Effects of Portfolio Planning Methods on Decision Making: Experimental Results*

Subjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects' likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment.decision making, marketing, portfolio planning methods

Hypotheses in Marketing Science: Literature Review and Publication Audit

We examined three approaches to research in marketing: exploratory hypotheses, dominant hypothesis, and competing hypotheses. Our review of empirical studies on scientific methodology suggests that the use of a single dominant hypothesis lacks objectivity relative to the use of exploratory and competing hypotheses approaches. We then conducted a publication audit of over 1,700 empirical papers in six leading marketing journals during 1984-1999. Of these, 74% used the dominant hypothesis approach, while 13 % used multiple competing hypotheses, and 13% were exploratory. Competing hypotheses were more commonly used for studying methods (25%) than models (17%) and phenomena (7%). Changes in the approach to hypotheses since 1984 have been modest; there was a slight decrease in the percentage of competing hypotheses to 11%, which is plained primarily by an increasing proportion of papers on phenomena. Of the studies based on hypothesis testing, only 11 % described the conditions under which the hypotheses would apply, and dominant hypotheses were below competing hypotheses in this regard. Marketing scientists differed substantially in their opinions about what types of studies should be published and what was published. On average, they did not think dominant hypotheses should be used as often as they were, and they underestimated their use

Portfolio Planning Methods: Faulty Approach or Faulty Research? A Rejoinder to 'Making Better Decisions' by Wensley

Wensley (1994) makes three key points. First, it is worthwhile to conduct empirical studies of the value of management techniques. Second, managers probably misuse portfolio methods. Third, the Armstrong and Brodie study is flawed. We agree with all three points.marketing, portfolio planning methods

Turning marketing promises into business value: The experience of an industrial SME

The article studies the value that businesses should have for their customers and shareholders. It explains how to develop such value to meet or exceed customer's expectations through the application of the promise framework. The promise model includes promises made to customers, promises kept, and promises that involve a synchronized effort from the whole firm to create and deliver value to customers

Hypotheses in Marketing Science: Literature Review and Publication Audit

We examined three approaches to research in marketing: exploratory hypotheses, dominant hypothesis, and competing hypotheses. Our review of empirical studies on scientific methodology suggests that the use of a single dominant hypothesis lacks objectivity relative to the use of exploratory and competing hypotheses approaches. We then conducted a publication audit of over 1,700 empirical papers in six leading marketing journals during 1984-1999. Of these, 74% used the dominant hypothesis approach, while 13 % used multiple competing hypotheses, and 13% were exploratory. Competing hypotheses were more commonly used for studying methods (25%) than models (17%) and phenomena (7%). Changes in the approach to hypotheses since 1984 have been modest; there was a slight decrease in the percentage of competing hypotheses to 11%, which is explained primarily by an increasing proportion of papers on phenomena. Of the studies based on hypothesis testing, only 11 % described the conditions under which the hypotheses would apply, and dominant hypotheses were below competing hypotheses in this regard. Marketing scientists differed substantially in their opinions about what types of studies should be published and what was published. On average, they did not think dominant hypotheses should be used as often as they were, and they underestimated their use.marketing, marketing research, marketing science

Theorizing with managers: how to achieve both academic rigor and practical relevance?

Purpose. There are heightened concerns that the theory-praxis gap is widening, despite decades of academic literature addressing the issue. We propose that one viable solution to this challenge is involving practitioners in research processes as active, reflective and empowered participants. Most extant discussions addressing the inclusion of managers as partners in theorizing restrain themselves to an ‘if’ question, arguing whether or not it is possible to create sufficiently rigorous knowledge in collaboration with practitioners. This leaves the ‘how’ question unanswered, i.e., how should such gap-bridging research be conducted in practice. Thus, the aim of this paper is to investigate how academic researchers in management and marketing can theorize with managers in order to generate results that are both academically rigorous and managerially relevant. Design/methodology/approach. Based on a literature review of collaborative theorizing processes, we develop a conceptual framework highlighting the main research design decisions when theorizing with managers. The use of the framework is illustrated with four research program examples. Findings. Most accounts of theorizing with managers use – explicitly or implicitly – abduction as the main mode of inference. In addition to this philosophical commonality, our literature review identified twelve themes that should be considered when designing collaborative research processes. The four illustrative examples indicate that theorizing with managers is an effective way of producing and socializing both academically sound and managerially relevant knowledge. On the other hand, collaborative theorizing processes are time-consuming and studies using abductive reasoning may be more challenging to publish in top-tier journals. Originality/value. This paper makes two contributions. First, we go beyond the extensive academic literature which provides a plethora of explanations and ideas for potential remedies for bridging the theory-praxis gap by offering a detailed description how one particular solution, theorizing with managers, unfolds in practice. Second, we ground collaborative theorizing processes in the philosophy of science and put abduction forward as a common nominator for such studies

Portfolio Planning Methods: Faulty Approach or Faulty Research? A Rejoinder to Making Better Decisions by Wensley

Wensley (1994) makes three key points. First, it is worthwhile to conduct empirical studies of the value of management techniques. Second, managers probably misuse portfolio methods. Third, the Armstrong and Brodie study is flawed. We agree with all three points

Forecasting for Marketing

Research on forecasting is extensive and includes many studies that have tested alternative methods in order to determine which ones are most effective. We review this evidence in order to provide guidelines for forecasting for marketing. The coverage includes intentions, Delphi, role playing, conjoint analysis, judgmental bootstrapping, analogies, extrapolation, rule-based forecasting, expert systems, and econometric methods. We discuss research about which methods are most appropriate to forecast market size, actions of decision makers, market share, sales, and financial outcomes. In general, there is a need for statistical methods that incorporate the manager\u27s domain knowledge. This includes rule-based forecasting, expert systems, and econometric methods. We describe how to choose a forecasting method and provide guidelines for the effective use of forecasts including such procedures as scenarios

Effects of portfolio planning methods on decision making: experimental results

Subjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects\u27 likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment

New directions for service research: refreshing the process of theorizing to increase contribution

Purpose – For service research to develop as an applied social science there is the need to refresh the process of theorizing so it focuses not only on increasing new academic knowledge but also on knowledge that is managerially relevant. Guidelines are provided to achieve this.Design/methodology/approach – A theorizing process that integrates general theoretic perspectives and contextual research to develop midrange theory is developed. The process is based on the philosophical foundations of pragmatism and abductive reasoning, which has their origins in the 1950s when the management sciences were being established.Findings –A recent research stream that develops midrange theory about customer and actor engagement is used to illustrate the theorizing process.Practical Implications – Practicing managers, customers and other stakeholders in a service system use theory, so there is a need to focus on how theory is used in specific service contexts and how this research leads to academic knowledge that is managerially relevant. Thus, as applied social science, service research needs to explicitly focus on bridging the theory-praxis gap with midrange theory byincorporating a general theoretic perspective and contextual research.Originality/value - The contribution comes from providing a broader framework to guide the theorizing process that integrates general theoretic perspectives and applied research to develop midrange theory. While general theories operate at the most abstract level of conceptualization midrange theories are context-specific, and applied theory (theories-in-use) embedded in empirical researc