = 11.07). We get the
same result using various instrumental variables to rule out against weak instruments. We use a log-linear transformation of
the variables in dollars to control for scale effects, and conveniently obtain estimated coefficients that represent elasticities of
the dependent variables to changes in the independent variables.
We run the following models for each of our dependent variables; BOgi representing the gross sales for movie i. The
superscript g takes two values; T and OW. T represents the total box office sales and OW the opening week-end gross for the
movie, respectively.
Model 1 (full sample):
BOgi = g + g (Bgi) + g (Number of Tie-insig) + egi.
Model 2 (tie-in sample):
BOgi = g + g (Bgi) + g (Number of Tie-insgi) + g (Tgi) + g1 (Sequelgi Fitgi) + g2 (Brand Familiaritygi Sequelgi) + egi.
g, g and (g1, g2) represent the vector of coefficients for the movie variables (Bgi), the tie-in variables (Tgi), and the
interaction terms, respectively. g is the coefficient of the number of tie-ins. The regression error term is egi.
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We performed robust regressions with the commonly used heteroskedasticity-robust standard errors approach in MacKinnon
and White (1985). In model 2, we dealt with the problem of collinearity of main and interaction effects by applying the
Principal Component Analysis method (PCA), which is used to predict regression models with highly correlated variables
(Judge et al. 1988).
We find that movies promoted with tie-ins benefit on average from larger production budgets (72 versus 54 million),
advertising spending (31 versus 21 million), number of screens (17,336 versus 11,811), and star power scores (17.43 versus
9.74). Also, the average total gross box revenues for movies without tie-ins (50.4 million) is lower than for movies with tieins (99 million). These differences have been found significant with t-tests performed on the sample means with and without
tie-ins (p < .01). Finally, within the promoted movies, the majority are associated with tie-ins launched before the release of
the movie (84%). This shows that movies promoted with tie-ins get better marketing support, and are likely to perform better
at the box office.
We find high determination coefficients for all regressions in line with previous research (R2 adjusted higher than 80% in all
models), suggesting high explanatory power of our models. The results of our cross sectional model indicate that tie-in
promotions significantly increase box office sales both at the opening week-end and for the movie's entire run in theatres. We
also find that tie-ins launched before the release of the movie have a significant effect on revenues while those launched after
the movie do not influence box office sales. Our results indicate that the tie-in characteristics also impact sales. Namely, the
fit of the tie-in with the movie's plot is positively related to the movie's revenues, and the brand familiarity of the partnering
firms influences box office sales for sequel and non-sequel movies in very different ways.
Our research has many implications for brand alliance researchers and for managers in the motion picture industry. First, our
results indicate that movie tie-ins lead to higher box office revenues. In particular, it helps attract moviegoers during the first
few days of the movie run; when only a few external cues are available to infer its quality. Second, in line with the brand
alliance literature, we find that high levels of fit, i.e., similarity and relatedness of the promoted brands with the movie plot
lead to increased sales for the movie, especially during its first days in theatres. Third, we find that sequel movies benefit
more than non-sequels from allying with well-known partners in a tie-in promotion. This suggests that asymmetric brand
familiarity of the movie and the partnering firms, i.e. when the movie is not familiar and the firm is very familiar to
consumers, does not benefit the overall performance of the movie.
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the Special Issue." Journal of Marketing Research 31(2): 149158.
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(3): 7489.
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NEGATIVE AFFECT INTIMACY: THE ROLE OF NEGATIVE AFFECT TAGS IN THE FINE ART MARKET
Darren Dahl, University of British Columbia, Canada
Juliet Zhu, University of British Columbia, Canada
ABSTRACT
Much of behavioral research has focused on an individuals desire to avoid negativity, and yet there exists a paradox whereby
individuals seem to seek out art laden with negative affect tags (such as the documented depression of an artist, or the sadness
of the subject matter). Consumers even seem to appraise artwork with negative tags as more valuable. This paradox is examined
in two experiments. A theory is proposed that negative affect tags (versus positive) can increase consumer evaluation of fine
art and that this relationship can be mediated by the intimacy the consumer feels with the creator of the painting. Two
experiments were conducted to examine these phenomena.
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THE EFFECTS OF SOURCE CREDIBILITY AND SALIENCE ON SALES PERFORMANCE:

A STUDY OF CORPORATE ART COLLECTORS
Monika Kackovic , University of Amsterdam
Joris J. Ebbers, University of Amsterdam
Nachoem M. Wijnberg, University of Amsterdam
INTRODUCTION
Signaling theory (Spence, 1973) focuses on using signals as proxies of quality and helps explain how signals reduce
uncertainties in pre-purchase decision-making. Signals convey information about a product or producers unobservable or
indiscernible quality (Kirmani and Rao, 2000), and are important in all markets but particularly those with informational gaps
(Akerlof, 1970), where for example, product quality is difficult to determine prior to consumption (Nelson, 1970) or perhaps
even after consumption (Darby and Karni, 1973).
Signals can originate from different types of sources. An important distinction is between 1st party sources, which are the
producers themselves, and independent 3rd party sources. Signals originating from 3rd parties e.g. winning an award or
being reviewed by a critic - can function to inform potential customers of product quality by ranking, reviewing, and rating
products (Dean and Biswas, 2001). Signals originating from 1st parties e.g. advertisements or warranties - also provide
information, but may be biased because the 1st party sending the signal has an evident self-interest in how the signal affects
customer behavior. This can in turn decrease the informative value of the signal if there is the perception from the customer
that the signal is not transmitting unbiased and accurate information (Kelley, 1967; Eagly and Chaiken, 1975; Mizerski,
Golden and Kernan, 1979). In this study, we focus on signals originating from 3rd party sources.
Signals seem to be especially important to new producers, precisely because they are new and there is little information
available about them. Additionally, the lack of established reputations and external networks leads these new competitors to
be less likely to be recognized as legitimate producers (Freeman, Carroll and Hannan 1983). As a result, customers and other
external stakeholders will be wary to be associated with them, and this can lead to their failure (Aldrich and Fiol, 1994). This
competitive disadvantage is the main cause of the liability of newness (Stinchcombe 1965). Conversely, this would imply that
older producers would have less need for signals and that the economic effect of signals would therefore be less strong if they
were about older and established producers.
Various studies have shown that signals originating from sources deemed credible by the customer - in terms of their
expertise or trustworthiness - have a greater positive effect on sales than signals originating from less credible sources
(Hovland and Weiss 1951; Bearden and Shimp, 1982). Besides credibility, research has also focused on the salience of the
source (Alba and Chattopadhyay 1986; Ehrenberg, Barnard and Scriven 1997; Romaniuk and Sharp 2004). Salience is the
propensity to be noticed or to stand out (Guido 1998). Earlier studies have shown that high noticeability will increase
sales of products compared to those of less visible products (Chandon and Wansink 2002). Salience is however, often
subsumed into source credibility or product awareness, and not studied as an independent dimension of signal strength
(Romaniuk and Sharp, 2004).
In our paper, we distinguish between the credibility and salience dimensions of the 3rd party source emitting the signal. We do
not consider the valence of the signal, mainly because the signals we study reviews, awards and gallery affiliation in our
empirical setting of the visual arts are all predominately positive. We do, however, fill a gap in the literature by providing a
deeper understanding of the effects of source credibility and salience as two independent dimensions - on customer
behavior.
Our study has a number of contributions to existing research. First, it provides insights into how and to what extent different
types of 3rd party signals affect a producers economic performance. Second, it adds to the existing body of signaling and
marketing literature by separately considering two distinct dimensions of signal sources credibility and salience and their
influence on sales. Many studies refer to signals in terms of credibility, but by measuring a signals strength based upon
source salience - independently from credibility can provide a greater understanding into the effectiveness and diversity of a
signals influence on sales. A third contribution is that we study the salience and credibility of signal sources in conjunction
with career age. The theoretical concept of the liability of newness (Stinchcombe 1965) suggests that 3rd party signals have
particular importance for newer producers. We establish whether the effects of signal source strength - along both of the
dimensions that are distinguished - are affected by the career age of the producer.
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Our empirical setting is the visual arts market in the Netherlands. We study visual artists who were residents at the Royal
Dutch Art Academy located in Amsterdam from 1990 2004. The artists in our dataset are active on the primary art market,
where they, or the gallery representing them, sell the artworks for the first time directly to customers (Singer and Lynch,
1994). The customers we study are corporate art collectors in the Netherlands. Studying this group of collectors gives
excellent insight into signal effectiveness along each dimension because in general, visual artists have very skewed
distribution of career success, but particularly early in their career there is high uncertainty about the quality of their products
(Caves, 2000; Adler, 1985; Rosen, 1981).
SOURCE CREDIBILITY
The credibility of a signals source is an essential determinant of the effectiveness of the signal (Sternhal, Dholakia and
Leavitt, 1978). Previous research has shown that if source credibility is high then customers are willing to accept the signal,
however, if source credibility is low customers find the signal less valuable. This is because customers do not accept signals
at face value but rather judge a signals accuracy by first judging the sources credibility (Eagly and Chaiken, 1975; Mizerski,
Golden and Kernan, 1979; Kirmani and Rao, 2000). However, if the source is emitting a signal as a result of other factors
(e.g. paid endorsement) then the claim will likely be discounted and signal effectiveness will be lost (Mizerski, Golden and
Kernan, 1979). Thus, we propose:
H1: The higher the source credibility of a 3rd party signal, the stronger the effect will be on sales performance in the period
following the signal.
SALIENCE
Salience is the likelihood of a signal or source to be noticed or to stand out in its environment (Guido, 1998). Romaniuk
and Sharp (2004) propose that salience should be considered a stand-alone concept and not as a subset of source credibility or
product awareness. There is only so much information that individuals can think of at any given time (Miller, 1956) and the
salience of the source can be described as the chance of being thought of or of being in an individuals consideration set
(Ehrenberg et al., 1997; Chandon and Wansik, 2002). Salience is not about how strongly the user feels about the source but
rather how much more noticeable or visible it is than the competition (Ehrenberg et al., 1997). This leads us to propose
following hypothesis:
H2: The higher the source salience of a 3rd party signal, the stronger the effect will be on sales performance in the period
following the signal.
THE ROLE OF AGE
Stinchcombe (1965) introduced the concept of the liability of newness to explain why new producers early in their career
have a greater risk of failure than established producers. The argument advanced is that new producers usually have low
levels of legitimacy, which makes other parties, such as investors or customers, less willing to associate with them (Freeman,
Carroll and Hannan, 1983). Legitimacy, however, can only be conferred to a producer externally (Singh, Tucker and House,
1986), and a good way to get this is for a new producer to be the recipient of signals originating from 3rd party sources. By
gaining evaluative judgments from 3rd parties (e.g., Rao, 1994; Anand and Watson, 2004; Eliashberg and Shugan, 1997) the
competitive disadvantages associated with the liability of newness decrease, while the likelihood of future market success
increase (Rao, 1994; Shepherd et al., 2000). This argument leads us to propose the following hypothesis about the interaction
between source credibility and career age:
H3a: The positive relation between the credibility of the source and sales performance in the period following the signal will
be negatively affected by career age.
Additionally, salient sources can help offset the liability of newness because the more noticeable, the greater the probability
to be in a customers consideration set and thus have a subsequent affirmative corollary effect of a positive evaluation
(Romaniuk and Sharp, 2004). A salient signal can help convey the impression that the producer is established and reputable,
therefore decreasing the liability of newness. Based upon these arguments, the following hypothesis about the interaction
between source salience and career age, we expect:
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H3b: The positive relation between the salience of the source and sales performance in the period following the signal will be
negatively affected by career age.
EMPIRICAL ANALYSIS
Our dataset contains information about 416 visual artists from 1990-2004. We study approximately 5,000 signals (i.e.,
reviews, awards and gallery affiliation) and analyze 450 sales events to corporate art collections in the Netherlands.
Sales event is the dependent variable, measured in terms of price paid in euros. The independent variables are reviews,
awards and gallery affiliations. Each type of signal source is analyzed on both credibility and salience dimensions. An
independent art expert ranked each source on a credibility scale: five being the highest and one being the lowest. Then for
each year only the highest credibility score is recorded for that particular type of signal. Salience of each type of source is
operationalized by counting the total number of a particular type of signal originating from a particular source per artist per
year. For each individual signal we use a five-year window previous to the sale event. Additionally a number of covariate
variables are used, such as career age, past sales to any collectors, past sales to same collector, and art genres.
RESULTS
We used a hierarchical regression analysis. The dependent variable sales event was log transformed; the maximum price paid
was 32,000 and the minimum was 100 with a mean price of 3,669.16. We found partial support for hypothesis 1. There
is a significant and positive relationship between credible reviews ( = .120, p<.05) and sales, and a weaker significant
positive relationship between credible gallery affiliation ( = .098, p<.10) and sales. Contrary to what we expected, there is a
significant but negative relationship between credible awards ( = -.090, p<.10) and sales. The results are mostly in support
of hypothesis 2 stating there is a positive relationship between high salience signals and sales, but only for reviews ( = .150,
p<.01) and gallery affiliation ( = .091, p<.10). There is no significant relationship between salience of awards and sales.
We found limited support for hypothesis 3a, namely a negative interaction between credibility of awards and career age ( = .195, p<.001). We also found partial support for hypothesis 3b. There is a significant and positive interaction between career
age and salience of reviews ( = .149, p<.05). However, in support of our hypothesis we also found a significant and negative
interaction between the salience of awards and career age ( -.274, p<.001).
These results are preliminary in nature as we are still collecting sales data and ranking source credibility and salience of 3rd
party signals. Additionally, we are currently working with a random effects panel data model, which seems to be a more
suitable econometric model for our longitudinal data.
DISCUSSION
As expected the main effects of reviews and gallery affiliation on both the credibility and salience dimensions have a positive
effect on sales to corporate art collections. An unexpected result however, is the negative relationship between source
credibility of awards and sales.
A possible explanation for this result is the presence of another market effect. Perhaps the negative main effect of credible
awards on sales is an indication that artists who receive highly credible awards are no longer bought by corporate art
collections. Since most corporate art collections focus on buying artworks from local, young and not yet commercially
established artists (Wu, 2002), receiving awards from highly credible 3rd party sources can cause them to divert their attention
to other (yet unknown) artists. Corporate collectors ideally like to discover artists themselves (Martorella, 1990; Wu, 2002)
and be perceived as early adopters. If an artist is fully established, little honor and prestige is left to gain. The signal awards
originating from high credibility sources seem to indicate that this class of customers diverts their attention from established
artists. Interestingly enough, the negative relationship between credibility of awards and sales is only expressed in the
credibility dimension model, not in the salience dimension model.
Another unexpected result is related to the interactions between signals and career age. The argument based upon the liability
of newness (Stinchcombe, 1965) suggests that producers with low career age have a greater risk of failure than producers
with high career age. Our study, however, shows a significant and positive interaction effect between salience of reviews and
career age but only with respect to producers with high career age. This contradicts the argument presented by the liability of
newness. One possible explanation can be that a kind of Matthew effect operates in respect to salience. The more exposure an
712
artist has had in the course of their career, the more likely potential customers consider you (Ehrenberg, Barnard and Scriven,
1997; Chandon and Wansink, 2002). Career age will likely increase cumulative exposure, which could make the salient more
salient. Second, there are significant and negative interaction effects between both credibility and salience of awards and
career age. The results from this interaction provide support for our hypothesis about the liability of newness. However,
instead of the liability of newness, this result can rather be considered as evidence of a liability of oldness.
Our study also has a few evident limitations. We only looked at one type of product - visual art and one particular group of
cohorts alumni of an art academy and their sales to one submarket corporate collectors in the Netherlands. Looking
more closely at the different dimensions of other types of signals could help to further explain the particular behavior of
specific groups of other market actors, e.g. museums and private collectors.
However, the main results we found seem relevant to any market and especially any market in which there is high uncertainty
about product quality. Even the finding that we explained by referring to the particular characteristics of corporate collectors
seems readily generalizable. The phenomenon of the liability of oldness may well be present in other contexts in which the
customers gain in prestige by being perceived as early adopters.
REFERENCES
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COPING WITH INFORMATION REQUESTS IN MARKETING EXCHANGES: AN EXAMINATION OF PREPOST AFFECTIVE CONTROL AND THE MEDIATING IMPACT OF BEHAVIOR BASED COPING
Patricia A. Norberg, Quinnipiac University, USA
Daniel R. Horne, Providence College, USA
ABSTRACT
This paper examines information based exchanges that allow consumers to behaviorally cope with requests for personal data.
We show through two experiments that individuals feel different levels of control over personal information, that they rely on
falsification as a means of behaviorally coping with personal information requests, and that felt in-process affect-based control
can change post-process based on their disclosure options. The implications for both marketers and regulators are discussed.
714
MORE MONEY, MORE PROBLEMS:

THE ROLE OF BUDGET FLEXIBILITY IN DEBT REPAYMENT DEFAULT
Russel Nelson, University of California, Irvine, USA
Mary Celsi, California State University, Long Beach, USA
Stephanie Dellande, Menlo College, USA
Mary C. Gilly, University of California, Irvine, USA
ABSTRACT
This research examines how budget flexibilityin the form of disposable income and malleable budget categoriesaffects
debt repayment behavior. Researchers have traditionally assumed that possessing greater financial resources increases
consumers debt repayments. Through a series of three field studies with members of a debt management program (DMP),
we find evidence for a counterintuitive proposition: while borrowers with larger financial resources have a greater repayment
capacity, in practice they are actually less likely to repay their obligations. In study 1, we find qualitative evidence that DMP
members were more likely to give in to financial temptation when they had disposable income or when they could
misappropriate funds from their grocery budgets or emergency savings accounts. In study 2, we show quantitatively that
DMP members with greater disposable incomes were more likely to report missing financial goals. In study 3, we model the
long-term outcomes for DMP members and find that members with larger grocery budgets, larger emergency savings
budgets, and larger disposable incomes were more likely to default on their debt obligations. This research extends the
literature on mental accounting and self-regulation and offers insights into consumer decision making and debt repayment
behaviors for financial counselors and public policymakers.
715
ASSURING ME THAT IT IS AS GOOD AS NEW JUST MAKES ME THINK ABOUT HOW SOMEONE ELSE
USED IT. CONSUMER REACTION TOWARD SECONDHAND GOODS FROM AN INFORMATION
PROCESSING PERSPECTIVE
David Ackerman, California State University, Northridge
Jing Hu, California State Polytechnic University, Pomona
* Authorship is in alphabetical order, authors contributed equally.
INTRODUCTION
This exploratory study seeks to understand why consumers react negatively to used goods from an information-processing
perspective. This research extends prior work on secondhand goods such as Argo, Dahl and Morales (2006) and suggests that
sometimes it matters less what consumers believe about a secondhand product than the degree to which they process
information about it having been used / contaminated by another. This study finds that products used for only a brief time by
another can elicit a negative reaction in consumers regardless of their prior beliefs about the condition of the secondhand
goods. In addition, the results of this study suggest that strategies purported to assure customers about secondhand products
may make things worse in some circumstances. These findings have implications for marketers of secondhand goods.
USED GOODS AND CONTAMINATION
Used goods are associated with negative affect as well, which is a major reason for their lower value in comparison with new
products. Literature has identified perceived contamination that results from another consumer having touched a product
(OReilly et al. 1984). This is a major problem for sale of used goods, but it can also be an issue for display goods as well
(Kotler and Mantrala 1985). Contamination is associated with feelings of disgust for the product (Hejmadi et al. 2004).
Feelings of disgust, defined as revulsion toward an object, are a major outcome of contamination (Rozin and Fallon 1987).
Disgust can arise in many different contexts, especially those involving contact of the object with the self. Regardless, the
contaminated object must be purified before it is accepted, which in many cases may not be possible (Hejmadi et al. 2004).
So, for example, no matter how many times food is washed or sterilized after contact with a cockroach, consumers may still
feel disgust at the thought of eating the food.
There are factors that influence whether a used product will be perceived as contaminated. Previous ownership is one. A
previous owner could transfer affect, either positive or negative, to the object depending on the feelings toward that person.
When the previous owner is unknown, as is the case for most used goods, there can be a general perception of residue
contamination from previous personal contact (Argo et al. 2006). Another factor is how closely the product came into
physical contact with the previous owner. To use an example from clothing, underwear comes into closer physical contact
with a previous owner than an overcoat and so is not as likely to be accepted as a secondhand purchase regardless of how
clean it may be (Roux and Korchia 2006).
Belief about whether used products are as good as new is another. Some consumers may believe that used products can be as
good as new. Others may believe that used products are not very good at all, and there are certainly a wide range of opinions
in between. Consumer reaction will be influenced accordingly. Thus,
H1: Consumer perceptions that a secondhand good is contaminated and feelings of disgust will be significantly related to
beliefs about the degree to which used products are the same as new products.
All of these factors influence the acceptance of used goods and the viability of secondary markets for a particular product. If
consumers feel positive affect transfer toward a particular product that has been bought by a previous owner, they will be
willing to buy it used and may in some cases even be willing to pay more than they would for the new product. The question
is how does the information that consumers process about used goods elicit a positive or negative emotional reaction?
INFORMATION PROCESSING AND CONSUMER REACTION TO CONTAMINATION
The information that consumers process about secondhand goods should influence their reaction to them. Srull and Wyer
(1980) found that increasing the accessibility of a trait category in memory increases the likelihood that it will be used to
716
interpret and judge subsequent information. That means that consumer reaction to particular products depends on information
about which attributes are salient in making judgments about them.
Tybout et al. (1981) applied an information processing approach in testing different approaches to combating rumors. They
found that rumors had an effect on product evaluation even if they were not believed. Direct refutation did not have any
impact on consumer negative reaction to a rumor. It only raised the salience of the rumor in the minds of the subjects. Only
other information, other brand cues and positive cues about the object of the rumor that focused subjects minds elsewhere
seemed to work.
This information processing approach can be applied to secondhand goods. Consumers react to goods that have been touched
by others the way they do because they have received the information that it is so. If a product is repackaged as new without
the consumers knowledge, assuming that it really is in new condition, there would be no effect on perceptions. It is the
processing of information about contamination by another consumer that leads to a negative reaction. This suggests that
consumer reaction to a used product may not necessarily be tied to the beliefs about it. Rather it will be tied to the
information processing about the product.
Feelings of disgust and contamination associated with such objects (Hejmodi and Rozin 2004) may come from thinking about
the object coming into contact with other people.
If this is true, assurances that the used product is like new will not change consumer reactions toward it, since these
feelings come from consumer processing of the information. Consumers may or may not believe these claims, but that is not
the point. The processing of the information about the contamination of the product raises the salience of it, impacting on
consumer perceptions and feelings. So, regardless of how credible the assurance of a product being like new, the assurance
will be ineffective. Thus,
H2: Consumer perceptions of contamination and feelings of disgust for a secondhand good will be the same whether they
hear a believable certification that it is like new or they do not.
In addition,
H3: Consumer value for a secondhand good will be the same whether they hear a believable certification that it is like new or
they do not.
STUDY
A 3 condition (used product, used product + assurance, new product) between-subjects design was used to examine the
effects of information processing on consumer perceptions of used goods and to test the above hypotheses. Data were
collected from students currently enrolled in two sections of an intermediate marketing course at a public university in the
Southwest United States. They were offered extra credit to complete an online survey regarding a pair of pants in a store in
the mall. Students were instructed that the authors were conducting research on fashion design. Altogether, 83 student
subjects participated and were randomly assigned to one of three conditions used product, used product + certified clean,
and new product.
Student subjects in the used condition were shown a description of a pair of pants in a store in a mall. They read Imagine
that you are entering a nearby secondhand store and see a pair of your favorite brand of pants (retail price new $60), worn
briefly by another person, that fit you just right. Subjects in the used + certified clean condition read exactly the same
wording except a sentence was added that stated They have been tested and certified by the American Garment Association
as completely cleaned and sterilized, just like brand new. Subjects in the new condition read simply Imagine that you are
entering a nearby store in the mall and see a brand new pair of your favorite brand of pants (retail price new $60) that fit you
just right. All student subjects were then asked to complete a survey about their perceptions of the pair of pants.
Measures include items measuring overall desire for the pants, perceived value, contamination, as well as the degree to which
the pants were perceived a part of the respondent or others. There was an open-ended measure asking respondents to provide
three adjectives best describing the pants. After that, a set of emotion / adjective scale items were used to measure subjects
feelings about the pants. A second open-ended measure then asked respondents how much they thought the pants were worth,
that is, the value. At the end of the survey, another open-ended question asked respondents the likelihood of whether they
would buy the pants.
717

The results of this study shed light on the negative reactions by consumers toward secondhand goods. Hypotheses 1 and 2
were supported and there was partial support for hypothesis 3. Results find that information processing is a major factor
impacting consumer perceptions of used goods. Almost every measure suggested that respondents viewed the pants less
favorably when there was a certification that the used pants were cleaned and just like new than when the pants were just
used without any cleaning. The pants were perceived to be less desirable and comfortable. These attitudes toward the pants
impacted emotions that were also more negative: the pants were considered to be more disgusting, revolting and less
pleasant. Lastly, the perceived value and change to buy were considerably less when the pants were certified to be clean than
when they were used without any cleaning or certification. In fact, the difference in the perceived value and chance to buy
between the used condition and the used + certified clean condition is so big that it is pretty much the same as the difference
between the used and new condition.
Reassuring consumers of secondhand products that the products are as good as new, clean, refurbished, etc. is not only
not useful but may be counterproductive. These findings suggest that whenever consumers process information that reminds
them about contamination of the product by another person, they have a negative reaction. This reaction occurs despite the
the positive reassurances of the information regarding the products.
Equally interesting is what did not differ between the used product conditions. The perceived contamination level of the pants
was not significantly different between the used and used + certified clean conditions despite the fact that consumers
valuation and chance to buy was much different. Perhaps beliefs about the pants were not impacted by information
processing to the degree that disgust-related emotions, attitude and evaluation of the pants were impacted.
The only negative emotions that differed between the two used conditions were related to disgust. The more consumers
processed information that reminded them that the pants were used the more disgusted and revolted they were, but they felt
no more angry, frustrated or sad. More information processing reminding consumers about contamination, from reassurances
that the product is not contaminated, does not necessarily convince them that a product is contaminated but it does elicit
contamination-related emotions.
These results confirm earlier research finding that products used by others, even if only for a short time, are perceived as
considerably worse than those that are new. They are less desirable, perceived as less valuable, and elicit more negative
emotional responses in consumers. This is consistent with prior research that shows products touched by others are
contaminated (Argo, Dahl and Morales 2006).
The ability to physically see, touch and perhaps smell products in browsing or shopping can be important for consumers, but
there are drawbacks. On the one hand, such goods as food and clothing are products where touch, smell and trial can be
important for consumer decision making. On the other hand, contamination of these products by other people in a store
lowers their value for consumers who are likely to have a negative emotional reaction toward them.
The negative emotional reactions by consumers in the study depended on their beliefs about whether pants worn briefly by
another person are the same as new. The more strongly they believed this, the weaker their emotional reaction. This result
may very well account for differences in consumer value for secondhand goods across different product categories.
Secondhand clothing that is worn close to the body may elicit a stronger negative reaction than that which is worn farther
away such as a coat or jacket.
Involvement in processing the information may be another factor that influences a consumers reaction to information about
secondhand products. A post-test with a sample size (n=140) found that consumers who pay more attention to the information
about the pants being certified clean react more negatively than those who pay attention less. This suggests that the more
involved consumers are in processing information about a secondhand good, perhaps for larger or more expensive goods, the
more counterproductive is information that assures them that these goods are in good condition.
Areas of future research should look at positive associations that can be connected with used products. Associating a
secondhand good with something positive could lead to a positive reaction in consumers. The consumer still knows that a
good is used, but instead of processing a perception of contamination, with reactions of disgust, they may process the product
with the good association. This may affect perceived value of the product as well, leading it to be more highly valued than if
it otherwise would be. For example, when a used good becomes a collectors item or a classic or vintage, its
secondhand status changes to a positive rather than a negative attribute. The consumer knows that the product has been used
718
by another, or perhaps many others, but this has become part of the positive association connected to the product, which can
make it even more valued than an equivalent new product.
REFERENCES
719
TRANSFER AND CLASSIFICATION OF KNOWLEDGE STRUCTURES OF DIGITAL CONSUMERS

Kristen Schiele, Woodbury University
Mine ok Hughes, Woodbury University
ABSTRACT
Traditional possession rituals occur when a product moves from market place to home (McCracken 1986), where consumers
demonstrate their symbolic ownership through rituals, such as removing tags, packaging, placing, customizing, and use. But
what if the physical product does not move from the market place to home as in the case of digital consumption? Using
online image-sharing sites such as Pinterest, consumers feel a symbolic ownership of their items even though they do not
possess the physical product, only the visual representation. In this way, the website members consume the images rather
than the physical goods.
The way we categorize the world around us is based on our cultural categories and knowledge structures. We re-visit
McCrackens (1986) theory of cultural meaning of consumer goods in the age of digital consumption, to determine how the
knowledge structures are classified and transferred by digital consumers. We also explore how consumers collect, organize,
and categorize images to present their taste.
Pinterest is a website where individuals create virtual pinboards of digital images. These images are pinned and
organized into collections called boards which users name based on themes, topics, or categories. The site empowers users
to discover new products, share ideas, and inspire one another. Initially Pinterest was considered a niche social network, but
the site has quickly expanded its user base to become one of the fastest growing websites to date.
We conducted seven semi-structured long interviews (McCracken 1988) with user-participants of Pinterest ages between 20
and 65 to better understand how they utilize the website to express and categorize their tastes. Our interviews began with a
general overview of the participants backgrounds and lifestyles, and then progressed to more specific questions regarding
their collections and collecting behaviors as they emerged through dialogue.
Our research revealed that the possession rituals of the Pinterest members include: labeling, organizing, personalization (i.e
writing comments, notes and personal instructions), and sharing their collections. This is similar to McCrackens description
of the possession rituals where the consumers spend a good deal of time cleaning, discussing, comparing, reflecting,
showing off, and even photographing many of their possessions (1986, 79). While McCracken describes the movement of
cultural meanings of goods in the conventional marketplace, on a digital platform the images of goods or other objects
become prominent in the classification of knowledge structures. The imagery of goods is the focal point among the users of
Pinterest, enabling this online public platform to become a venue for conspicuous consumption (Veblen 1899) where users
display their personal taste and virtual possessions. These images also reflect consumers attitudes towards certain cultural
categories considered feminine, such as recipes and home dcor. In this way, users extract the cultural meaning from the
images and adopt them as part of their digital self-representation.
The results of this research show that on a virtual platform, such as Pinterest, there are several processes happening
concurrently from the consumers perspective. While the digital consumer is collecting and organizing images according to
her subjective, yet culturally influenced categories (McCracken 1986), she is also communicating her multiple digital selves
(Belk 2013), displaying her taste (Bourdieu 1984), and consuming conspicuously (Veblen 1899).
720
QUANTITY OR QUALITY? HOW THE FIRM-CUSTOMER DIALOG

INFLUENCES CUSTOMER RELATIONSHIPS
H. Dieter Dahlhoff, University of Kassel, Germany
Natalia Sowik, EBS Business School, Germany
ABSTRACT
One of the main goals for companies in establishing long-term profitable customer relationships is the creation of a firmcustomer dialog. However, it is unclear how interaction processes should be designed in order to achieve positive effects on
customer loyalty. On the operational level, for instance, the question remains how the intensity and the quality of a firmcustomer dialog influence the relationship. Moreover, it is important to understand whether this influence differs across
industries and consumption contexts. The aim of the present study is therefore to investigate the influence of a firm-customer
dialog on customer relationships. Our paper contributes to the existing literature by specifically considering the design of
firm-customer interactions, thereby extending the more general perspective on interaction research.
Based on signaling theory we consider the role of dialog intensity and dialog qualityas two operational components of a
firm-customer dialogin the context of a product-focused consumption setting (cars) and a services setting (financial
services). Four hypotheses on the influences of dialog intensity and dialog quality on customer satisfaction and repeat
patronage intention, dialog intensity on dialog quality, and customer satisfaction on repeat patronage intention, are derived
and empirically tested. We use data from a large scale customer survey with over two thousand German consumers that we
analyze using structural equation modeling.
The results reveal that dialog quality has a stronger effect and mediates the influence of dialog intensity on customer
relationships. In a product-focused setting (cars) dialog intensity also directly influences repeat patronage intention but not
customer satisfaction, whereas in a pure services setting (banking) intensity directly affects satisfaction but not repeat
patronage intention.
Our study allows for drawing important implications for managers implementing a relationship marketing strategy. First,
increasing the amount of signals sent to customers appears to be reasonable for relationship marketing across industries.
However, the mere quantity of firm-customer interactions is not a sufficient lever. Second, marketers should not lose track of
customers perceived dialog quality, as this is by itself a strong direct antecedent of attitudinal and behavioral customer
loyalty, and additionally mediates the positive influence of dialog intensity.
721
THE KEY ROLE OF HR POLICIES AND PRACTICES IN IMPLEMENTING A RELATIONSHIP MARKETING

ORIENTATION
Oriol Iglesias, ESADE Universitat Ramon Llull, Spain
Fathima Z. Saleem, ESADE Universitat Ramon Llull, Spain
INTRODUCTION
The limitations of the transactional approach to marketing in services and industrial settings gave rise to a relationship
marketing (RM) paradigm (Grnroos 1997), which emphasizes building, maintaining, and enhancing relationships between
the company and its customers at a profit (e.g., Grnroos 1990). RM has received a lot of attention in the literature for
various reasons (Berry 1995), however there is a clear need for more empirical research on how to support the
implementation of a relationship marketing orientation (RMO) internally in organizations (Sin et al. 2005).
The existence of a supportive corporate culture seems to be essential for the successful development of a RMO (e.g. Iglesias,
Sauquet, and Montaa 2011; Day 2000; Piercy 1998; Winklhofer, Pressey, and Tzokas 2006). In this regard, some authors
have discussed they key corporate values that could promote a relational orientation (Grnroos 1994; Iglesias, Sauquet, and
Montaa 2011). However, the main shortcoming of these studies is that they only focus on the relevance of a corporate
culture that can facilitate a RMO, but do not place emphasis on the human resources management (HRM) policies and
practices that managers should promote to define and reinforce this corporate culture.
Therefore, this study aims to identify the internally consistent HR policies and practices that define, develop, and reinforce a
corporate culture that promotes and facilitates a RMO. Due to the lack of research in this specific field, this study leans
towards adopting an exploratory and interpretative methodology, following the principles of grounded theory (Glaser and
Strauss, 1967; Strauss and Corbin, 2007). The data consists of 58 in-depth interviews spanning three case studies in the hotel
industry. The results suggest that the key HRM policies that support a RMO are: recruitment, training, internal
communications, promotion, and compensation.
LITERATURE REVIEW
Role of Corporate Culture in Relationship Marketing
Client focus appears to be one essential value of a relationship marketing oriented culture, as this assures that the brand
provides its customers with exceptional personalized service and achieves superior levels of customer loyalty, that can lead to
the establishment of long-term relationships (Helfert, Ritter, and Walter 2002; Iglesias, Sauquet, and Montaa 2011). In this
regard, research shows evidence that HRM policies and practices facilitate the development of client orientation (Roberts and
Hirsch 2005). Another key value present in the literature is the concern for employees (Grnroos 1994; Iglesias, Sauquet, and
Montaa 2011). Companies should see their employees as internal clients that they need to satisfy and take care of, as
employee behavior heavily influences the relationships that the company maintains with its customers. Conduit and Mavondo
(2001) argue that HR management policies are extremely important devices to show concern for employees and fulfill their
expectations.
Human Resource Management
Human resource (HR) policies and practices play a crucial role in organizational performance (e.g. Huselid 1995; Beck and
Gerhart 1996), managing employee experience at work (e.g. Schneider and Bowen 1993; Schneider, White, and Paul 1998),
and influencing organizational culture (e.g. Posner, Kouzes, and Schmidt 1985).
HR policies and practices are influencers of the corporate culture of an organization and, at the same time, a given corporate
culture promotes certain policies and practices (Fombrun, Tichy, and Devanna 1984; Hendry and Pettigrew 1990; McAfee,
Glassman, and Honeycutt 2011). Through HR policies, an organization selects individuals whose values fit with its
corporate values, and socializes them in accordance with those corporate values (Chatman 1991; Stone, Stone-Romero, and
Lukascewski 2007). Moreover, the company also trains, compensates, and evaluates employees in line with the values
emphasized in its corporate culture (McAfee, Glassman, and Honeycutt 2011; Ulrich 2006). HRM is a fundamental tool to
manage culture (e.g. Ulrich 2006) therefore, the role of HRM is also fundamental in the development of a corporate culture
that facilitates a RMO.
722
RESEARCH PROBLEM AND METHOD

Despite the consensus in the literature regarding the need for a supportive corporate culture to favor the implementation of a
RMO, and the key role that HRM plays in this process, there is extremely scarce empirical academic research on this topic.
This leads to ambiguity on how managers can effectively implement a RMO in their firms. Sin et al. (2002 p.193) make a call
to conduct research on this area and to clarify this ambiguity, as managers need to know how they can be instrumental in
shaping the RMO of their firms.
Although authors have discussed they key corporate values that could promote a relational orientation (Grnroos 1994;
Iglesias, Sauquet, and Montaa 2011) the main shortcoming of these studies is that they only focus on the corporate culture
that can facilitate a RMO, but do not place emphasis on the HRM policies and practices that managers can promote to
reinforce this corporate culture. Additionally, within the specific field of relationship marketing, research by Perrien,
Filiatrault, and Ricard (1993) suggest that the ineffective implementation of a relationship approach is mainly due to lack of
emphasis on HRM.
Therefore, the objective of this research is to identify the emergent internally consistent HR policies and practices that define,
develop and reinforce a corporate culture that promotes and facilitates a RMO. As there is an evident lack of empirical
research on the topic, this study aims to allow theory to emerge from the collected data. Thus, grounded theory method of
analyzing the data seems the best possible approach, as it is specially recommended for cases where insufficient prior
research exists (Glaser and Strauss 1967).
The authors conducted in depth interviews with 58 individuals at varying organizational levels in the Spanish hospitality
industry. Company A was the first to be selected and 35 in depth interviews were conducted with top-level managers, middle
managers and front-line employees. In order to enhance the findings company B was selected as the second case. As a
contrast case, company Z was selected, because it is a well performing company, but that has still not implemented a clear
RMO. A total of 58 in depth interviews were conducted, in eight hotels and corporate offices spread throughout Spain. The
data was collected and analyzed iteratively and simultaneously until saturation criterion was reached (Strauss and Corbin
2007). Additionally, 400 hours of observation was undertaken and internal and external communication material was
analyzed, in order to triangulate the data.
Findings
The analysis and interpretation of the data using NVivo software lead to the development of higher-level categories, which
indicate that there are five key HR policies implemented and shared by corporate brands A and B that facilitate the
development of a RM oriented corporate culture, as compared to brand Z.
Recruitment
Recruitment practices vary based on the job positions. However, what is evident in all the cases is that both companies A and
B have a recruitment policy based on value congruence of client orientation, which is key for a relationship marketing
oriented company. It is also interesting to notice that both companies prefer recruiting new employees at the very first stage
of their career, just after completion of their studies, so that they have no previous influences and they can more easily and
rapidly align to the firms policies and practices.
We prefer hiring receptionists without previous experience, because we can then train them from zero Hotel Manager at
A.
Receptionists are hired as interns, giving the hotel a chance to try out potential full time employees. Waitresses and
housekeeping are hired through a referral system in order to draw upon dedicated individuals that current employees decide
are worthy of the job.
Training
Company A and B place a lot of emphasis on training its employees on a spectrum of tasks to support the implementation of
their relationship marketing strategy. In this regard, when employees are first recruited they have a really important welcome
training that allows them to interiorize the essential policies and practices that support this approach.
The first thing I did when I joined the company was the welcome training Receptionist at B.
723
Subsequent familiarization is provided through a combination of role plays, learning by doing and imitation. Both companies
also have their own universities to further train and develop their employees.
Internal Communications
Both companies seemed to agree on that communication is essential to fully develop a relationship marketing orientation.
They both promote not only top-down communication activities, but they especially support bottom-up communications, as
the insights from the first line employees are extremely important to refine and improve the relationship marketing strategy.
What really makes a difference is that they listen to our ideas and suggestions Waiter at B.
At the same time, horizontal communications are also promoted in order to ensure cross functional coordination.
Promotion
The interviews with hotel directors revealed that most of them (all in company A) had been internally promoted in some
cases after a long period of rising through the ranks and had worked in various positions and hotels in their company before
attaining their current posts.
We have never hired any hotel manager from outside. They are all promoted from inside - Human Resources Manager at
A.
Such a step-by-step approach to promotion ensures that individuals who are highly familiar with the organization and its
culture and well recognized occupy the top tier positions and continue to reinforce the emphasis on relationship orientation.
Internal development plans also exist that aim to identify high potential employees and provide them with suitable training to
pursue promotional positions.
Compensation
Both companies have compensation systems in place that reward those behaviors that improve some relationship marketing
metrics, such as customer satisfaction, loyalty or customer incomes.
We have compensation metrics that allow us to make sure that we obtain the desired behaviors that support our relationship
marketing initiatives. Human Resources Manager at B.
CONCLUSIONS
We found that the HRM policies and practices at Company A and B were quite similar and had been designed to support
their relationship marketing orientation. These findings add to the model by Iglesias, Sauquet, and Montaa, (2011) and
provide a comprehensive framework on the HRM policies and practices that develop and reinforce a supportive corporate
culture for a RMO company. The findings also provide tangible strategic guidelines for managers to implement a relationship
marketing oriented culture.
REFERENCES
Beck, B., & Gerhart, B., (1996) The impact of human resource management on organizational performance: progress and
prospects, Academy of Management Journal, 39(4), 779-801.
Berry, L. L. (1995). Relationship marketing of servicesgrowing interest, emerging perspectives. Journal of the Academy of
marketing science, 23(4), 236-245.
Chatman, J. A. (1991) Matching people and organizations: Selection and socialization in public accounting firms,
Administrative Science Quarterly, 36, 459-84.
Conduit, J., & Mavondo, F. T. (2001) How critical is internal customer orientation to market orientation? Journal of Business
Research, 51, 11-24
Day, G. S. (2000) Managing marketing relationships, Journal of the Academy of Marketing Science, 28(1), 24-30.
Fombrun, C. J., Tichy, N. M., & Devanna, M. A. (1984), Strategic Human Resource Management. New York: John Wiley.
724
Glaser, B., & Strauss, A. (1967), The discovery of grounded theory: strategies for qualitative research, Weidenfeld and
Nicolson, London.
Grnroos, C. (1990) Relationship approach to marketing in service contexts: The marketing and organizational behavior
interface, Journal of Business Research, 20, 3-11.
Grnroos, C. (1994) Quo Vadis marketing? Toward a relationship marketing paradigm, Journal of Marketing Management,
10 (5), 347-60.
Grnroos, C. (1997), From marketing mix to relationship marketing towards a paradigm shift in marketing, Journal of
Management Decision, 35 (4), 322-39.
Helfert, G., Ritter, T. and Walter, A. (2002), Redefining market orientation from a relationship perspective. Theoretical
considerations and empirical results, European Journal of Marketing, Vol. 36 No. 9/10, pp. 1119-1139.
Hendry, C., & Pettigrew, A. (1990) Human resource management: an agenda for the 1990s, International Journal of HRM.
Huselid, M. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial
performance. Academy of management journal, 38(3), 635-672.
Iglesias, O., Sauquet, A, & Montaa, J. (2011), The role of corporate culture in relationship marketing, European Journal of
Marketing, 45 (4), 631-650.
Perrien, J., Filiatrault, P., & Ricard, L. (1993), The implementation of relationship marketing in commercial banking,
Piercy, N. F. (1998), Barriers to implementing relationship marketing: analyzing the internal marketplace, Journal of
Strategic Management, 6(3), 209-22.
Posner, B. Z., Kouzes, J. M., & Schmidt, W. H. (1985), Shared values make a difference: An empirical test of corporate
culture, Human Resource Management, 24(3), 293-309.
Roberts, R., & Hirsch, P. (2005). Evolution and revolution in the twentyfirst century: Rules for organizations and managing
human resources. Human Resource Management, 44(2), 171-176.
Schneider, B., & Bowen, D. E. (1993), The service organization: Human resources management is crucial, Organizational
Dynamics, 21(4) 39-52.
Schneider, B., White, S. S., & Paul, M. C. (1998) Linking service climate and customer perceptions of service quality: Test
of a causal model, Journal of Applied Psychology, 83(2), 150-163.
Sin, L. Y. M., Tse, A. C. B., Yau, O. H. M., Chow, R., Lee, J. S. Y., & Lorett, B. Y. L. (2005), Relationship marketing
orientation: Scale development and cross-cultural validation, Journal of Business Research, 58(2), 185-94.
Strauss, A., & Corbin, J. (2007). Basics of qualitative research: Techniques and procedures for developing grounded theory.
Sage Publications, Incorporated.
Stone, D. L., Stone-Romero, E. F., & Lukascewski, K. M. (2007), The impact of cultural values on the acceptance and
effectiveness of human resource management policies and practices, Human Resource Management Review, 17, 152-65.
Ulrich, W. L. (2006). HRM and culture: History, ritual, and myth. Human Resource Management, 23(2), 117-128.
Winklhofer, H., Pressey, A., & Tzokas, N. (2006), A cultural perspective of relationship orientation: using organisational
culture to support a supply relationship orientation, Journal of Marketing Management, 22(1/2) 169-94.
Wright, P. M., & Boswell, W. R. (2002) Desegregating HRM: A review and synthesis of micro and macro human resource
management research, Journal of Management, 28, 247.
725
INTERORGANIZATIONAL NETWORK MANAGEMENT MODEL

