Index of Paper Presentations for the Parallel Sessions - Academy of ...

Proceedings2012 ACADEMY OFINDIAN MARKETINGINTERNATIONALCONFERENCEINNOVATION IN MARKETING FOREMERGING MARKETS - GlobalChallenges and OpportunitiesCompiled by :Dr.Suraksha Gupta, Dr.Denish Shah, Dr.Shamim MondalOnJuly 29-302012AtHotelLEELAPALACEBANGALOREINDIA2012

Index of Paper Presentations for the Parallel SessionsAuthorsTitle IndexConsumer BehaviourAjay Singh and *Sameer DeshpandeRole of Perceived Superiority of FemaleCondoms*Varsha Jain and Prof.Ashok RanchhodDeveloping a conceptual Framework forunderstanding Luxury Brand Consumption inIndia and China*Mihir Dash and Divas GuptaA Study of Mobile Number Portability amongStudents in India*Balakrishna Grandhi, Jyothsna Appaiah Singhand Rony JacobProximity marketing: Opportunities andChallenges in an Ememrging MarketInnovation and Performance*Maria Smirnova, Vera Rebiazina and OlgaTretyakThe role of product innovation in the contextof Russian economy*Mlenga Jere and Karren MushureExploring the factors that influence the use ofhair extensions amongst black women insouth African*Subin SudhirAn exploratory Study on the MarketingChallenges in the Diffusion of GrassrootInnovations: A Case study from India*Mlenga Jere and Steven Michael BurgessMessage Source Portrayals in EmergingMarket Advertisements: Analyzing Physicaland Cultural CharacteristicsIndustrial Marketing*Prem Dewani and *Piyush SinhaRole of Gratitude and Obligation in BusinessRelationship

Anna-Lena Ackfeldt and *Neeru MalhotraCan we manage the influence of role stressorson organizational commitment of front-lineemployees?*Nathalie Chinje and *Geoffrey BickLessons from Implementing CRM in anEmerging market: A case study of a mobiletelephony company in South Africa*Suraksha GuptaInternational Brands, Business Relationshipsand Marketing Innovation in EmergingEconomiesMarketing for Sustainability*Kavita Sharma and Monika Bansal*Saurabh Mishra and Sachin Modi*Karanam Nagaraja Rao and P SathyapriyaEnvironmental consciousness, its antecedentsand behavioural outcomesCorporate Social Performance, Brand Equity,and Shareholder ValueRural Penetration of Life Insurance Productsin India*Ansh Gupta and *S.B DashExamining the association between GreenExperience and Green Brand Equity: - Astudy in Indian green hotel industryMethodologies and MeasurementsGeetha M., *Piyush Sharma and BharadhwajSivakumaranA Comparison of Reflective/FormativeSecond Factor Models with the SchmidLeiman Factor StructureShilpa Bagdare and *Rajnish JainMeasuring Retail Customer Experience*Ankit Kesharwani, Daniel Sherrell, MakamBalaji and Nitin GuptaDo (How) Digital Natives Adopts A NewTechnology Differently than DigitalImmigrant? A Longitudinal Comparison ofFour Competing Theoretical Models

RahmanBangladesh and Singapore*Author’s name underlined will present the paperTimings of Session 1 - 1.00pm-2.15pm,Session 2 - 2.15pm-3.30pmRole of Perceived Superiority of Female CondomsIntroductionAjay Singh and Sameer DeshpandeMany social change campaigns employ educational tactics, and within those, fear appeal is dominant inthe way the message is communicated. We also find overemphasis on legal tactics, where penalties areimposed for carrying out a current behaviour (e.g., driving under the influence) or for not carrying out adesired behaviour (e.g., not wearing a seatbelt). While these efforts may be useful, they may not work forall (Rothschild, 1999). Education is likely to work with those who are motivated to change their behaviourand who perceive they have the self-efficacy to change. Similarly, law is likely to work when motivationis lacking. However, we need other tactics for individuals who lack self-efficacy or who perceive pooropportunity in the environment. As a result, such tactics have limited effectiveness in influencingindividual behaviour change. What is lacking in these efforts is the utilization of social marketing tactics.In other words, there is little emphasis on providing opportunities in the environment (Rothschild, 1999)that offer benefits from and reduce barriers to the desired behaviour.To explain this further, let‘s look at the 2 X 2 table discussed by McKenzie-Mohr (2011) to understand thebenefits from and barriers to current and desired behaviours. We can categorize these such that benefitsfrom a current behaviour (e.g. unsafe sex) is cell 1, barriers/costs is cell 2, benefits from a desiredbehaviour (example of desired behaviour: sex with male condoms) is cell 3, and barriers/costs is cell 4. Byfocusing on fear, campaign managers are highlighting the negative consequences of the current behaviour.In other words, they are focused on cell 2 of the McKenzie-Mohr table. On the other hand, the intendedaudience members are carrying out their current behaviour because they see a benefit, i.e., they arefocused on cell 1 of the table.This mismatch between what the audience members are seeking (benefits from their current behaviour)and what the campaign managers are offering them (highlighting barriers/costs of current behaviours) islikely resulting in ineffective campaigns, especially among those who lack ability or who perceive pooropportunity in the environment. In order to reduce this inconsistency, campaign managers need to becomebenefit-oriented. They need to explore and promote expected benefits from the desired behaviour. Whatbenefits they should promote could be assessed by understanding what benefits the audience perceivesthey receive from their current behaviour and offer a similar benefit from the desired behaviour, minus thenegative consequences of the current behaviour (i.e., offer cell 1 benefits for the desired behaviour withoutthe cell 2 costs). This would ensure a winning proposition in the social change campaign.

A few studies have explored audience perceptions of benefits in the social marketing context. Forexample, Deshpande and Rundle-Thiele (forthcoming) explore benefits received from current behaviour(binge drinking among American university students) compared to desired behaviour (participating inalcohol-free socializing activities) and discuss how the benefits from the current behaviour are superior,justifying why more students on American college campuses binge drink than drink and socializeresponsibly. More such studies are required since a context-specific understanding of benefits to currentand desired behaviour is lacking.In some instances, even when campaign managers employ social marketing strategies, promote benefits,and augment the behaviour by promoting a tangible product, they fail to be effective if socio-culturalfactors inhibit behaviour change. Referring back to the McKenzie-Mohr table, when the social productpresents insurmountable barriers (cell 4) for usage despite clear benefits and audience motivation to usethem, it is important that a new social product is introduced that offers similar benefits to the existingsocial product, but reduces the barriers to using it. To explore this topic, we investigated the perceptions offemale sex workers (FSWs) in India towards female condoms, especially compared to male condoms.Kotler and Lee (2008) propose a variety of benefit-oriented strategies to enhance the attractiveness ofdesired behaviour. However, they have not discussed the importance of promoting benefits perceived froma new social product over existing social product. Our study adds to the existing set of benefit-orientedtactics.BackgroundIndia hosts the world‘s third largest population living with HIV/AIDS. The estimate ranges from 2.1 to 3.1million (IIPS & Macro International, 2007), although the incidence is low (around 0.6% of thepopulation). Female sex workers (FSWs) and their male clients, primarily truck drivers and migrantworkers, are the core carriers of this virus. As a result, HIV/AIDS prevention efforts, including condompromotion, have targeted these groups. Although numerous efforts have been undertaken by thegovernment of India, foundations, and community-based organizations to promote condoms, the usageremains low (around 6%). Unless FSWs insist their clients wear male condoms, these campaigns wouldnot be effective in reducing the incidence of HIV/AIDS.There are several reasons why FSWs fail to insist that their male clients wear condoms. These include therole of patriarchy, which rears its head in all aspects of Indian culture, and puts FSWs in a weaknegotiating position. Negotiation is also hampered by poverty among FSWs. Male clients threaten to havesex with another woman if the FSW insists on use of a condom or they promise to pay extra if the FSWagrees to have sex without a condom. Thus, despite motivation and awareness among FSWs, condomusage remains low when male clients have sex with FSWs. Since male partner cooperation is less criticalwhen using female condoms (compared to male condoms), women feel empowered to use femalecondoms. It is logical to expect that, if female condoms are promoted, barriers will be reduced andcondom use will increase among FSWs. This study investigates whether the perceptions of FSWs areconsistent with our thoughts.In recent years, efforts have been undertaken to promote female condoms by the National AIDS ControlOrganization (NACO) in partnership with the private sector. Previous studies have investigated factorsthat influence the use of male condoms (e.g., Kerrigan et al. 2003) and female condoms (e.g., Wang et al.2007) among FSWs. However, studies in the past have not investigated whether benefits from femalecondoms are truly superior to those from male condoms (offering more benefits or fewer barriers) and ifso, how this superiority encourages the use of female condoms. In addition to this, our study alsoinvestigated the influence of age, years in business, and client attitude on the frequency of femalecondoms usage. In summary, the purpose of this study was to identify factors that influence acceptance offemale condoms (FCs) by FSWs.MethodThe first author sought ethics approval and followed ethics guidelines laid down by the Indian School ofBusiness. This institute also provided financial assistance for data collection of this study. Data was

collected in nine cities across five Indian states. Four of these states have high FSW activity and report ahigh incidence of HIV/AIDS. The cities were Hyderabad in Andhra Pradesh, Bangalore and Mysore inKarnataka, Mumbai and Pune in Maharashtra, and Chennai and Madurai in Tamil Nadu. The fifth state,with a low incidence of HIV/AIDS, is West Bengal, where data was collected in Kolkata and Darjeeling.The first author and his four colleagues collected the data, with the help of NGOs and police officers. Atotal of 3,000 FSWs were approached, of which 2,450 participated in the survey study. Of these, weremoved responses from those who were either unaware of female condoms, and/or had never used them,resulting in 1,939 cases.The FSWs were recruited based on a judgmental and convenience sampling technique and representedbrothel-based, street-based, and home-based workers, as defined by Dandona et al. (2005). Therespondents were asked questions and requested to rate them on a 7-point scale (ranging from 1= stronglydisagree to 7= strongly agree). The measurement scales were based on previous studies as well as focusgroups conducted among the FSWs. The questionnaire took 5-10 minutes to complete.Independent factorsFactor analysis revealed three factors with Cronbach‘s alpha exceeding 0.86. ―Barriers to using femalecondoms‖ (Clients will know when FCs are being used, FC can only be used if clients allow it, it isnecessary to remove FC immediately after intercourse, usage of FC is uncomfortable, FC can slip easilyduring the intercourse, FCs are costlier than MCs; ―advantage over male condoms in terms of marketingstrategy‖ (FCs are easier to use than MCs, FCs are more easily available in the market as compared tothe MCs, clients pay extra money for using FCs more than MCs, I get more incentives fromGovernment/NGO‟s for using FCs as compared to MCs); ―advantage over male condoms in terms ofenvironmental support‖ (FCs allow women to make the decision about using condoms more so ascompared to MC, my mausi (i.e. brothel in-charge) encourages me to use FCs more than MCs, my sakhi(i.e. co-workers) support the use of FCs more than MCs).A fourth factor ―client attitude‖ had two items (Clients enjoy FC as part of foreplay, FCs give pleasure tothe clients). These two were significantly correlated (r = 0.78, p

Referring to Table II, data also revealed geographical variation in female condom usage. FSWs in the statewith low incidence of HIV/AIDS, i.e., West Bengal, reported the highest usage of FCs among the FSWs,while the other four states, with a high incidence of HIV/AIDS, showed substantially lower usage. Webelieve the variation by state is a reflection of two factors. First, and probably the most important factor,could be the effort by the Durbar Mahila Samanwaya Committee to unionize Kolkata-based Sonagachisex workers. As part of the unionization process, FSWs forced male clients to wear condoms (Bhaumik,2005). This factor could have played a role in the increased usage of female condoms as well. All fourstates of Maharashtra, Tamil Nadu, Andhra Pradesh, and Karnataka have witnessed extensive HIV/AIDsprevention and condom promotion efforts by NACO and the Bill and Melinda Gates Foundation, alongwith many state and local level community-based organizations. While these efforts have increasedawareness of male condoms, FSWs face barriers. The unionization of FSWs remains low in these fourstates.------------------------Table II about here------------------------Degree of mobility may also have influenced the variation in female condom use. Our datarevealed that FSWs moved to at least three different locations, at least one or two locations outside beingthe district in which they were interviewed. FSWs move to maximize trade opportunities but greatermobility makes them vulnerable to poor ability to negotiate, resulting in lower accessibility to and usageof condoms.Discussion and managerial implicationsReferring to the McKenzie-Mohr (2011) study, we urge social change managers to devise strategies thatpromote benefits (cell 3) from the desired behaviour in addition to highlighting the negative consequencesof the current behaviour (cell 2). Thus, there is a need for a paradigm shift to switch focus from a cell 2 toa combination of cell 2 and 3 change strategy. Additionally, when the benefits from the desired behaviourfail to excite the target group, it is necessary to target a more responsive audience and improve the chancesof behaviour adoption by introducing a substitute social product, thereby reducing the barriers to thedesired behaviour (cell 4). We explored both of these issues by understanding the benefits obtained fromfemale condoms and incremental benefits from the use of female rather than male condoms by FSWs.In our study, FSWs reported that their colleagues offered better support to female over male condoms, thatthe marketing strategy was superior, and that the male clients had a positive attitude to the femalecondoms. All these factors had a positive influence on the frequency of female condom usage. Theattractiveness of the marketing strategy and the client attitude were the strongest influencers, confirmingthe understanding that a good social marketing strategy can play a pivotal role in enhancing theeffectiveness of the campaign. While promoting a newer version of a social product, it is helpful tohighlight its superiority over the existing version, something neglected in the past. This may be necessaryto reduce perceived barriers (raised by the current social product), enhance environmental support,improve customer attitude, increase product use, and increase the effectiveness of the social marketingcampaign. The female condom promotion campaign among FSWs in India should also be tailored to ageand level of mobility.The study findings could be generalized to other social contexts in which a social product already existsbut in which the campaigns have been less successful in promoting desired behaviours. In those instances,it would be useful to think of new social products that will be perceived as superior to the existing ones.These include the promotion of a healthy diet that is tasty, conveniently available, and reasonably pricedover the existing bland, expensive, and inconveniently available healthy diet, scientifically-based weightmanagement strategies that are more effective and less harmful, more effective techniques of smokingcessation (patch and pills) over cold turkey, and so on.ReferencesBhaumik, S. (17 September 2005), "Indian sex workers demand rights", BBC News, available at:

http://news.bbc.co.uk/1/hi/world/south_asia/4256412.stm (accessed 23 August 2011).Dandona, R., Dandona, L., Gutierrez, J. P., Kumar, A. G., McPherson, S., Samuels, F., Bertozzi,S. M. and the ASCI FPP Study Team (2005), ―High risk of HIV in non-brothel based female sexworkers in India‖, BMC Public Health, Vol. 5, pp. 87, doi:10.1186/1471-2458-5-87.International Institute for Population Services (IIPS), Macro International, and Ministry of Healthand Family Welfare, Government of India (MoHFW) (2007), National Family Health Survey(NFHS-3). 2005-06, India. Mumbai: IIPS and MoHFW.Kerrigan, D., Ellen, J. M., Moreno, L., Rosario, S., Katz, J., Celentano, David D. and Sweat, M.(2003), ―Environmental-structural factors significantly associated with consistent condom useamong female sex workers in the Dominican Republic‖, AIDS, 17, 415–423.McKenzie-Mohr, D. (2011), Fostering Sustainable Behavior: An Introduction to Community-Based SocialMarketing, New Society Publishers: Gabriola Island, B.C.Rothschild, M. L. (1999), ―Carrots, sticks, and promises: A conceptual framework for themanagement of public health and social issue behaviors‖, Journal of Marketing, Vol. 63 No.October, pp. 24-37.Wang, Y., Li, B., Song, D.-M., Ding, G.-Y., and Cathy, E. (2007), ―Power relation and condomuse in commercial sex behaviors‖, Biomedical and Environmental Sciences, 20, 302-306.

Table I.Descriptive statisticsMean SD Frequency• 20% have usedonce• 34% have usedFrequency of usageonce a weekor less• 47% one or morethan once aday• 48% less than 30Age in yearsyears old• 50% 31-50 yearsold• 56% had 5 orfewer yearsYears in the businessof experience• 44% had 6 or moreyears ofexperienceClient Attitude 4.65 2.31Barriers 3.67 2.25CompetitiveAdvantage (Strategy)4.54 1.95CompetitiveAdvantage (Support)4.84 2.05Table II.Geographical variation in female condom usageState N Mean SDWest Bengal 440 4.14 a 1.18Maharashtra 247 3.30 b 1.29Tamil Nadu 380 3.00 bc 1.17Karnataka 364 2.90 c 1.31Andhra Pradesh 508 2.48 d 1.51Different superscripts denote statistical differences (p < .05)

Figure 1.Factors that influence frequency of female condom usage among FSWsModel indicators:Chi Square GFI NFI TLI CFI RMSEA5.07, df = 3, n.s..99 1.00 .99 1.00 .02 (0 - .05)

Developing a Conceptual Framework for understanding Luxury BrandConsumption in India and ChinaAuthor 1: Dr. Varsha Jain* (PhD, MBA)Research Fellow, Head Division of Integrated Marketing communicationMudra Institute of Communications ResearchShela, Ahmedabad – 380058IndiaPhone: 09714621155varsha.micore@micamail.in, varsha8075@yahoo.co.inAuthor 2: Dr. Ashok Ranchhod (PhD, FCIM)Reader, Winchester School of ArtUniversity of South HamptonUnited KingdomPhone: 00-447855958024a.ranchhod@soton.ac.uk, ranchhod@gmail.com*Correspondence AuthorProfile of authorsAuthor 1: Dr. Varsha Jain (PhD, MBA)Dr. Varsha Jain is a Research Fellow and division head of integrated marketing communication at theMudra Institute of Communications Research in Ahmedabad. She has 26 publications in international,national and trade journals and book chapters to her credit in the last 4 years. Her papers are published inInternational Journal of Mobile Marketing, Young Consumers (Emerald), Vikalpa (IIM-A Journal), MediaAsia (NTU, Singapore), WARC (World Advertising Research Council, UK) etc. She reviewed papers ofAMIC conference in 2009, 2010 and 2011, Vikalpa (IIM-A‘s journal), Journal of CreativeCommunications (Sage Publication) and book chapters on integrated marketing communication forOxford University Press and on strategic brand management for Sage Publication. She has presented 18research papers within 4 years at national and international conferences such as Asian Media InformationCentre (AMIC, NTU, Singapore in 2009, 2010 and 2011), IIM Lucknow, IIM Indore, IMT GhaziabadICFAI, Hyderabad etc. She was chairperson at AMIC (Singapore) international conference in 2010. Herpapers were among the best papers at many conferences and got published by the conference organizerssuch as AMIC in 2009. She does research in the area of advertising and branding.

Author 2: Ashok Ranchhod, BSc., MSc., MBA, PhD, FCIMAshok Ranchhod is now Reader at the Winchester School of Art, University of Southampton. He waspreviously serving as the Director of the Mudra Institute of Communications Ahmedabad (MICA), the topCommunications School in India.He was also a Research professor at Southampton Business School for several years. Ashok has publishedextensively on e marketing in Journals such as the International Journal of Advertising and the Journal ofInformation Technology. He sits on the Editorial Boards of the Journal of Small Business and EnterpriseDevelopment, the Journal of e-Commerce Research and the Journal of the International Mobile MarketingAssociation.. He has undertaken consultancy work for major organisations and has written case studies oncompanies in several different sectors of industry for the Chartered Institute of Marketing. Prior to hiswork in academia, he was the Managing Director of Microplants, a biotechnology company based inDerbyshire.In addition to the published papers he has received prizes for his papers at the Academy of Marketing andThe British Academy of Management. Currently his research is into e-commerce and corporate socialresponsibility. He leads a team of research students in these areas. He has published over fifty papers sofar. Ashok is a Senior Examiner for the Chartered Institute of Marketing (CIM) and a Tutor at HenleyManagement College. Currently he is an External Examiner at Ashridge. He holds VisitingProfessorships at the University of Angers (France), Winchester School of Art (University ofSouthampton) and Napier University (Scotland). In recognition of his services to business and marketinghe was made a Fellow of the Chartered Institute of Marketing in 2000. He is also a Trustee of CAM(Communication Advertising and Communications). Over the last ten years he has won several bids forresearch. Ashok (with Calin Gurau) has also published the second edition of Marketing Strategies: AContemporary Approach published by Pearson Education.Developing a conceptual Framework for understanding Luxury Brand Consumption in India andChinaAbstractThe luxury market has shown great potential in emerging countries such as India and China. The Indianluxury market is valued at US $ 3 billion and the luxury market in China is currently worth US $ 10.7billion. It is expected that the luxury market in India will grow to US $ 30 billion and Chinese luxurymarket will settle at US $ 27 billion by 2015. This paper focuses on the perceptions of the consumers inthese nations together with models of interaction with the segments targeted by luxury brands. Thedifferences between India and China are compared and contrasted. The secondary research that has beencarried out indicates that the consumers in India and China have different perceptions of luxury based ontheir historical, social and economic backgrounds. The resultant opinions emphasize display ofextravagance in India and ‗face‘ representation in China. The industry implication of this paper is thatthrough an understanding of the different perceptions of luxury, marketers can formulate their brandingstrategies in India and China. In order to undertake further research in this important area, a set ofhypotheses have been proposed for testing.Keywords: Meaning of Luxury, Perception of Luxury, India and China

1. IntroductionLuxury has its origin in the Latin word ―luxus‖. According to the Oxford Latin Dictionary, it denotespleasurable extravagance and opulence (Gupta, 2009). Luxury incorporates beauty and art that appeals tothe senses. It seeks to provide pleasure and experiential benefit that extends beyond the functional utilityof products (Kapferer and Bastien, 2009). This benefit comprises of hedonic pleasure, which is furtherrooted in the distinctiveness of luxury. It also enhances the desire for luxury products. Thus, luxury is aqualitative concept that indicates abstract levels of sophistication and multi sensory appeal (Wiedmann etal., 2009).There are numerous typologies for luxury, namely, democratic luxury, inaccessible luxury and massluxury. ‗Democratic luxury‘ is that luxury wherein extraordinary consumers regard it to be common,while the common consumers would regard it to be extraordinary (Kapferer and Bastien, 2009). Itsuggests that different people have different perception towards luxury that may even change over time.‗Inaccessible luxury‘ is that luxury wherein the products are over indulgent and highly priced, and thus,they can be purchased by only a handful of consumers (Paskeviciene, 2010). Conversely, ‗mass luxury‘ or‗new luxury‘ is that type of luxury where there are high levels of sophistication and quality, but is lessexpensive, and thus may be afforded by many people (Silverstain and Fiske, 2008). There may bedifferent types of luxury, but still there is one common similarity among all the types of luxury, that is, thesymbolic desire for dominance within a social class. However, this symbolic desire is different fromsnobbery as it is based on provocation, while the desire for dominance is related to social implication.Thus, luxury may be deeply ingrained in the social fabric of human society (Kapferer and Bastien, 2009).2. Luxury BrandsLuxury brands yield prestige to the consumers that can be distinguished from their functional utility(Kapferer and Bastien, 2009). The price of these brands is very high, which translates into possibly lowpractical utility and a high level of intangible utility (Nueno and Quelch, 1998). Luxury brands provideintangible utility as they have the characteristics of uniqueness, superiority, brand distinctiveness and highlevels of observed quality (Phau and Prendergast, 2000). These parameters give luxury brands a fineimage that is preserved through appropriate branding strategies. The features of a marketing program ofthese brands are entwined so that the good quality of the product, memorable and sensory consumption ofthe brands can be maintained. These features are essential competitive advantages that generate exclusiveimportance for luxury brands. In this way, luxury brands provide the essential portrayal of branding(Keller, 2009).

Luxury brands possess certain attributes. The first attribute signifies beauty of the luxury brands. It mustbe portrayed creatively, as it is the most essential embodiment of the brand. The second attribute is theexcellent quality of these brands. This excellence can be portrayed by high level of sophisticatedcraftsmanship. The third attribute is enchantment, which charms and fascinates luxury owners. Theseattributes are not present in functional brands as they operate beyond the mere functional utility ofproducts (Kapferer, 1998).2.1. Distinctions between Luxury and Non-Luxury BrandsLuxury brands may be differentiated from non-luxury brands on five main dimensions, namely, perceivedconspicuousness, uniqueness, extended self, hedonism and quality (see Figure 1).Perceived Conspicuousness:Consumers perceive that there is a positive and direct relation between consumption of the luxury brandand their social status. Therefore, they purchase and use these brands in public as they believe that throughpublic representation of wealth, luxury consumption will enhance their social status and prestige (Zinkhanand Hong, 1991).Perceived Uniqueness:Consumers have a strong desire for exclusivity as it adds to their self esteem. Thus, they seek to purchasethose luxury brands, which have limited supply. Consumers want to portray that after buying such brands,they are able to maintain the exclusivity of the brands (Lynn, 1991).Perceived Extended Self:The construction of one‘s self is enhanced when symbolic meanings are associated with luxury brands andbecome part of a consumer‘s persona. Therefore, great symbolic associations are held with luxuryconsumption (Richins, 1994).Perceived Hedonism:The hedonic perception associated with luxury brands means that luxury consumption yields sensoryfulfillment to the consumers. Such gratification is in the form of emotional and experiential benefit thatextends beyond the functional benefits of these brands (Westbrook and Oliver, 1991).Perceived Quality:Consumers expect luxury brands to be of better quality than non-luxury brands. When the luxury brandsare able to deliver the good quality, they develop a premium image in the minds of consumers.Additionally, consumers also perceive that high prices are correlated with the quality of the brands andthus prefer these brands (Rao and Monroe, 1989).

Figure 1: Dimensions that differentiate Luxury and Non-luxury BrandsLuxury BrandsHIGHAll these dimensions were incorporated in a scale known as Brand Luxury Index (BLI) which measuresconsumers‘ opinions about luxury brands. Consumers may substitute one dimension for another that theyperceive to be of greater importance (Vigneron Hedonismand Johnson, 2004).2.2. Country differencesConsumers in different countries perceivePerceivedluxury differently.QualityCountry differences in perceptions of luxuryarise on the basis of cultural concepts and values. These cultural concepts are closely linked with thedimensions of luxury brands (see Figure 2). Researchers have found these differences on the basis of thefollowing parameters:Interdependent/independent self – linked with hedonism:The concept of independent self states that individuals perceive each other to be unique. Individualpreferences, tastes and needs are predominant in determining one‘s behavior. Such independence ofindividuals is widely prevalent among consumers in Western countries. Conversely, the interdependentself-concept emphasizes familial and social influences on tastes and preferences, which are present amongconsumers in Southeastern Asian countries (Wong and Ahuvia, 1998).The independent and interdependent concepts determine the extent of hedonism among the consumers.Hedonism is linked to experience of sensory pleasures that are highly individualistic in nature. Therefore,hedonism is given more significance in Western countries than in the Asian countries. Even within Asia,there are differences in the perceptions pertaining to luxury. In India, there is a blend of interdependenceand independence (Kulkarni, et. al., 2010). Due to this, Indians give importance on hedonic consumptionof luxury products. In the case of China, there is predominance of interdependent culture, thus there maybe less emphasis on the hedonic component.Proposition 1: The Hedonic component within a Luxury brand changes its perception in the mind of theconsumer.Social Roles – linked with Conspicuousness:DimensionPerceivedConspicuousnessPerceivedUniquenessPerceivedExtended SelfPerceivedNon-luxuryBrandsLThe independent and interdependent concepts of self, determine the kind of social roles played by theconsumers. In the case of independent self-concept, the roles are not much influenced by publicperceptions. Therefore, emphasis is laid on the quality of the luxury product, as it is an inherent attribute(Truong, 2010). However, in case of interdependence, the emphasis is on the public perceptions of selfand this leads to ‗face consumption‘ (Ram, 1989). This is directly related to public consumption of luxurygoods that highlights the noticeable and visible consumption. It is perceived to be important as itinfluences the social status and reputation of people in the society. Consumers in Asian nations, thereforehave greater levels of conspicuous consumption than in Western nations (Wong and Ahuvia, 1998).OW

Proposition 2: The social status of the consumer affects their perception of luxury brandsHierarchical Nature of Society – linked with Social Significance:When compared with Western nations, societies in Asian nations like India and China have beenhistorically divided into economic and social hierarchies. This affects luxury consumption as there is aneed to demarcate hierarchies through the display of wealth. Luxury goods are bought by various classesof people, in order to mark their status within a hierarchical society. The consumption of luxury goods, istherefore is linked social status (Wong and Ahuvia, 1998).Symbolic Meaning linked with Products:There is even symbolic meaning associated with the luxury products. However, it is not as significant inWestern nations as it is in Asian nations. Asian consumers tend to develop their concepts of self throughsymbolic relationships with luxury products. Moreover, the differences may exist within the Asiansubcontinent as Southeast Asian countries like China give more importance to symbolic meaning, ascompared to India (Wong and Ahuvia, 1998). For example Chinese consumers purchase luxury productssuch as Swatch, Louis Vuitton and Hennessy for their symbolic value. Chinese culture and theirconspicuous consumption are inseparable (Luxury: The consumption of symbols and symbolicconsumption, 2006). However, Indian consumers focus on symbolic values in some luxury productcategory such as Jewellery (JWT releases first ever study on Luxury brands in India, 2011).Proposition 3: The symbolic value attached to Luxury brands differs between Indian and ChineseconsumersFigure 2: Link between Dimensions, Perceptions of Luxury and their Effect on Different CountriesCountry DifferencesLevel ofInterdependent SelfHedonism ConceptSocial RolesConspicuousConsumptionSocial andEconomicHierarchySocialSignificancePerceptions of Luxury inDifferent CountriesSymbolicMeaning ofProductsSymbolicConsumption3. Luxury Consumption in India and ChinaAsia has different kinds of markets for luxury consumption, like India and China. In these markets, theconsumer demand for luxury products has increased as spending power has grown rapidly. The Indianluxury market currently stands at US $ 3 billion. It is likely to grow by 20% in the next two years (Bajpai,2011) and by 2015 it will reach at US $ 30 billion, making India the fifth largest luxury market by 2025

(India and China to spur luxury growth, 2011). Moreover, the Chinese luxury has reached US $ 10.7billion (Xinhua, 2011) and is expected to rise further to US $ 27 billion by 2015 (Atsmon et al., 2011).The differences between luxury consumption in India and China may be assigned to several externalfactors, namely, economic, social and cultural factors. They shape consumers‘ perceptions of luxury goodsin India and China.Economic Development and Growth:The economic development of the country has a direct impact on luxury consumption (Eng and Bogaert,2010). A rising economy has increased money in circulation, and more credit is available to consumers toincrease the discretionary purchases as it increases the consumption of luxury products. Conversely, incase of a recessionary economy, luxury consumption may decrease as consumer delay their purchasesunder adverse economic conditions (Browning and Crossley, 2000). The imposition of taxes in the form oftariffs and trade duties may also increase the cost of purchasing luxury items. Moreover, countries alsodiffer in their policies of these taxes on luxury products.The Indian economy was liberalized in 1991. It led to loosening of regulations, making the country a hotspot for all kinds of businesses. In 21 st century, there is increasing flow of credit in India due to its surgingeconomy (Sengupta, 2007). This has resulted in a large number of wealthy individuals in the country,particularly the High Net worth Individuals (HNIs). HNIs are those individuals whose net worth is greaterthan US $1 million (Stanley, 1988). The number of HNIs in India was estimated at about 126,000 in 2010(Banerjee, 2010). These individuals form one of the main segments for luxury consumption in India.Along with HNIs, the disposable income of the middle class has also increased and it has started spendingon luxury. The Indian middle class has been estimated to increase from 5% to 41 % of the totalpopulation from the year 2008 to 2025. The total income will increase to about $1.16 trillion within thistime period. This will form 58% of the entire nation‘s income (Farrell and Beinhocker, 2007). Thephenomenal growth of the middle class makes it one of the main segments for the consumption of massluxury items. With the rising stock market and India‘s economic performance in the last decade, there is acollective atmosphere of self-belief and confidence. It has led to the increasing fulfillment of consumerismand materialism in the luxury sector. This can be seen in case of the luxury automobile market. In India,this market consists of high end models such as BMW 7 series and Audi Q7 that comprise 35% of thetotal passenger car market. This figure is expected to grow by 5% to 7% in the coming years (Singh andZachariah, 2010). Although there are such encouraging figures reported by some sectors, luxury in Indiastill has a long way to go (see Figure 3). High tariffs are imposed on imported luxury goods and even thecustom duties are very high, often about 100% of the total value of the products (―India, Brazil on Hold,Luxury Targets West Asia‖, 2010). These taxes keep changing over time and thus it makes India a lessluxury-friendly country (―India‘s One Billion Euro Luxury Market can double in the Next 3 Years‖,2011).Proposition 4: Custom duty and tariffs create differences in the perception of luxury between India andChina

Figure 3: Effect of Economic Development on Luxury Consumption in IndiaLiberalizationin 1991Growth in BusinessEffects on Luxury MarketNegative EffectPositive EffectLess Growth of LuxurySectorIncreased Flow of CreditTaxesCustomdutiesTariffsHNIsLuxuryConsumersMiddleClassMaterialismSimilar to India, China is also a developing economy. Post the economic reforms of 1978, multinationalcompanies entered in the 1980s and the private sector emerged in the late 1990s. It resulted in phenomenaleconomic development of the country and has further increased incomes of the Chinese population(―Economy of the People‘s Republic of China‖, n.d.). There are two sections of the population that haveconstituted a great market for luxury in China, namely, the High Net worth Individuals and the middleclass. The first section consisting of the High Net worth Individuals (HNIs) is well established in China.There are about 477,000 HNIs, and this is the fourth greatest number of individuals in a single country

(―Premium Brands Luxuriate in China‘s New Wealth‖, 2010). They invest highly in products such asluxury automobiles which formed about 30% of HNIs‘ total expenditure in 2009, whereas in 2008 it wasonly 27% of their total expenditure (World Wealth Report, 2010). These wealthy consumers were noteven greatly impacted by the global recession of 2007-09. During 2009, only about 8% loweredexpenditure on luxury products and 44% indulged in greater consumption of these products (Atsmon, et.al., 2010). Such encouraging buying behavior has kept brands such as Diesel optimistic as it plans to opennew stores in the coming years in China (―China‘s Luxury Consumers: Moving up the Curve‖, 2008).The second segment that constitutes the luxury market is the Chinese middle class that has becomeextremely affluent. This class embraces conspicuous consumption with demand for those brand namesthat symbolises status. Consumers in this class are optimistic about their quality of life and are eager tospend on luxury. In order to encourage this demand for international brands, the Chinese economy hasreduced tariffs on imported luxury brands. This can be seen in the case of imported watches. The tariff onwatches was reduced from 28%-40% in 2004 to 11% in 2006 (―Luxury Brands in China‖, 2007). HongKong has a distinct advantage as it has low rates of corporate income tax. This facilitates the entry ofluxury brands in China through Hong Kong, thus making the city a centre for distribution networks(―China‘s Luxury Consumers‖ Moving up the Curve‖, 2008). Even in the case of FDI, limitations havebeen removed as it is no longer necessary that a joint venture should be established by a foreign companyto enter the market (―Refined Strategies: Luxury Extends its Reach across China‖, 2010).Another factor that has encouraged the growth of luxury brands in China is its abundant resource of cheapmanpower. In the past, luxury brands preferred to avoid specifying that the products were manufactured inChina. However, due to low cost labour, many brands like Armani have started their manufacturing andassembling operations in China. These brands use lower manufacturing costs, but good quality to theiradvantage and no longer shy away from specifying that the place of manufacture is China. Thus it can beseen that the Chinese economy has reached a position where it can afford to decrease the taxes andrestrictions on luxury products. It has made China one of the most desirable luxury markets in the world(see Figure 4).Figure 4: Effect of Economic Development on Luxury Consumption in ChinaEconomic Reforms in 1978Entry of MNCsIncreased IncomeLow Cost ofManpowerGrowthofPrivateIncrease inLuxuryConsumers

Reduction inTaxesandGrowth TariffsofLuxurySectorSocial Development and Education:HNIsAffluenceMiddleClassEconomicOptimismOverall Growth of Luxury Sector inChinaLowCost ofProductiManufactu onre ofForeignLuxuryProducts Expansion inChina of LuxuryBrands‘OperationsLuxury consumption is closely linked to social development as consumers purchase luxury brands todefine identities and express values. Consumers in different countries have different perceptions of luxurythat are closely shaped by their social upbringing, relationships and status. These perceptions often definethe consumers‘ associations with luxury and give them motivations to consume luxurious products (Engand Bogaert, 2010). These motivations may be internal or external. In case of internal motivation, there isa deep and holistic emphasis to satisfy oneself through purchase of these products. However, in the case ofexternal motivation, there is great emphasis on noticeable representation of luxury consumption in order todisplay one‘s status in the society (Truong, 2010).Similarly, luxury consumption may be influenced by the education level of consumers. A high level ofeducation ensures great professional opportunities for consumers and it may make them affluent enough toafford luxurious lifestyles. With education, consumers are also exposed to a variety of media that informsthem about the different kinds of luxury products that are available in the market. Media also gives them aplatform on which they can communicate with each other and spread the word about their preferred luxurybrands. Moreover, the extent of education and media exposure is different in different countries, and thusit may vary the level of luxury consumption (Degen, 2009).In India, consumers are deeply impacted by social depiction and status that is enhanced through thepossession of the luxury products (Eng and Bogaert, 2010). Being a developing country, wealth has onlybeen acquired by certain segments of society and thus, luxury consumption is a public and noticeabledisplay of one‘s economic status. There is a presence of successful, rich and elite industrialists andentrepreneurs who constitute these segments (Atwal and Khan, 2008). The importance of consumptionthat is public and noticeable motivates these Indians to acquire luxury items and flaunt their ownership.(Eng and Bogaert, 2010). Consumption of luxury is viewed as evidence of achievements in one‘s life, andit also shows that one has been able to gain recognition and popularity in social circles (Atwal and Khan,2008). Indian consumers are at a stage where either new money has been recently acquired or old moneywas handed down by elite ancestors and is now being spent on luxury consumption (Chadha, 2008). The

use of these forms of money for luxury purchases is prevalent among different consumer segments such asthe Global Indians, who are extremely rich and mostly reside in the big cities. They frequently travel todifferent countries to purchase some of the latest collections from their favourite luxury brands. TheseIndians may also make purchases of some exclusive brands in India. For instance, the Reverso watch byJaeger Le Coultre was available for $4.68 million and was popular among Global Indians. There isanother class of Indians who reside in small towns of Western India such as Nagpur and Aurangabad, butare still wealthy and indulge in luxury items (Vedpuriswar, 2008). In 2010, Aurangabad witnessed the riseof the ‗Aurangabad Group‘, which consisted of top industrialists and professionals who purchased 115Mercedes-Benz cars at one time (Marpakwar, 2010). Such Indians work hard for their wealth and feel thatthey deserve to own the best to enrich their lifestyles. There is another class that comprises of youngIndians who work hard to earn their desired lifestyles. They do not have affluent upbringing and in orderto earn their living, they work on outsourced call centres. These jobs would be considered unconventionalby the older generations, but the current generation perceives these jobs as an opportunity to improve theirstandards of living. When they acquire enough money, they also purchase luxury products (Atwal andKhan, 2008). Thus, it can be stated that in India, there is no limitation on any section of society toconsume luxury products as the modern consumer could be from different professions and from big orsmall cities (see Figure 5).A factor that has resulted in the widespread awareness and consequent aspiration for luxury is theincreased media coverage of luxury brands in India. It is quite common for luxury brands to advertisethrough newspapers that have national circulation. These ads showcase brands such as Escada and reportthe latest in the deluxe lifestyles and aim to educate and inform luxury conscious audiences (Atwal andKhan, 2008).Figure 5: Effect of Social Development on Luxury Consumption in IndiaRecent Acquisition of Money by WealthyConsumersImportance of Visible and ExtravagantConsumption of LuxuryPopularity of Consumers in the SocietyLuxury ConsumersGlobal IndiansConsumers in SmallTownsPreviously Un-affluentConsumers- Extremely Rich andReside in Big Cities- Frequently TravelAbroad- Rich Industrialistsand Professionals- Feel Deserved to OwnLuxury Products- Young Consumerswho have shifted to BigCities- Work Hard to EarnBetter Lifestyles

In the case of China, luxury products are perceived to provide evidence of the wealth of the affluentconsumers and as a help to improve social standing (Degen, 2009). China is at a stage where consumerswish to show off their wealth and thus incur expenditure on luxury in order to portray their rich lifestyles(Chadha, 2008). Social development is important in its effect on luxury consumption behavior and it hasresulted in the transformation of the traditionally wealthy luxury shoppers. According to ―Luxury Brandsin China‖, (2007), the Chinese society has witnessed the dominance of the class of‗traditional luxuryshoppers‘ that is usually represented by men above the age of 35 years. They are successful individualswho have well-established networks. They also choose to buy the luxury products for themselves and theirfamilies surrounding themselves with an ambience of luxury.However, this traditional luxury shopper is now giving way to different kinds of luxury consumers,namely, the ‗new luxury shopper‘, ‗empowered women‘ and the ‗little emperors‘. The ‗new luxuryshoppers‘ consist of famous personalities and industrialists who are usually young and in the age bracketof 20 to 40 years. They are all ‗nouveau riche‘, that is, they are the first ones to acquire great wealth intheir generation. This makes them open to experiences, eager and excited to display their newly acquiredwealth, and thus purchase luxury items to fulfill their lifestyles. The ‗empowered women‘ of China arethose who have recently attained financial independence and career advancement as they have receivedgreater education and are typically employed in service industries in the private sector. They frequentlyindulge in luxury purchases. The ‗little emperor‘ consumers belong to the younger age group consisting ofteenagers and young adults. This class of consumers is the most educated, self-assured and determinedamong the entire Chinese population. It is known to be brand conscious, unrestrained, obsessed withshowing off and making others marvel at its social standing (Wong and Ahuvia, 1998; Degen, 2009).They are the only-children in their single child families, and are accustomed to their families spendingmost of the disposable income on their wants. This segment, along with the empowered female consumershas a high sense of fashion and this has led to the rise in sale of fashionable luxury products such asclothes. Moreover, all the classes of consumers are high on luxury consciousness. They know theirpreference and do not hesitate in going out of their way to locate these products. For instance, many ofthem shop from places like Hangzhou, which is a very small but affluent city in which brands like LouisVuitton, Cartier and Hermes are well established (―Luxury Brands in China‖, 2007). They even frequentlytravel to high end shopping destinations in abroad such as Japan, Macau and Europe and indulge in buyingluxury products there. Thus, the Chinese consumers have an important footprint in different parts of theworld. This has been taken advantage of by brands like Swarovski as it has aimed at targeting the Chineseaudience not only in China, but also in its stores abroad (―Refined Strategies: Luxury Extends its Reachacross China‖, 2010).Although the Chinese are aware of luxury brands, many of them are not very loyal consumers. Luxurybrands have taken note of this fact and increasingly focus on expanding their marketing efforts to informand persuade consumers to make a purchase. In order to maintain loyalty, the brands organize events toshowcase current and upcoming editions. These events are reported by the media, and thus appeal well tocurrent and potential consumers (―Luxury Brands in China‖, 2007).Education characterizes these affluent classes of Chinese consumers. About 65% of the total affluentconsumers are educated to a post graduate level, 28% are educated to college level, and only 7% do nothave even high school education. The importance of education has increased in China as the Chinese havegreater ambition and they want to take advantage of all the professional prospects before them (Degen,2009). Along with this, the educated population is greatly exposed to various media such as the Internetand mobile phones, etc. As the media exposure has increased in China, the consumers are better aware ofthe luxury products that are available in the market (see Figure 6). Luxury brands are slowly expandingtheir presence on the Internet as it provides a platform for the brands to communicate their features andbranding strategies to the consumers. It also enables consumers to search for the latest collections of thesebrands. Mobile phones have deep penetration in the market and now even they can carry Internetconnections. It is estimated that 57% of consumers prefer to receive updates on their mobile phones about

the latest additions to the brands‘ collections. These consumers are eager to be updated on this informationas they prefer being fashionable and exclusive in their choice of luxury products. These updates alsoprovide familiarity to consumers regarding the authenticity of their luxury purchases (―Refined Strategies:Luxury Extends its Reach across China‖, 2010). This kind of exposure to media educates the Chineseconsumers not only about the brands, but also about the luxury infrastructure abroad. In North Americaand Europe, mega-retail outlets for luxury brands are highly popular. The Chinese are aware of theseoutlets and are even ready to accept their entry in China. As a result brands have launched big boutiquesand stores in Chinese malls. For example, Dior opened up its most deluxe outlet known as ‗DiorCosmetic‘ at Shanghai‘s West Gate Mall in 2003. Through this store, Dior aimed at encouragingconsumers to spend more on an increased and well-furbished collection (―Luxury Brands in China‖,2007). This awareness gives rise to preferences of luxury products among the Chinese. Therefore, theybecome confident in consuming these brands and this confidence has even reached smaller emerging citiessuch as Qingdao. For example, the luxury hotel Ritz Carlton is assured about luxury consumption in Chinaand has planned on opening its hotels in Tier II and Tier III cities as well (―Refined Strategies: LuxuryExtends its Reach Across China‖, 2010).Proposition 5: The perception of luxury varies between the old and new generations of consumerin both India and ChinaProposition 6: Chinese consumers are not loyal to Luxury BrandsProposition 7: Indian Consumers are loyal to Luxury BrandsFigure 6: Effect of Social Development on Luxury Consumption in ChinaEmphasis on Show-Off of WealthConsumption of Luxury to PortrayRich LifestylesWell Educated Classes of Consumers

PostGraduates– 65%CollegeGraduates –28%Below HighSchoolLevel – 7%Increased Exposure to MediaIncreased Luxury BrandAwarenessTypes of Luxury ConsumersTraditionalLuxury ShopperNew LuxuryShopperEmpoweredwomenLittle EmperorsUsually MaleBusinessmenover the Age of35 YearsNewly RichConsumers inthe Age Groupof 20-40 YearsFinanciallyIndependent,WorkingWomenTeenagers andYoung Adultswho are WellInformed andIndulgentHistory and Culture:Luxury consumption has shown its presence in ancient history. In the past, luxury had been the only wayto display one‘s social standing as societies used to be divided on the basis of occupation and class.Consumption of luxury products was meant to convey extravagance and could be afforded only by theroyals. This kind of consumption applied to certain types of products such as jewelry and textiles (in caseof India). The historical evolution of society has led to different levels of social division that are stillprominent in some countries. Furthermore, there is a charm for historical items that are perceived to beancient and royal, and these are viewed as luxurious by descendants of previous generations (Kapferer andBastien, 2009).In Indian history, the ruling class consisting of kings, emperors and royal families led lavish lifestyles andindulged in opulent display of wealth in the form of their jewels and dresses (Wong and Ahuvia, 1998).When Jacques Cartier had stayed in India in 1911, he had convinced kings such as Maharaja BhupinderSingh of Patiala to use Cartier jewelry. Thereafter, a necklace was made for the Maharaja by Cartier in1928 (Chuganee, 2006; Amarnath, 2011). Due to such support of luxury, Indians value extravagant andmajestic artistry, especially in traditional luxury items such as jewelry and textiles (Atwal and Khan,2008). They have strong associations with these products and therefore have personal meanings forluxury. However, this luxury was only accessible to the upper class in the past, but now, it can be accessedby other classes of the society (Belk, 1988).In the 21 st century, luxury consumption in India is also largely defined in the context of culturaldevelopment. Cultural values and norms exert a powerful influence on people‘s valuation of wealth andluxury. India has been largely classified as a collectivist culture, albeit with a growing influence of

Western individualism (Ramamoorthy, et. al., 2005). As collectivists, Indians lay importance on groupaffiliation and social harmony. Thus, luxury consumption is largely affected by group preferences andtastes (Eng and Bogaert, 2010). However, as individualists, Indians value the importance of independenceand personal success (Ramamoorthy, et. al., 2005). They work hard for their success and demand itemsthat enable them to fulfill their personal desires for luxurious experiences. They want luxury that willexpress them in the best way and this leads to strong emotional connections between the brand and theluxury consumer. Another facet of cultural development in India is the interaction between traditional andmodern cultures. Most middle and upper class Indians, while rooted to traditional Indian values, areexposed to global lifestyles through various media. This exposure finds its way into modern culture, whichis heavily dominated by Western style of consumption. The interaction between traditional values andglobal consumer culture is a representation of the Indian consumers‘ perceptions about luxury. This kindof interaction is well received by Indians as they take pride in their traditional culture. They feel thatmodern culture should be integrated with traditional culture so as to portray a wholesome and holisticexperience of luxury. The coexistence of traditional styles and modern Western brands gives rise toperceptions about luxury (see Figure 7). As a result, luxury brands have realized that Indians do not prefermodernist Westernization in all their brands. Indians often like global brands that have an Indiancharacteristic (Atwal and Khan, 2008). For instance, the luxury watch brand Tag Heuer has attracted theIndian actor Shah Rukh Khan and Formula race champion Karun Chandhok as its brand endorsers (Stars& Glamour, 2011). These celebrities have great appeal in India and are perceived to be appropriate forendorsing the brand. Indians in general connect well with these brand associations (Eng and Bogaert,2010). The cultural context of India may also be viewed in the light of its shopping culture. In Indiaexclusive streets devoted to luxury brands that are highly prevalent in places like Paris are rare. Most bigbrands open their showrooms in posh hotels so that their target consumers can be easily reached. This isslowly changing as there is a growth in malls such as DLF Emporio in the capital city of New Delhi thatpositions itself to be a high end luxury mall (Kulshrestha, 2010). However, in spite of this change, there isa lack of luxury infrastructure that exists in other countries such as China and Japan. It will take a longtime before this infrastructure becomes established, and that is the reason why most luxury retailers havepreferred to wait for a few years before fully establishing themselves in India (Narayan, 2006).Proposition 8: Individualism and collectivism affects the perception of luxury differently in India andChinaFigure 7: Influence of Culture on Luxury Consumption in IndiaIndian CultureCollectivism withan IncreasingInfluence ofCollectiv Individualism IndividuaismEmphasis onGroupNormsandSocialPreferenlismEmphasis onIndividualSuccessandPreferenInfluence ofTraditional andModern CultureTradition ModernalEmphasis onTraditionalIndianValuesEmphasis onWesternizationdue toGrowingExposure

The role of historical and cultural development in luxury consumption may also be viewed in the contextof China. The Chinese are marveled at the lifestyles of their elite ancestors. The acquisition of luxurybrands presents an opportunity through which they would be able to emulate the ancient wealthylifestyles. This has resulted in a high demand for the luxury products (Lu, 2008). The meaning of luxury inChina is based on contrasting values. One set of values is the Confucian values that are traditional innature and emphasize prudence and modesty. The other set of values is modern in nature and emphasizeson affluence and accomplishment (Degen, 2009). These ideologies have arisen due to the growingexposure to Western culture (see Figure 8). As a result, luxury lifestyle brands like Shanghai Tang offer aunique style of dressing and living as they incorporate traditional as well as modern cultures (―RefinedStrategies: Luxury Extends its Reach Across China‖, 2010). Due to the influence of modernism, Chineseconsumers value the acquisition of material possessions and this has greatly increased luxury consumption(Degen, 2009). Another feature that characterizes the culture of China is collectivism. Chinesecollectivism highlights group identity and interdependence. This leads to a heavy influence of faceconsumption. ‗Face‘ has been defined as the social value portrayed by a person in one‘s society (Goffman,1967). Consumers aim to enhance their ‗face‘ when they interact with others in the society. Therefore,social standing holds high importance and is displayed through luxury products like watches, clothes andjewelry. As a result, many high end brands such as Louis Vuitton have their biggest customers in China.The country also accounts for 22% of total sales for Richemont, 18% of sales for Gucci and 11% forHermes (―China to Become the World‘s Largest market for Luxury Goods over the Next Decade‖, 2011).Proposition 9: Traditional and modern values affect the perception of luxuryFigure 8: Influence of Culture on Luxury Consumption in ChinaPredominantInfluence ofCollectivismEmphasis onInterdependence, thus leadingto FaceConsumptionCulture ofChinaTraditionalValues that areConfucian andlay Importanceon PrudenceLuxury Consumption for SocialDisplay of Wealth and SuccessTraditional andModern ValuesModern Valueslay Importanceon Wealth,AchievementandMaterialism4. Perceptions of Luxury in India and ChinaThe influence of economic, social, historical and cultural development on luxury consumption has resultedin different perceptions of luxury in India and China. Consumers in different classes of the society have asimilar characteristic: the desire to work hard to earn and live better lifestyles. Consumers in all the classeswho earn well want to indulge in luxury to display wealth and status publicly. Self indulgence makes themfeel gratified whereas public consumption makes them feel socially acceptable. Thus, luxury is perceivedto be associated with the promises of gratification and recognition. Therefore, it can be stated that Indiansvalue both collectivism and individualism. Indian purchases the high-end luxury products such asjewellery, handbags and wines primarily for displaying the wealth as they want to get social recognition(France-Presse, 2011). However, Indian consumers purchase luxury products such as cars, bags and

watches to satisfy themselves and think it as ―I made it‖ (―Q&A: How Can Global Luxury Brands CaptureNewly Affluent India?‖, 2011).In China, the faster pace of economic development has led to a very high number of wealthy individualswho perceive that luxury consumption is a way to show off to others that they are successful. The Chineseconsumers give a lot of importance to luxury consumption, which is publicly noticeable by others in thesociety. This kind of consumption is motivated by desires that are determined by external opinions of thesociety rather than by internal desires (Truong, 2010). Therefore, they believe that luxury products mustbe consumed to reflect these external desires of enhanced social portrayals. This is applicable for thetraditionally rich consumers as well as the newly rich consumers. Both types of consumers are wellinformed about luxury offerings and are confident in their consumption behavior. In this way, luxurybrands should match the confidence levels of the consumers.Hence, it can be stated that Indian consumers perceive that luxury consumption may fulfill the desires forself indulgence and social display of wealth. Conversely, the Chinese consumers feel that luxuryconsumption should predominantly cater to the public representation of wealth (see Figure 9).Figure 9: Differences in Perception of Luxury in India and ChinaSelfIndiaPerception of LuxurySocial DisplayChina5. Meaning Transfer in India and ChinaOnce the Extravagperceptions of luxury have been framed, there is a transfer of meaning from the luxury productsto the consumers.anceThe meaning transfer theory was given by McCracken (1987) and posits that symbolicmeaning is transferred from goods to the end consumers. Once consumers identify the portrayed meaningsas being resonant with their cultural and societal framework, they associate the profound meanings of theproducts. Meaning transfer theory can be also applied to luxury products as there is an effective transfer ofmeaning, consumers can have symbolic associations with the luxurious products. This symbolicassociation is so high that the high price is given less weight by consumers who purchase these products(Paskeviciene, 2010).Furthermore, due to different perceptions of luxury, the process of meaning transfer may be different inIndia and China (see Figure 10). In India, the first stage of the meaning transfer process takes place whenthere is recognition of meanings represented by the society. The society represents a culture that has theelements of collectivism, individualism, traditionalism and modernism. Therefore, the meanings that areincorporated in the products should be holistic in nature as they should include all the elements. In thesecond stage, the luxury products may imbibe these elements and represent meaning to the consumers.When these meanings are effectively imbibed, they would portray that luxury consumption can provideproof of social success (collectivism), personal indulgence (individualism), royal preferences(traditionalism) and transfer of recently acquired money to attain possession of the luxury products(modernism). In the third stage, the consumers may perceive that the meanings that are represented by theluxury products are congruent to the kinds of associations valued by their society and thus embrace thesemeanings. They may recognize the symbolic connection between the luxury products and the connotationsportrayed by them. This symbolic connection communicates to the consumers that luxury consumptionwill help them to achieve recognition in society and fulfill their desires for extravagant lifestyles. It mayeven help the consumers to perceive an emotional connection with the luxury products. When this takesplace, the meaning transfer process may be successfully accomplished.

In China, the society represents a highly collectivist culture that has a combination of both traditional andmodern cultures. Thus in the first stage of meaning transfer, the meanings should be recognizedeffectively so that the characteristic of collectivism is predominant. This would be followed by the secondstage wherein the recognized meanings would be imbibed by the products. When this occurs, the imbibedmeanings would portray that luxury consumption can enhance one‘s social standing by conforming toshared preferences of luxury products (collectivism). This will lead to effective portrayal of ‗face‘ in thesociety (traditional culture). Moreover, the meanings should also portray that luxury consumption wouldalso lead to the show-off of wealth, thereby flaunting economic independence and ambition of thetraditional as well the newly rich luxury consumers (modern culture). In the third stage, the consumerswould be expected to establish the similarity between the meanings that are portrayed by the luxuryproducts and the connotations portrayed by the elements of the society. This similarity would portray tothe consumers that luxury consumption would lead to enhanced public perceptions and achievement ofmaterialism.Figure 10: Meaning Transfer for Luxury Consumption in India and ChinaIndiaMeaning Transfer for LuxuryConsumptionChinaRecognition ofMeanings thatRepresentPortrayalCollectivism,ofSocialIndividualism,Success,IndulgenceTraditionalism,andRoyaltyModernismRepresentationby theLuxuryof MeaningProductsinthe Form ofSocialRecognition andFulfillment ofInner Desire forExtravagance6. ConclusionRecognition ofMeanings thatRepresentCollectivism,Portrayal ofTraditionalism,Materialism inModernismSociety by theLuxuryRepresentationProductsof Meaning inthe Form ofSocial Successand Fulfillmentof Materialism

It may be stated that the different perceptions of luxury are shaped by the economic, historical and culturaldevelopment factors in India and China. These perceptions result from two kinds of luxury consumption:one that is induced by extraneous factors such as public representation of wealth and success, and theother that is induced by internal factors such as sense of self satisfaction (Truong, 2010). These kinds ofconsumption have shown different outcomes in terms of the transfer of meaning in both the countries. InIndia, the consumers perceive that indulging in luxury will enable them to achieve appreciation fromothers and build emotional bonds with the luxury products. In contrast, the consumers in China perceivethat through luxury consumption, they would be able to portray their augmented selves through therepresentation of affluence. This leads to widespread penetration of the brands in these markets (Chadha,2008).7. Implications and Scope for Future ResearchA comprehensive understanding of the perceptions of the luxury consumers in India and China will enablethe marketers to develop different branding campaigns and strategies for these countries. It will berecognized that the consumers‘ perceptions have a deep impact on the meaning derived from the luxuryproducts. For instance, in India, the consumers perceive that luxury portrays self-indulgence andconfidence. Therefore, they associate emotional meaning with the products. Conversely, in China, theconsumers perceive that luxury represents enhanced portrayal of the self. They interpret that the luxuryproducts hold meanings to portray social success. Therefore, if marketing strategies are formulatedaccording to these differences, they will appeal better to the consumers in these nations. The hypothesesthat have been set out within this conceptual paper indicate great scope for further research to ascertainwhether the propositions are indeed sensible or whether we are moving towards a more homogeneousglobal consumption pattern in Luxury goods.Qualitative research could yield useful cross cultural information about consumption patterns in Luxurygoods.ReferencesAmarnath, N. (2011), ―Cartier: here luxury‘s a lifestyle‖, available at:http://articles.economictimes.indiatimes.com/2011-02-27/news/28638547_1_cartier-designs-famouspatiala-necklace-important-market/(accessed 25 March 2011).Atsmon, Y., Pinsent, D. and Sun, L. (2010), ―Five trends that will shape the global luxury market‖, available at:http://csi.mckinsey.com/en/Knowledge_by_topic/Consumer_and_shopper_insights/globalluxury.aspx/(accessed 27 March 2011).Atsmon, Y., Dixit, V., and Wu, C. (2011, April), Tapping China‘s luxury-goods market, available athttp://www.mckinseyquarterly.com/Tapping_Chinas_luxury-goods_market_2779 (accessed 10February 2012).Atwal, G. and Khan, S. (2008), ―Luxury marketing in India: ‗because I‘m worth it‘‖. Admap, Magazine, Issue 491,pp. 46-48.Bajpai, S. N. (2011), ―The leap of luxury‖, The week, 23 January, pp. 50.Banerjee, P. (2010), ―Indian luxury market to grow, upper middle class income surges‖, available at:http://in.ibtimes.com/articles/67909/20101002/luxury-brands-cii-cwg.htm/ (accessed 20 March 2011).

