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

SB14 MARKETING SCIENCE CONFERENCE – 2010
3 - Market Expansion Effort in a Common Retailer Channel with
Asymmetric Manufacturers
Serdar Sayman, Associate Professor of Marketing, Koç University,
Rumeli Feneri Yolu, Sariyer, Istanbul, 34450, Turkey,
ssayman@ku.edu.tr, Gangshu Cai
This paper evaluates the market expansion effort in a common retailer channel
where two manufacturers are selling products through a common retailer. We
compare scenarios of no effort, manufacturers’ efforts, retailer’s effort, and hybrid
effort – where either manufacturer or the retailer provides effort. Our results indicate
that when the channel competition is relatively less intense, the retailer’s effort
dominates the manufacturers’ efforts for both the manufacturers and retailers; while
the manufacturers’ efforts might be advantageous when channel competition
becomes too intense. We also study the case of store brand and one manufacturer
brand.
4 - Effects of Manufacturers’ Advertising on Volumes, Retail Margins,
and Retail Profits
Alexei Alexandrov, Assistant Professor of Economics and
Management, University of Rochester (Simon), U of Rochester
Carol Simon Hall 3-110P, Box 270100, Rochester, 14627-0100,
United States of America, alexei.alexandrov@simon.rochester.edu
I show that when a retailer is selling two symmetric products, each produced by an
independent manufacturer, higher product differentiation results in higher wholesale
and retail prices (as opposed to prior theoretical literature), but lower retailer margin
and profit. If one of the products is retailer’s private label, and the private label is not
perceived to be much worse than the national brand, then as product differentiation
increases, the retailer’s margin decreases, so does the volume sold of the national
brand, and so does the volume sold of the private label. If the private label product is
perceived to be much worse, then some or all of the effects above might be reversed.
My paper also offers another explanation to the empirical finding of advertising’s
opposite effects on the retailer margin and the wholesale price.
■ SB14
Champions Center VI
Marketing Strategy III: General
Contributed Session
Chair: Nipun Agarwal, Global Events Strategist, IBM India Pvt. Ltd.,
Manyatha Embassy Business Park, Bangalore, India,
nipun.agarwal@in.ibm.com
1 - To Research or to Execute? Analysis of the Drivers of
Marketing Performances
Chiara Saibene, SDA Bocconi School of Management, Via Bocconi 8,
Milan, 20100, Italy, chiara.saibene@sdabocconi.it, Fabio Ancarani
An innovative, broader and integrated approach to marketing research and to
customer insight management, leading to more effective marketing strategies, is key
for gaining sustainable competitive advantage. In fact, MSI underlines among Top Tier
Priorities 2010-2012 the following issues: a) using market information to identify
opportunities for profitable growth; b) understanding customer experience and
behavior; c) developing marketing capabilities for a customer focused organization; d)
leveraging research tools and new sources of data. Are companies really able to
transform market information into strategic marketing decisions leading to
competitive advantage and superior performances? If not, are there other drivers
different from analytic and strategic marketing competences leading to superior
performances? We conducted in fall 2010 a research on 300 European Marketing and
Sales Managers. We measured companies’ ability to manage marketing and sales
competencies, the use of marketing metrics and perceived and objective companies’
performances. As regards market research, strategy and performances, we find
counterintuitive results: a) companies’ execution competences are the most important
driver of performance; b) competences related to market research and understanding
and strategic decision making competences do not have a statistical positive impact on
performance. These main findings show that, in our sample, marketing information
does not translate into differential marketing strategies and that execution is, at the
end, the main driver of performance. We then deepen our research on the financial
industry because in this industry marketing and market information competences are
playing a more and more critical role.
2 - Recall Now or Recall Later: Investigating Drivers of a Firm’s Decision
to Delay a Recall
Meike Eilert, University of South Carolina, 1705 College St, Columbia,
SC, 29208, United States of America, meike.eilert@grad.moore.sc.edu,
Kartik Kalaignanam,
Satish Jayachandran
Every year, numerous products are recalled because they violate safety standards and
pose a hazard to consumer well-being. In 2008, the Consumer Product Safety
Commission supervised 465 recalls, a 36 percent increase from the number of recalls
issued in 2000. To date, most research in the product recall area has focused on the
consequences of a recall on stakeholder attitudes and behaviors towards the firm.