Kolesnik Nadezda, National Research University Higher School of Economics, Russia
ABSTRACT
This research suggests the model for interorganizational relationships management. The framework evaluates partners with
respect to two constructs, which considered maximizing effects of organizational network on firm performance: distance and
value creation capacity of the partners. Set of assessment criteria and scales for measurement were specified. Finally, matrix
with four relationship groups and basic relationships strategies was elaborated. Finally, the proposed model is empirically
evaluated through case study, on the sample of 60 industrial companies. Model could be helpful for analysis and management
of diverse interorganizational relationships.
INTRODUCTION
The importance of relationship management is especially pronounced in cases in which interactions between partners lead to
network effect. During the last 20 years relationships management was one of the major trend in research and point in
business management. External outsourcing is a strategically important aspect of value creation and increase of the
competitiveness.
In industrial marketing, services marketing and managing distribution channels, a shift was taking place from managing
relationships with customers to managing relationships with wider range of partnerships with suppliers, internal customers,
institutions, intermediaries and other stakeholders [Clarkson et al., 1997 Gordon, 1998].These network or extended
relationship theories, ideas and concepts were advanced by a number of marketing researchers including Christopher et al.
[1991, 1994], Hunt and Morgan [1994], Doyle [1995] et.el. Another shift was seen as a move from a single dyadic
relationship to a multi-faceted series of inter-relationships [Egan, 2003].
The interorganizational network in our research is seen as a composition of organizations, where the focal firm (marketdriven company) coordinates activities within its numerous partners [Doyle,1995].To navigate in a network, management
must develop an understanding of the relationships that constitute the network. The better the network vision a firm has the
better its chances of foreseeing the strategic changes initiated by specific actorscompetitors, major customers, suppliers,
and government agencies [Moller, Halinen, 1999]. Increased competition between interorganizational networks required
advanced approaches for combined analysis of different types of relationships.
Management of relationships is crucial for organization, as network relationships are not free. Relationships in network are
the results of investments of management time and financial resources, and the development of relationships takes time. As
resources are scarce, the firm should try to develop an optimal set of relationships [Moller,Halinen, 1999].
The paper is organized as follows. First, we provide an overview of literature on relationship models management. Then we
develop a framework of model for relationships management: matrix with four relationship groups and basic relationships
strategies. Thirdly, we configure the set of assessment criteria and elaborate scales for measurement. Further we present
results from an empirical study.
THEORETICAL FOUNDATION AND MODEL DEVELOPMENT
The basic elements of model come from examining the literature on relationship management. The earliest relationships
management models were related to relationship with customers. There more than thirty models for customer relationship
management starting from Hartleys model in 1976 till our days. Customers were analysed and classified according to
different criteria: profitability, cost, potential value revenue, risk, cost to serve strength of relationship and ect. [Tsybina,
Rebiazina, 2013].Later, researchers moved to analysis of relationships with suppliers. Some attempts have been made to
establish models for measuring and improving relationships with wider range of partnerships.
One of the first network models, so called "interaction approach, was developed by the Industrial Marketing and
Purchasing Group (IMP Group). They conceptualized buyer-seller interaction as dyadic interaction at both the firm and
individual levels with the interaction influenced by the atmosphere, a multidimensional construct involving powerdependence, cooperation, expectations and closeness, and the environment of the interaction [Hakansson,1982;
Ford,1990].
OToole and Donaldson [2000] have elaborated a model with classification schema on the basis of the relationship strength
construct, which is measured by an assessment of the belief and action components inherent in a relationship (Picture 1).
726
The belief components measure behavioural processes and the action components, economic content [OToole, Donaldson,
2000]. There are four categories of relationships: Bilateral elements are at a high level and partners co-operate for mutual
advantage. Recurrent - relationship is open but not seen as strong by the parties involved, so that committed actions are low.
Dominant - partnerships in which a dominant partner specifies the hierarchical nature of the interaction between the partners.
Discrete relationship are the lowest relationship strength where opportunism dominates.
Another model proposed by Wilson [1995] classifies buyers and pointing out candidates for in-depth relationships (Picture
2).
The horizontal scale is the amount of value that the supplier adds to the product that the buyer is producing. The vertical
scale is the degree of operating risk associated with using the firm as a supplier. Operating risk refers to the risk that a
buyer incurs because of supplier failure to produce quality goods, on time delivery, or any of the other things that can
go wrong and cause difficulties for the buying organization [Wilson, 1995].
However there are some deficiencies within these models. First of all, almost all these models have not defined any
assessment criteria. The next weakness is that none of these models actually provides any assessment method or assessment
procedure. As a result, managers do not know how to use these models to make real assessment.
Model description
The main purpose of focal firm is to maximize effects from its interorganizational network. The effects of organizational
network on firm performance are coming from an interaction between tie characteristics and partners profile [Gulati, Dialdin,
Wang, 2002].
In the latest paper the reach, richness, and receptivity were proposed as three fundamental mechanisms that jointly constitute
model for explaining how network resources contribute to the organizational performance. Reach is the extent to which
an organizations network connects it to diverse and distant partners. Richness represents the potential value of the
resources available to the organization through its ties to partners. Receptivity denotes the extent to which the
organization can access and channel network resources across interorganizational boundaries. Receptivity in turn
portrays how organizational capabilities and the quality of ties to partners facilitate flows of network resources. The
interplay of these three mechanisms determines the benefits that the organization obtains from its network: reach
and richness jointly determine the potential value of the network, while receptivity is crucial in realizing that
potential [Gulati et.el,2011].
We suggest a general framework for relationship management for three types of partners. First, there are the core firms
partnerships with suppliers of raw materials and components. Second, there are partnerships with different services providers.
Third, there are partnerships with customers.
Picture 3 describes a 2x2 matrix elaborated for relationships analysis and management. The horizontal scale Value-creation
capacity is the value creation opportunities of the partners. The vertical scale Distance evaluates ties characteristics with
partner.
*Receptivity: the extent to which the organization can channel and leverage network resources across inter-organizational
boundaries.
We will continue further description of the model by explanation of three basic constructs: distance, value creation capacity,
and receptivity. We will configure the set of assessment criteria and elaborate scales for measurement of constructs.
Distance assessment and measurement
An organizations ability to use network resources strongly depends foremost on the quality of its ties to partners. Distance is
the key concept that characterizes ties and evaluates quality of the relationships between partners. Interorganizational ties
serve as channels for resource transfer, so the better relationships make the better transfer of different resources from node to
node. Refer to the literature for tie strength measurement the following dimensions were identified.
After analysis of the above dimensions we identified following five dimensions for our research.
727
Longitude is important as business relationships tend to become institutionalised over time [Ford,1980]. Previous
interactions are not isolated, but rather path-dependent and embedded into social practices. But long term relationships cannot
always lead to strong relationships.
Information exchange How much information is exchanged openly and freely between partners. It represents the current
level of mutual cooperation between partners. Informal communications (Intimacy) indicates degree of social interpersonal
relationships between partners, which is crucial for resource and information exchange [Granovetter, 1985].Reciprocity and
trust. Trust in marketing domain literature is defined as the belief that a party's word or promise is reliable and a party
will fulfill obligations in an exchange relationship [Schurr, Ozanne,1985]. Greater trust enables flows of rich information
and resources at the dyadic level [Gulati,2011]. Morgan and Hunt [1994] suggested that trust delimited the partners choices
since they were linked through personal ties, business ties and the spirit of relationships.
Goals and collective decisions. Whipple and Frankel [2000] state, the effective and success relationship requires the
establishment and execution of clearly-defined goals; in order to achieve these goals, well-defined communication and
regular meetings of managers involved with the relationship is important.
According to formulas we can calculate meaning for Distance for each partner.
If meaning of respondents reply for the question j about partner .

q amount of questions
amount of respondents.
Than average meaning of criteria basing on respondents answers:
Meaning of distance for i-firm:
(1)
(2)
Casting relationships basing on these questions we could place our partner into the upper or lower quadrants. Lower
quadrants correspond to transactional exchange [Dwyer, 1987] or traditional relationships. The relationships with weak ties
in Q1 and Q4 quadrants are short-term event with low switching costs, in which partners share little information and may be
motivated with the conflicting goals. In upper quadrants Q2 and Q3 ,relationships with stronger ties, correlates to relational
exchanges or collaborative relationships. The relationships are characterised by cooperation, mutual trust, common
objectives, and usually extended over time. For construct measurement we propose the set of criteria.
Value creation capacity
External networking with organizations with capabilities or resources provides great value creation opportunities, rather than
the firms internal capabilities and processes. These external resources might be new products, alternative distribution
channels, manufacturing capabilities, or more generally, knowledge that offer synergies and can be exploited in the market.
[Doyle, 1995]. In other words value creation opportunities of partners.
Todays marketing is about and exploiting opportunities generated from other firms. Value is created by the synergistic
combination of partners strengths. Value derives in many ways and forms: technology, market access, information and ect.
Such analysis is crucial for network as for the relationship to flourish, each partner needs to see some benefit beyond
working independently [Wilson, 1995].
Value and value creation has been found to be a foundational aspect in marketing and business [e.g., Drucker,
1954; Sheth,Uslay, 2007; Grnroos,2011]. Value creation capacity presents potential value of the resources available from
the partners, which could create value for customers. That value depends on the specific configuration and attributes of the
resources available. It is important to mention, that the value is considered to be created by customers as well. Customers are
becoming a key source of competitive advantage because, in addition to revenues, suppliers can gain product ideas,
technologies, and/or market access, etc. from their customers [Wilson, 1995, 2001; Walter, 1999].
728
Two recent contributions may help us to understand the dimensions of value and value generation in a more refined fashion.
Walter et al.[2001] and Moller, Torronen [2003] used the following direct- and indirect-value dichotomy for identifying the
following value functions in a business relationship from the suppliers perspective:
*Dimensions were proposed to be rated by companies from 1 (very low) to 5 (very high)
Besides mentioned above dimensions, the benefits of value creation capacity arise from the potential resources utility, rarity,
appropriateness, transferability [Gulati et.el, 2011]. We propose to use rarity and transferability for assessment of partners
value creation capacity.
According to formulas we can calculate meaning for Value creation capacity for each partner.
If meaning of respondents reply for the question j about partner .

q amount of questions
amount of respondents.
Than average meaning of criteria basing on respondents answers:
(3)
Meaning of value creation capacity for i-firm:
(4)
Basing on these questions we could place our partner into right or left side quadrants. Relationships in the right quadrants
(Q3, Q4) have got high switching costs due to the critical and idiosyncratic nature of the partners assets.
Interorganizational network performance
Receptivity is used in our model for assessment of interorganizational network performance. Receptivity captures the extent
to which organization can realize the potential value of the resources available in the network by means of reach and richness
[Gulati et.el, 2011]. Receptivity can be interpreted as absorbency. Receptivity depends on both distance and value-creation
capacity, whereby increase of level of distance or capacity leads to the increase of receptivity level, and vice versa decrease
of level of distance or capacity leads to the decrease of receptivity.
We can assume receptivity as a function for two variables: distance and value-creation capacity.

(5)
There could be extensive and intensive ways for receptivity growth. Extensive growth based on enlarging network. Inasmuch
as greater numbers of partners might spacer concentration and resources. Intensive growth is related to partner engagement
facilitation and inducing resource complementary. The appropriate analytical function for those conditions would be sum
function.

(6)
The interorganizational network performance we could evaluate basing on dual-relationship receptivity with each partner.

(7)
, where k amount of partners. (8)
The greater value of Rnet, would present the better performance of the network.
CONCLUSIONS
After assessment of partners we have a holistic view of firms network. Matrix categorizing partners into four groups (Fig.4):
neutral group, ballast, strategic partners, and key partners. Each relationship group has it specific characteristics and requires
a different management approach. The key point to stress there is the importance of the balance between four groups of
partners for sustainability and development of business. Model distinguishes two main strategy groups: forward strategies
geared to fostering relationships and retrograde strategies geared to diminish relationships. Arrows show how firm partners
can move from one group to another depending on the core (focal) firm strategy.
729
Strategic partners. The firms which are located at the upper right quadrant are the most important for the firm. They add
significant value to the firms product and have strong ties. The high value creation opportunities collaboratively with close
relationships provide high level of receptivity.
Key partners. Here are the firms that fall into the lower right quadrant. These relationship, by contrast, have got great
potential, but are not handled effectively. Such relationships should be run at arm's length, than partners valuable resources
can be used in full extension.
Ballast. The firms that have fall into the upper left quadrant. As mentioned above relationships are not free, so partners with
strong ties and low value level might be very inefficient for core firm, and even cause losses. At the same time this group of
partners can be source of new ideas and innovations. Maintenance and establishment of stronger ties requires resources,
which should be wisely allocated among partners.
Neutral group. The firms that have fall into the lower left quadrant. Partners of this group are the source for innovations.
Managers should scanning broadly and looking at organization with capabilities or resources that offer synergies that can be
exploited in the market. The long-term implication for them is to find complementary resources and remove it into group of
strategic partners. Otherwise firm is recommended diminishing relationships.
The procedure of managerial implication of the framework has got three stages: 1) evaluation of distance with partner, 2)
estimation of value-creation opportunities of partner, 3) mapping all relationships 4) estimation of overall network
performance 5) elaboration of appropriate relationship strategy.
An important advantage of such integrated analysis is the effect of seeing the network as a whole rather than evaluating
partners separately. We conclude with a discussion of the empirical results and their implication for relationship management
and theory.
TABLES
Table 1:Tie strength measurement
Author
Term used by author
Granovetter
Tie Strength
[1973,1982]
Levinger
[1977,1980]
Interpersonal closeness
Berscheid, Peplau
[1983];
Properties of interdependence
in close relationships
Thorelli [1986]
Tightness of interfirm network

links
Dimensions identified
1) Amount of time
2) Emotional intensity
3) Intimacy (mutual confidence)
4) Reciprocal services
1) Frequency of interactions
2) Spatial nearness
3) Presence of significant common goals
4) Exchange of personal disclosures
5) Extend of affection for one another
1) Frequency of interconnections
2) Strength (ability to evoke a response from the other)
3) Diversity of activities
4) Duration of interactions and relationships
1) Expenditure of money and executive talent
2) Quality (intensity and strength)
3) Extend of information sharing
Table 2:Assessment of Distance between partners

Criteria
Question
Longitude
Time of joint work with a partner.
Informal
communication
Share of time for informal

communication?
-2
less than
year
Less than
10%
730
-1
less than
year
30%
Measurement
0
+1
+2
hard to more than half period of
say
the firm existence
hard to
70 %
almost
say
90%
Trust
Do you trust to your partner?
No
Shared goals
Have your company got shared goals

with partner?
Do you take joint
decisions?
no
Collective
decisions
No
almost
hard to
no
say
only
hard to
operational
say
Seldom hard to
say
almost yes
completely
some
strategic
goals
very often
Often
Table 3: Value creation functions

Function
Characteristic
Profit
refers to the relative direct revenue from
function
a partner
refers to the volume of business
Volume
generated by a partner
function
Safeguard
function
Innovation
function
Market
function
Scout
function
Access
function
Dimensions *
margin per product
overall profit
amount of deliveries
long-term supply agreements
sales volume
refers to the possibility of guaranteeing
possibility of short notice deliveries
a level of business and revenue through
possibility to sell over-capacities
contractual arrangements with partner.
reduction of dependency on other customers
refers to the possibility of product and
joint development of production processes
process innovation with a particular
joint concept development of new products
partner.
adoption of new technologies
prototype testing
refers to the possibility of accruing new initiation of contacts with new customers
customers/distributors
through
the information about potential new customers
reference impact of a partner.
references to potential new customers
refers to the market and other
information about the market
information that can be acquired from the
information about competitors
working
environment
through
a
information about relevant third organizations (e.g.,
particular partner.
further suppliers and customers)
refers to gaining access to relevant other
support by handling contacts with governmental
actors in the working environment
agencies
though a particular partner.
initiation of contacts to important persons (movers
and shakers)
promotion in influential institutions and
committees
Table 4: Assessment of Value creation capacity

Variable
Overall profit
Long -term supply agreements
Sales volume
Joint development of new products and production processes
Initiation of contacts with new customers and partners
Information about market
Promotion in influential institutions and committees
Rarity - If it is possible to find substitution to the resource of the
partner?
731
-2
Very
low
Very
low
Very
low
Very
low
Very
low
Very
low
Very
low
Very
easy
-1
Low
Low
Low
Low
Low
Low
Low
Easy
Measurement
0
+1
Dont
High
know
Dont
High
know
Dont
High
know
Dont
High
know
Dont
High
know
Dont
High
know
Dont
High
know
hard to
very
say
hard
+2
Very
high
Very
high
Very
high
Very
high
Very
high
Very
high
Very
high
very
hard
Transferability - Is it possible to transfer resource from the partner?
Very
easy
Easy
FIGURES
Figure 1:The relationship matrix by OToole, Donaldson, 2000
Figure 2: Classification of potential partners by Wilson, 1995
Figure 3: Model for relationships management
Figure 4:Example of partners assessment map
732
hard to
say
very
hard
very
hard
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734
ENHANCING CUSTOMER PERCEIVED VALUE MEASUREMENT:

A MULTI-DIMENSIONAL INDEX FOR TELEVISION CONSUMPTION
ABSTRACT
Maximising customer perceived value is central to the marketing discipline. Marketing professionals therefore require a
robust means of measuring value perceptions in order to monitor requirements for and the effectiveness of value enhancing
activities. However, value measurement suffers from five flaws. First, the predominant one-dimensional approach calculates
a net perception, failing to capture the nature of contributory benefits and sacrifices. Second, most multi-dimensional
measures lack a robust, empirically derived foundation, subsequently offering limited validity. Third, the failure of
underlying models to delineate value from quality leads to conceptual confusion within multi-dimensional value
measurement. Fourth, value studies typically focus on individual perceptions, neglecting any relational influences on value.
Fifth, existing value scales often fail to capture the abstract nature of customer value. This paper describes steps towards
resolving these measurement challenges through the development of an index to measure value perceptions arising from paidfor TV consumption. The two-stage methodology develops a series of dimension scales from a robust empirical investigation
and constructs a reliable and valid index. The resulting index measures value formatively as a 2nd order construct comprising
six 1st order, reflectively measured value dimensions. The conceptualisation of value avoids confusion with quality and the
holistic research approach ensures the inclusion of relational influences on value. The applicability of our method to other
contexts is discussed and areas requiring further investigation are identified.
735
UNVEILING UNSOPHISTICATION
THE USE OF THEORY IN INTERNATIONAL ADVERTISING RESEARCH IN THE TOP THREE
ADVERTISING JOURNALS 2002-2012
Fernando Fastoso, Bradford University School of Management, UK
INTRODUCTION
International advertising research is suffering from a long-term ailment: theoretical unsophistication. Over 25 years ago,
Miracle (1984: 157) noted that theory in the field was exceedingly underdeveloped and recently Taylor (2007) named the
lack of theoretical sophistication as the greatest obstacle for international advertising research being published in the most
prestigious marketing and business journals. Indeed, today journals like the Journal of Marketing (Kohli 2011) and the Journal
of International Business Studies (Bello and Kostova 2012) expect submitted manuscripts to include a theoretical contribution
and that expectation makes the fields inability to deliver theoretical sophistication over such a long period of time all the more
surprising. We contend that one of the major barriers stopping researchers from addressing this shortcoming has been the lack
of a precise analysis of the nature of the problem beyond the generic diagnosis, i.e., one that makes specific how theoretical
unsophistication has manifested itself in research so far. Such analysis is necessary because marketing researchers have so far
failed to agree on what theory is (Crittenden and Peterson 2011). Therefore, the purpose of this paper is to explore the theoretical
unsophistication of international advertising research published in the top three advertising journals in the past decade. To
achieve this objective, this paper firstly explores the notions of theory and theoretical sophistication on the basis of the broader
management and marketing literatures; secondly, it develops two research propositions on the theoretical unsophistication of
international advertising research; thirdly, it tests those propositions on the basis of an analysis of systematically selected journal
articles published in the three most highly regarded advertising journals, i.e., Journal of Advertising, Journal of Advertising
Research, and Journal of Current Issues & Research in Advertising, over the past decade.
In the management literature, a debate emerged in the 1990s in relation to what theory is. Sutton and Staw (1995: 378) describe
theory as a story about why acts, events, structure, and thoughts occur. In response to that, DiMaggio (1995: 391) argues that
there is more than one kind of good theory. Firstly, he terms the understanding of theory in the spirit of Sutton and Staw
(1995: 378) as theory as narrative given its focus on a narrative about why events occur. This view was later echoed in the
marketing literature by Stewart and Zinkhan (2006). Secondly, however, DiMaggio (1995) highlights an alternative view of
theory which he terms theory as enlightenment. This view, influenced by the humanities, maintains that theory should focus on
discovery rather than explanation and be seen as a set of categories and domain assumptions aimed at clearing away
conventional notions to make room for artful and exciting insights (DiMaggio 1995: 391). Thus, in theory as enlightenment
the focus shifts from the explanation of phenomena the why question towards the phenomena themselves the what question.
In the marketing literature, this notion of theory is reflected in the views of Kozinets, Fischer and Belk (2012: 139), who state
that building theory encompasses identifying new concepts or constructs or processes that help us understand something
about the phenomenon, exceptions that delineate when an existing theory is relevant, and/or challenging the adequacy of
existing theory". In other words, the notion of theory as enlightenment focuses on identifying the new and exceptional to
challenge the theoretical status quo. In the marketing literature, a third understanding of theory is also evident and we term it
theory as a label for a body of research. This understanding is made explicit in the context of consumer culture theory, which
is not a unified, grand theory but rather a viable disciplinary brand for the research stream focused on consumer culture
(Arnould and Thompson 2005: 868; 2007: 4). This more generic understanding of theory can be found in a wide range of
studies in the fields of marketing and international business as they refer to, e.g., marketing theory (Felix and Hinck 2005:
111) or international business theory (Rugman and Verbeke 2008: 326).
The concept of theoretical sophistication is similarly elusive but, in contrast to that of theory, it is still to be defined. To elicit
a debate on this question, we use the management literature as a basis and propose that the theoretical sophistication of research
will be reflected in its ability to make a theoretical contribution. A theoretical contribution is essential in papers targeted at two
of the most highly regarded journals in the field, the Academy of Management Journal (AMJ) and Academy of Management
Review. Specifically, manuscripts submitted to those journals are expected to show how their findings refine appreciation of
the theory they are based on (Geletkanycz and Tepper 2012: 257), i.e., be explicit in how they challenge and extend existing
knowledge by providing compelling and logical justifications for altered views (Whetten 1989: 491). The AMJ summarizes
this expectation in its editorial guidelines as it states that it aims to publish empirical research that tests, extends, or builds
theory (AMJ, 2013). In a similar vein, we argue that theoretically sophisticated international advertising research should make
explicit how it tests existing theory, extends existing theory, or builds new theory.
736
Based on the preceding discussion, we firstly propose that the perceived lack of sophistication in international advertising
research so far may be a reflection of the type of theory that articles in the field have used, i.e., of an overreliance on the generic
view of theory as a label for a body of research:
P1: Theory as a label for a body of research is the most frequent understanding of theory in international advertising research.
Secondly, we propose that the perceived lack of sophistication in international advertising research so far may be a reflection
of the fact that, rather than testing existing theory, extending existing theory, or building new theory, most papers merely use
theory to frame the substantive issue of their focus without subsequently refining the understanding of that theory or building
new theory:
P2: A majority of international advertising research contributes findings to a body of research without using those findings for
subsequent theory development or refinement.
METHOD
In line with previous reviews in the field (e.g., Hult et al. 2008; Zou 2005), we adopted the systematic review approach
(Tranfield, Denyer and Smart 2003) to identify international advertising papers published between 2002 and 2012 in the three
most influential advertising journals (Henthorne, LaTour and Loraas 1998): Journal of Advertising, Journal of Advertising
Research, and Journal of Current Issues and Research in Advertising. On the basis of a combination of electronic searches on
Proquest and EBSCOhost with manual searches we identified 40 international advertising papers that contain theory, i.e., papers
that mentioned terms such as theory, theorize, or theoretical. Two academics coded the 40 papers independently on the basis
of a) the type of theory they included (i.e., theory as narrative, theory as enlightenment, theory as a label for a body of research)
and b) their level of theoretical sophistication (i.e., developing new theory, extending existing theory, testing existing theory,
and contributing findings to a body of research). Inter-coder reliability coefficients on the basis of the Index developed by
Perreault and Leigh (1989) were in excess of the recommended minimum coefficient size of .75 (Rust and Cooil 1994).
Disagreements on the classification of articles were resolved between the two coders.
The 40 papers identified mention 51 theories, theoretical models, or typologies. We refer to all as theories given the lack of
agreement on whether there are differences between the three terms (Sutton and Staw 1995). Our findings do not support P1
because the most frequent understanding of theory employed in international advertising research is not theory as a label for a
body of research but theory as narrative. Of the 51 theories identified, only 18 (35%) match the understanding of theory as a
label for a body of research. For instance, the theory on the mediating effects of self-construals (Choi and Miracle 2004: 75),
propaganda theory and mass communication theory (Kendrick and Fullerton 2004: 297), and luck-related naming
theories (Chang and Lii 2008: 525). In all 18 cases, the papers implicitly equate theory with research on a substantive issue as
they neither provide references for those theories nor explain what the main propositions of those theories are. A majority of
31 theories (61%) were cases of theory as narrative. Examples are the theory of reasoned action (Fishbein and Ajzen 1975)
employed by Schwaiger, Rennhak, Taylor and Cannon (2007), information processing theory (Bettman 1979) employed by
Ahn and La Ferle (2008), and input switch theory (Macnamara and Kushnir 1972) employed by Bishop and Peterson (2010).
The remaining two theories (4%) match the definition of theory as enlightenment, i.e., theory of brand morphing advanced by
Kates and Goh (2003), and the theory of globalization (Appadurai 1990; Ritzer and Malone 2000) referred to by Zhao and Belk
(2008).
Our findings support P2, as a majority of international advertising research contributes findings to a body of research without
using those findings for subsequent theory development or refinement. Of the 40 papers identified, 30 contribute empirical
findings to a body of research without subsequently refining the theories they are based or proposing new theories. For instance,
the study of integrated marketing communications (IMC) by Kitchen et al. (2008: 554) refers to IMC theory yet does not use
its cross-national findings to develop a theory around international IMC. Three papers advance new theory, e.g., the paper by
Schwaiger, Rennhak, Taylor and Cannon (2007: 2), which proposes a general theory that makes predictions about the
effectiveness of comparative advertising. Further three papers extend existing theory, e.g., the paper by Kim, Han and Yoon
(2010), which extends the originality-appropriateness framework on ad creativity (Koslow, Sasser and Riordan 2003; Runco
and Charles 1993) into collectivistic cultures. Finally, four papers test theory, e.g., the paper by Bishop and Peterson (2010),
which tests the applicability of the Markedness model (Myers-Scotton 1993a; Myers-Scotton 1993b) and the Matrix Language
Frame Model (Myers-Scotton 1995) in the context of bilinguals responses to advertising.
737
The findings of this study shed light onto the lack of sophistication attributed to the field of international advertising for over
two decades. Our findings on the type of theory used in research (P1) suggest that the majority of high quality journal articles
on international advertising are built on a good theoretical foundation. Most of them frame the substantive issues of their focus
within well-established theories such as information processing theory and the theory of reasoned action. On the basis of that,
we conclude that the field has the potential to deliver theoretical sophistication. However, the reason why the field may be
perceived as lacking theoretical sophistication is that the majority of its papers are using theory only as a frame to explore
substantive issues yet not using their empirical findings to either refine the understanding of the theory they are based on, as
recommended by (Geletkanycz and Tepper 2012), or to develop new theory on the substantive issue of their focus. We merely
choose three of many possible examples to illustrate this point. First, although three papers describe IMC as a theory, none
seizes the opportunity to use past research and their cross-national findings to either postulate IMC theory described as a
mere management fashion in the past (Cornelissen and Lock 2000: 10) or a new theory of international IMC. Second,
neither do the two studies on international humor by Laroche, Vinhal Nepomuceno, Huang and Richard (2011) and Leonidas,
Christina and Yorgos (2009) further develop the cultural theory (Hofstede 1980) they are based on or advance a new theory on
the use of humor in international advertising. Third, neither does the study by Chang (2008) further develop the theory it is
based on, cue utilization theory (Cox 1967), or advance a theory around the substantive issues of its focus, i.e., the country-oforigin effect and perceptions of brand globalness.
Overall, we believe that a majority of international advertising papers we analyzed have missed an opportunity to deliver the
theoretical sophistication that researchers in the field have been asking for since the 1980s. However, not all did, and we think
that the paper by Schwaiger, Rennhak, Taylor and Cannon (2007) is an example of good practice in the context of delivering
such sophistication. First, the paper is very explicit in that it advances theory, specifically a general theory that makes
predictions about the effectiveness of comparative advertising (Schwaiger, Rennhak, Taylor and Cannon 2007: 2). In doing
so, it eliminates the potential for speculation on whether a theoretical framework, theoretical concept, or theoretical
understanding is the same as a theory or not. Second, the paper is also explicit in how it combines previous research on
comparative advertising with information processing theory (Bettman 1979), and the theory of reasoned action (Fishbein and
Ajzen 1975) to develop a new theory. In doing so, it makes very clear how it extends previous knowledge, as demanded by,
e.g., Whetten (1989) and Geletkanycz and Tepper (2012). We see such clarity and straightforwardness as essential for the field
to finally begin to address the decades-old calls for more theoretical sophistication.
This study is the first to shed light onto how the field of international advertising has fallen short of expectations in terms of
theoretical sophistication. Our findings show how a majority of research in the field is lacking theoretical sophistication despite
having the potential to do so on the basis of the theories it uses. In doing so, our findings contribute to our understanding of
how theoretical sophistication in international advertising research could finally be improved, more than two decades after the
first criticism of the field in this respect was made (Miracle 1984). We are confident that future studies in international
advertising would benefit from considering our findings to both improve their chances of being considered for publication by
top quality marketing and business journals (Bello and Kostova 2012; Kohli 2011) as well as to ultimately improve perceptions
of theoretical sophistication of research in the field as a whole. The main limitation of this paper in its current form is that it
focuses only on advertising journals. Future research should therefore complement our analysis by considering marketing,
international marketing, and business journals. In addition, we concede that by deciding on the theory contents of articles to
analyze based on mentions of terms like theory, theoretical, and theorize, we may have left out of consideration articles which
included theory in a more implicit manner. Still, we would defend our approach on the grounds that the alternative, i.e., choosing
one of the many definitions of theory available as a screening criterion for article selection, would have been perceived as
arbitrary.
REFERENCES
738
BOND OR BRAND: PRESENTING A TYPOLOGY OF ONLINE BRAND COMMUNITIES IN A

COLLECTIVISTIC CULTURE
Jungmin Han, University of Manchester, UK
Stuart Roper, University of Manchester, UK
INTRODUCTION
Online Brand Communities (hereafter OBCs) can play a vital role in invigorating a brand, as illustrated by extant OBC studies
in relation to marketing, sociology, psychology and information systems. However, the ongoing evolution of OBCs, particularly,
enhanced through mobile technology, has led to increased diversification in the type and nature of OBCs. Concerns have been
raised that the meaning of community in OBCs has become diluted (Fernback, 2007), especially as the online characteristic
of OBCs allows an attitude of easy access, no responsibility. On the other hand, Canniford (2011) argues that OBC
subcultures can be intense and, importantly, revolve around a shared lifestyle rather than the brand. Indeed, Fournier and Lee
(2009, p. 106) propose that people are more interested in the social links that come from brand affiliations than they are in
the brands themselves. This poses a difficult debate for OBC management; social bonds among participants are vital in
maintaining the OBCs, yet this can be at odds with the initial rationale for initiating a brand community, i.e., brand promotion
and brand value, with the very real potential for tension between community members and community managers. We contribute
to this debate by presenting a framework for discussion of the possible synergistic and antagonistic relationships between
community and brand value. This framework is in the form of a typology that recognises the evolution of OBCs in terms of
their type and nature, focusing on the issues of brand value and community.
Communities can be understood by reference to the development of social bonding (Bagozzi & Dholakia, 2002; Fournier &
Lee, 2009). However, extant OBC research focuses on individualist cultures making the application of management strategies
derived from it difficult to apply to forums within a collectivistic culture. As Bourhis et al. (2005) point out, researchers should
not take a one-fits-all approach and should be aware that the success of management practices should be contingent on their
basic characteristics. More recently, it has been shown that, within a collectivistic culture, the various attributes of social
bonding may be more pronounced in some areas in comparison to forums within individualistic cultures. Consumers in a
collectivistic culture are more willing to share knowledge with other members, show a stronger need for social integration
(including establishing and maintaining contact with others in OBCs), evaluate themselves less positively, and are more status
conscious and more willing to contribute to the group than those in an individualistic culture. Thus whilst existing concepts of
social bonding may be applicable to forums within the collectivistic culture, it is important to understand the nuances in terms
of their weight and the interactions between them. This paper builds an OBC typology to classify diverse OBCs in a
collectivistic culture into meaningful categories, providing a useful framework for practitioners to effectively describe,
understand and manage OBCs. Consumers in a collectivistic culture are likely to rely on such other OBC participants personal
information as is available, to treat in-group members better than others (Hofstede, 2001) and to be more concerned about their
social reputation or losing face in public (Kim & Nam, 1998); therefore, they may put more effort into answering other peoples
questions so that they do not lose face in front of people they are acquainted with (Hofstede, 1992). This evidence shows that
forming a social bond is easier for collectivists and causes significant changes in OBC practices, unlike those in an individualist
culture. This has led us to develop a typology that can be applied to collectivistic culture to explain the OBCs in it.
DEVELOPING THE OBC TYPOLOGY
Before categorising OBCs, we examined the existing definitions of online community and brand community'; common words
used to describe online community are people, cyberspace, and interaction (Bagozzi & Dholakia, 2002; Hagel &
Armstrong, 1997; Jones & Rafaeli, 2000; Rheingold, 1993), while common words to describe brand community are brand
admirer, non-geographically bound and interaction (McAlexander, Schouten, & Koenig, 2002; Muniz Jr. & OGuinn,
2001). Furthermore, OBCs (1) are based in a virtual place, (2) are constituted by people with a shared interest in a brand and
(3) have intertwined grassroots interaction both offline and online. We locate the OBC in the overlap between online community
and brand community [Figure 1] and define it as an aggregation of individuals or business partners with shared interest in a
brand, who predominantly use computer-mediated communication as a virtual third place to share resources and support
social interaction with regard to the brand.
In order to classify OBCs, we conceptualise social bonding in terms of group cohesiveness based on the following definition
in Carron and Brawley (2000): the tendency for a group to stick together and remain united in the pursuit of its instrumental
739
objectives and/or for the satisfaction of member affective needs (Carron & Hausenblas, 1998). We distinguish the goals of
community along the continuum ranging from task commitment to social bonding (Beal, Cohen, Burke, & McLendon, 2003;
Carron & Brawley, 2000). Based on the literature, we adopt these two criteria and categorise OBCs in terms of a collectivistic
culture. Our OBC typology is presented below in Figure 2.
Task commitment is defined by the extent to which the group helps its members to reach important goals or participate in
desired activities. This instrumental aspect provides the basis for the cohesion of a group. When an OBC possesses a strong
task-based commitment, attachment to the group should be independent from the attractiveness of the individual members
(Hogg & Turner, 1985) and show greater continuity over time and greater stability in the face of changes of membership
(Prentice, Miller, & Lightdale, 1994);a task-committed OBC does not lose its attraction after the dropout of prominent group
members. Thus, the existence of task commitment would be a cue for collective action and the persistence of OBCs (Kelly,
1993). The Apple app developers forum, which aims to make applications with other skilled members, seems to be a good
example of a highly task-committed OBC. Task-committed OBCs are more likely to have consumers interacting with each
other exclusively online. In some cases, members may define an OBC primarily in terms of venues (e.g. online website or
board), and only superficially associated with any particular individuals within it. Social bonding is defined by group members'
liking for one another and the attractiveness of the group for its members. This represents the affective aspect of an OBC, the
extent to which the group is a goal in and of itself. A consumer might want to stay in an OBC because he/she likes other
members in a close relationship (member-attracted). Another consumer might want to be in an OBC because he/she just enjoys
the experience of being with other people, even though there is nobody specific who is close (group-attracted). This is described
as group property which is inferred from the number and the strength of mutual positive attitudes among members of a group
(Lott, 1961, p. 279). Members become less dependent on the OBC website when they have more intimate relationships. The
website is only one of a number of places where such groups meet and online social interactions are usually supplemented by
face-to-face and other offline forms of interactions. Though task commitment is crucial in keeping the focus of OBCs on brandrelated practices, a number of scholars began to raise the importance of social bonding between OBC participants, arguing that
the participants are as important as the brand, and sometimes even more so (Brodie, Ilic, Juric, & Hollebeek, 2011; Fournier &
Lee, 2009). In reality, OBCs show both characteristics in different degrees. Most importantly, they are dynamic because
frequent interactions among the same individuals result in a greater knowledge and interpersonal relationship building. The
relative levels of these two types of group cohesiveness and their dependence on each other may provide more insight into the
group and its dynamics. We lay emphasis on the point that what we are locating here is not the brand itself but the OBCs. Each
type illustrates characteristics of OBCs as a whole and the participants inside OBCs may vary. The groups are described below
with examples from Korean communities.
An OBC with the highest group cohesiveness among the nine types of OBCs is called a brand empire. Members are strongly
committed to each other, to the OBC itself and to the task. They tend to possess a degree of professionalism generated by their
devotion and attachment to the brand, and this is accelerated by close relationships among the members (e.g. increase of
knowledge through helping and sharing). Included in this area are a number of typical marginalised OBCs, so-called cult brands
(Ragas & Bueno, 2002), such as Harley Owners Groups (HOGs) (Bagozzi & Dholakia, 2006). Workplace OBCs also have a
high level of group cohesiveness, but they are more task-committed. Examples include a number of developer forums. Members
have a strong shared purpose and shared activities. They build weak and strong ties that facilitate the achievement of a goal
(e.g. information sharing, ideas development). The OBC as a second home has high group cohesiveness with a social bonding
that is stronger than its task commitment. Feeling close to each other, members share their lifestyle and show characteristics of
a tribe (Cova, 1997). An example is Starbucks OBC in Korea, where the members actively share their daily lives, seek others
advice and celebrate members birthdays, which shows their strong ties. Social capital leads members to reside in the
community even when they lose their interest in or loyalty to the brand because they value their relationship with other people
who are still in the group. Another type of OBC, the brand institute, focuses on achieving a goal. For instance, in one of the
Louis Vuitton OBCs in Korea, members are gathered to exchange brand-related information and trade second hand branded
products. Members are not interested in building social bonds; they have need-based commitment because the reason they stay
in the OBC comes from its utilitarian value. The brand theme park, located at the centre of the diagram shows medium level
of group cohesiveness and balanced task commitment and social bonding. A number of so-called successful OBCs of nonmarginalised and non-religious brands lie in this category, including Lacoste OBC in Korea where members build a close
relationship with each other around the brand Lacoste without having any fixed project to cooperate with each other. The OBC
at the right corner of the diagram is named Shelter. Though the OBC members here have met because of a common interest in
the brand, they often chat about off-topic issues and get emotional support. Diesel Mania in Korea is included in this type. Here,
consumers visit the OBC to share the lifestyle and to chat about mostly off-topics without much interest in the brand-related
information or project. Information desk refers to a task-committed group with low social bonding. Consumers have low group
cohesiveness as they visit the OBCs, such as Samsung and Vaio laptop OBCs, only for functional reasons (e.g. to solve
740
problems, get information, contact the company and complain). Members of the brand pub, a more casual drop-by than the
shelter, do not feel a strong sense of we-ness or responsibilities in terms of brand or shared activities, but visit the OBC to get
to know other brand users. As can be expected from their low group cohesiveness, members can easily leave the OBC. Lastly,
the brand museum is a spurious OBC where the members are neither socially attracted nor committed to a task. Members may
join the community only because of a random curiosity or because they need some specific information at that time. For instance,
members in Tiffany OBC on Facebook do not participate in this community but rather use it like a newsletter to get the updates.
Members hardly make any contribution and interaction between them is hard to find.
DISCUSSION AND FURTHER RESEARCH
We show the potential scope of OBCs that develop within the context of a collectivistic culture. It is generally accepted that
social bonding motivates the members to participate in the OBC; however, we emphasise that social bonds can be a doubleedged sword. Communities characterised by strong social bonds are more vulnerable to conflict and member drop-out.
Furthermore, when bonding between the members becomes too strong and members focus on sharing a lifestyle rather than
a brand, the OBC may develop to a community of interest rather than being brand focused. This highlights the dynamic and
even chaotic nature of communities as a brand management strategy. Therefore marketers should always be cognisant of the
dynamically developing nature of OBCs and proactively adjust their management strategies to accommodate this. The highly
task-committed OBC manager should develop bonding between participants, for example, through offline gatherings, so that
they can get to know each other and share experiences (Ren et al., 2012), which will also boost group cohesiveness. Also, in
the case of those with high social bonding, the manager can change the OBC environment in a more brand-focused way, such
as by holding an event or competition that will attract the members to share their expertise on and passion for the brand. Whilst
this typology is conceptual, it highlights the need for deeper understanding of the dynamics of the practices for each OBC type
and how these relate to brand value, which is most companys ultimate purpose in creating OBCs, both for the consumer and
for the company. Our planned research focuses on defining the intricate and delicate relationships between social bond
formation and brand value creation with a view to informing a future strategy for brand management. This will also enable the
consumers to enjoy a better brand experience as the marketers become aware of the importance of social bonds and attempt to
support the members social activities in the OBC context better in order to increase brand value.
FIGURES
Figure 1: The OBC as a Social Form of Brand Community
741
Figure 2: The OBC typology
References
742
WHAT YOU SEE IS NOT ALWAYS WHAT YOU GET: EXPLORING CHINESE WORD OF MOUTH
Jordan Gunderson, University of Nevada Las Vegas, USA
David Mikowski, University of Nevada Las Vegas, USA
ABSTRACT
Our paper builds on existing literature by studying the Chinese diaspora in the U.S. in terms of WOM triggers. We seek to
further understand the drivers for positive or negative WOM in this particular culture. As businesses continue to expand
internationally and draw foreign customers to the U.S., understanding cultural differences between U.S. and foreign
consumers becomes an important first step to developing adaptation strategies to foreign markets. China is emerging as one
of the worlds fastest growing major economy and provides an infinite amount of new opportunities for companies who strive
to expand internationally (BBC News, 2012). Despite the many opportunities in China, there are several obstacles to success
in the Chinese market. We conduct an experiment using purchase type (hedonic versus utilitarian) and service experience
(positive versus negative) as our between-subject manipulations on 137 non-student Chinese consumers. Our findings
indicate that Chinese consumers provide higher WOM for positive than for negative service experiences, but this finding is
attenuated by the purchase type. Overall, our research offers an experimental view of Chinese consumers and how they react
to hedonic versus utilitarian product types and negative and positive service experiences. Our findings augment existing
literature and call for further studies which can examine this same effect in a comparative framework cross-culturally.
As the business world becomes less company driven and more customer oriented, increasing loyalty becomes a critical factor
to building a successful company (Zahay, Peltier, and Krishen, 2012). Such loyalty is not easy to earn, but in the increasingly
socially connected world, customers who are brand advocates serve as a key marketing tool (Sen and Lerman, 2007). In
effect, as a free resource that consumers can avail of at any time and from multiple sources, word of mouth (WOM) not only
allows customers to tell their consumption stories and share their opinions, but it also allows them to research a seemingly
independent view of a business (Moore, 2012). As such, research abounds on the motivations driving WOM, whether
positive or negative, such as self enhancement, anger and retaliation, altruism, brand love, and many others (De Angelis et al.,
2012).
The culture of China is so vastly different than that of the U.S., that many products and strategies need refiguring before they
can be implemented in a country with more than one billion people. China is one of the worlds oldest countries with a
culture steeped in tradition and history. Government, religion, education and other major cultural factors cause Chinese
people to consume and perceive products and services differently than people in the U.S. The goal of U.S. companies
moving forward is to identify those differences and determine how best to convert them into competitive advantages.
As companies attempt to establish a presence in China, they will ultimately rely on marketing, and WOM of their customer
base. Given some of the special characteristics of the Chinese culture, understanding how Chinese consumers react to certain
retail situations will be critical in building a strong base in China. Therefore this paper examines how Chinese consumers
react differently to retail positive and negative situations, as they intersect with hedonic and utilitarian consumption contexts.
Thus, the key research question of the present paper is, How will the different combinations of positive or negative retail
experiences in either hedonic or utilitarian situations effect Chinese consumers levels of satisfaction, repurchase intent,
WOM, and view of switching costs? To our knowledge, no study has been conducted to explore this question in an
international marketing context. A better understanding of how WOM, satisfaction, repurchase intent and switching costs
can be influenced and predicted will help companies plan and prepare for the impact of their failures and successes.
743
WHEN DO LOGOS TALK TO THEIR AUDIENCE?