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modern communication services in rural areas. With the successfully concluded auctions of the 3G andBWA spectrum, this growth is set to become even more pronounced.The market's first operator was the state-owned Bharat Sanchar Nigam Limited (BSNL), created bycorporatization of the Indian Telecommunication Service, a government unit formerly responsible forprovision of telephony services. Subsequently, after the telecommunication policies were revised to allowprivate operators, companies such as Bharti Airtel, Reliance Communications, Tata Indicom, IdeaCellular, Aircel, Loop Mobile, Uninor, Tata Docomo and others have entered the market.According to TRAI, the telecommunications sector has witnessed a continuous growth in the total numberof telephone subscribers. From a meagre 22.8 million telephone subscribers in 1999, it has grown to621.28 million at the end of March 2010. The total number of telephones stands at 787.29 million as on31st December 2010 showing addition of 166.01 million during the period from March to December 2010.Wireless telephone connections have contributed to this growth as the number of wireless connectionsrose from 35.61 million in 2004 to 584.32 million in March, 2010 and 752.20 million as on 31stDecember 2010. The wire line started to decline from 40.92 million in 2004 to 36.96 million in March,2010 and 35.09 million in December, 2010, though it is stagnating now.Figure 1: growth of telephony(Source: TRAI)A recent report released by TRAI shows that the number of telephone subscribers in India increased to846.32 million at the end of March 2011 from 826.25 million at the end of February 2011, registering agrowth rate of 2.43%. The share of urban subscribers has declined to 66.65% from 66.72% where as shareof rural subscribers has increased from 33.28% to 33.35%. Subscription in urban areas grew from 551.27million in February 2011 to 564.08 million at the end of March 2011. Rural subscription increased from274.98 million to 282.23 million. The growth of rural subscription (2.64%) is higher than the urbansubscription (2.32%). The overall urban tele-density has increased from 154.01 to 157.32 and rural teledensityincreased from 32.95 to 33.35.Figure 2: growth of telephone subscription

(Source: TRAI)India is the second largest telecommunications market in the world after China with 846.32 millionconnections as on 31st March 2011, as per TRAI. It is expected to reach the mark of one billionconnections by 2015. Bharti Airtel is currently the largest telecommunications company in India with19.99% market share, followed by Reliance. The growth drivers of the telecommunications industryinclude the 3G Service, Mobile Number Portability (MNP) Service and Value Added Service.Mobile Number Portability (MNP) Service:

MNP allows any subscriber to change his service provider without changing his mobile phone number.MNP was launched on the 25th November 2010 in Haryana and on 20th January 2011 in entire country.With the introduction of MNP, mobile telecommunications service providers are forced to improve qualityof their service to avoid loss of subscribers. According to Frost & Sullivan, MNP worked well in SouthKorea and Hong Kong, while it was quite ineffective in Taiwan (with nine operators), Japan (fiveoperators) and Singapore (three operators). MNP implementation has worked well in Hong Kong since itslaunch in March 1999. In the first year itself, almost one million subscribers in Hong Kong opted forMNP, and this increased to over 1.8 million in 2002. Around 1.5 million of its 12 milliontelecommunications subscribers apply for mobile number porting annually. India is the 8th nation in Asiato launch MNP. Around sixty countries have already adopted MNP. As per the data reported by theservice providers, by the end of March 2011 about 6.423 million subscribers have submitted their requeststo different service providers for porting their mobile number. The status of MNP requests in variousservice areas is given below:(Source: TRAI)Many experts believe that MNP will not make much of a difference because only fewer customers areopted to change their service provider till now, since its implementation.Literature Review:The phenomenal growth of mobile telephony in India has given the Indian telecommunication sector ahigh visibility in the media. Many newspaper and magazine articles highlight this growth, and report itssegment-wise distribution. MNP in particular has received great media attention. However, not manyformal studies have been undertaken on issues related to the Indian telecommunications sector.Debnath and Shankar (2008) argued that the prime focus of the service providers is to create a loyalcustomer base by benchmarking their performances and retaining existing customers in order to benefitfrom their loyalty. They identified the different parameters for the mobile service providers in India for thebenchmarking of the service providers, and categorised them into various input and output parameterscontributing towards the number of subscribers for different service providers. They also examineddifferences between the number of subscribers and the performance of the service providers. They

suggested that benchmarking of the service providers would depend on the efficiency and quality ofservice.

Jha (2008) suggested that it is the youth which is the real growth driver of the telecommunicationsindustry in India. His study examined how demographics influenced the usage pattern of mobiles. Robins(2008) discussed the issues in marketing the next generation of mobile telephones, viz. ―3G‖. Hehighlighted various issues related to this. The first is related to the pricing of 3G handsets and services,given the high licensing fees. Also, the technology is not yet complete, there are no agreed internationalstandards, and service providers are unsure about what new services the technology will prove capable ofdelivering effectively. All variants of 3G remain dependent on largely unproven technology. He pointedout that marketing of 3G would be of high risk. First, 3G has no obviously unique selling proposition tobuild on except, perhaps, the combination of live video and easy portability. Second, the potentialcustomers have not yet had adequate opportunity to signal their service likes and dislikes. Third, the costand complexity of service provision leave doubt about the market‘s reaction to price.Bhatt (2008) analyzed the perceptions of students on the usage, necessity, and spending on mobile phones.He also compared the students‘ perspectives on the different mobile handset companies and mobileservice providers.

Kapoor 1 reported that business subscribers mostly from the postpaid category are more likely to shift theirservice providers‘ gears, while the prepaid, low and medium spenders are not likely to be motivated toswitch. He suggested that, as the market grows and hyper-competition takes effect, retention of the righttype of customers will become critical. He also argued that there is a powerful opportunity for operators todrive in-bound porting of high-value subscribers, provided that they have a good understanding of who ismore likely to switch. According to a Nielsen survey on MNP, more than half (55%) of all respondentswere generally satisfied with their mobile operator and 48% were satisfied with the network quality.Satisfaction scores on network quality dropped for almost all operators, with Airtel, BSNL and Relianceregistering the greatest drops. 46% were satisfied with the network coverage area of their operator and43% were satisfied with the price they paid for the mobile phone service by their operator. Other areas ofsatisfaction included customer service experience and quality of voice (both 42%), strength of signal,voice & data tariff options and accuracy of bills (all 41%), indoor coverage (40%), dropped calls (32%).He suggested that loyalty to operators is seen to be higher among lower socio-economic groups, older agegroups, and among females. Also, he suggested that the circles in which subscribers are more likely toshift sue to MNP are Mumbai and Delhi Metro, UP East and West, Gujarat, Rajasthan, Andhra Pradesh,Karnataka, Kerala, and Rest of West Bengal (does not include Kolkata Metro).Aulakh 2 reported that the number of cell phone users who have chosen to avail mobile number portabilityhas hit the 10 million mark in about four-and-a-half months since the national launch of mobile numberportability or MNP. As on May 24, 2011, Vodafone has recorded a net gain of 591,600 new customersfollowed by the Aditya Birla Group-owned Idea Cellular (590,343) and Bharti Airtel (563,460). ―Themovement is largely due to brand perception and brand awareness," says research firm KPMG'stelecommunications head Romal Shetty. Idea gained more customers due to the marketing campaign.Even in this scenario, independent surveys continue to indicate that one out of three customers who areconsidering switching would eventually sign-up with Airtel. Reliance Communications has been thelargest loser whose net loss of over 1 million customers. It lost customers in both CDMA and GSMnetworks, receiving 672,823 port-out requests in GSM, while the CDMA network lost 413, 846customers.Mohit 3 reported that the first-ever opinion poll on MNP was conducted across eight major cities (Delhi,Lucknow, Kolkata, Mumbai, Ahmadabad, Chennai, Bangalore and Hyderabad), covering both men andwomen older than 18 years, between Dec. 15, 2010 and Jan 10, 2011. More than one out of six mobilephone subscribers (17.6%) wanted to switch over to another telecommunications company as they are notsatisfied with current service provider, which means that approximately out of 700 million users 120million users are likely to switch their service provider. BSNL GSM, Reliance CDMA, Reliance GSM &Tata Indicom will be the losers in terms of subscriber base. Women were more loyal subscribers (i.e.)14.3% want to change compared to 18.8% men. The most dissatisfied customers were found in Hyderabad(37.3%), followed by Delhi (23%) and Ahmadabad (19.6%). Post-paid customers (19.3%) were moredissatisfied than pre-paid (17.4%). Finally, MNP is being undermined by the high switching rates (andhence weak loyalty) in the mobile telephone market in India.1 Kapoor. A. (July 30, 2009), ― Impact Of Mobile Number Portability In India – Nielsen Survey, fromhttp://www.watblog.com/2009/07/30/impact-of-mobile-number-portability-in-india-nielsen-survey/.2 Aulakh. G. (May 26, 2011), ―10 million opt for mobile number portability since launch.‖ EconomicTimes, from http://economictimes.indiatimes.com/articleshow/8586943.cms3 Mohit. A., (Jan 22, 2011), ―Mobile Number Portability Survey India – Are You Changing Your PhoneSignal Carrier.‖ from http://www.mobiletipstricks.com/mobile-number-portability-survey-india-are-youchange-your-phone-signal-carrier/

The formal literature on MNP in India is very scarce. Most studies of MNP are in the form of opinionsurveys and/or market reports. The current study aims to address this gap in the literature.MethodologyThe primary objectives of the study are to study the awareness level of MNP among the students, toexplore the brand-switching behaviour of mobile users by accessing MNP, and to understand the factorsinfluencing consumers towards MNP.The study has been limited in scope geographically to Bangalore, India. The study focuses on the studentsegment, as it represents the youth, a growing consumer segment in India. The data for the study wascollected from a sample of 186 students in various professional colleges in Bangalore through a structuredquestionnaire via an online survey.The profile of the respondents is described as follows. 71.5% of the respondents were male, 28.5% werefemale. In terms of age group, 31.7% of the respondents were students in the age group 19-22 yrs., 65.6%in the age group 23-26 yrs., and 2.7% in the age group 27-30 yrs. In terms of usage period of the currentservice provider, 5.4% of the respondents were using their service provider for less than 3 months, 21%for 3 months-1 year, 27.4% for 1-2 yrs., 28% for 2-5 yrs., and 18.3% for more than 5 yrs. Further, 3.8% ofthe respondents used post-paid connections, and 96.2% used pre-paid connections. Vodafone had themaximum share of respondents (51.1%), followed by Airtel (32.3%), then by Idea (7%), Reliance (4.3%)and other service providers (BSNL, Docomo, Aircel; 5.4%). In particular, Vodafone and Airtel were theleaders in the students segment, specifically Vodafone due to their good advertisement strategy (such asthe ZooZoo and pug ads), and their good plans for student segment.FindingsThe awareness level of Mobile Number Portability (MNP) was found to be very high, with 97.3% of therespondents being aware of MNP, and only 2.7% were not aware. Among the sources of awareness ofMNP, newspapers had the highest contribution (41.9%), followed by the internet (23.1%), television(18.3%) friends/family (11.8%), and radio and magazines (only 2.1%).However, with regard to brand-switching intensions post-MNP, only 21.5% of the respondents wereconsidering switching to new service provider, while the rest of the respondents (78.5%) were notconsidering switching. Out of the 21.5% respondents who were considering switching their serviceprovider, 8.1% respondents preferred to switch to Airtel, 7.0% to Vodafone, 3.2% to Reliance, 1.1% toIdea, and the rest with other service providers. Thus, 15.1% respondents were considering switching eitherto Airtel or to Vodafone, due to their good marketing strategies to attract the student segment.Cross-tabulation was performed to test the association between demographics (gender and age) and thelevel of awareness about MNP and between the type of connection and intension to switch to new serviceprovider post-MNP. There was no significant association between age and level of awareness about MNP(χ2 = 0.274, p-value = 0.872), and no significant association between gender and level of awareness aboutMNP (χ2 = 0.334, p-value = 0.563). However, there was significant association between type ofconnection and switching after implementation of Mobile Number Portability (χ2 = 5.472, p-value =0.019), with 57.1% of post-paid users considering switching over, while only 20.1% of pre-paid usersconsidering switching over.The satisfaction level (on a reverse scale) of the respondents with respect to different parameters for theircurrent service providers, and their overall level of satisfaction is presented in the Table 1.

The parameters for which the respondents expressed highest level of satisfaction were connectivity,followed by network coverage, and voice quality. The parameters for which the respondents expressedlowest level of satisfaction were service charge, customer service, and value-added service. The overallsatisfaction level with the current service provider was moderate/high.The reasons (on a reverse scale) expressed by the respondents who intended to switch service providersfor changing their current service provider post-MNP are presented in Table 2.

The most important reasons expressed by the respondents for changing their current service providerwere: better features offered by competitors, no new schemes or upgradation of existing plan, costlyvalue-added services, improper customer service, high call rates, high internet charges, poor networkcoverage, high SMS charges, frequent network problems, voice quality issues, and hidden charges.Factor analysis was performed for the reasons for changing the current service provider. The analysisshowed a KMO value of 0.623, with Barlett‘s test for sphericity χ2 = 429.1, and p-value = 0.000. Therotated component matrix is given in Table 3.

Four factors were extracted, together explaining 71.94% of the original variation. The resulting factorswere interpreted as follows. The first factor, comprising the variables poor network coverage, frequentnetwork problems, automated calls, voice quality, and family/friends, may be interpreted as theNetwork/Technical Problems factor. The second factor, comprising the variables no new schemes forupgrading existing plan, high call rates, high SMS charges, high internet charges, and unavailability ofrecharge facilities, may be interpreted as the High Charges factor. The third factor, comprising of thevariables improper customer service, error in billing or deducting extra amounts, and hidden charges, maybe interpreted as the Hidden Charges & Improper Service factor. Finally, the fourth factor, comprising thevariables costly value-added services, fancy number, and high service charges for recharge, may beinterpreted as the Costly Value Added Service factor.The reasons (on a reverse scale) expressed by the respondents for not changing their current serviceprovider post-MNP are presented in Table 4.

The most important reasons expressed by the respondents for not changing their current service providerwere: satisfaction with current service provider, brand loyalty, no added benefits, same service qualityacross service providers, and same user group plan across service providers.Factor analysis was performed for the reasons for not changing the current service provider. The analysisshowed a KMO value of 0.713, with Barlett‘s test for sphericity χ2 = 376.6, and p-value = 0.000. Therotated component matrix is given in Table 5.Three factors were extracted, together explaining 60.06% of the original variation. The resulting factorswere interpreted as follows. The first factor, comprising the variables of complex process, time delay inaction, hidden costs, and same user group plan across service providers, may be interpreted as theCost/Time delay factor. The second factor, comprising the variables brand loyalty and satisfied customer,may be interpreted as the Brand Loyalty factor. The third and final factor, comprising the variables of noadded benefits, don‘t care, and no difference in service quality between service providers, may beinterpreted as the No Perceived Differences/Benefits factor.

DiscussionThe key insights from the study of consumers perceptions towards MNP are discussed in the following.These insights are of great value to the marketers as they can frame their marketing strategies on the basisof these results in order to target consumers.There is a very high level of awareness of MNP among students. The main source of awareness wasnewspapers, and to a lesser extent internet and television. However, even with MNP, at 95% confidencelevel, only 15.6%-27.4% of students are considering switching service providers, while 72.6%-84.4% ofstudents are not considering switching service providers. In fact, as had been suggested by many experts,it is the post-paid customers that are utilising MNP.The main reasons for wanting to switch were related to better features offered by competitors, no newschemes or upgradation of existing plan, costly value-added services, improper customer service, high callrates, high internet charges, poor network coverage, high SMS charges, frequent network problems, voicequality issues, and hidden charges, i.e. the Network/Technical Problems, High Charges, and HiddenCharges & Improper Service factors. On the other hand, the main reasons for not wanting to switch wererelated to satisfaction with current service provider, brand loyalty, no added benefits, same service qualityacross service providers, and same user group plan across service providers, i.e. the Brand Loyalty and NoPerceived Differences/Benefits factors. This suggests that service providers are generally seen to offergood quality of service, with not much difference between them. In fact, users of Vodaphone and Airtelwere very satisfied with the quality of service.Thus, the introduction of MNP has increased competition to some extent. Service providers should keepimproving the quality of their service and provide more flexible plans in order to retain their customers,especially if competitors are continuously improving their services. This especially applies to tariffs - forexample, when Tata Docomo came out with call charges of ―one paisa per second,‖ other serviceproviders had to modify their plans (in fact, MTNL subsequently offered a plan with ―half-a-paisa persecond‖). The preferred service providers to switch to were Airtel and Vodaphone, because of theirsuperior service quality and flexible plans.Thus, MNP has made the student segment more price- and quality-sensitive. As a result, service providersmust offer better service at reduced prices in order to retain and expand its customer base. Overall,however, MNP implementation has a limited impact on the industry churn rate and profitability ofoperators. MNP was basically a hype, because all the service providers offer virtually the same quality ofservice.The study has some limitations. The sample size used for the study was relatively small. Also, therespondents were students from professional colleges in Bangalore. Thus, the results of the study may notbe generalisable to the all-India level.There is vast scope for further investigation in the same area. The study can be extended to examining theimpact of MNP on other segments, and in different geographical regions. Also, further research canaddress the interaction of MNP with other factors affecting brand-switching between mobile telephonyservice providers.ReferencesBhatt, M.V. (2008), ―A Study of Mobile Phone Usage among the Post-Graduate Students.‖ Indian Journalof Marketing, 38(4).Debnath, R.M. and Shankar, R. (2008), "Benchmarking telecommunication service in India: Anapplication of data envelopment analysis", Benchmarking: An International Journal, 15(5), pp.584 – 598.

Jha, S. (2008). ―Understanding Mobile Phone Usage Pattern among College-Goers,‖ The IUP Journal ofServices Marketing.Robins, F. (2003), ―The Marketing of 3G,‖ Marketing Intelligence and Planning, 21(6), pp. 370-378.Balakrishna Grandhi, Jyothsna Appaiah Singh and Rony JacobProximity marketing: Opportunities and Challenges in an Ememrging MarketAbstractLocation based marketing via Bluetooth is being increasingly used as a marketing toolby several organizations. Increased adoption of mobile phones has sparked thepossibility of sending right message at the right time and place to the right person.Over the years several innovations by mobile manufacturers have added significantvalue to the user. If this technology is utilized well, organizations can increase their

eturn on marketing investment. Retailers too can have benefit by using the Mobilechannel over a Bluetooth protocol for reaching out to their customers. This study looksat preferences of different retailers in the UAE, for a Bluetooth marketing solution, forgrowing their business. Full factorial conjoint analysis technique has been used forobtaining the insight.Performance Challenge for MarketingIn a recent survey of about 1700 Chief Marketing Officers (CMOs) across the globe conducted by IBM, itwas noticed that they were highly underprepared for the complexities of marketing and changes in thebusiness environment. An explosion of data and new age digital channels were some of the biggestchallenges. Most of the CMOs wanted to invest not just in traditional methods of marketing, but also makeuse of new advancements in technology to understand and serve their customers better (―From Stretchedto Strengthened‖, 2011). An organization should plan its strategy, innovation and marketing decisionswhile being conscious of the ―voice of the customer‖, failing which CMOs are bound to experience acontinued decline in the return on their marketing investments (McGovern, Court, Quelch & Crawford,2004).Aaron Shapiro observed, ―As consumers increasingly interact digitally with companies, competitive edgelies in understanding the range and complexity of those touch points‖. One of such mediums is the mobilecommunication technology. It is now being harnessed for advertising in the retail space. A unique featureof this type of advertising is that the range of broadcasting content can be controlled, thus making it anideal channel for Location Based Marketing.Bluetooth MarketingThere are close to 6 billion active mobile subscriptions across the globe, which can be compared withabout 2 billion Internet users. This underpins the vast potential of the mobile channel for advertising andmarketing. Berg Insight estimates the total value of the global mobile marketing and advertising market tobe € 2.61 billion in 2010. It is growing at a compound annual growth rate of 36.9 percent, and the marketis forecasted to be worth € 17.2 billion in 2016 (Andersson).Some of the top reasons for the growth in popularity of Bluetooth marketing are: ‗ideal for footfall- basedretail set- up‘, ‗it is permission based‘, ‗ability to enhance mindshare‘, ‗enables sharing adverts digitally‘,‗ease of recording data‘, real- time management‘, ‗measurement of campaign effectiveness‘, ‗costeffective‘and ‗instantaneous‘ (Romanov, 2011).Pepsi launched one of the biggest Bluetooth campaigns in USA. Viral video clips went live through busshelters in Washington D.C., Denver, Orange County, and pay phone kiosks in Pittsburgh & Philadelphia.The campaign ran for more than two months and was one of the most successful breakthroughs inBluetooth marketing (Ewan, 2007). BBC Radio 1 successfully marketed the world‘s largest ever musicfestival using Bluetooth technology in a creative and effective manner (―BBC Radio1 Case StudyOverview‖).Retail in the UAEThe retail sector in the UAE continues to grow at a rapid pace with a CAGR of about 13%. Healthypopulation growth, increased per capita income, growing standards of living, thriving service sector, andencouraging travel/ tourism sectors are the factors propelling the growth of this industry (―GCC RetailDevelopment Sector Overview‖, 2011). Instability in the middle- east has also contributed to the growth(Sambridge, 2012). Reaching out to the shoppers with the right message at the right time innovatively hasalways been a challenge for the retailers in the UAE. Retailers now have an option to use BluetoothTechnology as a channel for marketing communication.

The Regulatory PerspectiveAs per Telecom Regulatory Authority, the mobile penetration in UAE in 2011 is way above 100 percent(Cherrayil, 2012).The Arab Direct Marketing Association (ADMA) launched in the middle- east in 2009 and is directlylinked with the DMA (Direct marketing association), headquartered in New York (―Arab DirectMarketing Association launched‖, 2009). The ADMA gives guidelines as to how marketing applicationsof technology need to be used in a non-invasive manner. There are significant obligations on the marketerto respect a consumer‘s privacy and launch campaigns with utmost transparency. There are no specificlaws for Bluetooth Marketing in UAE because Telecommunication Regulatory Authority (TRA) is not yetinvolved and the technology is independent of the service provider.Context for the StudyThis study has been carried out for a Scandinavian company– Blutek Smarketer (BS)∗. BS is a privatelyheld wireless technology company, founded with a vision of harnessing Bluetooth and Wi-Fi technologiesto deliver proximity marketing services. With many years of experience with the Bluetooth technology,BS has obtained a leadership position worldwide.Techtron Solutions (TS)∗∗ is the regional partner for BS. TS is a leading software solution provider basedin the Middle East. TS is the regional partner for BS.Bluetooth TechnologyBluetooth technology offered by BS is a complete, easy to use, mobile marketing platform that will enablecompanies to reach specific target customers and offers a one-to-one interactive channel. The systemsupports all Bluetooth enabled mobile phones in the industry today. The network can be geographically aswide as one chooses it to be. Each BS Node (Bluetooth Access Point) is connected to a central serverthrough the internet. They would be placed at different strategic locations within a specific area forlaunching a campaign.Campaigns in any digital format can be launched through the application software that is hosted on acentral server. Customized campaigns can be defined, scheduled and different rules can be set based foreach different segment. The application also provides real-time statistical analysis of any given campaign.The content would be dependent on the location of the user whilst receiving the transmission.There are several advantages in using this technology for location based marketing:• Ease of getting closer to the customer through the mobile phone.• Free of cost to the user.• Possibility of personalizing the content.• Participation initiated by the user by giving permission.• Provides an opportunity for viral marketing• Response and effectiveness of the effort can be measured on a real time basis.• Suitable for several marketing initiatives (Offers, Vouchers, Competitions andLoyalty programs)

What is Proximity marketing?Proximity marketing is the localized wireless distribution of advertising content within a particular place.To receive any messages the customer must enable Bluetooth on their mobiles when they are within theproximity of a broadcasting device.The process of Bluetooth based proximity marketing involves setting up Bluetooth "broadcasting"equipment at a particular location and then sending information which can be text, images, audio or videoto Bluetooth enabled devices within the range of the broadcast server. (―Proximity Marketing‖). Mobilecampaigns can also be integrated with other media like email and internet in the marketing mix (White,2008).ResearchResearch ObjectiveEnhancing the effectiveness of marketing spend, as stated earlier, is a major anxiety for CMOs acrosscountries. ‗Proximity Marketing‘ can provide some assistance in this regard. Proximity marketing as apractice is gaining favor in the developed countries. This study has been done to assess if there is anopportunity for this technology solution in emerging countries. Hence, UAE has been chosen for study.The research objective was to see if buying behavior varied across different retailers with the respect torisk perceived, willingness to adopt, customization desired, etc.Retailers were not clear whether using the Bluetooth marketing channel would add value and generatecommensurate revenues. It was necessary to understand if the preference for the solution varied amongstdifferent retailers: government service/ retail organizations, standalone retailers, local franchisees andinternational franchisees (Reed, 2011). If the right bundle of attributes and options are not identified, onecould waste marketing resources and also face a dilemma in attracting customers and retaining them.Qualitative ResearchDemonstrations of the technology were given and pilot projects were conducted for a few retailers inDubai. Discussions were held with several organizations to understand the challenges being faced by themin sending marketing communications to the right person at the right time.In- depth interviews were conducted, using a discussion guide with IT Managers, CRM andMarketing/Product Managers in Banks, Government Retail arms, and Mall management offices.This phase of the research helped identify:

• Key insights with regard to adopting a new generation technology for marketing.• The attributes and options of importance to the UAE retailers.Key Insights:1. The opportunity for Bluetooth marketing appears quite significant for UAE retail.2. The acceptance levels could depend on creating awareness about Bluetooth marketing, and providing anoption to ‘accept‘, ‘reject‘ or‘selectively accept such messages‘.3. If shoppers are convinced the message is from a credible source, they are more likely to accept thecontent.4. Internet Service Providers Etisalat & Du Telecom may consider it a threat, to their sms and internetmarketing services, as their bandwidth could be under utilized.5. Very few retailers currently appear to be aware of the effectiveness of their marketing campaigns andhave proper means of measuring it.6. Retailers find resources is a constraint to create campaigns during times of recession. Bluetooth couldbe of some assistance in this regard.7. The key drivers for investing in Bluetooth Marketing amongst the UAE retailers appear to be the cost ofthe solution and how soon one can recover the investment.Preliminary insights indicated considerable heterogenity amongst the different retailers with respect totheir perception for a proximity marketing solution. Hence, the different retailers from different categorieswere chosen for the study.Based on the qualitative research, several attributes and options for each attribute have been identified asin Appendix A.SamplingFor the study, 30 retailers belonging to four different categories were interviewed:1. Government services/retail - This category included retail outlets of government across airport dutyfree, telecom, road and transport, and city municipality owned services. Progressive in nature, theyseemed to seek advanced technologies to reach out to their customers (E.g. Du Telecom).2. Standalone retailers- This category included retailers where management decisions were taken at thestore site independent of others (E.g. Zaabeel Bistro).3. Local franchisees- These were franchisee stores of local brands, decisions were made by themanagement at the head office based in the middle- east region (E.g. Jashanmal).4. International franchisees- These were franchisee stores of international brands which operated underpartnership with a local partner organization.The management decisions were taken primarily by the team located far off managing the principal brandand located far away (E.g. Boots Pharmacy).

Conjoint AnalysisFor identifying dimensions of importance and the relative salience of each in designing aBluetooth solution for Proximity Marketing, a conjoint analysis was done.This technique is appropriate particularly for designing a new product or service offering.Full- factorial Conjoint is appropriate as in this case since the offering was complex with a high number ofattributes (Scholz, Meissner & Decker, 2010). There is a possibility to receive a high rating across allattributes hence a constant sum approach like Conjoint was used. This helps bring out the trade- offsbetween various attributes well (Nedzer & Srinivasan, 2011).Full factorial Conjoint Analysis was used for this study using the statistical package for social sciences(SPSS version 15.0). The output generated importance levels and the preferred combination of attributes,and choices for each of the retailer individually, and as a category.Using the orthogonal design feature, sixteen combinations of attributes were generated into plan cards. InAppendix B, Respondents (retailers) were presented with the cards and asked to rank their preferences.Conjoint analysis was performed using SPSS ver. 15.0. The relative importance values of the attributesacross four categories (Government Services/ Retail, International franchisees, Standalone retailers andLocal franchisees) were recorded (refer Exhibit 1(a)).

The above graph clearly indicates that Business Model is the most important attribute across all retailers.Other attributes important across the board are Network Connection, Vendor Profile, Data Integration andLicense Model. Local franchisees appear to have high importance to Physical size, contrary to others‘choice. Significance of the attributes was high as per the Pearson‘s R as shown in Exhibit 1 (c).RecommendationsGovernment Service/ RetailA trend diagram was plotted for the utility estimate values, for options under each attribute as shown inExhibit 2(a).

Government service/ retail organizations preferred self hosting the solution as they have resources. Thisreduces the total cost of ownership for the vendor and enables the government entity to have a control onthe marketing content. One of the ways they would consider self-hosting this solution is by providing anon-demand cloud deployment.With a private cloud hosted by the government, integration of data with other enterprise solutions likeCRM, ERP and other similar MIS can be made possible Zone based licensing model has been preferred asthis was perceived to be a more feasible pricing model. The zones are determined by plotting thebroadcast areas and deciding the number of nodes required in that zone. Based on the foot fall anticipatedat that time of the year, the number of nodes in a particular zone can be increased or decreased.International Franchisees

From Exhibit 2(b), we observe that International franchisees prefer to rent since they do not wish highcapital expenditure given that the ROI is not certain. Rental model was ideal since the investment wouldbe low and there would be no restrictions on the number of Bluetooth campaigns that can be initiated.They wish to license the solution zone wise as they have a fair idea of demand throughout the year. Onlyduring promotional season, they would require more nodes to reach out to a larger number of shoppers.They preferred vendors who could provide references of past successful implementations, as they need toprotect their brand and they cannot afford to risk their reputation.

Local franchisees too prefer the rental model to minimize initial capital expenditure and they believe inthe ―try before you buy‖ in view of the risk perceived. These retailers generally are entrepreneurial withcapital from local investors. They have procured large store spaces in various malls and hence it wasimperative that the node be able to broadcast marketing content to a larger area in the store. Most of thesestores are established for well over a decade. Based on their past experience, they preferred the Licensingmodel as it would cater to the broadcasting needs based on the desired footfalls.Local franchisees have over the years invested in several other business solutions like CRM to maintain a360 degree view of the customer (from sales, marketing and service perspective) and thus require dataintegration to their CRM system.

Standalone retailers also preferred rental model, having a low risk taking ability for new technologysolution. However, they are also willing to invest in new ventures to beat competition by embracingtechnological innovation to improve customer experience. Some showed an inclination to the revenuesharing model, where both parties invest and share the profits. They rely on the vendor‘s knowledge ofbest practices from similar implementations in a variety of projects. Vendor‘s local presence wasimportant to these retailers and considered local ‗word of mouth‘ as the best reference. They preferreddata integration for combining their point of sale with accounting systems to evaluate their marketingcampaigns.Challenges for Proximity Marketing in Emerging CountriesBluetooth and proximity marketing face challenges as the technology evolves in emerging countries.Infrastructure: To attain scalability and reliability, retailers will have to incur a high capital expenditurefor initial IT infrastructure investment, or tie-up with a service provider. An on demand cloud deploymentmodel has a very low acceptance in the emerging markets as the corporate data residing in external datacenters is perceived to be susceptible to data misuse and public access.Customization Agility: The agility with which solution providers can offer a localized and customizedoffering is a challenge. For this purpose, solution providers prefer to do business through channel partners.A local partner can learn the nuances within the market and mitigate challenges faced from localregulatory authorities and bridge the cultural divide. This kind of flexibility in customization will be thekey for international retailers.Managed Services Offering: The entire operational responsibility for proximity marketing solution shouldbe managed by the service provider. Several retailers have expressed their preference to the BOM (Build-Operate-Manage) model as their risk associated with this was minimal. This is why retailers prefer that thesolution be rented initially and managed by the Vendor.

Adoption of alternate Technologies- Not all retailers are equally ready to adopt new technologies.Adoption behavior needs to be assessed by understanding customer preferences. If shoppers‘ attitudestowards receiving marketing content on their mobile devices through Bluetooth are not positive, theretailer may not be willing to shift to newer technologies that provide location based marketing.Increase in Smart Phone penetration: Though emerging markets have seen a low smart phone penetration,it is expected to increase over a period of time. Customers in these markets, especially the youth, haveshown a growing preference for smart phones as noted by the service providers and their preference forlucrative buying schemes in the smart phone market. Smart Apps and Device Management solutionsappear to hasten the adoption of alternate technologiesApple phones and Bluetooth standards: File transfers via Bluetooth are not native to the iOS devices. Theyrequire additional applications to be installed and configured. With increased sales of Apple Devices,acceptance for proximity marketing initiatives via Bluetooth can hit a roadblock if Bluetooth were tobecome a legacy file transfer protocol. Emergence of newer file transfer methods like Near FiledCommunication (NFC) is also seen as a threat to Bluetooth.Impact of Social Media: A social media network stands today as the most preferred channel for marketers.One receives marketing content from the retailer and from their network of friends who have hadexperiences with a product or service. Social Media channels like Facebook have also included LocationBase services. Within the network, a person can know where each person is located. This information canbe leveraged by retailers to provide content based on the location using traditional channels like SMS,MMS, Social Media Updates and Email marketing.Aesthetics: Affluent customers, during current recessionary times are also patronizing low end retailers.These retailers focus on the functional aspects rather than the emotional aspects of the retail experience.However, they now need to improve aesthetics and décor of the stores. Independent Stores wish to avoidusing physical cables/wires for network connectivity and the size of the node should be small to remainhidden from the public.Culture: Retailers need to respect the customer‘s privacy both in terms of access to personal informationand spamming the customer with marketing messages. In emerging countries there is generally noregulatory framework for retailers to provide marketing content to mobile devices through Bluetooth.In emerging markets, the more progressive retailers may not be content with a standalone proximitymarketing solution. Like their western counterparts, they are also keen to integrate their point of salesystems with other solutions like CRM and ERP. So a solution provider should enable analytics pertainingto new and existing customers for enhancing marketing performance.Way ForwardThis study has been done specifically for UAE- which is different from other emerging economies such asBrazil, Russia, India, and South Africa. It will be necessary for one to conduct a similar study for thechosen market to understand the perceptions for designing pertinent proximity marketing solutions.It is also suggested that, the number of attributes for the study be reduced for sake of simplicity. Samplesize needs to be larger so the inferences can be more reliable. A company marketing Bluetooth marketingsolution will be able to use its resources productively by identifying and reaching out to retailers willing totake more risk and initiative i.e. lead users and innovators (Eisenberg, 2011).

BIBLIOGRAPHYAndersson, R. Mobile Advertising and Marketing. Retrieved April 17, 2012 from BergInsight website: http://www.berginsight.com/ReportPDF/ProductSheet/bi‐mam5‐ps.pdfCherrayil, N. K. (April 4, 2012). TRA‟s new data do not reflect major change. RetrievedApril 14, 2012 from Gulfnews website: http://gulfnews.com/business/telecoms/tra‐s‐newdatado‐not‐reflect‐major‐change‐1.1003854Eisenberg, I. (2011). Lead- User Research for Breakthrough Innovation. ResearchTechnology Management, 54(1), 50-58.Ewan (April, 30, 2007). Pepsi launches America‟s biggest Bluetooth campaign.Retrieved April 13, 2012 from Mobile Industry Review website:http://www.mobileindustryreview.com/2007/04/pepsi_launches_americas_biggest_bluet

ooth_campaign.htmlMcGovern, G.J., Court, D., Quelch, J. A. & Crawford, B. (2004). Bringing Customersinto the Boardroom. Harvard Business School Publishing.Melewar, T. C. & Lim, L. (2010). Branding and marketing of technological andindustrial products. European Journal of Marketing, 44 (5).Netzer, O. & Srinivasan, V. (2011). Adaptive Self- Explication of MultiattributePreferences. Journal of Marketing Research, 48(1), 140-156.Reed, N. U. (2011). DR Gets Smart about MOBILE. Response, January Issue, 19(4), 30-34.Romanov, A. (January 17, 2011). 8 reasons why proximity marketing will matter forretailers in 2011. Retrieved April 14, 2012 from Retail customer experience website:http://www.retailcustomerexperience.com/article/178830/8‐reasons‐why‐proximitymarketingwill‐matter‐for‐retailers‐in‐2011Sambridge, A. (April 6, 2012). Fitch Upbeat on Dubai hospitality, retail sectors.Retrieved April 14, 2012 from Arabian Business website:http://www.arabianbusiness.com/fitch‐upbeat‐on‐dubai‐hospitality‐retail‐sectors‐452912.htmlShapiro, A. (April, 2012). Are you making the most of your company‘s ‘softwarelayer‘?. McKinsey Quarterly.Scholz, S. W., Meissner, M. &Decker, R. (2010). Measuring Consumer Preferences forComplex Products: A Compositional Approach Based on Paired Comparisons. Journalof Marketing Research, 47(4), 685-698.Simkin, L. (2008). Achieving Market Segmentation from B2B Sectorisation. Journal ofBusiness & Industrial Marketing. 23 (7).Weinstein, A. (2011). Segmenting technology markets: applying the nested approach.Marketing Intelligence & Planning, 29(7), 672- 686.White, L. (April 25, 2008)). How new digital technology is making its mark out-ofhome.Band, 18.Proximity Marketing. Retrieved Oct 17, 2011, from Wikipedia website:http://en.wikipedia.org/wiki/Proximity_marketingGCC Retail Development Sector Overview. Retrieved Sep 8, 2011, from VenturesMiddle East website:http://www.indexexhibition.com/files/gcc_retail_development_sector_overview.pdfAnonymous (2011). From Stretched to Strengthened. IBM.BBC Radio1 Case Study Overview. Retrieved April 13, 2012 from Bloozy website:

http://www.bloozy.co.uk/bbcradio1.phpArab Direct Marketing Association launched. Retrieved April 22, 2012 from AME Infowebsite: http://www.ameinfo.com/193380.htmlHow Bluetooth marketing works? Retrieved April 17, 2012 from Bluair website:http://www.bluair.pl/how-does-bluetooth-marketing-workThe role of product innovation in the context of Russian economyMaria Smirnova, Vera Rebiazina and Olga TretyakInformation about the authors:

Smirnova Maria, 0079217505094, smirnova@gsom.pu.ru, Associate Professor (Marketing), GraduateSchool of Management, Saint-Petersburg State University, Saint-Petersburg, RussiaRebiazina Vera, 0079031171113, rebiazina@hse.ru, Senior Lecturer (Strategic Marketing Department),National Research University ―Higher School of Economics‖, Moscow, RussiaTretyak Olga, 0079168568071, o_tretyak@inbox.ru, Professor, Head of Marketing Department, NationalResearch University ―Higher School of Economics‖, Moscow, RussiaTitle of the paper: The role of product innovation in the context of Russian economyAbstract:The paper aims at adding to existing theory on the role firm innovativeness in driving firm performancewith the focus on product innovation. Product innovation is in center of attention for emerging economies,while Russia is rather loosing positions in competing via offering innovative offerings in comparison toother BRIC economies. As suggested by Sahwney et al, 2006 we study the role of key offering dimensions- platform and solution innovation – in influencing performance outcomes. Following existing theory oninnovation – performance relationship, direct and indirect effects of market orientation on firmperformance are being tested. Since there is still no substantial research evidence on the mediating effectof innovativeness on market orientation – performance link in emerging economies, our study aims toclose this gap. Finally, the model includes moderating effect of product innovativeness. The study is basedon empirical survey of 204 Russian innovative firms with multiple respondents approach, resulting in 331qualified respondents. The results confirm existing differences, depending on the level of productinnovativeness, as well as illustrate variation in the role of market orientation subdimensions anddimensions of product innovation on firm performance.Key words: innovation, market orientation, emerging markets, RussiaIntroductionThe paper aims at adding to existing theory on the role of innovation capabilities as a ―missing link‖between market orientation and firm performance (Han et al, 1998). There is hardly any substantialevidence on re-assessment the way market orientation and innovativeness engage in influencing firm

performance (Human and Naudé, 2010). To address this issue we focus on product innovation in thecontext of Russian emerging economy and its two dimensions – platform and solution innovation(Sawhney et al, 2006).The research on the product innovations developed by Russian firms does not provide sufficientevidence for explaining the drivers and performance outcomes of the NPD process in Russian firms. Roud(2007) states that the level of innovations in Russian firms is four times lower than in some Europeancountries – e.g. Germany and Sweden. Comparing the BRIC (Brazil, Russia, India and China) economiesand their innovation environment, Kaartemo (2009, p.11) reports that ―Russia seems to be the worstpositioned among the BRIC countries on the innovation front‖. There is even prediction that Russia mightbe excluded from BRIC if innovation will not become central focus of economy.The aimed contribution combines re-assessment of the relationship between market orientation(MO), innovativeness and firm performance in emerging economy context, as well as testing mediatingeffect of platform vs. solution innovation. The paper is presented in the form of extended abstract andincludes short literature review and hypothesis formulation, sample description, short overview of theresults, conclusion and references.Literature review and hypotheses formulationWhile MO concept has been widely tested in multiple markets, its validity for transforming contextof emerging economies can still be seen as agenda for research. With some exceptions there is hardlyenough evidence on how MO constructs (customer and competitor orientation and interfunctionalcoordination) work in emerging economies, including Russia (Akimova, 2000; Greenley, 1995).The discussion on relationship between both constructs of market orientation and innovativenesshas been developed in later research (e.g., Grinstein, 2008; Zhou et al, 2005), among which an alternativeapproach has been presented – opposing MO and innovation orientation as a strategic choice of a firm(Berthon et al, 1999; Berthon et al, 2004). Thus in the latter approach market orientation and innovationorientation are looked at within dichotomy ―to serve or to create‖ (Berthon et al, 1999), discussingopportunities of firm‘s focus on just one of these two strategic orientations. The more radical innovation

strategy, the less might be importance of market orientation. The focus of firms, ―creating the market‖,thus is not determined by current customer needs and may neglect them in order to develop offerings,satisfying latent or future demand.Ability to develop and bring to the market new products and services is considered as one of themain capabilities of a firm (Lau et al, 2010). Underlying factors of product innovations are often linked toeither substantial change in value chain, product platform or development of a unique customer solution ortheir range. Sawhney et al (2006) consider both these factors – product platform and customer solution –as dimensions of innovations in firm offering, resulting in new products and services with added value forcustomers.For successful application of product platform strategy and creation of product innovation firmsneeds to understand core and differentiated customer needs and be aware of firm‘s target group (Stone etal, 2008). Platform innovation depends on good knowledge of customers, competitors and ability tointegrate internal functions (e.g. marketing and R&D):H1a: Customer orientation has positive impact on platform innovation.H1b: Competitor orientation has positive impact on platform innovation.H1c: Interfunctional coordination has positive impact on platform innovation.An increasing research discussion is devoted to solution innovation (Liu & Hart, 2011;Evanschitzky et al, 2011; Kakabadse et al, 2004; Shepherd & Ahmed, 2000). Evanschitzky et al (2011)highlight the role of competition in manufactured goods and note that services might be more attractivefrom the profitability perspective, thus increasing attractiveness for firms in combining products andservices. Solution may be successful only when a supplier truly understands customer needs, which maybe achieved through collaboration between buyers and suppliers and establishing strong relationships(Roegner, Seifert and Swinford 2001). Success of firm‘s ability to innovate via developing customersolutions depends on the level of market orientation:H2a: Customer orientation has positive impact on solution innovation.H2b: Competitor orientation has positive impact on solution innovation.

H2c: Interfunctional coordination has positive impact on solution innovation.Adaptation of organizational capabilities and value chain are required for solution development(Sato, 2009). For integrated solutions an essential driver is creation of a solution platform, includingstrategy and supporting infrastructure (Storbaka, 2011). From this perspective, technology platform, basedon using the communality principle in developing new products and services (Sawhney, et al, 2006; Stoneet al, 2008) and combining resources and capabilities (Ulaga & Reinartz, 2011) would contribute todeveloping capabilities, required to develop successfully integrated solutions and thus foster solutioninnovation (Sato, 2009):H3: Platform innovation is positively associated with solution innovation.The role of firm‘s innovativeness on firm performance has been widely discussed in existing researchliterature, providing diverse results (Morgan and Berthon, 2008; Pittaway et al, 2004). We assume that ina context of Russian emerging economy there is an even higher role of innovativeness in influencingfirm‘s results (Paladino, 2007), thus:H4: Platform innovation has positive impact on firm performance.H5: Solution innovation has positive impact on firm performance.Finally, we are testing also direct effect of MO on firm performance (Narver and Slater, 1990).H6: Market orientation has positive impact on firm performance.Figure 1 represents the overall conceptual model tested in the study. The model aims to test mediatingeffect of two innovation capabilities – platform and solution innovation.

CustomerorientationH1aPlatforminnovationH3CompetitororientationH1bH2bH2aH5H6aH6bH6cFirmperformanceInterfunc.coordinationH1cH2cSolutioninnovationH4Level of product innovativenessFigure 1. Conceptual modelModerating effect of product innovativenessConsidering higher uncertainty in emerging economies context (Paladino, 2008; Grinstein, 2008) themoderating effect of the product innovativeness might strengthen relationship between the marketorientation and innovation capabilities of a firm. The growth of emerging markets provides solid chancesfor successful innovations to support firm‘s position in own economy and even internationalization toother countries (Sheth, 2011). Thus we assume that the level of product innovativeness might moderateeffect of market orientation on developing firm‘s ability create platform and solution innovations,resulting in a difference in the impact of market orientation subdimensions on platform and solutioninnovation.Sample descriptionThe cross sectional sample contains 204 innovative companies (331 responses). The sample is determinedin order to investigate the phenomenon of innovation creation by Russian companies. Two criteria wereused to build the sample of innovative companies: industries and regions with the highest level ofinnovation activities were selected. The sample includes companies from 10 key industries from 13regions of Russian Federation representing 6 Federal districts (all except Far Eastern Federal districtwhich was excluded from the sample because of its remoteness and inaccessibility).

Measurement resultsTwo alternative models have been tested. Model 1 (direct effects model) tests hypotheses with onesample (n=312). For Model 2 (the two-group model solution) the level of product innovativeness (high;low) was used to divide sample into two groups. Models 1 and 2 support most of formulated hypotheses,but results indicate substantial differences between high and low product innovativeness groups. Thechoice of product innovation strategy thus results in different role of market orientation subdimensions, aswell as the role of two product offering dimensions – platform and solution innovation.The results of analysis in the context of transition economy are thus providing a new angle topreviously confirmed results on the way MO and innovative capabilities engage and create an effect onfirm performance. The next steps of the model development are going to include moderating effects offirm size and industry to check for robustness of the results.ReferencesAkimova, I. (2000). Development of market orientation and competitiveness of Ukrainian firms.European Journal of Marketing, 34 (9/10): 1128 – 1148.Berthon, P., Hulbert, J.M. & Pitt, L.F. (1999). To serve or to create? Strategic orientations towardcustomers and innovation. California Management Review, 42 (1): 37-56.Berthon, O., Hulbert, J.M. & Pitt, L. (2004). Innovation or customer orientation? An empiricalinvestigation. European Journal of Marketing, 38 (9/10): 1065-1090.Greenley, G.E. (1995). Market orientation and company performance: Empirical evidence from UKcompanies. British Journal of Management, 6: 1-13.Grinstein, A. (2008). The effect of market orientation and its components on innovation consequences: ameta-analysis. Journal of the Academy of Marketing Science, 36: 166-173.Han, J.K., Kim, N. & Srivastava, R.K. (1999). Market orientation and organizational performance: Isinnovation a missing link? Journal of Marketing, 62: 30–45.Human, G.J.P. & Naude, P. (2010). Relationship and innovation orientation in a business-to-businesscontext. South African Journal of Business Management, 41 (4): 15-26.Kaartemo, V. (2009). Russian innovation system in international comparison – the BRIC countries infocus, Electronic Publications of Pan-European Institute, 22/2009.Luecke, R. & R. Katz. (2003). Managing Creativity and Innovation. Boston, MA: Harvard BusinessSchool Press.

Morgan, R.E. & Berthon, P. (2008). Market orientation, generative learning, innovation strategy andbusiness performance inter-relationships in bioscience firms. Journal of Management Studies, 45 (8):1329-1353.Narver J.C. & Slater S.F. (1990). The Effect of a Market Orientation on Business Profitability. Journal ofMarketing, (October), pp. 20-35.Paladino, A. (2007). Investigating the drivers of innovation and new product success: A comparison ofstrategic orientations. Journal of Product Innovation Management, 24: 534-553.Pittaway, L., Robertson, M., Munir, K., Denyer, D., & Neely, A. (2004). Networking and innovation: asystematic review of evidence. International Journal of Management Reviews, 5/6: 137-68.Roud, V. (2007). Firm-level research on innovation and productivity: Russian experience. MEIDE papers,10 p.Sawney, M. & J. Chen. (2009). Defining and Measuring Business Innovation: The Innovation Radar.Working Paper.Venkatraman, N. (1989). Strategic orientation of business enterprises: The construct, dimensionality andmeasurement. Management Science, 35 (August): 942-962.Vorhies, D.W. & Harker, M. (2000). The capabilities and performance advantages of market-driven firms:An empirical investigation. Australian Journal of Management, 25 (2): 145-171.Walker, S.G. (2004). Innovation and Organizational Performance: Evidence and a Research Agenda.Advanced Institute of Management Research Working Paper Series, 002, June. Advanced Institute ofManagement Research, London.Heiner Evanschitzky, Florian V. Wangenheim, David M. Woisetschläger. Service & solution innovation:Overview and research agenda Industrial Marketing Management, Volume 40, Issue 5, July 2011, Pages657-660.Sato, C.E.Y. (2009). Capabilities development and platform strategy in integrated solutions: the case ofBT Global Services, Proceedings, Druid Summer Conference 2009, 29 p.

