As consumers spend more time on their mobile devices, a focal retailer's natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting ...may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor's location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use competitive locational targeting to generate incremental sales without cannibalizing profits. Although the experiment focuses on the effects of unilateral promotions, it represents an initial step in understanding the competitive implications of mobile marketing technologies.
By 2011, approximately 83% of Fortune 500 companies were using some form of social media to connect with consumers. Furthermore, surveys suggest that consumers are increasingly relying on social ...media to learn about unfamiliar brands. However, best practices regarding the use of social media to bolster brand evaluations in such situations remain undefined. This research focuses on one practice in this domain: the decision to hide or reveal the demographic characteristics of a brand's online supporters. The results from four studies indicate that even when the presence of these supporters is only passively experienced and virtual (a situation the authors term "mere virtual presence"), their demographic characteristics can influence a target consumer's brand evaluations and purchase intentions. The findings suggest a framework for brand managers to use when deciding whether to reveal the identities of their online supporters or to retain ambiguity according to (1) the composition of existing supporters relative to targeted new supporters and (2) whether the brand is likely to be evaluated singly or in combination with competing brands.
A Typology of Reverse Innovation von Zedtwitz, Max; Corsi, Simone; Søberg, Peder Veng ...
The Journal of product innovation management,
January 2015, Volume:
32, Issue:
1
Journal Article
Peer reviewed
Open access
Reverse innovation commonly refers to an innovation initially launched in a developing country and later introduced to an advanced country. Adopting a linear innovation model with the four sequential ...phases of concept ideation, product development, primary target market introduction, and subsequent secondary market introduction, this study expands the espoused definition of reverse innovation beyond its market‐introduction focus with reversals in the flow of innovation in the ideation and product development phases. Recognizing that each phase can take place in different geographical locations, the paper then introduces a typology of global innovation with 16 different types of innovation flows between advanced and emerging countries, 10 of which are reverse innovation flows. The latter are further differentiated into weak and strong reverse innovation, depending on the number of innovation phases taking place in an emerging country. This analytical framework allows recasting of current research at the intersection between innovation and international business. Of the 10 reverse innovation flows, six are new and have not been covered in the literature to date. The study addresses questions of ethnocentrism and the continuity of the flow of innovation, and discusses possible extensions of the model with respect to the number of geographical categories and phases of innovation. Four research propositions highlight areas for future investigation, especially in the context of optimizing a firm's portfolio of global innovation competence and capability. The implications for management are concerned with internal and external resistance to reverse innovation. Most significantly, while greater recognition and power of innovation in formerly subordinate organizational units is inconvenient to some, the ability to leverage the potential of reverse innovation makes a firm more likely to succeed in global innovation overall.
•We develop an analytical model to study the impact of an online-to-store channel.•This channel can help tap new customers but it also cannibalizes existing channels.•This new channel always leads to ...a higher product retail price.•We derive conditions under which such a channel is beneficial for the retailer.
The growth of e-commerce in the past decade has opened the door to a new and exciting opportunity for retailers to better target different segments of the customer population. In this paper, we develop an analytical framework to study the impact of an “online-to-store” channel on the demand allocations and profitability of a retailer who sells products to customers through multiple distribution channels. This new channel can help the retailer tap new customer segments and generate additional demand, but may also hurt the retailer by cannibalizing existing channels and increasing operating costs. The analytical model allows us to evaluate these fundamental tradeoffs and provide useful managerial insights regarding the specific product and market characteristics that are most conducive for increasing profitability. Our analysis provides some simple conditions under which adding an online-to-store channel would lead to higher profits for products that are only available online. If the product is also available in-store, the analysis becomes more complex. In this case, we performed numerical experiments to generate insights on when the OS channel should be used. Our results imply that the retailer needs to carefully select the set of products to be offered through the online-to-store channel.
How does the monetary value of customer purchases vary by customer preference for purchase channels (e.g., traditional, electronic, multichannel) and product category? The authors develop a ...conceptual model and hypotheses on the moderating effects of two key product category characteristics—the utilitarian versus hedonic nature of the product category and perceived risk—on the channel preference—monetary value relationship. They test the hypotheses on a unique large-scale, empirically generalizable data set in the retailing context. Contrary to conventional wisdom that all multichannel customers are more valuable than single-channel customers, the results show that multichannel customers are the most valuable segment only for hedonic product categories. The findings reveal that traditional channel customers of low-risk categories provide higher monetary value than other customers. Moreover, for utilitarian product categories perceived as high (low) risk, web-only (catalog- or store-only) shoppers constitute the most valuable segment. The findings offer managers guidelines for targeting and migrating different types of customers for different product categories through different channels.
