Emerald | European Journal of Marketing | Table of Contents

Determinants of Franchise Conversion: A Franchisee Perspective

Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - Conversion franchising is a strategy where franchisors recruit existing franchisees from rival systems or by converting independent businesses to franchisees.. The objective of the present research is to investigate the attractiveness of conversion offers and the likelihood of such offers being accepted under different conditions of the franchising agreement.Design/methodology/approach - Based on commitment theory and agency theory, it is hypothesised that conversion likelihood will be larger if the conversion offer is more attractive in terms of relational benefits, relational costs, the management of control in the franchise relationship, or perception of brand strength. The study comprises a qualitative phase followed by a scenario experiment held among 415 Australian business format franchisees across six industries.Findings - The qualitative findings reveal a predominantly calculative attitude towards the franchise relationship. The experimental findings support that relational costs and perception of brand strength are unconditional drivers of conversion likelihood, however the effects of relational benefits and power and control depend on the details of the conversion offer. Effects of relational benefits depend on the level of power and control. More experienced franchisees and service-based franchisees are more likely to convert.Research limitations/implications - The use of experimental case scenarios limits the external validity but enhances the internal validity by allowing to control for factors that are difficult to account for in survey-based approaches. The study includes only franchisees from Australia although from a range of industries. As demonstrated the proposed methodology can be easily modified for application in other contexts. Practical implications - The results can help franchisors tailor conversion proposals to suit specific conversion targets based on experience and industry type. Franchisors should generally focus on developing conversion proposals that are attractive in terms of perceived brand strength and relational costs. Relational benefits and management of power and control appear to play a role only in particular circumstances. For example, when no other factors differentiate the competitor, the management of power and control can make a difference in indicating franchise support quality and level of control among franchisees. Originality/value - The study extends franchising research to the franchisee perspective and to a non-American context. It utilises an experimental approach that hitherto had not been applied in franchising research, allowing rigorous testing of hypotheses about franchise behaviour. Hypotheses are tested for different industry groups.

Influence of Consumer Online Resale Awareness on Purchase Decisions: A Mental Accounting Perspective

literatinetwork@emeraldinsight.com (Shuling Liao, Hsunchi Chu) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - Consumer online resale is becoming an increasingly common method of both buying and selling goods. When an item can be easily resold online, consumers’ subjective estimation of the value of that item changes in complex ways based on consumption cost and resale return. This in turn can affect consumers’ decisions to purchase new products. We apply the principles of mental accounting to investigate how consumers’ economic psychology associated with buying a new product is affected when an awareness of the possibility of online resale is aroused. Design/methodology/approach - Three studies with between-subjects designs were conducted online to examine the effects of consumer awareness of a resalable item on purchase intention of a new item under different situations.Findings - The results indicate that (1) consumers’ awareness of the resale value of an already possessed product can influence their decision to purchase a new product; and (2) when the product to be resold is the same type as the desired new item (e.g., an old idle mobile phone and a new mobile phone), the influence of resale awareness on purchase intention is greater than when the two items are distinct type but share similar functions and therefore could be categorized in the same mental account in terms of budget planning (e.g., an old idle digital camera and a new mobile phone) and when the short-used new product to be resold is exactly the same one to be purchased (e.g., buy and resell the same new mobile phone shortly after purchase) .Research limitations/implications - The participants were all from a single Taiwanese online community. More and a great variety of participants (e.g., both online and offline consumers, even those from traditional secondhand markets) should be included in future studies to gain a better understanding of consumer purchasing and resale behavior. Although our studies are relatively theory-driven, the findings might be subject to cultural difference in online resale environment. Future studies may go beyond the cultural context studied herein and include a greater diversity of goods with different features, consumers with a range of resale experience, and a variety of scenarios to verify the robustness of our findings and improve the generalizability of the concepts. Practical implications - The results of the present three studies support this idea by showing that consumers prefer to dispose of items in their homes and that this elevates the purchase intention for new products. Thus, marketers should look favorably upon and implement strategies to exploit secondary markets.Originality/value - By notifying consumers of the future chance to resell a good, the awareness and expectation for an online resale could be prompted, which in turn enhances the intention to purchase a new good. Therefore, we suggest that online resale awareness and expectation are important factors affecting both consumers’ purchasing and reselling behaviors.

For Better or for Worse? Adverse Effects of Relationship Age and Continuance Commitment on Positive and Negative Word of Mouth

literatinetwork@emeraldinsight.com (Chatura Ranaweera, Kalyani Menon) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - We study the direct and moderating effects of relationship age, continuance commitment and satisfaction on the generation of positive and negative word of mouth (P/NWOM). Design/methodology/approach - Hypotheses based on the notion of liability of adolescence and the motivation to generate P/NWOM were tested with data collected through a survey of a random sample of customers of fixed-line telephone users. Findings - Relationship age adversely impacts PWOM and the effect of satisfaction on both P/NWOM. Continuance commitment increases NWOM and causes dissatisfied customers to generate greater NWOM while not affecting the PWOM of satisfied customers. Satisfaction shows a significant non-linear effect on WOM. Research limitations/implications - Future research could conduct longitudinal or experimental work to explicate the causal mechanisms underlying these cross-sectional survey results. Research could also extend these results to a B-B context.Practical implications - Results offer strong evidence of a dark side to long term customer relationships. Recommendations focus on managing long-term relationships and perceptions of continuance commitment to minimize adverse effects.Originality/value - As far as we know, this research is the first to offer a theoretically grounded explanation of the direct and moderating effects of relationship age on P/NWOM behaviour. Results challenge the premise of long term customers being a panacea for numerous problems faced by firms. Findings also help explain the contradictory results in prior research on the effects of continuous commitment on WOM.