Exploring the factors that influence the use of hair extensions amongst black women in southAfricanMlenga Jere and Karren MushureABSTRACTHair extensions are widely used by black and other women. This article explores the factors that influencethe use of hair extensions by black African women in South Africa. Based on a survey of 87 black Africanaged 18 years and above, the most preferred hairstyles and the influencing factors are identified. Theresults do not support the proposition that self-hatred or de-Africanisation is a major influencer ofhairstyle choices amongst the respondents. On the other hand, based on the respondents‘ cultural valuepriorities and their reasons for using hair extensions, the results suggest that the desire to conform tomodernity is an influencer of hairstyle choices. The article concludes by highlighting managerialimplications for marketing and business practitioners.Key words: black African women, hairstyles, hair extensions, feminine beauty, value prioritiesINTRODUCTIONHair extensions are widely used by black women in South Africa to create a variety of hairstyles.The South African hairstyles market can be split into two categories, namely ‗wet‘ and ‗dry‘. The ‗wet‘hair market relates to sales of chemical products such as hair relaxers used for straightening hair,shampoos, and hair dyes. The ‗dry‘ hair market is composed largely of hair extensions which are availablein the form of wigs, weaves and hair pieces (Mpungose 2004). The use of hair extensions has becomewidely popular amongst black women, who in addition to the use of ‗wet‘ hair products also use hairextensions. Apart from the need for fashion and beauty enhancement, another reason for the use ofextensions is convenience, which assumes that natural hair is unmanageable. Hair extensions, in additionto giving hair a richer and fuller look, are also used by women to cover up hair which has been damagedby chemical treatments (Bell 2010). Hairstyling is important to women because it presents beauty choicesto distinguish them culturally and socially. Hairstyling is also perceived as a way of enacting femininityand feeling attractive (Gimlin 1996). It is argued that women‘s hair is fundamental to their social positionand that women may use their hair as a source of power which is dependent on how people respond tothem based on their hairstyle (Weitz 2001).Perceptions of feminine beautyPerceptions of feminine beauty and the significance women place on their hair are different anddependent on cultural context. Feminine beauty is a concept which does not lend itself to easy definitionas its very meaning and essence is subject to diverging contextual connotations. But Arnheim (1996: 252)contends that ―...within the standards of different races the criteria for what is called beauty are the sameas those of the western tradition‖. This is attributed to the constant messages in the media that displaybeauty in Eurocentric ways (Patton 2006). Brand (1999) suggests that a white-dominated culture isresponsible for creating a ‗racialised‘ concept of beauty by which all women, regardless of race, are

judged. On the other hand, Brand (1999: 4) acknowledges that non-Eurocentric cultures may not conformto the same standards of beauty, arguing that beauty is ―...a contextual property deeply connected tofactual beliefs and moral attitudes‖. Mazur (1986: 282) concurs with this perspective and posits that―there is no universal standard of beauty‖. The variables which denote beauty vary depending on culturalcontext (Mazur 1986). The literature reviewed in this paper identifies Eurocentric beauty, Latino andAsian-American beauty, and African-American beauty. Understanding the different perceptions of beautyis important in exploring the influences on black women in South Africa women and their choice ofhairstyles.The Eurocentric conception of feminine beauty has evolved through the centuries with aspects ofthe feminine body such as the neck, waist, breasts, hips and buttocks being accentuated or concealeddepending on what society considered desirable (Patton 2006). For example, in America, the currentlyprevailing standard of beauty is white, young, slim and tall (Patton 2006). This idea of beauty is replicatedin the form of the Barbie doll image which Okafor (2007: 37) argues has become an image of a‗globalised beauty‘ and a demonstration of a perfect beauty by which beauty pageants appear to judgetheir contestants. It is argued that blonde white women who most closely resemble the image of Barbiehave a higher chance of winning beauty pageants and are also favoured in other image focused professionssuch as modelling and acting (Okafor 2007). According to Johnston and Oliver-Rodriguez (1997), haircolour and hairstyle are also considered determinants of attractiveness. The Eurocentric image ofbeautiful hair is that which is long, straight, bouncy or silky (Patton 2006). This mass promoted image ofbeauty has resulted in a perception of attractiveness which is racially centred with Caucasian featuresbeing highly associated with beauty.Casanova (2004) argues that the Latino prototype of feminine beauty represents aspirations towardsCaucasian ideals of beauty. In the Latin America context, beauty is associated with light skin anddownplayed Latino attributes which almost resemble Caucasian features; except unlike Barbie, a morevoluptuous body is regarded as attractive (Casanova 2004). Asian-American beauty holds the samestereotypical image of attractiveness according to Kaw (1993) whose work reveals an increasing numberof Asian-American women using eye and nose surgery to acquire ―...a feminine look considered moreattractive by society‖ (Kaw 1997: 81). This ―attractive look‖ refers to a narrow Caucasian nose and widereyes. For Asian-Americans and Latinas, the predicament with achieving the Eurocentric norms of beautyare not as great as those faced by black women, whose dark complexion and kinky textured hair sets themcompletely apart from other races in terms of their closeness in resembling the Barbie doll image.Most of the literature regarding black women‘s beauty perceptions is in the context of the African-American woman. Patton (2006: 26) argues that black women deal with the constant pressure ―...to meeta beauty standard that is inauthentic and often unattainable...‖ But Casanova (2004) contends that blackwomen are not overly-concerned about thinness compared to their white counterparts. Similarly, Webb,Looby and Fults-McMurtery (2004) argue that African-American men favour the heavier or larger bodyfigure, although there are signs that this perception may be changing to conform to the dominantEurocentric orientation. To a greater extent, the media favours African-American women whose standardof beauty is almost indistinguishable from the iconic white image as the black body image hastraditionally been besmirched (Patton 2006). Patton (2006) further contends that because not all African-American women are concerned with meeting the Eurocentric beauty standards, they create their ownstandards of beauty which make the most of their unique characteristics, resulting in creative hair styling,for example. This notion of making do with what they have is also acknowledged by Parker et al. (1995)who found that the perception of beauty by African-Americans was flexible due to their recognition of theinapplicability of the white stereotype of beauty or the Barbie image to themselves.The issue of hairstyling is particularly fascinating in that the texture of black hair lends itself tomany forms of manipulation to achieve various styles. Black women‘s hairstyles may involve chemicallystraightening the hair in order to achieve the flowing silky texture similar to that of Caucasian hair. Thehairstyles may also require the extensive use of hair extensions which can be artificial or natural hairfibres which are applied to the scalp or natural hair. The majority of African-American women do notmaintain their natural hair but employ the use of relaxers, heat appliances, and oils to achieve the desired

hairstyle. According to Dawson (2009), up to 34% of all hair products sold in the United States arepurchased by African-American women, whilst sales of hair weaves accounts for approximately 65% ofhair care revenue. In the South African context, about 43% of all hair care sales come from the ethniccategory, of which a sizeable part is attributed to ‗wet‘ hair products such as chemical relaxers and perms,conditioners and after-care products (Mpungose 2004). Elsewhere in Africa, and consistent with theforegoing discussion, Keita et al. (2005) found that the most frequently performed procedures in Malianhair salons were hair straightening, shampooing, oil-treatments, and colouring. It is therefore fair toconclude that hairstyling occupies an important place in the lives of lives of black women in South Africa.Why being beautiful mattersResearch suggests that beauty has significant repercussions for women in social and economicparticipation (Casanova 2004). Good looking people earn a premium in wages whilst average lookingpeople are paid better than people with below-average looks (Biddle, 2010). Rosenblat (2006: 223)contends that people who are considered physically attractive exude more confidence and arestereotypically perceived to be competent as employees due to the notion that beauty is ―correlated withintelligence, social skills and health.‖ Attractiveness also has benefits in intimate relationships; physicallyattractive women have a greater likelihood of marrying men of a higher social and economic status (Weitz2001). It is therefore fair to say that women who are considered beautiful hold some socio-economicadvantages compared to those who are not.From the literature reviewed here, it is apparent that black women, due to racial stereotypes, may beparticularly challenged in terms of opportunities available to them. Henry (1995: 293) asserts that blackwomen are subjected to stereotypes which suggest that they are inferior; thus placing them in ―...a vortexof interlocking, disempowering social and economic forces.‖ Black women are therefore under pressureto change their hairstyles to fit the dominant social construction of beauty. Patton (2006) argues, forexample, that a woman who meets the stereotypical Eurocentric standards of beauty increases her chancesof landing a job in the competitive American environment. Patton (2006) further argues that in the UnitedStates, an aspect of hair which is associated with white beauty apart from the obvious long and blonde isthat it must not look like a man‘s. Research suggests that even more than white men, African-Americanmen associate long hair with beauty (Rooks, 1996). Black women‘s natural hair type is distinctly opposedto the mainstream standard of beautiful hair. This argument points to the reasons why the majority ofblack women prefer to not maintain their natural hair but instead choose to straighten it or use hairextensions. This is despite the scalp disorders which are associated with hairdressing being more commonin people of African descent (Khumalo, Jessop, Gumedze, & Ehrlich 2007).Factors affecting hairstyle choices amongst black womenThe factors affecting black women‘s choice of hairstyles can be broadly categorised into two mainarguments: the de-Africanisation argument and the modernity argument. Some researchers (e.g., Henry1995; Ashe 1995) argue that an inherent self-hatred nurtured from a racist historical context which createdblack inferiority is responsible for the lengths to which black women go in altering the appearance of theirnatural hair. This argument suggests that in their aspiration to conform to Eurocentric standards of beauty,black women may begin to despise their own physical exterior, believing that ―Black is not beautiful...thatshe can only be loved by impersonating somebody else‖ (Patton 2006: 26). According to Henry (1995:289), when they do this, black women choose beauty options that ―de-Africanise‖ them. Similarly, Ashe(1995: 579) posits that straightening hair is a way through which black women seek to fit into the whitesociety‘s ideals of beauty, however unconscious this may be. On the other hand, black women who chooseto maintain their natural hair are resistant to the Eurocentric norms of beauty. This is evident in the use ofAfro hairstyles and dreadlocks, for example (Weitz 2001).The desire to be modern is the other reason why black women straighten their hair and use hairextensions. Nyamnjoh (2002: 104) defines modernity as ―...the desire to refashion the self, to imagine newways of being.‖ Hairstyling is part of how black women refashion themselves, regardless of whether the

hairstyles are ‗Afro-centric‘ or ‗Eurocentric‘. The choice by black women to use hair straighteners andhair extensions may therefore not be due the desire to meet the standards of white beauty, but a result ofthe convergence of cultures (Spronk 2009). Though Nyamnjoh (2002) and Spronk (2009) argue from theperspective of black women in Africa, similar arguments apply to African-American women as well.Patton (2006), arguing from the perspectives of African-American women, contends that when blackwomen choose straightened hairstyles, it is not because of their desire to emulate whites but a matter ofhaving a modern hairstyle. Neither is their choice a political statement, ―...but simply a matter of choice‖(hooks 1995: 123). But Okafor (2007) demurs and argues that globalization is an extension of white idealsthat involves victimization and leads black women, in the name of modernity, to choose Caucasianinspiredstyles at the expense of African inspired looks. This argument is in contradiction to Houlberg(1976) who suggests that authenticity does not imply rigidity, and that one can adopt new ways whilststaying true to their identity. Put differently, embracing modernity does not render one‘s ‗African-ness‘compromised (Maqoma 2002). As Englis, Solomon, and Ashmore (1994: 52) point out, globalization hasnot just led to the westernisation of other continents, ―...Western standards are evolving to include moreethnically diverse templates‖. To illustrate this, Patton (2006) suggests that physical features associatedwith black women such as fuller lips, body curves and curly hair have become admirable, resulting inwomen who do not naturally possess these attributes, spending money on cosmetic procedures andhairstyle in order to obtain what they do not naturally have.In conclusion, though black women in South Africa live in a society whose culture and values differsignificantly from that of African-American women, black women from both societies share a commonpreference in relation to hairstyle choices and the use of hair extensions. However, the factors affectingtheir behaviour as consumers may be different due to the wide gap in the cultural contexts of the twosocieties. Culture can be operationalised using values (Usunier & Lee 2009) and cultural values are knownto correlate with consumer behaviour (Henry 1976). Values are defined as enduring, desirabletranssituational goals that serve as guiding principles in the life of a person or other social entity (Rokeach1973; Schwartz 1994). An influential theory in the study of values is the values contents and structuretheory (Schwartz 1994; Schwartz et al. 2001) which uses the well-known cultural scale called the PortraitValues Questionnaire (PVQ) to make cultural assessments. Schwartz‘s PVQ identifies ten motivationaltypes of values namely; power, achievement, hedonism, stimulation, self-direction, benevolence,universalism, tradition, conformity, and security.The ten motivational types of values may be summarised by two orthogonal dimensions of valuesnamely self-enhancement vs. self-transcendence and openness to change vs. conservation. According toSchwartz (1992: 43), the self-enhancement vs. self-transcendence orthogonal dimension of values refers to―values in terms of the extent to which they motivate people to enhance their own personal interests (evenat the expense of others) versus to transcend selfish concerns and promote the welfare of others, close anddistant, and of nature‖. The values types that make up the self-enhancement value domain and the selftranscendencevalue domain are power and achievement, and benevolence and universalism respectively.On the self-enhancement vs. self-transcendence orthogonal dimensions, the self-enhancement values arein conflict with the self-transcendence values. The openness to change vs. conservation orthogonaldimension of values refers ―values in terms of the extent to which they motivate people to preserve thestatus quo and the certainty it provides in relationships with close others, institutions, and traditions versusfollowing their own emotional and intellectual interests in unpredictable and uncertain directions‘(Schwartz, 1992: 43). The value types that make up the openness to change value domain and theconservation value domain are self-direction, stimulation and hedonism, and tradition, conformity, andsecurity, respectively. On this orthogonal dimension, the openness to change values are in conflict withthe conservation values. In the study of South African values, Burgess (2002, 2011) found that SouthAfricans placed more priority on the values security, benevolence, and universalism. In the context ofSouth African, these three value types constitute self-transcendence. The value type security in SouthAfrica has been known to locate in the self-transcendence to reflect the importance of justice and equalityrather than the preservation of the status quo (Schwartz, et al. 2001).

The purpose of this article is to assess the factors that influence black women in South Africa to usehair extensions. More specifically, the article seeks to address the following questions:a) Is the use of hair extensions by black women in South Africa a symptom of self-hatred or de-Africanisation?b) Is the use of hair extensions by black women in South Africa a symptom of their desire toconform to modernity and consistent with their value priorities?

METHODSubjectsConvenience sampling targeting 120 black women of African origin aged 18 years old and abovewas used. A total of 92 responses were received from the survey of which 87 were usable.MeasurementIn addition to items relating to demographic and classification information, the data collectioninstrument contained quantitative and qualitative items. The quantitative items required the respondents toa) rank eight hairstyles (see Figure 1) on a scale ranging from 1 (best) to 8 (worst), b) indicate their levelof agreement with six statements that women give about hair extensions on a five-point scale ranging from1 to 5 with the labels Strongly agree, Agree, Neither agree nor disagree, Disagree, and Strongly disagree,and c) indicate the extent to which they are like the people described in ten statements about values on afive-point scale ranging from 1 to 5 with the labels A lot alike, Alike, Somewhat alike, Not much alike, andNot at all alike. The two qualitative items required respondents to state their reasons for using hairextensions or state their reasons for not using hair extensions.ProcedureThe data collection instrument was distributed via the internet. The quantitative analysis wasperformed using SPSS (version 19) software. The qualitative section of the survey was analysed bygrouping the responses into categories in order to find common themes in the responses.

RESULTS AND DISCUSSIONDescriptive statisticsThe majority of the respondents were in the 24-30 age group (Table 1), and 54% earned less thanR15000 (Table 2). At least 75% of the respondents claimed to use hair extensions from at least once amonth to once every three months (Table 3). The mean rankings of the hairstyle (ranging from 1 for bestto 8 for worst) revealed that the women preferred the two braiding styles followed by the weaving style(see Figure and Table 4).

Use of hair extensions a symptom of self-hatredThe first question sought to assess whether the use of hair extensions by black African women is asymptom of self–hatred or de-Africanisation. To address this question, the respondents that admitted tousing hair extensions were first asked to state their reasons for using them. The respondents‘ first reasonfor using hair extensions was the ease of maintenance in comparison to natural hair (41%) followed bybeauty enhancement (26%) (Table 5). The other reasons advanced for using hair extensions aresummarised in Table 5 which shows percentages based on the 84 respondents who admitted to using hairextensions.

Respondents were then asked to express their level of agreement or disagreement with sixstatements about hair extensions (Table 6). Examples of these statements which are abbreviated in Table 6include ―Hair extensions are cheaper to maintain than natural hair‖ and ―Hair extensions make me lookmore beautiful‖. The results show that the respondents had the most agreement with relating to easymaintenance (77.7% strongly agreed and agreed) and faster growth of natural hair (62.6% strongly agreedand agreed). This is supported by the mean scores for the six statements in Table 6 which show the levelof agreement was greatest for statements relating to ease of maintenance (M=1.93, S.D.=1.25) followed bygrowing natural hair faster (M=2.77, S.D.=1.33). The results also reveal that 51% of the respondentsstrongly agreed and agreed that hair extensions make them look more beautiful while 42% strongly agreedand agreed that straight, long and bouncy hair was more attractive than short kinky hair. Whenrespondents were asked to rate the pictures of various hairstyles (see Figure 1 and Table 4); their threemost preferred styles (i.e., braiding (long/singles, braiding (cornrows, and weaving (long/straight) allincorporate the use of extensions. The rating of the natural cropped (short afro) style as the fourth mostpopular hairstyle is perplexing and is most likely a reflection of the respondents‘ aspiration to embracethemselves for who they are. Whilst it represents the style they would like to wear, the respondents chooseto go with mainstream hairstyles which they believe are more socially acceptable and easier to maintain.

When asked to state their reasons for using hair extensions, the women who admitted to using hairextensions for beauty enhancement generally felt that extensions afforded them more flattering hairstylesdue to the additional length and volume which made their hair ‗fuller‘. One respondent added that usingextensions made her feel more sophisticated, whilst other women spoke of the confidence they gainedfrom wearing hair extensions. Some respondents admitted to using hair extensions to cover recedinghairlines. This is similar to the results of a study conducted by Keita et al. (2005) amongst Malian womenwhich found that the prime reasons for visiting salons were frontal alopecia (i.e., receding hairlines), dryand brittle hair, and the desire to look beautiful.The remaining three natural hair styles (dreadlocked, plaited, uncombed) were amongst the leastpreferred together with the curly bouncy weave style (Table 4). This appears to be further affirmation ofthe unpopularity of natural hair in preference for hair extensions. The fact that the curly bouncy weavewas rated in the bottom four seems to contradict the respondents‘ view that they find long bouncy hairmore attractive (Table 6). This suggests that women may like a type of hairstyle, but may not wear such astyle due to reasons such as affordability and convenience.To conclude the discussion on the use of hair extensions as a symbol of self-hatred or de-Africanisation, the observed rankings of the hairstyles affirms the respondents‘ preference for hairextensions to natural hair. However, the results do not fully support the hypothesis that black Africanwomen suffer from self-hatred. Whilst 51.3% of the women strongly agreed and agreed that Caucasianinspiredhairstyles are more attractive than their own (i.e., ―Hair extensions make me look morebeautiful‖, Table 6); the two most popular hairstyles (i.e., braiding (long/singles) and braiding (cornrows),Table 4) selected by the same respondents are inherently variations of African styles, except that they arebraided with hair extensions (see Figure 1). Okafor (2007: 49), in his study of women in Nigeria, assertsthat ―...elaborately plaited and woven hair in different designs...‖ apart from being hard-wearing andshowing a woman‘s face to advantage, is also an intrinsically African traditional hairstyle. In this study,since the highest ranked styles are African-inspired, it is prudent to conclude that the results do notsupport the self-hatred proposition.Use of hair extensions as symbol of modernityThe second question sought assess whether the black African women‘s use of hair extensions was asymptom of their desire to conform to modernity. To address this question, the respondents were firstpresented with ten statements from the PVQ scale to rate on a 5-point scale as explained previously. Therespondents‘ value priorities on the value domains relating to openness to change and conservation wereassessed in order to ascertain the respondents‘ desire to embrace change and therefore modernity. Theresults revealed that the openness to change value domain (M=2.34) was given more emphasis than theconservation value domain (M=2.44) (Table 7) by the respondents. Thirteen percent of these respondentsascribed their use of extensions to the need for variety; fun and fashion while 26% ascribed their use ofextensions to beauty enhancement (Table 5).These findings may be linked to the respondents‘ desire for modernity. As Nyamnjoh (2002)argues, a result of globalization is that consumers now have an inexhaustible availability of options.Nyamnjoh (2002: 119) further argues that globalization has created an interdependent world and in theAfrican context, African women ―...have capitulated to the lure of the West as a sign of modernity‖, but atthe same time have ―…sought to domesticate modernity and locate Africa within the global space‖. Thisstatement appears true for the hairstyle trends in Africa, which as previously pointed out, incorporateextensions that are African-inspired in design, and are becoming increasingly fashionable and global.Although these styles now compete with the Caucasian-inspired styles, the African woman in creating herown form of modernity, has also incorporated traditional styles into her current hairstyles, blending themwith extensions in order to make them last longer or to enhance their appearance in terms of volume andlength.The prioritisation of openness to change as the second most important value domain is consistentwith the age group of the majority of the respondents. Schwartz et al. (2001) posit that as people grow

older, they become less interested in exciting changes and challenges, and conclude that age thereforecorrelates negatively with openness to change. Given that 18 - 35 year-olds accounted for almost 90% ofthe respondents (Table 1); and despite the fact only 13% of the respondents identified the need for variety,fun, and fashion as their reason for using hair extensions (Table 5), it is reasonable to conclude that theresults partially support the hypothesis that women use hair extensions as a sign of modernity.Other reasons for using hair extensionsIn addition to the reasons discussed above, other reasons were also given for using hair extensions.The findings revealed that ‗low maintenance‘ was the most commonly cited reason for using hairextensions. Forty one percent of the women cited easy maintenance as their reason for using hairextensions (Table 5) while over 77% strongly agreed and agreed that hair extensions are easier to maintainthan natural hair (Table 6). Most women acknowledged that the texture of their natural hair made itdifficult to manage as it required bothersome combing and styling which demanded more time; hence theuse of hair extensions. Some of the respondents indicated that using extensions makes their hairstyles lastlonger, for example, when they use the braided styles which tend to hold longer when they are done usingextensions than when they are made entirely from natural hair. Just over 28% of the respondents stronglyagreed and agreed that hair extensions are cheaper to maintain than natural hair (Tables 5 and 6). Thissuggests savings in costs are due to the hairstyles lasting longer and therefore negating the need tofrequently hairstyling. Whilst this may be true for some women, it is noteworthy to mention that theresults also show that 55% of the respondents disagree and strongly disagree with the notion that hairextensions are cheaper to maintain than natural hair whilst 16% are neutral (Table 6).These findings are consistent with previous studies. The challenges posed by the texture of Africanhair are acknowledged by Keita et al. (2005: 26) who describe African hair as having a ‗dry and frizzyconsistency‘, which does not easily lend itself to different methods of hair styling. According to Khumalo(2005: 11), combing is a part of the daily grooming of African hair, as if it is left long enough withoutcombing, the hair will ―...spontaneously irreversibly intertwine...‖ with the result being thick dreadlockswhich are irregular. In this regard, in the respondents may be justified in referring to the inconvenience ofthe grooming requirements which their natural hair demands.

The third most predominant reason for using hair extensions identified by the respondents is theneed to protect their natural hair (Tables 5 and 6). Citing the damage caused by chemical hair relaxers andby heat styling accessories, the women indicated that the use of hair extensions helps prevent furtherdamage and also allows their hair to recover and grow. This claim is affirmed by Khumalo (2005) whoposits that the spiral nature of the follicle makes African hair susceptible to damage when the hair issubjected to daily grooming. On the other hand, twisting hair into dreadlocks allows it to achieve greaterlengths as it is does not suffer from the damage caused by frequent combing (Khumalo, 2005). From thisdiscussion, it is fair to infer that keeping hair under a weave or in braids allows it to grow by preventingbreakage due to frequent grooming. Ironically however, Khumalo et al. (2007) reveal that the prevalenceof traction alopecia is more common in hair kept in braids and extensions than in natural hair withoutbraids. Therefore, the women in this survey may be preserving their hair from damage caused by frequentcombing, but on the other hand, inadvertently bringing damage to their hair through traction fromextensions which may cause more damage than from natural long hair.CONCLUSION AND MANAGERIAL IMPLICATIONSThe purpose of this article was to assess the factors that influence black women in South Africa touse hair extensions. The study for this article sought to address two specific questions namely a) Is the useof hair extensions by black women in South Africa a symptom of self-hatred or de-Africanisation? and b)Is the use of hair extensions by black women in South Africa a symptom of their desire to conform tomodernity and consistent with their value priorities? The study found that the respondents, 90% of whomwere aged below 36 years and over 85% of whom had used hair extensions in the preceding three months,ranked braiding and weaving (long/straight) styles higher than they did natural hairstyles such as patternedplaits and uncombed afros. The predominant reason for using extensions according to the majority of therespondents had more to do with the perceived low maintenance requirements of hair extensions. This wasreemphasised by over 77% of the respondents agreeing with the statement that ―I find hair extensioneasier to manage than natural hair‖. However, some respondents did allude to using hair extensions toenhance their looks and for variety and fashion, witness over 51% of them agreeing that ―Hair extensionsmake me look more beautiful‖. The least preferred hairstyles the natural hairstyles and the weaving(long/bouncy).The findings did not support the self-hatred hypothesis as the main factor that influences hairstylechoices. Other factors, especially low maintenance requirements were more important as influencers ofhairstyle choices than factors relating to beauty enhancement. More than any other reason, that blackAfrican women are chose to use hair extensions primarily because of styling convenience. The implicationof this is that marketing and business people in the sector may need to place more emphasis on benefitsother than beauty enhancement in their strategy development in order to avoid overlooking the needs ofsome segments. These segments include those whose core need is the convenience of hair extensions.Consistent with previous studies, the respondents prioritised self-transcendence values. This wasfollowed by openness to change values, which suggested the respondents were not motivated by the desireto conserve the status quo and the certainty in their social environments but by the desire to pursue theirown interests. The respondents were therefore likely to pursue new ideas about hairstyling rather than betied down to tradition. The prioritisation of openness to change values suggests that the aspiration formodernity could have influenced hairstyle choices.Besides value priorities, other factors that lend support to the modernity hypothesis include therespondents‘ ascription of their use of extensions to beauty enhancement and variety and fashion. This isnot surprising in light of the well documented convergence of consumer needs and wants due toglobalisation. However, an interesting observation emerging from this discussion is that in addition tobeing influenced by and adopting Caucasian-inspired hairstyles, the women incorporate these withAfrican-inspired styles to create styles that straddle the two sources of influence. The two braiding stylesthat were highly ranked by the respondents reflect this blend of the two sources of influence.This study contributes to dispelling some of the myths surrounding the reasons for black Africanwomen‘s fondness for hair extensions. Whilst some researchers ascribed black women‘s alteration ofnatural looks to feelings of insecurity and aspiration to conform to white beauty standards, this study did

not find conclusive evidence of this. The study has some shortcomings which could be addressed in futurestudies. A better coverage of black African women of wider demographic backgrounds and a biggersample could be obtained by using a different survey distribution method (other than email) so as to reachparticipants who do not have access to internet.REFERENCESArnheim, R. 1996. Beauty as suitability. The Journal of Aesthetics and Art Criticism, 54(3): 251-253.Ashe, B.D. 1995. ―Why don't he like my hair?‖ Constructing African-American standards of beautyin Toni Morrison‘s Song of Solomon and Zora Neale Hurston‘s Their Eyes Were Watching God. AfricanAmerican Review, 29(4): 579-592.Bell, J. 2010. Black hair extensions. [Online] Available at: http://www.articlesbase.com/hair-lossarticles/black-hair-extensions-1751846.html.Accessed: 30 August, 2010Biddle, J.E. & Hamermesh, D.S. 1994. Beauty and the labor market. The American EconomicReview, 84(5): 1174-1194.Brand, P.Z. 1999. Beauty matters. The Journal of Aesthetics and Art Criticism, 57(1): 1-10.Burgess, S.M. 2002. SA Tribes: Who we are, how we live and what we want from life in the newSouth Africa. Claremont: David Philip Publishers.Burgess, S.M. 2011. Social axioms: A new culture measure for South African business research.South African Journal of Business Management, 42(in press).Casanova, E.M. 2004. ―No ugly women‖: Concepts of race and beauty among adolescent women inEcuador. Gender and Society, 18(3): 287-308.Dawson, A. 2009. Hair in the black community: Roots of a debate. Los Angeles Times. [Online]Available at: http://articles.latimes.com/2009/oct/11/image/ig-ethnichair11. Accessed: 30 August, 2010.Englis, B.G., Solomon, M.R., Ashmore, R.D. 1994. Beauty before the eyes of beholders: Thecultural encoding of beauty types in magazine advertising and music television. Journal of Advertising,23(2): 49-64.Gimlin, D. 1996. Pamela‘s place: Power and negotiation in the hair salon. Gender and Society,10(5): 505-526.Henry, W.A. (1976). Cultural values do correlate with consumer behavior. Journal of Marketing.Henry, A. 1995. Growing up Black, female, and working class: A teacher‘s narrative. Anthropology& Education Quarterly, 26(3): 279-305.hooks, b. 1995. Killing Rage. New York: H. Holt & Company.Houlberg, M.H. 1976. Collecting the anthropology of African art. African Arts, 9(3): 15-19.Johnston, V.S. & Oliver-Rodriguez, J.C. 1997. Facial beauty and the late positive potentialscomponent of event-related potentials. Journal of Sex Research, 34(2): 188-198.Kaw, E.1993. Medicalization of racial features: Asian-American women and cosmetic surgery.Medical Anthropology Quarterly, 7(1): 74-89.Kéïta, S., Faye, O., Kané, B.D.M., Ndiaye, H.T., Traoré, P. & Coulibaly, K. 2005. Hair care andhair styles of women in Bamako, Mali. International Journal of dermatology, 44(1): 26-29.Khumalo, N. 2005. African hair morphology: Macrostructure to ultrastructure. InternationalJournal of Dermatology, 44(1): 10-12.

Khumalo, N.P., Jessop, S., Gumedze, F., & Ehrlich, R. (2007). Epidemiology and Health servicesresearch: Hairdressing and the prevalence of scalp disease in African adults. British Journal ofDermatology, 157: 981-988.Maqoma, G. 2002. Identity, diversity and modernity in urban cultural cocktail. [Online] Availableat: http://www.batesdancefestival.org/PDF/IdntyDivrstyMdrnty.pdf. Accessed: 21 August 2010.Mazur, A. 1986. US Trends in feminine beauty and over adaptation. Journal of Sex Research,22(3): 281-303.Mpungose, S. 2004. Business of black hair is big, beautiful and growing. [Online] Available at:http://www.eprop.co.za/news/article.aspx?idArticle=4180. Accessed: 30 August 2010.Nyamnjoh, F.B., Durham, D. & Fokwang, J.D. 2002. The domestication of hair and modernisedconsciousness in Cameroon: A critique in the context of globalisation. Identity, Culture and Politics, 3(2):98-123.Okafor, C.G. 2007. Global encounters: ‗Barbie‘ in Nigerian Agbogho-mmuo mask context. Journalof African Cultural Studies, 19(1): 37-54.Parker, S., Nichter, M., Nichter, M., Vuckovic, N. Sims, C. & Ritenbaugh, C. 1995. Body imagesand weight concerns among African American and white adolescent females: Differences that make adifference. Human Organisation, 54 (Summer): 103-114.Patton, T.O. 2006. ―Hey girl, am I more than my hair?‖ African American women and theirstruggles with beauty, body image, and hair. NWSA Journal. 18(2): 24-51.Rokeach, M. 1973. The Nature of Human Values. New York: Free Press.Rooks, N.M. 1996. Hair Raising: Beauty, Culture, and African American Women. New Brunswick,NJ: Rutgers University PressRosenblat, T.S. 2006. Why beauty matters. The American Economic Review, 96(1): 222-235.Schwartz, S. H. (1992). Universals in the content and structure of values: Theoretical advances andempirical tests in 20 countries. In M. P. Zanna (Ed.), Advances in Experimental Social Psychology (Vol.25: 1-49). Orlando, Florida: Academic Press.Schwartz, S. H. (1994). Are there universal aspects in the structure and contents of human values?Journal of Social Issues, 50(4), 19-45. .Schwartz, S. H., Melech, G., Lehmann, A., Burgess, S. M., Harris, M. & Owens, V. 2001.Extending the cross-cultural validity of the theory of basic human values with a different method ofmeasurement. Journal of Cross-Cultural Psychology, 32(5): 519-542.Spronk, R. 2009. Sex, sexuality and negotiating Africanness in Nairobi. Africa: The Journal of theInternational African Institute, 79(4): 500-519.Usunier, J.-C., & Lee, J. A. (2009). Marketing across Cultures (5th ed.). New York: Prentice Hall.Webb, T.T., Looby, J.E. & Fults-McMurtery, R. (2004). African-American men‘s perceptions ofbody figure attractiveness: An Acculturation study. Journal of Black Studies, 34(3): 370-385.Weitz, R. 2001. Women and their hair: Seeking power through resistance and accommodation.Gender and Society, 15(5): 667-686.

An exploratory Study on the Marketing Challenges in the Diffusion of Grassroot Innovations: ACase study from IndiaSubin SudhirDesignation - Doctoral Student (FPM, II year)• Institute - Indian Institute of Management – Kozhikode• Contact AddressHostel - J, Room – 310IIM-KozhikodeIIMK Campus PO, Kunnamangalam, Calicut, KeralaPin: 673570• Phone - +91-9946642477• Email – subins04fpm@iimk.ac.inAbstractGrassroot Innovations are essentially solutions generated by people at the grassroots levels to tide overpersistent problems, the solutions to which are either not available or not affordable by a large section ofthe consumer masses in developing countries like India. These innovations, therefore, capture an unmetneed of a large section of the population and building a value chain around these innovations to take themto market holds the potential of wealth creation in a truly sustainable and equitable manner. The paperlooks at an exploratory study that uses the context of a case study from Kerala to develop a broadunderstanding of the issues and areas of future research in this region. Key challenges identified in thecontext of diffusion of grassroot innovations include (1) financial resource availability to the adopter, (2)lack of communication opportunities, (3) Budgetary constraints for the innovator for marketing of theinnovation, (4) sharing of expertise for the innovator and (5) a broader outlook at the drivers of grassrootinnovationIntroductionThe role of technology and innovation in emerging markets is great. Innovation and technologicalsolutions to everyday problems faced by people, if integrated with low costs can be the way to success fordeveloping countries and specifically the emerging markets like the BRIC (Gupta; 2009). It is important tounderstand that the role of this paper is to evaluate the marketing challenges after the innovation has beendeveloped; and not to understand the challenges in developing the innovation. Both the issues are ofimportance to the emerging markets, but this paper would focus on the challenges that the innovator facesafter he has developed the innovation and has decided to get it commercialized.The next sections of the paper looks at the relevant theorizing done in the - mostly in the context ofdeveloped economies, the case study is then elaborated to bring in the micro-level sociocultural factors

that influence the diffusion of grassroot innovations. Based on the context of the case study gaps areidentified in existing literature vis-à-vis the emerging markets context and marketing challenges areenlisted. The paper then summarizes the way forward for marketing research and practice to overcomethese challenges and create a suitable environment for the diffusion of grassroot innovations.Challenges are highlighted in the areas of (1) financial resource availability to the adopter, (2) lack ofcommunication opportunities, (3) Budgetary constraints for the innovator for marketing of the innovation,(4) sharing of expertise for the innovator and (5) a broader outlook at the drivers of grassroot innovation.Grassroot InnovationsGrassroot Innovations are essentially solutions generated by people at the grassroots levels to tide overpersistent problems, the solutions to which are either not available or not affordable by a large section ofthe consumer masses in developing countries like India. These innovations, therefore, capture an unmetneed of a large section of the population and building a value chain around these innovations to take themto market holds the potential of wealth creation in a truly sustainable and equitable manner (Bulsara,Shailesh and Porey; 2009).Before we venture into the details of how grassroot innovations are important to the emerging economies,it would be helpful to understand the definition of grassroot. The oxford English dictionary refers to grassroot as ―the most basic level of an activity or organization; or the ordinary people regarded as the mainbody of an organization‘s membership‖.Combining the definition of grassroot and the understanding that one would have from the abovedescription of a grassroot innovation, we can arrive at a few basic takeaways as to what a grassrootinnovation actually is;• Grassroot innovations are developed at the grassroot levels of the society.• The solutions or innovations are developed by people working on the same domain as the solutionbecomes potent.• The innovators are motivated to overcome the problems faced in the work that they perform on a regularbasis.• The solutions that they develop are either novel or are costly and unaffordable for them.• The unaffordability of the solution (in cases where the solutions to the problems already exist)communicates that these innovators are mostly from modest financial backgrounds.Srinivas and Sutz (2008) in their attempt to develop an analytical framework to understand the role of aninnovation in a developing country, have mentioned that the scarcity and the need for solution ensures thatidiosyncratic innovative paths are followed, which they argue have been least theorized and which mayprovide solutions for urgent and otherwise unsolved problems in developing economies.Diffusion of InnovationsIn one of the classic studies on the subject of diffusion of innovations Rogers (1995) has provided a goodinsightful idea about the way in which the diffusion of an innovation happens in a society. The authorinitially defines Diffusion ―as the process by which an innovation is communicated through certainchannels over time among the members of a social system‖ and innovation ―as an idea, practice, or objectthat is perceived as new by an individual or other unit of adoption‖.The major contribution of Rogers (1995) work is the fact that he describes the four majorelements of diffusion of an innovation. He suggests that the four elements of diffusion are (1) Innovation,(2) Communication channel, (3) Time and (4) The Social system.

Rogers (1995) then gives a five step model of how the innovation is adopted by the community. Hesuggests that the society and the people in the society will adopt an innovation in a five stage decisionmaking process that includes;1) Knowledge – person becomes aware of an innovation and has some idea of how it functions2) Persuasion – person forms a favorable or unfavorable attitude toward the innovation3) Decision – person engages in activities that lead to a choice to adopt or reject the innovation4) Implementation – person puts an innovation into use5) Confirmation – person evaluates the results of an innovation-decision already madeEach of these stages is important to the understanding of the innovation and the adoption of an innovationin the social context. The role of these stages would bring out the marketing challenges and will highlightthe differences in the marketing environment in an emerging market vis-à-vis a mature market, wheremost of these theories had been postulated.Diffusion scholars (Rogers, 1995; Moore, 2001) have suggested that the diffusion of innovation wouldfollow a bell shaped distribution. They have also suggested that the bell shaped distribution can be dividedinto five categories of system member innovativeness, where innovativeness is defined as the degree towhich an individual is relatively earlier in adopting new ideas than other members of a system. Thesegroups are (1) innovators, (2) early adopters,(3) early majority, (4) late majority, and (5) laggards.Innovators are venturesome types that enjoy being on the cutting edge. The innovation‘s possible benefitsmake it exciting; the innovators imagine the possibilities and are eager to give it a try. The implementationand confirmation stages of the innovators innovation-decisions are of particular value to the subsequentdecisions of potential adopters.Early adopters use the data provided by the innovators implementation and confirmation of the innovationto make their own adoption decisions. If the opinion leaders observe that the innovation has been effectivefor the innovators, then they will be encouraged to adopt. This group earns respect for its judicious, wellinformeddecision-making, and hence this group is where most opinion leaders in a social system reside.Much of the social system does not have the inclination or capability to remain abreast of the most recentinformation about innovations, so they instead trust the decisions made by opinion leaders. Additionally,much of the social system merely wants to stay in step with the rest. Since opinion leader adoption is agood indicator that an innovation is going to be adopted by many others, these conformity-lovingmembers are encouraged to adopt. So a large subsection of the social system follows suit with the trustedopinion leaders.This is the fabled tipping point, where the rate of adoption rapidly increases. For those who are cautious orhave particular qualms with the innovation, adoption becomes a necessity as the implementation of theinnovation-decisions of earlier adopters result in social and/or economic benefit. Those who have notadopted lose status or economic viability, and this contextual pressure motivates adoption.The last adopters, laggards, can either be very traditional or be isolates in their social system. If they aretraditional, they are suspicious of innovations and often interact with others who also have traditionalvalues. If they are isolates, their lack of social interaction decreases their awareness of an innovation‘sdemonstrated benefits. It takes much longer than average for laggards to adopt innovations.MethodologyThe method adopted in the paper is a case study based on observation and detailed unstructuredinterviews. The exploratory nature of the study entails that a single case study would suffice to give anoverall understanding of the way grassroot innovations diffuse and would guide the way forward for

future studies. Perry (1998) has briefed about the use of case studies to understand marketingphenomenon. He also guidelines the process of case study use. Perry (1998) suggested methodology wasadopted to collect the data for the case study. The case study was funded by the National InnovationFoundation (NIF).Limitations of the studyThe paper looks at an exploratory study at the diffusion of grassroot innovations. The major limitation ofthe paper is the fact that there is only one case study that is used to analyze and interpret the findings.Multiple case studies have to be used in varied context to ensure validity to the findings and claims in thepaper.The case study - Diesel based Marine PropulsionThe case study revolves around the fishing industry in Kerala, India; which is drastically different fromthat in advanced and developed world countries. In Europe and America, the fishing industry uses heavymachinery and large boats to get big catches that are mostly processed and sold in packaged forms. But, inIndia most fishing happens in small boats with little or no mechanization and the catch is mostly for a dayto day usage. The boats that the fishermen use in India are small and thus daily catch becomes veryimportant in establishing the survival of the community.The Innovation under discussion is change of propulsion technology of marine boats from kerosene todiesel – a cheaper fuel. The innovation has or will considerably reduce the costs involved in fishing in theregion. The Case study is intended to explain the scenario and the situations that lead to the innovation.The major contextual factors including the role of institutions, society and stakeholders, the level ofdiffusion of knowledge and the sharing of technology, commercialization and the availability of thetechnology for potential users.The innovatorThe innovator in the case is a 56 year old marine mechanic from the small town of Punnapra in theAlleppey District of Kerala, India. He is the recipient of the national award for grassroot innovations andhas been a marine mechanic in the unorganized fishing sector in the state. The innovator being from themarine fishing domain had undertaken a few attempts to operate a fishing boat himself and faced fuelefficiency issues with the kerosene engine that was being used at the time in 1995. Having thetechnological knowhow and having been facing the fuel efficiency issues; the innovator decided to try asolution for his problem – using a diesel based replacement for the current propulsion system. Thisqualifies him as being a grassroot innovator and his system a grassroot innovation. The innovator hasinvested 15 years and close to all his financial resources into the project.The innovationThe innovation is in two different stages which are part of a unique system that replaces the keroseneengine by a cost effective diesel engine. This reduction in cost can directly help the fisherman and in away act as the best possible way of social development. In Figure 1, the boxes marked 1 and 2 arebasically the two parts of the system developed and the remaining parts that together form the marinefishing boat. The parts that are developed include;1. Reversible reduction Gear Box2. Z-drive for Marine EngineThe engine is connected to a Reverse reduction gearbox that basically gives a gear system for forward andreverse propulsion plus a higher torque to the propeller. The gear box is then connected to a shaft and thento a universal joint, both aftermarket and customized by the innovator. This is then connected to a Z-driveand then to the propeller. The Z-drive has an axial movement that enables it to be lifted up and downwithout moving the other parts.

The social systemThe social system of the fishing community basically tries to explain the different set of people engaged inthe fishing system in the region. Each of these people in the ecosystem plays a very vital role in the fishingsystem and the overall culture of the fishing industry. They become important to each other and supporteach other to form the strongest institution in the region. Understanding the social system becomes veryimportant to establish the contextual and institutional aspects concerning the social setting in which theinnovation would be diffused.We would now elaborate briefly on the people who influence the diffusion of the innovation underdiscussion. The stakeholders who have a minimal role in the diffusion of the innovation have been limitedin the brief provided.FishermenThe Fishermen are the class of people who have been into the fishing process and who go out to the sea tocatch the fish. The fisherman is the prime member of the society who does the majority of hard labor andthe key adopter of the innovation. People in the fishing community largely use the motorized small boatsto go for fishing, usually in groups of two or three. They are mostly family members, who go for fishingtogether as they can keep the income for themselves. Father would have his sons accompanying him to thesea for fishing or brothers join together for the job. It‘s very common that most families have a boat oftheir own through government subsidies.The catch that a fisherman can get on a day is not very consistent, they may have good days but mostly thecatch remains marginal for their survival. The key factor that the fishermen stick to their job of catchingfish is that they do not have any specific knowledge or expertise in any other work and feel insecure inshifting to another profession.Madhu a local fisherman in Alleppey says that the day he gets a catch of Rs. 20,000 maybe the maximumone can get on any good day; he spends most in buying clothes for family, watching movies and otherrecreational activities. Things about planning and saving money or even repaying the debt (mostly

acquired during times of a bad catch) are often forgotten by the fisherman as they form a very casualmethod of handling money.Most fishermen have more than one motor kept idle at home. Every time a new motor comes into themarket and the feel it could give them some advantage, they go for this motor and they feel to not thinkabout the usability of the earlier one.The system that the fishermen operate is very simple. They need to incur some costs for their daily fishingactivity like the fuel, raw material, food etc. The fishermen get the catch and then subtract the cost fromthe price of fish sold, the remaining money is shared equally among the people who had gone to work thatday, and one equal share to the owner of the boat (in case of a hired boat). Each boat is appointed an agentto negotiate the price of fish in the market and handle all transactions. The fisherman in short engages inonly going to the sea and bringing back the catch. The agent here becomes responsible for the sales offish, provide credit to the fisherman, manage the availability of fuel etc.Communication at the level of the fishermen or the adopter of the innovation in this case, is only throughWOM. The potential customer is unaware of the technology at many instances, unless he has seen thetechnology or has been exposed to it through opinion leaders or other innovators. The absence of otherforms of communication makes the diffusion even more challenging.AgentThe agent is the central character in the fishing in the region. The agent is the person who takes care of thecatch for the boats and also gets the market mechanism running. The agent takes care of activitiesincluding1. Deciding the cost of fish2. Selling of fish in the market3. Middleman in local credit and fuel transactions4. Providing financial assistance to the fishermanIn most cases the boats are attached to an agent informally, but as a social norm.Mukundan, an agent explains that the process of being in charge of a few boats and for all credit and fuelrelated activities of these fishermen. Since the social system calls for the agent to sell the fish of aconcerned fisherman and get the money, the agent become a more credible custodian of guarantee than thefisherman himself. Suppose the fisherman needs money for maintenance in the boat, he gets the moneyfrom the agent through the local money launderer. The launderer makes the agent in charge of therepayment and the agent pays the fisherman only the amount after his repayment amount. This ensuresthat the debt is repaid in time, unlike the fisherman who may not repay the debt, due to his ill handlingcapacity of money.Money LaundererThe money launderer is another strong stakeholder. Due to the low stability in the daily catch of thefisherman, they need credit for their daily operations and this is met by the money launderer. He does notoperate directly with the fisherman, but operates through the agent. The agent is one person who can beeasily relied upon due to his daily money transactions and his unique central place in the ecosystem. Themoney launderer gives the money to the agent who then handles the recovery of money and also therecovery of boats or other tangibles in case of defaults.Modes of DiffusionDifferent ways in which the innovation can be diffused have been explored by the innovator and hissupporters. The need that the innovation has generated with the fuel efficiency in the operation of theinnovation has made a niche market for the innovation. Herein the technology diffusion drivers are the

end-user and community needs, or simply the market demand from the end user. Nonetheless three of theprominent modes of diffusion that the innovator has tried are mentioned below.MatsyafedThe Kerala State Co-operative Federation for Fisheries Development Ltd. or also calledMatsyafed is a registered Co-operative Apex Federation of primary level cooperative societies. Theengagement with Matsyafed is basically on the development and delivery of the marine system, based onthe Yanmar (brand of diesel engines) engines that would be procured by Matsyafed. The innovator issupposed to handle the development of the gearbox and the Z-drive, the installation and the after salessupport of these systems. Matsyafed has incorporated the initial phase of 24 units under the KeralaSustainable Urban Development program and is heavily subsidizing the project. These 24 units have beenprocured by Matsyafed, but only 4 boats have reached the end-users.Central Institute of Fisheries TechnologyThe Central Institute of Fisheries Technology (CIFT) is the only national centre in the country whereresearch in all disciplines relating to fishing and fish processing is undertaken and are planning a programfor the commercialization of the system. CIFT feels that the current system is not optimized to the fullestextent and the same can be done with some minor redesign on the innovation. This combined with asuitable boat design could give the innovation its fullest potential and energy efficiency.QURMOSThe innovator is also planning to have an independent agency for the marketing and distribution of thesystems. QURMOS is the name of the firm that was formed in this regard. The costs required getting thecommunication and distribution network in-place, seems to be the biggest hurdle at the present time.Sensemaking for MarketingThe issues described in the case study can be carefully analyzed to arrive at challenges for marketingresearch and practice.Attributes of the adopter at the grassrootThe adopter of the innovation at the grassroot is in many cases, in the emerging markets context, a personwith limited resources that he can share in acquiring the innovation. The key concerns here are that theadopter may not have the required financial resources to adopt the innovation. In the case, the fisherman –the adopter, is handicapped with low financial resources to acquire the innovation. The cost of productionhas to be managed in such a way to ensure that the fisherman can acquire the required resources. Toaddress the issues with the low financial resources, credit facilities have to be ensured to the adopter. Thiswould be the case only in instances where the innovation is of concern to the employment of the adopter.Now, since we are specifically discussing grassroot innovations; which are solutions to persistentproblems faced in the employment related aspects of the adopter, this situation would hold well.The role of institutions of credit have to be studied in detail, not just from a marketing point of view, butalso from the aspects of socio-economic development that these innovations could provide to the adopter.The role of informal social ties has to be understood in detail here. The agent and the money launderer inthe case have a great amount of influence in the financial resource availability of the adopter. This is acommon scenario across several of the emerging economies markets at thegrassroot level. The adopter in previous literature is suggested as a person with an individual will to take adecision on the adoption of the product. But, from the case study, we can see that the adopter in manyinstances in the emerging economies is not a person who has an individual opinion on the adoption of an

innovation. The adopter might be influenced by social hurdles that will restrict him from adopting aninnovation; even after being completely satisfied with the need fulfilling capacity of the innovation.The marketing challenge in the area of financial resource unavailability with the adopter is multifold. Thebelow points summarize the same.• Need to ensure the availability of financial resources with the adopter.• Need to understand and establish the role of social norms and networks, which influence the adopter inhis decision making.• Marketing research has to incorporate and establish a generalized set of factors that represent thegrassroot innovation adopter. This would require the changing of earlier understood nature of the adopter;as being classified only on the basis of innovativeness coefficients.Communication is another major concern for the marketer in the diffusion of grassroot innovations. In thecase of the diffusion of the diesel based marine engine, the communication was only through WOM. Thisis the case in many emerging markets, especially the rural markets in India. One might argue that thecollectivist societies in India, with good network effects, would have a high level of WOMcommunications; thus, this concern being invalid. In the case study the innovation was a potential productfor all the coastal states in India, but due to the regional differences, these innovations die down within afew settled communities. There are numerous similar examples in the National Innovation Foundation(NIF) libraries. The challenge of marketing here is to understand the required communication strategies toleverage on the WOM availability and ensure that the word keeps spreading.Challenges of the innovatorAny classic textbook of marketing will provide details on what the marketing strategy should be whenintroducing a new product. The role of communication, the role of promotions, the distribution mechanismand other aspects of how to manage the market have all been spoken time and again in the marketingliterature. But, does this work for the innovator turned entrepreneur at the grassroot? The characteristic ofan innovator at the grassroot is mostly a combination of low marketing budgets, unavailability ofmarketing expertise and concerns of survival. It would not be difficult for one to imagine the case whenthe innovator keeps the innovation to him and does not consider diffusing it into the market. Themarketing challenge here is to ensure that the innovator brings the product to the market and gets aid toget it diffused.Marketing must address this challenge by adopting an institutional setting. Marketing challenges that needto be addressed include;• To ensure that the innovator has the required set of resources to avail the market opportunity.• To enable the innovator with the marketing expertise that would enable him to ensure the marketingstrategy‘s successful implementation• Motivate the innovator to take the product to market• Marketing research has to ensure theorizing custom marketing activities plan for thegrassroot environments and emerging markets.The view that marketing must incorporate here is that the innovator has to be empowered to take theproduct to market with ease. The roles of institutions have to be highlighted in the theorizing of themarketing functionThe diffusion challengesThe challenges with the diffusion of the products are important in emerging markets, so as in any othermarket. But, in the emerging market context the importance of understanding the source of diffusionbecomes important. The network effects of the market may have a pull for the product due to its extreme

demand, but the social developmental characteristics of grassroot innovations make them even moreimperative. We have seen from the case study that the institutions play a very vital role in the diffusion ofgrassroot innovations. To reiterate; grassroot innovation in most cases is a solution or a workaround for asituation faced by people in their day to day employment.The makes the role of intuitions key in the context of diffusion. The diffusion of the innovation in the casehas clearly started from the institutional angle (when Matsyafed planned to diffuse the innovation). Theinnovation having social aspects that can be addressed through the adoption of the innovation makes itimportant to venture into different ways innovation can happen. Unlike in the established literature, in anemerging market grassroot innovation diffusion case, the diffusion cannot just be end-user driven, but canbe institutional driven as the case mentions about Matsyafed and CIFT.Diffusion can happen also through the community. The community, mostly referring to an informalinstitution, can spearhead the diffusion process and thereby get the product to be adopted by the end-user.In the context of the case in discussion this brings in the role of the informal Sangham. The Sanghamoperates in association with Matsyafed, but is different from the Matsyafed organization. Sangham has itsrepresentatives elected on a democratic voting system by the local fishermen; they then act as the agents tointeract with Matsyafed. Unlike the agent system of fish sales in most parts, in places that have a Sanghamoperating the Sangham gets to keep all the fish, they then sell the fish and keep 8% of the money tothemselves. The 8% of the daily sales is further divided into four components• 1% is accumulated and paid as bonus, back to the fisherman for the 2 months fishing isbanned• 1.5% is taken as a charge to the Sangham• 1.5% is paid to Matsyafed for the facility development• 4% is the commission to the agent who operates on the ground for the fish auctionThus the Sangham becomes a very effective and strong organization. The Sangham also provides loans forthe fishermen, which varies based on the needs of people. The Sangham after giving the loan has a uniquesystem of repayment also. They get the entire fish from the fisherman and in case the catch of the day ismore that specific amounts say Rs. 1500, then they take some amount as a loan repayment from this alongwith the normal 8%. This ensures that the fishermen are able and do the payments in time. These forms ofinformal associations can help guide the diffusion of innovation.The key marketing implications here would be to identify the fact that the diffusion of innovation on thegrassroot level could happen through three levels;• Institutional Driven• User Driven• Community DrivenMarketing research has to address this issue by incorporating these concerns into the literature andestablishing guidelines to enable the use of each of these in the diffusion practice.ConclusionThe paper is an attempt to explore the diffusion of grassroot innovations at the grassroot level in anemerging market scenario like in India. The paper builds on an exploratory case study that has looked atthe issues of diffusion of a Diesel based marine engine hat was made to replace the kerosene based engineand provide superior fuel efficiency.The paper looks at the societal context in the grassroot level and identifies issues that need to be addressedto ensure better diffusion of innovations. Challenges are highlighted in the areas of (1) financial resource

availability to the adopter, (2) lack of communication opportunities, (3) Budgetary constraints for theinnovator for marketing of the innovation, (4) sharing of expertise for the innovator and (5) a broaderoutlook at the drivers of grassroot innovation.References1. Gupta, Anil. Grassroots Green Innovations for Inclusive, Sustainable Development inThe Innovation for Development Report 2009-2010, Strengthening Innovation for theProsperity of the Nations, Ed. Augusto Lopez-Claros, New York, NY: Palgrave Macmillan,pp. 137-1462. Srinivas, Smita and Sutz, Judith, Developing Countries and Innovation: Searching for aNew Analytical Approach (2008). Technology in Society, Vol. 30, pp. 129-140, 20083. Rogers, Everett M. Diffusion of Innovations. 4thed. New York: Free Press, 19954. Moore, Geoferry A. Crossing the Chasm: Marketing and selling high-tech products tomainstream customers. Harper Paperbacks, 20025. Bulsara1, Hemantkumar P; Gandhi, Shailesh and Porey, PD. Techno-innovation toTechnoentrepreneurshipthrough Technology Business Incubation in India: An ExploratoryStudy (2009). Asia Pacific Journal of Innovation and Entrepreneurship, Vol. 3, No. 1, 20096. Perry, Chad. Processes of a case study methodology for postgraduate research inmarketing (1998). European Journal of Marketing, Vol. 32 No. 9, pp. 785-802. 1998Message Source Portrayals in Emerging Market Advertisements: Analyzing Physical and CulturalCharacteristicsMlenga Jere and Steven Michael BurgessAbstract

The importance of message source portrayals in advertising is well acknowledged in the because of itsimpact on persuasive effects. Based on extensive review of the literature, this paper identifies physical andcultural characteristics that can be used to assess advertisements in emerging market contexts. It proposesspecific categories and category dimensions that can be applied in the study of advertisements. Given thelower levels of literacy in the mass markets in emerging markets and the importance of nonverbalelements in advertisements, the need to adopt appropriate message source portrayals is emphasized.Key words: advertisements, message source portrayals, physical characteristics, cultural valuesIntroductionResearch on images of people portrayed in advertisements shows that the mere image of a messagesource (i.e., the central person in an advertisement) can have an important effect on attitude formation andchange. Several explanations have been offered for these effects. Theories of attitude formation andchange suggest that consumer assessments of message source characteristics help determine the processby which consumers respond to an advertising message and the depth and duration of persuasive effects(e.g., Kelman, 1961). Research on dual process theories of attitude change shows that even the nonverbalimages of a message source can communicate important information that affects consumer attitudes andbehavior (Petty & Cacioppo, 1984; Chaiken, 1980). Message source effects remain an important topic forresearch in advertising and consumer research (e.g., Clark, Evans, & Wegener, 2011).The importance of nonverbal elements in persuasive communication is three-fold.Firstly,nonverbal elements in persuasive communication can amplify persuasive messages in that they can lendsupport, modify, or emphasize the verbal elements. This improves the processing of messages by thetarget audience and reinforces or clarifies the meaning of the verbal elements (Knapp, 1972). Thissuggests that it is important for marketers to pay attention to nonverbal communication. Secondly,nonverbal elements tend to be more effective in reaching the target audience‘s emotions or affective statesthan verbal communication (Watzlawick, Deavin, & Jackson, 1971). Since it is a responsibility ofmarketing to influence consumer preferences, the ability to trigger the target audience‘s emotions or

affective responses through nonverbal elements in persuasive communication is important.Finally,nonverbal communication can be used to investigate the match or consistency between verbal elementsand nonverbal elements of. This facilitates inquiry into the extent of sincerity and depth of the persuasivecommunication, the communicator‘s difficulties in crafting the behaviors portrayed in the message, andthe importance of nonverbal and verbal elements to specific target audiences. The consistency argumentsuggests that marketers should incorporate nonverbal elements in their persuasive communication as asincerity check or to monitor communicational conflicts.The objective of this review is to identify physical and cultural characteristics in gender portrayalsin advertisements that can be used to assess advertisements in emerging market countries. This isimportant because the review puts together a list of advertising stimuli and cultural characteristics culledfrom different sources that can be applied to study advertisements. This is an important contribution to theemerging markets‘ advertising, source effects, and gender literatures.The main justifications for this review is that marketplace globalization has increased awareness ofimportant fundamental differences between high income countries (HIC) and emerging markets (EM)societies, which include basic differences in socioeconomic, cultural and regulative institutions. Mostprior research on source effects has been undertaken in HICs. In comparison, EMs are characterized bysocioeconomic institutions usually associated with low human development (i.e., low formal education,literacy and numeracy, relative youth, low access to print media and books) as well as important culturaland regulative differences.Conceptually, these differences make it unclear if theories developedelsewhere apply in EMs, suggesting the ―need to test even our most established theories in EMs‖ (Burgess& Steenkamp, 2006, p. 345). Practically, these differences suggest the need for locally adapted marketingprograms (Burgess & Steenkamp, 2006). Thus, the different institutional contexts should cause us toquestion the wisdom of assuming the generalizability of theories and empirical findings from HICs to theEMs and spur us to undertake more research in EMs (Burgess & Steenkamp, 2006).

Emerging Market Institutional ContextBurgess and Steenkamp (2006) recently provided a framework for understanding the typicalcharacteristics of EMs. They identify three main pillars of societies that underlie institutions in allsocieties, namely the socioeconomic, cultural and regulative systems. The socioeconomic system includessocial, political, economic and demographic factors while the cultural system deals with people‘s beliefs,attitudes, habits, norms and behaviors.The regulative system deals with formal rules and theconsequences of compliance or non-compliance; and the presence and effectiveness of regulatory andrelated institutions.The socioeconomic system in EMs is characterized by dynamics, demographics, and diversity. Thedynamics aspect refers to rapid rates of economic and social change. The demographic profile of EMs isgenerally youthful and diverse. This diversity produces one of the most distinguishing characteristics ofEMs: a bifurcated market in which one segment enjoys living standards comparable to HICs while otherslive in conditions of extreme poverty (Batra, 1999). Burgess and Steenkamp refer to the bifurcatedsegments as the ―urban elite‖ (generally about 5-20 % of the population) and ―mass-market‖, respectively.The urban elite exhibit many of the characteristics associated with the urban elite in EMs elsewhere. Forexample, they have relatively high levels of formal education and usually are employed in the modernformal economy. Their access to global media and awareness of global brands and advertising campaignsis high, with preferences for global brands common in many product categories (Alden, Steenkamp &Batra, 2006)On the other hand, many mass market consumers have living standards that are at or near the levelof subsistence (Ruth & Hsuing, 2007).Subsistence entails conditions of economic constraint andinterdependence that affects every element of daily life. The conditions of subsistence living standards,low formal education, illiteracy, innumeracy, cramped living conditions, often inadequate access to basicpotable water, electricity and formal healthcare shape their media and product consumption patterns(Burgess, 2002). These living conditions in EMs affect cultural systems, which may be observed in thepeople‘s cultural emphases (Schwartz et al., 2006; Schwartz et al., 2001).

Researchers acknowledge that advertising can play a significant role in the production andmaintenance of inequality due to the way people are portrayed in advertisements (Cortese, 1999; Lyonski,1983). The importance of researching the trends in gender role portrayals also is acknowledged;especially as research on gender role portrayals has produced inconsistent results (Wolin, 2003). However,little is known about the physical and cultural characteristics that are important in the design and analysisof portrayals of message sources in advertisements for use in EMs, especially those targeted at lowincomeconsumers. Most print advertisements are designed by people employed in the formal financialsector, who typically have high formal education but little day-to-day contact with people who have lowincomes (Kuzwayo, 2000).Physical Characteristics of the Message SourceGender display characteristics. Goffman (1979) contends that power relations are an importantaspect of gender representations in advertisements portraying women and men in social scenes. The sixcharacteristics or gender display categories that Goffman associated with the female message sources inadvertisements are relative size, feminine touch, function ranking, family scenes, ritualization ofsubordination, and licensed withdrawal (see Table 1). Goffman‘s display categories have been adoptedand used frequently in the literature (e.g., Hovland, et al., 2005; Kang, 1997).Table 1Coding Categories based on Goffman‟s (1979) ScaleCategoryRelative sizeFeminine touchFunction rankingDescription and category dimensionsPerson is larger, taller, elevated over others; person is heavier or in theforeground.Person‘s hands or fingers are used to caress, touch, or trace the outline of anobject. Person‘s face is used instead of hand or fingers to touch objects orother people. Person touches her/himself.Person is instructor or is being served by person of other sex or is in superioroccupational role compared to person of other sex.