Tore Kristensen, Copenhagen Business School, Denmark
Gorm Gabrielsen, Copenhagen Business School, Denmark
INTRODUCTION
This study is based on two experiments where the ability of a new logo to reach and audience is explored. The approach is
inspired by cybernetics and is based on measuring the variation of the reception of a logo seen just once. The variation is
measured as the combined variation of between-subjects (differences between individual receivers) and, in object variation
which is the richness of content that is created in the message received by a single individual. A big variation between
subjects means that they do not see the same and the assumption is that the message does not get clearly through to the
audience. A big variation within-subject means that the individual receives a varied, deep, and nuanced message. The ability
to do this rests partly on the ability to activate competences and experiences from the past and thus making sense. The
findings are that few logo elements are received by audiences, but a few do. What characterizes them?
Big corporations invest enormously in logo design. The logos of companies like Coca Cola, Ford, Gillette, BMW, Kraft,
Marlboro and many others have long dominated the commercial visual sphere. The underlying reason may be brand equity or
brand space, or a belief that the logos will be immediately recognized and lead to purchase decisions. When CEOs and their
marketers plan a new logo, it is quite likely that they assume the customers would see exactly what they see themselves. But
is this really the case? For example, the Best Global Brands of 2012 listed on the brand consultancy firm Interbrands web
site consist of logos that we see everywhere and all the time. The purpose of this study is to explore whether the value of a
brand is due to the pervasiveness of its logo in the public domain or the strong appeal of the logo itself.
As with product design, logo design has elements of both problem solving and meaning creation (Heskett, 2005). However,
logos do not follow the linear path one might assume. In a recent study, we found that while the correlation between product
design and the financial performance of the firms was positive, the correlation for logos was negative (Kristensen and
Gabrielsen, 2011). The reason was that logos offer potential or future problem solving. That is, they do not require the
company to work in a cross-functional way, as is the case when designing a product. Designing a new product requires
collaboration between various business functions, whereas a consulting agency may perfectly design a new logo based on
studies of the company values and intentions. Most research interest in logos has focused on their aesthetics, largely ignoring
what they communicate to the consumer.
LITERATURE REVIEW
According to Henderson and Cote (1998), logos aim to create an accurate identification of the brand by attributing visual
forms, to create a positive affect and meaning of the offer by means of a subjective familiarity. A good logo should speed up
the recognition of the right brands and product names. This recognition is a purely cognitive process. And even though early
works summarized in Zajonc (2003) emphasizing that the separation between cognition and emotion is less clear-cut than
usually assumed, the article quotes research stressing the pictures and verbal material of logo recognition. Henderson and
Cote (1998) stress that ..a logo should readily evoke the same intended meaning across people.. (15). A number of quotes
reinforce that marketing stimuli should communicate one clear message that is difficult to misinterpret (Henderson and
Cote 1998, p 17).The implication is that the logo should cause very limited between-subject variation and penetrate deeply
into the mind of the respondents by esthetic appeal.
A challenge with the existing body of literature is the focus on the esthetic appeals of the symbols and their forms
(Henderson, Cote, Leong and Schmitt (2003). While all this is very interesting, the real challenge for the researcher is how
and when get a message through. The challenge with the research is that they do not address this question. A message can be
communicating brand identity, creating a positive attitude towards the future experience of the product, or in general to
express a mission. A mission is a performative, in the sense that it suggests possible action (Austin, 1979). For example,
while some logos merely underline the company values, like that of Toyota, which is three ellipses forming a round, strong
and harmonic T, others are performative, as they underline a future experiential quality of the company like the wings of
Swissair or Aston Martin or the Viking ship of Rover, the wild Ferrari horse on two legs, or the jumping Jaguar.
Performatives are expressions that cannot be attributed as true or false. They can be happy or unhappy, and need not promise
a particular performance, but rather indicate a mood.
744
A performative is a linguistic act that aims to influence real-world behavior. A NIKE Swoosh is supposed to signal
Simple, Fluid, Fast. The Starbucks Siren may exemplify: A Siren is a mythical figure from Homers Ulysses. Ulysses
wanted to listen to the song of the sirens, maybe to receive wisdom. He had to let his people tie him to the mast of the ship so
Ulysses could listen to the irresistible song of the Sirens because the assumption is that he could not take it (Elster 1979).
This way he could enjoy the temptation and still survive. Starbucks offers an experience for which you (almost) need a
protection. A logo, then, may be seen as a declaration that purchasing a particular product or experiencing it is inherently
desirable.
How can we measure the effective transfer of messages of mission statement combined with performatives to an audience?
We used models from cybernetics and information science. These models focus on transformation of systems due to
information exchanges (Ross-Ashby 1956). In such a model, a transformation concerns the change in several variables at the
same time, like when a message concerns various forms of information, emotional content, performative and metaphorical to
be received and treated in complex ways by a system different from the one sending the message off. Even the simple
concept of a logo consists of considerable complexity when it concerns both a visual message, perhaps an emotional and
performative appeal. In closed systems dynamics, it is possible to deal with both entropy, which is the mixing and blending of
information content within the system and noise, which is exchanges with outside the border. To analyze a logo as
communication in a commercial market is clearly an open system, and it is possible to deal with noise or information loss as
well as entropy, but hard to distinguish empirically between them. We may distinguish between two types of noise or
entropy, but for the sake of simplicity, we may just call it variation. At the other end, the consumer is receiving messages and
they may be characterized by redundancy. This means that the receiver, especially adults, have considerable experience in
deciphering messages due to exposure to art, advertising, street images, dramas, etc. Seeing a new logo implies activating
ones memory and creating a meaning (Leder et al. 2004).
According to the cybernetic view, there are systemic aspects of variation involved. One form of variation that may occur in a
communication model is the variation between the respondents. If this variation is big, we cannot assume that many receive
the same message. If it is small, it is an assumption that many are affected in a similar way by a message. We say the message
gets through, assume that many get it, and react to the message in predictable ways, etc. This means they may not use so
much time and cognitive work to recognize and compare logos.
There is also another kind of variation which we may call object variation. It refers to the nature of the message content. If
this variation is low, we can only assume that a highly stylized message such as the symbol, shape, a word or very superficial
message gets through. On the other hand, if object variation is high, it means that many nuances and a rich meaning gets
through. That means, both the symbol, the shape and form, the verbal message if any and the performative utterance and its
emotional connotations is received. In this case, we assume that it is a strong message, and it is clear and to the point. If we
take other possible forms of variations out of the equation and concentrate of the two, even represent the two forms so the
sum of between subject and object variation is 100%, we may see how they co-vary. In the case that both vary very much, the
percentages would be 50/50. Conversely, if the between subject variation is big, there is a Babylonian confusion. Few people
receive the same message and there is limited access to the market as such. The message does not get through. So what we
desire is a big object variation.
METHOD
We conducted two experiments. In the first experiment, we tested five logos designed by professional designers for a
business school according to mission statements they had received from the management and communication consultants.
The mission statements indicated that the school aimed at being seen as dynamic, credible and international. There were 187
participants, of which 106 were women and 81 were men. 118 respondents came from private organizations and companies,
31 worked for government, 29 were students from EU countries, and 9 were students from non-EU countries. The second
experiment was a logo for the (fictitious) East-West bus company, based on a design made by a Thai design student. The
assignment was to make a logo that could represent the East-West Bus Company which would transport people along the old
Silk Road between Asia and Europe. The experiment was conducted online in Thailand and Denmark. The number of
participants in Denmark were DD = 298. They represent a representative sample collected by the Webpol service. In
Thailand the sample was smaller, NT = 52, a convenience sample.
In all cases, the respondents were asked to indicate in paired comparisons which of two logos they thought best reflected a
particular mission statement, stated below on the same page. The paired presentations varied and in the end all logos were
systematically compared with each other and measured against the mission statement.
745

Both experiments showed that logos may successfully contain elements that prospective users or find meaningful and
register. There were intercultural differences, but in general they were smaller than interpersonal differences. Certain
combinations between the mission and design elements were found to be effective communication. Simple elements such as
stairs, normal position of a body, a straight eye or a normal-sized mane and tail could communicate positively a safety,
normality reassurance. Table 1 shows a summary of the findings.
It may be concluded that strong symbolic signs such as wings, stairs, eyes, horse in mobile positions, tails and mane appeal to
the audience, even if they one see it only once. Strange images such as a cross eye of a horse is a frightening view in
Thailand, perhaps because elephants rather than horses are common in this country or because such an eye signals madness.
It should be noted that inter-subject variation seems to be larger than inter-cultural variation. This seems to confirm the view
that individual experiences are important in activating the sense-making of a logo.
Future research will concern in more detail how performative utterances combine well with design elements.
TABLES
Table 1
Sample
Experiment 1
Five propositions for a business
school logo
Lists of traditional stakeholders
Experiment 2
One multi-modal logo for a fictitious bus
company
Danish sample and sample of Thai students
Match
of
mission
and
design elements
Wing shows dynamics.

There was a trade-off between the
beans and ladder.
Intercultural
issues
Personal
variation
Hardly significant small sample
Safe and responsible missions were supported

by grazing position of horse, normal round eye
and normal sized mane and tail. Cross eyes
scared Thai respondents.
Significant, but not strong
Very high, which means limited

effect
Most elements strongly individual, except issues

related to safe and responsible.
Object - logo
REFERENCES
746
DOES 3D MAKE SENSE? THE ECONOMIC IMPLICATIONS OF ADDING A THIRD DIMENSION TO

ENTERTAINMENT PRODUCTS
Ann-Kristin Knapp, University of Muenster, Germany
ABSTRACT
Hedonic media industries face uncertainties when assessing the business potential of adding a third dimension (3D) to their
products. As producing entertainment content in 3D format may require a multimillion-dollar investment, it is unclear
whether such an investment is economically viable. Using the theoretical concept of hedonic consumption, we discuss the
additional value of consuming a product in 3D. We derive a contingency framework of how 3D affects movie success,
featuring the time of movie release, its genre and whether it is an early or late sequel to a previous movie as moderators.
Specifically, we investigate the incremental effect of 3D in the movie industry using secondary data of all 73 digital 3D
movies released between 2004 and 2011 in North American theaters and a statistically matched control sample of 1,082 2D
movies. We apply propensity score matching to account for the systemic difference between 3D and 2D movies that arises
from a preferred treatment of 3D products by movie studios. We thereby provide empirical evidence for a strong sample
selection bias which implies a general overestimation of the 3D effect. When controlling for this inherent difference, there is
no straightforward answer to the question of whether 3D is advantageous for entertainment media producers. Instead,
weighted least squares regression analysis indicates that the impact of 3D on movie success is determined by several product
characteristics as well as a non-linear interaction effect with time.
747

HOW DIGITAL SIGNAGE AFFECTS SHOPPERS IN-STORE BEHAVIOR: THE ROLE OF THE EVOKED
EXPERIENCE
Eleftherios Alamanos, University of Lincoln, UK
Charles Dennis, University of Lincoln, UK
INTRODUCTION
Since shopping is not just about obtaining tangible products but also enjoyment and pleasure (Martineau 1958), a practical
and theoretical concern is then to examine how specific design features of retail outlets stimulate consumers enjoyment and
pleasure. According to Schmitt (1999), retail environments can provide consumers with compelling experiences, which can
positively affect consumer shopping behavior, reflected by the time and money spent in the store. To enrich the
understanding of the processes that mediate the relationship between shoppers experiences evoked by specific atmospheric
design cues, and their in-store behavior, this study proposes an in-store response model which uses the construct of brand
experience (Brakus, Schmitt and Zarantonello 2009). In particular, this paper investigates how in-store screen networkalso
known as Digital Signage (DS)can be used as a provider of compelling experiences for shoppers which affect subsequent
consumer behavior. DS content may include advertisements, community information, entertainment and news. This study
focuses on the DS messages that are designed to provide shoppers with either sensory-affective or intellectual experiences
(Brakus et al. 2009) and examines DS as an effective, marketer-manipulable retail atmospheric stimulus.
THE EFFECTIVENESS OF DIGITAL SIGNAGE AS AN EXPERIENCE PROVIDER: PREDICTIONS
Brand experiences result from consumer interactions with brands as well as with shopping environments (Brakus et al. 2009).
They are neither belief-based nor evaluative judgments about the brand. They include internal responses such as sensations,
feelings, divergent (imaginative) thoughts and approach behaviors as well as convergent (analytical) thoughts triggered by
brand-related stimuli (Brakus et al. 2009). Therefore, most brand experiences are not cognitive, except for high-order
intellectual, analytical thoughts and reasons. In contrast, brand attitudes are general evaluations based on beliefs (Fishbein
and Ajzen 1975) and they do not tend to elucidate the nature of brand experience. However, brand experiences can result in
brand evaluations, both utilitarian and hedonic, and may develop into attitudes (Brakus et al. 2009).
We think that the experience construct is conceptually tied with both pleasure and meaning (Waterman 1993). Specifically,
evoked sensory-affective as well as behavioral experiences may contribute to pleasure, whereas evoked intellectual
experiences may contribute to meaning. In a shopping and retailing context, brands incorporate both products and services.
We argue that DS can enhance the overall shopping experience by building service brand for the advertiser due to the unique
characteristics of DS. Specifically, this study predicts that experiences evoked by DS aredepending on their type
important contributors to shoppers pleasure or to their ability to buy what they want. That is, a message broadcast on the instore DS designed to contain sensory cues may evoke an affective experience among customers. Since such experience is
inherently pleasurable (Dewey 1934), it may then positively affect shoppers attitude and approach behavior. In contrast, an
informational message may evoke an intellectual experience which consumers may find meaningful because it informs their
in-store decision making.
This study also suggests that evoked experiences can positively affect consumers approach behavior towards the advertiser
directly (experiential route) and indirectly through the (positive) attitudes towards the ad (deliberative route) (Epstein 1994).
When consumers are exposed to message designed to contain affective content, the experiential processing system tends to
operate by default and consumers rely on it when they process pleasant, affect-laden incidental cues because it is unlikely that
consumers can devote sufficient cognitive resources and effort to engage the deliberative system (Gorn, Goldberg and Basu
1993). In a previous study examining the effects of DS the majority of respondents were unable to recall specific content
(Dennis et al. 2010). Therefore, consumers intuitively infer their attitude from the (positive) affect, an example of the
affect-as-information heuristic (Schwarz and Clore 1996).
We summarize the preceding theorizing in the following hypotheses:
H1a: Digital signage ads with cognitive content (providing utilitarian information) will evoke intellectual brand experience
among consumers.
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H1b: Evoked intellectual experience will be directly associated with increased approach behavior towards the advertiser.
H1c: Evoked intellectual experience will be indirectly associated with increased approach behavior towards the advertiser by
positively affecting attitude towards the ad.
H2a: Digital signage ads with affective content (providing hedonic information) will evoke affective brand experience among
consumers.
H2b: Evoked affective experience will be directly associated with increased approach behavior towards the advertiser.
H2c: Evoked affective experience will be indirectly associated with increased approach behavior towards the advertiser by
positively affecting attitude towards the ad.
H3: Digital signage ads providing affective content, unlike digital signage ads providing cognitive content, will be directly
associated with positive attitude towards the ad.
Due to the primacy-of-affect effect (Pham et al. 2001) which likely operates when consumers are exposed to incidental
stimuli during a shopping trip (see above), we also propose that:
H4: Evoked affective experience will be more associated with increased approach behavior towards the advertiser than will
evoked intellectual experience.
The first-time shoppers are theoretically important because their motives for the visit are likely mostly hedonic and these
shoppers, unlike regular shoppers, may find aesthetic in-store experiences particularly stimulating. Therefore:
H5: Digital signage has a greater effect on the first-time shoppers then on the regular shoppers.
METHODOLOGY
For data collection, we used a popular high-end retail store in London, also a well-known brand and a tourist destination. We
focused on the process by which DS messages influence shoppers utilitarian and hedonic evaluations and drive their attitude
and approach-related behavior towards the ads broadcast and towards the advertiser, which was an in-house, upscale travel
company. The actual content of DS messages was produced by a commercial specialist who created three types of ad:
(i)
(ii)
(iii)
High-cognitive/low affect (C): an ad that contains brief details and price of a tropical island holiday in text
form with the logo of the travel company;
High affect/low cognitive (A): an ad that consists of a video of a seaplane landing in a beautiful tropical lagoon
next to a golden sand beach, also with the logo of the same travel company; and
High cognitive/high affect (CwA): an ad that combines the video and text from the first two ads.
Visitors at the store, who consented to participate in the study, were general shoppers and through the exposure to DS they
were collecting information for the advertised holiday package. Respondents were given a questionnaire which was designed
to get their responses on 1-to-5 scales that rated the strength of the causal relationships being investigated. The questionnaire
was used to test the causal relationships between the constructs identified and it concerned the following themes: (i) travel
agent affective/sensory brand experience (Brakus et al. 2009); (ii) travel agent intellectual brand experience (Brakus et al.
2009); (iii) attitude to the ad; and (iv) approach behavior towards the advertiser (the extent to which the respondents were
influenced by the ad in relation to their attitude and the transactions with the advertiser). Evaluations of DS and approach
behavior towards the advertiser constituted the dependent variables. We also measured spending and number of items
expected to be bought on that visit. High-cognitive/low affect, high affect/low cognitive and high cognitive/high affect ads
were tested by using a between-subjects design (146, 137, and 154 respondents respectively; n = 437).
When respondents started the questionnaire, the DS was visible and the content loop running, including the test ad. Initially
respondents answered general questions and then were asked to view the DS ad. Finally, they answered the DS questions
followed by approach behavior questions.
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Manipulation Checks
We tested the extent to which the DS ads with the high cognitive and the high affective content were perceived as such by the
participants. As expected, the content of the three ads resulted in the predicted utilitarian and hedonic evaluations of those
ads.
Predictions
The next step was to test the predictions regarding the influence of the DS ads on shoppers responses through a latent path
structural equation model (SEM). In reporting the total effects of the variables, SEM was applied three times to separate out
the effects respectively of (i) the CwA ad and (ii) the A ad; both compared with the C ad; and (iii) the CwA ad compared with
the A ad. (For brevity, the details of these separated SEMs are not reported but the results are similar to the appropriate parts
of the combined model).
As predicted, the estimated model links the specific digital signage ads to specific evoked experiences: cognitive ad to
intellectual experience and emotional ad to affective experience; then the evoked experience to approach behavior (from
intellectual experience and affective experience respectively). There are also indirect significant paths from intellectual
experience and affective experience to approach behavior via attitude towards the ad. Finally, there is a significant direct path
from the emotional ad to attitude towards the ad, yet the direct path from the cognitive ad to attitude towards the ad is nonsignificant, as predicted.
The direct influence of affective experience on approach (0.53) is significantly greater than the direct influence of intellectual
experience (0.14) (t = 4.82 p < .001), demonstrating that affective experience directly influences approach behavior more
than does intellectual experience. The same relationship holds if the direct and the indirect paths linking the respective
experiences with approach behavior are considered. The total effect of intellectual experience on approach is .17 (.144 + .133
x .187). The total effect of affective experience on approach is .63 (.526 + .541 x .187 + .290 x .133 x .187). These results
indicate that evoked affective experience is a stronger predictor of approach behavior than evoked intellectual experience.
As predicted, the cognitive ad is associated with the evoked intellectual experience, whereas there is no association between
the affective ad and intellectual experience. Also, the affective ad is associated with the evoked affective experience, whereas
there is no association between the cognitive ad and affective experience.
The path from affective to intellectual experience is significant, consistent with a previously reported result that hedonic retail
atmospheric stimuli could influence utilitarian evaluations (Beverland et al. 2006) and theoretically consistent with affect-asinformation heuristic (Schwarz and Clore 1996). An affective experience evoked by aesthetically pleasing sensory imagery
has a positive effect on higher-order utilitarian evaluations and evoked intellectual experience, exemplifying experiential and
cognitive information processing systems co-working (Epstein 1994). In conclusion, H1, H2, H3, and H4 are confirmed.
Differences Between Groups
The findings also indicate that there is a significant effect of the content on attitude to the ad. Exposing shoppers to either A
or CwA (compared to C) significantly increases attitude to the ad; on the other hand, there is no significant difference
between effects of A and CwA. We obtained similar results for approach to the advertiser and for the expected shopping
outcomes.
There are also significant differences between shoppers who visit the store for the first time (FV) and those who have visited
the store before (NFV). Affective experience (MFV = 3.3 vs. MNFV = 2.8, t (413) = 4.2, p < .01), attitude towards the ad (MFV
= 3.8 vs. MNFV = 3.4, t (413) = 4.5, p < .01), and approach to the advertiser (MFV = 3.1 vs. MNFV = 2.7, t (413) = 3.7, p <
.01) are significantly more positive for shoppers on their first visit, therefore confirming H5.
A further analysis of the first vs. non first visit customers has revealed that they differ in their evaluation of the CwA ad. That
is, the only significantly different structural weight in the SEM comparing the CwA with the C ad is the path from the
dummy variable CwA ad to affective brand experience, which is significantly higher for those on their first visit (.82)
compared to those not on their first visit (.57). The standardized total effect of the CwA ad (compared to the C ad) is greater
for shoppers on their first visit (.55) compared to subsequent visits (.45). Therefore, the CwA ad can positively influence
shoppers who are on their first visit more than others.
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The article has demonstrated that DS is an effective and controllable in-store experience provider. In relation to the
theoretical implications, the article suggests that DS works by evoking specific experiencesaesthetically pleasing sensoryaffective or decision-helping intellectualwhich then positively affect shoppers approach behaviors directly and
indirectly through the attitudes. Therefore, the study provides a theoretical explanation of the effectiveness of DS in retailing
by considering DS as an experience provider and by incorporating the type of the evoked experience as a key construct as
suggested by Brakus et al. (2009). It also contributes to the research on the influence of other pleasant atmospheric stimuli
(e.g., music, scent and lighting) on consumers shopping experience (e.g., Chebat and Michon 2003; Mattila and Wirtz 2001).
Regarding practical implications, the findings suggest that DS ads that evoke affective experience can be effective in
increasing shoppers intentions to buy from an advertiser and from a store that carries the DS ads. In addition, DS ads can
increase the intended time spent in the store. Finally, DS ads tend to be more attractive to shoppers who are in their first visit
in the store; therefore it can have important implications for store loyalty by enhancing consumers intentions of revisiting the
store.
A limitation of the study is that respondents were asked to watch the ads on the DS screens. Asking them to watch the ads
might have had an effect on the respondents processing of the ads. Future studies can elaborate on this limitation by carrying
out field experiments in which consumers will respond after the shopping experience in order to examine the degree to which
they can recall the DS message.
REFERENCES
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A MULTIDISCIPLINARY EXAMINATION OF 3D VIRTUAL SHOPPING ENVIRONMENTS: EFFECTS ON

CONSUMER PERCEPTUAL AND PHYSIOLOGICAL RESPONSES
Manveer Kaur Mann, Old Dominion University, USA
Yuping Liu-Thompkins, Old Dominion University, USA
Ginger S. Watson, Old Dominion University, USA
Yiannis E. Papelis, Old Dominion University, USA
INTRODUCTION
3D virtual reality technology can be used to create innovative virtual store environments capable of delivering unique and
engaging shopping experiences. However, the value of using such an advanced technology has not been fully exploited yet.
This study brings together knowledge from marketing, psychology, and engineering disciplines to investigate the role of
immersive 3D virtual reality in enhancing consumer experience in an online store environment. We propose to design an
immersive 3D virtual store and use psychological (cognitive elaboration, perceived diagnosticity, and perceived value) and
physiological (neuroimaging) measures to examine how consumers respond to the 3D environment versus a 2D environment.
By doing so, this study will illustrate the potential of 3D virtual reality in delivering more appealing shopping experiences than
the traditional 2D interface featured by most existing online retail websites. Thus, the findings of this study can be the harbinger
of future development of virtual shopping environments.
BACKGROUND
Since major online retailers Amazon.com and eBay opened their doors in 1995, the Internet has become an important retail
channel. According to Forrester Research, online shopping in the US is estimated to generate $226 billion in retail sales in
2012, and is expected to grow to $327 billion in 2016 (Rueter, 2012). Although the absolute magnitude of online retailing is
impressive, online shopping still accounts for only 7% of overall retail sales. A key barrier to further consumer adoption of
online shopping is the lack of rich sensory information in the online environment (Park, Lennon, & Stoel, 2005). Despite almost
two decades of development, retail websites are still mostly stuck with a click-and-order model, basically an online equivalent
of product catalogs with very limited interaction and visualization capabilities. This restrains consumers ability to fully
evaluate products and increases the risk associated with online shopping.
Current advances in virtual reality offer potentially promising solutions to the above problem. Virtual reality can be used to
produce 3D depictions of goods and environments, such that consumers can experience and actively interact with objects in
such 3D virtual environments. This provides a more realistic representation of products with more vivid information through a
multitude of sensory channels (Pantano & Servidio, 2012).With the help of new 3D display technologies, both retailers and
consumers can potentially utilize these technologies at a relatively low cost.
Although promising, the effectiveness of 3D virtual shopping environments is not well-understood (Pantano & Servidio, 2012).
This may be due in part to the wide variety of knowledge and skill sets needed to examine such environments: the technical
development of a 3D virtual shopping environment requires sophisticated engineering and computer programming; the optimal
design of the environment needs knowledge about consumers and the marketplace; and studying the effects of such an
environment requires help from human psychology. Hence, a systematic investigation of 3D virtual shopping environments is
inherently a multidisciplinary problem.
This study assembles a team of researchers with diverse backgrounds and experiences in merchandising, marketing, virtual
environment design, and human perception in order to examine the relative effectiveness of 3D virtual shopping environments
versus traditional 2D scenarios. Using perceptual and physiological (neuroimaging) measures, it will generate an in-depth
understanding of how consumers interact with such environments and the factors within the environment that contribute to
more or less positive consumer experiences. In doing so, it will help quantify the potential of 3D virtual reality in enhancing
consumer experience in an online store.
CONCEPTUAL DEVELOPMENT
The overall goal of this study is to investigate the role of immersive 3D virtual reality in enhancing consumer experience in an
online store environment. Specifically, we will examine the role of vivid presentation (in a 3D environment) in enhancing the
perceived value of an online store environment. Previous research related to the persuasive power of vividness is inconclusive,
752
as some studies succeeded in demonstrating the persuasive effect of vividness (e.g., McGill & Anand, 1989), while others
demonstrated that a vivid message is not always more persuasive than a non-vivid message (Keller & Block, 1997). In response,
some empirical studies were conducted to examine the set of circumstances in which vividness effects occur (e.g., McGill &
Anand, 1989; Keller & Block, 1997). However, we argue that an examination of the psychological and physiological processes
underlying vividness effects may be more beneficial in understanding how vividness works in marketing messages. More
specifically, in this study, we utilize physiological and psychological measures to examine the persuasive effects of vividness
in the context of 3D virtual store environments.
A vivid product presentation enhances the representational quality of product demonstrations by presenting more informational
cues about the product and stimulating more sensory channels than a pallid product presentation (Jiang & Benbasat, 2007). For
example, an immersive 3D virtual store environment can simulate direct examination of the product more closely than a 2D
virtual store environment, due to a richer presentation of the product (3D depiction vs. 2D depiction) and a greater level of
interactivity (e.g., using standard input devices vs. hand gestures to inspect a product). The Elaboration Likelihood Model
(ELM) suggests that, when individuals are given the opportunity to process a message (e.g., by having sufficient informational
cues to process), they engage in higher elaboration (cognitive processes such as evaluation, recall, critical judgment, and
inferential judgment). Consequently, an immersive 3D virtual store has the potential to stimulate more cognitive elaboration
among users.
However, this effect may not be uniform across individuals. In the context of product presentation, Schlosser (2003)
demonstrated that greater object interactivity produces more elaborate cognitive responses from experiential users. However,
the relationship was reverse for searchers or users with utilitarian goals. In terms of cognitive processing, searchers are goal
oriented and often have prior expectations about a product. Therefore, they are more likely to be concept-driven and engage in
top-down processing which is guided by prior expectations and knowledge. Their emphasis is efficiency in reaching their goal.
In contrast, experiential users are more likely to be data driven. Therefore they engage in bottom-up processing which is guided
by the stimulus and is more malleable based on the environment. They focus more on the actual experience that they derive
from the interaction.
The consumer learning literature further suggests that due to confirmation bias and pseudodiagnosticity, people are more
concerned about false positives and thus lean towards facts or unambiguous information that confirm their prior beliefs and
tend to interpret ambiguous stimuli as a confirmation of their prior beliefs (Hoch & Ha, 1986). Accordingly, in the case of topdown processing (searchers), the strive towards efficiency dictates that ambiguous stimuli will be less useful in learning new
information (Hoch & Ha, 1986). In the context of online shopping, a 3D environment can provide more vivid information than
a 2D interface, which presents both opportunities and threats. The opportunity is that 3D environment offers more informational
cues. The threat is that, vivid product presentation can be considered ambiguous and in that case, it is likely that searchers will
perceive vivid presentation to be less useful than information that is neither vague nor open to interpretation (unambiguous)
(Hoch & Deighton, 1989). For example, a 3D depiction of a handbag provides more information cues than a 2D depiction, but
searchers may perceive these informational cues to be ambiguous; for example, less vivid textual information (unambiguous)
about product measurement may be considered more useful than the more vivid but ambiguous visual gauge of product
dimensions in a 3D environment. As a result, they may discount such ambiguous information and do not process the
information in depth. Therefore, 3D depiction may not have any added value over a 2D depiction for searchers.
In contrast, experiential users (or browsers) browsing a website without the intent of confirming prior expectations or goals
(data-driven processing) are less likely to be swayed by confirmation bias or pseudodiagnosticity. Thus, they are less likely to
discriminate against ambiguous information. Quite the opposite, the more vivid and entertaining experience derived from a 3D
interface may prove more useful to these users than searchers. Based on this discussion, we expect that by presenting richer
information and stimulating more sensory channels, an immersive 3D virtual store environment can produce greater elaboration
and be perceived as more useful by browsers than can a 2D environment. But such difference will not be observed for searchers
due to the ambiguity of information. This leads to the next three hypotheses.
H1: An immersive 3D environment will elicit more elaboration than a 2D environment among experiential browsers but not
among goal-oriented searchers.
H2. A 3D product presentation will be considered less diagnostic (more ambiguous) than a 2D product presentation by
searchers, while the opposite will be true for browsers.
H3. An immersive 3D virtual store environment will be perceived to be of greater value than a 2D environment by browsers,
while the opposite will be true for searchers.
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We test the above hypotheses using psychological measures, as we will describe in the next section. But to provide further
corroboration the underlying process behind these differences, we also examine the neurological response in a subsample of
the participants. Reflected in physiological responses, a higher level of elaboration should translate into greater brain activity
in the areas associated with cognition. Additionally, perception of greater experiential value of 3D store environment by
browsers than searchers should translate into greater brain activity in the areas associated with visual processing and pleasure.
Observing brain activities in these areas will provide further proof of the differential impact 3D vs. 2D shopping environments
have on consumers.
RESEARCH METHODS
We will conduct an experiment featuring a 2 (2D vs. 3D retail environments, between-subject) 2 (searchers vs. browsers,
between-subject) full factorial design. The dependent variables will include physiological response (neuroimaging), perceived
diagnosticity, cognitive elaboration, and perceived value.
Stimulus Two versions of the same virtual store specializing in the product categories of luggage/handbags and office desk
products will be developed, one representing an immersive 3D environment and the other one a 2D version. The immersive 3D
environment will be realized through an auto-stereoscopic 3D display. It will contain interactive features that allow participants
to visualize and virtually inspect the products. Participants will be able to interact with these features using hand gestures, via
Microsoft Kinect. In contrast, the 2D store environment will present a traditional ability to interact via a standard input device
(mouse and keyboard).
Dependent Variables Existing scales will be used to measure perceived value (Babin, Darden, & Griffin, 1994) and perceived
diagnosticity (Jiang & Benbasat, 2007) on a seven-point Likert-type scales. Cognitive elaboration will be assessed via a
standard thought-listing procedure immediately following their interaction with the environment. Demographic variables
including age, gender, technology expertise, knowledge in the target product category, and involvement with the target product
category will also be recorded. For a subsample of the participants, electroencephalography (EEG) will be used for
neuroimaging to measure physiological response in terms of pleasure, cognition, and visual processing (Damasio, 2002) and
will be recorded while the participants interact with the virtual store environment.
Participants and Procedures A convenience sample of 100 participants will be randomly assigned to the 2D or the 3D version
of the virtual store. Within each store environment (2D or 3D), half of the participants will be assigned a goal of efficiently
finding a specific product within the website, and the remaining half be instructed to browse the website and look at whatever
they consider interesting. After the participants are done with interacting with the environment, they will answer a questionnaire
containing measures of their perceptual responses and the control variables. For eight participants, physiological responses will
also be tracked using EEG during their interaction with the virtual store. The relatively small sample size for the EEG tracking
is due to the costly and data-intensive nature of taking physiological measures.
Analysis Two-way ANOVA will be used to analyze the effects of the virtual store type (2D vs. 3D, between-subject) and user
goals (searchers vs. browsers, between-subject) on each of the dependent measures. Summative physiological data will be
reduced to single variables by using Matlab scripts for statistical analysis. Additionally, time series analysis will be conducted
to determine how the participant interaction evolves over time. The relationship among the perceptual and physiological
measures will be further explored through mediation analysis.
RESULTS
Currently the data collection is being prepared, and the results will be presented at the conference.
IMPLICATIONS
This study addresses a cutting-edge technology that can greatly benefit retail and other consumer product companies. As 3D
virtual technology matures and the cost decreases, it opens up the opportunity to creating a natural and rich shopping
environment that more closely matches what consumers encounter in an offline retail store. So far, studies of 3D virtual
technology have focused mostly on its applications in education, training, and entertainment. While some businesses have
started to explore the potential application of the technology to retailing, there is very limited systematic research that examines
how consumers respond to such a 3D virtual retail environment and what elements in such an environment will be more
essential. Our study presents an innovative approach to answering these questions from a multidisciplinary perspective merging
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engineering, marketing, psychology, and neuroscience fields. By doing so, we provide a holistic understanding of 3D virtual
shopping environments. With proper implementation, such environments not only can dramatically enrich online retail
offerings but can even be used to enhance point of purchase experiences in the offline context.
Besides the cutting-edge technology, this study also incorporates a unique combination of psychological and physiological
measures. So far, research on online consumer responses has focused on perceptual measures such as attitudes and intentions,
and on occasion has incorporated direct behavioral responses such as browsing paths on a website or actual purchases.
Physiological responses have not received much attention, despite their significant impact on consumer perception, choice, and
actions. This study draws upon the emerging field of neuromarketing to assess second-by-second consumer response to virtual
environments. This will help identify which type of retail environment produces the most positive cognitive and emotional
response and what elements in the environment induce such responses. By combining both a perceptual approach and a
physiological perspective, we contribute to a deeper understanding of online consumer behavior and enable businesses to better
satisfy the needs of their customers.
REFERENCES
Babin, B. J., W. R. Darden, and M. Griffin. (1994). Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value.
Damasio, A. (2002). How the Brain Creates the Mind. Scientific American Special Edition, 12(1), 4-9.
Hoch, S. J. and J. Deighton. (1989). Managing What Consumers Learn from Experience. Journal of Marketing, 53, 1-20.
Hoch, S. J. and Y-W. Ha. (1986). Consumer Learning: Advertising and the Ambiguity of Product Experience. Journal of
Consumer Research, 13, 221-223.
Jiang, Z., and I. Benbasat. (2007). Investigating the Influence of the Functional Mechanisms of Online Product Presentations.
Information Systems Research, 18(4), 454-470.
Keller, P. A. and L. G. Block. (1997). Vividness Effects: A Resource Matching Perspective. Journal of Consumer Research,
24, 295-304.
McGill, A. L. and P. Anand (1989). The Effect of Vivid Attributes on the Evaluation of Alternatives: The Role of Differential
Attention and Cognitive Elaboration. Journal of Consumer Research, 16, 188-196.
Pantano, E. and R. Servidio (2012). Modeling Innovative Points of Sales through Virtual and Immersive Technologies. Journal
of Retailing and Consumer Services, 19, 279-286.
Park, J., S. J. Lennon, and L. Stoel. (2005). On-Line Product Presentation: Effects on Mood, Perceived Risk, and Purchase
Intention. Psychology & Marketing, 22(9), 695-719.
Rueter, T. (2012). E-retail Spending to Increase 62% by 2016.
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HEY DEE-JAY LETS PLAY THAT SONG AND KEEP ME SHOPPING ALL DAY LONG.
THE EFFECT OF FAMOUS BACKGROUND MUSIC ON CONSUMER SHOPPING BEHAVIOR.
Luca Petruzzellis, University of Bari Aldo Moro, Italy
Jean-Charles Chebat, HEC Montreal, Canada
Ada Palumbo, University of Bari Aldo Moro, Italy
ABSTRACT
Atmospherics can act as a heuristic cue and guide consumer preference towards immediate choice. Background music is the
major element of retail atmospherics, it has been shown to stimulate not only emotions, but also cognition mainly when other
cognitive cues are either absent or significantly reduced. However, no studies have analyzed the effect of the notoriety of the
music on consumer behavior. This paper aims at analyzing the effect of the type of music, whether or not famous, on the
retail patronage, thus covering a gap in the literature. The findings show that a famous music reduces shoppers' cognitive
activity. It is very likely that it distracts their attention from the store cues such as the promotion messages. On the other
hand, famous music enhances positive feelings that, in turn, enhance shoppers' patronage.
INTRODUCTION
Atmospherics affect consumer behavior (e.g., Turley and Milliman 2000), in particular sales due to odor (Herrmann et al.
2013), product evaluation due to lighting (Ballantine et al 2010); patronage intentions due to store layout (Jacobs et al 2010),
price perception due to colors and lighting (Babin et al. 2003), purchase intentions due to merchandise arrangement (Law et
al. 2012). Atmospherics impact in-store behavior through the mediation of emotions and attitudes (Wirtz and Mattila 2007;
Vaccaro et al 2009; Puccinelli et al 2007). For example, slow tempo music compared to fast-tempo music produces affective
responses and consequently positive outcomes such as satisfaction, positive disconfirmation of expectations and relaxation
(Oakes et al 2003). Moreover, music induced pleasure was found to affect store evaluation, by the mediation of the attitudes
toward the servicescape and the sales personnel (Dube and Morin 2001).
Music, among atmospheric cues, is a powerful emotional stimulus, an efficient and effective means for triggering moods and
shaping retail experience (Jain and Bagdare 2011). Music can alter moods, which alters behaviors (Donovan et al. 1994;
Oakes 2000); in particular, music likeability (valence) exerts a positive influence on consumers mood (Grewal et al. 2003).
Most studies have analyzed emotional (Alpert and Alpert 1990; Grewal et al. 2003; Morrison and Beverland 2003) and
behavioral (Broekemier et al. 2008; Cameron et al. 2003; Morin et al. 2007) responses rather than cognitive ones (Areni
2003; Oakes 2003; Sweeney and Wyber 2002). Music has been manipulated both in its structural characteristics such as time
(rhythm, tempo, phrasing); pitch (melody, mode, harmony) and texture (timbre, orchestration and volume), and in its
affective elements such as valence (liking), familiarity and types (Jain and Bagdare 2011). However, no studies have yet
analyzed the notoriety of the music and its effect on consumer behavior. Some papers have considered familiarity as a proxy
of notoriety (Garlin and Owen 2006; Yalch and Spangenberg 2000); however, familiarity does not imply notoriety and vice
versa. Notoriety is an objective experience, that is, a music track is famous when it has been widely recognized as such. This
means that the chance individuals have been previously exposed to the music is high, so that it could imply that they could be
familiar with the music. However, familiarity, like originality, is a subjective experience. It is function of the tempo, tone and
melody. People could not know or be familiar with the famous music, as well as they could know non-famous music since
they could have been exposed to it before. Moreover, the familiarity effects easily fade over time. Therefore, music to be
familiar has to be heard before, due either to actual prior experience, or to context effects, which create a feeling of
familiarity. Contrary to advertising research (e.g., Pieters et al. 2002) familiar music attracts much attention than unfamiliar
one because it rapidly recalls memories. On the other hand, notoriety affects both cognition (negatively or positively) and
emotions (positively).
This paper aims at analyzing the effect famous-vs-non famous music on retail patronage. Three questions are addressed: 1)
Does famous (vs non famous) music cognitively impact patrons behavior?; 2) Does the notoriety of the music impact
consumers affective feelings?; 3) Does famous (vs non famous) music contribute to consumers identification with the mall?
Atmospherics guide consumers preference towards immediate choice, enhance consumer experience in retail (Puccinelli et al.
2009), increase purchase level (Morin et al. 2007), shopping time (Yalch and Spangenberg 2000) and expenditure patterns
(Guguen and Petr 2006).
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Consumers have limited cognitive abilities. Atmospherics or some elements of it, such as music and odor, can negatively
impact consumer decision making process (Shankar et al. 2000). Cognitive psychology studies show that low cognitive
activity reduces the strength of the relation between stimulating cues and attitudes (e.g., Mick 1992). Consequently the
presence of atmospheric cues is likely to cause either decision postponement (Chernev 2003) or negative emotions, such as
anxiety, frustration and stress, which leads to dissatisfaction and reduces the likelihood to purchase (Iyengar and Lepper
2000). This could cause confusion in the customer overwhelmed by atmospheric cues, leading to an unpleasant shopping
experience and dissatisfaction (Jacoby and Morrin 1998).
Background music is a major element of retail atmospherics (e.g., Garlin and Owen 2006; Milliman 1982, 1986; Morrison et
al 2011). It increases sales and positive attitudes toward the store. Music has been shown to stimulate emotions (e.g., Chebat
et al. 1993, Dub et al. 1995, Lin 2010) and cognition mainly when other cognitive cues are either absent or significantly
reduced (e.g., Chebat et al. 2001). Prior research across various disciplines such as marketing (e.g., Demoulin 2011),
psychology (e.g., Webster and Weir 2005) and music (e.g., Husain et al. 2002) have found a range of cognitive, affective and
behavioral consumer responses stimulated by music. The main and common result is that background music directly impact
shopping experience by influencing the purchase needs, overall affective evaluations and financial returns in terms of value
of sales, repeat purchase, items purchased, rate of spend, quantity purchased, and gross margin (e.g., Herrington and Capella
1996; Garlin and Owen 2006; Oakes and North 2008). Moreover, background music contributes to creating or enhancing
retail and brand images, managing time perception, liking or disliking the store and its assortment, increasing purchase
intentions (Areni 2003; Morin et al. 2007).
Most prior work examines music effects as a result of the elicitation and transfer of affects, in line with typical StimulusOrganism-Response (S-O-R) models that dominate environmental psychology (Mehrabian and Russell 1974). Music has
been found to affect emotional states, especially pleasure and arousal (Garlin and Owen 2006). In fact, a pleasant music
influences more favorable attitudes toward the servicescape and/or the provider (Dube and Morin 2001), more affective
responses to waiting (Oakes 2003), an increased desire to affiliate and more favorable service outcomes like evaluation,
patronage intentions and behaviors (Herrington and Capella 1996; Hui et al. 1997). Whereas an arousing music pushes
consumers to carry out their activities more quickly (Caldwell and Hibbert 2002). Indeed, music enhances varied responses,
such as expectations, perceptions, attitudes and quality evaluation, which are processed by cognitive activity (Jain Bagdare,
2011). For example, variations in tempo and genre affect cognitive processing in terms of quality perceptions and
consequently determine intended approach behavior, such as enjoyment of shopping, time spent browsing and exploring,
willingness to affiliate, tendency to spend more than anticipated, likelihood of returning to the store, willingness to buy,
likelihood of recommending the store (Sweeney and Wyber 2002).
Among the number of desirable consumers positive outcomes, patronage is one of the most effective in indicating a
proficient long-term relationship; consumers who frequently visit the mall and for longer durations will likely spend more
(Yavas and Babakus 2009). All the atmospheric cues and the retail managers efforts are aimed at increasing mall patronage
(Parsons 2003; Parsons and Ballantine 2004). Music has been found to positively affect patronage both through its liking
component (Vaccaro et al 2011) and through the simple presence (Garlin and Owen 2006).
Mall patronage depends on a number of dimensions (e.g. price and promotions, merchandise quality and variety,
accessibility) summarized in the concept of mall image (Chebat et al. 2010). In fact, a mall with a highly defined image is
likely to attract shoppers that may identify themselves with the kind of shoppers that patronize the mall; in other words the
concept of self-congruity (Sirgy 1982). The self-congruity affects patronage; shoppers select cues from a store environment
(e.g., music) and infer from these cues the personal characteristics of the typical shoppers. They then compare store/mall
image with their own self-images. Thus, the selected cues help shoppers to experience self-congruity. In turn, self-congruity
influences consumers attitude and behavior. The greater the fit between the mall image and the consumer self-concept, the
more favorable the attitude toward the store. As behavior is consistent with the self-concept, consumers patronize stores that
reflect their own images and make them feel comfortable during shopping.
Marketing and consumer behavior literatures demonstrate the effects of self-congruity on brand preference, choice,
satisfaction, and loyalty (e.g., Sirgy et al. 1991, 2000). Despite self-congruity experience affects patronage, there is a lack of
research analyzing the relationship between musical cues, self-congruity and patronage intentions. Congruency between the
self-concept and the image of the music itself could provide insights in explaining the relationship between musical cues,
self-congruity and patronage intentions.
757
Although previous theoretical patronage models (i.e., Hassan et al 2010; Chebat et al 2010) often recognize an important role
for atmospherics and retail environment effects in general, they do not acknowledge a construct representing the extent to
which everything seems to work together.
RESEARCH HYPOTHESES AND THE MODEL
Numerous studies have demonstrated the influence of atmospherics on store evaluation, patronage and loyalty (Babin and
Attaway 2000; Grewal et al. 2003; Michon et al. 2003); when consumers are exposed to an environmental cue that they like,
such as background music, they transfer their positive feelings to store evaluation and to in-store behavior (Gorn 1982). This
means that music preference is a valid explanation of the effects of music on behavior; consequently selecting music that fits
with the service providers image is one effective tool to obtain long term benefits (Oakes and North 2008; Vida et al 2007).
The notoriety feature of the stimulus (music) could increase or decrease the potential to change attitudes or beliefs (Wilson
and Shereell 1993). Indeed, pleasant music, as compared with less pleasant music, is associated with more favorable service
outcomes like evaluation, patronage intentions and behaviors (Caldwell and Hibbert 2002; North and Hargreaves 1996).
Therefore, it has been hypothesized that:
H1: The more famous the music the stronger the patronage
Studies in music psychology show relevant but not convergent findings on the attentional effects of music (Allan 2006; Jiang
et al. 2011; Di Muro and Murray 2012). While authors agreed on music cognitive effects, they do not agree on the optimal
arousal level. On the one hand, some authors (e.g., Chebat et al. 2001; Mc Connell and Shore 2011) have found that the
higher the arousal, the deeper the attention; while, on the other hand, others (e.g., Jefferies et al 2008) found opposite results,
that is, highly arousing music may hamper information processing and soothing music helps concentration on the task.
Previous research in advertising found that famous endorsers have a higher degree of attention and generate more favorable
affective responses than non famous ones; while the ad credibility increases with non famous spokespersons (Pieters et al.
2002). Erdogan (1999) found that famous endorsers are more effective in influencing attitude towards the advertisement,
brand and purchase intention. However, Mehta (1994) has maintained that there was no significant difference for the
concepts of attitude towards advertising, brand, and purchase intention for endorsed brands by celebrities and those endorsed
by non celebrities.
Since music-induced pleasure has been shown to have significant cognitive effects (e.g., Chebat et al. 1993; Morin et al
2007), it is hard to say if the effects of soothing music found in the music psychology literature are due to its high pleasure
component or to its low arousal component. Mano (1992, 1994) shows that arousal directly influences attention and that an
increase in arousal produces a narrowing of attention. When arousal passes this threshold, individuals tend to focus their
attention on a more limited number of objects. Sanbonmatsu and Kardes (1988) suggest that highly aroused consumers are
more likely to use simpler decision rules because their capacity to process information is reduced. Their findings are
generally indicative that high arousal reduces the amount of available processing capacity. Dube and Morin (2001) explore
the possibility that music pleasantness does not influence store evaluation through a direct affect transfer but alternatively
or complementarily by first altering consumer attitudes toward the environment, which then influence consumers store
evaluation.
H2: The more famous the music the higher the affective response and the lower the cognitive activity
Music needs to fit with the image of the store or service provider: consumers perceive more congruent fast loud music in a
dance club or a bar, whereas slower, softer music is preferred in health spa (Caldwell and Hibbert 2002). Fit or consistency
will be more effective in positively influencing consumer behavior in stores and servicescapes (Morrison and Beverland
2003; Oakes and North 2008). Sirgy et al (2000) maintain that the effects of store environments on retail patronage are
mediated by self-congruity. According to them, atmospherics significantly affect retail image and the general context within
which consumers decide to patronize. Self-congruity, in fact, operates through a psychological mechanism by which
shoppers match their self-concept to the retail patron image. The more appropriate the environmental cue the more effective
the influence on consumer behavior. As self- congruity correlates with preferences (Branaghan and Hildebrand 2011),
consumers more favorably patronize stores perceived as congruent with their self-image. Therefore, it has been hypothesized
that:
H3: Consumer self-congruity mediates the music effect on patronage.
758
EXPERIMENTAL DESIGN
The proposed model was tested during a mall intercept through background music manipulation in a real shopping context.
The experimental design compares famous vs. not famous music conditions. 200 famous and not famous songs selected from
a pool by an independent performing right organization formed 2 playlists of 100 tracks for each condition. These original
pop and rock songs from the 1970s to 2010 were relatively homogeneous in terms of style and genre; they were global hits
across generations according to their performance in the hit charts. The playlists have equal duration, which clearly exceeded
the maximum shopping duration of individual customers (that is 90 minutes in Knoferle et al. 2011). Both sets of famous vs.
non famous music pieces have the same tempo, in order to control for arousal which is related to tempo (Balch and Lewis
1996; Chebat et al. 2001; Husain et al. 2002; Kellaris and Kent 1994). For each playlist half of the songs have BPM values
between 85 and 125, 25 songs have BPM values lower than 85 and the rest higher than 125 BPM. The track mood was mild,
with neither energetic/aggressive nor ambient/atmospheric peaks. The two playlists were balanced in relation to melody, tone,
vocals, instruments, production, and other some specific features such as solos, riffs, grooves, vibratos and crescendos. Due
to the algorithm with which the songs were played, each track were performed every 5 hour within the same day in order to
avoid/minimize the probability of repeated exposure of any customer to the same song. Moreover, the two playlists were
played at the same moderate volume in order to avoid any volume effect (Babin et al. 2004).
The experiment was conducted in a large, urban shopping mall in Italy during the openings hours (from 9 a.m. to 8 p.m.). The
malls sound system was used to play the selected songs. Mall management allowed the systematic manipulation of the music
in the mall over the course of two weeks in November 2011 in order to avoid seasons and bank holidays as well as to
minimize the effect of other contextual variables that might influence consumers perception and attitudes, such as the
presence of events and/or promotions within the mall. Managerial constraints limited treatment implementations to 2 days per
week. Data were collected in two different waves, the same days, at the same hours, in order to minimize the effects of the
circadian rhythms. Trained interviewers invited shoppers to participate in the study. During the experiment, consumers were
asked to state their perceptions of the malls environment. The questionnaire focused on mall image, affective states, mall
attitude, consumer profile, and consumers shopping experience. All scales, primarily drawn from the literature, included
multiple items, as respondents were asked to rate their perceptions of the mall and the moods in the shopping environment.
The Positive and Negative Affect Schedule (PANAS) scale was used to investigate the effects of musical cues on consumer
emotional responses, instead of PAD (Baker et al. 1992; Chebat et al. 1993; Yalch and Spangenberg 1990), since it is a finergrained measure of affective response. As regards the mall atmosphere, interviewees were asked to assess their perception of
the mall atmosphere, using the Chebat et al. (2010) adaptation of Ailawadi and Keller (2004). The mall patronage was
measured through a two 7-point scale in response to the question: How do you often come to the mall X? (Chebat et al.
2010) and finally the self-congruity was measured through Sirgy et al. (1997) scale.
Music notoriety, which indicates the hit/non hit status was manipulated. These musical excerpts were controlled in tempo,
which is related to the music arousing properties, and pretested in terms of familiarity, which measures the exposure, tempo,
which is related to the music arousing properties, and notoriety, which indicates the hit/non hit status. 20 graduate and
undergraduate students were exposed to the two different playlists, asking them whether they recognize or not the music. As
a result, the notoriety of the music (F = 11.401; p = .003) was positive for the famous playlist (M = 4.3) and negative for the
not famous one (M = -4.8).
304 consumers participated in the study after their shopping and were willing to complete the questionnaire. The sample has
an average age of 39.5 years (SD = 1.49) and is composed of 55.9% females, over 75% with at least a high school level of
education, and about 45% employed.
FINDINGS
A MANOVA - where mall patronage was the dependent variable and the music type was the independent variable, while the
PANAS conditions (negative feelings, attention and arousal) were the mediators was carried out and showed that music
affects the attention and the arousal and not the negative feelings.
Music results to have an effect on store patronage only through positive feelings (F = 24.84; p = .000). This means that the
music effect is not enough to explain the mechanism that leads individuals to come back to the same mall, since the direct
relation between background music and patronage has not been verified (p = .650; see Table 3).
759
Consistently with Zhao et al (2010), positive affect proves to be a mediator (Table 5): when background music enhances
positive states, mall patronage is strengthened. However, the negative sign (= -.5754, p < .05) suggests that a competitive
mediation occurs, that is, additional mediators should be involved. Music contributes enhancing the likelihood consumer
patronize the mall when they are perceived as pleasant. Therefore, H1 is partially verified.
Music does not significantly stimulate negative feelings (p = .1823). Since music in both conditions is perceived as not
irritating and annoying, it is likely to be perceived as congruent with mall atmosphere. Music notoriety was found to
significantly influence the positive states and the arousal level; in particular the more the notoriety, the less the positive affect
( = -1.04, p < .000) and the stronger the arousal ( = .20, p < 0.1). Famous music activates consumers during their browsing
into the mall, while not famous music makes more comfortable and pleasant their stay. Specifically, famous music proves to
be more arousing than not famous one, which has been ranked as relaxing and calming. Therefore, the effect of music
notoriety confirms the opposite meaning of these two affective dimensions, pleasure and arousal (Demoulin 2011).
Music affects attitudes through cognitive process. In addition, since the emotional dimensions of music other than arousal are
controlled for in this experiment, the notoriety of the music is reasoned to be playing a stimulating role on cognitive activity.
ANOVA shows that not famous music proves to foster cognitive activity more than the famous music (F = 16.899; p = .004).
Consistently with the literature on the attentional effects of music, consumers under the famous music condition proved to be
distracted by the music they recognized, while under the non famous condition they were more relaxed and concentrated on
their shopping tasks, thus confirming H2.
A perceived congruity between the individual self-image and the mall image is more likely to attract customers and keep
them as patrons. Music communicates mall image and helps customers to strengthen their perceptions about the mall and its
typical clientele. However, the finings show that self-congruity as a mediator of the music effects on mall patronage does not
result as significant, while, by itself, affects mall patronage ( = .703, p < .05). Therefore, consumers do not identify with the
mall from the music, which could be explained by the type of shopping and the mall image where the experiment took place,
that in turn could be function of the type of stores in the mall and the consumers shopping style. However self-congruity
effect on patronage it is neither a music-induced effect nor a mediation effect. H3 is not verified.
In conclusion, the findings show that famous music reduces shoppers' cognitive activity since they are more aroused. It is
very likely that it distracts their attention from the mall cues and the shopping related cognitive process. On the other hand,
famous music enhances positive feelings that, in turn, enhance shoppers' patronage. However, the effect of the music
notoriety on the customers cognitive and emotional processes and subsequently on their attitudinal/behavioral outcomes,
including the mall image, willingness to pay and purchase intention, should be verified.
CONCLUSION
Famous music seems to have both positive and negative effects on shoppers. In fact, the choice of music type should be made
as the reflection of the retailers' strategic objectives. Should they want shoppers to pay attention to their promotion and
process the information, non-famous music is the appropriate choice. Should they want shoppers to make impulse buying
through emotional reactions to music, famous music should be the appropriate choice. If retail managers aim at retaining
shoppers in their stores, they should carefully select background music not only to match tastes and preferences of their target
customers but also to complement the other atmospheric stimuli in their stores as well as the overall store image. Music helps
to co-create a retailers positioning in the market. Therefore, if retailers want to develop an enhanced sensory experience for
their shoppers, measured by positive attitudes, time spent and sales performance, the selection of music should be based on
systematic customer research rather than on managers personal tastes.
TABLES
Table 1: Effects of Music on PANAS 1, 2 and 3 (a paths)
NEGATIVE FEELINGS
PLEASURE
AROUSAL
Coeff
-.1151
-1.0382
.2013
se
.0861
.0844
.1052
t
-1.3367
-12.3021
1.9141
p
.1823
.0000
.0565
760
Table 2: Direct Effects of PANAS on PATRONAGE (b paths)