Exploring Relationship Marketing in Membership Associations

literatinetwork@emeraldinsight.com (Nathan Vincent, Cynthia M Webster) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - Relationship Marketing (RM) studies have produced a range of conclusions which are attributed to the different exchange contexts, strategies and constructs used for analysis. This study explores RM within the context of a membership association to gain insights into membership maintenance, customer advocacy and association performance.Design/methodology/approach - Exploratory, qualitative research conducted draws on existing relationship marketing constructs. Six focus groups with current and former members of an Australian wine club provide insights regarding factors that influence their membership experience.Findings - Results show that satisfaction of membership benefits and confidence in the association’s expertise are essential in strong relationships. Moreover, member commitment to the relationship appears to be multidimensional with affective commitment, in particular, leading to member retention and advocacy. Results also indicate trust, satisfaction and commitment can be combined as an overall assessment of relationship quality. Desire for recognition, the social nature of wine and product involvement all emerge as important to the membership context.Research limitations/implications - This research provides valuable insights into relationships in membership associations and is a strong foundation for future confirmatory research regarding relationships between associations and their members.Practical implications - Membership maintenance is vital to the survival and profitability of membership based associations. By determining the benefits and factors that foster strong relationships, management can create marketing strategies and programs aimed specifically at influencing the key drivers of strong relationships. Originality/value - Although relationship marketing has gained prevalence in recent times across a number of industries, research into membership contexts is limited.

From receiving to achieving: The role of relationship and dependence for nonprofit organisations in corporate partnerships.

literatinetwork@emeraldinsight.com (Kathryn Elizabeth Lefroy, Yelena Tsarenko) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - The goal of this study is to examine the influence of resources provided to nonprofit organisations by corporate partners on the achievement of nonprofit’s social and organisational objectives, accounting for mediation effects of dependence and relationship. This goal was investigated from the perspective of nonprofit organisations. Design/methodology/approach - Following 20 preliminary in-depth interviews, an online survey was administered to people working in nonprofit industry who had experience working with their organisation’s corporate partnership. With 273 completed questionnaires, we tested the model with mediation analyses, using bias-corrected bootstrap confidence intervals method.Findings - Although reputation, non-financial resources and cash investments have strong and positive effects on achieving social and organisational objectives these relations are fully mediated by dependence and relationship between partners. Further analysis shows that relationship is a significantly stronger mediator than dependence on the effect of reputation in regards to the achievement of both sets of objectives. Originality/value - This article builds on marketing knowledge, using resource dependence theory to focus on the effects of corporate-provided resources on nonprofit organisations; a topic largely unexplored in extant literature. It is the first study to operationalise and empirically examine the specific effects of different types of resources on specific nonprofit performance objectives.

Integrating Consumer Characteristics into the Stochastic Modelling of Purchase Loyalty

Wed, 22 May 2013 00:00:00 +0100

Abstract

Purpose - This paper extends a widely used stochastic model of purchase loyalty to include covariates such as demographics, psychographics and geodemographics. Potentially, this allows covariates to explain variations in brand performance measures (BPMs) such as penetration/reach, average purchase frequency, sole buying, share of category requirements, repeat purchase and so forth. The result is to integrate consumer-based segmentation into previously unsegmented stochastic models of brand performance. Design/methodology/approach - This paper describes a model for predicting BPMs. Covariates are then introduced into the model, with discussion of model specification, model estimation, overall model assessment, and the derivation of generalized theoretical BPMs. The outcome is a practical procedure for behavioral loyalty segmentation.Findings - The implications for strategy and management in applying covariates to the BPMs are considerable. Where there are concentrations of consumers with high repeated purchase/consumption then many aspects of the marketing mix will be affected. An investigation of the role of covariates in understanding BPMs in the laundry detergent market is presented as an example and ways for market analysts to display results are demonstrated.Originality/value - Despite the fact that BPMs are the best operationalization of behavioral loyalty, until now there has not been a model to evaluate the impact of consumer characteristics as covariates on these BPMs. This paper’s original contribution includes a model which fits covariates to the BPMs. New statistical and graphical methods are described. Computer software for fitting the model and generating the output is available from the authors.