Family scenes Parent and child of same sex are similar in appearance or appear to sharespecial bond, parent seen as protector through distancing from family.Ritualization of Person shown in positions and poses that imply inferiority or deference such assubordination the following: Bowing, lowering oneself. Person shown on floor or bed or inother spatially lower positions. Person of other sex elevated above person.Person in bashful knee bend or leaning on someone. Person in canting posturewhere head or body is tipped lower. Person is smiling in response to others.Person is dressed like a child or posed like a child. Person is prey in mockassault or teased or being held possessively (around shoulder or hand).Licensed withdrawal Person shown as withdrawn from the scene or ‗tuned out‘. For example,person covers mouth or face with hands, turns gaze from other(s), with middledistance looks, dreamily talking on phone, emotional displays, snuggling ornuzzling others, being supported by others as in grief embrace. Person is‗tuned out‘ from the scene because he/she feels protected.Source: Hovland, McMahan, Lee, Hwang & Kim, 2005:893Researchers have also supplemented Goffman‘s gender display categories with several othercategories. Body display refers to provocative dress or nudity. Independence/self-assurance refers to theappearance of independence, confidence and autonomy (Kang, 1997). Facial exposure refers to showinga model‘s face. According to Archer, Iritani, Kimes, and Barrios (1983), showing a woman‘s faceemphasizes her personality and character while not showing a woman‘s face hides her personality andcharacter. Body parts refers to the display of the message source‘s body or body parts such as lips, legsand butts, in a way that dehumanizes or objectifies her (Archer, et al, 1983; Cortese, 1999; Kilbourne &Jhally, 2000).Social role characteristics. Four broad classes of gender role portrayals have been used in prior research,namely traditional roles, non-traditional roles, decorative roles, and roles depicting women as equal tomen (e.g., Plakoyiannaki & Zotos, 2009). Traditional gender roles depict women as reliant on men, suchas in the roles of the housewife. Non-traditional gender roles portray women in non-traditional activities,as career oriented, and with voices of authority (Plakoyiannaki & Zotos, 2009). In decorative roles,women are used for decorative purposes or to drape products to make them more appealing to their target

markets as a form of sexual appeal (Reid & Soley, 1983). Women portrayed in decorative roles usuallyare shown seeking beauty and physical attractiveness and as sex objects, even when sex is unrelated to theadvertised product (Plakoyiannaki & Zotos, 2009). In and roles depicting women as equal to men, womenare not shown in any female role stereotypes. They are portrayed as equal to men mainly in order toappeal to the different segments of readers that include both women and men (Lyonski, 1985).Previous research. Researchers in the social sciences and communication fields have studied theportrayal of women in the media for a long time (e.g., Courtney & Lockeretz, 1971; Hovland, et al.,2005). Although almost all of this research has been undertaken in the US and other highly industrializedWestern countries, some studies have been conducted in emerging market countries or across cultures(e.g., Cho, Kwon, Gentry, Jun, & Kropp, 1999). Here, we review some important prior studies regardinggender portrayals in advertising.Previous research on gender role stereotyping in advertising has produced inconsistent results.While some studies have reported the presence and increasing incidence of gender bias (e.g., Belkaoui &Belkaoui, 1976; Sexton & Haberman, 1974), other studies have reported the presence of gender bias butfound it to be decreasing (e.g., Allan & Coltrane, 1996). Most studies, however, find that womengenerally are not portrayed favorably and that they tend to be portrayed in narrowly defined traditionalroles (e.g., Belkaoui & Belkaoui, 1976; Courtney & Lockeretz, 1971). When women are featured inadvertisements, they typically are not portrayed as decision makers in the context of important matters(Maake, 2006).In addition to the identity cues associated with the message source, non-source cues (e.g., setting orlocation, background, language or text) may contribute to the persuasive potential of an advertisingmessage (Brumbaugh, 2002). Several studies have found that females and males tend to be used toadvertise different types of products (Bretl & Cantor, 1988) and likely to be confined to certain settings orlocations (Welter, 1966). Women are also more likely to be portrayed in family scenes and as providersof service to others (Maake, 2006). Power relations may also be revealed by narration and voices, for

example, by analyzing whose voice (the man‘s or the woman‘s) is the expert‘s voice or the voice ofauthority (Bell, Kravitz, & Wilkes, 2000).Gender role stereotyping in the 1970s. Sexton and Haberman (1974) undertook their studyamidst claims by activist organizations that women were not allowed the same variety of life patterns thatmen enjoyed. To determine the extent to which such stereotypes were present in magazine advertisement,Sexton and Haberman performed a content analysis of 1827 advertisement covering specific productclasses and time spans in five US magazines. The study findings corroborated the activist organizations‘claims in that the advertisements examined reflected women in very limited and/or narrow roles with only16% of the advertisement portraying women in non-traditional roles. Rarely were women depicted inleadership roles. On a positive note, a substantial decrease in the number of advertisement portrayingwomen in traditional roles as housewives and mothers was observed.Venkatesan and Losco (1975) undertook a comprehensive content analysis covering the period1959-1971, arguably a period that saw significant social changes regarding the place and status of womenin US society. The purpose of the study was to examine the portrayal of women‘s roles in printadvertisement and to investigate the changes in such roles. Based on a sample of 14378 advertisementsfrom general magazines, they found that the relative percentage of women appearing in advertisementremained unchanged at about 40% during the period under investigation. The three roles most frequentlyshown about women were that they were sexual objects, physically beautiful, and dependent on men.However, the portrayal of women as sex objects declined, possibly due to pressure from the women‘smovement.Gender role stereotyping in the 1980s. While research had been undertaken to examine theeffectiveness of sexually oriented advertising appeals, Soley and Kurzbard (1986) claimed that littleresearch had examined the actual use of sex in advertising. It‘s in this context that they analyzed thesexual content of magazine advertisement produced in 1964 and 1984. Their investigation involved asample of 1698 advertisement drawn from general interest magazines, women‘s magazines, and men‘smagazines. They found that while the percentage of advertisement with sexual content had remained

constant, sexual illustrations had become more overt and the tendency to present sexual content in visualrather than verbal form had increased. Further, females were more likely than males to be portrayed insexually suggestive ways.In the same decade, Lyonski (1985) undertook a content analysis ofadvertisement in 22 magazines from 1974-1975 and 1979-1980 and found that stereotyping had declinedmarginally.Gender role stereotyping in the 1990s. While they recognized the valuable research that had beenundertaken on gender portrayals since the 1970s, Plous and Neptune (1997) were of the view that previousstudies had some major limitations. They sought to explore the possibility that racial and gender bias wasincreasing in magazine advertisements. Using a sample of 1800 print advertisement drawn from 1985-1994 issues of two predominantly White female fashion magazines, two predominantly Black femalefashion magazines, and two predominantly White male fashion magazines, they found that regardinggender biases, female body exposure was greater than male exposure by a ratio of 4 to 1, suggesting that―…gender biases in magazine advertising persisted, and in some cases increased, between the mid-1980sand mid 1990s‖ (Plous & Neptune, 1997, p. 627).Klassen et al.(1993) contributed to the study of gender portrayals in advertisements byinvestigating how men and women, together, were portrayed. They examined a total of 3550advertisements drawn from issues of specific magazines from 1972-1989 and found that the proportion ofadvertisements with traditional poses had decreased while the proportion of reverse-sex poses and equalityposes had increased. Overall, there was also evidence that traditional depictions of women had beendeclining since the early 1980s. Equality portrayals on the other hand had been increasing as other studieshad also suggested.Gender role stereotyping in the 2000s. The interest in gender issues continued in the 2000s.Ahmed et al. (2004) published the results of a study whose objective was to determine if females andmales were equally likely to be featured in cardiovascular advertisements. Ahmed et al. (2004) drew asample of 919 unique advertisements which they examined for factors including gender, age, race, and theroles of the primary figure and the majority of the people featured in the advertisements. They concluded

that there was significant under-representation of females in cardiovascular advertisements andrecommended that physicians needed to be aware of this gender bias (Ahmed, et al., 2004). In the samedecade, Sengupta (2006) took the study of gender in advertising further by examining the intersection ofrace and gender to avoid the mistake of generalizing research findings to all women based on noninclusivesamples as some studies have done. Based on a sample of 194 advertisements from threeCanadian teen fashion magazines, evidence of a correlation between race and type of product advertisedwas found. While Black women were widely used in clothing advertisements, East Asian women weremore prominent in advertisements for technology products. Sengupta (2006) found that White womenoccupied more major or important roles than all the other women. The conclusion that was drawn wasthat older stereotypes were still present in advertisements (e.g., White beauty ideal, hypersexual Blackwomen) and new stereotypes are being conceived (e.g., technologically savvy East Asian women).A study on gender and advertising in Southern Africa found that despite accounting for about 52%of the population, only 41% of the models appearing in advertisements (both images and voices) werefemale (Morna & Ndlovu, 2007). This study also found that ―women are more likely to be seen thanheard‖ (Morna & Ndlovu, 2007, p. 5).In summary, the categories and proposed category dimensions for physical characteristics andsocial role characteristics that may be employed in the analysis of advertisements include those outlined inTable 2.

Table 2Categories and Proposed Category Dimensions: Physical and Role CharacteristicsCategory (variable)Product categoryProduct advertisedTypical product usersNature of main activity inthe advertisementLocation (i.e. setting) ofthe activityDecision making/exerciseof authority situationFamily sceneFunction rankingRelative sizeFeminine touchRitualization ofsubordinationLicensed withdrawalManifestation ofindependencePresence of narration orvoice from the modelNature of the narrationRole of the narratorTarget of the narrationExtent of dressingClearly visible facialexposureBody parts (display ofparts of body)Proposed category dimension detailFood, beverages, health and beauty, household, financial services, travel,transport, and leisure, retail, business to business, government/education,media promotion, othersHousekeeping products, non-housekeeping products, unknownMales, females, unisexHousekeeping activity, non-housekeeping activity, otherHome, away from home, staged settings, otherPresent, absent, unknown/unclearPresent, absentPresent, absentPresent, absent, or not applicable (i.e., solo models)Present, absentPresent, absentPresent, absentPresent, absentPresent, absentAdvice, other, not applicableHousekeeper (homemaker), professional, otherFemale, male, bothDemure, suggestive, partially-clad, nudePresent, absentPresent, absent

Cultural Characteristics of the Message SourceThe images of women depicted in advertisement also communicate cultural information. Culturalvalues have long been known to correlate with consumer behavior (Henry, 1976). In internationalmarketing, culture traditionally is operationalized using values (Usunier & Lee, 2009). Marketing andadvertising research has been influenced most by the value contents and structure theory (Schwartz, 1994;Schwartz, et al., 2001).Values are enduring, desirable trans-situational goals that vary in importance and serve as guidingprinciples in the life of a person or other social entity (Rokeach, 1973; Schwartz, 1994). ―Implicit in thisdefinition of values as goals is that (1) they serve the interests of some social entity, (2) they can motivateaction - giving it direction and emotional intensity, (3) they function as standards for judging andjustifying action, and (4) they are acquired both through socialization to dominant group values andthrough the unique learning experiences of individuals‖ (Schwartz, 1994, p. 21). Schwartz developed thePortrait Values Questionnaire (PVQ) for use in contexts including low-income consumers in emergingmarkets (Schwartz, et al., 2001). The ten motivational types of values in the PVQ are outlined in Table 3.In addition to values, social axioms may also be employed understand the cultural information inadvertisements. The most recent large-scale programmatic approach to measuring cultural dimensions, thesocial axioms survey, has been orchestrated by Leung and Bond (Leung, Bhagat, Buchan, Erez, & Gibson,2005). The social axioms survey measures five social axiom dimensions (Table 4). Leung and Bondpropose that values provide the answer to the question ―What goals will be pursued in life?‖ while socialaxioms answer the question ―How will these goals be pursued?‖ Social axioms are general beliefs thatpeople hold about the world and how things work in the world (Leung, et al., 2002).Table 3Value Constructs, Definitions, and ExamplesValue

construct Definition Examples of PVQ itemsPower Social status and prestige, control ordominance over people and resources.He likes to be in charge and tell others whatto do. He wants people to do what he says.Achievement Personal success through demonstrating Being very successful is important to him.competence according to social He likes to stand out and to impress otherstandards.people.Hedonism Pleasure and sensuous gratification foroneself.He really wants to enjoy life. Having a goodtime is very important to him.Stimulation Excitement, novelty, and challenge inlife.He looks for adventures and likes to takerisks. He wants to have an exciting life.Self-direction Independent thought and actionchoosing,He thinks it‘s important to be interested increating, exploring.things. He is curious and tries to understandeverything.Universalism Understanding, appreciation, tolerance He thinks it is important that every person inand protection for the welfare of all the world should be treated equally. Hepeople and for nature.wants justice for everybody, even for peoplehe doesn‘t know.Benevolence Preservation and enhancement of thewelfare of people with whom one is infrequent personal contact.He always wants to help the people who areclose to him. It‘s very important to him tocare for the people he knows and likes.Tradition Respect, commitment and acceptance of He thinks it is important to do things the waythe customs and ideas that traditional he learned from his family. He wants toculture or religion provide the self. follow their customs and traditions.Conformity Restraint of actions, inclinations, and He believes that people should do what theyimpulses likely to upset or harm others are told. He thinks people should followand violate social expectation or norms. rules at all times, even when no one iswatching.Security Safety, harmony and stability of society,of relationships, and of self.The safety of his country is very important tohim. He wants his country to be safe from itsenemies.Source: Schwartz et al. (2001: p 521)

Table 4Social Axioms, Definitions and ExamplesSocial axiom Definition ExampleSocialcynicismSocial cynicism represents a negative assessment ofhuman nature and social events.Kind-hearted people usuallysuffer losses.Reward for Reward for application refers to the position that the Hard working people willapplication investment of human resources will lead to positive achieve more in the end.outcomes.Social Social complexity refers to the view that there are One has to deal with matterscomplexity multiple solutions to social issues, and that the according to the specificoutcome of events is uncertain.circumstances.Fate control Fate control refers to the general belief that social Fate determines one‘sevents are influenced by impersonal, external forces. successes and failures.Spirituality (or Spirituality (or religiosity) refers to the view that Religious people are morereligiosity) spiritual forces influence the human world and that likely to maintain moralreligious institutions exert a positive effect on social standards.outcomes.Source: Bond et al. (2004: pp. 178-179)ConclusionThe literature reviewed has produced important findings on explicit and implicit stereotyping inmanifested in message source portrayals in advertisements and its effect on consumers. It is our proposalthat these valuable insights be extended to the study of gender portrayals in emerging markets. It isevident from the literature that advertisements have an important influence on consumers because throughthe socialization process, the persuasive messaging in advertisements can influence the formation ormodification of personal and group identities as predicted by the identity theory. Socialization into genderroles takes place through differential treatment and identification. Two important theories of socializationare the social learning theory and the cultivation theory. Both these theories predict that the portrayal ofmessage sources in advertisements purveys messages from which consumers learn, hence the importance

of understanding the type of persuasive messages that are contained in the physical characteristics andcultural characteristics associated with the message sources.Further, according to Kelman‘s (1961) seminal theory on processes of opinion change,advertisements are a form of social influence on consumers. Advertisements contain both verbal (text)and nonverbal components which are processed through the central and/or peripheral informationprocessing routes as explained by the dual process models of persuasion. The nonverbal components ofadvertisements are more likely to be processed via the peripheral route which does not make significantelaborative demands on the consumer. Given the lower literacy levels in the mass market sectors ofemerging markets, it is especially important that the images employed in advertisements are appropriateregarding the messages that they convey to the target market.Though there is a rich corpus of research that has been undertaken on messages source portrayals inadvertising we have found no evidence of research on message source portrayals in advertisementstargeted at low income consumers that emphasize the importance of assessing both the physicalcharacteristics and cultural characteristics. This paper‘s aim is to contribute addressing the dearth ofrelevant research by proposing specific categories and category dimensions that may be used in theanalysis of advertisements in the context an emerging markets.ReferencesAhmed, S. B., Grace, S. L., Stelfox, H. T., Tomlinson, G., & Cheung, A. M. (2004). Gender bias incardiovascular advertisements. Journal of Evaluation in Clinical Practice, 10(4), 531-538.Alden, D. L., Steenkamp, J.-B. E. M., & Batra, R. (2006). Consumer attitudes toward marketplaceglobalization: Structure, antecedents, and consequences. International Journal of Research inMarketing, 23(3), 227-239.Allan, K., & Coltrane, S. (1996). Gender displaying television commercials: A comparative study oftelevision commercial in the 1950s and 1980s. Sex Roles, 35(3-4), 185-203.Archer, D., Iritani, B., Kimes, D. D., & Barrios, M. (1983). Face-ism: Five studies of sex differences infacial prominence. Journal of Personality and Social Psychology, 45(4), 725-735.Batra, R. (1999). Marketing issues and challenges in transitional economies. In R. Batra (Ed.), Marketingissues in transitional economies (pp. 3-35). Norwell, Massachusetts: Kluwer Academic Press.

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Role of Gratitude and Obligation in Business RelationshipByPrem Prakash Dewani and Piyush Kumar SinhaIntroductionMarketers‘ quest to understand the dynamics of long term business relationships has fuelled an importantbody of academic research on loyalty and its role in business sustainability (Keating et al., 2003. Hsu,2007; Yuping and Yang, 2009). Recent insights from research in buyer-seller relationships have indicatedthat customer gratitude play an important role in developing buyer-seller relationships (Palmatier, 2009).Social psychology literature indicates that gratitude and obligation are central in interpersonalrelationships for reciprocity rule to work and in development and sustenance of relationships (Emmonsand McCullough, 2004, Tsang, 2007). Most theories of relationship marketing (RM) emphasize the role oftrust, commitment, and customer satisfaction either alone or in combination in development of businessrelationships (De Wulf et al., 2001; Palmatier, 2006; Sirdeshmukh, Singh and Sabol, 2002). Despite theagreement that gratitude is ‗core‘ of reciprocity and both gratitude and obligation are basis of interpersonalrelationships, literature that examines role of gratitude and obligation in long term business relationshipsare limited. This study attempts to address this research gap by undertaking the objectives 1) Examininghow various relationship investments (e.g. financial, social and structural) affect customer gratitude andcustomer obligation and 2) Examining how customer gratitude and customer obligation further affectrelationship output variables such as customer purchase intentions and attitudinal loyalty.Literature ReviewMarketers invest heavily to build customer relationship in terms of various relationship marketinginvestments. These relationship investments range from financial based investments, social investmentsand structural investments e.g. price based investments, non price based investments, communicationbased investments, providing preferential treatments to their customers, providing customized product andservices and value co creations.(Berry, 1994). These investments impact customers in terms of theirloyalty and customer purchase intentions. However, the impacts of these relationship investments are notalways positive. Literature provides different opinions about that. It has been found that impact of theserelationship investments may be positive (De Wulf, 2001), or ambiguous (Colgate and Danaher, 2001) ormaybe negative also (Hibbard, 2001). So relationship marketing investments are not always as effective,therefore, there is a huge scope to understand when these relationship investments have positive effectsand when these relationship investments have negative effect.

When people get some favour, they reciprocate (Goulder, 1960). These reciprocal outcomes may be apositive outcome or a negative outcome that depends upon, how do people perceive the relationshipinvestments. When people perceive them as it has been given with benevolent intentions, theseinvestments are valuable to the recipient, and it has incurred some cost to the benefactor, then theseinvestments generate feelings of gratitude. When these investments are perceived as lack of benevolenceand have are socially undesirable and taboo, they generate feelings of obligations. These feelings ofgratitude and obligation would eventually result in different action tendency. Gratitude has long termorientation of the action tendency whereas obligations result in immediate or short term action tendency(Fedrikson, 1998).The extant marketing literature restricts to explain the mediating role of consumer gratitude betweenrelationship marketing investment and seller‘s objective performance in terms of seller‘s performance(increase in sales and share of wallet). Authors have considered only role of consumer gratitude (which isa positive feelings), while completely ignored the role of customer obligation in development of businessrelationships. It has been well documented that there are two conditions which makes the reciprocity ruleto work. These conditions are 1) gratitude (which is felt in certain situations when recipient of a benefitperceives that the benefactor has done it intentionally, it has incurred some cost to the benefactor and thebenefactor has no ulterior motive to do so. 2) Obligation, which arises when people feel indebted to repaythe benefit rendered. This is negative state of mind and arises because of social norms. It is also found thatfeelings of obligations are highly dislikeable by nature. There are several marketing situations when arelational partner receives benefits, but because of his /her inability to not to reciprocate to the benefit,s/he feels sense of obligation (Goei and Boster, 2005). In such situations, the beneficiary act in twopossible ways. Either s/he reciprocates immediately and then terminates the relationship for future, or s/heavoids getting benefits (Goei and Boster, 2005; Morale, 2005)); (e.g. retail stores like Cookieman, sweetshops, apparel stores etc work on this principle, by offering the products for tasting or providing freesamples etc or investing in terms of efforts in showing variety of cloths and ornaments prior to sale, whichmakes people feel sense of obligation. After consuming free gifts or having consumed considerable timeand efforts of the sales man and / or shopkeeper, people feel a sense of indebtedness to reciprocate to thatinvestment). In either of the cases, the purpose of the benefactor gets defeated. Since the sales man orshopkeeper invest in the customer with an orientation of long term association or to get into long termrelationship with the beneficiary, but this sense of indebtedness results in a short purchase withtermination of the relationship.While investing in relationship, the benefactor does not have information that the beneficiary wouldperceive this investment in a positive or negative manner i.e. would reciprocate through gratitude or

obligation. Therefore, it is imperative to consider obligation and its role in long term relationships alongwith the role of consumer gratitude. This variable has been completely ignored so far in the extantliterature of marketing. Therefore, it is attempted to explore the role of consumer gratitude and consumerobligation in mediating the relationship between RM investments and consumer purchase intentions andloyalty.Although, it has been documented that successful RM efforts improve customer loyalty and firmperformance through stronger relational bonds (e.g., De Wulf, Odekerken-Schröder, and Iacobucci 2001;Sirdeshmukh, Singh, and Sabol 2002), yet it has also been observed that various RM efforts havedifferential effects. In some cases business executives have been disappointed in the effectiveness of theRM efforts (Colgate and Danaher 2000). Researchers have also suggested that in certain situations, RMmay have a negative impact on firm‘s performance (De Wulf, Odekerken-Schröder, and Iacobucci 2001;Hibbard et al. 2001). The prime reason behind this is that different relationship marketing programs(financial, social, and structural) may build different types of relational bonds and norms thatgenerate varying levels of return (Berry 1995, Bolton et al. 1998, Cannon et al. 2000). The conceptcan be understood with a simple example that interpersonal bonds take time and efforts to produce ascompared to economic bonds. Therefore, RM investments, which require inputs in terms of interpersonalrelationship development e.g. preferential treatment, personalized communication etc., give differentresults as compared to financial RM investments such as gifts and price discounts etc. Since theinvestment returns may vary by various relationship marketing interventions, therefore, the effect of eachtype of RM investments must be isolated to unravel the distinct effects of relationship marketinginvestment which are masked with in an aggregate measure. Since consumer gratitude and consumerobligation have been proposed as the key emotional mediating variable in relationship marketing theory,it is therefore important to explore the differential roles of these relationship marketing investments onconsumer gratitude and consumer obligation, which in turn further affects customer purchase intentionand consumer loyalty.Theoretical SupportAccording to theory of reciprocity, people reciprocate for the benefits received (Goulder, 1960). There aretwo components responsible for reciprocity to work, ―obligation‖ and ―gratitude‖. Obligation arisesbecause of social norms. People feel indebted because they perceive that the exchange process isincomplete and is in the favor of benefactor. To avoid these feelings of indebtedness, they feel motivatedto act in favor of benefactor. Obligations are negative feelings and are generated primarily because ofsocial norms. Contrary to that, there is an alternative sense of appreciation for the benefits received. These

feelings are positive in nature and terms as gratitude. In social psychology literature, gratitude has beendefined as the positive affective response to receive a benefit or a favor (Emmons and Crumpler, 2000).In sum, gratitude is a positive feeling, arises because of sense of thankfulness and appreciation, whereas,obligation is a negative, uncomfortable state which is determined by normative demand and can beperceived as highly aversive (Greenberg and Bartel, 1976). From the research perspective, many scholarsacknowledge that both the constructs can operate independently. There are empirical evidences thatgratitude can be a predictor of reciprocal actions (Emmons & Crumpler, 2000; Goei & Boster, 2005;Graham, 1988; McCullough, Kilpatrick, Emmons, & Larson, 2001). In contrast to that, studies onobligation have provided inconsistent results regarding the role of obligation in the favour-compliancerelationships. Some studies have found that favour increases obligation, and obligation, in its turn,increases compliance (Greenberg & Frisch, 1972; Greenberg &Saxe, 1975). Other studies reported norelationship between obligation and compliance (Goei & Boster, 2005).It is argued from ―broaden and build theory of positive emotions‖ that both gratitude and obligation wouldresult in different action tendencies (Fedrickson, 1998). According to the theory, negative emotions suchas fear, guilt and anger would result in quick and decisive actions. Since all these negative emotions occurin life threatening situations, which result in narrowing down the thought action repertoire and triggersquick and spontaneous actions. Contrary to that, positive emotions never occur in life threateningsituations. Positive emotions have complementary effect on thought-action repertoire. It broadens thethought-action repertoire and people usually delay their actions. In case of joy, happiness etc., peoplebroaden their action with respect to time dimension and usually respond with delayed actions as against incase of negative emotions. Extant literature on psychology and sociology has categorized as gratitude aspositive feeling and obligation as negative state. Therefore, it is argued that gratitude would result in longterm orientation of actions. On inception of gratitude, people would react in terms of building andsustaining long term relations with the benefactor. In contrast, obligation is unpleasant and undesirablefeeling. Therefore, to get rid of these feelings of indebtedness, people would react immediately. Thisimmediate action tendency would be as a result of narrowed nature of thought-action repertoire. Theimmediate reciprocity o inception of obligation would be a result of social norms and in long term peoplewould terminate the relationship with benefactor (Fedrickson, 1998).In sum, theory of reciprocity has considered norms of reciprocity as the basis of all reciprocal actions.Reciprocity theory is not able to explain the mechanism of reciprocal actions. Broad and build theory ofpositive feelings further provides foundation to consider consumer gratitude as the basis of long termrelationship. However broaden and build theory is not able to explain the role of negative feelings innurturing relationships. Considering both theoretical perspectives, present study is an attempt to develop aframework which explains the mediating role of consumer gratitude and consumer obligation in

development of long term business relationships as well as purchase intentions. For the present work,Berry‘s (1994) framework of relationship marketing investments has been adopted.Relationship marketing investments are the investments done by marketers with the perception that theseinvestments would enhance competitive advantage by increasing repeated patronage by the customers(Bolten, 1989). In extant marketing literature, various researchers have described these relationinvestments approaches in different forms such as customer bonds formed (Berry 1995), exchangecontrol mechanisms utilized (Cannon et al. 2000), benefits offered (Gwinner et al. 1998),functions served (Hakansson and Snehota 2000), and content area supported (Morgan 2000).Though, all the different mechanisms described above, uses different criteria for grouping the relationalactivities, yet the inherent intentions are similar e.g. to enhance the bonding between buyer and seller.Among all, Berry‘s framework of RM investments has been well accepted in the marketing literature.Therefore, for the present work, Berry‘s (1994) framework of relationship marketing activities has beenadopted. According to this framework, all types of relational marketing investments are categorized intothree types of investments, e.g. financial, social and structural investments.Hypothesis development and conceptual frameworkFinancial investmentsFinancial investments include providing financial and tangible rewards to customers with the intentions toincrease the patronage. These investments includes, providing free samples, gifts, coupons, reward pointsand any other form of monetary promotions (e.g., Berry, 1995; Gwinner et al., 1998; and Peterson, 1995).Financial offers increase customer patronage by enhancing customer‘s utilitarian value and therebyincreasing acquisition utility of the purchase. Although marketing literature includes all the incentives asfinancial investments which are given prior and post purchase, looking at the nature of the study,incentives which are given prior to purchase are considered as financial investments.ObligationCustomer feelings of obligation are feelings of indebtedness; an aversive psychological tension (Goei andBoster, 2005). Greenberg and Bar-Tal, 1976) has defined obligation as a negative, uncomfortable statewhich is determined by normative demand and can be perceived aversive. As a psychological construct,obligation has been defined as a ―state of indebtedness to repay another‖ in the context of the receipt of abenefit from another (Greenberg, 1980). It is argued that indebtedness is an emotional stat of ―arousal anddiscomfort‖ and that when one is in this state, one is alert to opportunities to reduce this discomfort.Financial investments and obligationResearchers across many disciplines have recognized that after receiving a benefit (e.g. financial, RMinvestments done by the seller), buyers feel ingrained psychological pressure to reciprocate. As a result,they would like to act in reciprocation. Equity theory perspective says that people like to reciprocate the

same quantum of benefit received. Since the nature of the financial investments are such that they areeasily evaluable and agreegable, and non memorable in nature, people try to reciprocate immediately. Ithas also been found that receiving a monetary favour results in feelings of indebtedness and provide asignificant motive to charity giving (Dawson, 1988). Similarly, receiving free samples prior to purchasecause sense of indebtedness and uneasiness among buyers (Nataliya, 2005). These feelings ofindebtedness are negative feelings in nature. Further, it was found that when people get financial basedinvestment prior to purchase, these investments provide extrinsic motivation to reciprocate to theinvestments received. Therefore, we hypothesizes thatH1) Financial investments would result in customer obligationSocial investmentsSocial relationship investments have been categorized into communication based investments, preferentialtreatments and non price based investments (De Wulf et al, 2001). It has been well documented that socialbonds enhances customer patronage by providing psychological benefits to the customers (Berry, 1995).These bonds offer hedonic value to the customers by providing experiential, emotional and affective worthto consumption (Chandon et al., 2000). These types of bonds take considerable time to develop and cannotbe easily duplicated by the competitors (De Wulf et al., 2001).GratitudeGratitude is defined in psychology literature as ―emotional benefits received, accompanied by a desire toreciprocate‖ (Emmons and McCullough, 2004). Feelings of gratitude occurs when people perceive thatthey have received some help which has some value to them, it has incurred some cost to the benefactorand the help has been offered with benevolent intentions and given gratuitously rather than social normsor ulterior motives (Mc Cullough et al., 2001). Although a few researchers have identified gratitude as a bidimensional construct (‗affect‟ as well as „conation‟) (Tesser, Gatewood & Driver, 1968; Wood, 2008;Palmatier, 2009), yet extant psychology and sociology literature have consensus about gratitude being“affect” (Oratpray, Clore & Collins, 1987; Benzev, 2000; and Emmons, 2004). Therefore, for the presentwork, gratitude has been considered as an “affect”Social investments and GratitudeIt has been found that when people get social investments, it would result in positive social reinforcementamong them (Luthans and Stajkovic, 2000). Similarly, receiving a personal communication basedinvestment would result in fulfilment of their desire for a friendly and close relationship, which is apositive feeling in nature. When people get non price based investments, they memorize them for longerperiod of time (Thaller, 1998). Similarly, when people get preferential treatments, it would result in

fulfilment of their desire for recognition (Jeffery, 1998). Since it has been well documented thatrelationship investments which results in fulfilment of need and desire, leads to comply in favour ofbenefactor because of gratitude (Goei & Boster, 2005), therefore, we hypothesize thatH2) Social investments would result in customer gratitudeStructural InvestmentsStructural investments include providing value added services, customization of products and services.These investments are also termed as third level of relational bonds and are most difficult to imitate by thecompetitors (Berry, 1994). Structural investments raise the customers switching cost to a competitor.Some of the studies have also suggested that structural bonds rank highest in the hierarchy of therelationships investments and it also provide huge opportunities to the firms to generate sustainablecompetitive advantage.Structural investments and GratitudeStudies have found that when people receive customized offers, it results in need fulfillment and highercustomer satisfaction among people. Both of them are positive feelings. Similarly when people getinvitation for value co creations by sellers/ marketers, it results in perception of benevolent intentions ofthe marketers and result in higher satisfaction and gratification of customers (Franke, Keinz and Steger,2009) (both of them are again positive feelings in nature). Receiving customized offers increase theperception of higher cost incurred by seller for particular transaction as compared to non customized offer(Franke, Keinz and Steger, 2009) and since, higher need fulfillment of customers and perception of highercost incurred by sellers result in higher gratitude among customers, so we hypothesize thatH3) structural investments would result in customer gratitudePurchase intentions are customer‘s intentions to purchase or repurchase. Generally, purchase intentionsare assumed as purchase behaviours. However, several researchers have identified that purchaseintentions do not necessarily lead to purchase behaviours (Chandon et al, 2000 Fitzsimmons & Morwitz,1996; Martin and Bush, 2000; Morwitz, Johnson & Schmittlein, 1993; Young, DeSarbo, & Morwitz,1996). In many situations, even when customers do not intend to purchase, they still do, while other timesthey do intend to purchase but end up not doing so. Sometimes, even though customers do not want topurchase from a certain company, they have no choice; like local electric utility companies. Therefore, forthis research work, customer purchase intention is defined in a broader manner. When customers have nochoice or have very few choices and consequently form ―reluctant‖ purchase intentions, this is not a ―true‖

purchase intention. Only when customers have enough of choice and they are willing and happy topurchase from certain seller, these customers have purchase intentions.It has been found that when people recognize the feelings of gratitude, this would generate attributionsabout the motive of the benefactor. This would increase the intentions to repay the benefactor by engagingin reciprocal behaviour based on these feelings of gratitude (Goei and Boster, 2005). It was also found thatfeelings of gratitude would increase customer‘s share of wallet in purchase as well as sellers performancein terms of total sales volume (Palmatier, 2009). Based on that, we hypothesize thatH 4) Customer gratitude would results in customer purchase intentionsGratitude and customer loyaltyCustomer loyalty has been considered to be one of the main keys to achieving company success andsustainability over time (Keating et al., 2003; Reichheld and Aspinall, 1993). It is customer‘sdemonstration of faithful adherence to the institution. At the core, there are customer‘s attitude and repeatpatronage as two separate constructs that build the loyalty relationship (Dick and Basu, 1994). It has beenfound that there is no straightforward relationship between a customer‘s attitude and repeat patronage(Dick and Basu, 1994). Low attitude can be combined with high patronage behaviour, high attitude withlow patronage behaviour, and both attitude and repeat patronage can be found high or low. These fourpossible combinations result in four quadrants, that reflect four types of loyalty: true loyalty (high attitudecombined with high patronage behaviour), latent loyalty (high attitude with low patronage behaviour),spurious loyalty (low attitude with high patronage behaviour), and disloyalty (low attitude with lowpatronage behaviour). Thus, the repeat patronage behaviour of different customers within a company‘scustomer base is not a mere function of their attitude. As Dick and Basu (1994) suggest, customers differin their type of loyalty relationship, and it is likely that customer characteristics help the researcherunderstand how the loyalty relationship differs from one customer to another. Considering that theintegrative approach of Dick and Basu (1994) suggests loyalty as a general term refers to both attitudinaland behavioural element. The behavioural element might or might not have a long term relationalorientation, yet attitudinal loyalty has a long term relational orientation (Dick and Basu, 1994). Therefore,for the present work, attitudinal loyalty has been taken as a measure of long term orientation ofconsumers.On receiving a benefit, people feel sense of thankfulness, gratefulness and appreciation. These feelings ofgratitude are although ephemeral by nature, yet become the basis of long term relationships. It is arguedthat the recipient of the benefit after realizing these one or other factors (the act done by the benefactor is

intentional, it has incurred some cost to the benefactor, the motive of the benefactor is not ulterior and alsothis act (RM investment) is valuable to the recipient), act in return to the benefactor. This act of returnhelps to create a cycle of reciprocity between giving and counter-giving and contributes to the ongoingconstruction of a relationship (Bartlett and DeSteno, 2006). Therefore the arguments appears logical thatproviding series of favour from both seller to buyer‘s side and the act of reciprocity from buyer to seller‘sside generate cycles of gratitude which eventually results in a more loyal customer with more purchaseintention to purchase from existing seller. There is a close link between feelings of gratitude andreciprocal behaviour which is responsible for the relational strengthening cycle, referring to it as acontinuing balance of debt –in favour of one member (seller) and then in favour of another (buyer).Therefore, it is logical to perceive that feeling of gratitude and gratitude based reciprocal behaviour cantrigger a series of relationship cycles which eventually would results in a loyal customer. Therefore, it isattempted to investigate thatH5) Customer gratitude would result in customer‟s attitudinal loyaltyCustomer Obligation and Customer Purchase intentions:To explain the phenomenon and mechanism of reciprocity in case of positive and negative feelings,Fredrikson (1998) explained that, in case of positive feelings, beneficiary is looking for a long termassociation with the benefactor under the influence of broad and build theory of positive feelings, whereas,in case of state of obligation, beneficiary feels sense of indebtedness. To avoid the feelings ofindebtedness, beneficiary reacts in favour of benefactor by modifying his/her behaviour. This modifiedbehaviour is to reciprocate immediately by showing higher purchase intentions, but the mechanism of thatchanged behaviour is narrowed in nature. That form of reciprocity comes from tit-for-tat type ofreciprocity. In this case, the beneficiary has no intentions to build the relationships or to encourageinterdependent relationships with his/her benefactor, yet s/he reciprocates immediately to avoid theemotional stat of indebtedness ―state of arousal and discomfort‖ (Greenberg, 1980, Komter, 2004)). Whenone is in this state, one is alert to opportunities to reduce this discomfort. Therefore, it is hypothesizedthat:H6) Customer obligation would results in customer purchase intentions.Customer Obligation and Attitudinal Loyalty

When people receive some favour, and feel sense of obligation because of perception that the favour hasbeen given with some malevolent intentions and is socially undesirable in nature, they reciprocate becauseof tit for tat theory. As per tit for tat theory, people do well for good and bad for bad. Since, these feelingsof obligation are unpleasant in nature and are considered as feelings of indebtedness, people would try toget rid of these negative feelings. People change the nature of their behaviour and make in narrow innature (Fadrikson, 1998). It has also been found that receiving a favour which result in feelings ofobligation, would also result in a threat to power of the people and people feel restriction to their actions,till they reciprocate. It also develops a sense of guilt, inequity and distributive in justice (Blue, 1964). Toavoid these feelings, people immediate reciprocate and would develop a negative attitude towards longterm relationship with the other party from whom favour have been received. So we hypothesize thatH7) Customer obligation would results in negative attitudinal loyalty.Control VariablesIt has been well documented that age of the customer (Carstensen, Isaacowitz, & Charles, 1999), productcategory involvement (Petty and Cacchiopo, 1986)., trait gratitude (Emmons, 2004) mood of the customer(Gardner 1985) and phase of relationships (Dawyer, Schurr and Oh, 1987), also have effect on relationbetween relationship marketing investments and customer loyalty, therefore these variables have taken ascontrol variables in the study. Information on gender and age would also be collected to find the impact ofthese variables on gratitude obligation and in turn customer loyalty and purchase intentions (Fischer,1993; Graham and Ickey, 1997; Grossman & Wood, 1993; Kelly & Hutson, 1999).S tru c tu ra lIn v e s tm e n tsS o c ia lIn v e s tm e n tsH 3 (+ V e )H 2 (+ V e )C u s to m e rG ra titu d eH 4 (+ V e )H7 (- Ve)A ttitu d in a l L o y a ltyF in a n c ia lIn v e s tm e n tsH 1 (+ V e )C u s to m e rO b lig a tio nH 5 (+ V e )H 6 (+ Ve)C u s to m e r P u rc h a s eIn te n tio n sProposed Research MethodologySurvey Method

This study is intending to use survey method for data collection. Survey method confirms to thespecialization of scientific research (Baker, 2002). A survey is an appropriate method when the researchobjective is to understand attitudes and predictive behaviour (Tull and Albaum, 1973). Survey achievesthis through evaluation, analysis and description of a population based on a sample from it (Baker, 2002).Given a sample, data are furnished by individual (respondents comprising the sample) in a consciouseffort to answer a question (Mayer, 1965).The instrument for data collection in this study would be questionnaire containing only structuredquestions both factual and opinion related questions. There would be no ‗interpretive, qualitative or openended‘ questionsPre-testFor pre test convenient sample can be used. It is considered an acceptable practice to conduct reliabilityassessment using convenient sampling (Flynn and Pearcy, 2001). Based on controlling for gender and age,it is planned to take twenty data points for each of category of male, female, age group of 18- 30 years andage group of 31-50 years. The age groups are specified (18-30 years) as new age shoppers and (31-50years) upper age shoppers. The upper age limit is fixed 50 years as old shoppers have distinctly shoppingbehaviour (Oats and Shufeldt, 1996). A total of 80 data points are planned to be taken from the city ofAhmadabad, using convenient sampling technique. The purpose of the pre-test is to test the reliability ofthe instruments intended to be used for the final survey and to check the wordings of the instruments.Since the sales intended to be used in the research are taken from the literature, it is imperative to test thereliability of the scales before final applications.Sampling and data collection planIn this study, it is intended to use systematic random sampling process. Shop intercept would be used tocollect the data. In this process, all the relevant shops of the product category chosen would be listed.Once listing of the shops is done, systematic random procedure would be used to select the shop for datacollection e.g. every third or fifth shop would be chosen for data collection. Similarly, the same systematicrandom sampling technique would be used to further choose the customer e.g. every third or firthcustomer would be asked to fill the questionnaire. Care would be taken to collect the sample at differenttimings of the day, e.g. morning, afternoon and evening to cover all the variability of the population. Itwould also be taken care to collect the sample from mom and pop store and modern format store. So thatmaximum variability of the population can be covered. Sample would be collected in Ahmadabad city.Since, study controls for the personal traits, the sample collected would be representation of the populationof the country.Sample size determination:

There is some debate on what constitutes an adequate sample size for structural equation modelling(SEM). Some researchers consider a sample size of 150 is adequate, while some specify sample size interms of indicator-variable: respondent ratio (Keney, 1998). So going by the second rule, a sample size of300 would be adequate to capture desired variability in the intended research. It is planned to take seventyfive data points for each of category of male, female and age group of 18- 30 years and age group of 31-50years, a total of 75 * 4 = 300 data point.Intended contribution:The proposed research is an attempt to provide affective base to explain the theory of relationshipmarketing. By explaining the mediating role of consumer feelings of gratitude, and consumer feelings ofobligation, the proposed work attempts to explain theory or relationship marketing. It is attempted toexplain the boundary conditions in which customer feels gratitude and would attempt to developrelationships and conditions in which customer feels obligations and show although higher purchaseintentions, yet would result in lower level of customer loyalty.It is also attempted to segregate the relationship investments which contribute to long term relationshipsfrom those relationship investments which contribute to short term relationships. This provides a basis formanagers and marketing practitioners to increase the effectiveness of their relationship marketingprogramme.ReferencesBagozzi, R. P. (1995). Reflections on Relationship Marketing in Consumer Marketing. Journal ofAcademy of Marketing Science, 23, 272-277Baker, M. J. (1992). Research Methods. Marketing Review, 3 (Winter), 167-193.Bar-Tal, D., Bar-Zohar, Y., Greenberg, M. S., & Hermon, M. (1977). Reciprocity behavior in therelationship between donor and recipient and between harm-doer and victim. Sociometry, 40, 293-298.Bartlet, M. Y. and DeSteno, D. (2006). Gratitude and Pro Social Behaviour. Psychological Science, 17,319-325.Ben-Ze‘ev, A. (2000). The Subtlety of Feelings. Cambridge, MA: MIT Press.Berry J., William R. Dardcn, and Milch Criffiii (1994). "Work and/or Fun: Measuring Hedonic andUtilitarian Shopping Value." Journal of Consumer Research. 20 (4), 644-56.Berry, Leonard L. (1996), ―Retailers with a Future,‖ Marketing Management, 5 (Spring), 39–46Berry. Leonard L. (1995). "Relationship Marketing of Services— Growing Interest, EmergingPerspectives." Journal of the Academy of Marketing Science. 23 (4), 236-45.Blau. Peter (1964). Exchange and Power in Social Life. New York; John Wiley & Sons.Bolten, R. (1998). A dynamic model of the duration of the customer‘s relationship with a continuousservice provider: the role of satisfaction, Marketing Science, 17, 45-65.Bollen, Kenneth A, (1989), Structural Equations with Latent Variables. New York: John Wiley & Sons.

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Can we manage the influence of role stressors on organizational commitment of front-lineemployees?Anna-Lena Ackfeldt and *Neeru MalhotraThis study investigates the influence of role stressors on organizational commitment. Suppositionsthat managerial interventions (empowerment and professional development) significantlymoderate the relationships between role stressors and organizational commitment are tested in asample of 184 FLEs. Role ambiguity and conflict influence affective and normative commitmentnegatively, exhibiting no effect on continuance commitment. Empirical evidence of howmanagerial interventions moderate the role stress-organizational commitment relationships isalso presented. Limitations of the study are discussed and a program of further research issketched.Research suggests that customers often base their perceptions of service organizations on theirinteractions with customer-contact staff during service encounters (Babin and Boles 1998; Hartline andFerrell 1996). Given the importance of front-line employees (FLEs) to service organizations,organizational commitment (OC) is a job attitude that ought to be of interest to managers foster andinfluence (Cohen 1992).Because of their boundary-spanning role, FLEs generally have multiple roles to fulfill, and areanswerable to demands from managers, customers and, in some cases, other employees (Bitner 1990;Boles and Babin 1996; Brown and Peterson 1993; Goolsby 1992; Singh 2000; Tubre and Collins 2000;Wetzels, de Ruyter and Bloemer 2000), causing them to experience role stress. From a managerialperspective, it is of interest to create a low stress work environment as role stress has been found to beundesirable (Boles and Babin 1996; Goolsby 1992; Singh and Rhoads 1991; Singh, Verbeke and Rhoads1996), and deleterious for employee effectiveness (Singh, Verbeke and Rhoads 1996). It is also of interest

to identify whether, and if so which, managerial interventions are effective in controlling the effect of rolestress on important job outcomes, such as OC.This paper aims to contribute to the literature, first, by studying the effects of the role stressors(ambiguity and conflict ) on Allen and Meyer‘s (1990) three component model of OC (affective,normative and continuance), since literature, to date, on the role-stress-OC relationship has only looked atthe uni-dimensional construct of commitment. Second, this paper addresses another crucial gap in theliterature by investigating the moderating influence of organizational practices on the role stress-OCrelationships, as direct effects of organizational variables on role stressors have been more frequentlystudied as compared to studying the moderating effects of such variables (Singh, Verbeke and Rhoads1996).The structure of this paper is as follows. In the next section, the literature on OC, role stress andmanagerial interventions is briefly reviewed and the rationales for the predicted relationships arepresented. Following this, the methodology of data collection and analysis is described, and the results arepresented. The paper concludes with a discussion of the study‘s implications for theory and practice.Possible limitations of this study and future research directions are also sketched.LITERATURE REVIEWOrganizational commitmentAllen and Meyer (1990) conceptualized OC as a multi-dimensional construct, and proposed athree-component model based on the three general themes of OC is found in the literature, i.e., theaffective attachment (affective), the perceived costs (continuance), and the obligation (normative)associated with the concept of commitment. Research findings have supported the existence of these threeseparate but interrelated components of commitment (Allen and Meyer 1990; Meyer and Smith, 2000).

Affective commitment (AC) refers to the employee‘s emotional attachment to identification withand involvement in the organization. AC has its roots in the concept of exchange (Meyer and Allen 1991).Employees want to remain, and are willing to exert effort on behalf of the organization because of thepositive work experiences and benefits they derive from their relationship with the organization. Hence, interms of reciprocity, it can be termed as ‗reciprocity by desire‘ (Meyer and Allen 1991).Continuance commitment (CC) is based on Becker‘s side-bet theory and is defined as commitmentbased on the costs that employees associate with leaving the organization (Meyer and Allen 1991).Anything that increases perceived costs, such as side-bets or investments like losing attractive benefits orgiving up seniority based privileges (e.g. pension funds), are generally considered as antecedents to CC(Meyer et al. 1993). Review of literature indicates that CC is quite distinct and does not relate significantlywith neither AC not NC (Meyer and Allen 1991; van Dam 2005).Normative commitment (NC), finally, denotes employees‘ feelings of obligation to stay with theorganization. It develops due to the internalization of normative pressures prior to entry or following entryinto an organization (Weiner 1982). It may also develop as a feeling to reciprocate the rewards paid inadvance, or costs associated with employment incurred by the organization (Scholl 1981; Meyer and Allen1991), hence, implies reciprocity by obligation.Role stressJob-related role stress is made up of two distinct constructs: role conflict and roleambiguity.(Singh 1998; Örtqvist and Wincent 2006). Role ambiguity refers to individual employees‘perception that there is a lack of clear and salient information that is needed to perform the job roleadequately, as well as when there is an uncertainty about the expectations about the roles differentmembers play. Knowledge of the expectations that surround a particular role would otherwise serve toguide employee behavior and also provide knowledge regarding the appropriateness of behavior (Agarwaland Ramaswami 1993; Singh 1993, 1998; Tubre and Collins 2000). Role conflict occurs when individualemployees perceives that the demands and expectations of two or more members of their role set (i.e.

supervisors/managers and customers) are incompatible or incongruent (Agarwal and Ramaswami 1993;Singh 1998; Tubre and Collins 2000).Research shows that the relationship between role stress and OC is generally negative, althoughsome stress can be positive for performance (Boles and Babin 1996), at least in the short term. Forexample, Singh (1998) found role stress to be positively influencing organizational commitment and jobperformance. The negative relationship is based on the idea that individuals who work in a workenvironment characterized by high role stress, are less likely to be willing to spend effort on theorganization they work for (Örtqvist and Wincent 2006). A recent meta-analysis by Örtqvist and Wincent(2006) found that both role stressors tend to influence OC negatively, but to varying degrees.As discussed above, role ambiguity and conflict are hypothesized to reduce the level of AC andNC employees‘ experience. It stands to reason that individuals who feel that they have to remain in theorganization but do not really want to, will perceive that the influence of role stress increases their level ofCC. Hence it is hypothesized:H 1 : a) Role ambiguity, b) role conflict reduce the levels of AC and NC that FLEs‘ experienceH 2 : a) Role ambiguity, b) role conflict increase the CC levels that FLEs‘ experience.The moderating influence of managerial interventionsLiterature suggests that employee attitudes like OC and role stressors are affected by managerialdecisions, interventions and the resource allocation of firms (Hartline and Ferrell 1996; Singh, Verbekeand Rhoads 1996; Heskett et al. 1997), and that organizational characteristics are more significantlyrelated to OC than personal characteristics (Cohen 1992; Mathieu and Zajac 1990; Meyer, Irving andAllen 1998). However, marketers have been more interested in studying direct rather than moderatingeffects of organizational variables (Singh, Verbeke and Rhoads 1996). Based on role stress theories (suchas Kahn, Wolfe, Quinn and Snoek‘s (1964) role episode model and Lazarus and Folkman‘s (1985)

transactional theory,we draw upon two important organizational variables, empowerment andprofessional development, and investigate the moderating impact of these variables on the role stress – OCrelationships, as perceived by FLEs, thus addressing a crucial gap in literature.In the past few decades, scholars and practitioners have shown increasing interest in work placeempowerment, a managerial strategy that endorses the sharing of power and control between managersand subordinates (Bowen and Lawler 1992; Conger and Kanungo 1988; Koberg et al.1999).Empowerment refers to situations in which the manager gives team members the discretion to make dayto-daydecisions about job-related activities (Hartline and Ferrell 1996). In a service context, empoweredFLEs have been found to experience more positive job attitudes like increased organisationalcommitment, display higher levels of self-efficacy, respond better to customer needs and wants, andexperience reduced role stress (Bowen and Lawler 1992; Koberg et al. 1999; Singh 1993, 2000; Wetzels,de Ruyter and Bloemer 2000).Professional development refers to professional growth that can occur when employees areprovided with professional development opportunities, which match their particular needs and interests(Hart 1994). Developing one‘s professional skills in order to further one‘s career and/or avoid becomingobsolete in the work force has become imperative (Koonce 1998). In services, it is crucial to provide FLEswith professional development opportunities to develop customer interaction skills (Zeithaml and Bitner2003). Past research suggests that professional development activities such as induction programs affectjob attitudes, especially organizational commitment, positively, as such activities help to reduce anxietythereby improving role clarity (Bowen and Waldman 1999). Professional development activities are alsoperceived as a sign of management commitment towards its employees (Kinicki, Carson and Bohlander1992).Thus, empowerment and professional development are consequently hypothesized to moderate therole stress - OC relationships.H 3 : a) Empowerment and b) professional development moderate the influence of role ambiguityon AC, NC and CC

H 4 : a) Empowerment and b) professional development moderate the influence of role conflict onAC, NC and CCMETHODOLOGYResearch setting and sampleFLEs from a regional ferry organization in the UK participated in this study. Employees interactdirectly with passengers in all service areas, which range from checking in, manning security points,assisting passengers in embarkation and debarkation and serving customers on-board. A survey packetincluding a cover letter from the researcher, a letter of endorsement from a senior manager and aquestionnaire with a pre-paid envelope was distributed to 520 employees via the organization‘s internalmail system. 188 employees returned their questionnaire, but four questionnaires were excluded becauseof missing data, thus, yielding an effective response rate of 35.4 %. The sample is 65% male, 58% are 36years or younger, 38% has worked for the organization at least 10 years, 92% are permanent staffmembers, 66% have completed the equivalent of high school, and 70% of the work in subordinatepositions.Missing values and response biasData on some variables, 0.7% of the values, was missing in a completely random fashion andwere replaced using the series mean in SPSS. To test for non-response bias, early and late respondents onmeasured demographic characteristics were compared (Armstrong and Overton, 1977). As there were nosignificant differences in the gender, age, education, tenure or organizational position of early and laterespondents, non-response bias was not seen to be a problem.

RESULTSConsistent with prior research, scales items for the eight constructs used in this study are drawnand adapted from the literature in marketing, management, and psychology. The constructs are measuredusing multi-item scales anchored by 1 = ―Strongly Disagree‖ and 7 = ―Strongly Agree‖. Each set of itemsfor each scale was factor analyzed to ensure that a one-factor model fit the data, which they do. Also, theitems achieve reliability as measured by Cronbach‘s alpha (>.70). The scale reliabilities for the constructsare presented in Table 1, along with their means, standard deviation, and correlations.―Insert Table 1 about here‖Baron and Kenny‘s (1986) procedure for multiple and moderated regression analysis wasfollowed to test the hypotheses presented above. H 1 a) is supported as role ambiguity was found toinfluence both AC and NC negatively (st. β = -.27, ρ = .00 respectively st. β = -.21, ρ = .00). Similarly, theinfluence of role conflict on AC and NC was negative (st. β = -.20, ρ = .04 respectively st. β = -.20, ρ =.02), thus supporting H 1 b). H 2 a and b are rejected as neither role ambiguity nor role conflict has asignificant effect on CC (RA-CC, st. β = -.03, ρ = .69; RC-CC st. β = .08, ρ = .37;).This study found partial support for the supposition that managerial interventions work asmoderators of the relationships between role ambiguity/role conflict and AC/NC. Although empowermentmoderates the effect of role ambiguity on AC (∆R 2 = .02, ∆F = 4.08, ρ = .05, st. ß = -.14, ρ = .05) and NC(∆R 2 = .02, ∆F = 4.40, ρ = .04, st. ß = -.15, ρ = .04) but professional development does not (AC, ∆R 2 =.00, ∆F = .38, ρ = .54, st. ß = .04, ρ = .54 respectively NC, ∆R 2 = .00, ∆F = .38, ρ = .54, st. ß = .04, ρ =.54 ). Thus, the results only lends partial support to H 3 a) and H 4 a). The supported moderating effects ofempowerment on the role ambiguity – AC/NC relationships are illustrated in Figure 1 below.―Insert Figure 1 about here‖Similarly, H 3 b) and H 4 b) are partially supported as professional development moderates theeffect of role conflict on AC (∆R 2 = .01, ∆F = 3.32, ρ = .07, st. ß = .12, ρ = .07) and NC (∆R 2 = .02, ∆F =4.28, ρ = .04, st. ß = .14, ρ = .04), but empowerment does not (AC, ∆R 2 = .00, ∆F = .91, ρ = .54, st. ß =.07, ρ = .34 respectively NC, ∆R 2 = .00, ∆F = .37, ρ = .60, st. ß = -.04, ρ = .60). The supported moderating

effects of professional development on the role conflict – AC/NC relationships are illustrated in Figure 2below.―Insert Figure 2 about here‖Although not hypothesized, it is worth noting that empowerment and professional developmentalso have a direct, positive on AC and NC (empowerment → AC, st. ß = .30, ρ = .00; empowerment →NC, st. ß = .21, ρ =.01; professional development → AC, st. ß = .52, ρ = .00; professional development →NC, st. ß = .48, ρ = .00).DISCUSSIONSummary and implicationsThe premises of this paper are, first, that role stress has a negative influence on OC and, second,that managerial interventions (empowerment and professional development) have moderating effects onrole stress- OC relationship. As regards the first premise, there is evidence to partially support theproposition that role stress influences OC. Recall that whilst the effect of role ambiguity and role conflicton AC and NC was negative, but non-significant on CC.With regard to the second major premise of this paper, partial support was found for thesupposition that empowerment and professional development moderate the role stress – OC relationships.The results of the moderated regression analyses revealed that there is a lack of moderating effect ofempowerment and professional development on CC. Unexpectedly, the moderating effect ofempowerment and professional development on the relationships between role ambiguity/clarity andAC/NC was not found to be uniform.This study demonstrates that the dysfunctional effect of role ambiguity on AC and NC can bereduced by empowering FLEs. The moderating influence of empowerment on the relationships betweenrole ambiguity and AC and NC suggest that high levels of empowerment is beneficial to the degree of ACand NC employees experience, but only when role ambiguity is low. When role ambiguity and

empowerment are perceived to be high, the moderating influence of empowerment on AC and NC couldbe dysfunctional. This suggests that it is crucial for service managers not to empower their FLEs at thecost of role clarity as this could be deleterious for the AC and NC levels that these employees experience,especially when they are not clear about the new role that empowerment bestows on them.Professional development was found to moderate the relationships that role conflict bears with ACand NC. The results of the moderated regression analyses suggest that FLEs who perceived highprofessional development activities rated their AC and NC levels to be higher than those who did not,regardless of the level of role conflict they experienced. Since professional development activities areperceived as the organisation‘s concern for its employees‘ future prospects of their advancement withinthe organisation, this perceived concern creates feelings of attachment (AC) and obligation (NC) on thepart of the employees to reciprocate the costs associated with development activities incurred by theorganization (Scholl 1981, Meyer and Allen 1991).Role conflict is, regrettably, unavoidable in front-line positions. It is, therefore, most encouragingto find that investing ‗scarce‘ resources in professional development programs for front-line staff couldprove effective in alleviating the dysfunctional influence of role conflict on their AC and NC levels,besides enhancing the skills and knowledge of front-line staff. These findings add further support toMeyer and Smith‘s (2000) findings that professional development activities are crucial for fostering ACand NC among employees.Limitations and future research directionsSince all respondents in this study are employees of a single organization operating in the UKtravel service industry, it would be beneficial for future work to test our hypotheses using longitudinaldata in different service contexts, to improve upon the generalisability of our findings. It would also beuseful to extend the study in non-western context such as India and China.

