Conference Sessions - Jesse H. Jones Graduate School of ...

FB15
4 - Price Pressure and Supplier Relations: Industry-Specific Findings
R. Mohan Pisharodi, Associate Professor of Marketing, Oakland
University, 414 Elliott Hall, School of Business Administration,
Rochester, MI, 48309, United States of America,
pisharod@oakland.edu, Ravi Parameswaran, John Henke, Jr.
Original Equipment Manufacturers (OEMs) in a number of industries across the
world are known to frequently follow the practice of using adversarial price reduction
efforts to extract lower prices from their suppliers. Several other OEMs, while
pursuing price reduction, have adopted more cooperative and less antagonistic
approaches driven by the belief that adversarial price pressure on suppliers will be
detrimental to good working relationships. This research probes the relationship
between OEM price pressure on suppliers and the nature of OEM-supplier working
relationships. A research model, founded on literature from multiple disciplines, was
developed to examine the above relationship. The model has one outcome variable
(Overall Relationship), two initial variables (Price Pressure and Other Pressures) and
five mediating behavioral variables. Responses covering nine manufacturing
industries were collected from a diverse sample of supplier respondents of global
OEMs with procurement operations in North America, Asia, and Europe using an
Internet-based survey questionnaire. The structural relations in the research model
were analyzed through structural equation modeling using LISREL, with the
complete data set as well as with industry-specific data sets. The results of statistical
analysis reveal a consistent pattern of relationships with industry-specific variations.
The overall pattern of relationships indicates that price pressure need not result in
poor supplier-OEM relationships, and can exist along with good supplier-OEM
relationships if the pressure is administered in a supportive manner. Inter-industry
similarities and differences are assessed and their implications for research in
marketing as well as for marketing management are discussed.
■ FB15
Champions Center V
CRM III: Customer Loyalty
Contributed Session
Chair: Radu Dimitriu, Lecturer in Strategic Marketing, Cranfield School of
Management, 1 Wynyard Court, Oldbrook, Milton Keynes, MK6 2SZ,
United Kingdom, radu.dimitriu@cranfield.ac.uk
1 - Do Reward Programs Affect Consumer Behavior?
Ricardo Montoya, University of Chile, Republica 701, Santiago, Chile,
rmontoya@dii.uchile.cl, Oded Netzer, Ran Kivetz
Reward programs have become ubiquitous in the marketplace and a key tool
companies use in the hope of shaping the behaviors of customers, salespeople, and
employees. For example, many retailer reward programs attempt to motivate
customers to visit the store more often and spend more during each visit. In the
present research, we test a series of existing and new hypotheses regarding the effects
of reward programs on consumer behavior. We analyze a large transactional dataset
from a major retailer’s reward program; the dataset includes individual-level
purchases and reward redemptions. We augment our modeling of this secondary
dataset with controlled laboratory experiments. Among other predictions, we
examine the “goal gradient” hypothesis, the “post-reward pause” hypothesis, and the
notion that customers “earn the right to indulge” (in luxury rewards) by exerting
more effort in the program. To the best of our knowledge, our research is the first to
model transactional data from a large retailer reward program in order to test a
diverse set of behavioral hypotheses. For example, we find that as customers
approach the program’s reward goals, they accelerate the rate at which they purchase
in the chain’s stores (i.e., a goal gradient effect). We also observe that customers who
need to exert greater effort to reach a reward threshold are more likely to redeem a
luxury reward. Customers also exhibit a “post-reward pause,” whereby after
redeeming a reward they temporarily reduce their purchase frequency. Our study of
these and other phenomena leverages the richness of the secondary transactional
dataset available from this retailer’s reward program. We empirically model these data
to better understand the effects of rewards programs on consumer behavior.
2 - Shortcuts to Glory? Exploring When and Why Attribute Performance
Can Directly Drive Loyalty
Johannes Boegershausen, Grenoble Ecole de Management,
12 rue Pierre Sèmard, Grenoble, France,
johannes.boegershausen@grenoble-em.com, Christophe Haon,
Daniel Ray
Providing customers with high satisfaction has been advocated as one of the primary
means to enhance their loyalty intentions (Johnson et al. 2006; Gupta and Zeithaml
2006). In order to achieve high levels of overall customer satisfaction, many firms
invest substantial resources into enhancing performance on the key service attributes.
Over the last decade, there has been a substantial interest in chain frameworks such
as the satisfaction-profit chain (Anderson and Mittal 2000), which in essence links
attribute performance, customer satisfaction, customer retention, and profit.
Surprisingly, despite numerous investigations and extensions of this and related chain
frameworks, the occurrence and consequences of a direct effect of attribute
performance on loyalty intentions has been largely neglected. Yet, several studies
(e.g., Mittal et al. 1998; Kumar 2002; Lariviére 2008) report such unexpected direct
effects. However, a critical re-assessment of the (full) mediating role of customer
satisfaction in the attribute performance – loyalty intentions relationship is nonexistent.
