Conspicuous Consumption on the Long Tail: How can Luxury Brands Benefit from Counterfeits?

We study how luxury brands can use product line expansion as a strategy when facing a threat from the counterfeit market. Consumers who are status-conscious consider the benefits and costs of buying luxury items in order to strengthen the beliefs of others about their status. Our findings suggest that product line expansion strategy serves these high-end consumers and their motives to strengthen their status image. In a market with counterfeiters, consumers have an incentive to buy additional products in order to reduce the uncertainty of their status signals. Increasing consumption makes it harder for others to imitate status when authentic brands signal quality and status with higher precision compared to counterfeits. Since each luxury item purchased contributes to one\u27s status in a marginally declining fashion, it is rational for a luxury brand to expand its product line such that it maintains its core product and introduces peripheral products with lower status signalling benefits and prices. We further show that an increasing counterfeit market share can increase status-conscious consumers\u27 willingness to pay for luxury goods. As a result, presence of counterfeiters can increase the profit of a luxury brand

The impact of price display on perceptions of luxury: a masstige perspective

Based on two experimental studies in which college students participated, this paper investigates the impact of price display in the luxury sector on low-end brands perceived luxury and attitude. In Study 1, we show that price display is associated with higher perceived quality, uniqueness, and conspicuousness for a fictitious low-end brand. In Study 2, we confirm this positive influence for a real low-end brand, and show that it transfers to brand attitude through perceived quality and conspicuousness. In addition, Study 2 indicates no negative effect of price display on perceptions of luxury for a higher level brand. In a pioneering attempt to evaluate the effects of price display in the luxury sector, this paper adds value to the body of literature on luxury brand management. Besides, it provides insight to managers of luxury brands of different range levels on the effects of price display, a practice that develops as more and more luxury companies engage in masstige strategies or open commercial websites

CORPORATE SOCIAL RESPONSIBILITY IN ROMANIA

The purpose of this paper is to identify the main opportunities and limitations of corporate social responsibility (CSR). The survey was defined with the aim to involve the highest possible number of relevant CSR topics and give the issue a more wholesome perspective. It provides a basis for further comprehension and deeper analyses of specific CSR areas. The conditions determining the success of CSR in Romania have been defined in the paper on the basis of the previously cumulative knowledge as well as the results of various researches. This paper provides knowledge which may be useful in the programs promoting CSR.Corporate social responsibility, Supportive policies, Romania

Three Essays on the Role of Unstructured Data in Marketing Research

This thesis studies the use of firm and user-generated unstructured data (e.g., text and videos) for improving market research combining advances in text, audio and video processing with traditional economic modeling. The first chapter is joint work with K. Sudhir and Minkyung Kim. It addresses two significant challenges in using online text reviews to obtain fine-grained attribute level sentiment ratings. First, we develop a deep learning convolutional-LSTM hybrid model to account for language structure, in contrast to methods that rely on word frequency. The convolutional layer accounts for the spatial structure (adjacent word groups or phrases) and LSTM accounts for the sequential structure of language (sentiment distributed and modified across non-adjacent phrases). Second, we address the problem of missing attributes in text in constructing attribute sentiment scores---as reviewers write only about a subset of attributes and remain silent on others. We develop a model-based imputation strategy using a structural model of heterogeneous rating behavior. Using Yelp restaurant review data, we show superior accuracy in converting text to numerical attribute sentiment scores with our model. The structural model finds three reviewer segments with different motivations: status seeking, altruism/want voice, and need to vent/praise. Interestingly, our results show that reviewers write to inform and vent/praise, but not based on attribute importance. Our heterogeneous model-based imputation performs better than other common imputations; and importantly leads to managerially significant corrections in restaurant attribute ratings. The second essay, which is joint work with Aniko Oery and Joyee Deb is an information-theoretic model to study what causes selection in valence in user-generated reviews. The propensity of consumers to engage in word-of-mouth (WOM) differs after good versus bad experiences, which can result in positive or negative selection of user-generated reviews. We show how the strength of brand image (dispersion of consumer beliefs about quality) and the informativeness of good and bad experiences impacts selection of WOM in equilibrium. WOM is costly: Early adopters talk only if they can affect the receiver’s purchase. If the brand image is strong (consumer beliefs are homogeneous), only negative WOM can arise. With a weak brand image or heterogeneous beliefs, positive WOM can occur if positive experiences are sufficiently informative. Using data from Yelp.com, we show how strong brands (chain restaurants) systematically receive lower evaluations controlling for several restaurant and reviewer characteristics. The third essay which is joint work with K.Sudhir and Khai Chiong studies success factors of persuasive sales pitches from a multi-modal video dataset of buyer-seller interactions. A successful sales pitch is an outcome of both the content of the message as well as style of delivery. Moreover, unlike one-way interactions like speeches, sales pitches are a two-way process and hence interactivity as well as matching the wavelength of the buyer are also critical to the success of the pitch. We extract four groups of features: content-related, style-related, interactivity and similarity in order to build a predictive model of sales pitch effectiveness

The impact of luxury values and luxury marketing factors on generation y's behavioural intentions