Due to certain practical limitations, we have studied only empowerment and professionaldevelopment as key moderators to the role stress-OC relationship. Further research could incorporateadditional managerial intervention variables as suggested in literature such as leadership support,feedback, participation in decision making, etc., which could help in controlling the dysfunctional effectsof role stress.Also, the effect of role stress on other outcome variables such as job satisfaction, turnoverintentions, pro-social service behaviors and organizational citizenship behaviors could be tested. In thiscontext, the effectiveness of managerial interventions in moderating these relationships would also bebeneficial to explore.REFERENCES

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TABLE 1CORRELATIONS FOR THE CONSTRUCTS USED IN THE STUDYMeans S.D. 1. 2. 3. 4. 5. 6. 7. 8.1. Affective 4.08 1.34 .88commitment2. Continuance 4.58 1.38 .04 .88commitment3. Normative 4.03 1.91 .80 .20 .79commitment4. Role ambiguity 2.63 .92 -.28 .04 -.20 .635. Role conflict 4.23 .99 -.16 .18 -.11 .56 .696. Empowerment 4.89 1.08 .36 -.05 .26 -.47 -.17 -.01 .817. Professional 3.96 1.32 .53 -.04 .49 -.27 -.20 -.03 .47 .85developmentCronbach‘s alpha on the diagonal in bold

ACNCACNCFIGURE 1ILLUSTRATIVE PLOTS OF THE INTERACTION BETWEEN EMPOWERMENT AND ROLE AMBIGUITYON AC AND NCL o wE m p o w e rm e n tL o wE m p o w e rm e n tHig hE m p o w e rm e n tHig hE m p o w e rm e n tL o w R o le a m b ig u ityHig h R o le a m b ig u ityL o w R o le a m b ig u ityHig h R o le a m b ig u ityFIGURE 2ILLUSTRATIVE PLOTS OF THE INTERACTION BETWEEN PROFESSIONAL DEVELOPMENT AND ROLECONFLICT ON AC AND NCL o wP ro f e s s io n a ld e v e lo p e m e n tL o wP ro f e s s io n a ld e v e lo p m e n tHig hP ro f e s s io n a ld e v e lo p e m e n tHig hP ro f e s s io n a ld e v e lo p m e n tL o w R o le c o n f lic tHig h R o le c o n f lic tL o w R o le c o n f lic tHig h R o le c o n f lic tLessons from Implementing CRM in an Emerging market: A case study of a mobile telephony company inSouth AfricaNathalie Chinje(E: nath@upbeat.co.za; C:+27832183300)PhD student, Graduate ResearcherWits Business School, Johannesburg, South Africa

&Prof Geoff Bick(E: geoff.bick@gsb.uct.ac.za;Ph: +27214061511 C: +27828942452)Professor of Marketing,UCT Graduate School of Business, Cape Town, South AfricaAbstractIn recent years, emerging markets have become the main ―engine of global (economic) growth‖ (Spence 2011, p.8).Whilst the rapid diffusion of its mobile telephony industry has been unprecedented (ITU 2009; Kalba, 2008) andwell documented in the literature (Kalba, 2008), the dearth of empirically based evidence on CRM implementationin emerging markets in general remains undisputed (Kumar et al., 2011).This paper sets out to provide insights into the lessons learnt from implementing a CRM programme in a leadingmobile telephony company in South Africa (SA). The case study draws on data gathered during twenty, one-on-one,semi-structured interviews with CRM strategy developers and implementers within the chosen mobile operator inSouth Africa.The findings illustrate that whilst some of the critical success factors for CRM effectiveness in South Africa may beconsistent with those in industrialized markets, the specificities of the SA market requires CRM adaptation. Thecontingency factors that can affect successful CRM implementation in South Africa include: (1) channel mix(particularly informal channel and social media), (2) operating structure, (3) training and staff recruitment practicesfocusing on service quality, (4) a governance framework and (5) government laws and industry regulations.Future research could include other geographical locations or case studies ijn other industries.Key words: CRM, Relationship marketing, emerging markets, mobile telecommunications

1. IntroductionThe meteoric rise of Africa‘s mobile cellular subscriptions has exceeded forecasts made by industry experts (ITU,2009). In September 2011, Africa became the second most connected region in the world in terms of mobilesubscriptions count, reaching more than half a billion number of mobile telephone users on the African continent(Rao, 2011). It is forecast that an additional 224 million mobile users will be added to this base over the next fiveyears (Rao, 2011). Whilst the penetration rate in the rest of the African continent remains low, averaging at 41%(Otto, 2011), in South Africa it reached the 100% penetration barrier during the third quarter of the year 2008(Cellular news, 2009). This high penetration rate in South Africa is telling of the state of its mobile telephonyindustry, which is, without doubt, saturated. Today, these South African mobile telephony companies, regardless oftheir size, have no option but to re-engineer their customer offerings to remain competitive.In this study, we investigate the CRM journey of a mobile telephony operator in South Africa by (1) examining thecommon success factors of CRM implementation, and (2) identifying those contingency factors that impact onsuccessful CRM in emerging markets, and in South Africa, specifically.The paper is organized as follows: a literature review on CRM success factors, including both an industrialized andemerging markets perspective; then follows a conceptual framework and thirdly, the research method. Subsequentsections include data analysis and results, conclusions, limitations and areas of future research as well as managerial,theoretical and societal implications.2. Literature review2.1 CRM and the emerging market contextThe available literature on CRM presents numerous definitions of what CRM is, thereby prompting Winer (2001:91)to assert that ―CRM means different things to different people‖. This plethora of definitions has created someconfusion on its true meaning (Pedron and Saccol, 2009; Jayachadran, Sharma, Kaufman and Ramon, 2008; Troy,2008; Iriana and Buttle, 2006; Meyer and Kolbe, 2005). For example, CRM has been referred to as technology(Nguyen, Sheriff and Newby, 2007; Hart, 2006), a business strategy (Schierholz et al., 2007; Buttle, 2009; Kumar

and Reinartz, 2006) and sales (Ahearne et al, 2012). Similarly, Srivastava, Shervani and Fahey (1999) define CRMas a process whilst Greenberg (2009) and Hasan (2003) link CRM to company philosophy. For the purposes of thisstudy, we have embraced this definition of CRM as being:―A core business strategy that integrates internal process and functions, and external networks, to create anddeliver value to targeted customers at a profit. It is grounded on high quality data and enabled by IT‖ (Buttle,2009, p. 15).The in-depth literature review on CRM shows that although it has been widely implemented in industrializedmarkets (Hsin Hsin, 2007; Mendoza, Marius, Perez, and Griman, 2007; Chen and Popovich, 2003; Wilson, Daniel,and McDonald, 2002), the preponderance of customer centricity in organizations has only gained momentumrecently in emerging markets. The emerging markets that have spearheaded the adoption of CRM include Asia,Scandinavia and a select number of countries in South America. Within the broad African context, empiricalresearch has been conducted on CRM in North Africa, and Egypt in particular (Ali and Brooks, 2009). Sub-SaharanAfrica is still lagging behind regarding the number and the scale of CRM initiatives that are being implemented andpublished in the academic literature.Since our study focuses on an emerging market economy, South Africa, we found it necessary to define what anemerging market is.In a recent study on emerging markets, Sheth (2011) identifies four characteristics of emerging markets consistingof: (1) Market heterogeneity: Emerging markets are fragmented markets with a significant portion being at thebottom of the pyramid with no to limited water or electricity. (2) sociopolitical governance: The governance of themarket is done by business groups, religions rather than competition; (3) Unbranded competition: There is a wideproliferation of unbranded products the barter exchange offerings are widely adopted; (4) chronic shortage ofresources: this is evidenced with power outages and limited skills available in the market; (5) inadequate

infrastructure such as poor roads, technology infrastructure or limited market transactions enablers such as creditcard facilities.Burgess and Steemkamp (2007:339) have defined emerging markets as ―countries in which PPP-adjusted GDP percapita converted to US dollar and smoothed for three year currency fluctuations is equal to or less than the highestranked country classified as ‗middle income‘ by the World Bank, currently Equatorial Guinea ($19 780).‖In a comparative evaluation of industrialized and emerging markets, Shengdong and Xue (2011) suggest thatindustrialized markets are politically stable and have a highly educated population. They also add that these marketsare highly advanced in innovation, technology, communication and entrepreneurship. On the contrary, according toHough et al. (2003) and Berndt et al., (2005), emerging markets have ―improved educational standards, improvedliteracy and working skills, relatively efficient technology systems, relative political stability, a movement towardsmarket-based economies, and rapidly expanding financial services‖ (Shengdong and Xue, 2011).In light of the above, it is necessary to understand the antecedents of successful CRM from both the industrializedand emerging market perspectives and to garner key insights in terms of similarities and differences.2.2 Antecedents of successful CRM: The industrialized and emerging market perspectivesThe antecedents of successful CRM refer to those CRM practices that must be in place to ensure that the CRM goalsof reduced customer complaints, increased sales, reduced costs and increased customer loyalty, retention andacquisition are met (Eid, 2007). These determinants are the driving forces behind CRM success and organizationalcompetitive advantage (Raman, Wittmann and Rauseo, 2006). They are attributes and variables with considerableeffect on organizational results (Buttle, 2009).

The discourse on CRM has made a tremendous contribution to the antecedents of CRM success in industrializedmarkets. A review of twenty CRM papers published between 2002 and 2012 on CRM in high income, industrializedmarkets, reveals that there are fundamental CRM practices that must be in place in an organization if it wants toachieve success. The following 9 factors are undisputedly at the top of the list and include: Shared vision, executivebuy-in, sound project management, interdepartmental cooperation, Information systems technology integration,change management and training, internal stakeholder engagement, business process re-engineering and CRMmeasures. The spider diagram below provides a visual representation of these factors identified in industrializedmarkets.Studies examining the determinants of CRM success in emerging markets have yielded mixed results.In their assessment of country effects on CRM success, Sharma and Iyer (2011) contend that the success of CRMstrategies in international markets depends on the level of a country‘s infrastructure development and its marketing

institutional development. Moreover, they assert that because of its costs and lack of tangible results, ―in countrieswhere there is both low infrastructure development and low marketing institutional development, it is suggested thatCRM strategies not be implemented at this time.‖ (Sharma and Iyer, 2007:73).Although their arguments may conceptually be sound, it is not evidence-based. Also, by suggesting that CRMshould not be implemented in these countries leads one to believe that Sharma and Iyer (2011) are tacitly advocatingthat sales or product focused strategies should be appropriate in such markets. Moreover, another limitation of thisapproach is their restriction to the marketing institutions and thus not incorporating other institutional forces such ascompetitors‘ activities which have been proven in some other studies to determine the CRM approach and success ofcompanies (Kirca, Bearden and Roth, 2011).In a study that focuses on strategies that fit emerging markets, Khanna, Palepu and Sinha (2005:64) assert that CEOsin developed, industrialized markets cannot assume that they can do business the same way in emerging markets―because the quality of the market infrastructure varies from country to country‖. Hence, adaptation to the emergingmarket context is required. However they warn against the use of composite indices such as the GrowthCompetitiveness Index ranking, Business Competitive Index ranking, Governance indicators, Corruption PerceptionIndex, Composite Country Risk points and Weight in Emerging Markets index when developing strategies inemerging markets. Instead, they propose that companies should capitalize on ―institutional voids‖ by applying theirproposed five context framework of (1) socio-cultural systems, (2) openness, (3) product markets, (4) labour marketsand (5) capital markets. It is evident from this study that the institutional context of emerging markets is critical indetermining the success or failure of business strategies.Kumar et al. (2011) studied the global diffusion of CRM technology whilst Shendong and Xue (2011) lookspecifically at CRM effectiveness in the mobile telephony sector of China. More studies on CRM in emergingmarkets have been conducted in Pakistan (Rahman and Azhar; 2008) and Saudi Arabia ( Almotari, 2010).

These studies demonstrate that implementation of CRM in emerging markets has focused on people, process andtechnology, consistent with what has been done in industrialized markets. Most of the factors identified by theabove-mentioned authors are consistent with what can be found in other markets. The contingency factors that arespecific to each of the markets they have studied have not been highlighted. Our study aims to do just that and ourmajor contribution will be on those contingency factors that can impede on or enhance the success of CRM in SouthAfrica.2.3 The South African mobile telecommunications industryThe mobile telecommunications sector of South Africa is one of the most advanced in Africa. In 2010, it contributedabout 2.8% to the SA Gross Domestic Product (GDP) (Esselaar, Gillwald, Moyo and Naidoo; 2010). According toEsselaar et al. (2010:4), ―mobile services continue to grow, with the operators reporting more than 100%SIMpenetration, though the 2007-2008 IRIA household survey suggests a penetration rate close to 65%, with at least10% of respondents indicating they have multiple SIM cards.‖ In South Africa, the Department of Communicationsreported more than 37 million users or about 95 percent of mobile phone users, had registered by June 2011(Jentzsch, 2012).The SA mobile telephony industry has five players namely Vodacom, MTN, Cell-C and 8ta (the latest entrant in themobile telephony industry) and the virtual mobile operators: Virgin Mobile and Red Bull. These virtual mobileoperators use the infrastructure provided by current mobile operators.These companies service both the post-paid and pre-paid markets. Statistics from the service providers show thatmore than 85% of these companies‘ customers are concentrated on the prepaid market. A research report publishedby RIA (2012) has found that the South African prepaid pricing structure is one of the highest in Africa. It assertsthat South African mobile operators do not compete on price. ―MTN has had the highest prices for the low-userbasket, at between ZAR 95,05 and ZAR 96,04, while Vodacom has stayed constant at ZAR 81,26. At the end of

2011, the average price of the low-user basket was ZAR 81,91, with 8ta at an average of ZAR 77,45 and Cell C atZAR 72,15.‖ (RIA, 2012:4)Mobile operators in South Africa operate in a fast paced and challenging industry characterized by networkconnectivity issues, highly competitive markets (due to mobile number portability which allows cellphone users tochange service providers whilst keeping their phone number has increased churn rate), price sensitive customers inthe pre-paid market, ongoing regulatory pressures and an increasingly informed and savvy customer.The ICT industry in South Africa is regulated by the Independent Communications Authority of South Africa(ICASA). ICASA monitors licensee compliance and develop industry regulations. It also protects consumers.ICASA‘s full mandate is embodied in the Electronic Communications Act.

3. Conceptual frameworkThis section reviews previous research conducted by leading scholars on the institutional and cultural contexttheories. Moreover, the effects of these theories are deeply analysed to ascertain the importance of their contributionin relation to the topic being researched.In the extant literature, a research stream focusing on institutional theory and led by such scholars as Dimaggio andPowell (1983), Scott (2001), Tolbert and Zucker (1996) have sought to explain organizational performance inspecific markets using the institutional theory, a branch of organizational theory ( Mahalingan and Levitt, 2007).Despite the many diverse definitions of institutional theories by scholars, it has mainly been viewed as a theoreticallens that is used to study the adoption and diffusion of organizational forms and practices (Bjorkman et al., 2006). Itis based on the principle that organizations are under social influence and pressure to adopt practices such as CRM –which are viewed as being appropriate for the situation (Scott, 2001). Kirca, Bearden and Roth (2011) assert that theinstitutional theory has gained support from the broader marketing community, particularly with regard to justifyinghow foreign firms behave in host countries. Hillebrand, Nijholt, and Nijssen (2010) concur when they suggest thatinstitutional processes can be important in explaining the adoption of CRM practices.Hall and Hall (2001) suggest that cultures can affect the way in which a company interacts with its communities.They compare cultures on a scale of high to low context. A high context communication or message rests on theimplicit codes whilst a low context communication achieves the opposite. This can be better explained by taking theexamples of Asian cultures where information is readily shared amongst members of the community. Suchcommunities are collectivists as they abide by the principle of ―sharing‖ or ―ubuntu‖ as referred to as in SouthAfrica.According to Arnould and Thompson (2005:870), Consumer Culture Theory (CCT) is ‗organised around a coreset of theoretical questions related to the relationships among consumers‘personal and collective entities: thecultures; underlying experiences, processes and structures; and the nature and dynamics of the sociologicalcategories through and across which these consumer culture dynamics are enacted and inflected.

We have used the above theoretical lenses to analyse the data we collected.4. Research Method4.1 Rationale behind the selection of the research methodThe research method followed was a case study. This qualitative method was selected on the basis of its (1)Relevance: The phenomenon can be studied in its natural setting and meaningful relevant theory can be generatedfrom the understanding gained through observing actual practice, (2) Understanding: The case method hasconsiderable ability to generate answers to the question ―why‖ rather than just ―what‖ and how, (3) Exploratorydepth: This method lends itself to early, exploratory investigations where the variables are unknown and thephenomenon not well understood (Meredith, 1998).Woodside (2010) concludes that the main feature of Case Study Research is the acquired data results in theunderstanding of the individual case that may include a person, a company, an industry and so forth.By using an inductive method, we were able to ―understand the multiple relationships among dimensions thatemerge from the data without making prior assumptions or specifying hypotheses about the linear or correlativerelationships amongst narrowly defined operationalised variables‖ (Patton, 2002:56)Although well praised amongst qualitative research proponents, case study research has received a lot of criticismson its lack of rigour. The concept of validity, reliability and generalisability in qualitative research has beenquestioned (Tobin and Begley, 2003)To address these accusations in our research, we collected data from both primary and secondary sources and thentriangulated them. Voss et al. (2002) suggest that triangulation through the use of various data collection methodscan strengthen the validity of data. Theory triangulation was also achieved by using multiple theories to interpret thedata. The generalisability of qualitative research findings is a weakness of this research method. However, byfocusing on the depth of what was being investigated, we were able to generate lots of insights and extensive data.

This approach is fully supported by Hyde (2002:84) who affirms that ―even a single case, if studied in sufficientdepth and with sufficient insight may provide the basis for a theoretical of a general phenomenon‖.4.2 Sample definition and descriptionA subset of a population comprising 20 CRM strategists and implementers in a mobile telephony company in SouthAfrica was interviewed. This is further illustrated in Table 4.1. Data were collected over a period of 8 weeks throughface-to-face and telephonic interviews. The researcher point of contact in the company was the Head of CRM whoassisted in providing an initial draft of potential research respondents. Purposeful sampling was considered in thisstudy.4.3 Data collectionThe main method used for primary data collection was a semi-structured discussion guide, which was piloted priorto the data collection process. Field notes were taken during the interview. Moreover, the data was digitally recordedand transcribed. It was then content analysed using a qualitative software analysis package called SATO. SATO wasdeveloped by Francois Daoust from the University of Quebec a Montreal (UQAM). One of the researchers met withFrancois to familiarize herself with the tool and to obtain an expert opinion on the outputs generated from SATO.The results of this research are the preliminary outputs of SATO.

Furthermore, secondary data were obtained from internal project documents, company annual reports, press releases,website and trade journals. These secondary data helped in the triangulation process to validate the research findings.5. Analysis and ResultsResearch respondents were asked to share their experience of CRM implementation in their company. As part of thediscussion, the following questions were asked? What does CRM mean in your organization? Why did you implement CRM? How did you go about implementing CRM? How do you rate your CRM implementation programme? And why? What critical factors (organisational, institutional, etc) impeded on or enhanced your CRM success/failure? How did you handle the challenges you were faced with? Any key lessons learnt?The answers provided by the research respondents gave us a long of list of success factors that were grouped intotwo themes consisting of: (1) organizational and (2) institutional factors. The themes are by no means exhaustive butthey are closely related to the CSF of CRM implementation.During the research, it was found that the organisational factors that are critical to the success of a CRM programmeare those included in the table below.

The table below presents the verbatim data of the interviews in relation to each theme that was identified. It alsoincorporates additional research findings relevant to the identified theme.

The second broad theme that was identified was Institutional factors. Institutional forces such as government laws,industry regulations, competition, socio-cultural and political affect the success of CRM in a way or another.

given by respondents are given in the following table:Actual quotations

Contrasting the research findings against the CRM literature The CRM literature pays particular attention to the organizational factors linked with CRM success, with theexception of recently published work by Hillebrand, Nijholt and Nijssen, (2011) that looks at institutionalfactors only. Our study focuses on both the organizational and institutional factors. The resource-based view appears to be the dominant theory used for studies on CRM. This can beunderstood as most of the CRM researches have focused on organizational factors. Moreover, the dearth ofCRM research in emerging markets may explain why researchers have not focused on the context andculture. Our study has focused on the institutional theory as the overarching theory whilst still incorporatingother theories such as CCT. With regards to organizational factors, most factors identified in the research in South Africa were consistentwith what we found in the literature. However, the applicability of some of these factors were different inthe South African context. The table below provides a summary of factors that were consistent andinconsistent with other industrialized markets.

With regards toinstitutional factors, most factors identified in the research in South Africa were inconsistent with what we found in

the literature. The table below provides a summary of institutional factors that were consistent and inconsistent withother industrialized markets.6. Conclusion, implication, limitations and directions for future researchThis study has demonstrated the critical success factors of CRM implementation in a mobile telephony companybased in South Africa. The contingency factors that have been identified include: (1) channel mix (particularlyinformal channel and social media), (2) Operating structure, (3) training and staff recruitment practices focusing onservice quality, (4) a governance framework and (5) government laws and industry regulations. Consequently,companies must adapt their offerings to the local market bearing in mind these key factors.The above-mentioned contingency factors could be useful to managers who want to enhance the success of theirCRM programme.Areas for further research could include other countries in Africa or other industries such as the Financial services orthe Retail industry. A longitudinal study to measure the success of a CRM implementation over time could also beundertaken.

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International Brands, Business Relationships and Marketing Innovation in Emerging EconomiesSuraksha Gupta PhD, Lecturer (Marketing), Brunel Business School, London, UKAbstractThis work in progress conceptualizes a model of innovation in marketing by virtue of competitiveness. The extantliterature on competitiveness advocates the fit between business partners in association based on mutual valuecreation. This paper adopts a resource-based view to support this approach. It contributes to knowledge by reflectingon the benefits gained by both partners, from mutual use of their individual resources for delivering superior value toconsumers. The study draws on literature and personal in-depth interviews with managers of international and localfirms to develop a framework. The field research for practitioner insights suggests that competitiveness forinnovation in marketing for partners is driven by associations developed considering resource based view.Key words: International firms, Local firms, Competitiveness, Innovation in marketing, Business relationships1.0 IntroductionThe resource based view (RBV) of Wernerfelt (1984) suggests that competitiveness can be achieved by deliveringsuperior value to customers. Literature focuses on the strategic identification and use of resources by a firm fordeveloping a sustained competitive advantage (Barney, 1991). International business theorists also explain thesuccess and failures of firms across boundaries by considering the competitiveness of their subsidiaries in emergingmarkets through local alliances (Luo, 2003). Local knowledge becomes a sustainable competitive resource and isconsidered to be useful for firms competing in global markets (Peng, 2001). This school of thought and itsrelationship to international business presents a pragmatic observation of resource based view oriented towardsmarketing (Srivastava et al., 2001; Peng 2001).

In order to understand individual competitiveness developed by sharing of individual resources of partners inassociation, this study integrates theories from international business (Dunning, 1993), international marketing(Douglas and Craig, 2006) and strategic marketing (Holm and Sharma, 2006). A model to test the dependence ofcompetitiveness variable on innovation in marketing based on mutual use of individual resources by partner firms inassociation is presented.2.0 Theoretical BackgroundSome of the routes for strategic entry of firms into international markets are exporting, licensing, franchising, jointventures or acquisitions (Dacin et al., 2007). The entry of a firm in foreign markets is directly linked to suchinitiatives (Shrader, 2001). Research suggests the strategic management of dynamic markets should take an approachbased on the marketing mix and customer value proposition (Srivastava et al., 2001; Miles and Darroch, 2006).Success is related to optimum utilization of resources available to a firm for competitively fulfilling needs of itscustomers (Frank and D‘Souza, 2004). The dominant assumption of success of both international and local firms isunderstood from resource based view (Das and Teng, 2000). Academic literature on innovation by competitivenesshas not paid attention to combining resources of two types of firms being studied. The objective of this research is toempirically examine and analyse the variables that influence competitiveness by interdependence of resources.Various types of resources are generated in an organization as a by-product of the customer value creation process(Ulaga and Chacour, 2001; Gronroos, 2004). Capability to use relationships as a source of knowledge forunderstanding customers and creating value is a tool for developing competitiveness (Srivastava et al., 2001).Strength to market combined with competitive products from international firms becomes the foundation for itsalliances and relationships with small and medium sized local firms (Luo, 2000). As observed by Peng (2001)competitiveness of a firm depends on its resourcefulness and relationships in the local market. Peng and Heath(1996) identified business exchanges and interdependence of firms for resources as basis of competitiveness.Role of Business RelationshipsBusiness nature of relationship fulfills the inadequacy of international firms to operate in competitive markets, andsupports shortfall of resources for local firms to compete (Madhok, 2006). Guanxi in Chinese context, Kankei inJapanese context and Inmak in Korean context are some examples that explain the role of relationships andcriticality of their benefits to firms seeking success in markets away from their domestic territory (Hitt et al., 2002).Authors such as Narayandas and Rangan (2004) and Hitt et al., (2002) suggest that both international and local firmsget the benefit of associating in the market space based on mutual sharing of individual resources. Both firms aspartners in relationship mutually leverage on the individual strengths of the other partner (Ireland et al., 2002).Resourcefulness to provide knowledge and relationships of local firms benefit international firms and local firmsbenefit from competitiveness of offerings with marketing strength offered by international firms (Freeman and Reid,2006).The objective of a firm is to create wealth for its stakeholders (Certo et al., 2001). Competitiveness in the products orservices offered by a firm to its customers also depends on the way in which they are offered (Srivastava et al.,1998). Local firms benefit from competitive offerings made by international firms and international firms expandbased on the resources and relationships offered by local firms as agents (Dacin et al., 1997). Individual strengths ofpartners are mutually beneficial to the association as it allows them to innovatively fulfill and deliver value to theirset of customers (Dewett and Jones, 2001).Mutually Beneficial RelationshipsAssociating with international firms cultivates a notion of being competitive for local firms (Lee et al., 2001;Burgees and Steenkamp, 2006) and market information provided by local firm allows international firms tosuccessfully compete (Dunning, 1988). The opportunity recognition ability of local firms with efficient after-salesservices and strong marketing support was studied by Anderson (1982). Research conducted by Heberer (2003) wasfocused on the strategic role played by small local firms in China and Vietnam in transforming the social andpolitical environment. International firms based on their financial and technological strengths provide an opportunityto local firms to generate wealth by competitively positioning them in local markets.

The exchanges between international and local small firms provide new avenues of growth (Weitz and Jap, 1995;Park et al., 2004). Local firms are a source of wealth for stakeholders (Certo et al., 2001), a source of employmentfor local regulating bodies (Amin, 1999) and source of local resource for international organizations (Kumar andLiu, 2005). The contributions made by both the partners in business relationships allow innovativeness in marketing(Dacin et al., 1997; Stuart 2000; Lee et al., 2001). Relationship between competitive advantage and resource basedview of the firm has been explicitly and implicitly proposed (Srivastava et al., 2001) but the perspective of abusiness relationship has been overlooked.Innovation in marketingBusiness relationships are useful for addressing demanding stakeholders in increasingly competitive markets (Weitzand Jap, 1995). Local firms can be innovative in their approach to competitively deliver value to customers becauseof their knowledge of local culture (Frey, 1969). Forming alliances with international firms enable local firms tooffer quality products or services with strong marketing and after sales support that becomes a competitiveadvantage for them amongst the local competitors (Hitt et al., 2002). Complexities and uncertainties of operating innew markets can negatively influence the performance of an international firm (Hitt et al., 1997).Marketing strategies of an international firm should be developed based on the understanding of the insights aboutthe factors that make its customers dissatisfied (Ram and Sheth, 1989). Small local firms play a critical role inenabling international firms to understand its customers (Fillis, 2004). The small local firms act as a source ofinnovation for marketing initiatives of international firms by giving them deep insights into the local marketconditions and specific cultural requirements of the market (Cox, 2007).Role of NetworksRole of quasi firms as a source of efficiency management based on exchanges between firms has been explained inliterature based on the general theory of networks (Larson, 1992). Dyer and Singh (1998) identified four areas ofinter-organizational competitive advantage, namely relation specific assets, knowledge sharing routines,complementary resources and capabilities and effective control. Yli-Renko et al. (2002) proposed a structurallytested model that reflected on the usefulness of inter and intra organizational relationship as internal and externalsocial capital in acquiring and creation of knowledge as a key resource for competitiveness. Hite and Hesterly(2001), ―The evolution of firm networks: from emergence to early growth of the firm‖, Strategic ManagementJournal3.0 Competitiveness by innovativenessMarketing innovativeness of a firm and its differentiation strategy to address requirements of its customers isreflected in its openness to new approaches (Akan et al., 2006; Calantone et al., 2006). Innovativeness in marketingis understood as application of new ideas, concepts and theories (Kohli, 2009). Innovation in marketing is deeplyassociated with use of market information and a critical understanding of the likes and dislikes of customers(Nambisan, 2002). It involves formulating strategies to address the needs of the customers delivered with extra valueadded in a way that leaves the customer in a satisfied state of mind (Olson et al., 2005). This conceptualizationprovides a valuable integration of international business and strategic marketing theories based on the resourcebasedview of business relationships. The shared resources may act as a moderating variable for the innovativenessin marketing and competitiveness of the firms in association. The constructs identified are used to develop a modelthat will be relevant to two types of firms acting as unit of analysis for this study. The model depicts the role ofinternational firm in providing competitive products, services and marketing support to those small local firms whocan provide local relationships, resources and sales opportunities to international firms but lack the financial strengthto manufacture and market products (Figure 1). This study aims to operationalise the constructs identified andevaluate the relevancy of the theory by establishing a structural model. The model reflects on the mutualcontributions of both local and international firms, in the form of factors that influences their individualcompetitiveness.

Research DesignResource based view is a new conceptualization of the literature previously amalgamated by many researchers(Conner, 1991; Barney, 2001; Yang et al., 2008). A measurement instrument can validate the scale developed to testthe model proposed by this research (Churchill, 1979). The instrument will be based on the review of literature andqualitative insights received from the data collected from the field (Nanually, 1967). The sample of internationalcompanies and local companies involved in the business of selling products or services offered by internationalcompanies will be selected for purpose of data collection. Access to the sample will be supported by the database ofinternational firms from a marketing agency offering its services to international firms and associations of localfirms.Research Data and MethodologyThe objective of our empirical research will be to look at the variables that strengthen the relationship betweeninternational and local firms from a resource-based view. The data for analysis involves two set of respondents i.e.international firms and local firms. Respondents will be the senior managers of international firms who are offeringproducts and services to local firms and local firms who are offering products and services of international firms totheir local markets. The data will be procured from marketing companies operating in India. For this research, weincommon look at how these two types of firms benefit from the resources owned by the other firm.As a part of analysis, we will be reviewing the individual contributions made by firms, to explain how they mutuallyallow the partner firms to exploit their resources for addressing competitive markets with innovating marketingpractices. In order to reflect on the quality of local relationships and resources provided by local firms tointernational firms we also measure the role of networks in the association as an indicator of internal capabilities ofthe firm. Based on review of literature and data available, authors have conceptualized specific constructs.This research aims to econometrically test the model presented in this paper by performing confirmatory factoranalysis and path analysis using structural equation modeling. Our structural model will look at the relationshipsidentified to understand the benefits of relationships between international and local firms in business networks. Therelationships will be evaluated through covariance structure analysis using LISREL (Anderson and Gerbing, 1988).A null model that will allow a better understanding of the structural model that will be estimated by considering therelationships between observable constructs to be zero. The structural paths will be estimated to find a saturatedmodel.SummaryIntegration of marketing and resource-based theory identifies the ability of a firm to utilize its knowledge andrelationships apart from products and services as valuable resources that can drive its competitiveness in themarketplace (Cooner, 1991; Barney, 2001; Fahy, 2002). Despite a plethora of research on this integration, thisstream of knowledge requires an established framework. This is a work in progress paper that has outlined a broadconcept into a framework which requires further investigation that can refine and establish the relationships betweenconstructs identified.ReferencesAkan O., Allen R.S., Helms M.M. and Spralls S.A. (2006), ―Critical tactics for implementing Porter‘s genericstrategies‖, Journal of Business Strategy, 27(1): 43-53.Amin A. (1999), ―An institutionalist perspective on regional economic development‖, International Journal ofUrban and Regional Research, 23(2): 365-378.Anderson J.C. and Gerbing D.W. (1988), ―Structure equation modeling in practice: A review and recommendedtwo-step approach‖, Psychological Bulletin, 103(3): 411-423.

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Yang Q., Mudambi R. and Meyer K.E. (2008), ―Conventional and reverse knowledge flows in multinationalcorporations‖, Journal of Management, 34(5): 882-902.19Yli-Renko H., Autio E. and Tontti V. (2002), ―Social capital, knowledge, and the international growth oftechnology-based new firms‖, International Business Review, 11(3): 279-304.liENVIRONMENTAL CONSCIOUSNESS, ITS ANTECEDENTS AND BEHAVIOURAL OUTCOMESAUTHORS1. DR. KAVITA SHARMAAssociate Professor

Department of CommerceDelhi School of EconomicsUniversity of DelhiDelhiIndiaPh. # 09868214616Email: ksharma.dse@gmail.com2. MS. MONIKA BANSALAssistant ProfessorShri Ram College of CommerceUniversity of DelhiDelhiIndiaPh#09953708387Email: bansal_monika23@yahoo.co.in

INTRODUCTIONPeople in various parts of the world are becoming more and more concerned about the hazardous impacts ofenvironmental degradation (Dagnoli, 1991; Levin, 1991; Li, 1997; Martin and Simintiras, 1995; Rice, Wongtada andLeelakulthanit, 1996) observed in terms of global warming, depletion of stratospheric ozone layer, acid rain anddesertification etc. (Ramlogan, 1997). At the beginning of the twenty-first century, these social and environmentalconsequences of the unquestioning pursuit of economic growth have become increasingly clear (Peattie and Charter,2006) and as the environment continues to worsen, it has become a persistent public concern both in developed anddeveloping economies.In the present scenario, the heightened environmental concerns and resulting response to them are not simplyconfined to the environmental policies and government initiatives, businesses too have joined the bandwagon termedas green movement, and are becoming more committed to environmental issues in their business decisions. But,profit driven firms are usually motivated to adopt the concept of green marketing in their businesses, providedconsumers demonstrate a high degree of environmental attitude and hence translate this into environmental friendlypurchasing commitment. Their increased concern for the environment and the resultant demand for green productscan act as a pressure point on business firms to turn green and start marketing green products.Moreover, consumers themselves are also the contributors to environmental degradation and pollution. According tosome studies consumption activities of private households contribute thirty to forty per cent of current environmentaldegradation (Grunert, 1993). Therefore, any environmentally responsible behavior on their part can go a long way inmitigating the problem of depletion of natural resources and bringing down pollution levels that have reachedalarming heights.Thus, it is imperative for a business firm to successfully identify and target such segments of consumers, generallyreferred as ‗green consumer segments‘, who exhibit some kind of pro-environment behavior in their use andconsumption related activities. Researchers are particularly interested in investigating important antecedentsdetermining the green purchasing behavior, so that those industries which have yet to develop or market eco-friendlyproduct options could determine their market feasibility and identify profitable segments.

It is in the backdrop of this stated role and responsibility of consumers in restricting environment degradation andthe need to clearly identify ‗green segments‘ that the present paper is an attempt to understand the term‗environmental consciousness‘ and its linkages with environmentally conscious consumer behaviour. The extantliterature review on environmental consciousness has thus led to pursuit of following objectives:1) To investigate the term ―Environmental Consciousness‖ and identifying the underlying components ofEnvironmental Consciousness.2) To identify the antecedents of Environmental Consciousness.3) To propose aframework explaining the linkage between Environmental Consciousness, it‘s antecedents, components, andbehavioral outcome.4) To identify the variables, if any, that may intervene Environmental Consciousness andEnvironmentally Conscious Consumer Behavior.ENVIRONMENTAL CONSCIOUSNESS OF CONSUMERSEnvironmental concern among consumers has attained substantial momentum and is continuing to alter consumers'basic habits (Stisser, 1994). With this, consumers have become major force to reckon with for attaining theobjectives of environmental protection and sustainable development. Researchers have been attracted to seek abetter understanding of various factors that determine the performance of environmentally responsibleWide range of studies has focused on ‗environmental consciousness‘ and pro-environmental behavior. Though, theterm came out of political and everyday language (Hofrichter 1992),nonetheless it is one of the central constructs inthe literature used to explain pro environmental consumer behavior (Schuster, 1992). Further, a deeper insight intothe dimensions of environmental consciousness could extend a great support in measuring it and understandingenvironmentally conscious consumer behavior.Environmental consciousness, as a form of social orientation,is more relevant in the context of businessorganizations, and it translates the degree to which an organization produced a product which is advantageous to thenatural environment while minimizing negative impacts on the environment (Kang and James, 2007).As an element of the individual belief system, environmental consciousness refers to specific psychological factorsrelated to individuals‘ propensity to engage in pro-environmental behaviors (Zelezny and Schultz, 2000). It‘s acomplex system of values and attitudes, and is also a part of the social consciousness (Monhemius, 1992; Wimmer,1992).

More importantly, environmental consciousness is proposed as a multidimensional concept, consisting of cognitive,attitudinal, and behavioral components (Schlegelmilch, Bohlen and Diamantopoulos, 1996). The cognitive levelcomponent relates to the possession of subjective knowledge by the consumer about the environmentalconsequences of his actions (Dembkowski and Lloyd, 1994). Environmental knowledge defined as ―a generalknowledge of facts, concepts and relationships concerning the natural environment and its major ecosystem‖(Fryxell and Li, 2003),measures individuals‘ level of information about environmental problems (Sanchez andLafuente,2010); and is a key factor activating both the personal norms that guide behavior and the process tointernalize pro-environmental values and beliefs.Environmental knowledge could abstract or concrete environmental knowledge, (Schahu and Holzer, 1990).Abstract knowledge refers to knowledge concerning environmental issues: problems, causes, solutions, and so on,wherein concrete knowledge relates to behavioral knowledge that could be utilized and acted upon. Abstractknowledge is the most significant type for predicting environmental action (Hines et al., (1986/87The affective component of environmental consciousness reflects an individual‘s concern for the environment, i.e.,perceived environmental degradation (Sanchez and Lafuente, 2010), and is of great importance in predictingenvironmentally conscious consumer behavior which may range from recycling behavior to a green buying behavior.It indicates consumer‘s general orientation towards the environment. Crosby, Gill, and Taylor (1981) presented amore tentative definition that considers environmental concern as a strong positive attitude toward preserving theenvironment. Based on the work of Van and Dunlap (1981) later they defined environmental concern as a general orglobal attitude with indirect effects on behaviors through behavioral intentions. Zimmer, Stafford, and Stafford(1994) described environmental concern as ‗a general concept that can refer to feelings about many different greenissues‘.Environmental concern has also been treated as an evaluation of, or an attitude towards facts, one's own behavior, orothers' behavior with consequences for the environment (Weigel, 1983; Takala, 1991). In a study centered onenvironmental concern, Stern (1992) identified four different environmental values or orientations. First dimensionwas represented in terms of new way of thinking called the New Environmental Paradigm (Dunlap and Van, 1978).The second value orientation associates environmental concern with anthropocentric altruism, i.e.,people care

about environmental quality mainly because they held the belief that a degraded environment poses a threat topeople's health. Third value orientation expresses environmental concern in terms of self-interest. Finally,environmental concern is considered as a function of some deeper cause, such as underlying religious beliefs or postmaterialisticvalues.Besides holding the environmental concern McIntosh (2009) emphasized upon stewardship also and considers themas a part of individually held value termed as Consumer Environmentalism,The value ―consumerenvironmentalism‖ was proposed as cumulative total of three sub factors i.e. Personal environmentalism, SocialEnvironmentalism and Environmental Advocacy, which in turn, drives consumers‘ attitudes towardsenvironmentally friendly products. The domain of personal environmentalism captures the likelihood that anindividual will make environmentally conscious decisions when the outcome of that decision has a direct impact ontheir immediate environs or physical person. It includes decisions oriented toward personal choice, like where toshop and how much to pay for eco-friendly products. Social Environmentalism intend to capture the strength of aconsumer‘s beliefs about society‘s role in considering and protecting the environment through environmentallyconscious behavior. It basically reflects how strongly an individual feels about society‘s role in makingenvironmentally conscious consumption decisions. Environmental Advocacy relates to the likelihood that anindividual will make an effort to influence others‘ behavior. It encompasses the items related to typical advocacybehaviors, such as encouraging others to change their behavior, boycotting, donating money and lobbying. Itconstrues how actively an individual consumer is willing to engage in behavior to encourage others to act in proenvironmentalways. It appears that environmental advocacy can actually be construed as the behavioral componentof environmental consciousness.General attitude which precedes more specific attitudes, intentions, and behaviors is also indicated as importantaspect of understanding environmental consciousness. Previous researches have indicated that various environmentfriendly behaviors have their own predictors. General environmental attitude may be expressed as an individual‘slevel of concern or interest regarding aspects of environmental, ecological or energy-saving phenomenon (Shrum etal., 1995). It basically reflects an individual‘s ecological worldview encompassing humans‘ relationship with nature,which has been found to be an antecedent to pro-environmental behavior (Stern, 2000).

However, a number of studies have indicated the existence of either a moderate or a weak relationship betweenenvironmental attitudes and ecological behavior (Axelrod and Lehman, 1993; Mostafa, 2007), and the analysis ofattitudinal components alone may not accurately predict actual behavior (Foxall, 1984; Tarrant and Cordell, 1997;Antonides and Van Raaij, 1998).Hence, affective component was found to also comprise of anxieties, expectations and emotive responses of anindividual. Since, it is the emotional 'judgment‘ of the individual about the consequences of his actions to thebiophysical environment (Bruhn, 1978), environmentally conscious behavior is not necessarily the consequence ofonly rational insight into the appropriate action (Urban, 1986).Consumer belief that the efforts of an individual acting alone can make a difference, conceptualized as ‗PerceivedConsumer Effectiveness or PCE‘, is another factor determining an individual‘s willingness to engage inenvironmentally conscious consumption behaviour (Kinnear, Taylor, and Sadrudin,1974). PCE, defined as ‗theevaluation of the self in the context of the issue‘ (Berger and Corbin 1992), is distinct from environmental concernsor attitudes. Since, consumer‘s concern about the environmental issues might not easily translate into proenvironmentalbehaviors; it is supposed that, individuals with a strong belief that their environmentally consciousbehavior will result in a positive outcome are more likely to engage themselves in such behaviors in support of theirconcerns for the environment. Both, perceived consumer effectiveness and environmental concerns have foundsignificant and positive effects on environmental behavior, attitude and interest (Antil, 1978; Webster, 1975; Weinerand Doescher, 1991;Straughan, Roberts, 1999;Lepisto, 1974;Van and Dunlap, 1981; Samdahl and Robert,1989;Rowlandset al., 2003;Ay and Ecevit, 2005).Some of the researchers have emphasized on including pro-environmental behavior also as an indicator ofenvironmental consciousness in terms of both the ―incidence‖ and ―frequency‖ of engaging in the environmentalfriendly behavior. But, this paper holds the view that environmental consciousness is the mental state variable andconsumer‘s pro-environmental behavior is linked to environmental consciousness as its outcome. It is expected thatenvironmental consciousness of individuals may vary from a basic level, which may be reflected as a generalconcern towards the environment to a more specific one thus resulting into more product specific behavior. It is,however, not certain that an individual‘s environmental consciousness will directly lead to behavior change, as there

may be some intervening variables that may serve as deterrent in projection of environmentally conscious consumerbehavior. For example, an individual may have an attitude that recycling is good, but unless one considers thatenvironmental issues are important or personally relevant, they are less likely to seek the information that will berequired in order to engage in recycling. Thus, the instances of certain variables which intervenes the impact ofenvironmental consciousness on required pro-environment behaviors are discussed next along with other relatedvariables.ENVIRONMENTAL CONSCIOUSNESS AND RELTED VARIABLESINTERVENING VARIABLESThough a direct relationship between environmental consciousness and pro-environmental behavior is possible, butthis is an oversimplification of a relationship. Stanley and Lasonde, 1993 studied the effect of environmental issueinvolvement on both overall and specific types of environmentally-conscious behavior, including consumerbehavior, and found that those highly involved with environmental issues are found to evaluate the true merits of anyparticular behavior, and engage in different set of environmental behaviors including purchase, consumption, anddisposal than those who are less involved in environmental issues. So, they engage in those behaviors that requiresome sort of specialized knowledge or where barriers to action are information based.In their study to examine the determinants of consumer‘s pro-environmental behavior H‘Mida, Chavez and Guindon(2008) proposed a model (fig.1) to establish the link between environmental consciousness, ecological buyingbehavior, and willingness to pay a higher price for a green product. It was suggested that if a consumer isenvironmentally conscious, he or she could be more willing to pay a higher price for the green product. On thecontrary, even if one is environmentally conscious, but for the lack of willingness to pay a higher price, it may notresult into expected

pro-environmental behaviour.ANTECEDENTSAs a matter of general belief women are expected to be more environmentally conscious consumer than men, as theydisplayed a greater willingness to seek eco-friendly products along with a great faith in the effectiveness ofenvironmental actions (Jain and Kaur 2006; Roberts, 1996; Roper, 1990; Roper, 1992; Stern et al., 1993; Van andDunlap, 1981; Laroche, et al.,2001; Smith, 2001). However, Brody et al.(2004) findings in this regard illustratedthat gender, as opposed to other demographic variables, is a bad predictor of environmental concern. Also,Diamantopoulus et al., (2003), Samdahland Robert (1989) did not find any significant gender based differences inthe context of environmental awareness and knowledge. Consumer age was found to be not much significant inexplaining environmental awareness and knowledge. Diamantopoulos et al.,(2003) point to a negative correlationbetween age and scores on environmental knowledge. The correlation between age and environmental attitude scalewas found to be significant. Interestingly, the research conducted in the context of behavioral domain, reflects thatolder people tend to undertake higher levels of recycling activities, but there is only a partial evidence of the varyinglevels of environmentally responsible behavior as reflected by young and old individuals.Specifically, people with higher income were found to be equipped with greater knowledge of the environmentalregulations, but several studies did not find any direct effect of income on environmental behavior (Anderson et al.,

1974; Antil, 1978; Van and Dunlap, 1981). Income served as poor predictor of environmental attitudes also. Apositive correlation existed in the case of willingness to pay more for environmentally friendly products (Jain andKaur,2006). Additionally, income was noticed to have a reverse relationship with FCB (frequency of conservationbehavior), thus indicating that individuals with higher income engage less frequently in FCB.In regard to education, the better-educated scored higher on all components of the environmental domain, probablyreflecting the fact that ‗‗the very nature of ecology with its complex interactions between organisms andenvironment serves to make its subject matter difficult to understand and assimilate‘‘ (Maloney et al., 1975). Thehigher-educated consumers understand the issues involved to a greater extent and, hence, are more concerned aboutenvironmental quality and more motivated to participate in environmentally responsible behaviors.Apart from demographics and psychological variables the inherent determinants of the environmental consciousness,H‘Mida, Chavez, and Guindon (2008) suggested the role of external factors such as media, family and culture inaffecting the level of environmental consciousness. Triandis (1982) explained that culture, which dictates the roleof humans in the natural balance of ecosystems, can be a much more significant determinant of environmentalconsciousness than demographics variables like age. In situations where economic growth and environmentalexploitation are proven to be important, cultural groups see themselves as superior to, or subordinate to or inaccordance with nature. Researchers report of the connection between lifestyle and green commitment, wherelifestyle was measured by consumption styles and green commitment by certain environment-related consumptionchoices. The results suggest that different lifestyles explain green commitment better than traditional socio-economicbackground variables (Haanpaa, 2007). However, lifestyle based analysis of environmental conscious consumers is awidely unexplored area of investigation.Media is crucial to deliver the right information to consumers and strengthen individual and collective environmentalconsciousness (Rios et al.,2006). It not only helps in developing environmental awareness and concern, but in doing so,it also allows consumers to act in accordance to their heightened sense of concern for the environment. It thereforeplays a significant role in building a direct relationship between environmental consciousness and ecological buyingbehavior.

Role of family is particularly relevant, as it signifies the acute influence of family in the development ofenvironmental awareness and consequent responsible environmental behavior (Gronhoj,2006). Membership to aparticular social class influences the extent of environmental knowledge, and according to whether consumers arewhite or blue collar workers, former perceive them to be more informed about green issues (Diamantopoulos et al.,2003).There is a relation between political views and environmental consciousness. It has been found that individuals whoare liberal behave in more environmentally conscious than others (Hine and Gifford, 1991; Roberts, 1996)BEHAVIORAL OUTCOMESProgress towards solving environmental problems is likely to depend on ecologically conscious consumer behaviormore so than the simple environmental concern. From marketing perspective, the central issue is to understand theimpact of environmental consciousness on environmentally conscious consumer behavior. There are in fact differentaspects to understanding of environmentally conscious consumer behaviour.First, an individual may display and engage in number of environmental behaviours. Some individuals choose toengage in as many environmental behaviors as they have the opportunity to; others may choose to perform noenvironmental behaviors. Engagement in environmental behaviors may require some investment that may beobserved initially in terms of time, money and/or physical and mental effort. For example, buying "green" productsmay cost more; recycling takes time; and in general, most environmental behaviors are at least perceived to be moreexpensive. Therefore, even individuals those who appear to have positive attitudes toward the environment orenvironmental behaviors may not always engage in specific environmental behaviors since they may be choosing aportfolio of behaviors based on perceived benefits and costs (Stanley and Lasonde, 1996).Thus, it is required to study and look into a broad range of environmental behaviors to facilitate furtherunderstanding into these behaviors. If individuals choose from a portfolio of environmental behaviors, then differenttypes of environmental behaviors will show different relationships to variables that are likely to impact individuals'ability and motivation to evaluate the costs and benefits and actually perform the behavior.Secondly, to control environmental degradation, individuals may undertake non-purchasing behavior includingrecycling and political activities (Bohlen et al.1993). While recycling activities are generally carried out by large

population, only the environmentally sensitive extremes of the population feel so strong to undertake politicalactions.Thirdly, purchasing behavior domain is comprised of both general and product specific purchase behavior. Thegeneral purchasing behavior can be studied using the statements such as: 1) Choose the environment friendlyalternative if one of a similar price is available 2) Choose the environment friendly alternatives irrespective of priceand, 3) Try to discover the environmental effects of products before purchase. Product specific behavior is related tocertain environment friendly products commonly available to consumers. The products chosen as indicators ofpurchasing behavior domain include: environmentally friendly detergents, products not tested on animals, recycledpaper products, and organically grown fruit and vegetables.Fourthly, Pickett et al., (1993), Granzin and Olsen (1991), and Balderjahn (1988),emphasized that peopleperforming a specific ecologically conscious consumer behavior, such as energy curtailment are most likely to bedifferent. The results of the study reflected that each behavior pattern has its own cluster of predictors, and that nogeneralizable set of predictors could serve to integrate behavioural dimensions.In some of the studies the relationship between environmental knowledge, environmental attitudes, andenvironmental behaviors has been established with specific pro-environmental behavior. For instance, Chen, Hsuand Lin(2011) conducted a study examining air travelers‘ environmental knowledge, environmental attitudes,environmental behaviors, and pro-environmental air travel behavior in Taiwan. Results indicated the existence ofmoderate to high levels of environmental knowledge and favorable environmental attitude among Taiwanesepassengers. While they engaged in general environmentally friendly behavior quite often, their pro-environmental airtravel behavior was low.Lastly, the analysis of level of environmental consciousness and willingness to adopt environmental friendlyconsumption behavior indicated that consumer attitudes relating to green consumerism are generally marginal, withsome inconsistency and variation. For example, the findings of the study revealed that consumers are likely to showsome interest in choosing the products that do not consume much energy. Yet, they did not seem to care much torationalize on petrol consumption of their cars, nor avoid buying products that extensively used scarce resources.The inconsistency in consumer values became much clearer over the issue of environmentally friendly products. It

was further revealed that though consumers are likely to express some interest in dealing with pro-environmentalmarketers with some desire to pay extra for green products, they did not seem to encourage others to buyenvironmentally friendly products, nor did they have a willingness to spend considerable time and efforts to buygreen products, or even choose products with reusable packaging (Alsmadi 2008).PROPOSED MODEL OF ENVIRONMENTAL CONSCIOUSNESSEnvironmental consciousness -a mental state variable is found distinct from its antecedents and associated behaviors.It is a multi-dimensional construct varying from low general level to high product specific level(fig.2).Demographics, Psychographics, media and political views are the various antecedent conditions affectingenvironmental consciousness of consumers. Therefore, differences in environmental consciousness can be tracedback to either one or more of these conditions related to the consumer as well as the products in question. In view ofthe extant review of researches it appears that behavioural outcomes of environmental consciousness may occur atmore general and/or specific level. In the context of select products, the underlying belief is that consumers may notexhibit environmentally conscious behavior even if they hold the value i.e., environmental consciousness.Consumer‘s environmental consciousness as per past researches does not provide much evidence in the support of itsdirect linkage with behavioral outcomes. Thus, it becomes imperative to take into account the variables which mayintervene environmental consciousness and environmental consciousness led behaviors.

This is particularly described in view of two factors viz., personal involvement and willingness to pay.IMPLICATIONSAs society becomes more concerned with the natural environment, businesses would begin to modify their behaviorin an attempt to address society's "new" concerns. Such newly introduced modifications become visible in the effortsof business organizations, which accept concepts like environmental management systems and waste minimization,and also integrate environmental issues into all organizational activities.Green marketing comprises of all those market related business activities which the firms undertake to create apositive impact or lessen the negative impact of their products on environment. Also, alternatively known asenvironmental marketing and sustainable marketing, it refers to organization‘s efforts at designing, promoting,pricing, and distributing products that will not harm the environment (Pride and Ferrell, 1993).Though, the reasonsto pursue green marketing are abound, but the extent to which these efforts can gainfully be taken to the market andgiven a required scale, it depends upon environmental consciousness of the consumers.According to Bohlen et al., (1993), identification of the green consumer segment is very important to position thegreen product offerings, or to communicate the environmental efforts. These green consumer segments are obtainedaccording to levels of environmental consciousness of consumers and pro-environmental purchase behavior andultimately these ―greener‖ consumer segments can be targeted.

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Zimmer, M., Stafford, T. F., and Stafford, M. R.1994. Green Issues: Dimensions of Environmental Concern. Journalof Business Research, 30, 63–74.Financial Implications of Corporate Social Performance: Is There Really a Need for a Government Mandateon CSR?Saurabh MishraAssistant ProfessorDesautels Faculty of ManagementMcGill University1001 Sherbrooke Street WestMontreal, QC, Canada, H3A 1G5Phone: (514)-398-3487Fax: (514)-398-3876Email: saurabh.mishra@mcgill.caSachin B ModiAssistant ProfessorCollege of Business and Innovation

University of Toledo2801 West Bancroft StToledo OH 43606, USAPhone: (419)-530-2258Fax: (419)-530-2290Email: sachin.modi@utoledo.eduExtended AbstractThere is a growing recognition among managers and scholars that firms need to balance their own growth with thebroader interests of the society to chart a sustainable path forward (Varadarajan and Menon 1988). Since developingcountries already lag behind in important indices of quality of life for their citizens, the societal implications ofcorporate actions become even more accentuated in these economies (Chapple and Moon 2005). However, firms areoften wary of investing in socially responsible initiatives as they remain unconvinced about the financial returns oftheir Corporate Social Performance (CSP) (Luo and Bhattacharya 2009). As such, many developing countriesstruggle with ensuring that firms act in a socially responsible manner. Indeed, a classic example of this is the currentdebate going over in India on whether the Indian government should legally mandate CSR actions by firms in itsupcoming Companies Bill (IndiaKnowledge@Wharton).Much of this debate among policy makers and managers stems from the rather equivocal view on CSR in extantresearch. On the one hand, the neoclassical economists led by Milton Friedman argue that the only job of managersis to maximize shareholder wealth and CSR initiatives distract them from this objective (Friedman 1970). On theother hand, scholars taking the stakeholder theory perspective argue that CSR helps improve relationship of firmswith their key stakeholders and thus generate value for them (Maignan et al. 2005). In line with these opposingperspectives, the evidence from past research linking CSR to financial performance has been unclear, with studiesreporting positive (e.g., Luo and Bhattacharya 2009), neutral (e.g., McWilliams and Siegel 2000) and negative (e.g.,Wright and Ferris 1997) findings.Although researchers have investigated the CSR–financial performance link, the focus has primarily been atassessing the impact of individual socially responsible actions of firms a not on a corporate level view embodied in afirm‘s overall CSP. Further, scholars have often overlooked mediating factors that may explain this key relationship(McWilliams and Siegel 2000). Indeed, research in marketing has shown that CSP may influence financialperformance through mediating variables such as consumer satisfaction (Luo and Bhattacharya 2006); however,insights on consumer-related factors have been quite limited to date. Especially, scholars have overlooked therelationship between CSP, brand equity, and shareholder value.In this research, we take a step towards addressing this gap by evaluating the central question: what is therelationship between CSP, brand equity, and stock returns and risks of firms over time? We follow Luo andBhattacharya (2009) to focus on Corporate Social Performance (CSP) rather than CSR. Moreover, we evaluate bothstock returns and risks as our measures of shareholder value. The financial economics literature suggests thatinvestors and managers are equally concerned with both the expected stock returns of their firms (i.e., the level,timing, and duration of cash flows) and with the associated stock risks (Fama and French, 1993; Srinivasan andHanssens 2009). However, extant research linking CSP to financial performance has paid relatively little attention toboth stock returns and risk metrics under a common framework. Our conceptual framework is presented in figure 1.Following, we briefly discuss our hypotheses.

