Coproduction offerings, in which customers engage in the production of goods and services, are ubiquitous (e.g., ready-to-assemble products, self-service technologies). However, although previous ...research has predominantly identified beneficial aspects of coproduction in contrast to traditional firm production, the pivotal role of coproduction intensity within coproduction processes has largely been neglected. Furthermore, little is known about strategies that firms can employ to positively influence customers' perceptions of coproduction processes. Drawing on a large field experiment with 803 customers engaging in actual coproduction processes, the current study makes a first attempt to address these research voids. The results show that coproduction intensity negatively affects customers' satisfaction with the coproduction process. Furthermore, the study offers first insights into how firms can mitigate these negative effects by employing corporate communication strategies that either emphasize specific coproduction value propositions (value-enhancing communication strategies) or highlight additional coproduction service supplements (intensity-reducing communication strategies).
The conventional service—profit chain (SPC) proposes that a firm's financial performance can be improved through a path that connects employee satisfaction, customer orientation, customer ...satisfaction, and customer loyalty. In this article, a complementary SPC that is built on both a conventional path and a social identity—based path is introduced. The latter SPC path centrally builds on customer— and employee—company identification as a core construct. Using a large-scale triadic data set that includes data from employees, customers, and firms, the authors find strong support for the extended SPC, which accounts for important customer (loyalty and willingness to pay) and firm (financial performance) outcomes. In addition, the effects of company identification exist incrementally beyond the effects of the conventional SPC path.
This article is the first to empirically examine the effect of customer loyalty in retail price negotiations. Across three field studies and one negotiation experiment, the authors establish what ...they call the "loyalty-discount cycle": in price negotiations with salespeople, loyal customers receive deeper discounts that, in turn, increase customer loyalty, resulting in a downward spiral of a company's price enforcement. The reason for the positive effect of customer loyalty on discount is twofold: (1) loyal customers demand a reward for their loyalty and invoke their elevated perceived negotiation power, and (2) to retain loyal customers, salespeople grant discounts more willingly. Furthermore, the mechanisms are moderated by the basis of a customer's loyalty (price vs. quality) and the length of the relationship between the salesperson and the customer. To escape the loyalty-discount cycle, salespeople can use functional and relational customer-oriented behaviors. The study helps managers and salespeople optimize their price enforcement and servicing of loyal customers.
Although managers are interested in the financial value of customers and researchers have pointed out the importance of stock analysts who advise investors, no studies to date have explored the ...implications of customer satisfaction for analyst stock recommendations. Using a large-scale longitudinal data set, the authors find that positive changes in customer satisfaction not only improve analyst recommendations but also lower dispersion in those recommendations for the firm. These effects are stronger when product market competition is high and financial market uncertainty is large. In addition, analyst recommendations at least partially mediate the effects of changes in satisfaction on firm abnormal return, systematic risk, and idiosyncratic risk. Analyst recommendations represent a mechanism through which customer satisfaction affects firm value. Thus, if analysts pay attention to Main Street customer satisfaction, Wall Street investors should have good reason to listen and follow. Overall, this research reveals the impact of satisfaction on analyst-based outcomes and firm value metrics and calls attention to the construct of customer satisfaction as a key intangible asset for the investor community.
There is little empirical research on internal marketing despite its intuitive appeal and anecdotal accounts of its benefits. Adopting a social identity theory perspective, the authors propose that ...internal marketing is fundamentally a process in which leaders instill into followers a sense of oneness with the organization, formally known as "organizational identification" (OI). The authors test the OI-transfer research model in two multinational studies using multilevel and multisource data. Hierarchical linear modeling analyses show that the OI-transfer process takes place in the relationships between business unit managers and salespeople and between regional directors and business unit managers. Furthermore, both leader—follower dyadic tenure and charismatic leadership moderate this cascading effect. Leaders with a mismatch between their charisma and OI ultimately impair followers' OI. In turn, customer-contact employees' OI strongly predicts their sales performance. Finally, both employees' and sales managers' OI are positively related to their business units' financial performance. The study provides empirical evidence for the role of leaders, especially middle managers, in building member identification that lays the foundation for internal marketing.