However, little is known regarding when firms recall defective products. We address
this gap in research by investigating the factors that influence the firm’s recall
decision, particularly the decision to delay a recall. A recall delay refers to the time
period between the firm being aware of a potential safety problem and its decision to
issue a recall. By delaying a recall, the firm can move recall-related costs to future
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time periods while obtaining the revenues from selling the product. However, from a
public policy perspective, a recall delay means that a defective product is on the
market longer without the defect being remedied. To shed insights into factors that
drive the recall decision, we use a unique secondary data set and focus on brandrelated
factors that influence a firm’s decision to delay a recall. The findings of our
study have important implications for the management of product recalls.
3 - Virtual Events: An Emerging Tactic that Complements the World of
Experience Marketing
Nipun Agarwal, Global Events Strategist, IBM India Pvt. Ltd.,
Manyatha Embassy Business Park, Bangalore, India,
nipun.agarwal@in.ibm.com
With the challenges and demands of globalization, in a highly competitive
environment where there is explosive growth of information, the requirements for
businesses, their executives, business partners and customers to come together and
exchange knowledge, build networks, and nurture relationships has never been
greater. In any organization, marketing plays a major role to own this responsibility.
Most marketers achieve this objective through conducting “events”. But in today’s
economy, it comes with challenges, when budgets are slashed and partner, customer
are not much ready or can travel and on above this, the attendees who do
participate, no follow up plan gets executed because of ineffective response lead
management system. As a result, marketing are being forced to scrutinize every detail
to prove the value of their events. Now, marketers feel that traditional events suffer
from high costs, limited audience reach, low flexibility, and inconsistent outcomes as
the market is more globalized for any organization. Now with more advanced
technological capabilities like high speed internet, streaming video, life-like graphics –
virtual events have arrived as a growing tactic which complements the world of
experience marketing, supported with other web social media tools which enables
marketers to start the conversation. Virtual Events provide both organization and
attendees with many advantages which traditional physical failed to achieve. This
paper will discuss on how different organization irrespective of their sizes, are using
virtual events as an add-on marketing tactic in their overall marketing plan to create
awareness, generate leads and collaborate with customers and partners.
■ SB15
Champions Center V
CRM VIII: Customer Lifetime Value
Contributed Session
Chair: Peter Pal Zubcsek, University of Florida, Department of Marketing,
212 Bryan Hall, P.O. Box 117155, Gainesville, FL, 32611-7155,
United States of America, pzubcsek@ufl.edu
1 - Churn Prediction Using Bayesian Ensemble in
Telecommunications Market
Jaewook Lee, Associate Professor, POSTECH, San 31, Nam-gu,
Pohang, Korea, Republic of, jaewookl@postech.ac.kr,
Namhyong Kim
Correct predictions in the field of marketing play an important role in the customer
management and maintenance and are essential in direct marketing and
micromarketing which focus on a specific group of customer. Recently, churn
prediction becomes a major issue of telecommunications market, one of the most
competitive industries with 20-40 % of customers leaving their provider in a given
year. The objective of churn management for target marketing is to maximize the
value of the company by minimizing the churn rate through identifying the
customers who are likely to leave and enhancing the management activities for those
customers. In this study, we consider the customer data provided by a wireless
telecommunications company where the data are large-scaled and highly imbalanced
as well as the two class of data highly overlap each other. Due to these reasons, the
various conventional data mining techniques are not so successful to get meaningful
results. To overcome this problem, we propose a novel principled Bayesian ensemble
model that optimally aggregates prediction results and provide generative process
based on variational analysis. The results of applying the proposed method to our
dataset show significantly better performance than the existing methods in terms of
predictions and complexity as well as provide an important predictive property of the
generative models that are crucial for supporting managers’ flexible and timely
pricipled decisions.
2 - Improved Churn Prediction With More Effective Use of
Customer Data
Özden Gür Ali, Koc University Rumeli Feneri Yolu, Sariyer, 34450,
Istanbul, Turkey, oali@ku.edu.tr, Umut Ariturk, Hamdi Ozcelik
In this paper we focus on the customer churn prediction problem in the highly
dynamic banking industry of emerging markets with ever-changing expectations of
consumers, increasing diversity in products and services offered, and abrupt changes
in economic conditions. Traditional churn models are typically estimated on cross
sectional data pertaining to a particular time period and applied on subsequent
periods, which is appropriate under static environments. On the other hand,
customer behavior responds to changes in the environment. We show that using
longitudinal data along with dynamic variables describing the customer experiences,
and the economic environment improves prediction accuracy independent of the
model used. Further, we propose the use of ordinal logistic regression to capture the
time to churn in non-contractual settings and evaluate its impact on predictive
accuracy of customer churn.