The Effectiveness of E-tailers’ Communication Practices in Stimulating Sales of Slow-Selling versus Best-Selling Products

Based on 60,000 books (approx. 2m purchase decisions) from Amazon.de, we analyze the interplay of four e-tailers\u27 communication practices – presenting product networks (recommendation systems), social features (eWOM, i.e. user-generated content), free trial, and vivid content – and demonstrate how they vary in effectiveness for influencing consumers’ purchase decisions online. Additionally, little is known about effects of these practices on driving sales across the sales distribution from bestsellers to niche products. Long tail theory predicts that consumers will become particularly attracted to buying niche products as those match personal preferences better than mainstream products. However, our large-sample results are partly counter to the theoretical predictions and previous studies in the field (as both bestsellers and niche products gain sales at the expense of medium popular products). We offer a clearer understanding of the varying functionality of online communication practices that helps retail managers select, combine and focus their communication practices

Effects of E-Retailer Provided Information and Social Influence on Purchase Decisions

We investigate drivers of consumer purchase decisions when shopping experience goods online, using the context of expertise literature in business topics. Based on 60,000 books from Amazon.de, we test hypotheses on the effects of (1) “brand” characteristics (author’s background, reputation, experience, demographics), (2) product characteristics (publisher, price, page count, reading excerpts, cover), and (3) social influence in terms of observational learning (OL), word-of-mouth (WOM), and expert opinions, on sales. The results demonstrate that online demand depends on a mix of these factors; yet, sales are largely determined by brand characteristics. In fact, the market’s perception of the author alters consumers’ price sensitivity and renders observable product characteristics insignificant; social influence amplifies this effect. These issues are underexplored since studies often focus on WOM effects without considering brand and product characteristics, and the relative effects of social influence, on purchase decisions. The paper shows how to target online demand more effectively

The influence of network design on firm performance:perspectives and empirical evidence

Von den Entwicklungen, die das Wirtschaftsleben in den letzten Jahren wegweisend geprägt haben, erreichen wenige eine solche Bedeutung wie das Phänomen der „Netzwerke“. Die Ubiquität von Netzwerken auf branchen-, unternehmensbezogenen, wie individuellen Ebenen bedingt zunehmend eine Umgestaltung globaler wirtschaftlicher Gefüge. Ausgehend von der These, dass ökonomische Erklärungsansätze für unternehmerischen Erfolg soziale Interaktion nur unzureichend berücksichtigen, bietet diese Dissertation interdisziplinäre Analysen der Voraussetzungen, des Auftretens und der Evolution von reziproker Kommunikation, Kooperation und Lernen in Beziehungen ökonomischer Akteure. Anhand aktueller empirischer Methodik werden Effekte der vorgenannten Prozesse auf Unternehmensstrategien und -erfolge untersucht. Ergebnisse beinhalten normative Implikationen für das Design von Netzwerkstruktur und Mitgliederselektion seitens des Netzwerkmanagements, wie für die Organisation individueller Netzwerkaktivitäten. Of all the phenomena that have gripped the business world in recent years, few match the impact of networks. The ubiquity of networking at the industry, firm, group, and individual levels is reshaping the global business architecture. Building on the premise that economic explanations for entrepreneurial success are incomplete and undersocialized, the five chapters in this dissertation provide an interdisciplinary analysis of the antecedents, prevalence, and evolution of reciprocal communication, cooperation, and learning in relationships among economic actors. Based on theoretical reasoning and recent empirical methodology, each chapter examines different effects of these processes on firm strategy and performance. The findings bear normative implications for the design of network structure and member selection at the management level, as well as for the organisation of individual networking endeavours

Effects of Consumer Learning and Channel Choice in Loyalty Programs

Based on a large-scale, unique longitudinal dataset comprising more than four million individual transactions, we study linkages between consumer learning, channel choice, and purchase behavior. We focus on online versus traditional over the counter channels. First, we investigate how the occurrence of consumer ‘learning’ is related to ‘unlearning’ in loyalty programs, and how (un)learning depends on the chosen channel. Second, we study how (un)learning effects, along with other contingent factors, impact customer loyalty, and explore whether the strength and/or significance of effects change over time. Hypotheses are tested in the context of two-part pricing schemes in travel services that are particularly intended to create loyalty, and offer a rare opportunity for an objective assessment of learning effects. Results show that (un)learning, as well as channel choice, and pricing issues, are significantly associated with contract cancelation. We provide managerial implications that help firms re-develop, communicate and fine-tune loyalty programs more effectively

Do Online Customers Make Better Purchases? – An Analysis of Point of Sale Choice, Purchase Decision Quality and the Effectiveness of Customer Loyalty Programs