HypothesesCSP and Brand Equity: Institutional theory (Scott 1987) and stakeholder theory (Maignan et al. 2005) indicate thatconsumers‘ interaction with companies extend beyond their individual needs to their identification with family,community, and country (Handelman and Arnold 1999). As such, ceteris-paribus, consumers would view brandsassociated with socially responsible firms as more favorable. Further, research indicates that CSR increasesconsumer identification with firms and helps enhance their evaluations and attitudes towards the firms (Brown andDacin 1997; Sen and Bhattacharya 2001), leading to increased brand equity.Therefore, we predict:H1: CSP of firms would be positively related to their brand equity.Brand Equity and Shareholder Value: Higher brand equity allows consumer recognition of products and services inthe crowded market place (Henderson and Cote 1998) and can serve as predictive cues of product performance toconsumers (Erdem and Swait 1998). This can help increase the level and timing of future cash flows of firms.Further, a more complex network of associations presupposing brand equity gives consumers greater confidence intheir attitudes towards brands (Pullig et al. 2006), making them less prone to attitude change (Pham andMuthukrishnan 2002), and attenuating the effect of competitors‘ persuasion attempts (Pechmann and Ratneshwar1991). This can help reduce the variation in the future cash flows of firms. Therefore, we predict:H2a: Brand Equity of firms would be positively related to their stock returns.H2b: Brand Equity of firms would be negatively related to their stock risks.CSP and Shareholder Value: Beyond its effect on consumers, CSP also has the potential to affect other stakeholdersof firms (Varadarajan and Menon 1988). Indeed, CSR initiatives generate ―moral capital‖ which can enhancecommitment among employees, recognition within communities and regulators, trust among partners, and higherattractiveness and dependability for investors (Luo and Bhattacharya 2009). As such, CSP can help enhance the leveland timing of future cash flows of the firms (Luo and Bhattacharya 2006). Further, moral capital generated by CSP

can also provide firms with an insurance-like protection, attenuating the negative fallouts from adverse events (Wileset al. 2010). This can help reduce the variability in future cash flows of firms. Therefore, we predict:H3a: CSP of firms would be directly positively related to their stock returns.H3b: CSP of firms would be directly negatively related to their stock risks.Methods, Findings, and ImplicationsTo evaluate these relationships, we compiled a dataset integrating information from several secondary sources. Ourfinal sample included 138 firms operating in the United States from multiple industries across the time period 2005-2009. A potential concern with modeling our theoretical framework is that CSP and brand equity of firms may beendogenous to stock returns and risks of firms and to each other. Further, stock returns and risks may also be relatedto one another. Ignoring these dynamics in analysis would likely give rise to inaccurate findings. We therefore useda three-stage least squares (3SLS) procedure as it allowed us to take into account the interdependencies between ourfocal variables. In addition, we controlled for a number of firm-level and industry-level covariates in our modeling.Overall, analysis confirmed that positive CSP enhances brand equity of firms, which in turn increases their stockreturns and reduces their stock risks, thus confirming H1 and H2a&b. Further, we also observed that CSP has adirect effect on stock returns and risks of firms, beyond its effect on these through brand equity, thus confirmingH3a&b. Admittedly, given data limitations from developing countries, our findings are based on a sample of firmsbased in the United States. However, we feel that our theoretical framework would be equally applicable in alleconomic contexts, and as such our findings should address some of the concerns facing policy makers indeveloping countries. Specifically, our research shows that CSP of firms has important implications for both brandequity and metrics of shareholder wealth.These observations suggest that managers of firms should consider the social implications of their actions not justfrom a purely philanthropic view, but also because doing so would generate economic value of them. Indeed, CSRappears not to be at odds with shareholder wealth as suggested by neo-classical economists, but rather in line with it.Since CSR appears to be a win-win game for both society and firms, our research suggests that there is no need forgovernments in emerging economies to legally mandate CSR activities. Rather, they may share findings of our workand similar other research (e.g., Luo and Bhattacharya 2009) to convince managers of the more direct effects of CSRon brands, customers, and their financial bottom-lines.References: Not provided due to space limitations. Available from the authors upon request

Rural Penetration of Life Insurance Products in India1. Dr. Karanam Nagaraja Rao,Assistant Professor, Alliance University, Bangalorenagaraja.rao@alliance.edu.in2. Dr. P. Sathya Priya,Associate Professor, Alliance University, Bangaloresathyapriya.p@alliance.edu.inAbstractReforms in the life insurance sector have opened up the growth of private players but still their reach in rural marketis comparatively nascent. This potential that exists in the rural market is a great opportunity for the existing players.The scenario in rural India is dominated by Life Insurance Corporation of India, a public sector organization. Privateplayers are hesitant to enter rural. This research attempts to explore the reasons for low penetration of private playersin the rural market. Perception of the existing insurance policy holders and insurance agents in Bangalore rural andKolar rural is studied. The descriptive research reveals that the existing insurance products are not designed for therural segment. The promotional activities are inadequate and insurance companies donot concentrate on microinsurance policies. These are the major hurdles for the existing insurance players in the rural market.Key Words: Insurance, Rural, private players, LICIntroductionThe insurance business registered an impressive growth in the past few years, especially after the opening up of theindustry to private players. ‗India with its huge middle class households has exhibited growth potential for the

insurance industry. Saturation of markets in many developed economics has made the Indian market even moreattractive for foreign players‘ (Sadhak, 2009).The potential available in the rural areas and the extent of life insurance penetration can be gauzed from thefollowing data (Rao, 2011): Almost 72% of Indian population resides in villages, with over 80% of them earning less than Rs. 6000/- permonth. Need for protection by way of insurance is tremendous, given the scale of operations. Life insurance penetration as number of policies sold to total rural insurable population is approximately25% as at 31/03/09. India‘s life insurance premium as a percentage of GDP is currently estimated at 4.1% against 5.2%in US,6.5% in UK and about 8% in South Korea, (Mehrotra, 2007). The penetration remained very low in rural areas and is currently hovering at 2.8% of the GDP as at 2005,(Sadhak, 2007). The Public sector LIC (Life Insurance Corporation of India), though could boast of selling social securitycoverage to nearly one crore BPL (Below Poverty Line) families, yet it represents over 20 % of 5 croressuch families. Many people in the countryside hesitate to buy the policies of private players perceiving them to be unsafe(Chauhan, 2009) Only 13% of Indian households with annual income less than Rs 45,000 (these people constitute 76 million)had savings bank accounts with any bank and similar proportion had life insurance, (Boston ConsultancyGroup report, 2007). ―India accounts for 16% of the world population, but accounted for only 1.68% of the world life insurancemarket in 2006. India is also far behind world averages in terms of insurance penetration, and insurancedensity. A mere 20% of the insurable population aged 20 to 60 years is currently covered by life insurance.Our survey also demonstrated India‘s low penetration levels: The average number of policies (life and non-

life) held by an Indian consumer is just 1.33, compared with the average of 5.2 polices per client for maturemarkets (Boston Consultancy Group report, 2007).These informations clearly indicate that Indian market is largely untapped for insurance products. In specific, therural population is high and there exists high potential for life insurance in this sector. In view of the gap that existsin the potential vis-à-vis the market captured, the objective of the study is to explore the reasons for low penetrationof insurance products in the rural market.Literature ReviewRanjan & Raveendra, (2008), claims that ―The rural market for life insurance is different from the urban market interms of needs, income levels and distribution (seasonality for example), penetration of media, awareness and so on.Except LIC of India, no other player has paid much attention to the rural sector in spite of their fully meeting theIRDA obligations. Prof. C.K. Prahlad rightly observes that rural market can be highly profitable if one is able tocarefully plan and tailor an entire set of low cost activities of advertising, distribution, and product design etc. tosuccessfully exploit the potential‖.Rangachary (2006), ex- Chairman of IRDA, states that ―the principle of differential pricing is necessary to sellproducts in rural areas‖. By partnering with customers (MLM pattern) of BOP and by partnering with NGOs, lifeinsurance companies can sell policies at relatively cheaper rates by cushioning the commissions that would havebeen paid to agents. Mckinsey & Company, a global Management consulting firm published its report on Indian lifeinsurance in 2007 and it says, ―By 2012 about 10.3 million household with income greater than Rs 2 lakh willcontrol more than 22 percent of rural consumption. Furthermore rural India will not be one market. Pockets ofattractive rural market will emerge in certain parts of India. Players will need to understand their needs, designproducts to match them and create distribution models to reach a highly fragmented consumer base cost effectively‖.

Gopinath, (2009) says that 70% of India lives in rural areas but have no access; or have negligible access toinsurance. Due to wide geographical disparity and high distribution costs, insurers have been chary of venturing intothis territory. With increasing rural incomes and improving infrastructure, rural and micro insurance offers immensepossibilities. But with opportunities, this sector throws various operational challenges as well, for the insurers - ruraland social sector insurance should not be approached as a legal or statutory requirement, but as a businessopportunity. With proper safe guards, this sector can contribute immensely to the top line as well as bottom line.Doing well while doing good is very much possible.Prahalad (2009), says that several production systems of the rural folk have associated risks which may lead toincome and revenue loss; and these can be mitigated through insurance leading to stabilization of income andreduced poverty'. Jawaharlal (2009) observes that it is not entirely on account of poverty in the rural areas that thereis a lopsided growth in insurance business. If tackled properly, there is vast potential to be tapped.―Marketing of life insurance is not mere selling. It involves trust building, identification of financial knowledge gapand personalized service content strategy. The approach, the product and the distribution needs to have a differentlook than that followed for the urban market‖, comments Sadhak, (2007). Joshi (2005) opines that there exists a hugesavings market which after potential for expansion of life insurance and awareness level is very high but realpurchase is low due to absence of market reach and probably due to lack of financial literacy.Brugman and Prahlad (2007), while emphasizing the role of NGOs in spreading insurance, argue that whilecompanies have discovered the importance of NGOs as paths to markets, social groups have realized that carefullycalibrated business models can unleash powerful forces for good. Their interactions have created new links betweenbusiness innovation and social development. Companies and NGOs are increasingly going into business together,pursuing scale and profits, social equity, and empowerment as part of an integrated value chain. Some NGOs arepositively thriving where state-owned or multinational companies have failed. Two years ago, when the Indianinsurance giant, Life Insurance Corporation, found it difficult to collect premiums and pay claims in rural areas in

the state of Andhra Pradesh, micro credit federations took over the business. Their extensive knowledge ofcustomers and their superior reach allowed the NGOs to grow the market rapidly. They operate quite profitably,earning an average gross margin of 27%.Machiraju (2002) argues that it is an undisputed fact that about 75% to 80% of the insurance population is yet to becovered in India. It is estimated that in terms of lives, the figure could be around 20 crores. Those who are insuredalso are not adequately insured. Insurance policies are sold, but not insuring the people based on needs. The reportpublished by Celent (2008), says that India‘s life insurance market is booming and the market has grown at a healthyCAGR of 24% over the past 5 years. Most of this growth is from the urban areas. The increase in competition isforcing insurance providers to look beyond urban centers and take their trade to the more challenging ruralhinterlands of the country, where only 3% of the population of more than 720 million people have any form of lifeinsurance coverage.Research GapAn investigation of the literature has revealed that there is a gap between the rural potential available in terms of lifeinsurance business and the potential tapped (only 25% of the rural people are covered by any type of life insurance).The existing studies reveal that there is less research on the rural insurance market. Insurance products are uniformfor both and urban and rural consumers. The needs of rural consumers are not yet addressed. Researchers oninsurance are categorical in stating that the life insurance companies are not successful in rural market. But there isless research as to why the companies are not successful in rural market. An attempt is made in this research to studythe reasons as to why the companies are unsuccessful in rural horizon.MethodologyFor the purpose of the study secondary data is procured from IRDA journals and annual reports of the various lifeinsurance companies as at March 31, 2009 and also relied on various departmental manuals of the insurers, newspaper reports and insurance websites. Primary data is collected to know the rural perspective for non-penetration ofinsurance products. For this purpose, two rural districts of Karnataka, namely, Kolar rural district and Bangalore

ural district are selected for the study. The rationale for selecting Kolar rural district and Bangalore (rural) beingtheir proximity to the metro city, Bangalore where the branches of all private life insurance companies are presentand the customers are exposed to all private players in one way or other. Since the present research is intended tostudy the rural life insurance market and the reasons for low insurance penetration, the research design adopted is‗exploratory‘ or ‗formulative‘ research and the major emphasis is on the discovery of ideas and insights.Sampling DesignTo collect the data from customers, ‗Cluster Sampling‘ technique followed by simple random sampling is adopted toensure the representation of the data for the whole population. The district of Kolar has 5 taluks and Bangalore ruralhas 4 taluks. The total rural population of each taluk happens to be the first cluster. A set of villages having apopulation of 20000 together is presumed as second cluster. The contiguity of villages from North West point toSouth East point happens to be the criterion as per the Census, 2001. Bangalore rural has 31 sub clusters in total - 6,9, 7 and 9 respectively in four taluks: Nelamangala, Doddaballapur, Devanahalli and Hosakote. Kolar rural has 48sub clusters in total - 8, 11, 11, 9 and 9 respectively in five taluks: Srinivasapur, Kolar, Bangarpet, Mulabagal andMalur. After identifying the number of sub clusters in each taluk, a methodical approach is adopted to collect thedata through the structured questionnaires. As the research is intended to collect data from the populations who haveinsurance policies, the data of the existing policy holders is collected from the agents available in each sub cluster inthe first phase. Total number of policy holders from a cluster of 20,000 populations is listed out in the second phase.In the third phase a set of 500 policy holders is identified as a sub cluster. Each policy is serial numbered and oneout of 500 policy holders is selected by way of lottery from a list of consecutive 500 policy holders with the help ofcomputer to ensure that all policyholders in the population have an equal chance of being selected. A total of 500samples are drawn with cluster method of which 250 respondents are from Bangalore rural and 250 Kolar rural.Sample selection process for Nelamangala taluk is illustrated in Table 1:

The data wascollected from the agents to understand perception about the trust level of existing customers, the insurance productsrural orientation, and insurance companies interest in rural areas. For this purpose, 200 agents were approached intotal, of which 100 from Bangalore rural and 100 Kolar rural. The difference in the perception of the agents in thesetwo regions with the insurance companies interest to go rural and the suitability of the policy for rural consumerswas studied with independent t-test. The significance of the consumers opinion about the insurance companies to berural centric was studied with chi-square test.Validity and ReliabilityTo ensure the validity of the instrument, the questionnaire was initially administered to 30 policy holders each forBangalore and Kolar respondents as a pilot study. On receiving the responses, suitable changes were effected to themain questionnaire. The reliability of the instrument is tested using Cronbach's Alpha test to determine the internalconsistency and to ensure that the same set of items would elicit the same responses if the same questions are recast

and re-administered to the same respondents. Since the value of Alpha is reasonably high and at around 0.70, thereliability aspect is taken care off. The primary data was analyzed by applying relevant statistical tools usingSPSS15.0.Definition of ‘rural’ for the Purpose of StudyThe IRDA defines rural as follows: ―The rural sector has been defined as a place in which, as per the latest census,the population is less than 5000, the density of population is less than 400 per square kilometer and more than 75%of the male working population is engaged in agricultural pursuits. (Agricultural pursuits are defined as cultivation,agricultural labor, and work in live stock, forestry, fishing, hunting, plantation, orchards and allied activities).Thecurrent study has considered ‗rural‘ as defined by IRDA.Growth of Insurance in IndiaThere is exponential growth in life insurance industry after it is thrown open to private players in 2000. During 2001to 2007, the life insurance industry registered a growth of 41% in new business sum assured with premiumregistering 28% growth. On analyzing the growth, it is evident that the growth is fueled largely by unit linkedpolicies. Table 2 clearly indicates the growth of Insurance in India for the period from 2003 to 2008 in percentagefor ULIP and non-linked business.

The percentage of ULIP business to the total business increases year on year where as the percentage of Non-linkedbusiness reduces. The implication is that the growth emanated from semi urban and urban centers and also from theaffluent segments of the rural areas as the minimum ticket size of a ULIP policy is generally Rs. 10,000 per year.The rural poor who are at the bottom of the pyramid with lesser disposable incomes may not find it convenient totake up these types of policies. In order to boost up volumes, companies are resorting to high ticket policy sale andnaturally the needs of less income groups in rural areas are not addressed. This has resulted in the lower percentageof Non-linked business to the total.Existing Policy HoldersThe Boston Consulting Group (BCG) in the year 2007 analyzed that insurance is linked with income. Lesser incomegroups in India have lesser percentage of insurance policies. 87% of households with less than Rs 45000 income peryear in India do not posses life insurance. 76% of households with incomes Rs 45000 income per year to Rs 90000per year do not possess life insurance. Table 3 illustrates this point.

When insurance is linked with income levels, it is of paramount need to design low ticket products with ruralorientation. The insurance companies did not address the life insurance needs of the low income groups to a greaterextent. There no special rural centric products by any life insurance company other than LIC of India which has onlyone exclusive rural product, Jana Rakha plan.Distribution NetworkIt is found that insurance companies are broadly opening offices in urban centres and rural visibility is quite low.Table 4 explains the distribution network of insurance companies.In India 76% ofthe people live in rural areas. In case of rural distribution outlets, only 31.38 percent of branches are available. The

public sector LIC has many satellite branches and majority of the private players have no offices in rural areas.Insurance marketing basically depends on trust building and personal relationship. The physical presence of anoffice can reinforce trust in the minds of the rural people.Micro Insurance PoliciesInsurance policies with flexible premium options and lower ticket size are possible through micro insurance. But noprivate insurance company has shown any interest in micro insurance. This is evident in tables 5.The number of insurance agents for micro insurance policies is very less for private insurance companies comparedto LIC of India. The data in table 6 for the year 2009 reveals the fact.Tables 5 and 6 explain the lesser participation of private players in low ticket micro insurance policies. Tables 2through 6 clearly indicate the less penetration of insurance companies in India and in specific rural horizon. There

exists a great potential for insurance players. But this also calls for the attention of marketers to understand theproblems that exist in the rural market for the low penetration levels.Reasons for Low Penetration of Insurance ProductsThe major reason revealed by the existing insurance agents and the customers is the non availability of rightinsurance product for rural need. The other reason being the traditional mindset that exists among the customerstowards LIC. Trust being the major factor has not paved way for private insurance companies. Insurance salesdemands trust of the customers. Evidence from primary data suggests that customers in rural areas do not trustprivate life insurance companies as much as they trust the public sector LIC of India. Table 7 brings out theperception of the customers.In order to test thefrequency of responses, the t-test is conducted and the results are tabulated below. The hypothesis formulated is:H 0 :H 1 :There is no significant difference between the perceptions of the rural people in Bangalore and Kolar aboutsafety of investments in private life insurance companies.There is significant difference between the perceptions of the rural people in Bangalore and Kolar aboutsafety of investments in private life insurance companies.The difference in perception of respondents in two different places are studied and tested with Independent t-test andthe results are tabulated.

Significance of t-test is less than 0.01. At 1 percent level of significance, the null hypothesis is rejected and it can be concluded thatthere is significant difference between the perceptions of the rural people in Bangalore and Kolar about safety ofinvestments in private life insurance companies.In order to assess the responses of agents who are instrumental in selling life insurance policies, their opinion aboutconsumers trust with the private players are enquired. The data is tabulated and presented in table 9.Consumers trust with private insurers in both Bangalore and Kolar rural is very less. So the marketers can focus theirmarketing techniques in generating trust in rural areas.Absence of Need Based Products

The needs of rural customers are different from urban customers. From secondary data, it is known that except LICof India, no other insurance company has exclusive rural centric products. ‗One-size fits all‘ is the marketing mantraof private players. To ascertain whether this true, opinion is sought from agents and tabulated as follows.It is understood that majority of the agents opine that insurance products are not rural centric. Marketers should takethis aspect and evaluate the products in their kitties vis-à-vis rural customer needs. The hypothesis formulated is:H 0: There is no significant difference between the view points of the agents that rural insurance products are needbased or otherwise.H 1 : There is significant difference between the view points of the agents that rural insurance products are need basedor otherwise.The difference in the opinion of the agents in Bangalore Rural and Kolar Rural was tested for its significance withIndependent t-test and the results are tabulated below:

Significance of t-test is less than 0.05. At 5 percent level of significance, the null hypothesis is rejected and it can be concluded thatthere is significant difference between the view points of the agents in Bangalore Rural and Kolar Rural with therural insurance products being rural centric.Agents Perception about Insurance Companies in Rural SegmentIn order to understand the interest of insurance companies to bring more products that caters to rural need, opinion ofthe insurance agents is sought. The data collected from the agents are presented in table 12.It is inferred from the above table that the perception of the agents is that the life insurance companies are not verymuch interested in rural business. Significance of the interest was analyzed. In order to test the difference in theopinion of the agents with two different regions (Bangalore Rural and Kolar Rural), Independent t-test is conducted.Null and alternate hypothesis formulated include:

H 0 : There is no significant difference in the opinion of agents in Bangalore and Kolar Rural about the insurancecompanies interest level in rural business.H 1 : There is significant difference in the opinion of agents in Bangalore and Kolar Ruralabout insurance companies interest level in rural business.The difference in the opinion across two groups was tested with Independent t-test and results tabulated are asfollows:Table 12: Results of Independent t-testCategory N Df t-test SignificanceLifeYesInsurance32Companies Interest inNoRural Business168Total 200198 -1.937 0.054Significance of t-test is 0.054 that is less than 0.10. At 10 percent level of significance, the null hypothesis is rejectedand it can be concluded that there is significant difference in the opinions of agents of Bangalore and Kolar Ruralabout the life insurance companies interest in rural business.ConclusionThe penetration level of the existing insurance players in the rural market is not commendable. The reasons asanalyzed from primary and secondary data for low penetration in rural areas are listed below. In order to boost volume of business, the insurance companies are resorting to big ticket policies.Sale of low ticket policies in rural areas is not given importance. Except LIC of India, no other company has exclusive rural centric products.

Physical presence of at least satellite branch ensures trust. But more than 79% of branch offices oflife insurance companies are in urban areas. Private players‘ presence in micro insurance sector is negligible. Rural customers do not trust private players as much as they trust LIC of India. This limits theirmaneuverability in rural areas. Agents, who are instrumental in selling in rural areas, feel that the products of insurance companiesare not rural customer need based. In their perception, companies are not evincing interest in ruralareas.This brings out the vast potential market available for the insurance players to tapper. For this purpose, insuranceplayers can increase the awareness level of the insurance products to the rural consumers, evolve products acceptablein the rural market and promote rural agents to ensure trust among the customers. Satellite branches in rural areascan be opened up to promote the insurance concept in rural market. Marketers thus can plan the strategies to enterand establish their presence in rural market that has huge opportunities.References:1. Boston Consultancy Group Report, 2007, ‗The Next Billion Consumers – A Road Map to ExpandingFinancial Inclusion in India‘, p. 16,http://www.cab.org.in/ICTPortal/Lists/Knowledge%20Bank/Attachments/8/The_Next_Billion_Banking_Customers_Nov_07.pdf2. Brugman, Jeb and Prahlad, C.K, 2007, ‗Cocreating Business‘s New Social Impact‘, Harvard BusinessReview, February, P. 4 – 14, http://business.twoday.net/static/foehrenbergkreis/files/20070226HBR_Cocreating.pdf3. Celent report, 2008, ‗Selling Life Insurance in rural India‘, 23rd May, p.1,http://www.celent.com/reports/selling-life-insurance-rural-india4. Chauhan Pooja, 2009, ‗Dissertation on comparative and competitive analysis of private life insurancecompanies in India‘ Dissertation thesis, p.no 25.http://www.scribd.com/doc/28856359/A-Dissertation-on-Comparative-and-Competitive-Analysis-of-Private-Life-Insurance-Companies-in-India-Since-Their-Entry5. Gopinath, K, 2009, ‗Rural and Social sector insurance‘, IRDA Journal, April, 2009, p.176. Jawaharlal, U, 2009, ‗Opportunities unlimited‘ IRDA Journal, March, 2009, p.10

7. Joshi, N.N, 2005, ‗Rural markets- Miles to go in Indian insurance industry to achieve globalcompetitiveness‘ 10 th Conference on insurance FICCI, p.1-14.8. Machiraju Apparao, 2002, ‗Breaking from the past‘, CII 7 th Insurance Summit, 2002, page.29. Mckinsey & Company report,2007, ‗India Life Insurance, 2012- Fortune favors the bold‘, p. 910. Mehrotra, D.K., 2007, Valedictory address at the Indian Merchant Chamber, Mumbai on 19 th Oct,07,Yogakshema,Dec,07, p.1011. Prahalad Pranav, 2009, 'Catalyst for Financial Inclusion- Insurance in the Rural & Social sector', IRDAjournal, April,09 p.20-2112. Rangachary, N, 2006,‘Rural Insurance needs different pricing‘, On-line post dt 23 rd June, 2006, p.1,http://www.thehindubusinessline.in/2006/06/23/stories/2006062301690600.htm13. Ranjan Das & Raveendra, 2008, ‗Strategic choices in Life Insurance business‘, page 5.http://www.etstrategicmarketing.com/Smjan-feb04/art1.html14. Rao, Nagaraja, 2011, ‗Study of Rural Life Insurance Market in India with Special Reference to LifeInsurance‘, Ph.D thesis accepted by JNTUH, Hyderabad, Sp.121-125.15. Sadhak, H, 2009, ‗Life insurance in India, opportunities, challenges and strategic perspective‘, ResponseBooks: New Delhi, p.188.

Examining the association between Green Experience and Green Brand Equity: - A study in Indian greenhotel industrySubmitted for presentation at the2012 AIM International ConferenceAnsh Gupta (Doctoral student Marketing area, Indian Institute of Management, Lucknow, E-mail:ansh.gupta@iiml.ac.in) [Presenting and corresponding author]Satyabhusan Dash (Associate Professor-Marketing Area, Indian Institute of Management, Lucknow, E-mail:satya@iiml.ac.in)Introduction:Globally, a general deterioration in the physical environment is driving individuals and organizations to implementchanges for improving the worsening state of the environment. There is a growing amount of evidence indicatingthat consumers are choosing products or avoiding others based on their impact on the natural environment (Rios etal. 2006). This increasing concern for the environment has not been overlooked by business fraternity as a resultmore and more companies are jumping on „Green‟ bandwagon to catch the opportunity (Ottman, 2008). Marketopportunities exist for companies that consider the genuine environment friendliness in their product/servicesdevelopment and endeavor to develop a „Green‟ brand (Chen, 2010). Image Power Green Brands Survey (2011) hasshown that consumers in emerging countries like China and India are more likely to purchase greenproducts/services. With the ideology of promoting sustainable consumption practices in emerging markets right frombeginning, the Green wave has reached India (Jain & Kaur, 2006).Green marketing has been the topic of academic interest for nearly four decades (Chamorro et al. 2009), but veryfew studies focused on formation of green brand equity. Hence, there is an urgent need to understand the factors thatresult in strong and positive Green branding (Ottman, 2008). The contemporary times have seen the parallel growthin environmental consciousness of consumers as well as skepticism about green claims. Thus, it is imperative toexplore the process of formation of positive green brand equity.The current study looks at Green branding through the lenses of the evolving concepts of experiential marketing,which is considered as a common factor in the success of various products/services and brands (Pine and Gilmore,1999, Brakus et al. 2009). Because of the inherent intangible nature of services, customer experience is moreimportant for branding of services than for products (Kayaman and Arasli, 2007). The purpose of current study is toexplore the association between of customers‟ „Green experience‟ and „Green brand equity‟ in the Indian greenhotel industry. The associations of personal characteristics (such as demographics, environmental concern andpurpose of travel) of Indian consumers are also studied.Literature ReviewLiterature on customer experience talk about two approaches: Emotion approach (Holbrook, 1986; Westbrook andOliver, 1991) and Customer value approach (Holbrook; 1994, 2006; Mathwick, Malhotra and Rigdon, 2001; Barskyand Nash, 2002). In the first approach customers‟ emotions are the mainstay of conceptualizing experience. While inlatter, customers‟ perceived value is the central point of customers‟ perceived experience. According to Holbrook(2006), the exploration of the customer experience actually builds a path to insights into the concept of customervalue. Holbrook (2006) defined customer value as an interactive relativistic preference experience. He further arguesthat consumption experiences underlie the creation of all customer value. According to this work, Holbrookemphasized that customer experiential approach actually examines the customer value that is attached to theconsumption. This means that in order to create customer experience it is important to indentify customer value.Following the Holbrook‟s argument, this study takes the customer value approach in conceptualizing the greenexperience.Referring to works of Holbrook (2006) and Mathwick et al. (2001), we conceptualize four typologies for greenexperiential value: Economic, Hedonic, Social and Altruistic. In context of green consumption the economic valuemeans the utilitarian benefits (excellence of the service provider in protecting environment), the social value means

self-expression benefits (heightened esteem), the altruistic value is same as warm glow (feel good for doing publicgood) , nature experience is similar to the hedonic value (in terms of aesthetically enjoying the environment friendlyexperience).Coddington (1993) suggest that green positioning as an essential factor in the success of green branding strategies.However, consumers often have difficulty distinguishing which hotels have a strong sustainability ethic (Darnall,2008). In consumers‟ minds, performance differences between hotels are indistinct in that each hotel appears to havesimilar objectives and procedures. Therefore, simply positioning the hotel brand as a green hotel will not give thehotel firm a significant competitive advantage. Hence, it becomes imperative to develop strong green brand equity inthe minds of the consumers. Chen (2010) defined green brand equity as ―a set of brand assets and liabilities aboutgreen commitments and environmental concerns linked to a brand, its name and symbol that add to or subtract fromthe value provided by a product or service.‖HypothesesBased on the extensive review of literature about- green marketing, concepts of customers‟ experience, greenbranding and branding in service (hotel) industry – following hypotheses are made:H1: The economic green experiential value is positively associated with green brand equity.H2: The hedonic green experiential value is positively associated with green brand equity.H3: The social green experiential value is positively associated with green brand equity.H4: The altruistic green experiential value is positively associated with green brand equity.Design/Methodology-The hotel industry is chosen as the service sector for the study as it has standard certifications (LEED, ECOTEL etc.)for designating hotel services as „Green‟. The proposed research design will be descriptive in nature. To meet theobjectives of the study, the \two phased approach is adopted- qualitative and quantitative in hotels having greencertification from at least one authorized certifying agency/company, administered among the hotel‟s guests atGreen Hotels in Delhi, Jaipur and Mumbai. A total of around 100 responses were collected, out of which 45 wereusable. SPSS 16 is used for analysis. We did the median split for the data and run cross-tab analysis to check thesignificant associations.Findings and discussion-Green experiential values (social and economic) for guests of the hotel offering eco-friendly services found to bepositively associated with the green brand equity of the hotel, refer to table 1 and table 2. The analysis shows that thegreen hotel guests who feel high green experiential social value, about 73% of them, also have high green brandequity of the hotel. On the other hand, 91% of the guests at green hotels who perceive low green experiential socialvalue have low perception for green brand equity of the hotel. The chi-square value comes out to be significant.Therefore, hypothesis 3 is supported.

Cross-tab analysis of economic green experiential value with green brand equity shows significant associationbetween two. The analysis reveals that 90% of the people who have low perception of economic green experientialvalue have low perception about the green brand equity of the hotel brand. On the contrary, about 67% of peoplehaving high economic green experiential value also have high green brand equity. Hence, Hypothesis H1 issupported.Whereas the associations of green experiential value (hedonic and altruistic) with green brand equity found to beinsignificant. Therefore, hypotheses H2 and H4 are not supported.In order to explore about those people who experience high economic and social value, further cross-tab analysis isdone between social value and purpose of travel (leisure, business or both). Referring to table 3, 92% of the peoplewho visit green hotel on a leisure trip experience high social value because of hotel being eco-friendly. Whereas,about 65% guests on business trip perceive low social value from a green hotel. Association of economic greenexperiential value with purpose of travel comes out to be insignificant.

We also found significant association between gender and economic green experiential value - 44% of male and82% female guests visiting green hotel experience high economic value pertaining to its eco-friendly aspects.Implications/Originality:- The study introduces a novel concept of Green brand experience and Green brand equityin services domain. The study is expected to contribute significantly to the domain of Indian service market (e.g.,Hospitality industry) and service brand development leveraging on its green efforts. The results of the study provideinsight into the relationship between green experiential value and green brand equity. The management would alsolearn relation between various personal characteristics of Indian customers (gender and purpose of travel) affect theirgreen experiential value. Thus, hotel managers can devise effective strategies to develop positive and stronger greenbrand equity towards the hotel. Further studies in this area can work on developing causal relationship between thediscussed variables.Key words:- Green brand equity, Green Experience, Green marketing,ReferencesBrakus, J. J., Schmitt, B. H., & Zarantonello, L. (2009). Brand experience: what is it? How is it measured? Does itaffect loyalty? Journal of Marketing, 73(3), 52–68.Barsky, J., & Nash, L. (2002). Evoking emotion: affective keys to hotel loyalty. The Cornell Hotel and RestaurantAdministration Quarterly, 43(1), 39–46.Chamorro, A., Rubio, S., & Miranda, F. J. (2009). Characteristics of research on green marketing. Business Strategyand the Environment, 18(4), 223–239.Coddington, W. (1993). Environmental marketing: positive strategies for reaching the green consumer. McGrawhillNew York.Chen, Y. S. (2010). The drivers of green brand equity: Green brand image, green satisfaction, and green trust.Journal of business ethics, 93(2), 307–319.Darnall, N. ―Creating a green brand for competitive distinction,‖ Asian Business & Management 7, no. 4 (2008):445–466.Jain, S. K., & Kaur, G. (2006). Role of Socio-Demographics in Segmenting and Profiling Green Consumers. Journalof International Consumer Marketing, 18(3), 107–146.

Holbrook, M. B. (1986). Emotion in the consumption experience: Toward a new model of the human consumer. Therole of affect in consumer behavior: Emerging theories and applications, 17–52.Holbrook, M. B. (1994). The nature of customer value: an axiology of services in the consumption experience.Service quality: New directions in theory and practice, 21.Holbrook, M. B. (2006). Consumption experience, customer value, and subjective personal introspection: Anillustrative photographic essay. Journal of Business Research, 59(6), 714–725.Kayaman, R., & Arasli, H. (2007). Customer based brand equity: evidence from the hotel industry. ManagingService Quality, 17(1), 92–109.Mathwick, C., Malhotra, N., & Rigdon, E. (2001). Experiential value: conceptualization, measurement andapplication in the catalog and Internet shopping environment☆. Journal of retailing, 77(1), 39–56.Ottman, J. A. (2008). The five simple rules of green marketing. Design management review, 19(4), 65–69.Pine, B. J., & Gilmore, J. H. (1999). The experience economy: work is theatre & every business a stage. HarvardBusiness Press.Rios, F. J. M., Martínez, T. L., Moreno, F. F., & Soriano, P. C. (2006). Improving attitudes toward brands withenvironmental associations: an experimental approach. Journal of Consumer Marketing, 23(1), 26–33.Swallow, L., & Furniss, J. (n.d.). GREEN BUSINESS.Westbrook, R. A., & Oliver, R. L. (1991). The dimensionality of consumption emotion patterns and consumersatisfaction. Journal of consumer research, 84–91.A Comparison of Reflective/Formative Second Factor Models with the SchmidLeiman Factor StructureGeetha M., Piyush sharma and Bharadhwaj SivakumaranINTRODUCTIONA common issue in structural equation modeling is the use of second order factor models(e.g. Agarwal et al. 2009). A second order factor is one that has no indicator variables. In a second order factormodel, typically, there is correlation amongst some first-order factors and this correlation is attributed to the fact thatthese are driven by something above, a ―super factor‖ or what is usually termed a second order factor (Kline 2005)that is theoretically superior (Rindskopf and Rose 1988). Within the genre of second order factor models, one has a

choice of using reflective or formative second order factor models (e.g., Bennett and Ali-choudhury 2009).However, in reality, most work uses standard reflective first order models as indicated in Figure 1.Jarvis et al. (2003) discuss the possibility of formative second order factors, yet few have actually explored itempirically. In fact, although a viable alternative to the traditional reflective second order factor model, a formativesecond order model has its own share of problems (Howell, Breivik, and Wilcox 2007). For example, formativemeasurement uses conceptions of constructs, measures, and causality that are difficult to defend, the presumedviability of formative measurement is a fallacy, and the objectives of formative measurement may also be achievedusing alternative models with reflective measures‖(Edwards 2011). Interestingly, the Schmid-Leiman Factor Structure (SLS) may offer a better solution in many cases(Wolff and Preising 2005). Hence, this paper tries to:a) Empirically compare and contrast reflective vs. formative second order models.b) Demonstrate the use of the SLS approach empirically as a viable alternative to the formative second order modelstructure.Specifically, we compare reflective vs. formative second order factor models vs. Schmid-Leiman Factor Structure with data from a mall survey in India that tested the impact of store environment on impulsebuying.MODEL DEVELOPMENTModel 1 - Reflective Second Order Factor ModelIn line with Baker et al. (2002), we define store environment as consisting of ambient (e.g. lighting, scent andmusic), design (layout, assortment) and social factors (presence and effectiveness of salespersons). Thus, storeenvironment is a second order factor.Drawing upon extant research in psychology and retailing, we came up with a model.Figure 2 offers the standard reflective second order factor model that is the ―default‖ option where the first orderfactors, social, ambient and design factors are reflective of the second order factor, store environment.

Model 2 - Formative Second Order Factor ModelAccording to Jarvis et al. (2003, pp.203), it is conceptually preferable to use reflective indicators if the direction ofcausality ―flows from the construct to the measures‖ and formative indicators if the direction is in the oppositedirection ―from the measures to the construct‖. In the case of store environment, the perceptions of ambient, socialand design factors drive overall perceptions of store environment rather than the other way round.Specifically, shoppers may evaluate a store‘s ambient factors (e.g. if the music is nice in the store), social factors(e.g. the store employees are friendly) and design factors (e.g. the layout is good). Based on these perceptions, theymay form an overall impression of the store‘s environment. It is unlikely that a shopper would first overall form apositive impression of the store and then because of this, conclude that its music was nice. Hence, in this case aformative second order model structure (Figure 3) may be appropriate.

Model 3 - Schmid-Leiman Factor (SLS) StructureWhen there is a second order factor structure and the concerned constructs have multiitem measures, the Schmid-Leiman factor structure can be used instead of the second factor structures. The indicator variables are considered tobe driven by both the first order factors and the erstwhile second order factor, as shown in Figure 4.METHODOLOGYWe used a single stage mall intercept (in 44 leading outlets in Chennai, India) method to collect data (Sample size =733, response rate = 46%). We used established scales for all constructs, which showed good reliabilities (Table 1).Only clearly unplanned purchases that could not be classified as reminder items were recorded as impulse purchases(Beatty and Ferrell 1998). The number of such impulse purchases was counted for each shopper.

We used a 2-step structural equation modeling approach, refining the measurement model before analyzing the pathmodel (Anderson and Gerbing 1988). We also tested CommonMethod Variance and found no evidence. Having purified the measurement model, we first analyzed a base modelwithout the second order factor, store environment with direct paths from ambient, social and design factors to themediators and found a poor fit. Next, we analyzed the model with the standard reflective factor structure, whichshowed a poor fit (χ2 = 860.33, df = 372, χ2/df = 2.3, RMSEA = .07, SRMR = .05, CFI = .91). While the fitimproved considerably, it was still below par. We then analyzed the model in Figure 3, the formative second ordermodel. We found that the fit improved further (χ2 = 388.52, df= 155, χ2/df = 2.51, RMSEA = .05, SRMR = .05, CFI = .95) with all the fit-indices better than the recommendedcut-off values (RMSEA < .06, SRMR < .08, CFI > .95). Finally, the Schmid-Leiman Factor Structure provided thebest fit (as expected) compared to the models without a second order factor structure and a reflective second orderone (χ2 =664.96, df = 356, χ2/df = 1.9, RMSEA = .04, SRMR = 0.03, CFI = 0.95).DISCUSSIONIn this research, we evaluated four models, one a base model with no second order factor; two, a model with thedefault reflective second order factor model; three, a model with a formative second order factor model and finally amodel with the SLS factor structure.We demonstrate the efficacy of using a formative second order and SLS factor structure.Hence, researchers using a second order model should not jump to the conclusion that a reflective second orderfactor is the only option.We empirically demonstrate that a formative second order model works better if there is a conceptual basis tobelieve that the first order factors drive the second order factor.However, if some of the problems present in formative second factors are anticipated, researchers may use the SLSfactor structure. Based on the findings in this paper, future researchers may ask the following questions:

Is the use of the second order factor model appropriate? If there are inter correlations amongst the first orderfactors, or there is a common conceptual basis for the existence of the first order factors, the answer would be yes.If yes, would a reflective second order model work better or would a formative second order model work better?If the flow of the directionality is logically from the second order factor to the first order ones, the former would bemore appropriate. If the directionality is from the first order factors to the second order factor, the formative secondorder model would be the right one to go with.If the use of formative second order causes problems with the conceptualization of constructs, operationalizationof their measures or causality among various constructs, then using the SLS factor structure may be recommended.Our research would thus be a useful pointer to others in Marketing and allied areas that use second order factormodels. We empirically demonstrate when researchers should reflective or formative or SLS factor structures. Froma substantive view, we add to the literature on second order factors. While Jarvis et al. (2003) suggest usingformative second order factor structures, we take it up and empirically demonstrate the same. We also demonstratethe use of the SLS factor structure in Marketing for the first time.Finally, we compare and contrast the use of variousalternatives (reflective vs. formative vs. SLS factor structures) all in one piece of work.REFERENCESAgarwal, James, Naresh Malhotra and Ruth Bolton (2009), ―Consumer Perceptions ofService Quality: A Cross National Analysis‖, Advances in Consumer Research, Pg. 19.Anderson, James C. and David W. Gerbing (1988), "Structural equation modeling in practice: A review andrecommended two step approach," Psychological Bulletin, 103(May), 411–23.Areni, Charles S. and David Kim (1994), "The influence of in-store lighting on consumers‘ examination ofmerchandise in a wine store," International Journal of Research in Marketing, 11 (2), 117-25.Baker, Julie, A. Parasuraman, Dhruv Grewal, and Glenn B. Voss (2002), "The Influenceof Multiple Store Environment Cues on Perceived Merchandise Value and PatronageIntentions," Journal of Marketing, 66 (2), 120-41.Beatty, Sharon E. and Elizabeth M. Ferrell (1998), "Impulse Buying: Modeling itsPrecursors," Journal of Retailing, 74 (2), 169-91.Bennett, R. and R. Ali-choudhury (2009), "Second-gift behaviour of first-time donors tocharity: An empirical study," International Journal of Nonprofit and Voluntary SectorMarketing, 14 (3), 161-80.Dickson, John P. and Gerald Albaum (1977), "A method for developing tailor-madesemantic differentials for specific marketing content areas," Journal of MarketingResearch, 14 (1), 87-91.Edwards, Jeffrey R. (2011), "The Fallacy of Formative Measurement," OrganizationalResearch Methods, 14 (2), 370-88.Howell, Roy D., Einar Breivik, and James B. Wilcox (2007), "Reconsidering FormativeMeasurement," Psychological Methods, 12 (2), 205-18.Jarvis, Cheryl Burke, Scott B. Mackenzie, Philip M. Podsakoff, David Glen Mick, andWilliam O. Bearden (2003), "A Critical Review of Construct Indicators and

Measurement Model Misspecification in Marketing and Consumer Research," Journal ofConsumer Research, 30 (2), 199-218.Kline, Rex B. (2005), Principles and practice of structural equation modeling, NewYork, NY: Guilford Press.Morin, M. and Chebat, J. C. (2005), "Person - place congruency: The interactive effectsof shopper style and atmospherics on consumer expenditure," Journal of ServiceResearch, 8 (2), 181-91.Rindskopf, David and Tedd Rose (1988), "Some theory and applications of confirmatorysecond-order factor analysis," Multivariate Behavioral Research, 23 (1), 51-67.Smith, W. (1989), "Trends in retail lighting: An intelligent design approach,"International Journal of Retail and Distribution Management, 17 (5), 30-32.Sproles, G. B. and E. L. Kendall (1986), "A Methodology for Profiling Consumers'Decision-making Styles," Journal of Consumer Affairs, 20 (2), 267-79.Summers, Teresa A. and Paulette R. Hebert (2001), "Shedding some light on storeatmospherics: Influence of illumination on consumer behavior," Journal of BusinessResearch, 54 (2), 145-50.Watson, David, Le Anna Clark, and Auke Tellegen (1988), "Development and validationof brief measures of positive and negative affect: The PANAS scale," Journal ofPersonality and Social Psychology, 54 (June), 1063-70.Weun, Seungoog, Michael A. Jones, and Sharon E. Beatty (1998), "The development andvalidation of the impulse buying tendency scale," Psychological Reports, 82, 1123-33.Wolff, Hans and Katja Preising (2005), "Exploring item and higher order factor structurewith the Schmid-Leiman solution: Syntax codes for SPSS and SAS," Behavior ResearchMethods, 37 (1), 48-58.

Measuring Retail Customer ExperienceDR. SHILPA BAGDAREAssistant ProfessorInternational Institute of Professional StudiesDevi Ahilya UniversityKhandwa RoadIndore – 452 017 (India)shilpa_bagdare@rediffmail.com91-9425076873

DR. RAJNISH JAINAssociate ProfessorInstitute of Management StudiesDevi Ahilya UniversityKhandwa RoadIndore – 452 017 (India)rajnish.ims@rediffmail.com91-9826036552

Measuring Retail Customer ExperienceABSTRACTPurpose - The purpose of this study is to develope a reliable and valid measure of retail customer experience.Design/Methodology/Approach – The paper reviews relevant studies dealing with theories and dimensions of retailcustomer experience for developing scale items. Scientific scale development process has been followed. The resultsare tested for reliability and validity using EFA and CFA.Findings – Retail customer experience is a reliable and valid construct, explained in four dimensions: joy, mood,leisure and distinctive. It results into a unique, pleasurable, and memorable shopping experience.Research Limitations/Implications – The study provides important insights into the delivered retail customerexperience as perceived by the shoppers. It was confined to only ―brick and mortar‖ retail stores. The study alsopresents related issues for future research.Practical Implications – The scale can be used by retail stores to measure the experiential responses of retailingefforts. It can help in identifying gaps in delivering pleasurable and memorable shopping experience.Originality/Value – The retail customer experience scale emphasize the role of emotional benefits in creating ajoyful shopping experience and provides a tool to help practitioners in monitoring experiential health.Key Words - Retail Experience, Shopping Experience, Retail Store, Emotion, CognitionPaper Type – Research Paper

Modern retailing is aimed at facilitating customers in acquiring products and services in a convenient and pleasantmanner. It has evolved from being a mere buying ritual to delivering a joyful shopping experience (Jin andSternquist, 2004). Retailing is about creating an integrated series of events leading to a pleasurable, involving,relaxing, rewarding, delightful retail customer experience in the shoppers‘ life (Jones, 1999; Cox et al., 2005; Hart etal., 2007; Arnold et al., 2005; Backstrom, 2011). Earlier researches have approached retailing from utilitarian andhedonic perspectives (Babin et al., 1994; Arnolds and Reynolds, 2003; Jones et al., 2006; Kaul, 2007; Carpenter andMoore, 2009). A large number of studies have also focused on exploring the buying motives, store choice criteriaand determinants of retail experience adopting economical, psychological and sociocultural approach (Terblancheand Boshoff, 2001; Burns and Neisner, 2006; Carpenter and Moore, 2009; Sinha and Banerjee, 2004; Puccinelli etal., 2009; Jain and Bagdare, 2009 ). The present study primarily draws from the works of Mehrabian and Russel(1974), Donavan and Rossiter (1982), Holbrook and Hirschman (1982), Pine and Gilmore (1998), Mathwick et al(2001), and Verhoef et al (2009) to adopt an experiential approach to retailing. In the present study, retail customerexperience refers to the outcome of consumed experience in a retail store, also known as shopping experience.Substantial amount of research has been devoted on antecedents and factors influencing choice of retail stores andcreation of retail experience. The focus of the present study is on delivered experience rather than determinants ofcustomer experience.Retail Customer ExperienceRetailing orientation is shifting from transactions to building lasting relationships by providing experiences. Modernretail stores are getting converted into a retail theatre or experience factory for creating a pleasant shoppingexperience to improve customer satisfaction and loyalty (Baron et al., 2001). Terblanche and Boshoff (2001) definedretail customer experience as all the elements that encourage or inhibit customers during their contact with a retailer.Customers engage themselves into a variety of activities while selecting a retail store, shopping and post shoppingstages, leading to a complete experience determining their satisfaction levels and repeat visits. The greater the degreeto which the customer experiences satisfaction with a retailer, greater would be the probability to revisit (Wong andSohal, 2003). Customer experience in the modern retail stores may be interesting, involving, absorbing, entertaining,

satisfying, different, pleasurable, memorable or beyond expectations. These experiences also reshape theexpectations and influence future purchase behaviour. Positive customer experience has been found to be relatedwith longer duration of stay, increased spend on different products, feeling to visit again and recommendation toother customers.Retail experience involves consumer processes (product evaluations, attitude formation) and responses (eg.satisfaction or purchase behaviour) affected by aspects of shopping environment, situation and consumercharacteristics (Fiore and Kim, 2007). Shopping in modern retail stores is essentially a sensory experience whichattempts to engage, entertain, involve, and absorb the customers through all five senses. Berry et al. (2002) opinedthat retailing is about creating a total customer experience by enabling customers to solve important problems,capitalize on the power of respectfulness, connect with customers‘ emotions, emphasize fair pricing and savecustomers‘ time and energy. Cox et al. (2005) identified that pleasures of shopping experience are governed by sixfactors namely bargain hunting, browsing, being pampered, sensory experience, kinaesthetic experience, andmingling with other shoppers. They observed that consumers tend to be drawn towards more private pleasures ascompared to social pleasures in store shopping. They further classified shoppers as joyless shoppers, bargain hunters,enthusiasts, attention cravers, and explorers.Shoppers‘ sense of sound, sight, smell and touch has powerful physical, cognitive, social and emotional effects.Sensory stimuli can influence store environment, improve the shopper experience and change the nature ofbehaviour. The right sensory stimuli, if applied appropriately, can calm, relax, de-stress, energise, improve mood,influence decision-making and the propensity to spend (Soars, 2009). The retailers use immersive technology, whichstimulates customers‘ visual, auditory, olfactory and tactile faculties to energise shopping experiences and radicallytransform the way in which consumers not only interact with, but also form emotional bonds with, brands. (Jones etal., 2010).Carpenter and More (2005, 2006) reported that consumers expect both hedonic and utilitarian value to be presentwhen shopping in the store. Swinyard (1993) found that shopping experience has a significant effect on the mood

and further reported that mood, involvement and shopping experience have significant effects on shoppingintentions. Healy et al. (2007) found that the retail experience is an emotional labyrinth in addition to being aphysical store layout. The combinations of static and dynamic elements supply a rich tapestry of hedonic activity,which provides customers with rich emotional benefits.Baker et al. (2002) proposed a conceptual model describing the effect of store environment dimensions – design,social and ambient, on consumer decision making. They suggested that creating a superior in-store shoppingexperience is critical, and could provide competitive weapon for brick and mortar retailers in the face of growingcompetition from online retailers. The customer‘s retailing experience consists of a series of clues (a) related toactual functioning of retail (logical dimension – price, merchandise, service etc.) and (b) emotional dimensioninvolving five senses and the environment (Knee, 2002). It was further suggested that customer interaction in storecan be better understood and managed using theatrical devices. Burns and Neisner (2006) also found that cognitiveevaluation and emotional reaction explain the level of satisfaction experienced in a retail setting. Customer considersa wide range of cognitive and emotional factors while selecting a particular store.Experiential retailing has been approached from five different perspectives namely experiential consumption,symbolic consumption, entertainment retailing, themed retailing, and cross shopping (Kim, 2001). Consumers shopfor a variety of known and unknown motives. Tauber (1972) proposed that people shop primarily due to personaland social motives, and often get engaged in impulse shopping. Shopping trip results into experiential outcomesassociated with consumption. Customers experience both utilitarian and hedonic value from shopping (Babin et al,1994; Jones et al, 2006; Diep and Sweeny, 2008; Carpenter and Moore, 2009). Utilitarian value refers to goal or taskaccomplishment focusing on rational benefits (Blackwell et al, 2006; Diep and Sweeny, 2008). Hedonic valuederived from shopping represents fun and enjoyment dimensions of overall shopping experience includingexcitement and escape from everyday activities (Diep and Sweeny, 2008; Carpenter and Moore, 2009). It has beenreported that satisfaction in shopping experience is more strongly related to hedonic rather than utilitarian value(Jones et al, 2006). Based on the integrative (experiential and utilitarian) nature of shopping experience, Fiore andKim (2007) proposed an overarching stimulus organism response based shopping experience framework. Their

model integrates components of both the hedonic experience related consciousness-emotion-value (CEV) model andthe utilitarian experience related cognition-affect-behaviour model (CAB) to explain consumer shopping. Pradeep(2010) proposed a shopping experience framework which includes dimensions such as information, environment,entertainment, education, simplicity, self worth, and community.Based on the review of literature, discussion with experts and observation, Retail Customer Experience is defined as―the sum total of cognitive, emotional, sensorial, and behavioural responses produced during the entire buyingprocess, involving an integrated series of interaction with people, objects, processes and environment in retailing.‖Dimensions of Retail Customer ExperienceExperiential outcomes have largely been explained as a combination of cognitive, emotional, behavioural andsensorial responses by the customer, however, hedonic and emotional benefits have been reported to play a moredominant role in shaping customers‘ experiences. In a study dealing with measuring emotional dimensions ofshopping experiences, using the scales of Mehrabian-Russel (1974), Izard (1977) and Plutchik (1980), it is reportedthat positive emotions are strongly association with the shopping outcomes (Machleit and Eroglu, 2000). The studieson customer experience and retailing clearly establish that shopping experience results into pleasurable outcomeswhich can be described in four dimensions: Joy, Mood, Leisure, and Distinctive.Joy: Shopping has been attributed as a joyful retail experience (Jin and Sternquist, 2004). Earlier studies haveemphasised on the feelings of pleasure derived during shopping process. Fun and pleasure dimensions ofentertaining shopping experiences are representation of joy of shopping (Holbrook and Hirschman, 1982; Jones,1999). Pine and Gilmore (1998) have also described the experience consisting of engaging, involving andentertaining dimension based on active or passive participation and connection of the customer in the entire process.Customers get engaged in the experiential process in a cognitive, emotional and behavioural manner (Brodie et al.,2010). They also find themselves in a state of enjoyment while shopping (Hart et al., 2007). The search ofstimulation has been referred as fundamental in shopper‘s behaviour. Consumers express strong tendencies ofapproach and avoidance behaviour while shopping (Patwardhan and Balasubramanian, 2011). Customers derive

strong feelings of pleasures from shopping, often described as private or personal in nature (Cox et al., 2005; Falkand Campbell, 1997; Backstrom and Johansson, 2006, Jones, 1999, Machleit and Eroglu, 2000).Mood: Customers have been found to be in a good mood during and after completing the shopping process.Shopping experiences reflect substantial emotional benefits and responses as positive feelings and moods (Holbrookand Hirschman, 1982; Babin and Darden, 1996; Jones et al., 2006). Mood is referred as a mild, transient, generalizedaffective state. It plays an important role in explaining shopping experience (Arnold and Reynolds, 2009). Thequality of shopping experience significantly influences shoppers‘ moods, involvement in shopping process, as wellas shopping intentions (Swinyard, 1993). Liljander and Strandvik (1997) and Richins (1997) have also clearlyexplained the role of positive emotions as goodness, happiness and excitement, in creating a pleasurable andmemorable customer experience. It has been observed that retail environment influence the moods of the shoppers.Pleasant store experience is expressed in terms of good mood of the shopper resulting into greater satisfaction fromshopping (Babin and Darden, 1996).Leisure: Shopping has been reported as a leisure activity in a large number of studies (Ballenger and Kargaonkar,1980; Babin et al., 1994; Howard, 2007; Robson, 2003; Backstrom, 2011). Customers prefer to shop from the placeswhich they like, which helps them relieve their stress, at the time and location convenient to them. Shopping isassociated with symbolic value, entertaining and delightful experiences (Jones, 1999; Arnold et al., 2005; Backstromand Johansson, 2006). It is described as a leisure activity resulting into pleasure, enjoyment and perceived freedom(Backstrom, 2011). Customer feel delighted while shopping in a pleasurable state (Oliver et al., 1997). It also givesan escape from day-to-day activities, provides relaxation and acts as stress buster (Mathwick et al., 2001; Soars,2009; Backstrom, 2011). Customers feel relaxed and refreshed after completing their shopping trip. Physical andsensorial dimensions have been identified as integral to customer experience (Pine and Gilmore, 1998; Schmitt,1999; Gentile et al., 2007) Shopping emerges as a leisure activity where greater importance is placed onentertainment value, ambience and peripheral facilities (Sinha and Banerjee, 2004). Retailers and shopping centredevelopers aim at making shopping experience a leisure pursuit (Howard, 2007).

