Research

Gear Manufacturers as Contestants in Sports Competitions: Breeding and Branding Effects

Several manufacturers make substantial investments to compete in sports contests, using the gear they develop and market. However, no systematic analysis of the breeding (i.e., innovation) and branding (i.e., marketing) returns from such investments exists. In this study, the authors conceptualize and empirically estimate the breeding and branding returns that such manufacturers obtain. The authors gather data for 30 car brands of 16 manufacturers over the period 2000–2015 regarding their participation, spending, and performance in Formula One championships, annual patent citations, and research-and-development (R

Yvonne van Everdingen, Vijay Ganesh Hariharan, Stefan Stremersch

Several manufacturers make substantial investments to compete in sports contests, using the gear they develop and market. However, no systematic analysis of the breeding (i.e., innovation) and branding (i.e., marketing) returns from such investments exists. In this study, the authors conceptualize and empirically estimate the breeding and branding returns that such manufacturers obtain. The authors gather data for 30 car brands of 16 manufacturers over the period 2000–2015 regarding their participation, spending, and performance in Formula One championships, annual patent citations, and research-and-development (R&D) budgets as well as monthly vehicle registrations, advertising expenditures, and Formula One TV viewership. The authors find that only gear manufacturers with relatively high levels of R&D spending obtain a positive and significant breeding return from competing in sports contests. While most brands obtain positive branding returns, the lower the level of advertising spending for the brand, the greater the branding returns they obtain from competing in these contests. Thus, research-intense (compared with advertising-intense) gear manufacturers have more to gain from competing in sports contests. These findings can help guide manufacturers in budget allocation decisions on sports competitions, R&D, and advertising.

Tournaments to Crowdsource Innovation: The Role of Moderator Feedback and Participation Intensity

Firms increasingly use innovation tournaments to crowdsource innovation ideas from customers. This article uncovers antecedents and consequences of customers’ participation intensity over the course of a tournament. More specifically, the authors theorize on the effects that the type and timing of moderating feedback have on tournament participants’ participation intensity, as well as the effect of the latter on idea quality. Through two longitudinal experiments using a commercial innovation tournament platform, the authors show that moderating feedback stimulates ideators’ participation intensity. They find that negative feedback increases participation intensity, as compared to no feedback and positive feedback. Moreover, negative feedback, either provided in isolation or together with positive feedback, is more effective during the early stages than in the later stages of a tournament. Using a large-scale managerial survey, the authors show that higher participation intensity leads to higher idea quality and better business performance. The effect of participation intensity on idea quality is stronger than the effect of number of ideas and as strong as the effect of number of participants on idea quality.

Nuno Camacho, Hyoryung Nam, P.K. Kannan, and Stefan Stremersch

Firms increasingly use innovation tournaments to crowdsource innovation ideas from customers. This article uncovers antecedents and consequences of customers’ participation intensity over the course of a tournament. More specifically, the authors theorize on the effects that the type and timing of moderating feedback have on tournament participants’ participation intensity, as well as the effect of the latter on idea quality. Through two longitudinal experiments using a commercial innovation tournament platform, the authors show that moderating feedback stimulates ideators’ participation intensity. They find that negative feedback increases participation intensity, as compared to no feedback and positive feedback. Moreover, negative feedback, either provided in isolation or together with positive feedback, is more effective during the early stages than in the later stages of a tournament. Using a large-scale managerial survey, the authors show that higher participation intensity leads to higher idea quality and better business performance. The effect of participation intensity on idea quality is stronger than the effect of number of ideas and as strong as the effect of number of participants on idea quality.

Advertising non-premium products as if they were premium: The impact of advertising up on advertising elasticity and brand equity

Non-premium brands occasionally emulate their premium counterparts by using ads that emphasize premium characteristics such as superior performance and exclusivity. We define this practice as “advertising up” and develop hypotheses about its short- and long-term impact on advertising elasticity and brand equity respectively. We test the hypotheses in two large-scale empirical studies using a comprehensive dataset from the automotive industry that includes, among others, the content of 2317 television ads broadcast over a period of 45 months. The results indicate that advertising up increases (decreases) short-term advertising elasticity for non-premium products with a low (high) market share. The results also show that an intensive use of advertising up over time leads to long-term improvements (reductions) in brand equity for expensive (cheap) non-premium products. Furthermore, an inconsistent use of advertising up leads to reductions in brand equity. The results imply that managers of non-premium products with a low market share can use advertising up to increase advertising effectiveness in the short run. However, advertising up will only generate long-term improvements in brand equity for expensive non-premium products. Finally, to avoid long-term reductions in brand equity, advertising up should be consistently used over time.