In the face of the growing prevalence of multiple appeals to sustainable consumption in marketers’ sustainable product communications, we examine the efficacy, in terms of consumer reactions, of ...adding an extrinsic appeal (e.g., “Purchase this green product to save money!”) to an intrinsic appeal (e.g., “Purchase this green product to save the environment!”) based communication for a sustainable product. Three studies provide support for our basic assertion that, compared to an intrinsic appeal, joint appeals (i.e., an intrinsic and extrinsic appeal together) reduce consumer preference for sustainable products. As well, these studies demonstrate that this adverse effect of joint appeals is based on a lowering of consumers’ attributions of the company’s sustainability efforts to intrinsic motives (e.g., to the company’s genuine concern for the environment). Finally, not all consumers react adversely to joint appeals; relative to intrinsic appeals, such appeals increase, rather than decrease, the intrinsic attributions and sustainable product preferences for consumers with lower involvement with sustainable consumption.
This research reveals customer- and employee-firm relations to be two routes by which firms can leverage executive incentive structures to create customer and firm value. Analyses of a unique dataset ...with multiple archival sources show that (1) increases in the proportion of CEOs’ long-term equity-based compensation positively influence actions that build customer- and employee-firm relations as measured by the Kinder, Lydenberg, Domini & Co. (KLD) data source, (2) such effects are stronger in unstable markets, and (3) customer and employee relationship-building actions affect firm value both directly and indirectly via the mediator of customer satisfaction as measured by the American Customer Satisfaction Index (ACSI) data source. The findings have implications for the improvement of customer satisfaction, the role of marketing in the organization, and the design of CEO incentive packages leading to higher customer satisfaction and firm value.
Prior research has firmly established that consumers draw benefits from a firm's engagement in corporate social responsibility (CSR), especially the feeling of a "warm glow." These benefits ...positively affect several desirable outcomes, such as willingness to pay and customer loyalty. The authors propose that consumers do not blindly perceive benefits from a firm's CSR engagement but tend to suspect that a firm's prices include a markup to finance the CSR engagement. Taking customers' benefit perceptions and price markup inferences into account, the authors suggest that CSR engagement has mixed effects on consumers' evaluation of price fairness and, thus, on subsequent outcomes such as customer loyalty. The authors conduct one qualitative study and four quantitative studies leveraging longitudinal field and experimental data from more than 4,000 customers and show that customers indeed infer CSR price markups, entailing mixed effects of firms' CSR engagement on price fairness. The authors find that perception critically depends on customers' CSR attributions, and they explore the underlying psychological mechanisms. They propose communication strategies to optimize the effect of CSR engagement on perceived price fairness.
Although the identification of customer needs constitutes a cornerstone of the marketing concept, the accuracy of frontline employees' perceptions of customer needs has never been examined in a ...systematic manner. Following research in social cognition, this article introduces the concept of "customer need knowledge" (CNK), which describes the extent to which a frontline employee can accurately identify a given customer's hierarchy of needs. The results of two large-scale, multilevel investigations involving data from three different levels (customers, employees, and managers) demonstrate the importance of CNK for the provision of customer satisfaction and customer value. In particular, CNK fully mediates the influence of employees' customer orientation and cognitive empathy on these customer outcomes. Moreover, whereas the length of the relationship between an employee and a particular customer enhances CNK, a large age discrepancy in relation to the customer decreases employees' level of CNK. PUBLICATION ABSTRACT
Comprehensive performance measurement systems such as the balanced scorecard have received considerable attention in marketing. However, whether and under which circumstances comprehensiveness as a ...performance measurement system property is desirable and contributes to firm performance is still a subject of debate in research and practice. To address this issue, the authors use dyadic field data from marketing managers and management accounting executives and extend prior work by developing and testing a more complex, contingency-based model. The empirical results confirm the developed framework. In particular, the results show that the relationship of comprehensiveness in a marketing performance measurement system to firm performance is conditional. Marketing alignment and market-based knowledge mediate this relationship, depending on marketing strategy, marketing complexity, and market dynamism. These insights explain mixed findings of previous research and provide important implications for research and managerial practice.
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