Distinctive: Customer experience is a major source of differentiation and competitive advantage (Schmitt, 1999).Each experience is unique, resulting out of internal, subjective and personal evaluation by a customer. The need foruniqueness is strongly felt by both the retailer as well as customer. In a study of fashion stores it was found that storedesign and store environment give a unique personality or distinctiveness to the store. It was further observed thatother factors such as corporate social responsibility, reputation, service level, the salespeople, the merchandise sold,price/quality perceptions and the consumer base determine perceptions of ―genuineness‖, ―solidity‖,―sophistication‖, ―enthusiasm‖ and ―unpleasantness‖ (Brengman and Willems, 2009). Summarizing the findings ofearlier studies, Palmer (2010) explained that experience involves progression over time, anticipation, emotionalinvolvement, and a ―uniqueness that makes an activity stand out from the ordinary‖. Successful experiences arethose that a customer finds unique, memorable and sustainable over time (Pine and Gilmore, 1998). The ability ofthe retailer to create unique and pleasurable moments keep the customers delighted during the entire process of retailexperience, and gives the retail store a distinctive image for identification and recognition.Need for measurement/ scale developmentExperience has largely been regarded as a personal and subjective phenomenon. Measurement of customerexperience has been challenging owing to complexities in description, lack of clear definition of the construct and itsdimensionalities. Studies on customer experience emphasize the need for development of a robust metrics for itsmeasurement (Verhoef et al., 2009). Some measurements are available in the related area such as Experiential ValueScale (Mathwick et al., 2001); Brand Experience Scale (Zarantonello, Schmitt and Brakus, 2007), and CustomerExperience Index (Kim et al., 2011). In the context of retailing, measures of utilitarian and hedonic shopping value(Babin et al., 1994) and retail service quality (Dabholkar et al., 1996) are commonly used. The need for developing ameasure for Retail Customer Experience was felt in the light of growing importance of customer experience inretailing.METHODOLOGY

Scale Development: Scientific process for scale development prescribed by Churchill (1979) was adopted forthe development of retail customer experience scale. On the basis of review of literature (Table – 1) and discussionwith the experts, initial list of items was prepared containing 45 items for retail customer experience. The firstscreening of items was done by five experts from industry (three) and academics (two). The original list of 45 itemswas reduced to 30 items after the screening. Thirty experts comprising of retail managers (5), executives (5),marketing faculty members (5), psychologists (5), MBA final year students majoring in marketing (5), and retailcustomers having experience of shopping from personal lifestyle stores (5) were selected for further screening ofitems. Second stage screening resulted into 18 items for retail customer experience. The retail customer experiencescale was developed in the form of semantic differential scale, where each item was measured on seven point bipolarscale. The scale was tested on 150 customers. Exploratory factor analysing using Varimax rotation was used forinitial analysis. Six items having low communalities, low factor loadings and cross loadings were dropped at thisstage. The second stage EFA on twelve items of retail customer experience scale resulted into four factors.Sample and Data Collection: The data was collected from four different locations in the city of Indore(Madhya Pradesh) using mall intercept survey. Indore is a cosmopolitan city with a population of 3.2 million (IndoreDistrict, Census, 2011) and considered to be commercial centre of central India. Shoppers of personal lifestyleproducts were identified by asking informal questions about their shopping. Respondents were asked about theirshopping experience. The data was collected with the help of a seven point semantic differential scale having twelvebipolar items. A total of 676 valid responses (355 males and 321 females) were obtained after removing incompleteresponses and outliers.

DATAANALYSIS AND RESULTSThe data was analyzed using Exploratory Factor Analysis technique for obtaining initial factor structure ofRetail Customer Experience. Factors emerged were further tested for reliability and validity using Cronbach‘s Alphaand Confirmatory Factor Analysis. Results of the analysis are presented under sub heads.Results of EFA:The data was first checked for sampling adequacy through Kaiser-Meyer-Olkin (KMO)Measure of Sampling Adequacy and for significance using Bartlett test of Sphericity. The values of KMO (819) andBartlett test of Sphericity (χ2 =2308.773, df = 66, p ≤ 0.0001) represented the adequacy of the data further analysis.The data was analyzed using Principal Component Analysis (PCA) and Varimax with Kaiser Normalization rotationmethod. After removing low communalities, cross loadings and low factor loadings, exploratory factor analysis ontwelve measurement items resulted into four factors having Eigen values more than one. Factor loadings andrespective variance are presented in the Table - 2. On the basis of constituent items, the factors were labelled as Joy,Mood, Leisure, and Distinctive, in line with the description available in the earlier studies

Confirmatory Factor Analysis: Exploratory factor analysis clearly resulted into four factor structure for retailcustomer experience scale. In order to further confirm the factors, Structural Equation Modeling (SEM) usingAMOS 18.0 was used to perform the confirmatory factor analysis. The analysis revealed that the scale items areloaded in accordance with the structure obtained in exploratory factor analysis.

Model Fit: The observed values in the measurement model indicated an acceptable model fit of the data (χ 2 =185.192, df = 48, p ≤ 0.001; χ 2 /df = 3.858; CFI = 0.939; TLI = 0.917; IFI = 0.940; NFI = 0.920; and RMSEA =0.065). In addition, all the indicators loaded significantly on the latent constructs. The values of the fit indicesindicate a reasonable fit of the measurement model with data as per the suggested acceptable range of values in theliterature. It reflects that the measurement model confirms the four-factor structure of retail customer experiencescale.Reliability of the measurement instrument: Cronbach‘s Alpha for retail customer experience scale was0.820 which is acceptable as per the suggested range (0.7 – 0.6) for scale reliability (Nunnally, 1978). TheCronbach‘s alpha values for the four factors were 0.715, 0.728, 0.717, and 0.664 respectively (Table - 2), indicatingthe reliability within acceptable limits. After performing CFA, the Composite Reliability of all the factors werefound to be 0.71, 0.75, 0.59 and 0.67 respectively. Composite reliability of all the latent variables should be greaterthan .70 (Carmines & Zeller, 1988). For the present scale, calculated values of two latent variables are greaterthan.70, whereas, remaining two latent variables have relatively low values.Validity of the measurement instrument: The validity of the measurement instrument can be established byface validity, convergent validity and discriminant validity (Hair et al., 2006). The scale has high face (content)validity as all the measurement items have been developed on the basis of careful review of available literature(Table - 1). The convergent validity was assessed by examining the factor loadings and average variance extracted ofthe constructs (Fornell and Larcker, 1981). All the indicators had significant loadings onto the respective latentvariables (p < 0.001). The average variance extracted (AVE) for each latent variable should be greater than 0.50(Fornell and Larcker, 1981). It was found that for only one construct, AVE was greater than 0.50, whereas, for otherthree it had relatively low values (Table - 3).

DISCUSSION

Modern retail is adopting a host of strategies to attract, hold, sell more and retain customers by carefullymanaging a positive shopping experience. There are enough evidences that retail customer experience has asignificant impact on retail sales, satisfaction, loyalty, profitability, word of mouth communication, and imageformation (Donovan and Rossiter, 1982; Lucas, 1999, Turley and Milliman, 2000; Wong and Sohal, 2006; Crosbyand Johnson, 2007; Verhoef et al., 2009). Growing competition, changing customer profile and expectations,sophisticated design tools, advancement in technologies and the quest for excellence has transformed the retailorientation from transaction to experience creation.The study provides insights into the nature, structure and description of retail customer experience which mayserve as an important basis for designing strategies by retailers. It has clearly emerged from the results that retailcustomer experience is a multidimensional construct incorporating four dimensions – joy, mood, leisure, anddistinctive. Retailers‘ efforts to create a holistic experience should be able to shape customers‘ perception alongthese dimensions. Each of these dimensions requires specific strategies and tools for their effective management.Modern retailing engages the customers by carefully crafting and delivering experiential benefits to theirshoppers. All the dimensions of retail customer experience incorporate elements of cognitive, emotional, sensorialand behavioural dimension to express customers‘ responses towards retail store operations. The present study hasbeen able to identify specific dimensions of retail customer experience on which customer responses can bemeasured to ascertain the impact of retail strategy.Contributions and Managerial Implications: Creating a unique pleasurable and memorable retail customerexperience has emerged as the most important strategy for achieving competitive advantage and sustaining retailperformance. The present study makes an important contribution to the body of knowledge by developing a reliableand valid scale for measuring retail customer experience in brick and mortar stores. All the four dimensions alongwith their constituent items clearly describe the multidimensional nature of the construct suggesting directions forindustry applications and future research.

Retail customer experience is a reflection of retailers‘ efforts towards building long term relationships withtheir customers. Measurement of retail customer experience will allow retailers in knowing the customers‘ overallperception, attitude and feelings towards retail stores on different dimensions which gets reflected in terms of retailperformance. Retailers can identify specific dimensions or areas of poor performance, thereby, enabling them todesign suitable strategies to create and deliver positive experience.Limitations and Future Research: The present study was confined only to brick and mortar stores focusingon the customers of personal life style stores. Generalization of results on other channels and retail stores requiresmore studies for validation purposes. Future researches may include other online and offline channels along with avariety of retail stores to explore the differences. The study also lacks in terms of analysing the relationship of retailcustomer experience with other outcome retail performance measures such as revenue, profitability, satisfaction,loyalty, quality, image and others. It has supported its findings only on the basis of earlier studies. It is required toundertake researches to assess the impact of retail customer experience on retail performances. Future researchesshould also incorporate the influence of moderating variables on retail customer experience. Studies may also focuson identifying specific functional and emotional clues to shape retail customer experience in the desirable directions.REFERENCESArnold, M. J. and Reynolds, K. E. (2009), ―Affect and retail shopping behaviour: Understanding the role of moodregulation and regulatory focus‖, Journal of Retailing, 85 (3), 308-320.Arnold, M. J., Reynolds, K. E., Ponder, N. and Lueg, J. E. (2005), ―Customer delight in a retail context:Investigating delightful and terrible shopping experiences‖, Journal of Business Research, 58, 1132-1145.Babin, B.J. and Darden, W.R. (1996), ―Good and bad shopping vibes: Spending and patronage satisfaction‖, Journalof Business Research, 35 (3), 201-206.Babin, B.J., Darden, W.R. and Griffin, M. (1994), ―Work and/or fun: Measuring hedonic and utilitarian shoppingvalue‖, Journal of Consumer Research, 20 (4), 644-56.Backstrom, K. and Johansson, U. (2006), ―Creating and consuming experiences in retail store environments:Comparing retailer and consumer perspectives‖, Journal of Retailing and Consumer Services, 13, 417-430.Backstrom, K. (2011), ―Shopping as leisure: an exploration of manifoldness and dynamics in consumers shoppingexperiences‖, Journal of Retailing and Consumer Services, 18, 200-209.

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Do (How) Digital Natives Adopts A New Technology Differently than Digital Immigrant? ALongitudinal Comparison of Four Competing Theoretical ModelsAnkit Kesharwani, Daniel Sherrell, Makam Balaji and Nitin GuptaABSTRACTBased on their comfort level with the digital world, digital users can be classified as either digitalimmigrants or digital natives (Palfrey and Gasser, 2008). Digital immigrants (DI) are those who started using digitaldevices or technology at some stage in their adult lives, while digital natives (DN) are users who were born into adigital world after 1977 (Tapscott, 2009). The existing research typically focuses on tech-savvy young adults (i.e.,DN) and has spent little effort trying to understand increasingly tech-savvy adults (i.e. DI). The objective of thestudy is to investigate the relative effectiveness of four competing theoretical models (e.g., Theory of PlannedBehavior) of attitudeintention formation in explaining and comparing the continued new technology usage intentionsof DN and DI. Using a three-wave panel model, this study will enable us to assess the effectiveness of eachtheoretical model at each of three time periods to predict these two digital-familiar groups‘ intentions for continuedtechnology use as well as assess the ability of the four psychological processes noted above to explain continuedtechnology use behavior over time.1. INTRODUCTIONEvery generation is shaped by the major developments and movements of its time. For this current young generation,it‘s digital devices and social networking. Recent reports and trends have shown that current generation youngpeople study, work, write, and interact with each other in a very different ways than the ways their ancestor hadgrown up. Major aspects of current generation young people lives like social interactions, friendships, civic activitiesare mediated through digital devices.This generation is not just different in behavior; they have been labeled with differing designations:Born Digital, Digital Young, Millennials, Next Generation, Echo Boomers, Net Gen, Screenagers, Bebo Generation,Google Generation, MySpace Generation, Gen Y, First Digitals, Generation Z, Generation I, Internet Generation, oriGeneration. But the dubbing that is successful in invoking the maximum number of hits in the literature andtriggered research is Digital Natives. Digital natives prefer to read blogs on computers, to listen music from digitalmusic players, to watch videos and to play games on internet and mobile, etc. For them camera means digital cameraand wall means Facebook wall. Social psychologists have found that people who grow up in different cultures do notjust think about different things, they actually think differently (Hayles, 2007; Nisbett 2004). Therefore, the digitalenvironment and culture in which digital natives are being raised may affect their thought processes. Unlike theirancestors, for these generations, any new product/services dealing with digital technology seem familiar and theytend to accept them. So, in spite of the fact that adoption of an e-service is crucial for its success, it does notguarantee the desired managerial outcome except the use continues for current generations. However, explainingconsumer acceptance of new e-Service is often described as one of the most researched areas in the contemporaryecommerce literature, little systematic effort has done to provide insight into continued IS use over time. Theobjective of this study is to compare longitudinal models of four competing theoretical models of innovationadoption. The each proposed longitudinal model is a unified framework that sheds light on four differentmechanisms underlying post-adoption phenomena; (1) the processes suggested by the competing theoretical modelitself, (2) sequential updating mechanisms, (3) feedback mechanisms, and (4) repeated behavioral patterns. Thelongitudinal models would be empirically compared among themselves in the context of continued usage in e-services setting.

2. LITERATURE REVIEW2.1. Competing Theoretical Models (CTMs)In literature, there are nine competing theoretical models: theory of reasoned action (TRA), technology acceptancemodel (TAM), motivational model (MM), theory of planned behavior (TPB), decomposed theory of plannedbehavior (DTPB), model of PC utilization (MPCU), innovation diffusion theory (IDT), social cognitive theory(SCT), and unified theory of acceptance and use of technology (UTAUT). Proposed study has chosen four CTMsbased on following two criteria: (a)Applications: The model should be applied extensively in different context of innovation adoption; and (b)Comparison: The model should be compared with any other existing theoretical models. This resulted in four CTMsstudying adoption of innovation: TAM, TPB, DTPB, and UTAUT.TAM posits that users‘ intention of using a new technology is mediated by two beliefs, ―perceived usefulness‖ and―perceived ease of use‖. Perceived usefulness refers to the extent to which an individual believes that the use of newtechnology will be helpful in improving his/her job performance. It comes from the definition of the word ―useful‖which means ―having a useful function‖. Perceived ease of use refers to the extent to which an individual believesthat the use of new technology is free of effort. It comes from the definition of the word ―ease‖ which means―freedom from difficulty or hardship or effort‖. In the course of its development, TAM has received extensiveempirical support through its applications in different technology contexts (Guriting and Ndubisi 2006; Lee et al.2007; Amin et al. 2008), comparisons with other competing theoretical models (Davis et al. 1989; Mathieson 1991;Taylor and Todd 1995; Venkatesh et al. 2003), and extensions (Venkatesh and Davis 2000; Gafen et al. 2003;Pikakarainen et al. 2004; Venkatesh andBala 2008). Given the extensive empirical support for TAM, it will be intriguing to see if their findings can beconfirmed in the digital natives‘ use of e-services also.TPB is one of the predictive persuasion theories that link between the attitude towards the behaviour and behavioralintention of an individual. TPB talks about the ‗perceived behavioral control (PBC)‘, a conviction that one thinksthat he/she has control over internal as well as external factors that may facilitate or impede action that will leaddesired goal. TPB posits that in addition to attitude and subjective norm, PBC also have a significant impact on bothbehavioral intention and actual behaviour of an individual. Though several researchers have argued that, as opposedto TAM, TPB is better model to explain individual behavior (Ajzen, 1988). ). In IT literature, the effect of PBC onintention has mixed findings. In a direct test, Mathieson (1991) found that PBC did not have a significantrelationship with behavioral intention, though it did not provide substantial explanatory power.Several studies examining indirect effect of PBC have shown significant findings (Moore and Benbasat, 1993;Hartwick and Barki, 1994).Taylor and Todd (1995) have decomposed the predictors of TPB into various sub-components. They decomposedattitude into perceived ease of use, perceived usefulness and compatibility; subjective norms into peer influence andsuperior influence; and control beliefs into self-efficacy and facilitating conditions. Because it incorporatesadditional factors, such as the influence of significant others, perceived ability and control that are not present inTAM, but have been shown to be important determinants of behavior (Ajzen 1991), it should provide a morecomplete understanding of usage.In 2003, Venkatesh and his colleagues (2003) proposed UTAUT after reviewing 8 innovation adoption theories. TheUTAUT model has been empirically tested with 70% of dependent variable variance accounted for, much higherthan that of TAM and TPB. In model, the factors affecting behavioral intention include performance expectancy,effort expectancy, social influence, and facilitating conditions. Although UTAUT provides great promise to enhanceour understanding for technology acceptance, the initial UTUAT study focused on large organizations. In addition,the scales used in UTAUT model are new as they are in combination of a number of prior scales, and therefore, thesuitability of these scales needs to be further tested. In UTAUT model, performance expectancy and effort

expectancy have been used to incorporate the constructs of perceived usefulness and ease of use in the original TAMstudy.In sum, these CTMs together have following features: (a) Outcome variable of each variable is actual usage; (b)Some construct have been studied by more than one model; and (c) All models have been extensively used inliteratures to study initial adoption of new technology/services. In a quest for a better model among CTMs to predictand explain their adoption behavior of an individual, many studies have compared these CTMs. But these previousstudies have demonstrated that test among these models have no consistent results. For example, Mathieson (1991)found that TAM is superior to TPB for predicting behavioral intention to use spread sheet packages. Taylor andTodd (1995) observed that decomposed TPB is superior to TPB and TAM in understanding behavioral intention.For professional workers, Chau and Hu (2001) proposed that TAM is superior to TPB for explainingbehavioral intention. So, mixed findings across these studies highlighted the need to develop simultaneous tests ofthese competing models for digital natives‘ acceptance of a new e-service.3. LITERATURE GAPS: The following three research gaps have been identified:(i) Despite the great interest in the digital natives, the research introduces a wide generation gap. It placesincreasingly ICT-savvy young on one side of the gap and adults born prior to 1980, with little or no ICT savvy, onthe other side. Such a generalization is problematic because the literature focuses primarily on the young–one side ofthe gap. It is further compounded by a paucity of research and understanding surrounding increasingly ICT-savvyadults. (ii) Yoo and Gothenburg (2010) propose a framework for experiential computing that includes artifacts,actors, space, and time. The space and time elements define the ―where‖ and ―when‖ (that is, the context) the actorsengage with the artifacts. A synthesis of these led us to propose four key dimensions that appear to be relevant forunderstanding digital natives in the context of UIS: users (digital immigrants versus digital natives), systems(traditional information systems versus ubiquitous information systems), activity (professional versus personal), andcontext (office versus home). When we chart these four intertwined dimensions together, we see a clear patternemerging. Most research in IS has focused on the inner/central regions of the chart, namely, the ―traditionalinformation systems used by digital immigrants for professional purposes at the office.‖ However, there is a paucityof research at the mid-to-outer regions of the chart that looks at ―ubiquitous information systems used by digitalnatives for professional and personal purposes at the office and at home.‖ (iii) Though these models providesvaluable insights to understand users‘ initial adoption, there is scarcity of literature that explain how those adoptionand usage intention evolve over time. Moreover, within those studies, there is discrepancy in findings. Bamberg etal. (2003) have found insignificant impact of habit on future behavior but Kim & Malhotra (2005) have foundsignificant behavior. Moreover, structural paths in Bamberg et al. (2003) are also different for two modes oftransportation, car and bus. So, lack of consensus among findings makes intriguing to re-examine the role of habitand behavioral intention over a period of time.4. MODEL FRAMEWORKThis study contends that an explanation of continued use of technology should simultaneously take into accountfollowing four mechanisms: the current belief evaluation – future behavior relationship (reason-oriented theory), (ii)the current belief evaluation - future belief evaluation relationship (sequential belief updating), (iii) the currentbehavior – future behavior relationship (habit), and (iv) the current behavior – future belief evaluation relationship(self-perception theory).The theory of belief updating provides theoretical underpinnings for the often-observed intertemporal updates ofconsumer evaluations (Hogarth and Einhorn, 1992; Bolton 1998). The main principle of the theory is that people donot perceive an external stimulus in its pure form as it is presented.Rather, as Hogarth and Einhorn (1992) put it, the prior knowledge ―is adjusted by the impact of succeeding pieces ofevidence‖ (p. 8). Within the framework of belief updating, the prior knowledge is referred to as an anchor, and thenew piece of information is regarded as an adjustment. In marketing, this conceptual framework has been usedextensively for studying intertemporal changes in, for example, customer attitudes (Bolton and Drew, 1991),

customer satisfaction (Bolton 1998, Mittal et al. 1999), and intention to purchase (LaBarbera and Mazursky, 1983,Mittal et al., 1999).The preceding discussion leads us to believe that user evaluations will undergo the same sequential updatingmechanisms as do consumer evaluations. To provide richer insights into how user evaluations unfold over time,therefore, it is essential to incorporate the theory of belief updating into the TAM framework. When applied in thecontext of continued use, the theory of belief updating suggests that for TAM: PEOU, PU, and INT at T = 1 willserve as anchors for future evaluations at T= 2 which will be updated with new adjustments. More specifically, INT (T = 2) is formed based onINT (T= 1), ATT (T= 2), and PU (T= 2); ATT (T= 2) is in turn determined by ATT (T= 1), PU (T= 2) and PEOU(T= 2); PU (T=2 is determined by PU (T= 1) and PEOU (T=2), finally, PEOU (T= 2) is also a function of PEOU (T=1) and other factors outside the boundary of this study (Figure 1).As opposed to common prejudice that individual behavior is mostly led by beliefs and attitudes; Melone (1990)found that much research in social psychology have been theorized on a reversed causal relationship from behaviorto beliefs and attitudes. However, most research to date in the IS domain has focused on the influence of userevaluations on user behavior rather than in the opposite direction (Kim and Malhotra, 2005). Abundant evidenceattests to the role of past behavior in the formation of judgments and intention. In a meta-analysis based on 64independent studies, Ouellette and Wood (1998) also showed that past behavior was significantly related to attitudes,subjective norms, perceived behavioral control, and intention. More specifically, the theory posits that (1) whencarrying out a routine task, the person will use rules of thumb as a way to save cognitive capacity but (2) forperforming an unfamiliar task, the individual will carefully process relevant information to arrive at a judgment. Thepreceding discussion suggests that whereas the sequential updating mechanism prevails among novice/light users(digital immigrants); the feedback mechanism is likely to occur mainly among experienced/heavy users (digitalnatives). Because both decision-making strategies are plausible in the context of continued use, we propose that EXPwill have a positiveeffect on respective determinants of each CTM at each time period (as shown in Figure 1).From the perspective of cognitive psychology, habit is made possible by a cognitive representation that links asituational cue and an action (Verplanken et al., 1997). This mental linkage is established as a result of repeatedperformances of the same behavior. That is, it is the well-learned mental structure that consistently instigates aroutinized behavior (e.g., visiting a favorite news Web site) given a situational cue (e.g., before beginning work inthe morning) without requiring deliberate decision making. Given the established cognitive structure, then thefrequency with which the behavior of interest is performed (i.e., the number of actions) is almost the same as thenumber of opportunities (i.e., the number of cues) to perform the behavior. In a stable context, furthermore, theoccurrence of opportunities in the past will be similar to the number of occurrences in the future.Consequently, future behavior, which is a function of future opportunities, tends to correlate with pastbehavior. Therefore, along with conscious intention, past use may be able to explain the variance in future use. Notethat we do not expect an individual user to follow both conscious (INT) and automatic processes past use/habit(EXP) simultaneously. I anticipate that both processes will coexist among various types of users (ranging fromoccasional to heavy users) within the context of continued use. To sum up, we propose the final hypothesis that USEat t = 1 will influence EXP at t = 2.

5. RESEARCH METHODOLOGYSince the objective of the study is to investigate the legacy of different CTMs in a continued usage of digital natives,longitudinal study is appropriate for the study. In this study, a three-wave panel model is applied to investigate intertemporalupdates of users‘ evaluation and self-perception theory on continued usage. Structure equation modeling isproposed to test the causal hypothesized relationships. The construct included in this study would be taken from theirrespective original studies. The measurement scales for the construct would also be adapted from the prior research.Two pre-test studies would be done. First, pre-test would be done to develop a scale to distinguish between digitalnatives and digital immigrants. Another, second, pre-test would be done to select the websites that would serve asthe context of the study. Respondents would be asked to mention websites they visit frequently for e-services likeonline shopping, e-ticket booking, online hotel room booking, online payments, etc. They would also ask to namethe some products that they have bought from these websites. The data for the main study would be collected fromactual users of these e-services.The research design of our study was based on the longitudinal studies by Venkatesh and his associates (Venkateshet al., 2000; Venkatesh, 2000; Venkatesh and Morris, 2000). At wave 1, respondents will be selected through snowballsampling. The respondents will be requested to participate and provide their e-mail address for wave 2 and wave3. To address the attrition problem in this kind of longitudinal studies, a lucky draw prize would be offered torespondents who have participated in all three waves. Initially study would try to collect more than three thousandresponses at wave 1 and expect to collect around 500 for each DN and DI at the end of wave 3.To ensure the reliability and validity of research models, 48 separate measurement models would be tested. Asshown in Table I, for each CTM, an individual measurement model as well as longitudinal measurement modelwould be evaluated at three time periods T1, T2 and T3 (Number in each cell is showing the order of measurementmodel test). Hair et al. (2010) criterion would be used to assess reliability and validity if each construct. Afterensuring reliability and validity of construct, structure equation modeling using AMOS will be used to test thehypothesized relationships.

To account for common method variance (CMV), study will follow several pro-active remedies as suggested byCraighead, Ketchen, Dunn and Hult (2011). Additionally, to avoid self-reported usage biasness study will measure,both objective measures and subjective measures. High-correlation between both measures would address this issue.Moreover, study would also try to refer to some statistical data (survey reports, findings, etc.) to providetriangulation. Further analysis will involve a comparison of early and late responses, as recommended by Armstrongand Overton (1977). A series of t-tests for independent samples will be performed to identify if there is a significantdifferences between early and late respondents, providing evidence of non-response biasness.6. EXPECTED CONTRIBUTIONThis study contributes to academic research by demonstrating that these four streams of research can be seamlesslyintegrated into a single unified theoretical framework to explain both pre-adoption as well as post-adoptionphenomena. Though, Kim & Malhotra (2005) have developed a longitudinal model of continued use by integratingfour mechanisms; present study has following advantage over that study: (i) this study would develop and test fourlongitudinal models based on four competing theoretical models (CTMs) instead of only one (i.e. TAM). (ii) Thisstudy will analyze 48 distinct models. Such kind of analysis would enable us to assess the legacy of each CTM inpresent context.(iii) This study would use three wave panel models as opposed to two-wave panel model as in Kim and Malhotra(2005) study. Kim & Malhotra (2005) themselves have suggested that use of three or more wave panel model wouldbe a better approach to investigate the longitudinal effects.References will be made available upon request.

AN INTERACTIVE MARCOM MODEL FOR EMERGING MARKETSDon E. Schultz, Northwestern University Evanston, Illinoisdschultz@Northwestern.edu 847-491-2059Edward C. Malthouse, Northwestern University Evanston, Illinoisecm@Northwestern.edu 847-467-3376ABSTRACTA conceptual model of the differences between marketing communication models used in established markets andwhat is needed in emerging markets is proposed. It is argued that existing marcom models often fail because ofculture, technology, interactivity, reciprocity, networks and channels. A new approach based for emerging markets isproposed: Consumer Networks and Negotiation (CN2). Recommendations for testing the model are proposed.Key Words: emerging markets, interactive models, networks, negotiationAN INTERACTIVE MARCOM MODEL FOR EMERGING MARKETSI. IntroductionOver the past few years, it has become increasingly apparent that many of the marketingcommunication concepts that have been developed and applied over the past several years in established westernmarkets are not relevant to, nor can they be applied successfully, in many of the emerging markets around the world.(Schultz and Patti 2009) A number of situations create these transferability problems, some of which are themechanical, environmental and structural foundations which support and have supported these emerging markets forcenturies. (Schultz and Kitchen 1997, Narsing et al 2008) Other challenges are cultural, social and even religiousbeliefs and practices. (Batra 1996) All these challenges and more have been faced by global marketers as they havetried to enter these seemingly lucrative markets, often with limited success. (Peng et al 2008)In this paper, we propose a dramatically different marketing communication model, one which specificallyaddresses many of the problems marketers have encountered in numerous emerging markets. It acknowledges andprovides solutions to the new, interactive marketplace which exists in many of these new economies. Indeed, themodel we propose is based on an approach that recognizes the increased and ongoing interaction between buyers andsellers and the various other factors which influence the development and use of new and unique marketingcommunication opportunities. Thus, not only does this new model provide concepts and methodologies that are

elevant in emerging markets, it also addresses many of the issues sophisticated marketers increasingly face today inestablished markets as well.While this model is still in development, it is based on solid research and an understanding of the emergingmarkets around the world. The model we propose has been vetted in several recent academic conferences.(ICORIA Berlin 2011, AAA Asia Pacific 2011) Portions of this new e-marketing communications approach havebeen accepted for publication in leading peer reviewed journals and textbooks. (Advances in Advertising Research2011) Thus, we believe the proposed methodology and approach is one which can be effectively used in emergingand established markets around the world.The structure of the paper is: (a) an initial discussion of marketing communication in established markets andhow those approaches and concepts emerged and have been developed, (b) a brief discussion of the challenges to theexisting established market and marketing communication models. That is followed by (c) an explanation ofobservations of the emerging markets marketing communication model. We close with (d) an acknowledgement ofthe limitations of the approach and some recommendations for next steps.II. Marketing Communication in Established MarketsMarketing communications, as practiced in established, western economies today, has evolved over time.(Duncan and Caywood 1996) However, many of the structures and formats used in marketing and marcomcommunication today had their genesis in the Industrial Revolution of some 200+ years ago. (Gronroos 2004) Themost common marketing system has been one where manufacturing firms developed and produced products whichthey then sought to sell through various types of distribution channels to end users and consumers. (Vargo and Lusch2004) Because manufacturing profits were based on production economies-of-scale, most manufacturers sought tooptimize their investments by selling ever-larger numbers of products to take advantage of the continually decliningproduction costs, and thus, constantly increasing margins. (Vargo and Lusch 2004) Today, that approach is bestrepresented as a supply-chain model. This approach represents a majority of the manufacturing organizationsaround the world today. Exhibit One illustrates the concept.Exhibit One Goes About HereSupply Chain ModelTo encourage the purchase and use of the products they had produced, manufacturers began to focus on theuse of various forms of marketing communication delivered through increasingly sophisticated channels to informand persuade customers and prospects. (Schultz and Schultz 1998) Starting with print media in the U.S., such asnewspapers and magazines in the 1880s, other media forms such as radio became available in the 1920s, followed bytelevision in the 1950s. (Hutton 1996) As media firms developed, audiences grew and widespread outbound and oneway marketing communication became possible.Initially, these media forms carried basic product message advertising which sought to encourage customersand prospects to (a) visit various retail establishments where the product(s) were stocked and inventoried and fromthat to (b) to prefer or request the brand(s) the manufacturer had attached to the products developed which wereavailable from those retailers. (Bowersox et al 2002) These communication systems became central to the successof the supply chain models.The marketing communication model, which evolved over time, was consistent with the supply chainbusiness model which it was designed to support. It was a one way, outbound, media-oriented, marketer-controlledcommunication system. (Borden 1964) The approach was based on the 4Ps or marketing mix model (Product, Price,Place and Promotion) which became the foundation of modern marketing. (Porter 1980) Using the availablecommunication systems, marketers could direct messages to people they believed might be the best prospects for

their products based primarily on demographic variables and control not only the content, but, the volume andtiming of marcom as well. (McCarthy 1964)Inherent in all these marketing communication approaches were the basic elements of persuasion. The goalof much marcom was to persuade customers or prospects to try the promoted product. The assumption was, once theuser had tried, they would be satisfied and would return for additional purchases. (McCarthy 1964) Thus, theestablished marketing communication model, developed some 75 or so years ago, is still the same as is in use today.Communicate, persuade, generate a purchase and let the product prove its value over time. This resultingacquisition-retention model drove the system. Thus, the basic marketing communication model was based onacquisition which could be achieved through persuasion and occasional reminders.In spite of the major economic, distribution and technological changes that have occurred, that marcommodel still describes the marketing communication system used by large number of consumer product companies inestablished markets in the 21 st century. (Schultz and Schultz 1998) The basic premise of marketing communicationmanagers seems to be: if it is still working, why change?Since the basic model of marketing communication was customer acquisition, generated through customertrial and product performance, the persuasion model made inherent good sense. Consumers had little informationabout the product other than what the marketer provided and had even more limited recourse in talking back to themarketer. Accordingly, customer-focused persuasion models were built which generally assumed that customers orprospects moved through some type of communication process on the way to a purchase decision. One simplemodel was the AIDA approach (Attention, Interest, Desire and Action) of the early 1900s. (Schultz and Kitchen2000) More sophisticated models, based on assumptions inherent in western-based behavioral consumer psychology,developed in the middle of the 20 th century such as the Hierarchy of Effects. The Hierarchy of Effects modelassumes marketers drive customers through a purchasing process, using multiple communication tools, deliveredthrough various forms of outbound message and incentive delivery systems. (Lavidge and Steiner 1961) Based onthe messages delivered, marketers could influence the ―consumer purchase process‖ and, as important, measure theprogress of the program through various, generally attitudinally- based, -research techniques.A stylized model of the Hierarchy of Effects model is shown in Exhibit Two.Exhibit Two Goes About HereHierarchy of Effects ModelThe support for the Hierarchy of Effects approach is based on a theoretical concept articulated by Lavidge andSteiner (1961) in the early 1960s. (Lavidge and Steiner 1961)The model assumes that consumers move throughsome type of communication process on the way to a purchase decision. The movement through thatpersuasion/communication model is controlled by the marketing organization. That is, by investing in marketingcommunications, the marketer ―pushes‖ the customer or prospect through the process, on the way to a purchase. Asshown, the consumer or prospect moves from awareness to knowledge to preference to conviction. And, at somepoint, a purchase may actually be made, although the Hierarchy is essentially a communication model. (Lavidge andSteiner 1961) The business-to-business marcom managers have adapted this same approach with their ―funnelsystem‖.As shown, the L&S model is linear, one way, outbound and assumes that the marketer is in control of all thevariables, that is, the 4Ps (product, price, place and promotion) which influence the consumer‘s purchase decision.While there are challenges to the Hierarchy model, (Barry 1987) it continues to be the most well established andaccepted in key marketing organizations around the world.To summarize, the traditional marketing communication system being used in established markets todayassumes (a) willing and interested prospects with disposable incomes who (b) are served by third party channels and

other distribution systems, who (c) have access to and attend to various relatively unfettered mass communicationmedia forms, (d) can be persuaded to make various attitudinal changes through effective communication, (e) whichwill eventually result in behavioral changes, i.e., the purchase and use of the promoted product and (f) as a result ofthat purchase, the customer will likely purchase again.A working model of the process is shown in Exhibit Three.Exhibit 3 Goes About HereEstablished Markets Marcom ModelAs shown, the system is all outbound (from marketer to customer/prospect) with limited response devices availableto the customer. The marketer controls all the elements in these marketing and communication systems and canapply those elements as needed or required to influence or persuade customers and prospects to act in waysbeneficial to the seller.The problem today is that the established, western-originated and controlled marketing communicationsystems, which developed and evolved during the 20 th century, are relevant to only about 20% of world‘spopulation. The balance of the world‘s economies and markets operate under different systems and with differentparameters. Thus, this paper argues that a new, interactive marcom model is needed for marketers to succeed withthe other 80% of the world. (Schultz and Block 2003) The balance of this paper describes the type of model neededand suggests a conceptual approach which might be employed.III. Why the Established Marcom Model Doesn‘t Work in Emerging MarketsToday, sophisticated marketing organizations are finding that their established marketmarcom models just don‘t work in new and emerging markets. (Peng et al, 2008) Commonly, they blame theemerging market economic system they are trying to enter for their failures. (Patel Thompson and Thompson 2012)Lack of data, lack of logistical systems, lack of education of the consumer population, lack of managementcapabilities of people in the new markets, and a host of other reasons are given. Commonly the argument is made:this program worked beautifully in Australia or France or the U.S., it should work just as well in Indonesia or Brazilor Nigeria. After all, we‘ve translated it into the local language and embedded some television shots of local sites togive it a ―local feel‖. Yet, failures occur and western managers don‘t seem to know what caused the problem.In our view, the reasons existent established market models fail in emerging markets are fairly clear.First, the rest of the world isn‘t like the Midwest portion of the United States with a different language beingthe primary differentiator. Given the developments of the past few years, emerging markets are commonly similar to,but more often, radically different from established markets. While there are a host of reasons for those differences,some of the most common ones are:A. Culture: culturally, emerging markets are not like established ones and just translating theconcepts into the local language is not sufficient. In many cases, emerging markets arecommunal rather than individualistic, as are commonly found in the west. Thus, the family,communities, social groups and other networks are much more important than they are in theestablished western markets. . (Flambard-Ruaad 2005)B. Communication: often, emerging markets are much more sophisticated in terms ofcommunication systems than are their western counterparts. For example, 42% of all internetusers are located in Asia (Internet World Stats, 2010). One internet portal in China, QQ, hasalmost 1 billion users (touchchinese.com, 2012) Interactivity and mobility are the two key

factors. Many emerging economies have leap-frogged western economies with newcommunication technologies that often took years to develop in the west. (Chapman et al 2002)C. Interactivity: consumers in emerging markets tend to assume there is some give and take inmarketing situations, the ―bazaar mentality‖ found in many emerging markets (Sharma andKrishnan 2000). Thus they have no problem with negotiating a price or other element in thecourse of reaching an agreement. (Dawar and Chattopadhyay 2000)D. Reciprocity: in most emerging markets, the goal of an exchange is for both parties to feel theyreceived value for what they invested. Western economies seem to continuously set up a systemwhere one side wins and the other loses.(Peng et al 2008)E. Networks: most all markets and all people in emerging economies are members of some type ofnetwork whether that is family, community, nation or whatever. Thus, the linear models thathave been developed in the west have little relationship to their lifestyles, their businessoperations or the way they lead their lives. Understanding the networks customers andprospects have created for themselves and within which they operate is critical in understandingemerging markets. (Meyer et al 2008)F. Channels: the west is filled with large scale, broadly stocked retail systems which compete withothers of the same kind. In many emerging markets, the small, family owned and run retailshops are often the dominant outlet for many consumer products. Established market marketersrequire logistics and transportation systems often not available in emerging markets (Hoskissonet al 2000)While there are many other differences between established and emerging markets, thesefive will help set the stage for the marcom model we propose in the following section.IV. Building a Marcom Model for Emerging MarketsIn Exhibit Four, we present the conceptual model which we suggest could be moresuccessful in emerging markets than adaptations of those which are currently being used in the established westernmarkets. At this point, our model is still evolving, only exploratory and yet to be proven in the marketplace. Webelieve, however, it reflects and accommodates the challenges and issues marcom faces in emerging markets today.The model is illustrated in Exhibit Four.Exhibit Four Goes About HereEmerging Markets ModelWith the development and diffusion of new information technologies, traditional marketing and marcom has beenchanged forever. We propose that the two critical elements in this new marcom model are (a) the inclusion ofvarious types of networks and other interactive systems, resulting in increased (b) emergence of negotiatedrelationships between the buyer and seller. In this Networked and Negotiated Relationship emerging market system(Exhibit 4) the marketer will continue to develop products and services through the traditional manufacturing-basedsupply chain model. Those marketers will likely continue to advertise and promote them in traditional media andoften with direct marketing (arrow A) systems. Those persuasive promotional efforts will likely continue to bedistributed through mass distribution channels (arrow B) as well as through internal distribution channels (arrow C).That will be much like what has gone before. But, the marketer no longer has the nearly complete control over themessages, offers or even information about the products they are trying to vend as they have had in the past.Before discussing the meaning of what we are calling the Emerging Market Marcom Model, it is important to notethe role of the World Wide Web, search engines and now mobile devices, particularly in emerging markets. Thesetechnologies now enable customers and prospects to sort through, evaluate and make decisions based on informationranging from product descriptions to retail pricing to customer-generated evaluations of products and services (Nelet al. 1999). These developments have had much to do with the well-publicized ―shift of marketplace power‖ (e.g.,

Deighton 2009) from the marketer to the consumer. Mobile communication forms have allowed customers to gathermarketplace information anywhere at any time, thus breaking the tether of the broadcast signal, the cable wire andthe computer cord (Krause and Magedanz 1996). In short, the Web, search and, more recently, mobile devices havegiven customers fingertip access to massive amounts of information, available anytime and anyplace desired. Whatis most interesting about this new marcom model is that the tools and technologies are today, often moresophisticated in emerging markets than in established ones. For example, today, Facebook has more users outside theU.S. than domestically. (Internetworldstats.com 2012) Thus, the increasing use of technology, particularly inemerging markets, plays a critical role in the new marcom model we propose.Note the proposed model is still a customer-oriented communication system. Two new elements have been added,however. One is the network concept, where it is assumed that all marketers, customers, channels, etc. are or will beconnected electronically. In other words, the system is no longer linear and direct, from marketer to customer. It isnetworked where multiple voices, using multiple communication channels are all interconnected and cancommunicate in multiple dimensions. This network model changes the entire marcom system, which has historicallybeen based on a linear ―stimulus-response‖ model, as found in the Lavidge and Steiner (1961) Hierarchy of Effectsmodel previously described. The marketer sent out stimuli, in the form of messages and incentives, and consumersresponded. In a network model, there are few loci of control. That simple change obviates many of the traditionalmarketing concepts and approaches.This dramatic change is largely due to social media (Scott 2007). With the rise of electronic systems such asFacebook, YouTube, Twitter and the like, customers can now talk back to marketers, ask questions, challenge claimsand the like. Historically, marketers spoke and customers were supposed to listen and respond. Now customers cancommunicate with other, like-minded customers all over the world. That is, customers can create their ownmarketing and brand contact systems, either positive or negative, and share them with others, or indeed, the world. Itis a system marketers can‘t control. More loss for the marketer, more gains for the customer.The second major change is negotiation. That means when customers gain control of marketplace information, as isthe case in many emerging markets, they have the capacity to negotiate channels, pricing, terms, and incentives – inshort, the whole range of formerly marketer-controlled activities that determined the marketplace value of offers andproduct bundles (Tuli et al. 2007). Today, it is not unusual for a consumer to walk into an electronics store, armedwith a mobile device, view the retailer‘s offerings and prices, and immediately compare and contrast them with whatis available across the street (Shankar et al. 2010). In these instances, which are becoming more and more common,particularly in emerging markets, the seller must either negotiate with the buyer or lose the sale. Interestingly, it isnot just the communication that is being negotiated, but, the entire relationship between the marketer and thecustomer.Another important difference between the emerging markets model and the traditional approach developed in theestablished markets is that the continual pushing of controlled brand messages at customers and prospects is nolonger as effective as it was in the past. Consumers, now armed with technologies such as DVRs and spam filters,can shut out messages at will (―Stop‖ sign impeding the flow through arrow E). Instead, they now commonly seekout relationships with marketers of their choice through search or other interactive means.Clearly, the traditional approaches used in the current established market model will continue to be useful andrelevant, particularly in markets where information technology is less developed or where consumers are stilllearning how to be consumers. The ability of makers/sellers to direct information to specific groups of customers andprospects, thus moving them out of the mass market and into identifiable segments to which relevant marketingmaterials can be delivered, will continue to evolve over time.These are the major changes which increasingly are found in emerging markets and which we believe will continueto grow and evolve. When consumers have interactive capabilities, they quickly learn to use them to level theplaying field with even the most sophisticated marketing organizations. Examples where this is occurring abound in

Korea, China, India, Brazil and other markets (Mathews 2009). Therefore, we argue the model we have developed isthe most relevant one for emerging markets. It is in those markets where the new interactive technologies aredeveloping most rapidly. Indeed, it may well be these new markets, which are often considered to be less developedby traditional marketing organizations, where our proposed model would be most appropriate. And, it is about theseconsumers that existing marketers have the least information, knowledge, insights and experience. Thus, we believethis proposed marcom model is more appropriate for those markets (Schultz et al. 2009).V. Limitations and Next StepsWhile the emerging market marcom model we propose is clearly superior to theestablished marketer controlled approach presently in place in established markets, additional research anddevelopment will be needed to flesh out the approach and make it relevant and useful to marcom managers. Some ofthe areas where development will be needed are:A. An Understanding of Network Models – For the most part, present day, established market marketingand communication methods and approaches are primarily linear and one-way (outbound). That meansmarcom managers must learn how networks are created, not just through technology but, by consumersas well, how they are expanded, contracted and re-formed on all levels. Most likely new types ofresearch techniques such as object-oriented modeling, principal-agent analysis, evolutionary learningand network models for the diffusion of innovation (Valente 1996) will be required.B. Negotiation and Relationships – Most academics, and even limited numbers of traditional marketers, arenot accustomed to researching in negotiated marketplaces. This will require new forms ofunderstanding consumer behavior and the ability to generate new insights. The most favored researchapproach, the individual questionnaire may have to be adapted and adjusted to culturally differentpopulations.C. Synergy – Historically, the western model of media management has been to optimize one or two majormedia delivery forms, observe their impact and then adapt or adjust as needed. In emerging markets,there are generally a multitude of media and marketing communication tools. The question becomesone, not of optimization, but, of identification of synergy among and between various communicationalternatives. The challenge will be to find the best combination of media forms and then harness thosetools for effectiveness first, and then efficiency later.D. Research Methods – Clearly, new research methods must be developed not only to gather data on theemerging markets but to find ways to evaluate the results as well. Traditional survey research is oftensuspect, and suspected in emerging markets, thus new data gathering methods must be found.Analytical tools must be re-evaluated as well. Marketing to the mass will likely be replaced bymarketing to the differences. Thus, new types of consumer behavior will be required. And, evaluationmust undergo a critical self-examination as well. Optimizing returns may not be as important asrelationship building and the concept of reciprocity in different societies.Clearly, the development of this new marketing communication model for emerging markets holds a host ofresearch opportunities for academicians and practitioners alike. But, our minds must be open to these newalternatives and approaches. Previous experience may not be as important as understanding the changes as theyoccur.As for next steps, we believe it is critical to start to develop the various pieces and parts required in this newmodel. That we plan to do in future articles and papers. More importantly however, is that this model must bepresented and tested not only among emerging market academics and practitioners, it must be vetted with existingand established marketers and marketing organizations as well. That means exposure and discussion. We hope

some of the leading academic research organizations such as ESSOMAR, the ARF, the AMA and the AIM groupwill take up this approach, encourage their members to add to, enhance and revise the model proposed. Emergingmarkets, with some 80% of the world‘s population, are simply too important to be ignored or forced into a nonrelevantmarcom model.References:Barry, T. E. (1987). The development of the hierarchy of effects: An historical perspective. Current Issuesand Research in Advertising, 10, 251–295Batra, Rajeev (1996) ―Marketing Issues and Challenges in Transitional Economies‖ Working paper number12, The William Davidson Institute at the University of Michigan Business SchoolBorden, N.H. (1964) ―The Concept of the Marketing Mix‖, Journal of Advertising Research, Vol. 4, June1964, pp. 2-7.Bowersox, D.J., Closs, D.J., Cooper, M.B., (2002). Supply Chain Logistics Management. McGraw-HillIrwin, Boston, MA.Chapman, Ross L., Soosay, Claudine and Kandampally, Jay (2002), Innovation in logistic services and thenew business model : a conceptual framework, Managing service quality, vol. 12, no. 6, pp. 358-371.Dawar, Niraj and Amitaca Chattopadhyay (2002) ―rethinking Marketing programs for Emerging Markets,Working paper number 320Deighton, John (1997) ―Commentary on ‗Exploring the Implications of the Internet for ConsumerMarketing‘‖ Journal of the Academy of Marketing Sciences, Vol. 25, No. 4, 347-351Duncan, T. and Caywood, C. (1996) The concept, process, and evolution of integrated marketingcommunication. In E. Thorson and J. Moore (eds) Integrated Communication: Synergy of Persuasive Voices.Mahwah, NJ: Lawrence Erlbaum Associates, pp. 13–34.

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COPING WITH SERVICE FAILURE: THE MODERATING ROLE OF BRAND REPUTATIONAuthors:Ms. Aditi SarkarResearch ScholarIBS HyderabadHyderabad, Indiaaditisarkar21@yahoo.comMobile: +91 9948130579&Dr. M S BalajiAssistant ProfessorIBS HyderabadHyderabad, Indiamakambalaji77@gmail.comMobile: +91 9573210207

Coping With Service Failure: The moderating Role Of Brand ReputationFailures in service delivery are inevitable and recovering such service encounters represent a significant challengefor service firms. When failures occur, customers experience negative emotions as the service provider does notmeet the expectations and as a result, they feel dissatisfied. Research findings have confirmed that customersmaintain different levels of expectations of service performance with regard to reputed versus lesser known firms(Palmar, Beggs and Keown-McMullan,2000; Roggeveen, Bharadwaj and Hoyer, 2007; Hess, 2008; Huang, 2011).For reputable brands, customers have high expectations of service performance and view them as having serviceprocedures that deliver quality services. Further, given the high uncertainty from service intangibility, brandreputation acts a signal about the service performance and allows customers to anticipate more accurately the servicedelivery process (Weigelt and Camerer, 1988; Selnes, 1993). Thus, brand reputation may affect the evaluation ofservice failure as customers‘ expectation of service performance is influenced by the repute of the service brand. Insuch instances, how customers cope with the service failure is an important managerial issue as coping affectscustomers‘ post-failure attitudes and behaviors. According to the appraisal theory, individuals often use copingstrategies to reduce negative emotions from stressful encounters (Lazarus, 1991; Gelbrich, 2010). Surprisingly, littleresearch has focused on the coping strategies customers‘ engage in, to manage stress from service failure.Coping is the private internalization process by which customers attempt to manage negative experiences such asservice failures (Gabbott et al. 2011). Researchers in Psychology have indicated a typology of coping strategiesindividuals‘ employ to manage stressful situations (Folkman and Lazarus, 1980; Carver et al. 1989; Yi andBaumgartner, 2004). In case of service failures, customers appraise the service encounters through copingmechanism and evaluate the extent to which the situation is changeable and attributed to self or anotherparty(Gabbott et al. 2011). Thus, appraisal of the stressful events influences the coping strategies used by thecustomers. As service failures of different magnitude and repute involves distinct appraisal of the event, they arelikely to be associated with different coping strategies to manage the situation. However, there is little systematicresearch on the relationship between service failure, brand reputation, coping and satisfaction. This study will

examine the effects of magnitude of service failure and brand reputation on customer coping strategies andsatisfaction.This study makes important contributions to service literature. First, we examine the role of customer coping inservice failure encounters. Although psychology literature proposes various coping strategies to deal with stress fromeconomic crisis, health-related outcomes and depression, it is unclear whether they are applicable in service failurecontext. Specifically, we demonstrate the different coping strategies customers employ to manage stress from servicefailures influenced by its magnitude and brand reputation. Second, we show that failure severity and brandreputation interacts to influence customer satisfaction and that coping strategies to mediate this relationship.Although previous studies have examined the role of severity in influencing coping strategies and satisfaction, weemphasize the role of brand reputation in determining customer coping strategies and satisfaction. The rest of thearticle is organized as follows: first, we present a review of relevant literature on failure severity, brand reputation,coping strategies and satisfaction in developing the research hypotheses. Second, the experimental study carried outto test the hypotheses is presented. The paper concludes with the discussion of the results, implications foracademicians and practitioner and limitation and future research directions.Literature ReviewCoping StrategiesMany researchers have indicated how consumers cope to deal with stressful consumption related experiences(Duhachek, 2005; Duhachek and Kelting, 2009 and Gabbott et al, 2010). According to Lazarus and Folkman (1984),coping is ―the constant changing of cognitive andbehavioral efforts to manage specific external and /or internal demands that are appraisedas taxing or exceeding the resources of the person.‖ More recently, Gabbott et al (2010) defined coping as ―privateinternalization by the customer of any negative situational effects associated with service failure.‖ Aappraisal theorystates that an individual‘s coping process is driven by a three-step process of cognitive appraisal (Folkman andLazarus, 1988). First, the individual‘s assesses whether a situation is potentially threatening or not in the primaryappriasal process, and in case a threat is identified, individuals experience

stress. Secondary appraisal relates to identifying an appropriate response to mitigate thisstress. This step emphasizes the ability of the individual to cope with the stress. Finally, theprocess culminates with the execution of the coping strategy (Lazarus, 1966 and Lazarusand Folkman, 1984; Folkman and Lazarus, 1988). With varied levels of stress invoked due to difference in theseverity of the problem, consumers have diverse coping strategies at their disposition to deal with the failures.Duhachek (2005) based on the extant literature identified eight dimensions of coping which were namely; action,rational thinking, emotional support seeking, instrumental support seeking, avoidance, positive thinking and denial.ActionConsumers‘ stress related to service failure often drives them towards engaging in taking action to mitigate thestress. In case of high severe failures, action might be in the form of direct confrontation with the marketer toinfluence them to change their minds. This strategy aims at the ways the problem can be solved by devising a plan ofaction. It includes information search, taking direct action against the marketer in order to reduce the stressassociated with the service failure (Carver et al., 1989 and Yi and Baumgartner, 2004)Rational thinkingA failure when perceived to be of less severe is often dealt with making conscious effort to subdue emotions fromdirecting one‘s behaviour. Explained this as restraint coping strategy where an individual deals with the stress byholding back to the emotions unless there is a right opportunity to act upon it (Carver et al., 1989). Customerscontrol their emotions by providing appropriate rationale for the situation. They distance themselves from thesituation, and analyze it in a more objective manner (Duhachek, 2005).Seeking social support for emotional reasonsThis form of coping behaviour is used to improve the emotional state of an individual (Duhachek, 2005) and is moreprevalent way of coping when the severity is low but brand reputation is high. It is a mechanism of seeking supportfrom others by discussing the problem with them (Yi and Baumgartner, 2004). Thus individuals irrespective of highor less severe failure would want to seek moral support from others for sympathy or better understanding of theirsituation (Carver et al., 1989).Seeking social support for instrumental reasons

Often in to cope with the stress associated with high severe problems, customers seek advice and assistance fromtheir counterparts who might have been a similar situation (Yi and Baumgartner, 2004). Thus with others‘ supportthey try and ameliorate the stress associated with the situation by taking proper actions.Positive thinkingThere are instances when a less severe problem might not drive the consumer to do something about it but to managethe stress internally (Carver et al., 1989). Although this mechanism of coping does not assure a decrease in the levelof stress but it helps an individual to reinterpreting the situation in a more favourable way. Customers look at thebrighter side of the problem and consider it as a learning experience and (Yi and Baumgartner, 2004 and Duhachek,2005).AvoidanceThis is analogous to the strategy, behavioural disengagement as propounded by Carver et al., (1989) where acustomer gives up on any attempt to reduce the stress anticipating a poor coping outcome. When individualsacknowledge that their efforts would be ineffectual in altering the situation they distance themselves from it anddistract themselves by channelizing their efforts in doing other things (Yi and Baumgartner, 2004).DenialThis coping mechanism is adopted by the customers when they try to forget the stressor completely. Denial is arguedto be prevalent when individuals fail to avoid the situation(Carver et al.,(1989). They reduce the stress by denyingthe existence of the situation itself (Yi and Baumgartner, 2004).Emotional VentingConsumers who have had a bad service experience would prefer to vent out their disappointment if the failure hascaused a highly stressful condition. These individuals are the ones who are explicit about their feelings ofdiscontentment (Yi and Baumgartner, 2004). Such vocal individuals express their negative emotions in anticipationof appropriate steps to be taken by the marketer.These eight dimensions of coping although interrelated, are conceptually and empirically distinct.Customer coping strategies and service failure

Prior studies have extensively studied the role of service failure in influencing customer attitude and behavioraloutcomes (Parasuraman et al., 1991; Mattila 2004; Bodey and Grace 2006; Grégoire et al., 2009). However, theprocess by which customers cope with service failures has not been studied exclusively. In the context of servicefailure, coping strategies are heavily influenced by the perception about the severity of service failure (Blodgett etal., 1997; Tax et al.,, 1998). Although prior literature suggests that service failures can be determined by its severity,frequency and timing, this study specifically focuses on the severity of service failures. According to Smith et al(1999) failure severity measures the magnitude of loss experienced by the customers. It is an important situationalfactor that determines the formation of post-failure attitudes. The study by Mattila (2004) on the negative effects ofservice failure reported that customers feel let down in case of service failures, thus resulting in sharp decrease intheir post-failure attitudes and loyalty. This indicates that for more severe problems, customers may perceive greaterloss which affects their post-failure attitude towards the product. Similarly, Swanson and Hsu (2009) showed thatfailure magnitude influences individual‘s subsequent attitudes, emotions and behaviours. Since, service failures ofdifferent magnitudes result in varying levels of stress, we argued that customer coping strategies would vary acrossthe levels of failure severity.In the purview of psychology literature, Jorm et al., (2004) argued that under a stressful condition individuals wouldoften initiate actions to reduce their stress. These actions would range from taking appropriate steps to mitigate thestress, seeking for social help or intensifying the everyday work to avoid the stress, depending on the level ofseverity associated with the stress. However, there are studies in organizational behaviour literature that argue socialsupport to be a less prevalent mechanism of coping when individuals need to make a decision with higher precision(Dalal and Bonaccio, 2010). Other studies in the organizational perspective indicate the importance of socialcommunities where people turn to each other in order to cope with the stress (Korczynski, 2003). In the marketingliterature, studies on choice of complaint channels revealed that consumers who want to even out with the marketer,predominantly prefer interactive channels than remote channels for making complaints. This indicates that a face toface interaction help the customers to cope better with the stress caused by the service failure (Mattila and Wirtz,2004). Further, the influence various coping strategies (expressive, active and denial) have on the behaviouralintentions of the customers is found to be dependent on the level of anger elicited by the incident and the thoughts

evoked by the incident (Strizhakova et al., 2012).Thus it can be predicted that b the choice of coping strategieswould depend on customers the level of anger induced due to the varied degrees of failure. Based on the aboveliterature, we proposed that when customers evaluate the problem to be of high severe, they will use strategies suchas action coping and instrumental support to reduce the stress associated with the problem. On the contrary, if theproblem is perceived to be less severe i.e. when the potential harm is low, customers would rely on strategies such asrational thinking, positive thinking, emotional venting, emotional support, denial and avoidance. Hence wehypothesize:Hypothesis H 1 : Service failure severity directly impacts coping strategies such that for more severe failurescustomer employ more of action coping and social support for instrumental reasons and for less severeproblems they use more of rational thinking, positive thinking, emotional venting, social support for emotionalreasons, avoidance and denial.Moderating effect of brand reputationService failures lead to detrimental consequences for organizations in the form of dissatisfaction, (Bitner, 1990; Hesset al., 2003) resulting in complaint intentions (Folkes, 1984; Singh, 1990; Gregoire et al., 2009), and exit orswitching behavior (Keaveney, 1995). Customers have different expectation for recovering failures from the firmsdepending on their reputation. Uncertainty management theory (Lind and Vandeboss, 2002) suggest that justiceperceptions gains prominence when level of uncertainty is more in the environment. Under uncertain environmentalcondition, individuals are more apprehensive about their ability to control the surroundings. The sense of uncertaintystems from the lack of trustworthiness of the authority of which they have no prior experience. ―Consequently, in thepresence of uncertainty, people tend to react very positively towards authorities who uphold fairness norms andprinciples and very negatively towards authorities who violate those norms and principles”, (Tangirala and Alge,2006, p.2).However, in the perspective of literature on brand reputation, a highly reputed brand is an indicant of thetrustworthiness of the service provider. Customers expect better quality of service from firm with high reputationand therefore are displeased on experiencing a service failure (Zeithamal et al., 1993; Oliver, 1997; Niedrich et al.,2005). However, studies by Keh and Lee (2006) argued that an enhanced brand reputation shields the company from

the disparaging effects of service failures. This contradictory finding suggests that the effect of brand reputation oncustomers‘ response to service failures warrants further exploration. We draw on key aspects of two theories –expectancy disconfirmation theory and judgment assimilation theory in understanding the role of brand reputation incustomer evaluation of service failure. According to expectation disconfirmation theory (Oliver, 1997), customerspatronizing a highly reputed brand have higher expectation in terms of quality of the service provided because of theenhanced attitudes, beliefs and perceptions. On experiencing a service failure in these high reputation brands, thedisconfirmation between the perceived performance and expected performance would be higher compared to anaveragely reputed brand. Thus, customers experience greater loss in case of service failure of the high repute brandscompared to the average repute brands. Following this, we propose that the different coping strategies employed toreduce stress depends on the reputation of the service brand and failure severity. Customers‘ perception of the firmreputation alters customers‘ responses to service failure in terms of employing the coping strategies. Thus wepostulate that for high severe failures, customers experience greater disconfirmation and use coping strategies thatare focused on solving the problem such as action coping and seeking social support for instrumental reasons. Thesecoping strategies would also be used for less severe failures when the company reputation is high as disconfirmationexperienced would be greater for the highly reputed companies than averagely reputed companies. Similarly, copingstrategies directed towards emotions such as rational thinking, positive thinking, emotional venting, seeking socialsupport for emotional reasons, avoidance and denial, although are used more by customers in less severe failurecondition, are also used in high severe failure condition when brand reputation interacts with the severity of thefailure. However, in high severe condition they are less likely to be used by customers of high reputation companythan average reputation company.Hence we hypothesize:Hypothesis H 2a : Severity and brand reputation has a significant interaction effect such that for less severefailure condition, action coping would be more pronounced for high reputation company than averagereputation company.