Ivan Guitart, Jorge Gonzalez, and Stefan Stremersch

Non-premium brands occasionally emulate their premium counterparts by using ads that emphasize premium characteristics such as superior performance and exclusivity. We define this practice as “advertising up” and develop hypotheses about its short- and long-term impact on advertising elasticity and brand equity respectively. We test the hypotheses in two large-scale empirical studies using a comprehensive dataset from the automotive industry that includes, among others, the content of 2317 television ads broadcast over a period of 45 months. The results indicate that advertising up increases (decreases) short-term advertising elasticity for non-premium products with a low (high) market share. The results also show that an intensive use of advertising up over time leads to long-term improvements (reductions) in brand equity for expensive (cheap) non-premium products. Furthermore, an inconsistent use of advertising up leads to reductions in brand equity. The results imply that managers of non-premium products with a low market share can use advertising up to increase advertising effectiveness in the short run. However, advertising up will only generate long-term improvements in brand equity for expensive non-premium products. Finally, to avoid long-term reductions in brand equity, advertising up should be consistently used over time.

Predicting the consequences of marketing policy changes: A new data enrichment method with competitive reactions

Eelco Kappe, Sriram Venkataraman, and Stefan Stremersch

This article introduces a new data enrichment method that combines revealed data on consumer demand and competitive reactions with stated data on competitive reactions to yet-to-be-enacted, unprecedented marketing policy changes. The authors extend the data enrichment literature to include stated competitive reactions, collected from subject-matter experts through a conjoint experiment. The authors apply their method to investigate hypothetical and unprecedented sales force policy changes of pharmaceutical companies. The results from the data enrichment method have high face validity and lead to various unique insights compared with using revealed data only. The authors find that only a very large sales force decrease initiated by the market leader triggers all competitors to decrease their sales force as well, leading to substantial profit increases for each firm. With respect to sales force allocation, when competitors decrease their sales force, they mainly decrease the reach of detailing across doctors, rather than decreasing the number of details to the most-visited doctors. The proposed data enrichment method provides managers with a powerful tool to, ex ante, predict the consequences of unprecedented marketing policy changes.

 

What to Stress, to Whom and Where? A Cross-Country Investigation of the Effects of Perceived Brand Benefits on Buying Intentions.

Ralf van der Lans, Yvonne van Everdingen and Valentyna Melnyk

This paper investigates cross-country differences in the importance of four brand benefits that are commonly stressed in international positioning strategies—quality, uniqueness, leading position,
and growing popularity—in determining brand purchase intentions. It also investigates how these effects are moderated by country characteristics, consumer characteristics, and perceptions about competing brands’ benefits, as well as whether they are stable across product categories. To achieve this, we developed a hierarchical Bayesian model that recognizes the ordinal nature of the measurement of purchase intentions and captures scale usage differences in a parsimonious way. The model is estimated using a unique multi-continent, multi-category data set across 19,682 respondents from 25 countries. In total 337 brands across six product categories (fast food, beer, designer brands, athletic shoes and apparel, mobile phones, photography) and two service categories (airlines, credit cards) were assessed. The results show that on average intrinsic benefits (i.e., quality and uniqueness), are most important in determining purchase intentions. The strengths of these effects are significantly influenced by culture and become weaker if more competing brands are perceived to possess these benefits. Companies are therefore advised to trade-off between positioning their brand along a brand benefit that appeals to a country, while ensuring that this positioning is distinct from the positioning of competing brands. If a multinational company prefers using one global strategy, then focusing on quality is recommended.