We address this void by drawing from the multi-attribute model, postpurchase
thought, and service quality literature to provide a theoretical explanation
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why certain attributes may directly impact attitudinal loyalty (i.e. repurchase and/or
recommendation intentions). Our empirical analysis in an intercontinental aviation
setting demonstrates that direct effects of attribute performance on loyalty intentions
are the rule rather than the exception. Moreover, we highlight the detrimental effects
for resource allocation of failing to control for these direct effects. Lastly, we open
avenues for future research by exploring additional possibly omitted mediators (Zhao
et al. 2010).
3 - How do E-Commerce Interfaces Affect Customer Satisfaction
and Loyalty?
Hsiu-Wen Liu, Assistant Professor, Soochow University, 56, Kueiyang
St., Sec. 1, Taipei, Taiwan - ROC, hsiuwenliu@gmail.com, Yu-Li Lin
This article presents an empirical test of user interfaces in the context of online
retailer. The model posits that user interfaces lead to consumer satisfaction and
loyalty. The sample includes 600 customer data. Results from the empirical test
indicated that user interfaces affects customer satisfaction. Customer satisfaction
affects customer loyalty. Further, customer satisfaction serves as a fully mediator of
the effects of user interfaces and customer loyalty. Finally, theoretical, managerial and
future research implications are included.
4 - Investigating Multipurpose Customers
Radu Dimitriu, Lecturer in Strategic Marketing, Cranfield School of
Management, 1 Wynyard Court, Oldbrook, Milton Keynes, MK6 2SZ,
United Kingdom, radu.dimitriu@cranfield.ac.uk, Fred Selnes
Whereas the bulk of the sales of many companies comes from product categories that
are typical of their business model and activity, considerable sales opportunities arise
from offerings in ancillary categories. For instance, the last decades have seen food
retailers extending their product range to include non-food items, such as electrical
appliances, clothing, banking solutions or even petrol. We define those customers
buying across categories as “multipurpose customers” (e.g., customers buying both
food and non-food items from the same retailer). We analyzed the customer purchase
data for an online bookshop specializing in selling academic books. We computed
repurchase likelihood scores for the customers in the database based on an RFM
approach. Controlling for purchase frequency, recency and amount spent, we found
that being or not a multipurpose customer (i.e., buying both academic and nonacademic
books such as fiction) was a strong predictor of customers’ repurchase
likelihood. Multipurpose customers seem therefore to be extremely attractive. Several
important questions arise however about multipurpose customers. First, is their
higher repurchase likelihood based on affective commitment, or rather on calculative
commitment or simply inertia? Second, would a company benefit from initiating
campaigns to migrate the other (usually largest) part of their customer portfolio
toward becoming multipurpose, or would such a marketing effort lead to a poor
return on investment? Overall, our study documents the importance of multipurpose
customers and presents a series of propositions meant to guide further research on
the topic.
Friday, 1:30pm - 3:00pm
■ FC01
Legends Ballroom I
Choice V: Empirical Results
Contributed Session
Chair: Christian Schlereth, Goethe University Frankfurt, Grueneburgplatz
1, Frankfurt, 60323, Germany, schlereth@wiwi.uni-frankfurt.de
1 - Measuring Scale Attraction Effects in Charitable Donations:
An Application to Optimal ‘Laddering’
Kee Yeun Lee, Doctoral Student, University of Michigan, 620 Hidden
Valley Club #201, Ann Arbor, MI, 48104, United States of America,
keeyeun@umich.edu, Fred M. Feinberg
When seeking donations, charities nearly universally use an appeals scale: a set of
specific monetary values from which potential donors can choose. However, little is
known about how to appropriately select the scale points themselves, which are
intended to serve as referents or anchors. Choosing them well is crucial: if charities
select very high scale points (e.g., to try to increase donation amounts), they may risk
alienating donors and receiving nothing; low scale points may encourage more
people to donate, but less overall from each. Using unique data from a 3.5 year quasiexperiment,
we employ a Tobit-II type model to account for both donation incidence
and frequency. The model allows for tests of several distinct (latent) reference-price
operationalizations, as well as (heterogeneous) pulling-up and pulling-down scale
point attraction effects. Results show that the appeals scale really matters: even
though donors can give what they wish (or not at all), the scale impacts both the
“whether” and the “how much?” of donations. We find a strong negative correlation
between donation incidence and amount, suggesting that asking for too much might
raise average donation, but at the cost of lowering the proportion who do donate.
Intriguingly, although we did not find significant heterogeneity on when people give
(seasonality), scale attraction effect strength does vary across donors. This variation
provides tangible information to help charities with “laddering”: deciding how much
to increase the amount requested of individual donors based on past history.