The present dissertation is based on a research about luxury values, human behaviour, marketing strategies and buying intentions in the luxury market. Moreover, it focuses on the generation Y, individuals born between 1977 and 1995, because they are already an important segment in today’s market, and are becoming even more important due to their large size, their current significant amount of spending power and their potential for huge amounts of future spending power. This dissertation establishes a connection between the Theory of Planned Behaviour (TPB) of Ajzen (1991), which states that human behaviour is affected by behavioural intention, which, in turn, is affected by attitude, subjective norms, and perceived behavioural control; and the luxury value framework of Wiedmann et. al. (2009), which states that what really adds luxury value in the consumer’s perception is defined through the existence of four latent dimensions: financial, functional, individual, and social. Additionally, the dissertation in hand studies the importance of luxury marketing strategies and its relationship to behavioural intentions. Results revealed that the overall luxury values had a positive relation with the TPB constructs, however, not all the constructs had a positive relation with consumer purchasing intentions. Moreover, the marketing factors showed a positive relation with intentions, however some of them were quite low. The overall findings that derived from analysis resulted in some very interesting facts, which have been explained and summarized in the conclusion. Managerial implications relating to these facts were also discussed in the end.A tese em questão trata-se de uma investigação sobre os valores do luxo, o comportamento humano, estratégias de marketing e as intenções de compra no mercado de luxo. Foca-se ainda na geração Y, indivíduos nascidos entre 1977 e 1995, porque estes são já um importante segmento no mercado, e tornam-se cada vez mais importantes devido á sua grande dimensão, ao seu presente poder de compra e futuro potencial poder de compra. Esta dissertação faz a conexão entre a Teoria do Comportamento Planeado de Ajzen (1991), que diz que o comportamento humano é afectado pela intenção comportamental, que por sua vez é afectada por atitudes, normas subjectivas e controlo comportamental; e a framework dos valores de luxo apresentada por Wiedmann et. al. (2009), que diz que o que realmente acrescenta valor nas percepções dos consumidores é definido por quatro dimensões: financeira, funcional, individual e social. Além disto, a presente dissertação estuda a importância de estratégias de marketing de luxo e a sua relação com as intenções de compra. Os resultados mostram que os valores de luxo têm uma relação positiva com os constructos da teoria do comportamento planeado, mas nem todos apresentam uma relação positiva com as intenções de compra por parte dos consumidores. Os factores de marketing revelaram ainda uma relação positiva com as intenções, apesar de algumas destas relações serem baixas. As conclusões gerais desta análise apresentaram factos bastante interessantes que foram explicados e sumarizados nas conclusões, sendo discutidas também as implicações para a gestão dos mesmos

Consumer-based brand equity: Do brand relationships matter?

This paper explores the concept of consumer based brand equity and its relevance in today’s environment. In doing so, we extend the previously used dimensions of brand awareness, image, perceived quality, and loyalty to include the dimension of brand relationship. By conducting an empirical study with brand users in Slovenia, we confirm that brand relationships play a role in brand equity studies and should be considered in further research. Consequently, we argue that brand equity should be theoretically treated as a dynamic concept, where the static evaluation of the consumer’s role is extended to include dynamic co-creation. A practical implication of our findings is that brand managers need to take a more proactive role in forming brand equity and its evaluation

The Shift from Conspicuous to Inconspicuous Consumption and the Messages Hidden in Plain Sight

With the growing fragmentation of the luxury consumer market, the increasing mix of conspicuous and inconspicuous products offered by luxury brands, and the overlapping motivations for (in)conspicuous consumption behavior in the marketing literature, this research investigates under which circumstances a luxury consumer will choose to engage in either conspicuous or inconspicuous consumption. Three cross-sectional studies with experimental designs are conducted to test the proposed Triple C Model of (In)Conspicuous Consumption and determine if the proposed model can be used to predict, and ultimately change, consumption behavior among certain luxury consumers. The proposed model purports that construal level, sender cultural capital (e.g., the knowledge to know the difference between seemingly plain and inconspicuously branded luxury products), and the sender’s perception of their audience’s cultural capital are the underlying mechanisms that influence the choice to engage in either conspicuous or inconspicuous consumption. Results reveal that the level in which luxury consumers construe luxury products was inversely related to the amount of cultural capital they maintain for luxury products. Lower (more concrete) construal level luxury consumers had more cultural capital than higher (more abstract) luxury consumers. Results also revealed the effect of cultural capital on whether to engage in either conspicuous or inconspicuous consumption was moderated by the sender’s perception of their audience’s cultural capital. Higher cultural capital luxury consumers were more likely to engage in inconspicuous consumption when they perceived their audience also to have a higher amount of cultural capital, but were more likely to engage in conspicuous consumption when they perceived their audience to have a lower amount of cultural capital. This effect was attenuated among lower cultural capital luxury consumers, as they were more likely to engage in conspicuous consumption regardless of their perceptions of their audience. Finally, this research used the Triple C Model of (In)Conspicuous Consumption to target initially higher (more abstract) construal level luxury consumers who had lower cultural capital to change their consumption behavior to engage in inconspicuous consumption over conspicuous consumption under certain circumstances

Essays in industrial organization and management strategy

Abstract: This thesis contains five essays in the theory of industrial organization and management strategy. An introduction makes the main ideas accessible to non-specialists by presenting the essays as fictitious cases. The first essay investigates strategic disclosure of verifiable information. The disclosed information concerns a hidden action, and the transmission of information takes place in a noisy environment. The second essay explores how search costs and informational asymmetries influence the possibilities for entry in markets for search goods. The model that is used analyzes signaling with common information. The third essay presents a principal-agent model in which the agent enjoys working. The principal, instead of designing a pecuniary incentive scheme, can appeal to the agent's private benefits by giving him a say in the job the agent has to do. The fourth essay applies this idea in order to study the strategic impact of organizational structure. Possible linkages between internal organization and market strategy are highlighted. The last essay focuses on the prices selected by a monopolist who sells a durable good and repairs it in the case of breakdown. The monopolist can circumvent inefficiencies by inviting a competitor in the repair market or by leasing the good instead of selling it.