During the last few years, nostalgia has become a fashion in Taiwan. “Nostalgic” restaurants are becoming common in Taiwan. A nostalgic restaurant can be a hot pot restaurant decorated with ...furnishing relating to the origin or earlier use of the “hot pot” in Taiwan. The study here uses SEM to test the hypotheses relating to nostalgia affecting consumption. The results indicate that (1) nostalgia has both direct and indirect impacts on consumption intention; (2) consumption affected by nostalgia varies depending on the individual; and (3) younger customers' predisposition to want cheap prices is an important consideration in marketing nostalgia to younger customers.
Purpose - The purpose of this paper is to review what we know - and don't know - about Generation Y's use of social media and to assess the implications for individuals, firms and society.Design ...methodology approach - The paper distinguishes Generation Y from other cohorts in terms of systematic differences in values, preferences and behavior that are stable over time (as opposed to maturational or other differences). It describes their social media use and highlights evidence of intra-generational variance arising from environmental factors (including economic, cultural, technological and political legal factors) and individual factors. Individual factors include stable factors (including socio-economic status, age and lifecycle stage) and dynamic, endogenous factors (including goals, emotions, and social norms).The paper discusses how Generation Y's use of social media influences individuals, firms and society. It develops managerial implications and a research agenda.Findings - Prior research on the social media use of Generation Y raises more questions than it answers. It: focuses primarily on the USA and or (at most) one other country, ignoring other regions with large and fast-growing Generation Y populations where social-media use and its determinants may differ significantly; tends to study students whose behaviors may change over their life cycle stages; relies on self-reports by different age groups to infer Generation Y's social media use; and does not examine the drivers and outcomes of social-media use. This paper's conceptual framework yields a detailed set of research questions.Originality value - This paper provides a conceptual framework for considering the antecedents and consequences of Generation Y's social media usage. It identifies unanswered questions about Generation Y's use of social media, as well as practical insights for managers.
The development and adoption of eco‐friendly innovations needs to be enhanced to reduce emissions caused by industry and transportation. Companies have been heavily investing in technologies and ...manufacturing processes to improve the development of eco‐friendly innovations such as alternative fuel vehicles (AFVs). While the long‐term viability of AFVs will be determined by consumer demand, only few consumers are willing to adopt these eco‐friendly innovations. To increase the diffusion of AFVs, it appears crucial to reach a critical mass of adopters and thus the point at which an innovation spreads exponentially through a target market. In this respect, previous research points to the importance of using external policies to turn the early majority into early adopters, which are primarily distinguished by their extent of innovativeness. However, diffusion theory suggests that consumer innovativeness as an innate trait is fairly stable over time and is thus not externally changeable. Yet, external measures might still be effective in strengthening effects of consumer innovativeness, turning the early and perhaps also the late majority into early adopters. Unfortunately, current research on consumer adoption behavior in general and on AFV adoption still lacks studies of the effectiveness of different external measures to turn potential adopters into early adopters by fostering positive effects of consumer innovativeness. This article addresses this shortcoming by empirically analyzing data from 1080 consumer evaluations in the domain of AFVs. Results from structural equation modeling confirm that AFV adoption relates positively to consumer innovativeness and that this effect can be intensified by providing external policies such as infrastructure, incentives, and communication policies.
The main purpose of this study is to understand the consumption of luxury brands in different age groups. Attitude functions (social-adjustive, value-expressive, hedonic, utilitarian) explain luxury ...brand consumption among three age groups. A total of 297 respondents between the age of 16 and 59 participated in a survey. Using structural equation modeling, this study shows that the hedonic and utilitarian attitude functions are relevant across all age groups, while the impact of the social functions greatly differs among the target groups. Whereas the social-adjustive function strongly enhances luxury brand purchase behavior of late adolescents (16–25years), value-expressiveness only impacts the luxury consumption of young adults (26–39years). The social functions do not determine the acquisition of luxury brands by middle-aged adults (40–59years).
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