Why do firms invest in consumer advertising with limited sales response? A shareholder perspective

Marketing managers increasingly recognize the need to measure and communicate the impact of their actions on shareholder returns. This study focuses on the shareholder value effects of pharmaceutical direct-to-consumer advertising (DTCA) and direct-to-physician (DTP) marketing efforts. Although DTCA has moderate effects on brand sales and market share, companies invest vast amounts of money in it. Relying on Kalman filtering, the authors develop a methodology to assess the effects from DTCA and DTP on three components of shareholder value: stock return, systematic risk, and idiosyncratic risk. Investors value DTCA positively because it leads to higher stock returns and lower systematic risk. Furthermore, DTCA increases idiosyncratic risk, which does not affect investors who maintain well-diversified portfolios. In contrast, DTP marketing has modest positive effects on stock returns and idiosyncratic risk. The outcomes indicate that evaluations of marketing expenditures should include a consideration of the effects of marketing on multiple stakeholders, not just the sales effects on consumers

Big data and data science methods for management research: From the Editors

The recent advent of remote sensing, mobile technologies, novel transaction systems, and high performance computing offers opportunities to understand trends, behaviors, and actions in a manner that has not been previously possible. Researchers can thus leverage “big data” that are generated from a plurality of sources including mobile transactions, wearable technologies, social media, ambient networks, and business transactions. With the promise of big data come questions about the analytical value and thus relevance of these data for theory development—including concerns over the context-specific relevance, its reliability and its validity. In this editorial, we address both the collection and handling of big data and the analytical tools provided by data science for management scholars. This primer can guide management scholars who wish to use data science techniques to reach better answers to existing questions or explore completely new research questions

The Impact of Brand Quality on Shareholder Wealth

This study examines the impact of brand quality on three components of shareholder wealth: stock returns, systematic risk, and idiosyncratic risk. The study finds that brand quality enhances shareholder wealth insofar as unanticipated changes in brand quality are positively associated with stock returns and negatively related to changes in idiosyncratic risk. However, unanticipated changes in brand quality can also erode shareholder wealth because they have a positive association with changes in systematic risk. The study introduces a contingency theory view to the marketing-finance interface by analyzing the moderating role of two factors that are widely followed by investors. The results show an unanticipated increase (decrease) in current-period earnings enhances (depletes) the positive impact of unanticipated changes in brand quality on stock returns and mitigates (enhances) their deleterious effects on changes in systematic risk. Similarly, brand quality is more valuable for firms facing increasing competition (i.e., unanticipated decreases in industry concentration). The results are robust to endogeneity concerns and across alternative models. The authors conclude by discussing the nuanced implications of their findings for shareholder wealth, reporting brand quality to investors, and its use in employee evaluation

State Property jewellery: Going for gold with a Search Engine Optimisation (SEO) strategy

SMU Faculty/Staff can download the case and teaching note with your SMU login ID and Password via the following links: The Case (SMU-23-0023) Teaching Note (SMU-23-0023TN) For purchase of the case and supplementary materials via The CMP Shop, please access the following link: The Case (SMU-23-0023) For purchase of the case and supplementary materials via The Case Centre, please access the following links: The Case (SMU-23-0023) Teaching Note (SMU-23-0023TN) For purchase of the case and supplementary materials via Harvard Business Publishing, please access the following links: The Case (SMU-23-0023) Teaching Note (SMU-23-0023TN) </ul

Iuiga’s challenge: Is omni-channel worth it?

SMU Faculty/Staff can download the case and teaching note with your SMU login ID and Password via the following links: The Case (SMU-20-0029) Teaching Note (SMU-20-0029TN) Supplement (SMU-20-0029S) Teaching Note Supplement (SMU-20-0029TNS) For purchase of the case and supplementary materials via The CMP Shop, please access the following link: The Case (SMU-20-0029) For purchase of the case and supplementary materials via The Case Centre, please access the following link: The Case (SMU-20-0029) Teaching Note (SMU-20-0029TN) Supplement (SMU-20-0029S) Teaching Note Supplement (SMU-20-0029TNS) For purchase of the case and supplementary materials via Harvard Business Publishing, please access the following links: The Case (SMU-20-0029) </ul

What Happens Online Stays Online? Segment-Specific Online and Offline Effects of Banner Advertisements

Many firms are allocating increasing parts of their advertising budgets to banner advertising. Yet, for firms that predominantly sell offline, existing research provides little guidance on online advertising decisions. In this study, the authors analyze the impact of banner advertising on consumers' online and offline behavior across multiple distinct campaigns for one focal firm, which predominantly sells through the offline channel. Results suggest that banner and TV advertising increase website visit incidence for consumers who have not visited the focal firm's website in the previous four weeks (nonrecent online consumers). For these consumers, banner and TV advertisements indirectly increase offline sales through website visits. For consumers who have visited the firm's website in the previous four weeks (recent online consumers), the authors find evidence for a cross-campaign, brand-building effect of banner advertising, and TV ads also directly affect offline purchases. Overall, the findings indicate that for firms that predominantly (or even exclusively) sell offline, banner advertising is most suitable to generate awareness for a firm's new products among nonrecent online consumers, and to build their brand(s) among recent online consumers