Ad agency professionals' mental models of advertising creativity

Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - The purpose of this paper is to map advertising agency practitioners’ mental models of creativity.Design/methodology/approach - Following the grounded theory paradigm, twenty-eight depth interviews were conducted with advertising agency executives.Findings - Complementing earlier studies in advertising creativity, we discover an integrated and dynamic system of practitioner mental models. Substantive Models depict agency professionals’ core understanding of advertising creativity and its dialectical structure. Developmental Models conceptualize the intrapersonal and social acquisition of creative skills. Social Models characterise the social contexts within which advertising creativity is conceived. Effectiveness Models introduce native explanations for the market effectiveness of creativity. Interrelationships between the four categories of models are presented.Research limitations/implications - Understanding advertising executives’ mental models enriches the literature on the production-side of marketing culture.Practical implications - Shared understandings of mental models between advertising agencies and client brand management teams may help to reduce agency-client conflict.Originality/value - This study (1) provides an integrated view on advertising practitioners’ multifaceted mental models about creativity; (2) captures the dynamic interactions between mental models thus reaching beyond previous isolated accounts; (3) it helps to redress an imbalance in marketing theory between the production and consumption contexts of marketplace culture formation.

Impact of Store Environment on Impulse Buying Behaviour

Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - This paper explores the process by which four store environment (music, light, employee, and layout) and two individual characteristics {shopping enjoyment tendency (SET) and impulse buying tendency (IBT)} influence impulse buying behavior through positive and negative affect, and urge to buy impulsively.Design/methodology/approach - The data was obtained using a structured questionnaire from 733 respondents in a mall survey conducted in Chennai, South India. Findings - In the structural model tested with AMOS, we found that store environment drove impulse buying (IB) through positive affect and urge. Results also showed that the personality variables (SET and IBT) influenced IB through positive affect and urge. This paper did not find support for the relationship between negative affect and urge. Research limitations/implications - Theoretically, we add to the list of antecedents of impulse buying, and to the outcomes of store environment. From a managerial viewpoint, we suggest that retail managers invest in improving the store environment to increase the level of impulse buying in their stores. Specifically, they need to focus on enhancing friendliness of store employees, playing appropriate music, designing proper layouts and having well-lit stores to encourage impulse buying. Originality/value - Prior research studied the elements of the store independently and also its long term impact. To the best of our knowledge, our research is the first to study the impact of store environment (in conjunction with trait variables) on impulse buying.

Trash talk rebuffed: Consumers' defense of companies criticized in online communities

literatinetwork@emeraldinsight.com (Jonas Colliander, Anders Hauge Wien) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - Marketing literature views word-of-mouth (WOM) as unidirectional communication in which consumers transmit either positive or negative messages based on their consumption experiences. Becoming visible in online forums, however, are consumers who engage in WOM as part of interactions with other consumers. This article investigates a phenomenon frequently occurring in these interactions; consumers who defend companies and brands against others’ negative WOM. Design/methodology/approach - We investigated the online defense phenomenon in its natural setting using an online ethnography, known as a netnography. Findings - This study provides empirical evidence for the existence of six different defense styles, as well as details of the identified factors underlying consumers’ choices of defense styles. Moreover, our analysis highlights the different outcomes of various company- and brand defending behaviors and illustrates that this consumer phenomenon can be effective in preventing the spread of negative WOM or in mitigating its impact.Research limitations/implications - Future research could benefit from further testing the effectiveness of the various defense styles as well as investigating how to stimulate this important buffer against negative WOM. Practical implications - Companies are increasingly allocating resources to the monitoring of online conversations so as to be able to respond to criticisms in social media. Our findings indicate that other consumers frequently respond to these complaints before the companies do. These company- and brand defenders could replace some of the resources companies currently devote to social media. Originality/value - Our study identifies company and brand defending as a new WOM activity, thus extending the concept of WOM beyond praising and complaining. In addition, this study suggest that consumers who counter negative messages are not necessarily loyal, as previously assumed, but rather motivated by a sense of justice or a need for self-enhancement.

An Investigation into Online Reviewers’ Behavior

literatinetwork@emeraldinsight.com (Hua-Ning Chen, Chun-Yao Huang) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Purpose - The current research explores variables that explain the differences in online reviewers’ behavior.Design/methodology/approach - Our panel dataset is compiled from Amazon.com’s book section and uses publicly available information about reviewers in combination with the reviews they wrote. We utilize the Pareto/NBD model with time-invariant covariates. The model’s parameters are estimated by using maximum likelihood estimates (MLE) with MATLAB software.Findings - This study contributes to the literature by exploring how the characteristics of reviews and the reviewers might shape consumer review frequency and continuity. Specifically, our results show that review ratings, comments on a review, and helpful votes have a positive association with review frequency and continuity. Furthermore, the length of the textual review has a positive relationship with review frequency, but a negative relationship with review continuity. Relative to anonymous reviewers, people who write reviews and use their real names post reviews less often, but their review continuity is longer.Originality/value - This paper is the first to empirically identify variables that explain review frequency and continuity, thus enabling companies to gain a better understanding of their reviewer base and hence to manage more efficiently online word-of-mouth. It is the first study to apply a well-known behavioral model to address online review behavior.

The Principles of Islamic Marketing by Baker Ahmad Alserhan. 2011. Gower Publishing Limited: Surrey (UK). 204 pages. ISBN 978-0566089220.

literatinetwork@emeraldinsight.com (Aliakbar Jafari) — Fri, 13 Sep 2013 00:00:00 +0100

Abstract

Not available.