Coeff
-.5714
.5543
.2979
NEGATIVE FEELINGS
PLEASURE
AROUSAL
se
.1297
.1378
.1230
T
-4.4056
4.0222
2.4209
p
.0000
.0001
.0161
Table 3: Total Effect of IV on DV (c path)

Conditio
Coeff
.0888
se
.1958
t
.4537
p
. 6504
Direct Effect of IV on DV (c-prime path)

Conditio .5385 .2310 2.3314 . 0204
Table 4: Indirect Effects of IV on DV through Proposed Mediators (ab paths)
Effect se
Z
-.4497 .1829 -2.4581
TOTAL
1.2818
NEGATIVE FEELINGS .0658 .0513
-.5754 .1496
-3.8467
PLEASURE
.0600
.0398 1.5069
AROUSAL
p
.0140
.1999
.0001
.1318
Bootstrap results for indirect effects

Indirect Effects of IV on DV through Proposed Mediators (ab paths)
Data
boot
Bias
SE
-.4497 -.4538 -.0041 .1902
TOTAL
.0544
NEGATIVE FEELINGS .0658 .0668 .0010
-.5754 -.5787 -.0033 .1626
PLEASURE
.0600 .0581 -.0018 .0398
AROUSED
FIGURES
Figure 1. The model
SELF
CONGRUITY
MUSICTYPE
AROUSAL
PATRONAGE
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YOU KNOW YOURE WORKING CLASS WHEN YOUR TV IS BIGGER THAN YOUR BOOKCASE:
ENDURING HOUSEHOLD IDENTITY CONFLICT
ABSTRACT
Voted among the funniest jokes at the 2012 Edinburgh Festival, the line you know youre working class when your TV is
bigger than your bookcase reflects a powerful cultural stereotype: that lovers of television occupy a lower social class than
those who prefer more status-imbuing pastimes. Perceptions of social class membership constitute part of consumers
desired self-identity, the maintenance of which is continuously pursued via congruent consumption. The influence of selfidentity on consumption behaviour is complex, as multiple identities require negotiation in the achievement of overall
identity coherence. Further complexity arises from customer network influences, as consumers manage overlapping
identities at individual, relational and collective levels. These complex influences result in identity conflict, in which
consumption supports desired and undesired identities simultaneously, or necessitates a choice between multiple desirable
identities. Despite this complexity of effect, studies of self-identity have focussed predominantly on individual-level studies
within purchase decision-making scenarios. Network-oriented studies are limited in number and focus purely on product
choice. There is a need, therefore, for investigation into self-identity conflict as it arises among customer networks within an
ongoing consumption context. This research addresses this need by examining identity conflict within families arising from
paid-for TV consumption. Our data reveal social class perceptions as a rich source of identity conflict. Class-related
conflicts are identified within and between family members, implying that identity conflict endures after product purchase.
Conflict resolution is observed as involving adjusted TV consumption, highlighting the concurrent creation and resolution of
identity conflict within a specific context. Unresolved identity conflict is also observed, which - along with resolution
behaviours - has a potentially detrimental impact on relationship value. Implications for relationship marketing practice
include the need for increased attention to identity issues to reduce conflict, to support resolution, and to prevent relationship
value destruction.
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RETHINKING IDENTITY AND OWNERSHIP IN THE DIGITAL CONSUMPTION ERA:

A QUALITATIVE STUDY OF CONSUMER RELATIONS WITH DIGITAL POSSESSIONS
Victoria Ligon, University of Arizona, United States
Tony Stovall, University of Arizona, United States
Silvia Van Riper, University of Arizona, United States
INTRODUCTION
Digital consumption has grown exponentially in the last 20 years. As the digitization of products becomes more ubiquitous,
individuals find themselves having to reformulate symbolic meanings once exclusively associated with material possessions.
New forms of ownership of digital objects are challenging the existing roles that possessions play in self-identity formation.
It is the goal of this paper to uncover these emerging relationships.
This study intends to explore the implications of the digitization and dematerialization of goods from a consumers
perspective. The following research questions guide this study: What symbolic meanings do consumers attach to digital
possessions? How do consumers conceptualize ownership of digital possessions? This study contributes to the consumer
behavior literature through its exploration of the relationship between digital consumption and the consumers' creation of self.
It also contributes to understanding the nature of ownership in the digital realm.
METHOD
The research methodology employed in this study was descriptive analysis of focus group interviews. Because of the lack of
research in the area of digital consumption, we employed a qualitative research design to gain insight into the types of
conversations that participants engage in around this topic. We conducted four focus groups split along commonly
acknowledged generational lines: 18-24, 25-31 (Gen Y); 32- 47 (Gen X); 48-66 (Baby boomers). The Gen Y group was
divided into two groups the younger group was comprised of those who are generally considered to be digital natives.
Participants were recruited from the university community at large, consisting of both students and staff members at a large
university in the Southwest. The participants were selected based on high technology adoption rates and time spent in a
computer-mediated environment, as ascertained by a pre-screening questionnaire. Digital content was defined as objects that
come in both digital and physical format such as music and books. A total of 31 people participated in the four focus groups
(26 women, 5 men).
DIGITAL CONSUMPTION AND SELF-IDENTITY
The relationship between individuals and possessions has traditionally been studied from the perspective of material objects
(Darmory & Kedzior, 2009). In this study we attempted to determine whether digital goods are fundamentally different from
material goods in the role they play in fostering self-identity formation. We expected those who had been born in the digital
era digital natives (18-24) to have a different relationship with their digital possessions than baby boomers, who
experienced digital consumption later in their lives. We did find some differences between our generational focus groups. In
some important regards, however, people across generations seemed to hold similar opinions about the role of physical and
digital books and music in their lives. We discuss these similarities and differences throughout this paper.
In his pioneering work on materialism which considers the central importance of possessions in an individuals life, Belk
(1985, 1988) proposes that consumers use their possessions to create a unique self-identity and to project that identity to
others. Individuals have also been found to use possessions to delineate the boundaries of where the me and the not me lie
(Kleine, et al 1995). The versatility of digital music was perceived by our participants to be an opportunity for a constant
formulation/re-formulation of the self. One important aspect of digital music consumption is the ability to select individual
digital songs and compile customized playlists. Participants in our focus groups felt that digital files helped them express who
they were in a better way than a music CD would. As one participant stated:
As far as music goes, its more customizable and that seems to reflect who I am and my taste more directly. They [personal
playlists] feel more representative. Its not something that some record company put together.
Moreover, Belk's theory of the extended self (Belk, 1988), posits that individuals' possessions are so central to their concept
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of self that they actually become an extension of their personal identity. This theory has been used in a wide variety of
consumer behavior research to understand the deep bonds that people form with their material possessions. The importance of
these belongings is often much greater than any single utilitarian function would indicate and can be explained by the time,
effort and attention that an individual has invested in a product to create personal meaning and participate in identity creation
(Belk, 1988). In our research, a sense of pride and accomplishment often accompanied the task of cultivating a unique digital
library and participants enjoyed the opportunity to showcase their creativity and skill. According to Schultz, Kleine and
Kernan (1989) this personal investment is a prerequisite for possessions to be valuable for identity creation. In this way, we
found that digital possessions can help individuals to develop their identity.
Possessions can also help to define a persons not me boundaries (Kleine, et al 1995). Our data suggests that music CDs are
being used by many participants in exactly this way. Though most acknowledged some advantages that CDs have over digital
music files, such as providing more lucrative support to the artist, the general sense among participants was that CDs
belonged to a different era, an era with which they did not want to be associated. As an extreme example, one genY
participant expressed this sentiment: If I walked into a house and someone had a wall full of CDs, Id walk out . a
thought which may suggest that the younger generation infers status from certain objects in a different way than people from
older generations. This generational difference was highlighted by a boomer participant, a self-identified collector, who
offered that he preferred the musical purity of vinyl records and the tactile experience of reading CD liner notes over the
experience of listening to digital audio files (though he did enjoy the convenience of digital music when exercising). He also
strongly preferred the sensory experience of holding a physical book. This participants preferences suggest that for
audiophiles and bibliophiles, possessing the actual physical objects are necessary for signaling their identity as a connoisseur.
Although the value proposition of digital music was appealing to most participants, several older participants indicated that
they cared more about their physical book collections than their e-book libraries. For many older participants, the private
nature of digital collections seemed isolating many believed that physical books served as important conversation starters in
social situations while many younger participants actually appreciated the private nature of their digital libraries. In addition,
the younger generations considered it old-fashioned to own CDs, and appreciated the portability, versatility, and
personalizability of digital files. As a result, digital music was more fully integrated into their daily lives. Overall, the
transition to digital music has been easier and smoother than the transition to e-books, and many participants, especially the
younger groups, could imagine themselves going all-digital, although only in terms of music.
Although all participants seemed to accept content digitization as the new normal, the relationship between e-books and selfidentity formation was less clear than with music. When participants were asked about their preference for either physical or
electronic books, they referred to experiential value as a deciding factor. Although the older generation valued certain
features of e-books, such as the ability to customize the font size or use the search function, they expressed nostalgia around
physical books; when using e-books they missed the tactile experience of reading a book or the sentimental attachments
associated with childrens books or cookbooks. Younger generations commented on the pleasurable experience of flipping
through the pages or highlighting text. Interestingly, the younger generations expressed a sense of what we term anticipated
nostalgia, an expectation that they will miss having a tangible keepsake of the memory of reading favorite books to their
kids. In addition, many people questioned whether e-books could ever be an adequate substitute for physical books when
reading to children. Even though they seemed to approach this issue from different perspectives, all age groups perceived that
attachment to books was connected to the idea of engaging the senses through the reading experience. Although all groups
admitted to using e-books because of their convenience and portability, most participants missed essential elements of
reading a physical book in the e-book experience. This appears to be one of the reasons why e-books had not been more
widely adopted by our participants and why they appear to be less valuable for self-identity formation purposes.
OWNERSHIP
Etzioni (1991) proposed that the traditional conceptualization of ownership as a legal contract is only one aspect of the
human relationship to property; the other is symbolic and contextual. It depends on an individual's attitude toward an object
and also on a collective understanding of what ownership means in a particular context (Etzioni, 1991). Etzioni explains that
property must be examined as a "dual creation, part attitude, part object, part in the mind, part 'real' (p. 466). A cognitiveaffective approach to ownership has been called 'psychological ownership' (Pierce et al., 2003) 'perceived ownership' (Peck &
Shu, 2009) and 'subjective ownership' (Reb & Connolly, 2007). Psychological ownership has been shown to influence the
way that consumers value objects (Pierce, et al., 2003; Peck & Shu, 2009) and even been shown to have a greater impact on
value perceptions than legal ownership (Reb & Connolly, 2007). Feelings of psychological ownership are influenced by both
the context of the person-object relationship and culturally determined socialization beliefs around ownership (Pierce, et al,
2003). Etzioni (1991) argued that the attitudinal component of ownership is far more complex than legal ownership.
768
Consumers in our groups appeared to be unsure, collectively, about the legal status of their ownership claim, and yet, most
participants, regardless of age, were clearly inferring an ownership stake in their digital possessions. More than half of
participants felt that they owned their digital files, and almost all expressed frustration about their perceived lack of control in
their usage of these digital possessions. Participants complained about not being able to share files, not being able to transfer
files to new devices and not being able to play/read files on all of their portable devices (particularly in cases where
participants had a large number of internet capable technology machines). We propose that this frustration stems, in part,
from a disconnection between our participants inferred psychological ownership of digital products and their actual legal
ownership status (or lack thereof).
In an effort to protect copyrights and limit illegal distribution of digital material, digital content providers have imposed
restrictive rules on purchasers of digital content and as such, many of the notable features commonly associated with
ownership in the material realm are missed in the digital sphere -- features like sharing with friends and family, gifting,
donating and selling used copies; control over when and where and how an item is used and in what devices; and perceived
security and permanence. Consumers seemed to desire all of the features of ownership that they might experience with a
physical book or CD and the absence of these features of personal control feels restrictive and unfair. As one participant
exclaimed,
"I gave you money; you gave me music. I should be able to listen to it however I want to. I should be able to give it to my kids
if I want to because I already paid for it. I shouldn't have to pay for it again."
This sense of injustice was particularly pronounced for e-books, which were noted to cost as much, or more, than a paperback
equivalent, and much more than a ubiquitously available used copy of the same physical content.
Interestingly, digital consumption was viewed most favorably by participants who seemed to display a present-oriented bias
orientation in their consumption patterns. For some this was purely a matter of preferring the immediate convenience of
digital goods without concern for future disposition acts such as gift giving, selling or handing down content. For others, it
was precisely this freedom from burdensome physicality that seemed attractive. These participants were likely to report
engaging in decluttering activities related to their physical book and music collections. Digital consumption seems, at this
point, to be free of the future oriented concerns that are attached to physical items, concerns about storage and transport,
damage, theft, loss and future disposition. In this way, digital possessions were favored by individuals for both their
immediate convenience and their long term lightness. This was true across generations, but for different reasons. Young
people preferred digital goods for their ease of storage and transport, while certain older people preferred digital files for their
lack of burden, in both a physical and mental sense. As one woman explained, it seems that I've gotten into a different phase
of my life, less is more, it's like, I don't want all those books on my shelf and I don't want to figure out what to do with them.
The degree to which consumers have embraced digital content seems to impact their value expectations around digital
ownership. Some people were wary of purchasing digital content because of their concern about restrictions on usage; others
were in a state of reluctant acceptance of providers' terms-of-use because the value they attributed to their digital content was
great enough to accept undesirable restrictions on usage. Based on this spectrum of acceptance, and the underlying discontent
of many participants, we believe that ownership may not be the most appropriate concept for understanding a consumers
relationship with digital content because it sets up too many expectations of control based on an understanding of ownership
of physical products. We encountered far less frustration from participants who have embraced the idea of digital
consumption as a service, rather than a purchase that bequeaths perpetual access and unlimited control. Several participants
were active subscribers to access-based consumption services such as Spotify, which allows users to pay for access to a body
of content, rather than own specific songs. This preference for access over ownership was expressed by one participant who
said:
"With music, I don't really care if I own it.... I use Spotify, not iTunes... I can download the music to my computer, I can
access it on my phone, I can do whatever I want, but I don't own it. I can't burn CDs with it, I can't give it to someone else,
but I don't really care."
Research for this project was conducted using participants who were selected for their relatively high use of digital content,
and even amongst these heavy users, we encountered resistance to digital content adoption, especially in the context of ebooks. We propose that much of the wariness that consumers seem to have toward digital content adoption can be explained
by a disconnect that exists between consumers' expectations of ownership based on their relationship with equivalent material
possessions (their inferred psychological ownership) and their actual legal ownership status. Unless this discrepancy can be
769
resolved, we expect that restrictions on perceived ownership rights may continue to produce feelings of dissatisfaction
amongst a portion of consumers. Marketers may produce greater customer satisfaction with digital products by framing
product usage as a service for which people pay for ongoing access. By framing consumption in this way, consumers may be
more accepting of the limits that are already being imposed on usage in the digital sphere. Moreover, in a digital services
context, companies could sell additional rights on an ad hoc basis, such as access to content on additional devices, or the right
to share an item for a limited amount of time. Regardless of whether companies opt to sell digital content as a service, a
selling strategy that includes clear limitations of digital ownership would help digital content consumers adjust more easily to
the new terms of ownership.
CONCLUSION
One of the major goals of this study was to explore the relationship between the formation of self-identity and consumption
of digital possessions. This preliminary exploration of the symbolic meanings that consumers attach to their digital
possessions leads us to believe that digital goods are in fact contributing to consumers sense of self and to the identity they
project to others about themselves. This was primarily shown through the care and attention that people spent in cultivating a
unique and personal music library. It was also evident in their rejection of physical CDs as artifacts of a bygone era.
Contemporary digital music consumers appreciate the convenience and customizability of digital music and they also
appreciate the fact that they can be more selective in how they share their music tastes and preferences with others. Another
finding of our research is that consumers that have better adjusted to the digital world are mainly present-oriented, that is,
they do not seek a self-preservation value in digital objects, but mostly enjoy the benefits that digital consumption provides at
present. Another characteristic of these consumers is that they tend to have a light lifestyle and enjoy the reduction in
physical possessions in their lives. Present-orientation and lightness are found to be traits of the digital consumption era.
A second goal of this study was to determine how consumers conceptualize ownership in the digital realm. We found that
consumers who assumed synonymous meanings of ownership in the digital and material worlds experienced frustration and
dissatisfaction with their digital possessions. Consumers who access digital content as a service seem to experience the least
amount of dissonance in their understanding of their ownership rights (or lack thereof). For many consumers, the flexibility
and convenience that digital goods offer allowed them to overcome some of the frustration they experienced around control
of their content, but some resentment and dissatisfaction with their experience remained. Our findings suggest that the current
ambiguity in the terms of digital content ownership may be affecting the growth in the adoption rate of digital content. Given
that many renowned classical philosophers, from Locke to Kant to Hegel, have debated the concept of ownership (Thorne
McCarty, 2002), it is not surprising that both industry players and consumers are struggling to make sense of this emerging
marketplace. Moving forward, companies should fully explore the advantages and disadvantages of communicating the
boundaries of digital ownership or the sale of digital content as an access-based service so that consumers relationships with
digital goods can be enhanced.
Overall, this study has shed preliminary light on some of the ways that consumers interact with their digital possessions.
Marketers should be aware that digital objects play important roles in individuals lives by serving self-identity creation
purposes. Conceptualization of digital ownership is also clearly distinct from that of traditional material ownership. Based on
these broad findings, companies may benefit from positioning and differentiation strategies that better match consumers
needs and expectations in the digital marketplace. Finally, it is our hope that this paper will spark interest in the symbolic
meanings attached to digital consumption among marketing professionals and academic researchers. It seems clear that
digital content consumption may be just a starting point in the future of non-material consumption opportunities.
REFERENCES
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SHAPING CUSTOMER SERVICE & STORE ATMOSPHERE: AN EXPLORATORY ETHNOGRAPHY OF

RETAIL ENVIRONMENTS
Stephanie M. Mangus, Louisiana State University, United States
ABSTRACT
This research uses an ethnographic approach to study the components of customer service and in-store environment in retail
restaurant environments. Over twenty hours of participant observation at two locations uncovers themes of relationships and
technology use. The author explores these themes identifying a typology of in-store relationships including employee-tocustomer, customer-to-customer, and employee-to-employee interactions. These relationships are further analyzed for nuances
identifying different forms and purposes of these relationships. The role of technology is also explored from the consumer and
employee perspectives. The research identifies a need for consumer education in new technology introductions in retail
environments, as well as offers such education as opportunities to build employee-customer relationships and place emphasis
on quality customer service interactions. Both the relationship and technology themes emerge as useful tools to be used to
enhance the customer experience.
771
ATTITUDES TOWARD GREEN COMPUTING IN TRANSITION ECONOMIES: A ROMANIAN PERSPECTIVE

Olesia Mihai, Alexandru I. Cuza University, Romania
Victoria Seitz, California State University San Bernardino, USA
Elias Rizkallah, La Sierra University, USA
Ehab Khamas, California State University San Bernardino, USA
ABSTRACT
Computers today are an essential part of individuals lives all around the world; however, these tools are extremely toxic to
the environment given the materials used, limited battery life and technological obsolescence. As one of EUs newest
member, Romania is adopting policies and transferring legislation on all aspects of governance including those related to the
environment. What impact, if any, has membership had on this transitional economy regarding e-waste and environmental
attitudes among its residents? Hence, the purpose of this study was to assess green computing habits of consumers in a
transition economy. A self-administered questionnaire was developed to determine consumers attitudes toward green
computing, e-waste disposal and demographic characteristics. It was hypothesized that consumers attitudes toward green
computing would increase after reading the information on computer toxicity. A convenience sample of students enrolled in
business communication courses at a Romanian university was surveyed. Results of paired t-tests revealed significant
differences for 13 of the 15 statements at the p < .05 level. Implications were then discussed.
INTRODUCTION
E-waste is a major problem worldwide and is growing daily. According to Widmer et al (2005) e-waste not only contributes
to disposal of toxins that are hazardous to the environment but also dangerous to humans that are exposed to them. Some of
the toxins include mercury, lead, cadmium, arsenic, and selenium, that when burned create toxic emissions that harm human
health (Widmer et al., 2005). The problem becomes an international fiasco when developed countries export their hazardous
e-waste to undeveloped ones (The Basel Convention. . .2009). The Basel Convention on the Control of Trans boundary
Movements of Wastes and their Disposal was signed in 1989 with the EU and the United States providing leadership in the
implementation of it (Dreher and Pulver, 2008). However, although the EU ratified the Convention in 1993, the US along
with Afghanistan and Haiti has yet to do so (Dreher and Pulver, 2008).
For the most part, the EU has been proactive regarding environmental protection in domestic regulation and foreign policies.
For example, EU companies are the largest adopters of ISO 14001 the international standard for company-wide
environmental management systems (Nishitani, 2010; Neumayer et al., 2004). In 2005, they established guidelines for
electronics end of life (EOL) making manufacturers responsible in their Directive on Waste Electrical and Electronic
Equipment (WEEE Directive) (Toffel, Stein, and Lee, 2008). The directive required all member states to pass legislation that
transferred the cost of recycling and disposal of e-waste from the government to manufacturers.
Some of the newest member states in the EU are former Soviet states in much of Eastern and Central Europe. These
transitioning economies are in the process of transferring legislation and incorporating EU policies. In the 1990s many of
these countries were encouraged by the EU to implement environmental action programs, with some receiving technical
support to adopt new policies. Cherp (2001) reports that environmental assessment among ex-communist states has been a
gradual process with many still following the State Environmental Review originally develop during the tenure of the USSR.
In 2007, Romania became a member of the EU and is in the process of implementing many of its directives, policies and
procedures for governance and the environment; however, this is not the countrys first. In 1973 Romania adopted its first
environmental legislation in response to a growing concern for these issues. During the communist era environmental policy
dictated that any project should take into account the protection and preservation of the environment. As a result of EU
membership, Romania has developed a New National Strategy for Sustainable Development for 2013 2020 2030;
however, as noted by Cherp (2001) there is still a gap between legislation and practice.
Nishitani (2010) suggests that the pressure exerted by stakeholders is often a starting point for adoption of environmental
practices among companies. One of those stakeholders is consumers. McDougal (1993) states that consumer environmental
knowledge is the key to driving the green movement.
772
According to Laroche et al. (2002) knowledge is the key to forming environmentally proactive attitudes, with attitudes being
the underlying predictors of ecological purchases.
The researchers found that importance and inconvenience to be
paramount when it came to green attitudes among consumers; importance referring to the severity of the problem and
inconvenience regarding recycling behavior (Laroche et al., 2002). Specifically, they found that some consumers were not
willing to pay more for green products yet perceived that companies operated in a sustainable manner (Laroche et al. 2002).
However, given Romanias history in the environmental movement and membership in the EU, are consumers attitudes and
behavior favorable towards green computing? Hence, the purpose of this study was to assess green attitudes of consumers in
a transitioning economy and determine if information presented to them would influence their attitudes when purchasing
computers. Specifically, the objectives of the study were to:
1.
2.
3.
Determine consumers attitudes towards green computing habits,