Drug Detailing and Doctors’ Prescription Decisions: The Role of Information Content in the Face of Competitive Entry

Eelco Kappe and Stefan Stremersch

We study the effects of information content in 59,814 pharmaceutical sales calls on doctors’ prescription decisions for statins, in the face of entry of competing brands and generics, using a hierarchical Bayesian distributed lag model. We conclude that adding information content to the prescription response model improves the in- and out-of-sample performance of the model. In the first six months following generic entry, it is more effective for incumbent brands to detail on drug contraindications and indications, compared to other periods, to positively differentiate from generics. In the first six months following branded entry, it is less effective for incumbent brands to detail on drug indications and costs, given increased competitive clutter. We also document substantial heterogeneity among doctors in their response to information content. Our model is helpful for analysts to more accurately assess the effectiveness of detailing. Our empirical results are also informative for drug manufacturers as they set or change their messaging policies in response to entry and help firms to tailor their message content at the doctor level.

Optimal targeting of advertisement for new products with multiple consumer segments

Armed with improved targeting technology, firms are increasingly interested in optimizing their advertising dollars through consumer segment-specific targeting, particularly while introducing new products. That task becomes especially important in markets with distinct consumer segments—the early market and the main market—that affect each other’s adoption behavior. In this study, in contrast to prior normative studies that assume a single-segment market structure, we derive dynamic optimal advertising and segment-specific targeting strategies for firms facing a two-segment market structure. We allow for mutual demand interactions between the two segments, and for the diffusion parameters, advertising sensitivity, and cost of targeting to differ across the segments. We model the effect of advertising as a logarithmic function that accounts for diminishing marginal returns. Among our key findings: From profit optimization perspective, our two-segment model outperforms the single-segment model under multiple diffusion dynamics contexts—especially for the ‘bimodal chasm’ and the ‘early dip followed by bell-shaped’ type diffusion patterns—even when the cost of targeting the early market is relatively high. Our numerical analyses indicate that the optimal share of advertisement targeted to the early market segment at launch needs to be much higher than the share of the early market segment in the population. Advertising sensitivity, relative cost of targeting the early market, and the proportion of early market consumers in the population have the greatest effects on the optimal time to transition the targeted advertising spending from the early to the main market segment.

Vijay Ganesh Hariharan, Debabrata Talukdar, Changhyun Kwon

Armed with improved targeting technology, firms are increasingly interested in optimizing their advertising dollars through consumer segment-specific targeting, particularly while introducing new products. That task becomes especially important in markets with distinct consumer segments—the early market and the main market—that affect each other’s adoption behavior. In this study, in contrast to prior normative studies that assume a single-segment market structure, we derive dynamic optimal advertising and segment-specific targeting strategies for firms facing a two-segment market structure. We allow for mutual demand interactions between the two segments, and for the diffusion parameters, advertising sensitivity, and cost of targeting to differ across the segments. We model the effect of advertising as a logarithmic function that accounts for diminishing marginal returns. Among our key findings: From profit optimization perspective, our two-segment model outperforms the single-segment model under multiple diffusion dynamics contexts—especially for the ‘bimodal chasm’ and the ‘early dip followed by bell-shaped’ type diffusion patterns—even when the cost of targeting the early market is relatively high. Our numerical analyses indicate that the optimal share of advertisement targeted to the early market segment at launch needs to be much higher than the share of the early market segment in the population. Advertising sensitivity, relative cost of targeting the early market, and the proportion of early market consumers in the population have the greatest effects on the optimal time to transition the targeted advertising spending from the early to the main market segment.

Introduction to the IJRM Special Issue on Marketing and Innovation

Gui Liberali, Eitan Muller, Roland T. Rust and Stefan Stremersch

This special issue of the International Journal of Research in Marketing results from the inaugural edition of bi-annual joint symposia of the American Marketing Association (AMA) and the European Marketing Academy (EMAC). The Erasmus School of Economics (Erasmus Center for Marketing and Innovation, ECMI) organized this inaugural symposium on May 27th and 28th, 2014, in the context of its Centennial
celebrations. The future organizers are the Wharton School (for the 2016 edition) and INSEAD (for the 2018 edition). These symposia are meant to address a topic of high relevance to the marketing community, thus changing over future meetings.

For the Erasmus inaugural meeting we chose Innovation and Marketing as a topic for the symposium. Keynote speakers on the practitioner side included among others, Paul Polman (CEO of Unilever), Jean Francois Van Boxmeer (CEO of Heineken), Jacques Van den Broek (CEO of Randstad), and Frans Muller
(CEO of Delhaize). Academically, keynotes were given by Jan Peter Balkenende (Erasmus University and former prime minister of the Netherlands), Eric Bradlow (Wharton), Glen Urban (MIT), Nirmalya Kumar (LBS and Tata), and Jagdish Sheth (Emory).