Based on a large-scale, unique longitudinal dataset comprising more than 4m transactions, I first investigate drivers of customers’ point of sale choice (online vs. counter PoS). Second, I study which PoS yields higher purchase decision quality. I establish whether linkages hold across different customer segments and pricing contexts, and examine consumers’ learning effects over time. Third, I study customer loyalty in both distribution channels, and explore how loyalty develops across different segments, pricing contexts, and levels of decision quality. Hypotheses are tested in the context of two-part pricing schemes in travel services. Purchase decision quality is in fact dependent on the chosen PoS. Besides, it largely varies across customer segments; however, learning effects do occur over time. Loyalty depends on pricing contexts and segments as well as on previous decision quality and PoS choice. The results provide implications for upgrading consumers’ purchase behavior and acquisition and retention in each channel

Linkages between pricing practices in franchise chains and franchisor-, franchisee- and system-level-outcomes

International audiencePrevious literature highlights the professionalization of resale price management as a major challenge firms face in the quest for achieving competitive advantage and long-term profitability. However, recent evidence suggests that around two-thirds of companies are frequently unable to set the “right” prices, with severe negative impacts on business outcomes. The challenge inherent in pricing management becomes even more complex in hybrid organizations like franchising, as much of the raison d’être of franchising is built upon maintaining chain uniformity. However, franchisees and franchisors may have very different views on what the optimal prices are at a given unit. Therefore, to further our understanding of pricing management in franchise chains, we aim to offer a novel conceptual framework for approaching the question of how pricing decisions are taken and implemented in chains and what business consequences result. By integrating franchisee-, franchisor-, and system-level perspectives, we study linkages between franchisor’s pricing practices, franchisees’ attitudes towards these practices, means of relational governance that help balance both parties’interests, and franchisor-, franchisee-and system-level outcomes. Based on survey data from 406 franchisees in the largest European franchise market, France, the model provides direction on how to foster, promote, and fine-tune a cooperative climate in the chain in the context of pricing strategies

Pricing-based practices, conflicts and performance in franchising

International audiencePricing management is complex in hybrid organizations like franchising, as much of the raison d’être of franchising is built upon maintaining chain uniformity. However, franchisees and franchisors may have very different views on what the optimal prices are at a given unit. The aim of our research is thus to assess how resale pricing decisions are made and implemented in franchised chains and what the business consequences are. Our research question is then “Which pricing-based practices reduce conflicts between franchisors and franchisees and so enhance performance?” Based on a questionnaire-based survey of 406 franchisees in the largest European franchise market, France, the results of our analyses show that resale pricing in franchised chains is of crucial importance not only vis-à-vis customers, but also vis-à-vis franchisees, particularly concerning their satisfaction, store performance, and intention to acquire additional stores. On the franchisor part, pricing is essential in terms of brand performance and brand name value. Regarding the franchisor-franchisee relationship, pricing is crucial in terms of the occurrence of conflicts

Resale prices in franchising: insights from franchisee perspectives

International audiencePurposeThe purpose of this paper is to offer a novel perspective on resale pricing in franchising, i.e. from a franchisee perspective, by combining legal and managerial considerations in the European context. The objective is to assess franchisee perceptions regarding resale pricing in their chains.Design/methodology/approachThe authors adopt a qualitative approach and use 46 in-depth interviews with franchisees covering retail and service industries in the French market.FindingsMany of the interviewed franchisees believe that joining a franchise chain involves respecting the recommended resale prices. For some of the franchisees, in link with the chain uniformity, imposing uniform resale prices throughout the chain represents a strength, because customers who visit different stores within the franchise chain expect to find consistent pricing. Moreover, many franchisees consider that their franchisors have some know-how that they use to set correct resale prices, taking into account the profit margin.Research limitations/implicationsThis research contributes to the literature on resale pricing in franchising, as well as the franchising literature in general, by combining legal and managerial considerations, adopting a franchisee perspective, covering retail and service industries and focusing on French and European markets.Practical implicationsThis research can be viewed by franchise experts, franchisors, franchisees and franchisee candidates as a synthesis of resale price-related legal aspects, adopted practices and potential conflicts in franchise chains in the French market. It also highlights price-related practices to be avoided to prevent potential conflicts.Originality/valueThe subject of resale pricing in franchise chains is a hot topic, because of its link with customer attraction, chain uniformity, franchisor know-how, franchisee autonomy and the legal dimension

Competing risks for train tickets – An empirical investigation of customer behavior and performance in the railway industry

Based on a comprehensive data set of German railway customers we analyze consumers’ choices and particularly subsequent changes of two-part pricing contracts (loyalty cards). In a competing risks framework, we simultaneously estimate effects on three types of contractual events: cancellations, upgrades, and downgrades. Focusing on customer relationship management (CRM) practices, we find several factors affecting these events, some of which railway companies can influence to their advantage. Intuitively, installing auto-renewal procedures for loyalty cards decreases cancellation hazards. However, automated electronic mailings (e.g., reminders and account statements) and advertising (e.g., ticket offers) can be counterproductive and increase the risk of cancellation