Determine consumers demographic characteristics, and
Determine changes in consumers attitudes regarding green computing habits when presented with information.
Findings from the study will assist policy makers in implementing EU environmental directives on e-waste in Romania
successfully. As well, the research findings will aid computer and other electronic manufacturers in packaging and marketing
these products to consumers in the country. By understanding consumers attitudes, but more importantly their motivation
toward green computing, marketers can develop messages and products that support them.
According to Katz (1960) attitudes form the foundation for social behavior and are determined by an individuals motives.
Attitudes have three components: the cognitive or knowledge component, the affective or feeling component and finally the
behavioral component.
People form an attitude in several different ways depending on the particular hierarchy of effects that is operating. The ways
we learn include classical conditioning, instrumental conditioning or learning that can result from a very complex cognitive
process. Learning is the mode of attitude formation in the current study and in cognitive learning theory people are seen as
problem solvers who actively use information from the world around them to mater their environment.
Although
this
sensation/information lasts only a few seconds, it is sufficient to allow the person to consider whether they should investigate
further. If they retain this information for further processing, it transfers to short-term memory. Hence, short-term memory
holds the information while additional information from long-term memory is evaluated is light of this new information.
Then a cognitive process called elaborative rehearsal allows information to move from short-term to long-term given the
meaning of the stimulus and relating it to already established attitudes.
In changing consumers attitudes regarding green computing it is critical to understand how additional information plays in
changing existing attitudes. Social judgment theory suggests that an individuals initial frame of reference acts as a conduit
in how consumers assimilate new information regarding existing practices (Meyer-Levy and Sternthal, 1993). For example, if
the individual has a positive attitude towards the environment or believes it is a good thing to take care of the environment as
viewed by society, it can be hypothesized that when the respondent reads the information brief regarding the toxicity of
computers and technological obsolescence, it triggers their favorable position regarding the environment. After processing,
the final verdict that is rehearsed to their long-term memory (the new information) would change their attitudes and thus their
responses would differ after reading the given information. Hence, the researchers hypothesized that once presented with
information regarding the toxicity of computers and e-waste that consumers attitudes would significantly change to be more
environmentally conscious regarding use and purchase of them.
METHODOLOGY
Sample
The survey was distributed and data was gathered from a regional university in Moldova County in the North Eastern part of
Romania. The convenience sample was drawn from a population of students enrolled in an English-only business program in
the College of Business and Economics. One hundred and forty-eight students participated in the survey.
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Instrument
A self-administered questionnaire was developed in English to ascertain the following information: (1) attitudes regarding
green computing habits and purchases, (2) attitudes toward e-waste disposal, and (3) demographic characteristics. To
determine the impact of information on attitude change the researchers developed an informational brief regarding the
toxicity of computers and technological obsolescence titled Your Computer. . . Did You Know. This was inserted into the
instrument followed by the same series of statements regarding attitudes regarding green computing habits and purchases.
To measure attitudes towards green computing habits and purchases the scale developed by Schwepker and Cornwell (1991)
was modified and used in the final instrument. The original scale consisted of a total of 14 statements regarding litter, solid
waste disposal, and solid waste reduction in packaging. Some statements were adapted to reflect the nature of computer
waste and green computing habits. Further, statements were developed based on the literature regarding computer toxicity.
Statements included I put my computer into sleep mode to save energy when its not in use, computers should be made
with recycled parts, computers are toxic to the environment, organizations need to have a policy to dispose computers
properly, a company should provide free e-waste disposal and recycle programs, power saving features are important to
me when looking for a computer, and when shopping for a new computer, its carbon footprint is important to me. The
final scale consisted of 15 statements that was measured using a five point Likert scale ranging from strongly agree (5) to
strongly disagree (1). This final scale was replicated and used after the informational brief on computer toxicity.
To measure e-waste disposal three closed-ended questions were developed. The first question was regarding the best option
for e-waste disposal. Four responses were developed from the literature and included ship back to manufacturer, take to a
local charity for reuse, take to a computer retailer, take to a recycling center, and take to a collection event. The second
question asked respondents what they thought happened to their computers after they disposed of it. Again, five responses
were given and included sent to a landfill, valuable metals are extracted, equipment is sold, and recycled in another
country. The third close-ended question asked respondents why it was important to keep e-waste out of landfills. Five
responses were given and included fills up landfills too fast, hazardous substances leach into waterways, dangerous to
humans and animal health, wastes precious metals such as copper and gold, and its not important to keep e-waste out of
landfills. Finally, based on the literature reviewed demographic characteristics were sought and included age, gender,
ethnicity, annual income, and marital status.
RESULTS
One hundred and forty-eight respondents completed the survey. Regarding gender the majority were female (67%), single
(84.4%) with an annual income of less than $20,000 (78.4%). Regarding ethnicity, the majority (88.5%) were White.
Regarding attitudes toward green computing and purchases most respondents agreed and strongly agreed with statements
regarding putting their computer into sleep mode (66.2%), wished their computer was recyclable (67.6%), turned their
computer off when not in use (75.0%), wish their computer was made with recyclable parts (67.6%), thought they should be
made with recycled parts (68.9%), believed that companies should provide details on greenhouse emissions and energy
efficiency (76.3%), and thought that companies should provide free e-waste disposal and recycle programs (70.2%), and
looked for power saving features when buying a computer (55.4%). Regarding computers toxicity to the environment,
approximately 40 percent were neutral while 37 percent agreed with this statement. Regarding whether a computers carbon
footprint was important when shopping for one, half of the respondents were neutral (50%). The response was similar for
upgrading computers to become greener (35.1% neutral; 48.7 % agreed) and for the statement regarding looking for
computers that use less energy when shopping (29.7% neutral; 48.9% agreed). Regarding battery use, 38 percent were
neutral regarding the use of eco-friendly batteries and 34 percent were neutral regarding looking for eco-friendly batteries.
Reliability testing for the scale resulted in a Cronbach Alpha coefficient of .83.
Regarding attitudes towards disposing of e-waste most respondents felt the best options were to take the item to a recycling
center (35.8%) or to a computer retailer (35.1%). Most respondents (48.6%) thought that computers were recycled in another
country (37.2%). Almost half (37.8%) noted that it was important to keep e-waste out of landfills because hazardous
substances leach into waterways while (32.4%) stated that it wastes precious metals such as copper and gold.
Hypothesis Testing: To test the hypothesis, paired T-tests were conducted on each of the statements in the scale regarding
attitudes toward green computing before and after reading the informational brief on computer toxicity. Results showed
significant differences at the p < .05 level for 13 of the 15 statements (Table 1). Means increased significantly suggesting
greater agreement for statements regarding the importance of carbon footprint when shopping for a computer; wanting
computers made with recycled parts, upgrading computers to be greener; looking for computers that use less energy;
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computers are toxic; and organizations need to have policies to dispose of computers properly and reduce packaging.
However, means decreased significantly suggesting less agreement regarding turning off computers when not in use;
companies should provide free-waste disposal and recycle programs; companies should provide details on green house
emissions and energy efficiency; I look for eco-friendly batteries; and I use eco-friendly batteries (Table 1). Means did not
change significantly for statements regarding I put my computer in sleep mode; computers should be made with recycled
parts; and power-saving features are important when looking for a computer. Hence, the hypothesis was partially supported
in the research.
DISCUSSION AND IMPLICATIONS
The research sought to assess green computing attitudes among consumers in a transition economy and determine if
information regarding computer toxicity would influence consumers attitudes regarding their habits and purchases of such
electronics. Findings partially supported the hypothesis with greater agreement for statements regarding the importance of
carbon footprint when shopping for a computer; wanting computers made with recycled parts, upgrading computers to be
greener; looking for computers that use less energy; the toxicity of computers; and, the disposal of computers and reducing
packaging. However, after reading the information on computer toxicity respondents agreed less regarding turning off their
computer when not in use; providing company sponsored free-waste disposal, recycle programs and details on green house
emissions and energy efficiency; looking for eco-friendly batteries; and using them. Means were significantly unchanged
regarding putting the computer in sleep mode; computers being made with recycled parts; and the importance of powersaving features when looking for a computer.
Even as a transition economy, Romanians are environmentally proactive and desire eco-friendly solutions to their computing
needs. Interestingly, results showed that respondents do want companies to reduce packaging and to implement disposal
practices for e-waste; however, they dont believe it should be provided free. As well, respondents were less likely to agree
that companies should provide details on greenhouse emissions and other environmental information suggesting that perhaps
the government rather than business take on this role. As a former Communist nation, where government sustained
enterprises provided products that were consumed by the people, the role of private business in a transition economy is still in
its infancy.
Results showed that after reading the information on computer toxicity that respondents agreed less regarding the importance
of buying and using eco-friendly batteries. This may be due to limited accessibility given the developing nature of the
market. With the internet, consumers throughout the world are aware of new and environmentally sound technologies and
marketers must be sensitive and continually assess consumers attitudes and needs regarding computers when developing new
markets. Hence, it is recommended that such products and services be introduced in developed and transitioning economies
at the same time.
Results suggest that the majority of respondents assimilated the additional information regarding computer toxicity and
modified their attitudes significantly. Seitz and Razzouk (2001) found that, unlike previous findings, attitudinal factors are
better predictors of intention to purchase environmentally packaged products than demographic characteristics.
In 2001, the Western Electronic Product Stewardship Initiative (WEPSI) proposed developing a environmental assessment
criteria of electronics as a means to direct governments and other entities into environmentally better purchasing decisions.
Subsequently, the EPEAT system is used in at least eight nations including the US and Canada and is used to identify
environmentally friendly electronics (Environmental benefits. . . 2007). This system evaluates electronics based on several
criteria including reduction of harmful materials, recyclability, energy conservation, corporate performance, end-of-life
(EOL) management, and product longevity. EPEAT registered computers have reduced levels of toxic metals, are energy
efficient and are easy to upgrade and recycle. Twelve manufacturers subscribed to EPEAT and provide sales data to the
Council. In their 2007 report the Council noted that extending the life of electronics through upgrades and refurbishing
would be the best solution for the state of electronic waste. Although many manufacturers subscribe to the EPEAT system,
getting the message to consumers is lacking. Findings show that Romanian consumers are proactive regarding energy
savings; however, regarding other components of computers, such as batteries and materials, they lack the knowledge to
make informed choices. Given Romanians history, the role of government in moderating consumer purchasing behavior of
green computers and other electronics through educational materials could be perceived both positively and negatively.
Electronics manufacturers must realize that consumers in emerging markets, such as Romania, are environmentally conscious
and desire access to eco-friendly computer products and accessories. Hence, manufacturers that subscribe to EPEAT should
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develop labeling and symbols that are incorporated into packaging and product design to further communicate their support
of green computing initiatives such as EOL. Further, these manufacturers should communicate this distinction as a point of
brand differentiation when developing advertising messages. To this point, differentiation among computer manufacturers
has been based on after-sale service, brand reputation, speed, and technological capabilities. Additionally, product strategies
should include educational seminars provided to resellers in the form of employee training so that they are better able to
communicate features and benefits of green computer brands and models to consumers as the retail wheel continues
developing in the country.
In Europe regulation is currently under way making manufacturers responsible for computers End-of-life (EOL). Such
regulations make manufacturers responsible for taking back their old merchandise and either recycling it or disposing of it in
an environmentally safe manner (Toffel et al., 2008). Subsequently, other manufacturers would follow suit to grab a portion
of this market share resulting in greener computers in the marketplace and a reduction of hazardous e-waste. As a transition
economy, Romania provides an opportunity for manufacturers to initiate and sponsor programs to recycle computers and
other e-waste. Although responses suggested that government entities would satisfy this role, such programs offered
voluntarily by companies would further enhance brand image and loyalty among these technologically savvy consumers.
FUTURE RESEARCH
Future research in evaluating green computing attitudes in countries outside the US may consider modifying the survey
instrument to closely reflect the status of computing in that country and employ the countries own language. Further,
although the survey was distributed to students enrolled in an English-only business curriculum, it was not their primary
language and, therefore could have affected responses. As well, the Energy Star symbol and other logos may only be one
countrys energy program, as in this case, the US, hence, survey development in cross cultural analysis should take in country
programs and initiatives and incorporate them in the survey.
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Laroche, M. A. Tomiuk, J. Bergeron and G. Barbaro-Forleo (2002) Cultural differences in environmental knowledge,
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Meyers-Levy, Joan and Brian Sternthal (1993). A Two-Factor Explanation of Assimilation and Contrast Effects, Journal of
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environmentally conscious market. Resource and Energy Economics, 32, 2010, 395-407.
Neumayer, E. and R. Perkins (2004) What explains the uneven take-up of ISO 14001 at the global level? A panel-data
Analysis. Environment and Planning, 36(5), 823-839.
Schwepker ,Jr, C. and B.T.Cornwell (1991) An examination of ecologically concerned consumers and their intention to
purchase ecologically packaged products. Journal of Public Policy and Marketing, 10(2), 77-101.
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Seitz, Victoria, Nabil Razzouk (2001) The influence of consumers environmental sensitivity on product choices: An
empirical study Journal of Promotion Management, 6(1/2), 133-145.
The Basel Convention at a glance. . . (2009). Retrieved from http://www.basel.int
Toffel, M. W. , A. Stein, K. L. Lee (2008) Extending producer responsibility: An evaluation framework for product take-back
policies. Working paper 09-026, University of California Davis/Irvine, 2008 mtoffel@hbs.edu
Widmer, R., H. Oswald-Krapf, D. Sinha Khetriwal, M. Schnellmann, H. Boni (2005) Global perspectives on E-Waste.
Environmental Impact Assessment Review, 25, 436-458.
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Table 1
Results of Paired T-tests before and after reading the Informational Brief
N = 148
Statement
Mean
Mean
2 tailed
Before
After
t
df
p value
____________________________________________________________________________________________________
When shopping for a new computer, its carbon footprint is important to me.
2.94
4.22
-11.18
147
.00
I wish my computer was recyclable.
3.76
4.18
-4.24
147
.00
I put my computer into sleep mode to save energy when its not in use.
3.61
3.72
-.90
147
.36
I turn off my computer off when its not in use.
4.09
3.82
2.35
147
.02
Computers should be made with recyclable parts.
3.91
3.93
-.19
147
.85
Upgrading my current computer is important to me in becoming greener.
3.36
4.05
-6.47
147
.00
I look for computers that use less energy when shopping for a new computer.
3.37
3.62
-2.24
147
.03
Computers are toxic to the environment.
3.23
3.49
-2.50
147
.01
Organizations need to have a policy to dispose of Computers properly.
3.59
3.92
-3.22
147
.00
It is important to me that companies reduce packaging for their computers.
3.19
4.11
-10.847
147
.00
Powers saving features are important to me when looking for a computer.
3.51
3.66
-1.59
147
.11
A company should provide free e-waste disposal and recycle programs.
3.91
3.34
5.57
147
.00
Companies should provide details on the greenhouse Emissions, energy efficiency, restricted substances, and Material
efficiency for its packaging.
3.97
3.28
6.02
147
.00
I look for eco-friendly batteries for my laptop.
3.38
2.68
4.86
147
.00
I use eco-friendly batteries for my laptop.
3.03
2.52
4.163
147
.00
778
COUNTERPRODUCTIVE ENVIRONMENTAL PERFORMANCE DISPLAYS:

LESSONS FROM THE AUTOMOTIVE SECTOR
Batrice Parguel, Universit Paris-Dauphine, France
Florence Benot-Moreau, Universit Paris-Dauphine, France
ABSTRACT
This paper mobilizes classical models of information processing and persuasion (ELM) to examine the efficiency of a European Directive 1999/94/EC of December, 13, 1999 regarding automotive carbon emission information to convert consumers
to more sustainable patterns of consumption. This Directive states that European carmakers have to prominently display their
vehicles carbon emissions rate on advertisement or commercial brochures. Based on an experiment conducted on a representative sample of French consumers, the authors show that this obligation, far from guiding consumers choice toward environment-friendly vehicles, is ineffective, and even counterproductive, among non-expert consumers. They show that the
display of environmental information should rather take a colored A-G scale to guide non-expert consumers towards sustainable consumption behaviors. The authors finally discuss implications for public policy makers.
INTRODUCTION
The critical environmental concerns surrounding climate change have pushed most public authorities to seek efficient policies to defend long-term collective welfare. For example, in compliance with the Kyoto protocols targeted 8% reduction of
greenhouse gas emissions by 2012, the European Directive 1999/94/EC of December 13, 1999, focused on passenger cars as
the primary source of carbon emissions and required information regarding the carbon emissions of new passengers cars sold
in European countries to be easy to read and no less prominent than the main part of the information at the point of sale
and in all printed promotional material.
In 2008, Climate Action Networkan umbrella group of NGOs active in climate change issuesnoted that 99 % of advertising in newspapers, magazines, and billboards failed to respect the provisions of Directive 1999/94/EC. It also complained
that information on carbon emission rates was not mandatory or standardized across advertising media, and it frequently appeared in very small print. Then in 2012, three French environmental groups (Respire, FNAUT, and Ecologie sans frontire)
brought legal action against the PSA Peugeot Citron Group for its noncompliance with the Directive 1999/94/EC. Before
considering appropriate applications of the law though, we argue that the first question should be its efficacy to foster sustainable consumption patterns. Is raw information about carbon emissions sufficient to enlighten consumers, even supposing
that everyone notices and reads it? Lessons from the European experience thus might help define efficient public policy
worldwide.
To do so, we investigate the effectiveness of Directive 1999/94/EC in its capacity to guide consumers perceptions of carmakers and the cars they produce. We begin by establishing a conceptual framework based on theories of information processing and persuasion, which we test through an experimental approach. The results indicate that Directive 1999/94/EC is
counterproductive for consumers who lack sufficient knowledge about carbon emissions standardsapproximately threequarters of the population in our sample. The appearance of carbon emission information in advertising improves consumers
perceptions of the automakers ecological image, even when that information indicates poor environmental performance
(EP). The color-coded, AG format label would be more effective. After discussing these results, we conclude this article
with regulatory recommendations for public policy makers.
LITERATURE REVIEW
Because some proportion of damage to the environment is due to consumers lifestyles, the 1992 UN summit in Rio introduced the notion of sustainable consumption, as a top priority. Sustainable consumption refers to the use of goods and
services that respond to basic needs and bring a better quality of life, while minimizing the use of natural resources, toxic
materials and emissions of waste and pollutants over the life cycle (Oslo Symposium on Sustainable Consumption 1994),
such that the emphasis is on the demand side. Yet relying solely on consumers and business benevolence to implement sustainability produced slow, uncertain progress. As Thogersen (2005) reminds us, three main actors influence the sustainability of private consumption: consumers, businesses and governments, and the latters role entails the development of market
infrastructures and public policy instruments.
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Policy instruments encompass the set of techniques of governance by which institutional actors support and effect social
change towards a defined goal (Wolff and Schnherr, 2011), mainly by directly influencing individual consumption behavior or indirectly changing the consumption framework. Wolff and Schnherr (2011) classify policy instruments into four categories: regulation, such as mandatory standards, prohibitions, or bans; economic instruments such as subsidies, taxes, and
tradable permits (e.g., carbon emissions cap-and-trade systems); communicative instruments or information, including product labeling, consumer education, and advisory campaigns; and procedural instruments, such as voluntary agreements and
infrastructure provision.
Communicative instruments, also referred to as consumer knowledge (Press and Arnould, 2009) or information (Stern,
1999), seek to empower consumers to share responsibility for sustainable consumption in order to achieve new consumption
patterns through responsible consumers informed choices (Scammon and Mayer, 1993) rather than bans. Thogersen (2005)
identifies several external and internal conditions necessary to support their efficacy. Externally, consumers are constrained
by the availability of relevant information about alternative options (Prothero et al., 2011; Thogersen, 2005). Accurate information demands sufficient scientific certainty about which option is the most sustainable in the long run; it also requires all
manufacturers to participate in declaration schemes or labeling programs (Thogersen, 2005). Internally, consumers are constrained by their limited financial, time, cognitive capacity, and knowledge resources, as well as by their perceived lack of
self-efficacy, which reduces their motivation to behave responsibly.
Labeling schemes attempt to counter the problem of a lack of relevant information, as exemplified by nutrition labels, ecolabels, energy labels, and emerging carbon footprint labels. Although simple in principle, these instruments are not a panacea
for sustainable consumption. For example, the profusion of eco-labels has made them confusing (Langer, Eisend and Ku,
2008), and whereas the labels efficacy depends on consumers knowledge and the level of credibility they perceive (Langer,
Eisend and Ku, 2008), many consumers simply assume that eco-labeled products are more expensive (Prothero et al., 2011).
Furthermore, not all types of labels have been studied (see Horne, 2009); in particular, research regarding EP information has
concentrated mainly on voluntary schemes (not mandates) and ISO Type I schemes (i.e., multiproduct, multicriteria, thirdpartyvalidated programs, such as the AB organic label, Nordic Swan, or EU eco-label) instead of ISO Type II (selfdeclarations) or ISO Type III (report card format, displaying multicriteria information) approaches. One exception studies a
mandatory label that mentions carbon emission rates, namely, the Energy Star label (Murray and Mills, 2011). Finally, previous studies consider efficiency conditions independently, without providing a general framework of EP information processing.
To extend these previous contributions, we address a mandatory scheme (European Directive 1999/94/EC), which requires
the display of self-declared, single-criterion information: the carbon emission rate of each vehicle. Conceptually, we build on
the observation that consumers suffer from limited resources in their opportunity, motivation, and ability to consider information, which implies that the elaboration likelihood model (ELM; Petty and Cacioppo, 1981) should be relevant for understanding the efficacy of the directive.
CONCEPTUAL FRAMEWORK AND HYPOTHESES
The ELM framework identifies different routes to persuasion, depending on peoples motivation and ability to consider the
information provided by a persuasive message. A motivated and competent consumer follows a central route and bases her or
his judgment on the quality of the arguments; a less competent and motivated consumer follows a peripheral route and bases
judgments on ad execution elements. In our study, the objective information (i.e., carbon emission rate) demands specific
expertise to be processed efficiently, so we predict that the display of emission rates exerts different influences on
consumers, depending on their degree of expertise. Previous studies note the role of expertise, by revealing consumers
difficulties understanding subtle ecological claims; for example, in response to claims of recycled versus disposable
products on packaging, 5% of respondents could provide precise, accurate definitions (Morris, Hastak and Mazis, 1995).
For expert consumers, we predict that the European Directive will exert the desired influence: If they remember having seen
an emission rate, without remembering the value, the mention should have no effect, whereas if they remember a high
emission rate, they will perceive the brand as less ecological. However, among non-expert consumers who recall having seen
the emission rate, the effect of the display may be the same, regardless of whether they remember the value or not, because
they cannot accurately assess the data. In line with the ELM predictions, these latter consumers likely use heuristics, such as
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metacognition about advertising practices (Wright, 2002), to interpret the presence of the carbon emission rate, which
ultimately will exert an influence on how they perceive the brand.
Inman, McAlister, and Hoyer (1990) demonstrate a similar signal effect in the case of sales promotions: When consumers
adopt the peripheral route, the mere signal of a promotion is enough to trigger buying behavior, even without a price
discount. We thus predict that consumers explain the display of the carbon emission rate by assuming the advertiser (i.e.,
carmaker) is proud of its EP, supported by their generalized metacognition that advertising exists to provide positive
information about the product or brand (Wright, 2002). Such an assumption also is largely supported by attribution theory
(Heider, 1944; Kelley, 1973; Kelley and Michela, 1980), which in turn is a heuristic for following a peripheral processing
route (Petty and Cacioppo, 1981). Attribution theory distinguishes two types of causal attributions: to the dispositions of the
actor (intrinsic motives) and to environmental factors (extrinsic motives). Eagly, Wood and Chaiken (1978) also reason that
message recipients usually expect communicators to argue for their own vested interests, in the absence of other information.
Previous works in the context of sustainable consumption (Langer, Eisend and Ku, 2008; authors, 2011) show that
consumers attribute information provided by private companies (cf. by independent third parties) to extrinsic motives (i.e.,
the need to sell products), such that they assume the company must be communicating about its positive EP. Accordingly,
non-expert consumers deduce that the advertiser mentions EP information because it has achieved good EP, and they
therefore perceive the brand as more ecological. The reasoning leads to our first hypothesis:
H1: Among non-expert consumers, the display of a poor EP indicator enhances the brands ecological image, whether
these consumers (a) remember its value or (b) not.
The information format also determines information efficacy. At a general level, cognitive psychology indicates the
superiority of visual versus textual communication in terms of recall and memory (Kaplan, Kaplan and Sampson, 1968; Lutz
and Lutz, 1978; Paivio, 1969). In an advertising context, Childers and Houston (1984) show that this superiority is especially
prominent among consumers with low motivation and ability to process the semantic content of messages. This finding has
been replicated in several real-world, applied contexts, such as warnings on cigarette packs. Graphic warnings prove more
effective (easy to notice, understand, and recall) than textual ones for people with low literacy levels (Hammond et al., 2003).
For eco-label designs, Tang, Fryxell and Chow (2004) conclude that the best format to help every kind of consumer features
a picture and short text.
A similar case appears in research into nutrition labels, which also display numerical information from which consumers
must infer nutritional qualities. The label format is crucial, especially if it can reduce the perceived costs of searching and
processing this information (Moorman, 1996). Central to the processing of numerical nutrition information is the need for a
comparison baseline, because raw figures offer no real meaning on their own and instead must be confronted against
reference values (Viswanathan and Hastak, 2002). For consumers with low literacy levels, graphic nutrition labels (e.g.,
showing value ranges or ratings) are more effective than those displaying raw figures or percentages in terms of aiding
consumers judgment (Viswanathan, Hastak and Gau, 2009). Our carbon emission information context seems similar; adding
a graphic representation of the raw information about emission rates should help non-expert consumers calibrate EP
information. Therefore, we hypothesize
H2: Among non-expert consumers, the addition of a graphic AG scale to a poor EP indicator damages the brands
ecological image.
Previous advertising research also uses a mediation chain, from attitude toward the ad to brand attitude, through brand beliefs
(Lutz, 1985; McKenzie, Lutz and Belch, 1986), to explain advertising effectiveness. We predict this effect applies in our
study context too, such that providing EP information influences brand attitudes. According to the ELM model, experts and
non-experts do not follow the same mediation route though. For non-expert consumers, the first causal factor is the format of
EP information (raw or graphic); they cannot interpret the value of EP indicators by themselves. Therefore,
H3: Among non-expert consumers who view a poor EP indicator, the brands ecological image mediates the influence
of the EP information format (a), but not of the actual value of the EP indicator (b) on brand attitude.
METHODOLOGY
The experimental design consists of a 4 (no rate; carbon emission rate slightly above the norm; very high carbon emission
rate; graphic environmental label) by 2 (experts versus non-experts) between-subjects design, in which we manipulated
environmental information. We measured respondents objective expertise, which is preferable when the research objective
relates to the consumers ability to encode new information (Selnes and Grnhaug, 1986), because it avoids several biases
(social desirability, difference in self-confidence).
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The average carbon emission rate required for all new passenger cars by 2015 by the European Automobile Manufacturers
Association agreement is 130g/km; therefore, we consider 149g/km a rate slightly above the norm and 209g/km as a very
high carbon emission rate. We used the two above-norm values to identify any potential threshold effects. The manipulation
check confirmed that respondents perceived the latter as higher than the former (M = 3.66, M = 4.69, p < .01).
In all conditions, respondents reviewed a commercial Web page (see Appendix 1), which presented a new vehicle (L3)
constructed by the brand LUNA, a fictitious manufacturer. We chose this fictitious brand to avoid any effects of prior brand
familiarity; the experiment explicitly explained that the carmakers real name could not be revealed. Testing the fictional
brands commercial website helped ensure realism in the online survey. Respondents completed the questionnaire without
the opportunity to return to review the web page.
To ensure a statistically generalizable sample, we recruited 422 respondents (51% women, mean age = 38 years) from the
panel of a professional market research institute. The sample represented various regions in France and was heterogeneous in
terms of socio-economic status. We randomly assigned the subjects to the four treatments.
To assess brand ecological image, we developed a four-item ad hoc scale. The rest of the questionnaire contained adaptations
of previously validated scales: attitudes toward the brand (Batra et al., 2000) and web page (Ng and Chyi, 2008), consumers
automobile involvement (Strazzieri, 1994), and environmental consciousness (authors, 2011). To measure respondents
objective expertise, we assessed their knowledge of the average carbon emission required for all new passenger cars by 2015
by the European Automobile Manufacturers Association agreement. All the constructs used seven-point scales. We
conducted unidimensionality and reliability checks for the multi-items scales and found satisfactory reliability. The mean
item scores indicated the construct measures.
RESULTS
Of the 422 respondents surveyed, some did not support the manipulation, such that they recalled being exposed to a rate
when they were not or vice versa. Some did not remember the exact rate even if they recalled being exposed to a rate display
or provided the wrong answer. Therefore, 270 people remained in the sample to test H1, and 215 respondents qualified to test
H2 and H3. Non-experts represented 72% and 74% of these samples, respectively. Additional analyses showed that the four
samples were homogenous in terms of their expertise (F(2) = 2.82, ns), environmental consciousness (F(3,214) = .58, ns),
and automobile involvement (F(3,214) = 1.08, ns).
To test our hypotheses, we ran analyses of variance, controlling for respondents attitudes toward the brand, automobile
involvement, environmental consciousness, gender, and age. We present the results in Table 1. The non-expert consumers
who remembered the display but not the rate value perceived the carmaker brand as more ecological (Mecolo = 4.97; F(1,61) =
12.72, p < .05) than non-experts who were not exposed to such information (Mecolo = 4.16). Furthermore, recalling the value
of the carbon emissions rate influenced their perceptions of the carmakers ecological image (F(2,104) = 5.62, p < .05), such
that they perceived the carmaker brand as less ecological when they saw no information about the emission rate (Mecolo =
4.12) than when they remembered a 149g/km emission rate (Mecolo = 5.11; F(1,75) = 16.19, p < .05) or a 209g/km emission
rate (Mecolo = 4.41; F(1,78) = .57, ns). These results support H1a and H1b. In addition, all else being equal (i.e., the same
149g/km carbon emission rate), adding a color-coded (green-to-red) environmental label (Mecolo = 5.05) to the display of a
moderately high carbon emission rate (Mecolo = 4.06) damaged the carmakers ecological image among non-expert consumers
(F(1,80) = 10.02, p < .05), in support of H2.
In a complementary analysis, to better determine the specific effect of the graphic label versus raw data, we measured the
attributions consumers made to explain why the brand displayed its EP information. They could choose intrinsic motives,
according to the item, because the carmaker is sure of its good performances and wants to communicate them, or extrinsic
motives, namely, because of legal compliance. Among non-expert consumers, the graphic red-to-green format boosted
their selection of extrinsic motives compared with the raw format (Mgraphic = 6.16, Mraw = 4.96, t = 3.135, p < .05) and
reduced their attribution of intrinsic motives (Mgraphic = 4.49, Mraw = 5.81, t = 4.614, p < .05). Together with their better
processing of the information, this finding contributes to explain why the mere positive signal effect of EP displays
demonstrated in H1 disappears.
As ancillary findings, we also noted the results for a similar analysis among expert consumers. Two main differences
emerged. First, recall of the carbon emissions display without memory of the carbon emissions rate did not influence their
782
perceptions of the carmakers ecological image (F(1,20) = .18, ns). Second, adding a green-to-red environmental label to the
display of a high carbon emission rate did not influence their perceptions either (F(1,28) = 1.03, ns). The only factor that
influenced this perception was their recall of the value of the carbon emissions rate (F(2,31) = 12.83; p < .05). That is, expert
consumers perceived the carmaker brand as more ecological when it provided no emission rate information (Mecolo = 4.34)
than when they remembered the 149g/km emission rate (Mecolo = 4.15; F(1,25) = .13, ns) or 209g/km emission rate (Mecolo =
2.04; F(1,25) = 19.28, p < .05).
To test the mediating influence of the brands ecological image on the link between EP information display and consumers
attitudes toward the brand, we used Zhao, Lynch and Chens (2010) procedure and Hayess (2012) PROCESS macro. We
applied a bootstrapping procedure with 5000 bootstrapped samples to counteract the assumption of normality for the
sampling distribution of the indirect effect (ab), as required by the Sobel test (Hayes 2009). As the results in Table 2 indicate,
considering the influence of the environmental performance information value (i.e., 149g/km vs. 209g/km) on brand attitude,
the bootstrap analysis showed no significant indirect effect. However, considering the influence of environmental
information format (i.e., 149g/km with or without a green-to-red environmental label), the bootstrap analysis revealed that
the mean indirect effect was negative and significant (ab = .2554), and the 95% confidence interval did not include 0 (
.5249 to .0921). In the indirect path, a = .9335 (p < .05), so adding the color-coded environmental label damaged brand
ecological image by .9335 units, and b = .2736 (p < .05), so even when holding the environmental information format
constant, a unit increase in brand ecological image enhanced brand attitude by .2736 units. The direct effect c was not
significant, so we can only establish indirect-only mediation. These results support H3a and H3b.
DISCUSSION
With its between-subject experimental design, this study, theoretically grounded in ELM, examines the effects of Directive
1999/94/EC, which requires carmakers selling in Europe to display the carbon emission rates of their new passenger cars,
prominently, on all promotional documents. Of the various interesting results, perhaps the most notable is our finding of a
counterproductive effect of the mandated information on non-expert consumers, who represent about three-quarters of the
population. For these consumers, the display of the carbon emission rate falsely improves the companys ecological image,
whether they remember the rate or not. A possible strategy to eliminate this bias would be to show, in addition to a raw environmental performance indicator, a graphic, red-to-green environmental label that enables non-experts to recognize when the
label indicates EP and thus make more accurate brand ecological evaluations. This study also provides evidence of the mediation route to persuasion followed by non-expert consumers, in line with the ELM framework: EP information influences
brand attitude through brand beliefs (brand ecological image), but it is not the value of the EP indicator per se that counts,
but rather its format.
We thus draw several theoretical implications regarding consumers information processing. At a general conceptual level,
the positive signal effect of displaying poor raw EP indicators is not surprising; Petty and Cacioppo (1981) clearly describe
the peripheral route to persuasionprecisely the one followed by the non-experts in our studyas based on inferences or
heuristics obtained from various elements of the communication (e.g., source, execution cues). What is interesting is the element that actually engenders the heuristic, namely, the carbon emission rate, which is an objective, technical piece of information that offers simple, unbiased evidence of a cars environmental quality. This finding could spark an interesting debate
among ELM researchers about central (e.g., message and argument per se) and peripheral cues (e.g., music, source, graphical
elements). In our study, it was not the element per se (the rate) that mattered but rather the way consumers processed it, depending on their ability. Using the same cue, people drew different conclusions, such that one group was able to analyze the
information accurately, but the other relied on a heuristic process. The EP indicator itself cannot constitute the central or peripheral element, in that it offers two distinct components: its value (processed by experts and therefore a central cue) and its
format (raw vs. graphic; processed by non-experts and therefore a peripheral cue). These findings indicate that no indicator
can be considered fully neutral, technical, and objective, even if it appears as a raw figure. Format is always a crucial element
that public policy makers cannot ignore.
This research provides insights about how people process numerical information, in line with research into nutrition labels
(Viswanathan and Hastak, 2002; Viswanathan, Hastak and Gau, 2009). Nutrition labels closely approximate our study context, and our results are in line with those of Viswanathan, Hastak and Gau (2009), in that we show that for non-experts (less
literate consumers), graphic EP indicators lead to more accurate product evaluations. Such graphic presentations, which mix
scales, colors, and numerical information, offer a compelling option for public policy makers, in the sustainability domain as
well as nutrition settings. Further research must pursue a deeper theoretical understanding of their efficacy, perhaps based on
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psychometric theory (e.g., anchor points, number of anchors) or cultural approaches that detail labels metaphorical roles in
relation to other concrete objects (e.g., ruler or scale, speedometer, traffic lights). Many other formats need to be tested, including the ruler rating chosen by the EPA for its new vehicle label, a speedometer, or a thermometer. Other studies also
might consider multicriteria labels). At first sight, more information better empowers consumers, but what happens if the
information is too complex or if the criteria use different scales or do not coincide and need to be weighted (Levy, Fein and
Schuker, 1996)?
From a public policy perspective, this study highlights the ineffectiveness of the European Directive, as it is currently applied, and suggests some corrections. More generally, we offer some insights about sustainable consumption public policies
that rely on increasing consumer knowledge or information. First, very simple measures, such as showing an EP indicator,
are not sufficient. Rather, they need to be accompanied by some education scheme, whether in brochures or legal footnotes,
to explain the meaning of the figures. We hope researchers replicate our study in a few years, to determine if the proportion
of experts has changed and if, through progressive learning and habituation, consumers have become better able to interpret
the information. Second, we reveal that mere information, even at the most basic level, cannot be disconnected from its
presentation or information format. Neutral and technical information simply does not exist; public policy makers cannot
forget basic communication rules. Furthermore, public policy cannot focus only on specialists but also must acknowledge
communicants. Third, we believe it is possible to improve the process for defining public policy in Europe by introducing
more experiments and intermediate field studies before proposing new regulations. For example, applying regulations among
perimeter nations often demands substantial energy and coordination. Working with experimental zones and testing ideas
before deploying them universally could be well worth the immediate costs, to lower implementation costs and barriers in the
long term.
Finally, we note several limitations of this study. It features only a French sample that, though representative of France, cannot represent all European citizens, especially in terms of their varying levels of environmental consciousness. In addition to
replicating this experiment in other countries, researchers might replicate it using other carbon emissions values, to better
understand the threshold or specific effects of certain numerical values (e.g., round vs. 9-ending numbers). A replication of
this study with a well-known brand, rather than a fictitious one, also could complement our findings by indicating how the
processes of persuasion and attitude change with previous brand beliefs in this context (Lutz, 1985).
TABLES
Table 1. Influences of Environmental Information on Non-Expert Consumers
No Memory of CO2
Emissions Rate
CO2 emissions rate (no display vs. display)
12.72***
CO2 emissions rate (no display vs. 149g/km vs. 209 g/km)
Memory of CO2 Emissions

Rate
5.62***
AG environmental label (no display vs. display)
10.02***
Attitude toward the ad

Automobile involvement
Environmental consciousness
Gender
Age
Adjusted R
***p < .01 (two-tailed).
8.69***
12.06***
10.49***
1.26
.75
.54***
Table 2. Mediation Tests: Bootstrap Results for Indirect Effects

Mean Indirect
Path from
Indirect Effect on Brand
Effect (ab
Environmental
Attitude
paths)
Information to Mediator
Brand ecological image
mediating the effect of
-.2554
-.9335
environmental information
format
Brand ecological image
mediating the effect of
-.1586
-.6020
environmental performance
Notes: Significant effects at a 95% confidence interval appear in bold.
784
11.18***
7.35***
.21
5.02***
2.70
.28***
9.20***
.21
.88
.88
.26
.21***
Path from
Mediator to
Brand Attitude
Bias-Corrected
95% Confidence
Interval
.2736
[-.5249; -.0921]
.2635
[-.6596; .0208]
FIGURE
Figure 1. Experimental Stimuli
CO2 emissions rate-only
No CO2
emissions rate
149g/km
209g/km
785
CO2 emissions rate with environmental

labeling
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787
COOPERATING IN BUSINESS RELATIONSHIPS: THE EMERGENCE AND COLLAPSE OF POWER

SYMMETRY, TRUST AND COMMON GOALS
Saara Julkunen, Department of Business, University of Eastern Finland, Finland
Mika Gabrielsson, Department of Business, University of Eastern Finland, Finland
ABSTRACT
Cooperation in interorganizational business relations is needed to achieve a wide range of outcomes for the parties involved.
In this paper we explore the complexities of establishing and nurturing cooperative relations. We present two cases of interorganizational relationships where the organizations seek cooperation but find themselves engaged in rather antagonistic or
unpredictable positions. We investigate the meanings of cooperation from the actors narratives and how these help explain
behaviors in business partnerships. We show how power symmetry, trust and common goals operating within organizational
structures, processes and formal roles come in the way of achieving perception of full interorganizational cooperation.
788
BORN TO SURVIVE: SMALL AND MEDIUM BUSINESS IN RUSSIA NEEDS MARKETING

Olga Saginova, Plekhanov Russian University of Economics, Russian Federation
Nadezhda Zavyalova, Plekhanov Russian University of Economics, Russian Federation
Irina Skorobogatykh, Plekhanov Russian University of Economics, Russian Federation
Zhanna Musatova, Plekhanov Russian University of Economics, Russian Federation
INTRODUCTION
Societies are interested in developing small and medium business to increase employment rates; improved life standards and
social stability depend on the revenues generated by small and medium business employment or self-employment. A small
number of small and medium enterprises (SMEs) create the majority of jobs (Storey 2003). However, the creation of new SMEs
does not always result in new jobs creation; only 2% of all new SMEs create 33% of new jobs (Storey and Strange 1992).
An important social goal in developing small and medium entrepreneurship is SMEs participation in innovations and economy
modernization. SMEs influence economic efficiency and innovations commercialization through increased competition
stimulating entrepreneurs to be more efficient (Disney et al, 2003), SMEs increase labour productivity (Fritsch and Mueller
2004) and help to achieve stable economic growth (Romer 1986, Wennekers and Thurik, 1999). To this end new SMEs need
to be created, but more importantly their survival rate should be increased. This is what different government programs of
support to entrepreneurs are meant to do. Two approaches or strategies developed by R. McArthur and E. Wilson - R-strategy
and K-strategy - can be applied to entrepreneurial organizations (Aldrich and Martinez, 2001). R-strategy reflects maximization
of births: many new SMEs will never survive their first years but due to their number, the share of survivors will be maintained.
K-strategy means that the number of new SMEs is limited but efforts to support them guarantee high survival rate.
Unstable economic environment of emerging and dynamically developing markets is usually characterized by the
predominance of R-strategy, described by high birth rate and short life cycles. While the contributions of small businesses to
economic development are generally acknowledged, entrepreneurs are faced with many obstacles that limit their growth and
survival. Publications on small business development show that the rate of failure in developing countries is higher than in the
developed world (Arinaitwe, 2006). Moreover, the Russian government seems to support R- strategy, providing different kinds
of support to newly organized SMEs. Both federal and local governments provide these types of support. However, it is not
clear if this strategy assists in solving employment problem in Russia, whether it results in social stability and higher standard
of living, or stimulates SMEs increased contribution to innovations and economy modernization. The paper provides the
analysis of these issues by researching factors influencing small business development and needs as seen by receivers of
different forms of government support.
Literature review provided information about the problems of growth and survival of SMEs in developing countries, which
include administrative, operating, strategic and exogenous constraints (Okpara and Wynn, 2007). Publications on SMEs in
developing countries identified financial resources, lack of management experience, poor infrastructure and corruption as the
main obstacles to SMEs development and growth (Okpara and Wynn, 2007; Wong, Ho and Autio, 2005). It has also been
found in previous research that the survival opportunities of SMEs can be increased by internationalization (Lee et al 2012),
R&D intensity, and technological competence of small businesses (Mudambi and Zahra 2007).
Government support programs in Russia specifically target innovative SMEs, i.e. those who produce innovative goods or
provide innovative services and have specific expenditures for R&D (as defined by the corresponding Statement of the Russian
Ministry of Economic Development of 30.10.2009). The purpose of our research was to find out whether the business
constraints characteristic for other developing markets were also relevant for Russia and whether government support provided
to innovative SMEs increase their survival opportunities. Basing on literature review survival opportunities were measured by
increased employment, SME scaling and internationalization, and increased use of innovative technologies and R&D
investments.
METHOD
Research project undertaken in May - September 2012, was sponsored by the Ministry of Economy of the Sverdlovsk region.
The sample used was selected from the database of innovative SMEs in the Sverdlovsk region, which included the receivers of
different types of government support: grants for young entrepreneurs (under 30 years of age), grants for existing innovative
enterprises, grants for innovative start-ups, grants (subsidies) for the first payment of the leasing fee. Research was carried in
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two stages: the first stage included desk research using content analysis of various research reports on government support to
SMEs in the Sverdlovsk region. The second stage included a survey of entrepreneurs who received some forms of government
support. First telephone contacts were made with all potential respondents to explain the purpose and content of the survey.
These contacts were then followed by a structured questionnaire mailed or e-mailed to be filled in. Out of almost 600
entrepreneurs contacted by telephone, 360 questionnaires were sent and 110 filled questionnaires were received, 107 of them
were valid for further analysis. The questionnaire included five sections:
1.
2.
3.
4.
5.
Characteristics of SME and its products (Q 1-5)

Types of government support received (Q6) and assessment of additional support provided (Q7)
SME scale of operation (Q8), its resources (Q9) and investment activity (Q10) as well as main economic results (Q
11-13)
Evaluation of SME influencing factors and needs (Q 14-16)
Evaluation of government support at different level (federal, regional and municipal) (Q 17-18)
The questionnaire was agreed upon with the sponsor of this research (Ministry of Economy of the Sverdlovsk region) and pretested on a small sample (n=8) selected from the larger sample. The correlation of random split-halves for internal consistency
for the questionnaire ranged from 0.86 to 0.90, the step-up formula ranged from 0.88 to 0.96. Though the questionnaire turned
out to be complex and multi-topical, research team and the project sponsor agreed to use one questionnaire rather than split it
into several separate ones. Research results covered three years: 2010, 2011, and 2012.
Basing on the literature review and content analysis of the previous studies of SMEs in the Sverdlovsk region, the following
research hypotheses were formulated:
H1: Government support positively affects SMEs growth and survival opportunities:
H1a: government support positively affects SMEs scaling and internationalization,
H1b: government support positively affects new jobs creation by SME,
H1c: government support positively affects SMEs economic results (revenues, profit, material and capital assets);
H2: Government support positively affects SMEs investment into R&D and the use of new technologies;
H3: Newly created and existing SMEs do not differ in the way they view factors, affecting small business;
H4: Newly created and existing SMEs differ in the way they view small business needs.
Analysis of the scaling of SMEs activity and their internationalization was based on sales to areas outside Sverdlovsk region
and abroad (internationalization), setting up new branches and creating new jobs. Though not all filled questionnaire contained
answers to this question, government support received showed no moderation of increased internationalization or creation of
SME branches or subsidiaries outside the Sverdlovsk region. Only 13% of respondents mentioned sales outside Sverdlovsk
region and 8.4% of respondents increased their sales outside the Sverdlovsk region in the period under review. No one
mentioned sales abroad or creating branches and partnerships in foreign countries. Thus, government support they received did
not result in scaling up their business or internationalization.
Economic results of SMEs were positively affected by government support received, most of respondents showed increased
revenues and profits, increased investment into capital assets. However, none of the respondents mentioned an increase in nontangible assets or acquisition of new know-how or patents. Jobs created by SMEs also remained unchanged, the number of
employees in the existing SMEs did not increase, and the overall increase of jobs created was due to start-ups only. So
hypothesis 1 that government support provides better opportunities for SMEs growth and survival was only partially proved.
Though sales revenues and profits did increase as well as SMEs investments into their business development, government
support did not stimulate internationalization, business scaling or increased employment. Results show that new jobs were
created through new SMEs not the development and growth of the existing ones.
R&D development and use of innovations analysis demonstrated different understanding of innovations by respondents. Only
49% of them mentioned use of innovative technologies though all belong to SMEs defined as innovative in the database. The
majority of those who mentioned the use of new technologies and investments into R&D (76%) were new start-ups created
around some patent or know-how. Existing SMEs did not demonstrate any increase in R&D investments. So hypothesis 2 was
not proved, the existing forms of government support do not stimulate increased SMEs contribution to innovations and economy
modernization.
790
The analysis of factors affecting small business showed that both existing SMEs and new start-ups view these factors in the
same way. Bureaucracy of administration and effective government support were mentioned as the most important factors
influencing small businesses operations by both existing SMEs and new start-ups. So hypothesis 3 was fully proved.
Research showed that though the needs of different groups of SMEs demonstrate some variety, top priority in all responses was
given to similar needs. Marketing consulting and marketing research services came right after government support, office
premises and skilled labour availability (Fig. 1), factors mentioned in all small business research since early 2000s. The need
for marketing consulting services was assessed as more important by the respondents than access to financial resources (loans
guarantees and short-term credit) or the necessity of changes in legislation.
Marketing consulting availability to SMEs is still low in Russia. We believe one of the reasons is that consulting services are
provided by marketing agencies working with big companies, so consulting fees are not affordable for SMEs, especially when
they are just starting their business. Moreover, entrepreneurs sometimes find it difficult to formulate their needs clearly.
Government programs include only legal consultations about SMEs registration and government support applications.
Regional Marketing Centers, an organization uniting independent marketing agencies specializing in consulting services
provides market analysis, partners selection, channel management services. However none of these are adapted for small
businesses and do not provide customized solutions for SMEs. Thus, the first hypothesis was only partially proved, as marketing
services and consultations were on the top of the list both for the start-ups, and for existing SMEs.
Responding to questions about the effectiveness of government support entrepreneurs clearly demonstrated deficiency of Rstrategy in government support provision: none of the support receivers opened new affiliates, increased the scale of their
business operations, started to export their products or increased the number of employees from socially vulnerable segments.
Moreover, their responses clearly indicated that entrepreneurs were more satisfied with services provided by regional
administration, while local municipal and federal support programs were assessed as being too slow, too bureaucratic, and
about half of the applicants were not satisfied with their quality and availability.
Basing on the research results, a number of recommendations were developed. A system of indicators showing the effectiveness
of government support was proposed. Government support programs should target successfully developing SMEs, to increase
survival rate and stimulate their growth and geographic expansion. Priority in government support should be regionally
differentiated targeting regional priorities. Government support programs should include marketing research services.
Standardized research can target the most common SME needs and marketing consulting should be adapted to the needs of
SMEs.
Further research in this areas could target issues of SMEs growth and expansion after receiving government support programs
and measure SMEs contribution to economy modernization and innovations.
FIGURES
Figure 1. The needs of SMEs
Subsidiestoinnovativecompanies
Skilledlabour
Marketingandsalesmanagement
SkilledITspecialists
Warehousing
Shorttermcredits
Unskilledlabour
0
0.5
1.5
791
2.5
3.5
4.5
REFERENCES
Aldrich Howard E. and Martinez Martha Argelia (2001) Many are Called, but Few are Chosen: An Evolutionary Perspective
for the Study of Entrepreneurship, Entrepreneurship: Theory & Practice, 25(4), 41-56.
Arinaitwe, J.K. (2006), Factors constraining the growth and survival of small-scale businesses: a developing countries analysis,
Journal of American Academy of Business, Cambridge, Vol. 8 No. 2, pp. 167-78.
Disney, R., Haskel J., and Heden Y. (2003), Restructuring and Productivity growth in UK Manufacturing, Economic Journal
113, 666-694.
Fritsc H M. and Mueller P. (2004) Effects of New Business Formation on Regional Development over Time, Regional Studies
38 (8), 961-975.
Lee H., Kelley D., Lee J. and Lee S. SME Survival: The Impact of Internationalization, Technology Resources and Alliances.
Journal of Small Business Management, 2012, 50(1), 1-19.
Mudambi and Zahra 2007 Ram Mudambi & Shaker A Zahra, 2007. The survival of international new ventures, Journal of
International Business Studies, Palgrave Macmillan, vol. 38(2), pages 333-352, March.
Okpara, J.O. and Wynn, P. (2007), Determinants of small business growth constraints in a sub-Saharan African economy, SAM
Advanced Management Journal, Vol. 72 No. 2, pp. 24-35.
Okpara John O., (2011), Factors constraining the growth and survival of SMEs in Nigeria: Implications for poverty alleviation,
Management Research Review, Vol. 34 Iss: 2 pp. 156 - 171
Romer, P.M. (1986), Increasing Returns and Long Run Growth, Journal of Political Economy 94, p. 1002-1037.
Storey, D.J. and Strange, A. (1992), Entrepreneurship in Cleveland 1979-1989: A Study of the Effects of the Enterprise Culture,
Research Series, No. 3, Sheffield, UK: Employment Department.
Storey, David, Andr van Stel (2003) Investigating the link between firm births and job creation in British regions, 1980-98: Is
there a Upas Tree effect? Retrieved from: http://www.entrepreneurship-sme.eu/pdf-ez/N200317.pdf Wennekers, S. and
R. Thurik, 1999, Linking Entrepreneurship and Economic Growth, Small Business Economics 13 (1), 2755.
Wong Poh Kam, Ho Yuen Ping Autio Erkko. Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data
Small Business Economics (2005) 24: 335350
792
EVALUATING USER EXPERIENCE WITH SOCIAL NETWORKING SITES: A MEDIATED MODERATION