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Unraveling scientific impact: Citation types in marketing journals

The number of citations a paper receives is the most commonly used measure of scientific impact. In this paper, we study not only the number but also the type of citations that 659 marketing articles generated. We discern five citation types: application, affirmation, negation, review and perfunctory mention (i.e., citing an article only indirectly without really using it). Prior literature in scientometrics recognizes that the former three types, on average, signal a higher level of scientific indebtedness than the latter two types. In our sample, these three types of citation represent only 15% of all citations. We also find different determinants of citation behavior across citation types. Across the 49 determinants we included, only 13 have the same effect across all citation types, of which only 5 are statistically significant across all citation types. For instance, we find a significant inverted U-effect of challenging commonly held beliefs on citation counts, but only for three of the citation types: affirmation, review and perfunctory mention. Our results encourage scientific stakeholders to move beyond mere citation counts to assess a paper's or a scholar's scientific contribution, as well as to devote greater attention to the citation process itself.

Stefan Stremersch, Nuno Camacho, Sofie Vanneste, Isabel Verniers

The number of citations a paper receives is the most commonly used measure of scientific impact. In this paper, we study not only the number but also the type of citations that 659 marketing articles generated. We discern five citation types: application, affirmation, negation, review and perfunctory mention (i.e., citing an article only indirectly without really using it). Prior literature in scientometrics recognizes that the former three types, on average, signal a higher level of scientific indebtedness than the latter two types. In our sample, these three types of citation represent only 15% of all citations. We also find different determinants of citation behavior across citation types. Across the 49 determinants we included, only 13 have the same effect across all citation types, of which only 5 are statistically significant across all citation types. For instance, we find a significant inverted U-effect of challenging commonly held beliefs on citation counts, but only for three of the citation types: affirmation, review and perfunctory mention. Our results encourage scientific stakeholders to move beyond mere citation counts to assess a paper’s or a scholar’s scientific contribution, as well as to devote greater attention to the citation process itself.

The relationship between DTCA, drug requests, and prescriptions: Uncovering variation in specialty and space

Patients increasingly request their physicians to prescribe specific brands of pharmaceutical drugs. A popular belief is that requests are triggered by direct-to-consumer advertising (DTCA). We examine the relationship between DTCA, patient requests, and prescriptions for statins. We find that although the effect of requests on prescriptions is significantly positive, the mean effect of DTCA on patient requests is negative, yet very small. More interestingly, both effects show substantial heterogeneity across physicians, which we uncover using a hierarchical Bayes estimation procedure. We find that specialists receive more requests than primary care physicians but translate them less into prescriptions. In addition, we find that the sociodemographic profile of the area a physician practices in moderates the effects of DTCA on requests and of requests on prescriptions. For instance, physicians from areas with a higher proportion of minorities (i.e., blacks and Hispanics) receive more requests that are less triggered by DTCA and are accomodated less frequently than physicians from areas with a lower proportion of minorities. Our results challenge managers to revisit the role of DTCA in stimulating patient requests. At the same time, they may trigger public policy concerns regarding physicians' accommodation of patient requests and the inequalities they may induce.

Stefan Stremersch, Vardit Schwartz-Landsman, Sriram Venkataraman

Patients increasingly request their physicians to prescribe specific brands of pharmaceutical drugs. A popular belief is that requests are triggered by direct-to-consumer advertising (DTCA). We examine the relationship between DTCA, patient requests, and prescriptions for statins. We find that although the effect of requests on prescriptions is significantly positive, the mean effect of DTCA on patient requests is negative, yet very small. More interestingly, both effects show substantial heterogeneity across physicians, which we uncover using a hierarchical Bayes estimation procedure. We find that specialists receive more requests than primary care physicians but translate them less into prescriptions. In addition, we find that the sociodemographic profile of the area a physician practices in moderates the effects of DTCA on requests and of requests on prescriptions. For instance, physicians from areas with a higher proportion of minorities (i.e., blacks and Hispanics) receive more requests that are less triggered by DTCA and are accomodated less frequently than physicians from areas with a lower proportion of minorities. Our results challenge managers to revisit the role of DTCA in stimulating patient requests. At the same time, they may trigger public policy concerns regarding physicians’ accommodation of patient requests and the inequalities they may induce.

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