Veranderende Datasets Binnen de Marketing: Puur Zegen of Ook een Bron van Frustratie?

Rede in verkorte vorm uitgesproken bij de openbare aanvaarding van het ambt van hoogleraar Bedrijfskunde, in het bijzonder Marketing Models aan de Faculteit Bedrijfskunde van de Erasmus Universiteit Rotterdam op 7 maart 200

How To Seize a Window of Opportunity: The Entry Strategy of Retail Firms into Transition Economies

In most western countries, grocery retailers are faced with maturing domestic markets with a year-to-year sales growth close to zero. Moreover, most Western-European markets are characterized by a high concentration rate, with a combined market share of the top five players easily exceeding 70%. One important outcome of this evolution has been a growing interest in cross-border initiatives. However, even though the industry gained importance, retailers are still struggling to develop the competencies to compete and survive in this new, more global, arena. In this paper, we study entry investments into Central and Eastern-European transition economies to unveil when, to what extent, and to which retailer the strategic window in these different markets opens. We develop and empirically test a set of hypotheses on factors that affect (1) the speed (timing) and (2) size of retailers’ decisions to enter Central and Eastern European markets. A conceptual framework is proposed which looks at strategic decisions through the option lens. This perspective offers an economic rationale for the behavioral process of major resource allocations. The resulting hypotheses are tested, using a joint hazard/poisson-regression framework, on a data set covering all entry decisions of the top 75 European grocery retailers towards Central and Eastern Europe. We find that in these transition economies important legitimization effects can be derived from rivals’ actions. Especially the moves, made and anticipated, by home rivals are carefully monitored. This reflects the idea that retailers are motivated not only by the chance of creating value in these new markets, but also by the fear of being left out

Channel Power in Multi-Channel Environments

In the literature, little attention has been paid to instances where companies add an Internet channel to their direct channel portfolio. However, actively managing multiple sales channels requires knowing the customers’ channel preferences and the resulting channel power. Two key components of channel power are (i) the existing customers’ intrinsic loyalty to a channel, and (ii) the channel’s ability to attract new customers. We apply the Colombo and Morrison (1989) model to analyze the channel loyalty and conquesting power of two direct channels operated by a given firm. In addition, we analyze the evolution over time in each channel’s power, and test for differences in channel power among different product categories offered by the firm, and among different customer segments

Persistence Modeling for Assessing Marketing Strategy Performance

The question of long-run market response lies at the heart of any marketing strategy that tries to create a sustainable competitive advantage for the firm or brand. A key challenge, however, is that only short-run results of marketing actions are readily observable. Persistence modeling addresses the problem of long-run market-response quantification by combining into one measure of “net long-run impact” the chain reaction of consumer response, firm feedback and competitor response that emerges following the initial marketing action. In this paper, we (i) summarize recent marketing-strategic insights that have been accumulated through various persistence modeling applications, (ii) provide an introduction to some of the most frequently used persistence modeling techniques, and (iii) identify some other strategic research questions where persistence modeling may prove to be particularly valuable

Intra- and Inter-Channel Competition in Local-Service Sectors

Although economically very important, local-service sectors have received little attention in the extensive literature on competitive interactions. Detailed data gathering in these sectors is hard, not only because of the multitude of local players, but also because key service dimensions are hard to quantify. Using empirical entry models, we show how to infer information on these sectors’ degree of intra- and inter-channel competition from the observed entry decisions in different local markets. The approach also controls for relevant socio-demographic characteristics of the trading area that may affect performance. We apply the proposed empirical entry model to the video-rental market. Additional entries of video stores are found to significantly increase the level of intra-channel competition. Unlike the predictions of many normative economic models, we find this increase to be larger when the entry occurs in a duopoly than in a monopoly, a pattern consistent with recent experimental research on collusive behavior in oligopolies. We also find evidence of inter-channel cannibalization from the upstream channel (movie theatres), but not from the downstream channel (premium cable). Finally, various socio-demographic characteristics of the trading zone, such as income and household size, are found to also have a significant impact on store performance

The European Consumer: United In Diversity?

The ongoing unification which takes place on the European political scene, along with recent advances in consumer mobility and communication technology, raises the question whether the European Union can be treated as a single market to fully exploit the potential synergy effects from pan-European marketing strategies. Previous research, which mostly used domain-specific segmentation bases, has resulted in mixed conclusions. In this paper, a more general segmentation base is adopted, as we consider the homogeneity in the European countries’ Consumer Confidence Indicators. Moreover, rather than analyzing more traditional static similarity measures, we adopt the concepts of dynamic correlation and cohesion between countries. The short-run fluctuations in consumer confidence are found to be largely country specific. However, a myopic focus on these fluctuations may inspire management to adopt multicountry strategies, foregoing the potential longer-run benefits from more standardized marketing strategies. Indeed, the Consumer Confidence Indicators become much more homogeneous as the planning horizon is extended. However, this homogeneity is found to remain inversely related to the cultural, economic and geographic distances among the various Member States. Hence, pan-regional rather pan-European strategies are called for

Decomposing Granger Causality over the Spectrum

We develop a bivariate spectral Granger-causality test that can be applied at each individual frequency of the spectrum. The spectral approach to Granger causality has the distinct advantage that it allows to disentangle (potentially) di®erent Granger- causality relationships over di®erent time horizons. We illustrate the usefulness of the proposed approach in the context of the predictive value of European production expectation surveys

Managing Product-Harm Crises

Product-harm crises are among a firm’s worst nightmares. Since marketing investments may be instrumental to convince consumers to purchase the firm's products again, it is important to provide an adequate measurement of the effectiveness of these investments, especially after the crisis. We provide a methodology through which firms can assess the impact of product crises in a quantitative way. Based on the model estimates, firms can estimate the required level of investment to recoup from the crisis. A key finding of this paper is that it is not only important to assess the extent to which business is lost as a result of the crisis, but also to find the new, postcrisis response parameters to marketing activities. The study of an Australian product-harm crisis for peanut butter reveals that a product crisis may represent a quadruple jeopardy for a firm: (i) loss of baseline sales, (ii) a reduced own effectiveness for its marketing instruments, (iii) increased vulnerability, and (iv) decreased clout. We arrive at this conclusion by using a time-varying error-correction model that allows for (i) shortand long-term marketing mix effects, (ii) intercepts and response parameters that change over time as a result of the crisis, and (iii) missing observations, which result from the absence of the impacted brands during the product-recall period. The time-varying error-correction model is applicable to other marketing-research areas in which these three requirements (or any subset thereof) apply

On The Predictive Content Of Production Surveys: A Pan-European Study

For over forty years, Business Tendency Surveys have been collected in multiple member states of the European Union. Previous research has studied the predictive accuracy of the expectation variables included in those surveys through bivariate, within-country, Granger-causality tests, which has resulted in mixed conclusions. We extend previous research in various ways, as we (i) explicitly allow for cross-country influences, and (ii) do so using both bivariate and multivariate Granger-causality tests. Specifically, the multivariate El-Himdi and Roy test is adapted to jointly test the forecasting value of multiple production expectation series, to assess whether part of this joint effect is indeed due to cross-country influences, and to determine which countries' expectation series have most "clout" in predicting the production levels in the other member countries, or have higher "receptivity", in that their production levels are Granger-caused by the other countries' expectations

Marketing Models and the Lucas Critique

The Lucas critique has been largely ignored in the marketing literature. We present a number of conditions under which the critique is most likely to (also) apply in marketing settings. Next, we provide some perspectives on how to diagnose and accommodate the Lucas critique, and identify various avenues for future research