RELATIONSHIP
Weiling Zhuang, Eastern Kentucky University, USA
Qian Xiao, Eastern Kentucky University, USA
Maxwell K. Hsu, University of Wisconsin-Whitewater, USA
ABSTRACT
Social networking sites (SNSs), such as Facebook, MySpace, YouTube, QQ, and Twitter, are defined by their unique focus on
allowing people to present themselves, share contents, articulate their social networks, and establish or maintain connections
with others. The proliferation of social networking sites has created a phenomenon that engages millions of Internet users
around the world. Given the popularity of these sites and their importance in peoples lives to facilitate communication and
relationships, it is important to understand the factors influencing SNSs use and user satisfaction.
While majority of studies have confirmed that social connections or maintaining social networks is the key factor explaining
why people use social networking sites (Haythornthwaite, 2002; Ellison et al., 2007), very little is known about the role of
SNSs users feelings and perception which play in forming their overall SNS usage experiences, and the factors that make
using social networking sites a compelling experience. This study tends to examine the nature of SNSs use and explore the
factors that influence the use and gratification.
One of the major determinants of technology use is competency (Spitzberg, 2006). Competency factors are expected to impact
SNSs use, in that use of SNSs reflects and extends users' technical capabilities, and facilitates the awareness, development and
fulfillment of needs or desires previously unrealized. Along with the competency logic, it is reasonable to believe that a diverse
social environment will contribute more to the competency enhancement and the resulting satisfaction than the social platforms
composed of like-minded others. Therefore, we expect SNSs users' perceived competence is positively associated to user
satisfaction. The relationship is furthermore moderated by users' perceived identification with user community. We further
propose a mediator of the interaction between users perceived competence and user identification on user satisfaction to
demonstrate a comprehensive SNSs user experience model. In particular, as a consequence of competency-enhancing
experience from interacting in a diverse online social environment, users will embrace affective states or positive emotions
such as feeling flexible, spontaneous, imaginative, creative, and playful.
The sample includes a group of students who enrolled in undergraduate and/or graduate level classes in United States. LISREL
8.80 (Jreskog and Srbom, 1993) was applied for measurement analysis in the current study. Next, the hierarchical regression
models were used to test the proposed hypotheses. The results supported both hypotheses.
Our findings entail important implications regarding how to design SNSs to effectively address users' personal and social needs,
and motivate users participation and engagement. Our study suggest that the feature of SNSs as a media of generating and
bridging social capital could be enhanced by the diversity of user composition, as evidenced by the empirical results that
perceived competence in relationship to user satisfaction is more salient for the low level of perceived user identification. Our
study also shows that fun aspect of SNS usage should also be a design focus. As such, SNSs should be effectively designed to
augment the function of generating and bridging social capital, supporting loose social ties, and allowing users to create and
maintain larger, diffuse networks of relationships from which they could potentially draw resources.
Future work could quantitatively extend our study by moving beyond the American setting, and incorporating the cross-cultural
elements to determine which societies have similar or divergent views on the moderating role of social networking sites' users'
identification with user community on the relationship of users' perceived competence with users' satisfaction with the site.
Furthermore, future studies could test the similar framework by including other antecedents and consequences.
793
COMPARING AUSTRALIAN AND MALAYSIAN DESTINATIONS INTERNET DIFFUSION

Daniel Bruce Budd, Murdoch University, Australia
Ahmad Fareed Ismail, Putra University, Malaysia
Jamie Murphy, Australian School of Management & Curtin Graduate School of Business, Australia
INTRODUCTION
In a recent study, practitioners ranked social media as the top research priority and academics ranked social media second
(Williams, Stewart and Larsen 2012). Academics and practitioners concur on the need to research how to use social media for
destination marketing, and the need to measure these emerging technologies impact on destination performance. Destination
managers and consultants seek answers on social media best practices and return on investment (Fisher 2009; Hoffman and
Fodor 2010).
One nascent research stream focuses on the presence, and use, of popular social media (Dwivedi, Yadav and Venkatesh 2012;
Xiang and Gretzel 2010). This stream aligns with the Diffusion of Innovations rich history studying the presence and use,
respectively adoption and implementation, of technology (Ismail, Hashim, Gemignani and Murphy 2012). Large
organizations get and use new technology faster than small organizations do. Pioneering tourism studies tend to examine and
describe largeoften operationalized as employees, revenue or brand value organizations social media diffusion (Hays,
Page and Buhalis 2012; Hvass and Munar 2012; O'Connor 2011).
Adoption research, whether or not the organization has the technology, agrees that Facebook, Twitter and YouTube, usually
in that order, are the leading social media in aviation (Hvass and Munar 2012), hospitality (O'Connor 2011) and destination
management (Dwivedi, Yadav and Venkatesh 2012; Hays, Page and Buhalis 2012). Implementation research, how
organizations use Facebook, examines engagement metrics related to comments, fans, likes, photos, posts and videos (Hays,
Page and Buhalis 2012; Hvass and Munar 2012; O'Connor 2011).
This paper adds to emerging social media research, with descriptive and theoretical results on destination management
organizations (DMOs) adoption and implementation of websites and social media. The study may be the first to test
theoretical relationships among social media adoption variables, implementation variables and DMO characteristics.
METHODOLOGY
This research drew on Australia and Malaysias national and state DMOs, respectively NTOs and STOs. The sample, 26
DMOs, comprises the Australian and Malaysian NTOs, Australias eight STOs and Malaysias 16 STOs. This paper uses 12
diffusion measures: website adoption, adoption of six social media, five website implementation measures and one Facebook
implementation measure. In addition to three popular social mediaFacebook, Twitter and YouTubethe study included
two recent social media, Google Plus and Pinterest, and a blog. These six social media adoption measures and website
adoption were yes/no binary variables.
Technology implementation studies rely upon variables that measure performance of the adopted technology (Palmer 2002;
Zach 2011). Unlike building websites or launching social media, DMOs have no control over TripAdvisor presence. Users,
not DMOs, post destination reviews on TripAdvisor. Given that user opinions exist, linking to TripAdvisor from the DMO
website reflects advanced website use. Another binary website implementation measure is a favicon, a 16x16 pixel image that
displays in a browsers address bar and reinforces the DMO branding. Three other website implementation measuresall
ordinal measures reflecting performanceare Google PageRank, Alexa Traffic rank and incoming links. The final
implementation measure is binary, use of Facebooks timeline tool.
Content analysis, sensitive to symbolic forms and unstructured materials (Krippendorff 2011), suits investigating Internet
technologies (McMillan 2000) and conceptual development (Dwivedi, Yadav and Venkatesh 2012). The unit of analysis was
the DMO homepage as visitors usually decide upon further exploration based on the homepage. Using just the homepage
increases intra-coder reliability versus examining the entire website (McMillan 2000).
Organizational size, such as number of employees or sales, often correlates positively with technology diffusion. For this
reason and others, developed countries usually lead in technology diffusion (OConnor 2011; Park and Oh 2012; Rui and
794
Bilo 2010). All things equal, Australian DMOs should outperform their Malaysian counterparts, and NTOs should lead
STOs in website and social media diffusion.
NTO websites usually reference their STOs (Gertner, Berger and Gertner 2009). Google searches for the official tourist
organization validated the 26 DMOs. But three Malaysian STO websitesKedah, Negeri Sembilan and Perliswere under
construction or failed to load, reducing the sample to 23 DMOs. There were no significant differences (p<.05) between
countries nor between DMO types regarding website adoption. Testing for significant differences relied upon Crosstabulations and Mann-Whitney U tests, respectively for nominal and ordinal diffusion measures. Table 1 below shows the
adoption of four social media.
None of the 23 DMO websites linked to Pinterest or Google+. Similar to pioneering DMO studies (Dwivedi, Yadav and
Venkatesh 2012; Hays, Page and Buhalis 2012), Facebook was the top social medium with 74% adoption. Both NTOs, all but
one Australian STO, and almost two thirds of the Malaysian STOs had a Facebook page. Over half the DMOs, 57%, adopted
Twitter, then YouTube (39%) and Blogs (22%). Both NTOs used Twitter but not YouTube. Australian STOs led the
Malaysian STOs in the adoption of all social media, significantly so for YouTube (p<.05).
Table 2 shows the comparison of implementation across DMO levels and countries. Australian STOs led Malaysian STOs in
all six measures, significantly for four measures but not for favicons and Facebook timeline. The NTOs, 71% of the
Australian STOs and half the Malaysian STOs implemented Timeline before Facebooks automated update of all Fan
Pages.
The study helps enlighten academics and tourism practitioners on comparing two different nations, a developed and
developing nation. The findings illustrate the gaps on social media adopted and the websites implementation, and align with
existing diffusion research. Size relates positively to both adoption and implementation.
The low TripAdvisor presence reflects low importance, perhaps because DMOs have no control over TripAdvisor compared
to Facebook, Flickr and Twitter that allow direct communication. However, DMOs should link to TripAdvisor from their
websites and lead visitors to third party opinions. This openness supports DMO credibility and helps ensure that DMOs listen
to their customers. As for the Fav Icon findings, the Malaysian STOs should add Fav Icons. This simple, one-off exercise is
an important branding image for any website.
Moreover, the outcomes from social media adopted by both nations confirmed the popularity of Facebook as the top social
media application. As for YouTube adoption, perhaps Malaysian tourism practitioners should consider reducing the gap and
consider proactive video promotion. More importantly, the three Malaysian STOs should fix their dead websites
immediately. And both countries should implement systems so that visitors always find a live DMO website. These
Malaysian instances suggest that academics should embark on research related to diffusion, adoption and implementation, of
existing and new digital marketing tools.
Due to the timing of the study, none of the DMOs had adopted Google Plus or Pinterest. Future research could revisit these
and other emerging media. Future studies should also investigate implementation measures. Tourism practitioners must
evaluate the benefits and outcomes of their adoption of Facebook Fan Pages and other social media in line with their
marketing objectives. Implementation must seek and measure a positive return on investment of adopted technologies such as
social media (Fisher 2009; Hoffman and Fodor 2010).
TABLES
Table 1: Social Media Adoption
Facebook
Twitter
You Tube
Blogs
Australian STOs
88%
75%
75%
25%
Malaysian STOs
62%
39%
23%
15%
13
795
Total STOs
71%
52%
43%
19%
21
Australian NTO
100%
100%
0%
100%
Malaysian NTO
100%
100%
0%
0%
Total NTOs
100%
100%
0%
50%
Total DMOs
74%
57%
39%
22%
23
Table 2: Implementation: website performance and Facebook timeline

Trip
Fav Icon FB Timeline Google
Advisor
Rank
Australian STOs
13%
88%
Page Alexa
Rank
Traffic Inbound
Links
71%
Range
Median
Malaysian STOs
15%
39%
Median
Australian NTO
Malaysian NTO
All DMOs
54,268 362,930 911 - 6,018
6.5
143,364
3-6
195,535
5,437,708
1,171,172
152
1,881
50%
Range
All STOs
6-7
14 1,103
14%
*57%
60%
***
***
***
0%
100%
100%
20,883
7,127
100%
100%
100%
79,552
3,140
17%
61%
65%
3-8
20,883
5,437,708
303,017
Range
Median
14 7,127
911
* p<.05, *** p<.001

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Dwivedi, Mridula, Anil Yadav, and Umashankar Venkatesh. (2012). Use of Social Media by National Tourism
Organizations: A Preliminary Analysis. Information Technology and Tourism, 13(2), 93-103.
Fisher, Tia. (2009). ROI in Social Media: A Look at the Arguments. Data Base Marketing & Customer Strategy
Management, 16(3), 189-195.
Gertner, R., K. Berger, and D. Gertner. (2009). Country-Dot-Com: Marketing and Branding Destinations Online. Journal of
Travel and Tourism Marketing, 21(2), 105-116.
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National Tourism Organisations. Current Issues in Tourism, 1-29.
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Management Review, 52(1), 41-49.
796
Hvass, Kristen, and Ana Munar. (2012). The Takeoff of Social Media in Tourism. Journal of Vacation Marketing, 18(2), 93105.
Ismail, Ahmad Fareed, Noor Hazarina Hashim, Gabriel Gemignani, and Jamie Murphy. (2012). Leapfrogging and Internet
Implementation by Tourism Organizations. Information Technology and Tourism, 13(3), 177-189.
Krippendorff, Klaus. (2011). Agreement and Information in the Reliability of Coding. Communication Methods and
Measures, 5(2), 93-112.
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World Wide Web. Journalism and Mass Communication Quarterly, 77(1), 80-98.
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Conference. Denver, Colorado.
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Practices. In Conference on Social Media and Tourism. Verona, Italy.
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151-167.
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Media Marketing in the Tourism Industry. International Journal of Tourism Sciences, 12(1), 93-106.
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Hospitality Management. Opatija, Croatia, 179-190.
Williams, Peter W., Kent Stewart, and Donna Larsen. (2012). Toward an Agenda of High-Priority Tourism Research.
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Xiang, Zheng, and Ulrike Gretzel. (2010). Role of Social Media in Online Travel Information Search. Tourism Management,
31(2), 179-188.
Zach, Florian. (2011). Partners and Innovation in American Destination Marketing Organizations. Journal of Travel
Research, 51(4), 412-425.
797
MODELING CUSTOMER EQUITY:

THE ROLES OF SOCIAL NETWORKING SITES, TRUST, AND BRAND EQUITY
Chawanuan Kananukul, University of North Carolina at Greensboro, USA
Sojin Jung, University of North Carolina at Greensboro, USA
Kittichai Watchravesringkan, University of North Carolina at Greensboro, USA
INTRODUCTION
The popularity of social networking sites (SNSs), especially Facebook and Twitter has grown tremendously in the past few
years. Internet World Stats (2012) reports that more than 835 and 140 million are active users of Facebook and Twitter,
respectively. Particularly in the Asia-Pacific region, 240 million online users visited SNSs in 2010, accounting for 50 percent
of online population (Baird and Parasnis 2011). These online platforms have transformed online consumer behavior which
creates potential opportunities for firms to advertise their products to better serve existing customers and attract new ones.
SNSs allow brands to interact with consumers, thereby gathering a major stage in e-commerce (Boveda-Lambie and Hair 2012).
Recognizing this trend, marketers have invested considerable resources on SNSs by setting up their brand profile page in
generating awareness and interest, and ultimately product purchase. Among various industries, the apparel is the fastestgrowing segment in e-commerce (eMarketer 2012). Leveraging SNSs has become a major strategic communication vehicle for
apparel brands in hope of enhancing brand equity and ultimately customer equity. Specifically, many fast fashion brands with
zero advertising expenditure policy (i.e., Zara, H&M) have been relying on SNSs as a means of effectively communicating
with their targets. However, while taking advantage of the interactivity that SNSs deliver, whether or not SNSs engagement
can influence customer loyalty remains unanswered, how to use SNSs to establish customer relationship has received the least
research attention (Baird and Parasnis 2011). McKnight et al. (2002) indicates that consumer engagement in vendors website,
as a result of trust, could influence adoption of products. However, the effect of consumer engagement in SNSs on their intended
behavior has not been thoroughly investigated (Gummerus et al. 2012). To date, very few studies have examined the role of
SNSs that drive consumers to interact with firms marketing effort on these online platforms that may have different effects on
their subsequent cognitive and behavioral decision-making outcomes.
The main objective of this study, thus, is to empirical examine the overall multistep causal decision-making process involving
perceived benefits of SNSs-trust-brand equity-customer equity within the context of fast fashion brands. Specifically, the study
attempts to delineate the specific direct relationships that exist between each construct. Thailand was selected as the desirable
context for the study for several reasons. First, Thailand stands at one of the three largest apparel markets in Southeast Asia
with apparel sales of USD10.8 billion in 2010 (Kate and Thieberger 2011), indicating that Thai market represents lucrative
opportunities for many apparel brands. Second, multinational fast fashion apparel firms such as Zara, H&M, Forever 21,
Uniqlo, and Topshop are penetrating aggressively in Thai market due to the countrys fashion savvy residents (InsideRetail.Asia
2013). Last, given the ubiquitous consumption of online social venues, no-known studies have examined the impact of
perceived benefits of SNSs and its consequences using Thai SNSs users. Understanding the underlying factors influencing
trust, brand equity, and customer equity in the social media context can help marketers define character of social media in ways
that serve to enhance customer equity. With this study, we hope to contribute to the limited body of scholarly research vis-vis social media settings and to provide online marketers with insight into how an understanding of SNS users perceived
benefits-trust-brand equity-customer equity relationship can be integrated into online relationship marketing programs.
LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT
Relationship marketing theory
Relationship marketing refers to all marketing activities directed towards establishing, developing, and maintaining successful
relational exchanges (Morgan and Hunt 1994, p. 22). Consumers engage in relational market because they want to limit their
choice to simplify their information processing, choosing process, buying and consuming tasks (Sheth and Parvatiyar 1995).
Consumers are motivated to reduce perceived risk, thus, they engage in external search information (i.e., through community)
and develop greater confidence in order to evaluate choices (Beatty and Smith 1987). According to Morgan and Hunt (1994),
consumers engage in relational exchanges with firms whom they trust to share values. Relationship marketing theory considers
trust as a central construct (Luo 2002). Zucker (1986) posits that trust can be produced from the person or group who share
individual commonalties or similar cultural values, past exchange/interaction or expected future exchange/benefits from the
firms or firm-specific attributes. Thus, communication is a source of building trust, suggesting both trust and communication
constantly reinforce each other (Morgan and Hunt 1994; Luo 2002). In relationship marketing theory, trust is considered as an
798
important component of successful relationship marketing (Arnett and Badrinarayanan 2005). A substantial empirical study
indicates the impact of relationship marketing on behavioral loyalty. That is, consumers engage in relational marketing can
lead to greater marketing efficiency, such as customer retention and commitment to the brand (Sheth and Parvatiyar 1995).
Successful relationship marketing can influence purchase intention (Mittal et al. 1999) and improve customer loyalty, and firm
performance through stronger relational bonds (Wulf et al. 2001).
Perceived Benefits of SNSs and Trust toward SNSs
SNSs are applications that enable users (both individuals and brands) to creating their profiles and connecting to others by
sending instant message (Kaplan and Haenlein 2010). Previous studies indicated that consumers tend to engage in SNSs
communities because of perceived benefits (i.e., practical, social, and entertainment) derived from SNSs (Gummerus et al.
2012). Practical benefits refer to information obtained from engaging in the SNSs communities. That is, SNSs have been used
by consumers to gain recommendations, reviews and opinions from friends or the collective social community. Consumers
interact with brands SNS because they believe the SNS is the right channel to use to get the benefit they seek such as specific
information (Baird and Parasnis 2011). SNS community thus becomes a channel for customer feedback, which lead to practical
benefits (Gummerus et al. 2012). In addition, consumers can achieve social benefits by interacting with the firm or other SNS
users and gain entertainment benefits (i.e., relaxation, fun) through their participation on SNSs (Gummerus et al. 2012).
According to Zucker (1986), trust is defined as an individuals perceptions of the institutional environment (i.e., the Internet)
that stems from embedded social practices, as well as the perceptions resulting from past and expected future exchanges. Luo
(2002) indicates that social cues (i.e., consumer behaviors in the community) can influence trust by showing ones
trustworthiness and commitment to the social exchange. Existing research found that consumers are likely to use information
obtained from their engagement in SNSs community to infer their trust toward SNSs (McKnight et al. 2002). Likewise, it is
expected that consumers may not only evaluate the value of practical benefits, but also social and entertainment benefits derived
from their engagement in SNSs to infer their trust toward SNSs. Therefore,
H1: Perceived benefits of SNSs will influence trust toward SNSs.
Trust towards SNSs and Brand Equity
McKnight et al. (2002) found that consumers who trust the vendors website are also likely to display high degree of trust
towards a specific vendor. Furthermore, consumers perceived competency, benevolence, and integrity of the vendor could
result in a secure willingness to depend on the vendor (McKnight et al. 2002). Simply stated, trust towards the website is likely
to enhance firms positive image, which consequently results in consumer loyalty toward the vendor. Studies analyzing brand
communities indicated that customer empowerment and consumer-generated content in SNSs are of high relevance in
increasing brand image (Muniz and Schau 2007). Ballester and Aleman (2005) stress the importance of trust in the development
of brand equity, suggesting trust influences brand loyalty, which in turn contributes to brand equity. Brand management
theorists (Aaker 1966; Keller et al. 2011) posit that brand loyalty and brand image are important components of brand equity.
Thus,
H2: Trust towards SNSs will influence brand equity.
Brand Equity and Customer Equity
Rust et al. (2004) define customer equity as the discounted sum of customer lifetime values, which is made up of components,
such as brand equity. Kim and Ko (2011) found that perceived brand equity influences purchase intention, which in turn, affects
customer equity. Much academic research has measured customer equity via number of expected purchase during the specific
time and purchase volume (Kim and Ko 2011; Rust et al. 2004). Building on the previous research, we expect that consumers
perceived favorable brand equity may result in high volume and high frequency of purchase. Hence,
H3: Brand equity will influence customer equity.
METHODOLOGY
Sample and procedures
The online surveys were administered to Thai consumers. A personalized email invitation with an embedded link was sent by
the researchers to friends and families inviting them to voluntary participate in the study. The researchers also employed
snowballing technique by asking these potential participants to forward the survey on to others who might be interested in
participating in the study. Only responses from those who indicated that they are the current SNS users and had visited fast
799
fashion brands profile page on SNS at least once in the past three months were considered in the final analysis. Thus, the final
sample was comprised of 219 usable responses. Of these, 25% were male. The total percentage of participants belonging to the
age group 18 to 23 was 65%, 20% in the age group of 24 to 30 years, and 15% in the age group of 31-45 years. The majorities
of participants had at least a 4-year undergraduate degree (82%) and were single (90%). In addition, 36% indicated their
monthly income between 10,000 to 40,000 Baht (or equivalent to USD 650-1,300 per month). The online questionnaire was
first developed via Qualtrics in English and then translated into Thai by a native Thai graduate student who is fluent in both
English and Thai. The survey was then back-translated by a native Thai professor who is also fluent in both English and Thai
to ensure translation equivalence (Douglas and Craig 1983). A questionnaire was then pre-tested using a convenience sample
of five Thai consumers who are the current SNS users and had visited fast fashion retailers SNSs on either Facebook or Twitter
at least once in the past three months. As a result, the questionnaire was slightly modified.
Measurement
The final questionnaire had four sections. In the first section, participants were asked to indicate whether they have a personal
account with SNSs (i.e., Facebook, Twitter). The question was used to screen out unqualified participants who had not used
SNSs. Those who indicated that they have a personal account with SNSs were guided to answer twenty-one questions pertaining
to their perceived benefits of SNSs, i.e., practical, entertainment, and social benefits (Ducoffe 1996; Gummerus et al. 2012)
and five items assessing their trust toward SNSs (McKnight et al. 2002). In the second section, participants were asked to
indicate whether they had visited any fast fashion brands profile page on SNSs (i.e., Zara, H&M, Uniqlo, Mango, Topshop,
and Forever 21) and chose one of these brands they recently visited on SNSs. They were then directed to answering the
following questions related to brand equity and customer equity keeping in mind of the brand they just named previously.
Fifteen items were used to capture perceived brand equity (Bruhn et al. 2012; Yoo et al. 2000). For scales assessing perceived
benefits of SNSs, trust toward SNSs, and brand equity, a 7-point Likert-type scale was used (1 = strongly disagree and 7 =
strongly agree). The third section contained scales assessing customer equity and was evaluated in terms of purchase
frequency and purchase volume. To capture purchase frequency, participants were asked to indicate their frequency of shopping
for the fast fashion brand in the past six months (Kim and Ko 2011) via a 7-point Likert-type scale (1= not at all to 7= very
often). To capture purchase volume, participants were asked to indicate how many apparel purchases out of every 10 were
made for the fast fashion brand and amount spent for the fast fashion brand out of every 2,000 Baht (Carpenter 2008). Lastly,
demographic information was assessed via categorical items.
A principal components factor analysis using varimax rotation was performed on each multiple-item scales, including perceived
benefits of SNSs and brand equity. To set the criteria for each factor analysis, factors with eigenvalues greater than 1.0 and
items with factor loadings of 0.40 or more on only one factor were retained. For perceived benefits of SNSs, the sample yielded
three factors accounted for 67.47% of the total variance. Factor one, entertainment benefit ( = 0.90) and included seven items
with an eigenvalue of 7.15 and variance explained of 42.07%. Factor two, practical benefit ( = 0.89) and included six items
with an eigenvalue of 2.44 and variance explained of 14.33%. Lastly, factor three, social interaction benefit ( = 0.85) and
included four items with an eigenvalue of 1.88 and variance explained of 11.08%. For brand equity, the sample yielded two
factors accounted for 78.35% of the total variance. Factor one, brand image ( = 0.85) and included seven items with an
eigenvalue of 10.42 and variance explained of 69.467%. Factor two, brand loyalty ( = 0.95) and included four items with an
eigenvalue of 1.33 and variance explained of 8.90%.
Structural Model and Test of Hypotheses
Following the two-step approach suggested by Anderson and Gerbing (1984), a confirmatory factor analysis (CFA) was first
conducted to estimate a measurement model using maximum likelihood in LISREL 8.8. We deleted six items due to either poor
loading values, i.e., < 0.60 (Anderson and Gerbing 1988) or large standardized residuals, i.e., > |2.58| (Schumacker and Lomax
2004). In addition, we also followed the recommendation suggested by Jreskog and Srbom (1993) to establish a conservative
error variance for the single-item scale (i.e., purchase frequency). As a result, the CFA model consisted of eight 29-item
constructs. Factor loadings of the indicators for each construct were greater than 0.60 and t values ranging from 8.65 to 30.48
of factor loadings in each variable, providing evidence of convergent validity (Bagozzi et al. 1991). The average variance
extracted (AVE) for each construct, ranging from 0.56 (trust) to 0.90 (brand loyalty), exceeded the minimum criterion of 0.50,
indicating that most of variance was explained by the constructs (Bagozzi et al. 1991). In addition, the composite reliabilities
800
(CR) of the measures, ranging from 0.86 (trust) to 0.96 (brand loyalty), exceeded the threshold of 0.70, except the purchase
volume construct (CR = 0.68), indicating acceptable internal reliability (Nunnally and Bernstein 1994). However, the CR of
the purchase frequency was not reported because we employed only one item to capture this construct. The correlations among
the constructs ranged from 0.06 (between perceived entertainment and purchase volume) to 0.59 (between perceived practical
benefit and trust toward SNSs), indicating that constructs do not share a substantial portion of their variance. Discriminant
validity was also supported using the interval confidence test in that the correlation between two latent constructs plus or minus
two standard errors does not include one. Results revealed that this condition was met for all variable pairs. On the basis of
these criteria, it was concluded that the measurement model is reliable and valid.
Next, structural equation modeling (SEM) was performed to test the conceptual model and the hypothesized paths. According
to SEM results, the chi-square value for the conceptual model was significant (2 = 875.11, df = 392, p < .001), indicating the
model was a poor fit. However, chi-square statistical results tended to be influenced by the size of the sample and model
complexity. Other widely employed fit indices, such as normed chi-square, Root Mean Square Error of Approximation
(RMSEA), Normed Fit Index (NFI), Comparative Fit Index (CFI), and Tucker-Lewis Index (TLI), revealed that the
hypothesized structural relationships fit the data satisfactory (2//df = 2.23, RMSEA = 0.066, NFI = 0.91, CFI = 0.95, and TLI
= 0.94). In addition, two dimensions of perceived benefits of SNSs (i.e., practical and social interaction benefits) explained 40
percent of variance in perceived trust toward SNSs. In addition, trust toward SNSs explained 17 percent of variance in brand
image and 9 percent of variance in brand loyalty, respectively. Two dimensions of brand equity, i.e., brand image and brand
loyalty explained 73 percent of variance in purchase frequency and 16 percent of variance in purchase volume. All hypothesized
paths were significant, except for the path from perceived entertainment benefit to trust toward SNSs. The results of H1
indicated that perceived practical and social interaction benefits of SNSs had a significant, positive effect on trust toward SNSs
( = 0.51, t = 5.72; = 0.26, t = 3.58), thus, H1 was partially supported. As predicted, results of H2 showed that trust toward
SNSs had a significant, positive effect on brand equity related to brand image and brand loyalty ( = 0.41, t = 5.37; = 0.30, t
= 4.14), supporting H2. Finally, results of H3 revealed that brand equity related to brand image and brand loyalty had a
significant and positive effect on customer equity in terms of purchase frequency ( = 0.27, t = 3.07; = 0.37, t = 4.27) and
purchase volume ( = 0.29, t = 3.07; = 0.21, t = 2.41). Therefore, H3 was also supported.
Overall, the results of this study successfully establish a cognitive-behavioral model of perceived benefits of SNSs-trust towards
SNSs-brand equity-customer equity using the Thai sample. Specifically, the studys findings suggest that SNSs users who
believe they are likely to receive practical and social interaction benefits from engraining in SNSs were likely to trust the SNSs.
However, we did not find the significant relationship between perceived entertainment benefit and trust towards SNSs. This
may be explained that SNSs users do not trust SNSs if they merely engage in SNSs for only entertainment purpose. We further
found that SNSs users with high degree of trust towards SNSs were likely to display favorable brand image and high degree of
brand loyalty of the fast fashion brand seen on SNSs. In addition, those with positive brand image and favorable degree of
brand loyalty were likely to purchase the apparel brand frequently as well as purchase them with high volume. These findings
are somewhat in line with previous studies, suggesting the importance of trust in developing brand equity (Ballester and Aleman
2005) and the positive relationship between brand equity and customer equity (Kim and Ko 2011). Results of this study
contribute to the existing literature in the area of social media, trust, brand equity, and customer equity in the context of apparel
industry. The results offer practical implications to fast fashion brands by shedding light on the importance of establishing
consumers trust toward SNSs in order to enhance brand equity, which subsequently affect their customer equity. The results
suggest that SNSs play a critical role in creating customer equity for the brands, suggesting firms employing a clear strategy in
managing their SNS. That is, marketers may create a sense of community to build trust with the SNS users and influence
conversation on brand-based topics to increase brand equity. Marketers should be aware of the fact that, within SNSs, it is not
possible to fully control what consumers are saying about the brand. Thus, marketers need to monitor information about the
product/brand being presented on their brand profile page on SNSs because the quality of information and the way the
consumers interact with each other and the firm via SNSs can have an impact on their trust toward SNSs. The extent to which
consumers display their trust towards SNSs can have a significant impact on how they perceive the brands and their purchase
behaviors. Future study should enhance the sample size for the purposes of generalizability. Likewise, the study needs to be
replicated with consumers in other countries and/or with different product categories.
REFERENCES
801
THE INFLUENCE OF SOCIAL MEDIA ON CONSUMPTION PRACTICES

Chiraz Aouina Mejri, ESG Management School, France
ABSTRACT
As more and more consumer interactions move online, the interpersonal influences and Word of Mouth (WOM) are
transformed in this new landscape. For instance, earlier research demonstrates that, consumers place a great deal of
importance on the information and opinions found online, and, they are increasingly sharing their opinions online (Hennig
Thurau et al. 2004; Balasubramaniam and Mahajan, 2001; Goldsmith and Horowitz 2006, Berthon et al. 2007). In this
context, a logical interest for marketers and brands would be to understand the implications of Social Media on consumer
consumption behavior. Although some earlier studies have examined interpersonal influence, online persuasion, peer to peer
recommendation behavior, opinion leadership and WOM (Senecal and Nantel 2001; Kiecker and cowls 2001; Godes and
Mayzlin 2004; Walsh, Mitchell and Weidman 2004; Bruyn and Lilien 2004; Bailey 2005), few studies explore the pathway
between social media, emotional attributes and consumption decisions. In this regard, it could be of prime interest for
marketers to understand the influence of these social media on consumers tendency to consume. This qualitative study,
inspired by dearth of information on this relationship investigates two questions, what product specific information is sought
by social media users during the consumption process and in what way does social media content (SMC) influence
consumers propensity to consume. The comprehension of this phenomenon would aid brands to better understand the online
consumer behavior, their decision making process and consumption trends in light of the social media. In order to
appropriately respond to our research questions, twenty one qualitative in-depth interviews were conducted with a sample of
five graduate students, three PhD. students and thirteen MBA students in Paris. The average group age of the sample was 25.8
Years. Based on the review of existing literature and considering our research questions, an interview guide was developed,
which included six main questions and related probes. The respondents were prospected about the information they sought at
different stages of consumption, social media content usage behavior, frequency of seeking product specific information, the
process and usage of that information etc. The interviews ranged from thirty to ninety minutes. The findings explain the
influence of SMC on the consumption behavior and purchase decision making, first by resolving certain dilemmas,
inhibitions in the pre purchase scenario and second by enciting consumers to propagate the brand and product during the post
purchase scenario. The emerging model suggests that the consumers leverage social media to formulate their consumption
decisions and propel consumption by resolving four types of dilemmas related to (1) Information: lack of ample information
about a product and service, (2) Desire: lack of motivation and desire towards a product or service, (3) Experience: lack of
experience knowledge about a product or service and (4) Anxiety: excessive anxiety and uncertainty around a product and
service.
802
CONSUMPTION DESIRE CONSTRUCT

Wei Hua, Old Dominion University, U.S.
ABSTRACT
No doubt is marketing concept the cornerstone of marketing in either term of science (discipline) or of business practice.
However, the studies on consumer need are fragmented and lack a single framework that embraces all together key fundamental
needs and desires, thus providing a holistic view of them. For the past several decades, most scholarly attentions have been
attracted into emotional desire of customers (Levy 1986, 1999; Campbell 1987; Arnould and Price 1993; Belk et al 2003).
Accordingly, desire is defined to be transitory, under constant change and elusive. Obviously, this contemporary perspective
throws away neoclassical economics assumption that sees customer as economic man, and echoes the 'postmodernism turn' in
marketing literature. Because of being passionate and external in nature desire must be interactive with the objects it targets on.
This leads to interpretivist research philosophy (Mittal 2006), thus lacking positivism feature which is the foundation for any
scientific inquiry, as Fullbrook (1996) suggests: "It is nave to believe that neoclassical economics, no matter how obsolete, can
be transcended by a new economics which has not undertaken the hard work of laying its own deep foundations." (p. 292).
In addition, this postmodernist view leaves several key questions open: 1) how can we explain brand loyalty by elusive desires?
2) How will marketing strategy of leading consumers potential desires be possible? Which direction will incoherent desires
move toward? Is it predicable? 3) Which fundamental factors drive consumption desires? Why some stimuli are more workable
and efficient than others? With these questions in mind, we conceptualize a construct of consumption needs and desires with a
specified scale founded upon three theories possessions and the extended self (Belk 1988), Freuds three-personality model
(1923) and Maslows hierarchy of needs theory (1943).
803
DO YOU STILL LOVE YOUR FAVORITE LUXURY BRAND? THE IMPACT OF CONSUMER
CHARACTERISTICS AND PURCHASE TYPE ON LUXURY DIVERGENCE
Wan Yang, University of South Florida, USA
Anna S. Mattila, Pennsylvania State University, USA
ABSTRACT
Given the unprecedented growth of luxury industry in the past decade, gaining a deeper understanding of differences between
luxury goods and luxury experiential services, as well as luxury consumers buying behaviors based on their need for status,
has become increasingly important. To that end, this study examines the joint effects of product type (luxury experiential
services vs. luxury goods) and need for status (low vs. high) on consumers attitude change toward their favorite luxury
brands.
Less affluent consumers were used to trigger potential out-group influences. Based on the differences between experiential
services and tangible goods as well as the differences between Patricians (low in need for status) and Parvenus (high in need
for status), we demonstrate that when the less affluent start mimicking Parvenus brand preferences, the impact is more
detrimental when the consumption object is a luxury goods rather than an experiential service. Conversely, Patricians exhibit
similar levels of attitude change across the two types of luxury products.
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FEELING A LITTLE GUILT BUT RUMINATING A LOT:

HOW INDULGENCE IMPACTS GUILT AND ITS CONSEQUENCES
Renaud Lunardo, Bordeaux School of Management KEDGE Business School, France
Camille Saintives, Groupe ESC La Rochelle, France
ABSTRACT
While guilt is an emotion that can be experienced by many consumers in the everyday life, its influence on satisfaction
remains understudied. Two experiments show that when individuals exhibit a low level of guilt, they ruminate more under the
condition of low (vs. high) indulgence. Further, indulgence moderates the mediating effect of rumination on the guiltsatisfaction relationship. This mediating effect by which guilt leads to more rumination and consequently less satisfaction
occurs only in the case of low indulgence.
INTRODUCTION
The extent to which we feel satisfied after a purchase may depend on the indulgence of the purchase, but too much
indulgence may lead us to exhibit guilt. For instance, eating a chocolate cake may be pleasurable and satisfying; however, our
satisfaction with a chocolate cake may be lower if we see such indulgent consumption as a "bad thing" and cannot stop
thinking about it. The unpleasant and self-conscious guilt feeling (Baumeister, Stillwell and Heatherton 1994) described in
the above example arises when individuals think they have violated an internal moral, societal or ethical standard (Kugler and
Jones 1992), or acknowledge a transgression (Burnett and Lunsford 1994). Guilt feelings are associated with regret over the
bad thing done and are likely to be accompanied by a strong sense of wrongdoing and remorse (Tangney 1995), individuals
feeling guilty blaming themselves and accepting to be punished for their behavior (Huhmann and Brotherton 1997).
Additionally, guilt feelings may lead individuals to experience past-oriented self-recrimination, in which they ruminate about
the behavior that led them to exhibit guilt (Quiles and Bybee 1997).
In these circumstances, the issue of the extent to which indulgent purchases may lead consumers to feel guilt has become
important for marketers who aim to increase the satisfaction with and consumption of their products. A dilemma lies here in
their goal to satisfy consumers through indulgent products and the risk to provide products that lead them to guilt and
rumination rather than satisfaction. To date, what research has identified about guilt feelings is that they emanate from
impulsive (Mukhopadhyay and Johar 2007) and compulsive (OGuinn and Faber 1989) buying and lacks of self-control
(Giner-Sorolla 2001; Kivetz and Keinan 2006; Kivetz and Simonson 2002a). It has also been shown that consumers use a
variety of methods to reduce feelings of guilt, by encouraging virtuous consumption, such as donations to charity (Basil,
Ridgway and Basil 2008; Strahilevitz and Myers 1998) or work to justify their rewards (Kivetz and Simonson 2002b).
However, little is known about the effects of guilt on rumination and satisfaction. Specifically, there are two major gaps in
the knowledge. First, the effects of guilt and indulgence on rumination have received no attention and remain to be
determined. Although it could be expected that high guilt feelings lead individuals to ruminate more when indulgence is high
(versus low), this effect could be contested. One may argue that when guilt is high, individuals ruminate more, whatever the
degree of indulgence. On the contrary, when the guilt feeling is low, a high degree of indulgence may lead individuals to
focus on their pleasure rather than on their guilt, leading to less rumination. Second, although Lee-Wingate and Corfman
(2010) have provided a contribution to the understanding of the effect of guilt on satisfaction, extant research has not
explored the role of rumination in this relationship. Yet, rumination could explain why consumers feel more or less
satisfaction after having experienced a guilt-inducing consumption, consumers ruminating more being likely to exhibit less
satisfaction. One may also ask if this mediating effect of rumination may vary according to the degree of indulgence.
In this article, we thus explore these two issues. In the first study, we examine in a clothing context whether consumers
feeling guilty exhibit more rumination in the presence of a low or high indulgent consumption. In the second study, we
extend the results of the first study to the context of food consumption and explore the mediating role of rumination in the
effect of guilt on satisfaction. The results of these two studies contribute to three streams of the small but growing body of
research on consumption guilt. First, the expected interactive effect of guilt and indulgence on rumination found out in the
first study contributes to the emerging literature on guilt by shedding light on the moderating role of indulgence. Second, the
mediating effect of rumination observed in the second study also contributes to the literature on the consequences of
consumption guilt. Third, the moderated-mediating role of rumination also observed in the second study provides a deeper
805
understanding of the effects of guilt on satisfaction. The following section develops the theoretical bases for explaining the
effects of guilt on rumination.
Rumination and guilt
Rumination has long been mentioned as a risk factor for depressive disorders (Nolen-Hoeksema 1998). When ruminating,
individuals concentrate on the negative and damaging features of a situation; rumination is therefore associated with intrusive
thoughts, negative thinking and self-blame. Repetitively focusing on the meanings, causes and consequences of their
troubling problems, individuals may impair problem-solving or constructive action and evaluate the problem as more
threatening than it is (Lyubomirsky et al. 1999). Moreover, researchers have provided evidence that rumination serves to
amplify the intensity and duration of emotions, such as anger, sadness or anxiety (Rusting and Nolen-Hoeksema 1998).
In the clinical literature, rumination has been seen as an outcome of pathological guilt, guilt being associated with a chronic
self-blame and an obsessive rumination over a specific transgression (Tangney 1995). In the same way, previous research in
psychology has concentrated on the maladaptive aspects of guilt such as chronic rumination and an excessive sense of
responsibility (Quiles and Bybee 1997). Indeed, when feeling guilty, people appear to be preoccupied with a specific
transgression: guilt weighs heavily on their mind, people thinking of it over and over (Tangney et al. 1996).
Although only a little body of research has removed it from this clinical context (e.g. Martin and Tesser 1996), rumination
may within a consumption context occur at the post-purchase stage of the decision process and involves a focus on the
undesirable and unfavorable outcomes the purchase or consumption decision has produced. Rumination is associated with
intrusive and recurrent negative thoughts about the past, and self-blame (Lyubomirsky et al. 1999; Nolen-Hoeksema 1998).
As a past-oriented cognitive process, rumination reflects a consequence of frequent and intense regrets (Martin and Tesser
1996; Nolen-Hoeksema et al. 1997). Also, as a self-blame process, rumination occurs when individuals consider themselves
as the origin of a transgression. Thus, we propose that:
Hypothesis 1: The more consumers experience guilt, the more they ruminate.
The role of indulgence
Consumers are more likely to feel guilty about choosing indulgent products, such as hedonic food (candies, snacks, gourmet
restaurant dinners), than utilitarian products (Kivetz and Simonson 2002; Strahilevitz and Myers 1998). Specifically,
consumers making indulgent choices exhibit more guilt in the short term than consumers making utilitarian choices (Kivetz
and Keinan 2006). Under this temporal view, consumers feeling guilty of having consumed an indulgent product may in the
short term ruminate about such consumption. However, it may also be argued that the low or high degree of indulgent
moderates the link between guilt and subsequent rumination. Indeed, since guilt reflects a self-conscious emotion (Tangney
1995), when individuals feel highly guilty, such a high degree of guilt may lead them to focus on their behavior and thus to
ruminate more (Moberly and Watkins 2010), whatever the low or high degree of indulgence. On the contrary, when
individual feel lowly guilty, rumination may be more important in the condition of low indulgence. Indeed, since hedonic
affective responses are more immediate than self-conscious responses are (Giner-Sorolla 1999), consumption of a highly
indulgent product that does not induce too much guilt may lead individuals to focus more on the positive affective outcomes
of their consumption than on their guilt, leading to less rumination. This suggests the following hypothesis:
Hypothesis 2: Indulgence moderates the positive effect of guilt on rumination. Individuals feeling low guilt will
ruminate more in a low indulgence condition than in a high indulgent condition. Individuals feeling highly guilty
will exhibit no differences in rumination across the conditions of indulgence.
STUDY 1
Method
We tested this first hypothesis using a 2 1 scenario-based between-subjects experiment manipulating the indulgence of
clothing consumption (n= 126, 55% being women, 40% being 16-30 years old and 60% being more than 30 years old). In
order to manipulate the indulgence of a consumption that induces variance in guilt, a preliminary study exploring indulgent
806
consumption contexts in which guilt may vary was conducted. Ten women and 6 men, ranging from 19 to 60 years old and
from diverse educational backgrounds, were asked to tell the products whose consumption might make them feel guilty. Ten
(62.5%) respondents cited at least one example of guilt-inducing consumption involving pieces of clothing. Further, on the
whole set of interviews, 43 examples of guilt-inducing consumption contexts were directly related to clothing. Considering
that primacy of clothing consumption respondents made during the interviews, the decision was thus made to choose clothing
consumption as the context of the first study. Manipulation of indulgence thus consisted of presenting in the scenario clothes
that consumer were really pleased (high indulgence condition) or not (low indulgence condition) to wear. Participants were
then presented with a questionnaire. Guilt was assessed using the scale developed by Dahl, Honea and Manchanda (2003; =
.71). In order to measure rumination as an event-induced construct instead of as a personality trait that would imply
inappropriate items (Cox et al. 2011), the rumination scale proposed by Mc Cullough, Bono and Root (2007) was chosen ( =
.92). For manipulation checks, measures also included one that assessed indulgence (Batra and Ahtola 1990; = .89).
Measures exhibited reliability, and convergent and discriminant validity (Fornell and Larcker 1981).
Results and discussion
Manipulation checks revealed that the manipulation of indulgence was effective, participants estimates of indulgence being
higher in the high indulgence scenario (M = 4.53) than in the low indulgence scenario (M = 3.18; F(1, 124) = 42.23, p <
.001).
A linear regression revealed a significant positive impact of guilt on rumination ( = .372, t(1,123) = 4.579, p < .001),
supporting Hypothesis 1. More importantly, results revealed a significant interacting effect of indulgence and guilt ( = .320,
t(1,123) = 1.988, p < .05; see fig. 1), revealing indulgence as a moderator of the guilt-rumination relationship. Specifically,
the equation of the multiple regression indicated that the positive effect of guilt on rumination increases as indulgence gets
higher. A spotlight analysis (Aiken and West 1991, Fitzsimons 2008) revealed that when guilt is low, people having
consumed a lowly indulgent product ruminate more (M = 2.91) than those having consumed a highly indulgent product (M =
2.11; p < .05). When guilt is high, no significant differences of rumination were found across the low and high levels of
indulgence (p > .10). These results support Hypothesis 2.
Overall, the results bring support to the hypothesis that guilt interacts with indulgence to affect rumination. Specifically, they
show that when individuals feel a low level of guilt, they ruminate more when indulgence is low. However, the presence of a
guilt-rumination effect raises the question as if rumination could explain why guilt feelings lead to lower satisfaction, thus
playing a mediating role between guilt and satisfaction.
As suggested in the literature (Tangney 1995) and found out in Study 1, when consumption makes consumers feel guilty,
they may then ruminate about it. When ruminating about a guilt-related episode, consumers cant stop thinking about it, this
lasting focus on the consumption exacerbating its unpleasant outcomes. Rumination plays an important role in fostering the
negative side of the consumption, and may thus be likely to lead to less satisfaction. Moreover, since rumination can be
referred to as an emotion-focused way for consumers to deal with stress, it may be viewed as a coping strategy (Lazarus and
Folkman 1984). Previous research suggested that coping strategies play mediating roles between the positive or negative
affect and its subsequent outcomes (e.g., Carver et al. 1993). Hence, it could be expected that rumination mediates the effect
of guilt on satisfaction. However, this effect should be considered in light of the crucial role of low indulgence in the effect of
guilt on rumination. Indeed, low indulgence induces more rumination when guilt is low, and exerts the same effect on
rumination than high indulgence when guilt is high. Thus, rumination may mediate the effect of guilt on satisfaction only in
the case of low indulgence. Hence:
Hypothesis 3: Rumination mediates the effect of guilt on satisfaction (Hypothesis 3a). This mediating effect is
moderated by indulgence: specifically, under conditions of low indulgence, guilt may lead to more rumination and
less satisfaction, while high indulgence may not lead rumination to mediate the effect of guilt on satisfaction
(Hypothesis 3b).
Study 2 is designed to test these predictions. Study 2 extends the results of the first study by replicating the study in the
context of food consumption. Furthermore, it includes satisfaction as a dependent variable to see whether rumination can be
considered a potential mediating variable of the effect of guilt on satisfaction.
807
STUDY2
Method
As guilt has largely been investigated in the context of food consumption (e.g., Wansink and Chandon 2006), Hypothesis 3
was tested by manipulating indulgence of food (low vs. high) in a 2 1 scenario-based between-subjects experiment (n=124,
50% being women, 39% being 16-30 years old and 61% being more than 30 years old). The questionnaire contained the same
battery of items used in Study 1. A measure of satisfaction was included, consisting of an adaptation of the six-item scale
from Oliver (1980). For discriminant validity purposes, the item including the word guilty was removed, leading to retain
five items ( = .89). Here again, measures exhibited reliability (Guilt = 85; Rumination = 94; Indulgence = .91), and convergent
and discriminant validity.
An ANOVA revealed that the manipulation of indulgence was effective (M = 5.64; M = 3.34; F(1, 122) = 133.73, p < .001).
As in Study 1, Hypothesis 1 is supported, the results revealing a significant interaction between indulgence and guilt (
= .335, t(1, 122) = 2.189, p < .05). In accordance with Aiken and West (1991), we analyzed the effect of indulgence for
individuals who felt low versus high guilt (one standard deviation below and above the centered mean of the guilt measure,
respectively). We find a significant simple effect of indulgence among individuals feeling low guilt ( = -.989, t(1,122) = 2.378, p < .05), such that individuals feeling low guilt ruminate more when indulgence is low (M = 2.24) than high (M =
1.51). As in Study 1, the effect of indulgence was not significant among individuals feeling high guilt ( = .556, t(1,122) =
1.318, p > .10; see fig. 2).
As one of the major purposes of Study 2 was to test rumination as a mediator between guilt and satisfaction, a first mediation
following the procedure developed by Zhao, Lynch and Chen (2010) has been conducted. As recommended, the Preacher and
Hayes (2008) macro and 5000 bootstrapped samples have been used to determine whether the indirect effect is significant.
Results support Hypothesis 3a and the mediating role of rumination on satisfaction, the indirect effect of guilt being
significant with a 95% confidence interval excluding zero (-.279; -.015).
To test moderated mediation, a test of the indirect effect of rumination was conducted for each low and high indulgence
condition using Preacher, and Hayes (2008) bootstrapping technique. In the low indulgence condition, the indirect effect of
guilt was significant with a 95% confidence interval excluding zero (-.250; -.023), suggesting mediation. In the indirect path,
feeling guilt increases rumination by a = .39; since b = -.28, so holding constant the guilt feeling, a unit increase in
rumination decreases satisfaction by .28 units. The lack of significance of the direct effect c (p > .05) indicated indirect-only
mediation. In the high indulgence condition, the indirect effect of guilt was not significant with a 95% confidence interval
including zero (-.344; .106), suggesting that mediation cannot be established. The respective presence and absence of
significant indirect effect of guilt on satisfaction in the low and high indulgence conditions support the moderated-mediation
hypothesis and thus Hypothesis 3b whereby the mediating effect of rumination on satisfaction occurs only for consumers
feeling guilty of having consumed a product of low indulgence.
Study 2 presents several noteworthy findings. First, by replicating the findings of Study 1 while using a different
consumption context (food vs. clothing), Study 2 provides converging evidence toward our conceptual framework positing a
moderating effect of indulgence. It also shows that rumination helps in predicting changes in the effects of guilt on
satisfaction.
CONCLUSION
General discussion and implications for theory and practice
While most of the empirical studies on guilt have addressed its antecedents (Kivetz and Keinan 2006), the objective of this
paper was to focus on its consequences, and to test a framework that includes rumination as an outcome. Specifically, we
focused on the consequences of guilt, and tested a framework that includes rumination as an outcome of guilt. We
investigated the interacting effect of guilt and indulgence on rumination to see how these variables interact in the formation
of the guilt-satisfaction relationship. Our key results are as follows.
First, indulgence exerts a moderating effect on the relationship between guilt and rumination. More precisely, while higher
levels of guilt lead to higher rumination, a low level of guilt leads to more rumination in the presence of low indulgence.
808
Second, the negative effect of guilt on satisfaction is explained by rumination which mediates this relationship. Consumers
exhibit less satisfaction toward a product that makes them feel guilty because of their rumination. Third, and somehow
counterintuitive, indulgence moderates this mediating effect of rumination, rumination mediating the guilt-satisfaction effect
only in the case of low indulgence. In other words, the mediating effect of rumination occurs only for consumers feeling
guilty of having consuming a product of low indulgence. A likely explanation may be found in the low levels of self-control
such consumption imply. Products which are lowly indulgent should lead consumers to be able to resist to temptation. Thus,
consuming such products may imply a lack of self-control that would yet be easy to achieve. Having not being able to exhibit
self-control in such a context of low indulgence may make consumers ruminate even more than if they would have consumed
a highly indulgent product. In a highly indulgent context, lacking of self-control can be perceived as understandable, making
rumination less likely to occur. Still, it would be interesting to test whether consumers having consumed a lowly indulgent
product feel less self-control than those having consumed a highly indulgent product. Furthermore, the role of such failure in
self-control needs to be investigated to test whether self-control failure mediates the effect of guilt on rumination and
satisfaction.
For practitioners, one of the major conclusions of the studies is that guilt increases rumination but this effect is higher when
indulgence is low. The consequences for marketers is that they can decrease consumer's rumination by offering products that
induce low degrees of guilt but provide consumers with high degrees of indulgence. For instance, for food products usually
viewed as lowly guilt-inducing like little candies marketers may hesitate between offering some that are positioned as
healthy (like candies low in sugar) or offering some that are positioned as genuine guilt-inducing and pleasurable products.
Our results show that if marketers offer unpleasant guilt-inducing products, consumers will ruminate more than if products
were lowly guilt-inducing but highly pleasurable. Marketers may thus provide consumers with products that induce low
degrees of guilt associated with high degrees of pleasure. This combination may be the one that leads to the lowest degree of
rumination. Further, since results of Study 2 show that rumination mediates the effect of guilt on satisfaction under conditions
of low indulgence, providing consumers with products that induce low degrees of guilt and high degrees of pleasure may also
lead to the highest degrees of satisfaction.
LIMITATIONS AND FURTHER RESEARCH
Finally, as it is usually the case with experiments, caution should be applied when generalizing the effects found in these two
studies to other settings. Despite trying to capture the essential aspects of decisions involving guilt under conditions of
different indulgence levels, the two experiments included hypothetical scenarios. As such, they may not incorporate all the
factors facing an individual in these types of consumptions situations. For instance, further research would gain in
investigating the effect of guilt on rumination in different conditions of perceived control over the consumption. Indeed, as
research has emphasized the effect of control on attributions (e.g., Folkes 1984), it may be argued that consumers who have
control over a guilt-inducing consumption may feel more responsible for their behavior and thus feel more guilt than those
who do not feel having such control (Burnett and Lunsford 1994). Experimental designs manipulating indulgence but also
control over the consumption would thus be of great interest to get a deeper understanding of how these two variables interact
in the formation of guilt and its consequences.
Future research would also gain in extending these results by including a temporal perspective in the study of the effects of
guilt and indulgence on rumination and satisfaction. For example, studies have shown that time could affect the effect of
indulgence on guilt by increasing it in the short run, while decreasing it in the long run (Kivetz and Keinan 2006). Since guilt
declines with time (Keinan and Kivetz 2008), adopting a temporal perspective may be of interest to observe different effects
of guilt and indulgence on rumination and satisfaction.
809
FIGURES
Figure 1. Study 1: Rumination as a function of guilt and indulgence
Rumination
1
Low Guilt (-1SD)
High Guilt (+1SD)

Guilt
Low Indulgence
High Indulgence
Figure 2. Study 2: Rumination as a function of guilt and indulgence
Rumination
1
Low Guilt (-1SD)
High Guilt (+1SD)

Guilt
Low Indulgence
High Indulgence
FIGURE 3.Study 2: Rumination as a mediator of the effect of guilt on satisfaction, and indulgence as a moderator of the
mediating effect
Rumination
aOverall = .56***
aLow Indulgence = .39***
aHigh Indulgence = .73***
Guilt
cOverall= -.21*
cLow Indulgence = -.16
cHigh Indulgence = -.32*
abOverall = -.14*
abLow Indulgence = -.11*
abHigh Indulgence = -.09
Note: * p < .05 ; ** p < .01 ; *** p < .001
810
bOverall= -.25*
bLow Indulgence = -.28*
bHigh Indulgence = -.13
Satisfaction
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CONSUMER-BASED FASHION EQUITY: PROPOSITION OF A NEW CONCEPT AND THEORY TO

UNDERSTAND AND EXPLAIN LOYALTY TOWARD FASHION PRODUCTS
Caroline Le Bon, University Paul Czanne Aix Marseille, Aix Graduate School of Management (CERGAM), France.
Dwight Merunka, University Paul Czanne Aix Marseille, Aix Graduate School of Management (CERGAM) and
EUROMED Management, France.
ABSTRACT
This research introduces the concept of consumer-based fashion equity and proposes a new theory to understand consumers
interest in and loyalty to fashion products. Drawing on Keller (1993), we extend the concept of consumer-based brand equity
and propose that consumer-based fashion equity accounts for the role that fashion plays, in determining consumers loyalty to
fashionable productssimilar to the way brand equity explains why high equity brands appeal more to consumers than do low
equity ones. Thus, fashion equity accounts for the value that fashion adds to products and induce loyalty, despite products
constantly varying attributes.
Literature review and 11 qualitative interviews led to the proposition of a five dimensions fashion equity scale which
nomological validity was tested and assessed from 228 customers for fashion clothes and mobile phones. Results reveal the
good performance metrics of the fashion equity scale, as well as the mediating influence of fashion attachment between fashion
equity and fashion loyalty. Results also show that fashion involvement influences consumer-based fashion equity. Such new
theory explaining consumers behavior on the basis of fashion value per se leads to interesting theoretical and managerial
discussions.

814
MEASUREMENT OF DIGITAL CONTENT MARKETING EFFECTIVENESS THROUGH SOCIAL MEDIA

KyungOk Kacy Kim, University of Texas at Austin, U.S.
ABSTRACT
Social networking sites (SNSs), as new forms of interactive media, allow marketers to open instantaneous communication
with existing and potential customers. Sixty-nine percent of all Facebook users are fans of one or more company pages, 92%
of marketers are already using Facebook today, and 75% of the marketers are planning on increasing their activity in the
future (eMarketer 2012). Those phenomena obviously are evidence of the importance of social media marketing, which can
have a significant impact on marketers business. Undoubtedly, establishing a social media presence is essential for marketers,
however, the strategies for communicating with customers have changed constantly in SNSs. Those interactive media change
marketing communications from a traditional one-way process to a multiple-way process with the interaction of the marketer
and consumer. Despite the growing interest in social media, measuring the effectiveness of interactive media has been
incomplete (Rosenkrans 2009). That suggests the need for new measures of the effects and effectiveness of social media in
order to understand consumer response to marketing communications.
This study offers a broad perspective on measuring the effectiveness marketing communications that include interaction as a
comprehensive social media analysis. The objective of this research is to explore the issue of how to define and measure the
effectiveness of social media as supporting digital content marketing. Digital content marketing is one of the dominant
marketing strategies in the digital market (HiveFire, 2011). Digital content marketing includes the creation and publication of
original content such as blog posts, photos, videos, website resource pages, case studies or white papers to enhance a brands
visibility. Since the digital content is downloaded for immediate viewing and use, SNSs are essential either to distribute the
digital content or to generate website traffic to the businesses website, which is the hub of the actual digital information.
There are several major performance indicators of social media usage such as message frequency, audience reach, and
audience engagement. Using those social media performance metrics, this study develops a comprehensive model to estimate
the audience size of a businesses website, which is related directly or indirectly consumers to digital content marketing
effectiveness through social media. A page view metric, which is the act of browsing a specific web page on the website of
the business is used to estimate website traffic on the businesss website. An Internet-based coupon deal company provided
the data used for analysis.
A stepwise time series regression model was created to examine the relationship of frequency, engagement, and reach for two
social media platforms Facebook (FB) and Twitter (TW) on the page views of the company website. The ten social media
variables FB posts, TW Tweets, FB Likes, FB Comments, FB clicks, WT Replies, TW Retweets, TW clicks, FB Friends,
and TW Followers were used as independent variables with page views as the dependent variable. The least significant
predictors were dropped and additional regression analyses were performed until a final model was obtained with all
variables significant at the 0.05 significant level (P<.05).
The interpretation of the results focuses on the final model with the non-significant predictors eliminated. The result supports
that all independent variables except TW Followers are significant and have a positive association with page views. First of
all, it is important to note that the relationships between metrics of social media performance and page views are correlational,
but not causal. Moreover, according to the present study findings, the message frequency on Facebook and Twitter such as
FB Posts and TW Tweets are significantly positively related website traffic as well as social media users engagement
variables. Even though the effect on page views vary between each predictors, the overall metrics of this study support the
importance of the critical characteristics of social media such as social impressions, clicks, messages shared, and network size.
Since page views could be translated to a companys digital content marketing goals because it would present the effect of
existing and potential consumers who are sensitive to marketing efforts (i.e. digital content).
This study highlights that the seriousness of understanding a variety of new sources of online information that are created,
initiated, circulated, and used by consumers intent on educating each other about products, brands, services, personalities, and
issues. One of the most exciting aspects of this study is seeing how marketing efforts and communication such as campaigns
and promotions through social media have evolved and have turned into strategic plans. Since this study is one of the first
empirical investigations in the marketing communication field related to measuring social medias effectiveness based on
traditional media measurements reach and frequency concepts additional research remains to be done to better understand
the social networking phenomena.
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THE RELATIONSHIPS AMONG SELF-BRAND CONGRUENCE, BRAND ATTACHMENT, CUSTOMER

ENGAGEMENT, AND BRAND LOYALTY
Yana Andonova, University of Massachusetts Amherst, USA
Elizabeth Gelfand Miller, University of Massachusetts Amherst, USA
William D. Diamond, University of Massachusetts Amherst, USA
ABSTRACT
Although relationship marketing has been recognized as a feasible strategy in mass consumer markets, the research and
development of theory in the field has focused primarily on the analysis of social bonds between people, either in a B2B
context, the services sector, or both. It has been acknowledged, however, that the development of strong and lasting
customer-brand bonds creates a competitive advantage for companies. Therefore, understanding the ways in which
consumers relate to brands is an important area of research. The current research investigates the relationships among selfbrand congruence, brand attachment, customer engagement, and brand loyalty. These constructs represent different ways in
which customers relate to brands. Using an experimental design, we show that self-brand congruence positively affects brand
attachment and customer engagement. We also show that brand attachment predicts brand loyalty. We fail to support the
hypothesized positive relationship between customer engagement and brand loyalty, which is a perplexing finding
considering that companies are constantly looking for ways in which to engage their customers.
816
NEGATIVE PRODUCT REVIEWS IN SOCIAL MEDIA: LINKING INTERPERSONAL AND

SOCIALPSYCHOLOGICAL FACTORS TO eWOM INTENTIONS
Jiyoon Karen Han, University of Texas at Austin, United States
LeeAnn Kahlor, University of Texas at Austin, United States
ABSTRACT
Research suggests that word-of-mouth (WOM), particularly negative WOM, has the potential to influence consumers
behavior related to specific brands and products. In the last decade, product reviews have surged in online environments such
as social media. Therefore, the purpose of this study is to pose a model for understanding WOM behaviors in electronic
environments (eWOM), and to apply that model to an empirical examination of intentions to share negative product reviews
via social media.
This research builds on Lau and Ngs (2001) WOM model, which posits three personality constructs as influential in peoples
intentions to share information via WOM: self-confidence, sociability and social responsibility. In addition to these
constructs, we draw on several more constructs from the research on computer mediated communication including group
interaction and attraction, group member expertise and community satisfaction to pose a novel model that is specific to
eWOM. We also will explore the concept of judgmental confidence as it relates to potential information sharers.
To test our model, data are currently being collected at a large Southwestern university using an online survey method to
explore eWOM behaviors among college students. We anticipate that the results will reveal that social media users with
higher levels of social responsibility, sociability, self-confidence, as well as higher judgmental confidence (in the context of
sharing product reviews) and perceived familiarity and satisfaction with a particular social media site, will have stronger
intentions to share negative product reviews (eWOM) on that site.
817
UNDERSTANDING ETSY: SOCIAL MEDIA AND MARKETING WITHIN A COMMUNITY OF SELLERS

Tiffany Machado Blanchflower, University of North Carolina at Greensboro, USA
Nancy Nelson Hodges, University of North Carolina at Greensboro, USA
INTRODUCTION
Social media use by online retailers and marketers has typically focused on developing brand relationships with consumers
(Baker 2012; Castronovo and Lei 2012; Kim and Ko; 2012), and increasing a brands online social presence as a way to build
a brand-based consumption community (Hur, Ahn, and Kim 2011). Online retailers typically do not use social media to build
business-to-business relationships or to create partnerships with others sharing a common consumer market. In the rare
instances when online retailers do use social media to build relationships with others, it is often limited to those that are
already supply chain partners (Brennan and Croft 2012; Sood and Pattinson 2012). In contrast, Etsy.com deliberately uses
social media to create a marketplace designed to connect businesses together within a larger selling community. In light of
this approach, the purpose of this study was to explore how Etsy uses social media to support business-to-business
relationships and create its marketplace through a community of sellers.
A great deal of research has explored the notion of consumption-based brand communities, defined as groups of consumers
that form a community based on a shared interest in a retail brand (Cova 1997; Laroche 2012; Muiz and OGuinn 2001;
Schau, Muiz, and Arnould 2009; Sung et al. 2010). However, few studies explore selling communities as brand
communities. As a selling community, Etsy brings together individuals with a shared interest in selling their goods through
the site. Moreover, Etsy sellers often share marketing strategies, an approach that has been commonly used by cooperatives to
provide support for noncompeting businesses involved in a like-minded marketing activity (Auerbach and Neiman 2012;
Hibbert et al. 2001; Nembhard 2006; Norbck 2005). However, Etsy is a for-profit enterprise. As such, an examination of
Etsys marketing practices can provide insight into how the notion of a selling community can broaden our existing
understanding of social media used for marketing in the online retail format.
Etsy provides an online retail space for artists, crafters, collectors, and consumers from all over the world to sell and buy
handmade and vintage goods as well as craft supplies (Etsy Inc. 2012). Yet, Etsy is more than a retail space, it is also a
community of sellers and buyers that create and share personal profile pages within a semi-public bounded digital space
(Boyd and Ellison 2008). As such, the selling platform of Etsy can be described as a social networking site that is bound by a
community of people who share a common interest in the selling and/or buying of goods and supplies. Etsy provides its
community with a variety of social media tools, such as blogs and forums, as well as the capacity to share and comment on
photos and videos designed to support seller-to-seller relationships. For example, Etsy Teams are groups that members
form based on a common interest. Etsy provides every team with a blog space, and even partners with the social networking
site MeetUp to help members find teams that meet offline. Photo sharing tools are also available to create Etsy Treasuries,
which allow sellers and buyers to create a visual display of 16 items comprising their favorite Etsy listings taken from various
shops. All social media elements and other business functions are maintained by the sites employees, referred to as Etsy
Administration.
Revenue of Etsys sellers is expected to grow by 32% in 2012 alone (Steiner 2012). However this retail site has received very
little attention within the existing literature on social media and online marketing. To address this gap in knowledge, this
study examines the various marketing practices of Etsy as a socially-networked online retail marketplace that takes a
cooperative approach to selling goods.
METHODOLOGY
Three questions were developed to guide the study: (1) What are the marketing practices of an Etsy seller?(2) What are the
marketing practices of Etsy as a site? and (3) Combined, how do these marketing practices rely on social media to create a
unified message? As little is known about the topic, a qualitative research design was deemed necessary. Specifically,
Kozinets (2006) netnographic approach to the study of digital data guided data collection, which included observation of
text-based interactions, images, and videos. Etsy was identified as a community conducive to netnographic observation as it
met Kozinets (2006) four criteria: (1) the community aligns with the research question; (2) the site provides different sources
of data; (3) the data is descriptive and rich; (4) there are community interactions. Etsy is a heavily visited site with over 11
million members (Etsy, 2010), providing the traffic required for in-depth data collection. Moreover, Etsy uses social media
tools to facilitate community dialogue, providing different types of rich and descriptive data. Etsy therefore offers the
dimensions necessary to understand its particular seller- and site-based marketing practices.
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Data were collected via two primary methods: (1) online participant observation and (2) auto-netnography. Observation data
was collected over a 4 month period and focused on text-based interactions through blogs, such as community stories, online
workshops, and team pages. Observation data was also collected from the Seller Handbook, which is a series of posts
provided by Etsy Administration on how to sell products on the site. Auto-netnography requires the researcher assumes a
fully participative role within the setting under study, relying on personal experiences within the community rather than
observations alone (Kozinets 2009). To achieve this, one of the researchers participated in the Etsy community as a seller of
handcrafted jewelry for approximately four months. This participation included engaging with the site every day and
spending approximately 30-40 hours a week on the development and maintenance of the shop, as well as interacting with
other sellers and posting comments on various blogs, forums, online workshops, and labs. Finally, further engagement was
achieved by developing treasuries, corresponding with both sellers and buyers, as well as joining two online Etsy teams.
Over 850 single-spaced pages of field notes, which included seller-to-seller interactions were compiled as a result of the data
collection efforts. Spiggles (1994) suggestions for qualitative data analysis and interpretation were followed, wherein
patterns in the data were first identified and labeled. Then, conceptual links between patterns were defined and examined for
similarities and differences. A set of thematic categories emerged and relationships across these categories were identified to
develop characteristics and dimensions of each theme. As a result of this iterative process of analysis, three main themes were
identified and are used to structure the following interpretation: Sharing Trade Secrets, Etsy Karma, and Educating Etsy.
Sharing Trade Secrets
For a shop to be successful, sellers must master the four elements of the marketing mix, which on Etsy refers to tagging and
titling (product, promotion and placement), product photography (promotion), product descriptions (promotion and
placement), and product pricing (price). Using the social media tools embedded in the site, sellers will often share
information about their marketing mix with other sellers in the form of strategies, technical tips, or seller referrals. For
example, Mary, a seasoned Etsy seller, shares strategies she has had success with in the past related to marketing her goods.
She blogs,
My advice to new sellers is to learn to use your tags and try to list something everyday instead of listing a bunch one day and
then none for several days. Spread them out. As far as tagging, try going to a shop that is selling similar items and getting a
lot of sales....Study their titles and the tags they use for ideas. And last...use your shop stats page to see what the people that
ARE finding you are typing in for search terms. Hope this helps someoneWhen I started doing this my sales increased
dramatically.
In an Etsy Handbook post about product photography, Susan shares her personal experience with how improving the
photographs of her products improved her sales, Good photography really is a key selling point. I recently improved my
photos and it increased my sales dramatically. Still a work in progress, though... Within the same blog post, Meg shares
technical tips about the type of equipment required to shoot quality photos, and provides a suggestion for the purchase of
equipment: Invest in a light box and studio lights. You can buy a kit on ebay for not much money, the diffused light these
give make such a difference.... Interestingly, the community also advocates the use of professional services if a seller does
not have such skills or equipment. For example, one seller that provides photography services posted, For those without a
DSLR camera, I provide professional photography services on a trading-for-products basis. Visit my shop... Payment for
such service can come in the form of products, thereby establishing a reciprocal relationship between the two sellers. An Etsy
shops success is largely based on its visibility, or the number of views it receives. However, a high number of views do not
always lead to a high number of sales. For instance, a sellers product could appear on the first page of a customers product
search, leading him or her to the shop, but poor quality photographs, unhelpful product descriptions, or unreasonable price
points could easily turn that customer away and on to the next seller. The data reveal how strategically tagging an item and
giving it a clear title, along with providing clear product images, are the factors that are required for a sellers shop to
succeed.
Despite the critical role of the marketing mix in a shops success or failure, sellers openly share Etsy related strategies, tips,
and referrals with other sellers. Similar to marketing practices found among cooperatives (Auerbach and Neiman 2012),
sharing trade secrets reflects the common goal of Etsy and its sellers: succeeding as a marketplace community. Members
help each other, and Etsy, to achieve this goal by sharing strategic kinds of information about the marketing mix that are
819
specific to Etsy with one another. This approach is quite different from the practices of more traditional online retailers,
wherein strategies aim to outperform other businesses that share a common consumer market. The desire and willingness
exhibited by Etsy sellers to support the success of their competitors through the reciprocal sharing of critical marketing
information reflects the sites focus on building a community of sellers.
Etsy Karma
Etsys practices of sharing trade secrets to build and maintain the Etsy community reflects a business ethos of collaboration
and partnership. It also suggests a belief that what one seller does for another (competing) seller is critical to the foundation
of the selling community as a whole. This emphasis on building a positive and supportive selling environment reflects a
consciousness of community that comes through in the sites use of social media and marketing practices.
Sellers often remark on the notion of Etsy Karma, or giving back to get ahead. For example, in a post about Etsy Teams
Lela comments on the positive and collaborative nature of Etsy: It's so nice to know that Etsy is more than just a place to
sell, it's heart-warming to know it's really a community and there's support more than competition. Similarly, in a blog about
her selling practices, Martha echoes the positive impact of the sites business ethos,
The reason Etsy is best, is that you care about your peeps! we love you, thank you for helping the world become a more
creatively full~filled place....this site is such a positive contribution to the world's happiness~ people doing what they love,
and the rest is (joyfully) following...
Seeking assistance when needed is a common practice within the Etsy seller community. For example, on an Etsy Team blog
page, Emily shares her troubles, reaching out to the seller community:
I am feeling a lil helpless with my etsy shop. I have killer photos, reasonable prices, I list at least once a day, and I am
always trying to "be" in my shop. I have the etsy app so I respond within minutes to peoples questions.... what else can I do?
Several sellers quickly respond with advice. Jeff says, Wow, Emily, your shop is nice, and 83 sales isn't anything to scoff at!
Honestly, you are way ahead of most Etsy sellers (myself included) when it comes to sales. Maybe you're actually pricing
your items too low? The researcher/seller also reviewed Emilys shop and posted constructive comments. The following
day, without being asked, Emily returned the favor by providing some advice on how to improve the researcher/sellers shop.
Sarah, a new seller on Etsy, points to the sites opportunities for collaboration rather than competition as the key to eventually
succeeding with her shop,
Im a newbie too. And I havent had much views until I started participating in the threads at Forums/Teams. [I] started to
understand how things work on Etsy and what you really have to do... I could increase my views by being present on Forums
& Teams. The next step is to have sales!...Thanks!
With the understanding that collaboration is a two-way street, it is common practice for Etsy shop owners to leave messages
of support to fellow sellers on blog posts, treasury listings, and forums. These messages are vital to understanding what Etsy
is all about, as they set the foundation for maintaining a community of sellers, rather than a marketplace of independent
businesses. Sellers understand that how they act and participate within the community influences the success that they will
likely have within the community. The positive ethos of Etsy has fostered an online retail space where shop owners can feel
comfortable about reaching out to competing sellers for assistance and then sharing tips and advice in return. As part of a
greater whole, sellers are exposed to the idea of Etsy karma through the practices of other sellers, which are ultimately
reinforced through the sites unique approaches to seller education.
Educating Etsy
Etsy sellers, whether novice or veteran, receive an education in Etsy business practices through the incentives it provides for
engaging in community building and interaction. Relying on social media tools, Etsy also encourages sellers to share their
lessons learned. For example, on the sites main blog page, Etsy Administrators have created a series of online videos and
posts titled Quit Your Day Job and Etsy Success Stories featuring sellers who have turned a hobby into a career. Featured
Etsy sellers give back to the community by sharing marketing practices that helped them to achieve full-time seller status.
Other sellers seem to find these lessons vital to their success, and communicate as much in the messages they post. For
example, Lana stated, [it is] always good to review these tips and I do apply them every day to my shop. Because of all of
820
these tips my shop has finally taken off in the last 6 months, so grateful for all of the advice here .... Even Tara, a seasoned
Etsy seller, commented on the usefulness of the information,
Even for those of us that are not newbies this information is always good to review. Sometimes we get caught up in doing
things a certain way and don't realize that we have forgotten some of key points that will help to make us successful.
Relying on a social media platform, the educational tools provided by Etsy for use by sellers ensure that, as a business, Etsy
maintains a unified marketing message. For example, the Seller Handbook, a commonly used source for information about
selling products on Etsy, provides sellers with information about Etsy business practices, including how to set up a shop as
well as ways to participate within the broader community of sellers. Etsy Teams are another means of educating members
about the broader Etsy community, as teams often create their own mission statements, procedural guidelines as well as
projects that reinforce the importance the Seller Handbook places on sharing information with one another.
It is important to highlight the unique approach to education taken by Etsy, in that while Etsy Administration has a hand in
creating educational opportunities, it does not set out to regulate how businesses sell products on the site. Instead, sellers
share their knowledge as to how to succeed on the Etsy platform and use social media tools to work together to co-create
education-based resources like the Handbook, designed to be used by all sellers. Moreover, Etsy does not require that a seller
pursue opportunities to engage in the site as a community in order to sell goods through it. However, it does appear that
sellers are intrinsically motivated to learn about its community functions, in as much as seller posts and testimonials
repeatedly indicate that participation in the community helps to increase shop traffic and sales.
There are literally thousands of sites where consumers can purchase handmade goods online. Yet Etsy and its sellers have set
this site apart, by defining it as a marketplace built by the notion of karma, or that one gets what one gives, and by uniting
competing sellers to create a collaborative selling community. This study illustrates that sharing marketing strategies,
practicing reciprocity, and reinforcing a message of collaboration can actually lead to sales success, even among competing
sellers. Online retailers face enormous competition from a plethora of businesses, both inside and outside of their particular
consumer markets. Etsys strategy speaks to how businesses that share common characteristics or consumer markets might
consider partnering through marketing and social media, and potentially thrive in an environment where consumer choice is
practically limitless.
As this study reveals, by integrating the fundamental elements of social networking with a focus on partnership, teamwork,
and collaboration, Etsy has built an online community of sellers rather than just a successful retail website. Etsys integration
of social networking and other social media elements have resulted in a unique type of online retailer, one that encourages
business-to-business relationships to create a community of competing businesses. While Etsy educates sellers about what
works in terms of online marketing and business practices, it is the sellers who carry out the sites message of community and
ultimately shape what Etsy is all about. This dynamic between site and seller adds a new dimension to the idea of
consumption communities and should be addressed in future research on the topic.
REFERENCES
821
FEELING BLUE: THE EFFECTS OF VISUAL CUES ON TEMPERATURE PERCEPTIONS

ABSTRACT
Product temperature is an important factor in food and beverage evaluations. While extreme food/beverage temperatures can
sometimes be determined through visual cues, such as from steam emitting from a bowl or frost on a glass, temperature is
usually evaluated through manual (i.e., hand) or oral haptic perception. When mediums such as insulated packaging prevent
manual haptic temperature perception, oral perception is the primary mode of temperature evaluation. This research
investigates how mere exposure to peripheral red and blue visual cues, such as the color of the cup a beverage is sampled
from, the napkin a beverage is served on, or the color of the beverage itself, that consumers incidentally encounter influence
product temperature perceptions. In addition, we investigate the downstream behavioral consequences of this effect on
consumption volume and food preparation.
We draw on theories of intersensory integration and propose that the relative weighting of haptic and visual cues in
temperature evaluations will be a function of ease of obtaining visual (vs. haptic) information. We propose that because
visual information has a relative advantage in terms of ease of encoding compared to haptic information, visual color cues
will tend to receive more weight in temperature evaluations so that individuals exposed to a red color cue will rate a product
as having a higher temperature than individuals who are exposed to a blue color cue.
In six studies we show that exposure to red (blue) visual cues leads to higher (lower) product temperature perceptions which
we term the color-temperature effect. We provide evidence that this effect is driven by visual cues receiving greater weight
than haptic cues in temperature evaluations due to the ease with which visual cues can be encoded. We also show that this
color-temperature effect can have downstream consequences on the volume of a product consumed as well as food
preparation practices.
822
IVE GOT YOU UNDER MY SKIN: TACTILE STIMULATION OF CLOTHING

Mya Pronschinske, University of Wyoming, USA
Kent Drummond, University of Wyoming, USA
ABSTRACT
Research in marketing involving the sense of touch has primarily focused on the sensory inputs resulting from the use of
ones hands (Peck 2010). However, our literature is lacking research that considers the tactile inputs from the entire human
body. This research inquiry seeks to understand the interaction between clothing and consumers physical experience of
wearing the clothing on their skin (i.e., cutaneous) and the movement of the clothing due to consumers muscle tissue (i.e.,
kinesthetic) (Klatzky and Lederman 1992, 1993).
Despite recent approaches to understand bodily sensations on judgment (Krishna and Morrin 2008; Meyers-Levy, Zhu, and
Jiang 2010), this research has focused on feelings as information (Schwarz and Clore 1983, 2007) and thus reduces the
physical experience to information induced through situational factors. The previous research has primarily focused on when
consumers are engaging in the pre-purchase search, subsequently when they receive haptic and tactile sensory inputs to make
a decision for purchase (Peck 2010). Our research is situated in the understanding of clothing evaluated through its use and
the sensations that arise from wearing the clothing.
Research consisted of an extended multisite ethnography to assess the lived experience of clothing consumption choices and
wearing the clothing. Between May 2010 and September 2012 the first author entered into iterative periods of participant
observation in multiple pageant activities throughout the United States. Data were collected as field notes, ethnographic
interviews, and photographic evidence (Arnould and Price 1993). Between the periods of participant observation, the first
author and her advisor triangulated data with other visual and textual sources drawn from pageant magazines, television
shows, and videos, news media, online pageant clothing designers, as well as personal and public web space (Kozinets 2002;
Schau and Gilly 2003). To answer the research questions, an investigation into the beauty pageant community: a complex
assemblage of individuals (e.g., contestants, pageant directors, expert styling professionals, photographers, and individual
audience members), organizations (e.g., pageants, fashion brands) all come together to influence how the contestants interact
with clothing and accessories to create an idealized pageant image.
This analysis differentiates clothing consumption by transcending the conventional notions of clothing as adornment. It also
goes beyond the traditional view of clothing as a sign-vehicle that allows an individual to express their ideal self. The
narratives provided throughout our extended fieldwork point to the interconnections between clothing and the tactile
sensations felt upon the body that exemplify the contestants desire to be recognized for the embodied feminine. Thus
clothing allows them to transform their body (and their existence for themselves and for others). Previous research falls short
in that clothing is reduced to an object. Thus, clothing reveals its value through its actual consumption on the body, which is
its body-in-motion that exposes its overall image of the body. This is both felt by the individual through the cutaneous (skin)
and kinesthetic (muscle tension) upon ones own tactile surface and through the evaluations of the others gazing upon the
contestants.
While the producers of the pageant may be seeking the true embodiment of whom the contestant is. Contestants speak quite
candidly about how they manipulate their bodies to adhere and embody the idealized image. The contestants fight a tension of
what the producers desire and how they can best represent and hopefully be chosen as the winner (epitomized representation
of success in the field). The contestants highlight that the evaluation is based upon how well they interact with their clothing
options (i.e., how well they sell that the gown was meant specifically for them).
In conclusion, clothing has been shown to have transformative qualities through its interaction with the body. The contestants
feel the gown on their cutaneous skin and through the consumption rituals of becoming pageant ready for evaluation; their
kinesthetic muscle tensions are manipulated. Thus, clothing and accessories are used in-context to aid in the transformation
into the role of pageant contestant (Goffman 1959). Utilizing the tactile, haptic experiences of wearing certain clothing in
context, aids in successfully performing the idealized gendered body image.
823

CONSUMER IMAGINATION: AN EMPIRICAL EXAMINATION OF THE IMPACT OF NEED FOR HAPTIC
INFORMATION
Nancy Spears, University of North Texas
Atefeh Yazdanparast, University of Evansville
ABSTRACT
The human imagination has long fascinated scholars and practitioners. Some researchers argue that imagination enables
consumers to construct stories in which they are the main characters in a future consumption situation. Schau (2000 p. 50)
defined imagination as the site of knowledge creation and suggested that the imagination has two key functions: (1)
imagination unites incoming or newly presented information with what is already known to create knowledge; and (2)
imagination provides an avenue for identity construction as the consumer situates him/herself relative to the product or service.
In fact, in the imagination, incoming sensory knowledge is combined with what is already known through thought structures
and processes to create knowledge that links identity and consumption.
In spite of these important contributions, there remains little consensus among scholars about how the consumer imagination
is structured (White 1990; Zhao, Hoeffler, and Dahl 2009). The present research has the central purpose of advancing our
understanding of this issue. Drawing from extant literature, the present research identifies and investigates the impact of
constraint imposed on imagination stemming from missing information in working memory and the constraint imposed by the
elaborative approach. Moreover, the study tests the role of perceived ownership as a potential process mechanism of
imagination.
A 2 (NFT instrumental: +/1 Std. Dev.) X 2 (elaborative approach: imagine or consider) between subjects design was employed
in which NFTinstrumental was measured and imagine vs. consider elaborative approaches were manipulated. Respondents
read a cover story about an online purchase situation of a sweater for attending an upcoming event. The information on the
target product (i.e., sweater) overview, fabric, care, and sizing were provided. Next, respondents were randomly assigned to
one of the two manipulated scenarios instructing them to either use their imagination to form a picture of what they will look
like in the sweater or consider the features of the sweater and think about how those features go with their body.
The results demonstrate the boundary influence that missing product information imposes on imagination when the consumer
prefers the type of information that is missing. Thus, imagining consumers who prefer to touch products prior to purchase have
lower purchase intentions and product confidence. Moreover, the results indicated that consumers imagination leads to higher
product judgment confidence and purchase intention through an elevated sense of ownership, identifying perceived ownership
as the underlying mechanism for the imagination effect.
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THE EFFECTS OF AMBIENT LIGHT ON CONSUMER PRODUCT CHOICES

Dipayan Biswas, University of South Florida, USA
Donald Lehmann, Columbia University, USA
ABSTRACT
Stores and restaurants vary considerably when it comes to ambient light intensity with some stores and restaurants being very
bright and others being very dim. But, would the ambient light intensity in a store or restaurant influence a consumers
choices between virtue and vice products? We focus mostly on virtue and vice products in the context of healthy and
unhealthy foods. However, we also extend our results to a non-food context. We predict that dim ambient lighting will lead to
an increased preference for vice products and propose two theoretical explanations for why this may occur. Specifically,
theories related to mental alertness would predict that consumers would be less mentally alert and more sleepy in dim (vs.
bright) lighting. Theories related to disinhibition would also predict a greater preference for vices in dim lighting, since
consumers tend to feel anonymous in dimly lit environments. Across, five experimental studies, two conducted in field
settings at restaurants and three conducted in the lab, we test our hypothesis regarding the greater preference for vice products
in dim lighting and empirically investigate which of the two competing theoretical explanations might be more dominant in
driving this effect. Collectively, the results support our hypothesis and show that consumers choose vices to a greater extent
in dim (vs. bright) lighting. Process evidence supports the mental alertness model and not the disinhibition model.
825
ADOPTION OF ONLINE SHOPPING: A TECHNOLOGY ACCEPTANCE PERSPECTIVE

Abdul Rehman Ashraf, University of New South Wales, Australia
Narongsak Thongpapanl, Brock University, Canada
Mohammed Razzaque, University of New South Wales, Australia
ABSTRACT
Use of the Internet has increased remarkably in the past few decades and, therefore, has created a need to better understand the
adoption of e-commerce across different cultures. Our study makes a significant contribution in different ways. First, an
extended technology acceptance model (TAM) was developed and validated in an international setting, other than the U.S., in
order to better understand the adoption of e-commerce across different cultures. This study extends McCoy et al. (2007) and
Straub et al. (1997) work by validating TAM in the Pakistani culture. Contrary to our expectation, the predictive power of TAM
seems robust and holds for both Pakistan and Canada. Second, the importance of perceived ease of use (PEOU) to intention to
shop online was validated across the two cultures. The results of this study clarify an important issue in TAM studies, namely,
when and why PEOU is important and influences intention to use a system (Gefen and Straub 2000; Keil et al. 1995). PEOU
is more important than perceived usefulness (PU) in motivating users to accept a technology at the early adoption stage and its
importance diminishes as users become familiar with the system. Practitioners, who might have confusions regarding the
importance of PEOU due to previous TAM studies, should reconsider the extent to which PEOU affects online shopping at the
early adoption stage. Similarly, in the case of Canadian customers, PU is the main factor that directly and indirectly affects
intention to shop online. Furthermore, in developing programs to motivate customers to shop online, e-retailers must recognize
the importance of trust on PEOU, PU, attitude and intention to shop as trust had the strongest effect on PEOU for the Pakistani
sample and on PU for the Canadian sample.
826
THE INFLUENCE OF TECHNOLOGY ADDICTION ON TECHNOLOGY ACCEPTANCE AND USE:

AN EXPLORATION OF MOBILE COMMUNICATIONS TECHNOLOGY
Kenneth W. Graham, Mississippi State University, USA
INTRODUCTION
Over the past decade the rapid advancement of mobile communication technology (MCT), including cell phones,
Smartphones, laptop computers, tablet PCs and other mobile internet enabled devices, has been nothing less than astonishing
rivaled only by the rapid adoption and voracious consumer appetite for these innovations. For example, within three months
of its introduction in 2007, Apple announced that it had sold its one-millionth iPhone (Apple 2007). Just five years later,
Apple announced within three days of the introduction of its latest generation iPad tablet PC that sales had topped three
million units (Apple 2012a).
Research into consumer acceptance and use intention of new technology has relied primarily on the Technology Acceptance
Model (TAM; Davis 1989). A parsimonious, 3-construct model, the TAM has been shown to be robust in predicting use
intention of new technology, especially when used in conjunction with moderating variables. For example, studies have
explored the moderating influence of product familiarity (Coupey, et al. 1998), self-efficacy (Dabholkar and Bagozzi 2002),
and reference groups (Goldenberg et al. 2009), on the acceptance and intended use of various types of technology. While a
vast array of consumer traits have been examined, few studies have examined the potential affects of addictive consumer
behavior on technology adoption. Therefore, the aim of this paper is to explore the influence of technology addiction on
consumer acceptance of technology within the domain of MCT.
In this research, the definition of technology addiction proposed by Griffiths (2000) is adopted; thus, herein technology
addiction is defined as, compulsive consumer behaviors involving human and technology interactions. Recent research
suggests that dependency on mobile internet enabled MCT, may be due to the widespread exposure, use and integration of
MCT into business and personal life (Porter and Kakabadse 2006). Griffiths (2003) notes, virtual environments have the
potential to provide short-term comfort, excitement, and/or distraction (p. 559), and outlines numerous features of the
internet that provide the building blocks of addictive online behaviors. These include accessibility, affordability,
anonymity, convenience, escape, immersion/dissociation, disinhibition, event frequency, interactivity, simulation, and
associability. Current generation MCT provides instantaneous consumer access to the mobile internet and therefore
convenient access to these building blocks and various online activities that have been shown in the literature to be the
focus of addictive behaviors, including: internet use (Wyidyanto and Griffiths 2006), email and chat rooms (Beard 2002),
social networks (Taylor, et al. 2011), online auctions (Turel, et al. 2011), online gaming (Mehroof and Griffiths 2010), and
pornography (Griffiths 2000). To further theoretic understanding the technology acceptance process and to better inform
managerial decisions regarding consumer engagement in mobile commerce, the objective of this study is to explore the
moderating influence of technology addiction on the technology acceptance model in respect to MCT.
METHOD
In this research, the specific domain within MCT that was selected for study was mobile application (app) technology.
Mobile apps are independent software programs that run on mobile devices and range in their degree of sophistication. Apps
are designed to perform a virtually endless array of tasks, including communications, games, multimedia and productivity
functions. Mobile apps are the primary drivers of the multi-function utility of MCT and can be downloaded directly to the
device or accessed wirelessly on a remote server. To illustrate the widespread adoption and use of mobile app technology and
its relevance to this study, in 2012 Apples innovative online App Store, which opened in 2009 with 500 apps, announced it
had surpassed 25 billion downloads from its current inventory of more than 550,000 apps (Apple 2012b).
To address the research objectives, scenario methodology was employed in which a scenario was created and presented to
prospective respondents. Scenarios are often used in the marketing literature for service and satisfaction research (Dabholkar
and Bagozzi 2002) because they allow researchers to explore constructs that are either overly complex or not easily
operationalized (Ueltschy et al. 2007). Given the complexity of mobile apps and MCT in general, the use of scenarios for this
exploratory study is justified.
The realism and familiarity of the scenario used in this method is critical to its effectiveness; therefore, a pre-test was
conducted with 45 subjects enrolled in an online internet marketing course at a large southern university to determine their
827
usage of mobile apps, the types of businesses for which they currently utilized apps, and their preferences for app features
they would find most useful. These data resulted in the development of a scenario describing an oil change service encounter
at an auto repair company, for which a mobile app is available to enhance the service experience. The scenario was pre-tested
with 18 subjects, 61 percent of whom reported the most recent reason for taking their vehicle in for service was for an oil
change. Using a 7-point Likert scale anchored by very strongly disagree and very strongly agree, results showed strong
support for the scenario as being realistic (mean= 5.374) and subjects reported no problems imagining themselves in the
scenario (mean=6.00).
A student snowball sample was utilized for this pilot study. Students were recruited from undergraduate marketing courses at
a large southern university to participate in the survey, at which point they were also asked to provide email addresses for
potential study participants. From the 132 students asked to participate 86 useable responses were collected for a response
rate of 65 percent. The snowball sample resulted in an invitation to participate email being sent to 251 potential respondents,
which resulted in 10 emails being returned as undeliverable. The first email wave yielded 22 responses. After 10 days, a
follow up email was sent to the entire snowball sample of 241, which resulted in an additional 11 responses. In total, the
snowball sample yielded 33 usable surveys for a response rate of 13.7 percent.
Respondents were invited via email to participate in a survey and were provided a URL hyperlink to an online questionnaire.
Respondents were asked to read the first part of the study scenario, which describes them taking their car to a retail
automotive service station for an oil change, where they encounter a poster advertisement for a free mobile app that will
allow them to track the progress of their car through the service center. The poster states that the app will send them time-tocompletion updates as their car is being serviced, allow them to keep track of their vehicles maintenance schedule, and allow
them to pay online. After reading the scenario, respondents were asked three questions using validated scale items for
perceived ease of use (PEOU) ( = .830). The instrument was a 7-point Likert scale anchored with very strongly disagree
and very strongly agree. After completing these questions, respondents were asked to read the conclusion to the scenario,
which describes a series of interactions with the mobile app regarding their oil change and concludes with them successfully
paying for their oil change via the mobile app. After reading the conclusion to the scenario, respondents were asked to answer
questions regarding the perceived usefulness (PU) of the app ( = .789), and their intention to continue to use the app (INT)
( = .914). Following completion of these items, respondents were directed to complete an adaptation of the 20-item Internet
Addiction Test (IAT; Widyanto and McMurran 2004). Exploratory factor analysis resulted in six items being removed from
the scale, resulting in a 14-item scale. The adapted scale showed strong reliability ( = .944) with strong inter-item
correlations, adjusted item-to-total correlations and squared multiple correlations. The instrument asked respondents about
their use of mobile apps and the degree to which these activities affected other aspects of their daily activities, social
interactions, career and productivity, sleep behavior and feelings on a 5-point Likert scale with never and always as anchors.
The IAT scoring protocol developed by Young (1996) was scaled to fit the adapted 14-item scale, resulting in scores ranging
between 14 and 30 indicating a typical user, scores between 31 and 49 being indicative of problematic use, and scores greater
than 50 indicating significant disruptions to daily life. Of the 119 total respondents to this survey, 101 fell into the normal use
category, 16 into the problematic use category and 2 were classified as having a significant behavioral problem with regard to
their mobile app use.
Following completion of the modified IAT, respondents completed demographic questions regarding gender, age, level of
education, mobile device ownership, number of mobile apps currently installed on their device(s), and their most frequently
used apps. Respondents also completed a product familiarity scale developed by Oliver and Bearden (1985) as a control. The
completed questionnaires were then downloaded from the survey website and imported to SPSS 20 statistics software
application for analysis.
Utilizing SPSS 20, hierarchical regression analysis was utilized to test the hypotheses in this study. Due to the differences in
scale width, all scales scores were converted to z-scores and then averaged to form composite measures. To control for the
influence of product knowledge or familiarity, a regression analysis was conducted to observe any effects of prior product
knowledge on consumers continuance of use intention. Result revealed no direct or interaction affects of product familiarity
on INT (mean = 5.403; Adj. R2 = .155; R2 = .205; F = 4.118; p > .05). Given these results, analysis continued without
further consideration of the product familiarity variable.
828
Multiple regression analysis was used to test the main effects of PEOU and PU on INT. Results indicate that PEOU is a
significant predictor of INT (= 0.388, Adj. R2 = .143, p < .001), PU is a significant predictor of INT ( = 0.712, Adj. R2 =
.303, p < .001), and PEOU is a significant predictor of PU ( = 0.635, Adj. R2 = .403, p < .001).
To test the moderating effects of technology addiction (TADD) on the TAM, a hierarchical regression procedure was used.
Separate analysis was conducted for respondents who scored within the normal range on the modified IAT (n=101) and those
who scored beyond the normal use range (n=18).
For those respondents scoring beyond the normal range on the IAT, significant interaction effects of TADD were observed
for the relationships between PEOU and PU ( = -1.387, R2 = 0.264, p < .001), and between PEOU and INT ( = -1.018,
R2 = .142, p < .05). No interaction effects were observed for the relationship between PU and INT ( = -0.133, R2 = 0.001,
p > .05). As was predicted, no interaction effects were observed for those who scored within the normal range on the IAT.
Results of this study revealed significant interaction effects of technology addition. Research suggests that addictive
behaviors will result in a positive increase of consumers perceptions toward the object of their addiction (Turel, et al. 2011);
however, contrary the literature, results of this study find that technology addiction has a negative moderating influence. A
possible explanation for this unexpected result could be the discounting of delayed rewards. Addicts have been shown to
discount future rewards and place greater value on more immediate rewards (Saville et al. 2010); therefore, those who scored
higher on the modified IAT may not have been enticed by the benefits offered by the fictitious app featured in the scenario.
Another curious finding is the lack of an observed interaction effect on the relationship between perceived usefulness and use
intent. This lack of effect could be a result of the discounting of future rewards as above, or it could be that even though
technology addiction lowered the respondents perceived ease of use of the fictitious app, after reading the scenario
conclusion in which the app was shown to perform well, respondents were persuaded that the app was relatively useful; thus
offsetting the negative affect of technology addiction.
The results of this exploratory study provide interesting results that contribute to the technology acceptance and behavioral
addiction literature. These initial findings illustrate how technology addiction can be an important influencing factor in the
acceptance of new technology, and particularly mobile apps and MCT.
While results are mixed, there is evidence that the role of technology addiction in technology acceptance can have an impact
on consumer use intentions of mobile technology, and thus may inform managerial decision making, especially in the areas
of audience segmentation and mobile commerce. If consumer behavior and perceptions of MCT can indeed be influenced by
technology addiction, it stands to reason that purchase intent via mobile commerce and responsiveness to mobile advertising
may likewise be influenced; however, additional research will be required to establish the validity of these notions.
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830
THE DARK SIDE OF BUYER-SUPPLIER RELATIONSHIPS IN THE ADOPTON OF DISRUPTIVE

TECHNOLOGIES
Michael Obal, Temple University, United States of America
INTRODUCTION
While there has long been a focus on the antecedents of product adoption, there has been significantly less research that has
looked at the antecedents of quality decision making in an adoption scenario (Bhattacherjee, 2001). How does an IT manager
know that the technology he/she is buying will provide the correct solution for the firms current issues and will be used
continuously by his/her firm?
For managers looking to adopt an incremental technology, these questions should be relatively easy to answer. By definition,
an incremental technology should only have slight improvements or adjustments compared to the current technology and,
therefore, should require less new knowledge to be taken in by the users (Dewar and Dutton, 1986). Disruptive and radical
technologies, on the other hand, require the user to adopt new usage patterns and therefore take on new knowledge. These types
of innovations often introduce consumers to new features not seen in previous generations, thus requiring the user to spend
extra time and effort learning how to use the technology (Dewar and Dutton, 1986; Christensen, 1997). In the case of disruptive
innovations, the new technology eventually displaces the old technology, thereby providing a competitive advantage to firms
who adopted the disruptive technology early on (Christensen, 1997). Therefore, firms should be motivated to adopt a disruptive
technology early on and train their employees on the new technology before their competitors are able to do so.
However, identifying a technology as disruptive before it has disrupted the market can be extremely difficult. Significant
emerging technologies are easily seen after the factbut rarely are the winners clear at the outset. (Doering and Parayre, 2000,
p. 75). Managers should have the ability to decide which technologies are in fact disruptive and move quickly to adopt them
before their competitors. A firm that adopts the wrong technology, or no new technology at all, may be left at a disadvantage
compared to competitors who have integrated the disruptive technology (Christensen, 1997; Tellis, 2006). Therefore, successful
firms must be able to identify disruptive technologies before they have emerged (Danneels, 2004).
In high risk and uncertainty scenarios, such as the potential adoption of a disruptive technology, firms often turn to trusted
suppliers. By doing this, the buying firm is mitigating some of their risk and uncertainty (Ganesan, 1994). However, as argued
in this article, a strong buyer-suppler relationship may have a converse effect on adopters of disruptive technologies. Strong,
interorganizational relationships may actually reduce buyers motivations to search for the optimal product and price and,
instead, lead them to simply rely on their most trusted suppliers (Jeffries and Reed, 2000). Furthermore, very high levels of
trust in a supplier could lead that supplier to become opportunistic (Grayson and Ambler, 1999). We argue that, since disruptive
technologies tend to be difficult to predict and properly understand, a more extensive searching effort is required to make an
optimal adoption decision. This point is highlighted by the finding that the majority of firms that successfully introduce
disruptive technologies tend to be new entrants to the industry, not incumbents who have developed long-term relationships
with their customers (Henderson, 1993; Christensen, 1997). As such, the optimal supplier of a disruptive technology may be a
supplier that the buyer does not have an existing relationship with.
In order to illustrate this argument, this article proposes the following variables as precursors of a quality adoption decision for
a disruptive technology: interorganizational trust, efficiency motives, normative supplier pressures, mimetic competitor
pressures, information technology (IT) capabilities and searching efforts. We propose that normative pressures, as brought on
by suppliers, will have a negative influence on adoption decision quality and will be driven by interorganizational trust (trust
between a buying manager and a supplier of disruptive technology). Conversely, we suggest that firms should adhere to
efficiency motives, increased searching efforts, and develop IT capabilities to lead them towards an optimal adoption decision.
As such, we argue that searching efforts should be viewed positively in this scenario while interorganizational trust should be
viewed negatively, thus contradicting previous views of these constructs (Whetten and Cameron 1991; Zaheer et al., 1998;
Jeffries and Reed 2000). Combining the aforementioned construct relationships, this article proposes a new model identifying
the antecedents of a quality adoption decision for disruptive technologies. This model is tested using survey data from 174
buyers of cloud computing technology, which has been identified as an emerging disruptive technology (Marston et al., 2011).
831
First, it has been found that pre-existing levels of interorganizational trust will lead to less haggling over costs and quicker
resolutions to negotiations (Gulati and Sytch, 2008). Buying firms who exhibit high levels of trust with a given supplier will
be more likely to purchase from that supplier with little motivation for negotiation (Jeffries and Reed, 2000). We postulate that
this influence of trust drives normative supplier pressures (pressures felt by organizations to conform to the norms of the
industry) (Son and Benbasat, 2007): H1: Pre-adoption interorganizational trust will have a positive influence on normative
supplier pressures.
As previous literature has found, mimetic competitor pressures (pressures brought on by uncertainty that encourage buying
managers to imitate the decisions of leading competitors) may also play a role in the adoption scenario (Son and Benbasat,
2007). We hypothesize that, as these mimetic competitor pressures increase, the norms of the industry will change. Therefore:
H2: Mimetic competitor pressures will have a positive influence on normative supplier pressures.
As noted by Grewal et al. (2001), firms that allocate time and effort to understand a product and environment are likely to
substantially benefit from their efforts. These benefits are driven by both efficiency motives and effort-based learning (Grewal
et al., 2001). Efficiency motives are driven by product characteristics, demand uncertainty, and market volatility (Son and
Benbasat, 2007). Extending Grewal et al. (2001), we hypothesize that: H3: Efficiency motives will have a positive influence
on searching efforts.
In this study, we operationalize a quality adoption decision by measuring perceived usefulness (Karahanna et al., 1999),
satisfaction (Bhattacherjee, 2001), confirmation (Bhattacherjee, 2001), continuance intention (Fishbein and Ajzen 1975), and
continued usage (Grewal et al., 2001). H4-H8 will use these five constructs to measure the dependent variable quality of the
product adoption decision. As indicated by Jeffries and Reed (2000), quality solutions are found when motivation is high and
when all solutions have been considered. In order to determine all possible adoption solutions, searching efforts will likely be
high. Adopters who allocate time to understand the benefits of a specific technology will experience substantial benefits
compared to those who do not (Grewal et al., 2001). Therefore: H4: Searching efforts will have a positive influence on the
quality of the product adoption decision as measured by (a) perceived usefulness, (b) continued usage, (c) continuance
intention, (d) satisfaction, and, (e) confirmation.
As explained by Son and Benbasat (2007), legitimacy-oriented motives, such as mimetic and normative pressures, may lead to
more adoptions, but will not lead to increased, continued usage of said adopted product. If the decision to adoptis primarily
driven by legitimacy-oriented motivesthe investment necessary for initial adoption may be wasted. (Son and Benbasat,
2007). Therefore, we hypothesize: H5: Mimetic competitor pressures will have a negative influence on the quality of the
product adoption decision as measured by (a) perceived usefulness, (b) continued usage, (c) continuance intention, (d)
satisfaction, and, (e) confirmation.
H6: Normative supplier pressures will have a negative influence on the quality of the product adoption decision as measured
by (a) perceived usefulness, (b) continued usage, (c) continuance intention, (d) satisfaction, and, (e) confirmation.
Next, Klonglan and Coward (1970) found that continued usage of an adopted product was more likely to occur when the
adopting firm was driven by economic considerations. Further research built off of these findings to establish that efficiency
motives were more predictive of continued usage than legitimacy-oriented motives (Grewal et al., 2001; Son and Benbasat,
2007). Therefore: H7: Efficiency motives will have a positive influence on the quality of the product adoption decision as
measured by (a) perceived usefulness, (b) continued usage, (c) continuance intention, (d) satisfaction, and, (e) confirmation.
Finally, Grewal et al. (2001) found that a firms continued participation in an electronic market was driven by that firms IT
capabilities. Therefore: H8: IT capabilities will have a positive influence on the quality of the product adoption as measured
by (a) perceived usefulness, (b) continued usage, (c) continuance intention, (d) satisfaction, and, (e) confirmation.
METHODS AND RESULTS
In order to empirically test our model, a survey of 188 recent adopting managers of cloud computing packages was conducted.
The survey consisted of fifty-six items, fifty of which aimed to capture the constructs of interest and six of which aimed to
capture firm demographics. Respondents who qualified were taken to the body of the survey, of which 7-point Likert scale
items were used to capture the constructs of interest. After gathering responses, 14 respondents were removed due to improper
completion of the survey, bring the final sample size to 174 responses. After obtaining responses and cleaning the data, a
confirmatory factor analysis (CFA) was conducted to confirm the validity and reliability of the data. The model exhibited
satisfactory fit (Chi-square=1154.151; df= 842; 2/df=1.371; RMSEA=.046 (.039-.053); SRMR=.0415; NFI=.857;
832
CFI=.956; IFI = .957; TLI = .951). In support of convergent validity and reliability, the average variance extracted (AVE)
exceeded .5 for all variables, the Cronbachs alpha values all exceeded .7 , and all item loadings exceeded .7 (Kline, 2010).
As expected, pre-adoption interorganizational trust increased the normative supplier pressures felt by respondents ( = 0.140,
p < .01), therefore providing support for hypothesis 1. Hypothesis 2 was also supported as mimetic competitor pressures
increased normative supplier pressures ( = 0.391, p < .01). As a driver of searching efforts, efficiency motives were found to
be positive and significant ( = 0.405, p < .01), providing support for hypothesis 3.
As predicted, searching efforts increased perceived usefulness ( = 0.294, p < .01), continued usage ( = 0.291, p < .01),
continuance intention ( = 0.181, p < .01), and confirmation ( = 0.174, p < .01), thus providing overall support for hypothesis
4. Mimetic competitor pressures showed no influence on continued usage ( = -0.019, p > .10), and continuance intention ( =
-0.028, p > .10). Conversely, mimetic competitor pressures showed a positive influence on satisfaction ( = 0.199, p < .01) and,
less significantly, on perceived usefulness ( = 0.136, p < .10) and on confirmation ( = 0.098, p < .10). As the influence of
mimetic competitor pressures has provided inconsistent findings, hypothesis 5 is not supported. Consequently, Sobel tests found
that the influence of mimetic competitor pressures was, in some cases, mediated by normative supplier pressures.
As predicted, normative supplier pressures had a negative, significant influence on perceived usefulness ( = -0.191, p < .05),
continued usage ( = -0.203, p < .10), continuance intention ( = -0.196, p < .05), and satisfaction ( = -0.266, p < .01), thus
providing overall support for hypothesis 6. Consistent support for hypothesis 7 was found as efficiency motives had a positive
influence on perceived usefulness ( = 0.346, p < .01), continued usage ( = 0.445, p < .01), continuance intention ( = 0.316,
p < .01), and satisfaction ( = 0.480, p < .01), and confirmation ( = 0.303, p < .01). Once again, complete support for hypothesis
8 was found as IT capabilities had a positive, significant impact on perceived usefulness ( = 0.486, p < .01), continued usage
( = 0.658, p < .01), continuance intention ( = 0.379, p < .01), and satisfaction ( = 0.282, p < .01), and confirmation ( =
0.152, p < .01). In sum, statistical support was found for seven out of eight hypotheses with the exception of hypothesis 5.
DISCUSSION AND CONCLUSSIONS
Given our final results, this study provides radical implications for buyers of disruptive technologies. Primarily, these findings
challenge the notion that interorganizational relationships have a consistently positive relationship with firm performance.
Instead, the findings suggest that pre-existing interorganizational trust may increase normative supplier pressures, thus leading
to suboptimal adoption strategies. Furthermore, the results indicate that increased searching efforts, development of IT
capabilities, and a focus on efficiency motives were more effective drivers of making a high quality adoption decision. Simply
put, buyers should avoid simply conducting business with their most trusted supplier and instead should consider all possible
alternatives before deciding on not only their final supplier, but also the final product. By doing this, buyers should get closer
to making an optimal adoption decision, leading to continued usage and lasting attitudes of perceived usefulness towards the
new product.
These findings may seem drastic and counterintuitive and should come with a few caveats. First, search efforts are treated as a
positive in this study as they lead potential buyers to consider all options and increase the optimality of their adoption decision
(Jeffries and Reed 200). However, in practice, search efforts are not generally viewed as a positive as they translate into lost
time and money. As such, managers should take these findings into consideration as they reflect on the trade-off between
search efforts and quality of adoption decision. Second, these findings may not translate well beyond adoption scenarios. In
everyday operations, the risk of making the wrong decision is much lower and the desire to minimize search efforts is much
higher.
REFERENCES
833
INVESTIGATING THE ROLE OF TRUST IN MOBILE BANKING ACCEPTANCE

Rania Mostafa, Damanhour University, Egypt
ABSTRACT
This study employed Technology Acceptance Model (TAM) and Theory of Reasoned Action (TRA) to examine consumers
acceptance of mobile banking. By using structural equation modeling to investigate a sample of 264 postgraduate students in
Egypt, this study confirmed that intention to use mobile banking is based on technology and trust attitudes which are derived
by their counterpart beliefs. Contrary to expectation, attitude toward technology was found to exert higher contribution to
intention to use mobile banking than trust attitude. According to the results of this study, valuable implications were provided
for researchers and practitioners.
INTRODUCTION
The recent advance of information and communications technology over the past few decade and the emergence of third
generation (3G) mobile communication technologies has activated the rapid development of mobile banking (Yang et al. 2011;
Zhou 2011). In the United States, about 59 percent of the Americans adults use the wireless internet service (PewInternet 2010).
In Europe, online banking is increasingly growing, with the expectations that more than 40 percent of Europeans will adopt
online banking by 2012 (Meyer 2011). Despite the growing use of mobile services such as web navigation, internet download,
and instant messaging services, mobile banking services have been adopted by a minority of users (Zhou 2011). Many
traditional banks such as Barclays bank and HSBC bank with their branches worldwide have released their mobile banking
services. In order to achieve success in the mobile banking industry, a precondition is to facilitate user adoption and usage of
mobile banking technology and to build trust toward service provider and the new technology namely, mobile banking (Zhou
2011).
Mobile banking means that users use their mobile to conduct banking transactions such as balance checking, money transfer
and bill payment at their convenience (Dahlberg et al. 2008). Through mobile banking, users might gain advantages of time
saving, flexibility, update information gaining and so on (Yang et al. 2011). Therefore, mobile banking contributes to creating
time and place utilities by freeing users from location and temporal constraints, and enables them to access their bank accounts
and conduct banking transaction at anytime from anywhere (Zhou 2011).
However, similar to the online shopping, mobile commerce and online banking and due to the virtual nature and the lack of
control, mobile banking involves high degree of uncertainty and risk (Zhou 2011). Thus users need to develop trust in order to
adopt and use mobile banking. Initial trust arises when users adopt mobile banking for the first time (McKnight et al. 2002a).
Building users initial trust is pivotal for mobile service providers. On one hand, due to the lack of previous experience, users
will perceive high degree of uncertainty and risk when they use mobile banking for the first time. Moreover, similar to online
banking, mobile banking is built on mobile networks and may be more susceptible to hacker attack and information misuse.
Therefore, mobile service providers need to build initial trust among users to help them overcome their perceived risk.
On the other hand, the low switching cost made it easy for users to switch back to online banking or traditional banking if they
cannot build initial trust in mobile banking. Thus mobile bankers need to develop users initial trust to acquire and retain them.
In addition, exploring the use of mobile as a financial distribution and communication channel, it is essential to recognize that
a salient difference between using the mobile rather than traditional channels is the lack of social presence, i.e. the ability to
have a two-way direct communication (Gefen et al. 2003). Considering that this paper is focusing on mobile banking where
the social presence is minimum this could be a crucial barrier to overcome and which in turn sets trust building as a central
factor especially due to the virtual settings that lack personal interaction rather than face to face interaction (Gidhagen and
Persson 2011).
Despite the extant research conducted on online banking (e.g., Alsajjan and Dennis 2010; Salhieh et al. 2011) and mobile
commerce (e.g., Chandra et al. 2010; Lee 2005; Li and Yeh 2010; Siau and Shen 2003), only few research was conducted in
mobile banking (e.g., Zhou 2011). And although priori research documented the role of trust in mobile commerce (e.g., Lee
2005; Li and Yeh 2010; Siau and Shen 2003), the effect of initial trust on mobile banking user behavior has seldom been
examined (Zhou 2011).
834
Despite the recognition of the theory of reasoned action as the underlying theory for technology acceptance and trust, previous
research integrated the two theory differently and have omitted crucial variables from their proposed model and have
hypothesized different relationships among the variables under study, for more detail please see Benamati et al. (2010). In an
attempt to provide a clear view and understanding of the nomological relationships associated with the cognitive variables
(both beliefs and attitudes) that precede the use and acceptance of website, Benamati et al. (2010) argue for the re-inclusion of
belief and attitude constructs related to technology acceptance and trust research streams, and recommended that these
constructs should be clearly conceptualized and operationalized as they are critical for understanding relationships in such
models.
The purpose of this paper is twofold. Given that the intention of buying mobile banking is the most significant issue to the
success of mobile banking market (Yang et al. 2011), the purpose of this research is to identify factors that influence customers
intention to use mobile banking. Moreover, the intention of a consumer to accept new technology is complex and involves
many variables. As previous scholars mentioned, technology acceptance model (TAM) (Davis1989) is widely acknowledged
as a robust model in predicting and understanding the behavior of consumers toward adoption of technology because of its
parsimony and explanatory power (Calantone and Griffith 2006; Venkatesh et al. 2003). The purpose of this research is to
identify determinants of initial trust building in mobile banking. This purpose is achieved by developing and testing a
conceptual model that integrates technology based model -TAM- and trust which are deemed as complementing each other and
provides an opportunity to better understand consumers acceptance and use of mobile banking.
The paper is organized as follows. Theoretical background and hypotheses development are presented. Following this,
conceptual model is proposed and tested using survey data collected from postgraduate students in an Egyptian University.
Conclusion and managerial implication are discussed and future research directions are presented to suggest path for academic
investigations.
THEORETICAL FRAMEWORK AND HYPOTHESES DEVELOPMENT
Theory of reasoned action (TRA) (Ajzen and Fishbein 1980) explains how beliefs, attitudes, and behavioral intentions influence
an individuals actual behavior. TRA theorizes that the primary determinant of a persons actual behavior is his or her behavioral
intention to carry out that behavior. Behavioral intentions, in turn, are developed by the persons attitude toward the behavior.
Finally, attitudes are derived by the persons beliefs about the behavior.
The current research combined TAM and TRA models by including attitude constructs which were usually omitted from either
model. TAM studies frequently omitted technology attitude construct from their proposed model. In addition, trust attitude
which is found to be crucial in technology adoption was frequently omitted (Benamati et al. 2010).
Technology Beliefs, Technology Attitude, And Intention To Use
TAM (Davis 1989) is a widely used model in explaining technology adoption intention. According to TAM, the actual use of
technology is determined by the behavior intention. Behavior intention is formed as a result of the person attitude toward
technology where the later is a function of perceived ease of use (PEU) and perceived usefulness (PU) (Venkatesh and Davis
1996). PEU is defined as the extent to which the user expects the technology system to be effort free. PU is defined as the users
beliefs that the technology system will enable the user to improve his or her job performance (Davis 1989). Empirical research
(e.g., Davis 1989; Yang et al. 2011) provided evidence to the influence of PEU on PU. Where perceiving ease of use of the
technology results in perception of the usefulness of this technology in facilitating and improving performance.
Attitude has become a crucial variable in technology adoption research such as in e-commerce adoption (Benamati et al. 2010).
Previous research demonstrated the positive impact of attitude on purchase intention (Yang et al. 2011).
Trust Beliefs, Trust Attitude and Intention to Use
Trust beliefs include three dimensions: competence, integrity and benevolence (Benamati et al. 2010; Gidhagen and Persson
2011). Ability refers to the customer perception concerning the expertise, knowledge and skills of the technology provider.
Integrity refers to the customer perception regarding the credibility, dependability and reliability of the providing firm.
Benevolence refers to the customer perception about the extent to which the technology provider cares about the user interest
even beyond profit motives (Benamati et al. 2010; Gidhagen and Persson 2011).
Trust is usually conceptualized and operationalized inconsistently across research (Benamati et al. 2010). Some research
conceptualizes trust as beliefs (Bhattacherjee 2002), attitude (Mayer et al. 1995), or as behavioral intention (e.g., McKnight et
835
al. 2002b). Consistent with Benamati et al. (2010), the current research conceptualizes trust as an attitude and it refers to the
willingness of one party to rely on another one in situations that involves some degree of risks based on the positive expectations
towards the future behavior of that party (Mayer et al. 1995).
The current research argue that the mobile users will hold positive trust beliefs towards the mobile banking service provider, if
the mobile user perceives that the mobile service provider (1) has sufficient knowledge, skills and expertise to carry their tasks
effectively; (2) is dependable and reliable, in other words that the mobile banker do not violate promises, mislead or betray the
user; (3) cares about the mobile banking user interest not just their own interest. Trust beliefs will mitigate uncertainty risk
contributing to positive trust attitude. In accordance with TRA, if the mobile users perceive favorable utility from the mobile
banking, they will have positive attitude toward technology which in turn enhance purchase intention.
Based on the aforementioned discussion, the current research proposes a conceptual framework that suggests that intention to
use mobile banking is based on technology and trust attitudes and beliefs (Figure 1). Therefore, the current research proposes
the following hypotheses:
H1: Perceived ease of use of mobile banking is positively related to perceived usefulness of mobile banking
H2: Perceived ease of use of mobile banking is positively related to attitude toward mobile banking technology
H3: Perceived usefulness of mobile banking is positively related to attitude toward mobile banking technology
H4: Trusting beliefs are positively related to trust attitude
H5: Attitude toward mobile banking technology is positively related to intention to use mobile banking
H6: Trust attitude is positively related to intention to use mobile banking
METHOD
The data were collected using a survey administered to postgraduate students in an Egyptian university. Data analyzed using
LISREL 8.54 structural equation modeling (SEM) technique (Jreskog and Srbom, 1996).
DATA COLLECTION
Questionnaires were distributed to 296 postgraduate students in business courses in an Egyptian University and 291 were
received, yielding a response rate of 98%. Twenty seven questionnaires were unusable. The remaining sample size is 264 which
represent a usable response rate of 89%. This sample size meets the statistical sample requirement recommended by Hair et al.
(2010) of five to ten observations for each variable and mirror research in e-banking (e.g., Salhieh et al. 2011; Zhou 2011). The
respondents are 169 (64%) male and 95 (36%) female, with respondents age ranging from 18 (13.6%) and above 50 (.8%).
MEASURES
Although all the items were drawn from previous empirical studies, the scales were adapted to capture the context of this
research. The questionnaire was originally developed in English and then translated into Arabic using the back translation
method (McGorry 2000). An initial version of the questionnaire was reviewed by academics and doctoral students in the
marketing field in order to verify its appropriateness and comprehensiveness. Subsequently, the instrument was pretested by
administering it to 10 postgraduate students who are also financial services users for precision and clearness. In accordance
with the results, only some minor changes were suggested, the questionnaire was simplified and shortened.
ANALYSIS AND RESULTS
Following the two-step approach recommended by Anderson and Gerbing (1988), the measurement model was estimated to
measure the reliability and the validity of the scales. Then the structural model was examined to test the research hypotheses
and the goodness of fit of the research model. First, a confirmatory factor analysis (CFA) was conducted to examine the
reliability and validity of the model. The loading of each item on its underlying construct exceed the desirable 0.7 cut-off point
except for one factor loading on trust belief. Cronbach alphas were calculated and were acceptable for each construct, ranging
from .78 for trust belief to .91 for perceived usefulness. Composite reliability () and average variance extracted (AVE) for
each construct were also calculated and exceed the desired level of .70 and .50 respectively which demonstrate convergent
validity. The discriminant validity was also examined by comparing the AVE with the squared correlations between the
construct and all other variables. Results showed that the AVE for each construct is greater than the squared correlations
between the construct and all other variables which support discriminant validity (Fornell and Larcker, 1981). The final
836
measurement model fitted the data well (2 = 293.45, df = 155, p-value = .000; RMSEA = .058; NFI = .97; NNFI = .98; CFI =
.98; IFI = .98; GFI= .90; AGFI= .86). Therefore, the scale has sufficient construct reliability and validity. Table I shows the
standardized factor loading, , , AVE, and the overall model fit indices. Second, the structural model was estimated to test
the research hypotheses using LISREL 8.54 (Jreskog and Srbom, 1996). The structural model shown in Figure (I) yields a
2 of 339.62 (df = 163, p-value = .000). Since the 2 statistic has a drawback of yielding unreliable results when the sample size
and the model complexity increase other fit indicators (RMSEA, NFI, NNFI, CFI, and IFI, GFI; AGFI) were used to assess the
model fit (Hair et al. 2010). In addition, the R2 values for each structural equation are estimated to assess its explanatory power.
The resulting model fit for the structural model (RMSEA = .064; NFI = 0.96; NNFI = .98; CFI = .98; IFI = .98; GFI = .89;
AGFI= .85) indicated an acceptable model fit to the data. In addition, results provide supports to hypotheses H1, H2, H3, H4,
H5, H6 (see table 2).
DISCUSSION
All research hypotheses were supported which reflects that the mobile users will hold positive trust beliefs toward the mobile
banking service provider, if the mobile user perceives that the mobile service provider (1) has sufficient knowledge, skills and
expertise to carry their tasks effectively; (2) is dependable and reliable, in other words that the mobile banker do not violate
promises, mislead or betray the user; (3) cares about the mobile banking user interest not just their own interest. Trust beliefs
will mitigate uncertainty risk contributing to positive trust attitude. Furthermore, if the mobile users perceive favorable utility
from the mobile banking, they will have positive attitude toward technology which in turn enhance purchase intention.
The research examined the relative contribution of each of the attitude construct to the intention to use mobile banking. The
two attitudes together explain (61%) of the variation in intention to use. Contrary to previous research that found attitude toward
technology to be insignificant (e.g., Taylor and Todd 1995; Jackson et al. 1997) or got limited impact on usage intention than
did trust attitude (Benamati et al. 2010), the current study found that attitude toward technology exert higher contribution to
intention to use mobile banking than trust attitude. This finding could be due to the lack of direct mobile banking usage
experience in Egypt; users may fear the new technology and as a result place a significant load on their attitude toward the
mobile banking technology in determining their intention to adopt this new technology.
CONCLUSION
The emergence of Smartphone and banking applications contributed to the development of mobile banking. Recognizing that
there is a need for further research considering the influence of technology-related factors, such as the mobile banking, as well
as trust-related factors to explain the adoption and use of technology to solve specific problems, this paper combines technology
acceptance with trust. More specifically, the research employed the model proposed by Benamati et al. (2010) and suggests an
analytical framework for investigating antecedents of and intentions towards using mobile banking.
Trust is important in financial services especially within mobile banking where customers tend to perceive high degree of
uncertainty and risk with transitions. However, attitude toward technology was found to exert higher contribution to intention
to use mobile banking than trust attitude. Because Egyptian customers lack sufficient knowledge or information about mobile
banking technology, especially because mobile banking technology is in its early stages in Egypt. As a results, customer place
high load on the importance of security of this new technology.
THEORETICAL IMPLICATIONS
The current research contributes not only conceptually to empirical research in financial services, but it bridges a crucial
research gap. Extant research dropped attitude constructs from models based on TAM and TRA. In addition, numerous
researches dropped trust construct- which deemed crucial factor- from technology adoption models Therefore, the key
contribution of this model is combining TAM, TRA, and trust construct in a model for examining technology acceptance. The
proposed research was empirically tested in a relatively new technology setting, namely mobile banking environment.
The paper helps bankers to exploit the emerging opportunity of mobile banking especially with the fierce competition of
traditional banks which set pressures on bankers to find a profitable channel to expand. Therefore, traditional banks can now
move rather to brick and mortar model but also to wireless banking model which enables them to diversify their distribution
channel, cross sell their financial services, rich more customers, and better satisfy the current ones.
837
This research suggested that despite the importance of both technology attitude and trust attitude in enhancing usage intention
toward mobile banking, attitude toward mobile banking technology is more crucial in driving customer to use mobile banking.
Therefore, managers need not only focus on building trust attitude of the customers but managers need also to enhance
customers attitude toward the mobile banking applications and network. So banks should invest money in designing easy
mobile banking system and application that yield perceived usefulness which in turn enhance customers attitude toward the
mobile banking technology.
LIMITATION AND FUTURE RESEARCH
This research has some limitations. First, data were collected from postgraduate students in a single university. Future research
should replicate the study by collecting data from other universities or from other samples to demonstrate the generalizability
of findings. Second, this research did not measure the effect of the bank reputation on trust attitude. Therefore, future research
is recommended to incorporate the service provider reputation in the technology adoption model. Third, Mobile banking could
have an economic impact on banks by saving administrative cost. Future research should investigate the economic impact of
the use of mobile devices in providing financial services.
TABLES
Table 1: Measurement Model: The Standardized Factor Loading, , AVE,
Construct
Items
Standardized
factor loadings
Trusting beliefs (TB)
BEN
.66
INTEG
.76
COMPT .8
Trust attitude (TA)
TA1
TA 2
TA 3
TA 4
.79
.86
.86
.71
PU1
PU2
PU3
PU4
.81
.87
.89
.83
PEU1
PEU 3
PEU 4
.81
.9
.89
ATT1
ATT2
ATT3
.84
.91
.76
IU1
IU2
IU4
.89
.93
.8
Perceived Usefulness (PU)
Perceived Ease of Use (PEU)
Attitude toward Technology (TA)
Intention to use mobile banking (IU)
838
AVE
.79
.55
.78
.88
.65
.878
.91
.72
.90
.90
.76
.880
.87
.70
.755
.91
.78
.901
Table 2: Path Coefficients and Their Significance

Hypothesis
Path
H1
H2
Perceived ease of use Perceived usefulness

Perceived ease of use Attitude toward
technology
H3
Perceived usefulness Attitude toward
technology
H4
Trust beliefs Trust attitude
H5
Attitude toward technology Intentions to use
H6
Trust attitude Intentions to use
Note: *p < 0.05; **p < 0.01; ***p < 0.001
839
Coefficients ()
t-value
.50***
0.44***
7.30
6.81
Support or
not
Support
Support
0.49***
7.52
Support
1.22***
0.82***
0.20***
8.31
11.94
3.65
Support
Support
Support
FIGURES
Figure 1: Conceptual Model
Technology
Beliefs

Perceived
easeofuse
Perceived
usefulness
Attitude
toward
Technology
Intentionto
UseMobile
Banking
TrustingBeliefs
Benevolence
Integrity
Trust
Attitude
Competence
840
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More information about this series at http://www.springer.com/series/13409

Krzysztof Kubacki Editor

Ideas in Marketing: Finding

Monterey, CA, USA

Reprint from Original edition

ACADEMY OF MARKETING SCIENCE

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ACADEMY OF MARKETING SCIENCE

Technology and Marketing

Sales and Sales Management

Product and Brand Management

Marketing Ethics, Corporate

Marketing: European Issues

Children and Adolescent

Marketing and Social Media

Marketing and other Business

Supply Chain Management

Customer Service: The Good,

ACADEMY OF MARKETING SCIENCE

ACADEMY OF MARKETING SCIENCE

ACADEMY OF MARKETING SCIENCE

Jean Charles Chebat

ACADEMY OF MARKETING SCIENCE

Maryam Ali Ficociello

Maria Teresa Cuomo

ACADEMY OF MARKETING SCIENCE

Dirk Vom Lehn

Birgit Leisen Pollack

ACADEMY OF MARKETING SCIENCE

Frauke Mattison Thompson

Gene van Heerden

Lucea van Huyssteen

Marthinus van Loggerenberg

Johan van Rekom

ACADEMY OF MARKETING SCIENCE

Frederick Hong-Kit Yim

Yik Man Wong

ACADEMY OF MARKETING SCIENCE

Ju Yoon (Karen) Han

ACADEMY OF MARKETING SCIENCE

Hsiu-Yuan (Jody) Tsao

Juan Carlos-Sosa Varela

Sarah J.S. Wilner

Ekin Pehlivan Yalcin

Frederick Hong-Kit Yim

Anastasia Stathopoulou, Birkbeck College, University of London, UK

Typology of moderators of the customer satisfactionrepurchase intention

Birgit Leisen Pollack, University of Wisconsin Oshkosh, USA

Personality, satisfaction, and customer citizenship behaviors