Hypothesis H 2b : Severity and brand reputation has a significant interaction effect such that for less severefailure condition, seeking social support for instrumental reasons would be more pronounced for highreputation company than average reputation company.Hypothesis H 2c : Severity and brand reputation has a significant interaction effect such that for high severecondition positive thinking would be more pronounced strategy for average reputation company than highreputation company.Hypothesis H 2d : Severity and brand reputation has a significant interaction effect such that for high severecondition rational thinking would be more pronounced strategy for average reputation company than highreputation company.Hypothesis H 2e : Severity and brand reputation has a significant interaction effect such that for high severecondition emotional venting would be more pronounced strategy for average reputation company than highreputation company.Hypothesis H 2f : Severity and brand reputation has a significant interaction effect such that for high severecondition seeking social support for emotional reasons would be more pronounced strategy for averagereputation company than high reputation company.Hypothesis H 2g : Severity and brand reputation has a significant interaction effect such that for high severecondition avoidance would be more pronounced strategy for average reputation company than high reputationcompany.Hypothesis H 2h : Severity and brand reputation has a significant interaction effect such that for high severecondition denial would be more pronounced strategy for average reputation company than high reputationcompany.METHODResearch design, sample and procedureThe research design was a 2 (high vs low severity service failure) x 2 (high vs. average reputation organization)scenario-based experiment. Airline travel was chosen as the study context as it was widely used in prior studies toexamine customer response to service failure (McCollough, Berry and Yadav, 2000). A total of 193 graduate

students were recruited from various classes enrolled in the business administration course at a large IndianUniversity. The respondents were randomly assigned to one of the four experimental conditions and the data wascollected over a period of four days. Of the participants 58.5% were male and 86% of total participants were agedbetween 18 and 24. Having read the reputation scenario, the participants were asked to respond to questions on howthey would cope with the given situation. The sample scenarios are presented in Appendix I.MeasuresThe manipulation check questions on severity and brand reputation were measured on a 10-point Likert scale.Coping strategies was measured using an eight-factor coping model proposed by Duhachek (2005).A total of 36items were used to measure the eight dimensions of coping. Sample items included ―concentrate on ways to solvethe problem (action-based coping)‖ and ―let me feelings out some way (emotional venting).‖ The responses werecollected on a 7-point Likert scale. Exploratory factor analysis (EFA) with varimax rotation conducted on the copingscale extracted an 8-factor structure solution which explained 69.4 % of the variance. Subsequently, confirmatoryfactor analysis was carried out to assess the reliability, convergent validity, and discriminant validity of the eightcoping dimensions. The results of the reliability analysis (Cronbach‘s alpha ranging from 0.72 to 0.92), convergentvalidity (item-factor loading from 0.64 to 0.93 and average variance extracted ranging from 0.54 to 0.85) anddiscriminant validity (AVEs more than squared variance for all constructs) suggested an acceptable psychometricproperties of the constructs.[Insert Table I and Table II here]RESULTSManipulation checksThe severity ratings for service failure was significantly higher in the high severe failure condition (M = 8.98) thanin low severe failure counterpart (M = 6.64), t = -12.83, p

Hypotheses TestingTo test the hypotheses, data was analyzed using multivariate analysis of covariance (MANCOVA). The dependentvariables were the eight dimensions of coping. Failure severity and brand reputation were used as fixed factors.Gender and age were included as covariates for the analysis. The multivariate test result showed significant main2effects of failure severity (Wilk‘s λ = .645, F = 12.09, p

Main effects of brand reputationResults of univariate tests suggested that brand reputation failed to impact the choice of any coping strategy exceptemotional venting (F = 4.13, p< .05, η 2 p = .022) and instrumental support (F = 3.83, p< .05, η 2 p = .021). Emotionalventing was found to be significantly more in high reputation company (M high repuation = 3.94, S.D = 1.18) than in lowreputation company (M average reputation = 3.78, S.D = 1.18), t = -2.1, p

difference between high and average reputation company. However, customers on high severe failure were found toengage in rational thinking more for average reputation (M average reputation = 4.05, S.D = 1.39) than in high reputationcondition (M high reputation = 3.56, S.D = 1.08) but this difference was found to be significant only at 10% level, t = 1.85,p=.06, supporting H 2d .The proposed interaction effect of severity and brand reputation on emotional venting was partially supported.Although customers had a significant interaction effect on emotional venting, in high severe failure condition therewas no significant difference observed between high and average reputation failing to support H 2e . Rather, customerswere prone to emotional venting when the problem severity was low, where they preferred venting out theiremotions more when the service failure was experienced with highly reputed company (M high reputation_low severe = 4.20,S.D = 1.02) than with a company with average reputation (M average reputation = 3.52, S.D = 1.12), t = -3.15, p < .05.Interaction effects of severity and brand reputation on seeking social support for emotional reasons, avoidance,denial was found to be insignificant.[Insert Table III here]Additional resultsComparison of all cell means indicated that action-based coping had the highest average value when the severity ofthe failure was high. This observation provides sufficient support to show that to cope with high severe problems,customer adopt strategies which are directed towards solving the problem. The results showed that the average ofaction coping strategy ranged from M= 5.25 in high reputation condition to M = 5.7 in average reputation. Thus, thisstrategy was used more prominently over rational thinking, positive thinking and emotional venting indicating thatcustomers are more likely to find ways to solve the problem when the severity of the problem was high. On thecontrary, strategies customers used to cope with the low severe failures are predominantly rational thinking, positivethinking and emotional venting. All these strategies were found to have greater averages in low severe conditionthan in high severe condition indicating the likelihood of the customers employing these strategies when the problemis not perceived to be a severe one.DISCUSSION

The main objective of this study was to investigate how failure severity and brand reputation impact the variousdimensions of coping strategies. Specifically, we manipulated failure severity and brand reputation and examinedtheir main effects and interaction effect on coping strategies. Our findings indicate that coping strategies depend onboth failure severity and brand reputation. Further, the findings show that brand reputation moderate the impact offailure severity on the coping strategies used by the customers.Although service failure and recovery is an important aspect of customer relationship management (Tax et al.,1998), yet little theoretical research has addressed the impact of service failure severity on the coping strategiesemployed to reduce the stress associated with the failure. Further, the brand reputation plays an important role incustomer evaluation of service failures. To bridge this gap, the present study examined how brand reputation of thecompany moderates the impact of severity of the failure on the coping strategies. This study makes significanttheoretical contributions in understanding the various coping strategies employed by the customers‘ indifferentconditions of failure severity and brand reputation. As hypothesized, this study demonstrated that customers resort tomultiple coping strategies to reduce stress experienced during service failures of varying magnitude. Of the eightcoping strategies, it is observed that when customers experience service failures of high severity they engage inaction coping than rational thinking, positive thinking and avoidance. Action based coping was primarily employedin coping with the stress resulting from high severe failure condition. Further, coping strategies such as positivethinking, rational thinking and emotional venting were predominantly employed in low severe conditions.Main effect of severity on action based coping indicated that when the severity of the problem is high customers tendto voice their disgust to the company in anticipation of corrective measures or they themselves take up initiative tosolve the problem. However, low severe problems are better dealt with strategies which are directed towardsmanaging their own emotional state such as rational thinking and positive thinking. Since magnitude of the problemis low in this case customers get a better opportunity to delve into the source of the problem rather than takingaggressive action against the company. The findings also suggested greater use of avoidance and denial aspredominant strategies to cope with less severe failures. This is because customers often find these service failures tobe too insignificant to probe further.

As postulated in the hypotheses H 2a through H 2h , we found that the reputation of the company interacted with theseverity conditions to impact some of the coping strategies. The results demonstrated that although action copingstrategy was used predominantly in high severe condition, brand reputation of the company interacted with the lesssevere failure condition too, to enhance the use of action coping strategy supporting H 2a. Customers‘ propensity touse action based coping strategy in less severe failure condition was found to be high when the brand reputation ishigh rather than when brand reputation is average. Since customers have high expectation of service quality from ahighly reputed company, even a slightest failure will lower the perceived quality of the service to a great extentresulting in high expectancy disconfirmation among customers (Cronin and Taylor, 1994). Hence these customerswill prefer to solve the problem by taking proper action to lessen the stress caused by the failure.The observation that high severe failure of highly reputed brands would result in less of action coping compared toaverage reputation is because customers expect highly reputed company to have proper recovery process in placeand anticipate the company to be competent enough to solve the problem. Whereas, for an averagely reputedcompany, customers feel that the concerned company may not have the required resources or infrastructure to solvethe problem. This drives the customers to take up more action based coping strategies such as finding ways to solvethe problem by themselvesThe hypotheses H 2c through H 2h predicted that interaction effect between severity and brand reputation would lead toadoption of coping strategies directed towards managing emotions, a phenomenon that was found to be pronouncedamong customers of average reputation company when severity of the failure was high. Thus, although rationalthinking in, absence of brand reputation was found to be a preferred way to cope with less severe failures, inpresence of brand reputation it was a preferable way of coping with high severe failures as well. The role of brandreputation in evaluating the effect of high severe failure on rational thinking indicated that this strategy was used lesswhen customers experience a high severe failure with a highly reputed company compared to customers of anaveragely reputed company. High expectancy disconfirmation, Cronin and Taylor (1994) is case of highly reputedcompanies does not allow the customers to justify the failure magnitude with any potential explanation. But foraveragely reputed companies, even if the failure severity is high, customers discount the experience more easily byassessing the failure situation more realistically. In such cases, a lowered expectation from the company helps the

customers reason out the potential causes which they were unable to do when they already have a high expectationfrom a highly reputed service provider. Thus they find it easier to analyze the high severe failures of averagelyreputed companies more objectively.Positive thinking was also used more pronouncedly among customers in low severe condition, irrespective of thereputation of the company. However, the interaction effect of brand reputation was found to be crucial amongcustomer in high severe failure condition. Customers were found to perceive the high severe failures with a morepositive bent of mind when the reputation of the company was average. Thus we suggest that even if the failure isperceived to be highly severe such companies have a better chance to reposition themselves in customers‘ minds visa-visa highly reputed company as customer‘s tolerance level for these companies is higher. Customers readily lookat the brighter side of the experience and assess the situation more positively for these companies which they fail todo for highly reputed companies..A final contribution that this study makes in the coping literature is the moderating impact of brand reputation onemotional venting. The results indicated that although there was a significant interaction effect of severity and brandreputation on emotional venting, hypotheses H 2e could not be supported as customers facing high severe failuresfailed to show any difference in emotional venting between high and average reputation company. Customersperceived, that to cope with a high severe failure condition, it is more important to make an effort to rectify thesource of the failure that is causing the stress than to get overpowered with emotions. Thus emotional venting wasfound to be used primarily when the magnitude of the failure was less but the reputation of the company was high.This indicates that due to soaring expectation, even a minor failure of a highly reputed brand, results is anger anddisappointment leading to greater emotional outrage.IMPLICATIONSThe results of our study have several important implications for practitioners. First, although literature providesevidence of diverse coping strategies present which helps an individual to cope with a stressful situation; this studyon service failure context, confirmed that customers stick to only few strategies while coping with high or less severefailure. Thus managers can take appropriate steps to analyze these coping strategies which can be generalized based

on varied levels of failure severity and brand reputation. This would help them come up with better recoverystrategies that would cater to larger segments of customers.Second, the study proposed that in case of high severe failures, strategies such as positive thinking and rationalthinking are used less when the company is highly reputed. This indicates that customers would not justify thefailure with any rationale nor would they try to look at the brighter side of this experience. These customers wouldprefer to make an effort to reduce the source of their stress by taking appropriate actions which might includeswitching the company or indulging in negative word of mouth. Thus it would be very difficult for managers toidentify these customers who would silently exit from the relationship. This kind of behaviour would further result incustomer turnover, revenue loss and goodwill loss for the failing firm. This suggests that marketing managers mustcarefully design recovery strategies to restore the trust among the customers experiencing high severity failures andprevent them from discontinuing the relationship.Finally, of the main finding of this study is the impact of failure severity on the companies with average reputation.Very interestingly, the results demonstrated that high severe problems not only provoke customers of highly reputedcompanies to indulge in active coping strategies but it induces the customer of averagely reputed company to agreater extent. Thus the results of this study confirm that irrespective of high or average reputation, marketingmanagers should be extra cautious while dealing with high severe failures. However, this does not mean thatcustomers facing high severe problems do not resort to other coping strategies. They do engage in emotion-basedstrategies such as rational thinking and positive thinking but to a lesser extent when compared to less severeproblems.An interesting finding of the study suggests that customers facing less severe failure are more prone towards ventingout their anger when the service provider is of high reputation. These customers have higher propensity to let theirfeelings out since they are high on emotions resulting in greater negative word of mouth. Thus highly reputed brandsshould be very careful about recovering the minor problems which can potentially be detrimental in terms of spoilingtheir goodwill. This warrants managers of the highly reputed companies to identify and take care of these customerswho are more prone to express their emotional state even if the magnitude of the failure is less.LIMITATIONS AND FUTURE RESEARCH

There are several limitations to this study and therefore potential future research directions. First, the interactioneffects of failure severity and brand reputation on coping strategies were examined using only one service industry(airlines). As such generalization of this research should be handled with caution. The, future research shouldbroaden the understanding of failure severity and brand reputation by investigating their effects in other servicecategories. Secondly, we have used single service experience scenarios to manipulate failure conditions and brandreputation. Future studies could further validate our study by using multiple service failure scenarios. Thirdly, ourstudy examines the direct effect and interaction effect of failure severity and brand reputation on the copingstrategies warranting further research into the underlying process of using these strategies. Future research canexamine how emotions, post failure mediate the relationship between interaction of severity and brand reputationand coping strategies. Finally, our study stops at the various coping strategies used by the customers. Hence futureresearch could further investigate how the coping strategies eventually shape the outcome behaviour of thecustomers.ReferencesBitner, M. J. (1990). Evaluating service encounters: The effects of physical surroundings and employee responses.The Journal of Marketing, 54(2), 69-82.Blodgett, J. G., Hill, D. J., & Tax, S. S. (1997). The effects of distributive, procedural, and interactional justice onpostcomplaint behavior. Journal of Retailing, 73(2), 185-210.Bodey, K., & Grace, D. (2006). Segmenting service ―complainers‖ and ―non-complainers‖ on the basis of consumercharacteristics. Journal of Services Marketing, 20(3), 178-187.Carver, C. S., Scheier, M. F., & Weintraub, J. K. (1989). Assessing coping strategies: A theoretically basedapproach. Journal of Personality and Social Psychology, 56(2), 267.Chebat, J. C., & Slusarczyk, W. (2005). How emotions mediate the effects of perceived justice on loyalty in servicerecovery situations: An empirical study. Journal of Business Research, 58(5), 664-673.Choi, S., & Mattila, A. S. (2008). Perceived controllability and service expectations: Influences on customerreactions following service failure. Journal of Business Research, 61(1), 24-30.Cronin Jr, J. J., & Taylor, S. A. (1994). SERVPERF versus SERVQUAL: Reconciling performance-based andperceptions-minus-expectations measurement of service quality. The Journal of Marketing, 58(1), 125-131.Dalal, R, S., & Bonaccio , , S. (2010). What types of advice do decision-makers prefer. Organizational Behavior andHuman Decision Processes, 112 (1), 11–23.de Matos, C. A., Rossi, C. A. V., Veiga, R. T., & Vieira, V. A. (2009). Consumer reaction to service failure andrecovery: The moderating role of attitude toward complaining. Journal of Services Marketing, 23(7), 462-475.Del Rio, A. B., Vazquez, R., & Iglesias, V. (2001). The effects of brand associations on consumer response. Journalof Consumer Marketing, 18(5), 410-425.DeWitt, T., Nguyen, D. T., & Marshall, R. (2008). Exploring customer loyalty following service recovery. Journalof Service Research, 10(3), 269-281.

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Smith, A. K., Bolton, R. N., & Wagner, J. (1999). A model of customer satisfaction with service encountersinvolving failure and recovery. Journal of Marketing Research,36(3), 356-372.Smith, A. K., & Bolton, R. N. (2002). The effect of customers‘ emotional responses to service failures on theirrecovery effort evaluations and satisfaction judgments. Journal of the Academy of Marketing Science, 30(1), 5.Spreng, R. A., Harrell, G. D., & Mackoy, R. D. (1995). Service recovery: Impact on satisfaction and intentions.Journal of Services Marketing, 9(1), 15-23.Strizhakova,Y., Tsarenko, Y., & and Ruth, J, A. (2012). ''I'm Mad and I Can't Get That Service Failure Off MyMind'': Coping and Rumination as Mediators of Anger Effects on Customer Intentions. Journal of ServiceResearch. 000(00) 1-16.Swanson, S. R., & Hsu, M. K. (2009). Critical incidents in tourism: Failure, recovery, customer switching, andword‐ of‐ mouth behaviors. Journal of Travel & Tourism Marketing, 26(2), 180-194.Tangirala, S., & Alge, B.J. (2006). Reactions to unfair events in computer-mediated groups: A test of uncertaintymanagement theory. Organizational Behavior and Human Decision Processes. 100, 1-20.Tax, S. S., Brown, S. W., & Chandrashekaran, M. (1998). Customer evaluations of service complaint experiences:Implications for relationship marketing. The Journal of Marketing,62(2), 60-76.Voorhees, C. M., & Brady, M. K. (2005). A service perspective on the drivers of complaint intentions. Journal ofService Research, 8(2), 192-204.Weun, S., Beatty, S. E., & Jones, M. A. (2004). The impact of service failure severity on service recoveryevaluations andpost-recovery relationships. Journal of Services Marketing, 18(2), 133-146.Yi, S., & Baumgartner, H. (2004). Coping with negative emotions in purchase-related situations. Journal ofConsumer Psychology,14(3), 303-317.Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1993). The nature and determinants of customer expectations ofservice. Journal of the Academy of Marketing Science, 21(1), 1-12.Appendix-IHigh reputation scenarioYou have booked tickets in a well-known (AAA) airline company to attend your best friend‘s wedding. Thisparticular ‗AAA‘ airline that you have chosen has reputation for being highly committed to providing excellentquality service to its customers. The airline was recently awarded 5-Star Ranking by SKYPAX. The 5-star statusrecognizes the airline at the forefront of product and service delivery quality achievement. Particularly this airlinecompany is also well-known for on-time arrival and departure. They provide excellent in-flight services and theemployees are well trained.High severe failure scenarioYou booked your tickets well in advance to avoid any last minute problem. You arrive at the airport and wait in thecheck-in line. Soon it is your turn and you tell the staff member your flight destination. However, the staff respondedyou that this flight of ‗AAA‘ airlines is cancelled. On further enquiry, the staff member responded very rudely. Thestaff member was least apologetic and was reluctant in helping you with an alternate flight.

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Brand Communities on Social Networking Sites in emerging markets: The case of MTV IndiaBySushant Kumar, Doctoral Student (Marketing)Indian Institute Of Management, Prabandh Nagar, Off Sitapur Road, Lucknow - 226 013 Email:sushant.iiml@gmail.com, fpm10017@iiml.ac.inandDr. Satish S. Maheswarappa, Assistant Professor (Marketing)Indian Institute Of Management, Prabandh Nagar, Off Sitapur Road, Lucknow - 226 013 Email: sms@iiml.ac.inAbstractMotivation for study: With the evolution of internet there been an emergence of the concept of groups (or virtualcommunities) revolving around a particular brand or consumption activity. Due to high growth in social networkingsites users in emerging markets, brand in emerging economies are increasing their budgets to foster thesecommunities.Research Gap: Brand community literature has addressed the issue participation motivations, value creationpractices and its outcome in brand communities. While literature has investigated cases of Apple, Harley Davidsonand few other brands there is little research on brand communities on social networking sites based on brands inemerging markets.Purpose: The purpose of this study is to investigate brand community consumption patterns within a brandcommunity on social networking sites for a brand in an emerging market.Methodology: Netnogrpahic method combined with empirical analysis of coded data for MTV India (an emergingmarket entertainment brand) was used for the study.Findings: We find five broad content categories that can be classified on the dimensions on scope of content and itsrelatedness to brand. We find different consumption patterns (consumption as experience and consumption as play)and significant differences in the engagement level produced by different content categories.Implications: This study following a social-constructivist epistemology offers insights about brand communitycontent, engagement and consumption practices.Brand Communities on Social Networking Sites in emerging markets: The case of MTV India1.0 IntroductionVirtual groups evolved with bulletin boards where users could exchange information, applications, messages andother data. USENET established by Tom Truscott and Jim Ellis in 1980 is one of the oldest form communityexchanges on Internet. They came a decade before the evolution of Internet. Virtual cyberspace interactions havebecome very popular in recent years and the research interest in this area has increased considerably (Dainton &Aylor, 2002; Tidwell & Walther, 2002). As of July 2010, the social networking site Facebook had more than 500million active users (Zuckerberg, 2010). To put things in perspective, it is approximately 1.5 times more than theprojected population of United States (310 million) (U.S. Census Bureau, 2010). The implications of social mediaare significant like mass emergency events where the interaction leads to bigger and better forms of information(Palen et al., 2010). Businesses are using this medium to advertise, create social networks and their social mediacampaigns are attracting heavy news media coverage. For instance Procter & Gamble invited Facebook members in20 college campus networks to become ―fans‖ of Crest Whitestrips on its Facebook Page. According to Facebook, itwas a great success attracting 14,000 fans (Stross, 2008). State departments such as the Delhi Traffic Police areusing Social Media to catch offenders. Twitter a micro-blogging platform where users publish status updates within140 characters is being used by businesses to get feedback, give directions and engage consumers. Procter andGamble has used Facebook and Twitter to determine the commercials that would be aired during the NBC coverageof winter Olympics (Elliott, 2010). It has been suggested that Social Media can be a powerful tool for listening tocustomers and building a reputation for responsive service with a real time feedback that can engage with customersquickly and help them solve problems (Zimmerman, 2011). User generated websites such as Facebook, YouTubeand Twitter are providing forums for hundreds of millions of users and providing marketers the opportunity toexploit these interactions to gain ready information on consumer preference and needs (Pantano et al., 2010).

1.1 Social Networking Sites and IndiaThe virtual community represents one of the most interesting developments of the information age(Balasubramanian & Mahajan, 2001). India‘s internet user base of 81 million is the fourth largest in the world(Narasimhan, 2011). According to a 2010 study by Nielsen Company, 70 per cent of all social networking site (SNS)users in India access a SNS every day (Mishra, 2011). The popularity and essence of social media across the globe iswell established and businesses are realizing the need to have experts handle their social media campaigns. To meetthis demand for education in social media strategy, many global top business schools are also incorporating courseson social networks into their curriculums (Mackay, 2010). In India, as of July, 2010, Facebook became the mostused social networking site with a total audience of more than 20 million users (see table 1) with growth ofapproximately 179 per cent.Top Social Networking Sites in India Total Unique Visitors (000)Jul-09 Jul-10 % ChangeTotal Internet : Total Audience 35,028 39,562 13Social Networking 23,255 33,158 43Facebook.com 7,472 20,873 179Orkut 17,069 19,871 16Bharatstudent.com 4,292 4,432 3Yahoo! Pulse N/A 3,507 N/ATwitter.com 984 3,341 239LinkedIn.com N/A 3,267 N/AZedge.net 1,767 3,206 81Ibibo.com 1,562 2,960 89Yahoo! Buzz 542 1,807 233Shtyle.fm 407 1,550 281Table 1: Statistics for Indian social networking site users (Comscore press release, 2010)The presence of India with respect to global usage of Facebook also stands out with India being the seventh largestin terms of Facebook user base as of July, 2010.Growth of Top 10 Social Networking MarketsWorldwideSocial Networking Unique Visitors(000)Jul-09 Jul-10 % ChangeWorldwide 7,70,092 9,45,040 23%United States 1,31,088 1,74,429 33%China N/A 97,151 N/AGermany 25,743 37,938 47%Russian Federation 20,245 35,306 74%Brazil 23,966 35,221 47%United Kingdom 30,587 35,153 15%India 23,255 33,158 43%France 25,121 32,744 30%Japan 23,691 31,957 35%South Korea 15,910 24,962 57%Table 1: Growth of Top 10 Social Networking Markets (Comscore press release, 2010)

The social networking site revolution and its use by brands such as MTV India, Maruti Suzuki, Times of India, TataDocomo (see table 3) in generating close to a million fans and the wide differences in the fan base of these brandscalls for a careful examination. This paper investigates the motivations behind intentions to ―Like‖ a community onIndia and world‘s largest used Social Networking Site, Facebook.Brand Members Brand MembersMTV India 2073841 Nokia India 484875Maruti Suzuki Ritz 153660 Micromax Mobile 134542Maruti Suzuki Estilo 72444 Pepsi India 1038767Jet Airways 183973 Tata Docomo 1722912Cadbury Bournville 554834 Reebok India 604629Amitabh Bachchan 80479 Aircel India 557402Sachin Tendulkar 305269 Times of India 915817Shoppers Stop 723460 Hindustan Times 138676India 1158181 Khan Market, New Delhi 68239I Love Maggi 201386 Maggi Point, Dehradun 12134Table 2: Fans of Indian Facebook pages as on 25th May, 2011Although in India, low penetration of internet can be seen as a hindrance in studying the Indian SNS user, theincrease in spend on SNS marketing campaigns by big Indian brands and the rapid growth and influence of SNSsinvolving 60 per cent of total internet users (Mishra, 2011) requires investigation. Moreover the lack of research onIndian SNS user, fast growing nature of internet and user base of SNSs in India makes this investigation relevant fororganizations looking to increase expenditure on social media.

QuickTime and adecompressorare needed to see this picture.Figure 1: MTV India‘s brand commuity (as seen on 12th march 2012)2.0 Brand CommunitiesA brand is a ―collection of perceptions in the mind of a consumer‖ (Fournier, 1998 p.4; see also Kleine & Baker,2004). The notion of brand community was first defined by Muniz and O‘Guinn (2001). They defined it as a―specialized, non-geographically bound community, based on a structured set of social relationships amongadmirers of the brand‖ (Muniz & O‘Guinn, 2001, p.412). There has been considerable activity and researchfocussed on brand communities (Matzler et al.2011; Belk & Tumbat, 2005; McWilliam, 2000), which has suggestedthat a company‘s web based brand community, must be a part of its total brand

strategy due to its impact brand trust and loyalty (Matzler, et al., 2011). Many terms have been used to define brandcommunities (Belk & Tumbat, 2005) for instance Schouten and McAlexander (1995) with reference to Harley-Davidson motorcycle owners called such groups as ―subcultures of consumption‖ that shared commitment to aproduct class, brand or a consumption activity..With the evolution of internet, there been an emergence of the concept of groups (or virtual communities) revolvingaround a particular brand or consumption activity. Many studies are related to Harley-Davidson‘s Harley OwnersGroup (HOG) (Fournier et al., 2000; Schouten & McAlexander, 1995), and HOG is cited as a prototypical exampleof a brand community. Like many other brand communities, HOG is actively nurtured by the company. Muniz andO‘Guinn (2001) used three constructs to identify the features that distinguished brand communities.1. A sense of belonging to the brand community or a consciousness of kind. Members feel a connection with thebrand and they feel that ―sort of know each other‖ (p.418). There is also a distinction between the users of theirbrand and other brands. Due to this distinction they feel special about being users of the brand.2. The evidence of rituals and traditions. These traditions centre on the shared consumption experience of theconsumers with the brand. Such rituals at first appear insignificant, but then they function perpetuate consciousnessof kind (p.422). These experiences involve celebrating the history of the brand and sharing stories that involve thebrand. Its helps in reproducing the culture of the communities and the brand.3. Moral responsibilities. A sense of obligation to the community and its members that is often (but not always)shared by the community members. These systems are highly contextualized and can be very subtle.Muniz and O‘Guinn, further state that the most important element of a community i.e. consciousness of kind is the―we-ness‖ shared by members as defined by Bender (1978). Bagozzi (2000) conceptualizes it as ―we-intentions‖where he builds on the work on shared intentions, which is the idea that members in a group can individually havean intention that ―we will do something together‖ (Bagozzi, 2000 p. 392).3.0 Research IssuesIn the 21st century the notion of brand communities occupies a very important space, which is real, democratic andprovides the evidence of community in consumer culture (Muniz and O‘Guinn, 2001). There is growing evidence ofthe increasing participation of consumers in digital environments (Bagozzi & Dholakia, 2002). Virtual communitiesthat have evolved with USENET groups in the early eighties provide digital platforms that facilitate this onlinesocial action. Literature on this subject has mainly focussed on developed economies that were the centre of digitalrevolution. The social side of consumption has been a neglected aspect of consumer behavior (Bagozzi, 2000).Among various streams of research, scholars have focussed on character of these communities (e.g. Muniz andO‘Guinn, 2001, Balasubraminian & Mahajan 2001), uses and gratifications perspective (e.g. Dholakia et al., 2004;Muntinga, et al. 2011), impact of brand communities on loyalty (e.g. Matzler et al., 2011; Casaló et al., 2008),motivations to participate in eWOM (e.g. Hennig-Thurau et al., 2004) and the consequences of identifications withthese communities (Algesheimer et al., 2005).While there have been numerous studies on specific brands conducted in developed markets such as Coca-Cola(Sicilia & Plazon, 2008), Harley Davidson (Bagozzi & Dholakia, 2006), Volkswagen (Matzler et al., 2011), Nutella(Cova & Pace, 2006) and Apple (Belk & Tumbat, 2005), there is little know about the brand communities inemerging markets. Moreover there is little known about brand community brand communities formed onentertainment related brands. MTV India features in the top 1000 Facebook pages with a member base of over 3.1million (as on 27th February 2012). This study intends to understand value creation practices of entertainmentrelated brand communities on social networking sites using the process of Netnography.4.0 Research Design and methodologySince the purpose of this study is to investigate value creation practices of brand communities for entertainmentrelated brands with a special reference to emerging markets we chose to analyse MTV India‘s online brandcommunity. We use Netnography to analyse and classify the nature of content of MTV India‘s brand community bypassively joining the community and collecting archival data on the community for three weeks. The nature of the

community makes it possible to view discussions without actively participating in them. We follow the process ofopen coding to code the updates. We also rely on data about the number of people engaging with the content on thebrand community available in the form of number of likes, comments and shares for each post. We‘ve classifiedthese engagement values on internal engagement and external engagement where likes and comments representsinternal engagement i.e. within the community and external engagement represent the shares for a particular post.5.0 FindingsMTV India has almost 97% of members below the age of 30 years, which is probably a combination of the nature ofMTV India as a youth brand and Facebook, which is popular among youth. More than three quarters of the membersof MTV India are below the age of twenty two with almost one quarter below the age of 18 (see table 4).Country of ResidenceResidence Indian Undisclosed/NRI Total MembersNumber of members 2,198,760 985,566 3,184,326Percentage 69.05% 30.95% 100%Gender (Among Indian residents)Gender Men Women Total MembersNumber of members 1,434,000 764760 2,198,760Percentage 65.22% 34.78% 100%Relationship (Among Indian residents)Status Single In a relationship Engaged Married UndisclosedNumber of members 1,192,180 141,260 24,820 82580 757920Percentage 54.22% 6.42% 1.13% 6.42% 34.47%Age (Among Indian residents)Age Group Below 18 18-22 23-26 27-30Number of members 541120 1147520 356560 88220Percentage 24.61% 52.19% 16.22% 4.01%Table 4: Demographic data of MTV India‘s brand community till February 2012First, we find that members had no mechanism of initiating a post on the brand community. This is a markeddeviation from earlier studies done on brand communities that were fostered around discussions between consumers.We find presence of all three types of interactions i.e. consumer to consumer interaction, consumer to brandinteraction and consumer to community interactions (Muniz & O‘Guinn, 200) Consumer can only respond to thediscussions initiated by the brand. During the period of study, the brand initiated eighty four discussions.5.1 Types of contentThe discussions thread belonging to five categories can be classified into two broad categories – Brand relatedcontent and promotional content. Brand related content can be classified on the dimensions of relatedness to brandand scope of content or sphere of significance (see figure 2). The dimension of ―relatedness to brand‖ explains thebrand community topics that are closely associated with brand related output. The dimension of ―scope of content‖explains the scope of the output of brand community. For instance a television show or a music video may berelevant to an individual but a hockey team winning national prize has a greater scope (nation).

QuickTime and adecompressorare needed to see this picture.The coding of content and measurement of engagement values determined by the brand community members whohave shared the content, commented on it or liked it provided by the brand community of MTV India gives usinsights into the differences between engagement levels between types of content. We find the significant maineffect of relatedness to brand and scope on engagement levels (see table 5). We find that greater scope of contentengages more brand community members as compared to lower scope content. Similarly a high relatedness ofcontent to brand results in higher engagement as compared to a lower relatedness to brand. Comparing betweencategories we find content of national and global relevance i.e. greater scope and lower relatedness to brandproduces maximum engagement followed by allied content, content on life, brand related content and finallypromotional content.QuickTime and adecompressorare needed to see this picture.5.1.1 Fundamental content

Fundamental content consisted of brand related content that was core to MTV India. They consisted on informationabout recent TV shows, previous TV shows, events, anchors, jockeys and people associated to the brand. Mediarichness about this fundamental content varied with mostly posts being image or video based accompanied by texts(see figure 3).QuickTime and adecompressorare needed to see this picture.Fundamental content mostly talks about present shows with superlatives about the show if it had not been seen or anenquiry about it quality appended with humorous statements if the content had already been aired before. Thediscussions revolving around the content were either about the content or were discussions between members of thecommunity. The volume of discussions was skewed towards the latter with most unrelated to the content.

QuickTime and adecompressorare needed to see this picture.QuickTime and adecompressorare needed to see this picture.Thediscussionsbetween consumer related to content that is appreciative, critical or offers suggestions about it relates to consumingas an experience metaphor (Holt, 1995) where the object of consumption is autotelic, without much interpersonalactions. Our results provide support for evaluation and appreciation within the ―consuming as experience‖ metaphor.While literature also talks about accounting that takes place, if the ―sense-making‖ task is complex and requires a lotof information, accounting becomes a significant aspect of consumption. However due to the orientation of the brand(entertainment and music), we did not find accounting in our analysis of the conversation of members in the threadsindicating that the task for community members is not complex for fundamental content. The discussion of brandcommunity members unrelated to the object of consumption i.e. the video put by MTV India is high on interpersonalactions whereas serving little instrumental purpose. This is related to consuming as play where consumption objectsused as resources to interact with fellow members.5.1.2 Life contentLife related content consists of general saying, humorous quotes that have little association with the contentproduced by brand. These posts mostly include a text based or an image appended by a textual updated. Whilecomparing it with fundamental content, the general nature of posts by the brand is relatively lower on mediarichness.

QuickTime and adecompressorare needed to see this picture.Life content shows little evidence of other modes of consumption with the dominant mode being consumption asplay. This came after manually scanning through over 2000 reactions of consumers to life related content. Lifecontent shows greater engagement in terms of ―likes‖ and ―shares‖ by the members of the brand communityattributed to its appeal irrespective of the brand.5.1.3 National/Global contentNational or Global content relates to content which has a larger significance and are of social relevance. Theytypically comprise of news (national and international) bulletins (see figure 5). In MTV India‘s brand community wesee a greater proportion of national news as compared to international news with overall a greater engagementpattern as compared to fundamental or life content.

QuickTime and adecompressorare needed to see this picture.The responses ofband community members mostly comprised of consumption as an experience where responses about the contentcould be associated with autotelic consumption with little instrumental purpose. Within autotelic consumption, thecomments were skewed towards appreciative reactions within all threads initiated by the brand community. Therewas evidence of consumption as play but consumption as experience dominated the thread.QuickTime and adecompressorare needed to see this picture.5.1.4 AlliedcontentAllied content comprises of threads that correspond to greater sphere of significance, but are related to the brand.This type of content mostly comprises of information and news about celebrities associated to entertainment andbrand related content (see figure 6).

QuickTime and adecompressorare needed to see this picture.The responses and consumption patterns of brand community members of such content was again dominated byconsumption as an experience with the responses being skewed towards appreciation within autotelic consumption(see table 9).QuickTime and adecompressorare needed to see this picture.5.1.5 PromotionalcontentPromotional content consists of offers and promotions that were initiated by the brand community had little directrelevance to the brand. This included promoting offers, products, and contests by other brands (see figure 7).

QuickTime and adecompressorare needed to see this picture.The responses for promotional content were lower than other content categories with consumption patterns skewedtowards consumption as play. There was little discussion about the primary consumption object while interpersonalinteraction between community members being high.QuickTime and adecompressorare needed to see this picture.6.0 ConclusionThe social side of consumption has been a neglected aspect of consumer behavior (Bagozzi, 2000). With theevolution of internet, there been an emergence of the concept of groups (or virtual communities) revolving around aparticular brand or consumption activity. This study explores the concept of brand communities on the worlds‘ mostpopular social networking site, Facebook. Brand community of MTV India represents a brand community on asocial networking site about an entertainment related brand in an emerging market. While there is a generalconsensus among researchers that a company‘s web based brand community, must be a part of its total brandstrategy (Matzler, et al., 2011), our exploration of MTV India presents insights about brand community practices andconsumptions patterns. We find there are five different categories of content used to engage users, each having an

impact on the engagement levels of brand community members. These content categories can be classified on thebasis of scope of content and relatedness to brand. Greater scope while gives greater engagement, higher relatednessof content to brand also positively influences brand community member engagement. While between five categorieswe find that content of national or global relevance produces highest engagement as compared to allied content. Wesee that greater scope of content leads to higher engagement with the brand community content. The contentcategories which are relatively lower in scope such as life or fundamental content lead to a form of autotelicconsumption with greater interpersonal actions among consumers, which is dominated by consumption as play. Wesee that lower scope of content makes users engage in greater interpersonal actions while the object of consumptionis an end in itself (non-instrumental). The content categories with greater scope such as national or global content orallied content lead to consumption as an experience, with consumption activities being focused on the object ofconsumption produced by the brand community.The content classification and its impact on levels and type of engagement gives insights on content strategies thatcan be adopted by brand community managers to facilitate engagement. Content which has a greater scope willengage with greater amount of brand community members and will offer consumption as an experience rather thanplay. Brands can affiliate their content with information of national or global importance. While society is animportant stakeholder for brands, this study clearly empirically validates that it engages more amount brandcommunity members. Thus brands in their communication strategies on their communities can talk about sociallyrelevant issues. Affiliate strategies capture this engagement in a good way, where the presence of brand relatedcontent is high and the scope of the content is broader. We see that promotions about other brands or productsproduce little engagement with brand community members as compared to other forms of content. Although ourstudy does not offer insights about the reasons for promotion of such content, owing to the amount of response andconsidering it as an object of consumption, it will not be as engaging as other forms. But, if combined with contentoffering greater scope, the engagement and the reach of such content can be increased.Theoretically, following a social-constructivist epistemology, this study contributes to knowledge in brandcommunities through social construction considering brands as social systems that produce social and economicdistinctions through unceasing communications (Giesler, 2003). The survival of communities depends on quality andquantity of communications rather than attitudes on membership (Luedicke, 2006). This study focuses on the contentof communication within brand communities on social networking of an entertainment brand (MTV India) tounderstand its effects on consumptions patterns on members. It also opens new research questions such as anexploration into the differences of consumption patterns within various types brand communities. In summary thisstudyvalidates the importance of scope of content and it‘s relatedness to brand in a brand community in influencingconsumption patterns.7.0 ReferencesAlgesheimer, R., Dholakia, U. M, & Herrmann, A. (2005). The social influence of brand community: Evidence fromEuropean car clubs. Journal of Marketing, 69(3), 19–34.Bagozzi, R. P. (2000). On the concept of intentional social action in consumer behavior. Journal of ConsumerResearch, 388–396.Bagozzi, Richard P., & Dholakia, Utpal M. (2002). Intentional social action in virtual communities. Journal ofInteractive Marketing, 16(2), 2-21.Balasubramanian, S., & Mahajan, V. (2001). The Economic Leverage of the Virtual Community. InternationalJournal of Electronic Commerce, 5(3), 103-138.Belk, R. W., & Tumbat, G. (2005). The Cult of Macintosh. Consumption, Markets & Culture, 8(3), 205-217.

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Spectator-Based Brand Equity and Indian Premier League: An Empirical Assessment in Spectator Sports inEmerging Economies1Anil Gupta, 1Anish Yousaf, and 2Neelika Arora1The Business School, University of Jammu, J&K, India2School of Hospitality and Tourism Management, University of Jammu, J&K, IndiaAbstractPurpose- This paper aims at validating the Spectator-based brand equity (SBBE) model of Ross, Russell and Bang(2008) in context of the television viewers.Design/Methodology/Approach- In the first phase, a pilot study was conducted to find the most recalled team ofthe Indian Premier League (IPL). Based on this, Mumbai Indians was selected for further analysis. A qualitativeresearch was undertaken in the second phase of the research to find out various appropriate associations of peoplewith the teams playing in Indian Premier League. In the third phase a questionnaire was drafted and data wascollected from 220 respondents, who were university or college students having an interest for the Indian PremierLeague and who watch sports on television or pay-per-view channels. The model was tested using structuralequation modeling.

Findings- For television viewers the modified version of SBBE shall be applicable as the model in the present formdoes not capture all the brand association dimensions. Non-player personnel, organizational commitment,organizational attributes, and social interaction were found non-significant among television viewers. Brandassociations dimension was strongly predicted by team rivalry and team success. Interestingly, the unity and coordinationbetween the players of the team and the determination and passion of the players for winning the matchesfor their teams can be suggested for predicting the reliability of the team. The past performance of the team andprevious records of the team also helps in building brand-equity in context of television viewers.Research limitations- Data was collected from respondents interested in professional sport only and the researchexamined one segment of the sport consumer base. Another limitation is from geographical point of view asrespondents were from a particular state and no team from that state was playing in the Indian Premier League. Thiscan have some serious impacts on the brand awareness dimensions.Originality/Value- This is the first study in the sports marketing literature to validate the SBBE model in context oftelevision viewers. All the models developed earlier focused only on full-season ticket holders or on those whowatch sports in stadiums but none of the model focus on television viewers.Keywords: Brand Equity, Branding, Cricket, Fan(s), Spectator-based brand equity, IPL, Teams, Team Branding,Television viewers, Sports Marketing.Article type: Research paperSpectator-Based Brand Equity and Indian Premier League: An Empirical Assessment in Spectator Sports inEmerging EconomiesIntroductionSports occupy an increasingly important place in the economic and social sphere. Sport equivalent to religion forsome, is not only about game, but also contributes significantly to the economies of the countries. From an economicperspective, sports accounts for a significant part of the entertainment and service industries (King, 2004). Sportingevents are highly popular among the consumers as they offer the consumers with an emotional value. Modernconsumers are spending large amount of money and time on attending the sporting events like Olympics, FIFA, ICC,Wimbledon, Formula 1, NBA, and Indian Premier League. These events touch people‟s emotions, their lives; anddeliver a massive, highly-engaged, targeted audience for a brand. Both marketing through sports and marketing ofsports is increasing across the world leading to emergence of new field of study i.e. ―Sports Marketing‖.The most popular sport played in India is cricket despite the fact that it is not the national game of India. Indiancricket has a rich history and has produced a number of world class cricketers. Managed by the Board of Control forCricket in India (BCCI), there are various domestic tournaments like Deodhar Trophy, Irani Trophy, Duleep HazareTrophy, Corporate Trophy, Ranji Trophy etc. None of the above mentioned tournaments were able to catch theattention of Indian people and corporate houses. It was Indian Premier League (IPL), introduced in 2008, whichcaught the attention of the people and corporate houses even before its launch. The interesting features of IPL suchas 20-20 format, involvement of celebrity team owners (Shahrukh Khan, Preity Zinta, Shilpa Shetty), auctioning ofcricketers, multiple celebrity cricketers within a single team and cheerleaders resulted in a greater acknowledgementof IPL by the people.Emergence of IPL resulted in the commercialization of cricket and marketers viewed IPL as an important platform tobuild their brands. DLF Group, India‟s biggest property developer, paid US $50 million to be the title sponsor of thetournament for 3 years from 2008 to 2010. In addition to brand building through sponsorships, some corporate housecame forward for buying the teams resulting in creation of team brands. Sports teams always act as a bridge betweenthe spectators and the sports and are connected to the heart of the people.Commercialization of sports and progressive service selling by the teams has become an antecedent to bringprofessionalism in the sport industry.Today sports and respective teams compete with other leisure offerings, and therefore managing good relationshipswith their fans and other stakeholder groups such as the corporate sponsors (Bauer, Sauer, and Schmitt, 2005)becomes critical. In modern highly competitive sporting era, every team management is interested in building itsteam as a strong and global brand and win fan loyalty. It has been observed that higher loyalty of fans ensure theirinvolvement in the teams activities and leading to economic success of the team. In a survey done by Gallup

(www.gallup.com) in mid 2009, it was observed that more than 56% of the respondents were watching the sportsbecause they were the fans of a particular playing team. It is therefore important for team management to identifycritical factors that have an impact on the success of the teams.One such factor has been identified as „brand-equity‟ of the teams which helps a sport team to differentiate it fromthe competitors and can help in developing competitive advantage. Bauer, Sauer and Schmitt (2005) empiricallydetermine the positive relationship between brand-equity, purchase intentions and loyalty of the fans which directlyacts as antecedents to the economic success of the sport team(s). Gladden, Milne and Sutton (1998) advised thebrand managers to incorporate the concept of brand equity in their teams in order to enhance the image of the teamand hence their revenues. Gladden, Irwin and Sutton (2001) put more focus on strengthening the team as a brand.According to them today team managers give greater emphasis on branding as a strategic activity to achieve thelong-term profits rather than the focusing on winning that helps only in achieving the short-term profits. Thus,measuring the brand-equity of sports teams is as important as building it.Till date the research in the area of brand equity in sports (Gladden, Milne and Sutton, 1998; Gladden and Funk,2002; Bauer, Stokburger-Sauer and Exler, 2008; Villarejo-Ramos and Martin-Velicia, 2007; Ross, Russell and Bang,2008) focuses on full-season ticket holders or the spectators but does not include those viewers who watch sports onTV or on pay-per-view channels. Such viewers are in large numbers in Asian and European countries and areinvolved in majority of the sports related consumption. As per International Cricket Council (ICC), more than 310million viewers view different sports on ESPN Star Sports 24 hours a day in Asia. As per a rating agency aMap, thefinal of the ICC World Cup 2011 between India and Sri Lanka, considering the viewership of a single channel only,was viewed by 67.6 million viewers in India only. Important thing is that this figure did not include the viewershipof national channel Doordarshan which has a reach to approximately 90% of the countrys‟ 1.21 billion population.These numbers are huge and motivating for the marketers who are associated with the sports. Thus, measuring thebrand-equity of sports team(s) should include above mentioned target customers. This paper, thus, aims at validatingthe spectator-based brand equity model of Ross, Russell and Bang (2008) among television viewers in the context ofa sports team playing in the Indian Premier League.Literature ReviewBrand EquityThe concept of brand equity is supposed to be born during 1980s‟ when it was widely used by advertisingpractitioners and academicians. Aaker (1991) further popularized this concept through his best-selling book-―Managing Brand-Equity‖. A close association with brand loyalty and brand extension and viewing brands as one ofthe most valuable assets of the companies has led brand equity to generate much interest among the researchers,business houses and wide variety of industries. Brand equity has been defined by different definitions and indifferent forms. Keller (1993) defined it as: ―The differential effect of brand knowledge on consumer response to themarketing of the brand‖. Farquhar, et al. (1991) defined it as added value endowed by the brand name. Thedifference between overall brand preference and multi-attributed preference based on objectively measured attributelevels defines brand equity (Park and Srinivasan, 1994). Yoo and Donthu (2001) defined it as the difference inconsumer choice between the focal branded product and an unbranded product given the same level of productfeatures.Various financial techniques were used to measure the brand-equity, in the beginning years of its growth, to arrive ata financial value called as financial-based brand equity but with the passage of time most of the researchers felt thatbrand-equity should be centered on the customers and should be measured from the customers‟ perspectives. Yooand Donthu (2001) argued that a positive marketing outcome created by the branded product is responsible for thedifference between a branded and a generic product in the customers‟ mind. In marketing literature, this differenceor the utility can be viewed both from customer and firm-based perspectives. The former focuses on ―consumermind-set‖ and the later as the financial-outcomes. Keller classified these two perspectives as the motivations forstudying the brand-equity concept.One motivation is financially-based which is basically used for the estimation of the value of the brand foraccounting purpose. Financial based brand-equity is defined as the financial asset value it creates to the businessfranchise. The second reason as per Keller (1993) arises from a strategy based motivation. Intense competition,higher prices, flattening demand has led marketers to have a good understanding of the behavior of their consumers.

Knowing about the behavior of their customers, marketers can take better strategic and tactical decisions regardingthe positioning and the marketing-mix decisions. Keller put more focus on creating a good and sound knowledgeabout the brand in the consumers‟ minds and clearly indicates this knowledge as the firm‟s most valuable asset. Heargues that financial valuation of the brand is of no use if the managers don‟t know how to exploit that value bydeveloping profitable strategies. Keller says that when the customer is familiar with the brand and holds somepositive, unique and favorable associations in the memory customer-based brand equity occurs.Customer-based brand equityAaker (1991) and Keller (1993) are considered as the most prominent views for providing insights into the customerbasedbrand equity. Aaker (1991) defined customer-based brand equity in terms of four basic dimensions and callsbrand equity as the set of brand assets and liabilities linked to a brand that add to or subtract from the value providedby a product or service to a firm and to the firms‟ customers. Keller (1991) presents his framework from theperspective of an individual customer based on brand knowledge. He defined customer-based brand equity as thedifferential effect of brand knowledge on consumer response to the marketing of a brand. He categorizes brandknowledge in two major dimensions: brand awareness and brand image. Brand recall and brand recognitionconstitutes the brand awareness dimension whereas brand image is composed of various associations of the brands.Customer-based brand equity occurs when there is brand awareness and the customer holds some strong, unique, andfavorable brand associations in memory.Keller also explains the benefits of having high customer-based brand equity. A brand having positive customerbasedbrand equity generates greater revenues, lower cost, higher profits, firms can command higher prices,successful brand extensions and licensing opportunities and also firms can have customers‟ willingness to seek outnew distribution channels and effective marketing communications. Simon and Sullivan (1993) argued brand-equityas the appropriate metric for evaluating the long-term impact of the marketing decisions taken by the managers. Tobe more precise, the strategic role played by brand-equity helps marketers to make wise management decisionswhich ultimately help them in gaining a competitive advantage.Spectator based brand equity and team brandingTill date, various researches on brand equity results in all different kinds of dimensions of brand equity. Someresearchers moved a step further and applied the concept to different industries such as healthcare sector (Blackston,1992; Ferguson, Paulin, and Bergeron, 2010; Meyers, 2009), services sector (Voss, Roth, and Chase, 2008; Berry,2000), sportswear industry (Tong and Hawley, 2009; Kocak, Abimbola, and Ozer, 2007; Vazquez, Río, and Iglesias,2002), financial sector (Mackay, 2001; Taylor, Hunter, and Lindberg, 2007), FMCG sector (Park and Srinivasan,1994; Netemeyer et al., 2004) and automobile industry (Tolba and Hassan, 2009; Pappu, Quester, and Cooksey,2007). Also, one such field where the leverage of brand equity has been garnered is the Sports Marketing field.Importance of sports can be seen from the fact that sport industry is now valued at an estimated $141 billion and itprovides opportunities on a global scale, for all the parties involved, to generate revenues (Klayman, 2009). As theconcept of ―Team Branding‖ has become more prominent in the sports marketing domain so it has become importantfor every team to develop its own image and maintain professionalism (Ratten and Ratten, 2011). Also, branding ofteam has been called as one of the most important assets of a sports organization by Bauer et al. (2005). Theassociation of multiple business houses with the teams had led the commercialization of the sports and has becomemore prominent in this decade of the sporting era.The management of the sports team is indulged in a number of marketing strategies to build the brand-equity of theirteams but at the same time measuring the brand-equity is also an important parameter for checking how much thefans value the team. Important questions that are to be focused are: How much is the fan base of the team?, Howmuch profit our team is making?, How much money we are earning from the sale of the merchandise? How manyspectators are viewing the matches of the team? All these questions relate directly or indirectly to the profits andrevenues of the sports team (s) and the simple answer to all these questions somewhat lies in the brand-equity. Cobb-Walgren, Beal and Donthu (1995) viewed that high equity brands contribute to the long-term success of theorganizations by generating higher consumer preferences and purchase intentions. Team-branding and developing aloyal fan-base helps the marketing managers to get connected to fans and at the same time helps the teams to fightcompetition and increase revenues. As a result, branding of teams has emerged as an important decision for themarketing executives.

Team-branding, thus, becomes an important dimension for gaining the competitive advantage and differentiating theteam (s). The management of the sports teams should frequently develop and at the same time measure the customerbasedbrand equity of their team (s). For this purpose, various researchers had developed their models aiming atmeasuring the brand equity of the sports team(s). Gladden, Milne and Sutton (1998) were the first who develop aconceptual model for explaining various antecedents to brand equity in the Division I College Athletics. Theantecedents were classified into team related, organization related and market related factors. The impact of theseantecedents on the brand equity was measured using Aakers‟ (1991) brand equity theoretical model. Theseantecedents having an impact on the perceived quality, brand awareness, brand associations and brand loyalty givesrise to some consequences which also had an impact on increasing or decreasing the brand equity of the collegeteams. They considered brand-equity creation as a cyclical phenomenon including both the antecedents and theconsequences.Gladden and Funk (2002) develop Team Association Model (TAM) consisting of 16 dimensions. These dimensionswere derived from Kellers‟ categorization of brand associations. The 16 dimensions were classified on the basis ofattributes, benefits, and attitudes. The model was empirically tested on the sample of sport consumers nationally andit was supported that these 16 distinct constructs represents the brand associations in sports. Bauer, Stokburger-Sauerand Exler (2008) and Villarejo-Ramos and Martin-Velicia (2007) also develop models for measuring the brandequityand brand associations in the team sports setting but one of the serious limitations of their models was thefocus on spectator sports industry from manufactured goods point of view. Ross (2006) conceptually shows therelationship between marketing strategies of a sports team and its impact on the brand equity of the team. He alsohighlights the outcomes of having a high brand-equity as high profits, merchandise sales, ticket revenues, andattendance.Ross, Russell and Bang (2008) advised managers to put more emphasis on the extended marketing mix rather thantraditional marketing mix while devising marketing strategies for spectator sports and argued that marketingstrategies for spectator sports should not focus only on traditional marketing mix but it should also involve 7 P‟s ofservices marketing.They viewed brand equity as an important construct that is affected by the marketing activities of the teammanagement and having an important effect on the outcomes of the activities. These marketing efforts effect thebrand awareness and brand associations of the sports team(s), which in turn leads to some favorable conditions, ifemployed strategically. So all the models developed earlier were not having any significance when they were usedfor measuring the customer-based brand equity of sports team(s). They also argued that there are very less studiesthat focus on the brand-equity concept in spectator sports perspective and even more less studies that focus on thebrand-equity from the customers‟ perspective. They develop their model, called as spectator-based brand equitymodel, to measure the brand-equity of sports team(s) from customer perspectives.This model consists of 49-item and 13 constructs which they empirically apply for measuring the brand equity of aNBA team by collecting data from sporting consumers. Brand Association was measured by measuring 1) Non-Player Personnel 2) Team Success 3) History of the team 4) Stadium/Home of the team 5) Team Characteristics 6)Logo of the Team 7) Concessions 8) Socialization 9) Team Rivalry 10) Commitment and 11) Organizationalattributes. On the other hand, Brand Awareness was measured on the basis of 1) Team Identification 2)Internalization. The model also provides a baseline results for future researches regarding the development andmeasuring the spectator-based brand equity. This model, however, focuses more on full-season ticket holders anddoes not include those viewers who watch sports on TV or on pay-per-view channels. The aim of the paper is tovalidate this model in context of the television viewers by measuring the customer-based brand equity of a sportteam playing in the Indian Premier League (IPL).MethodologySelection of team

For our research purpose, the scope was limited to cricket as a sport. Even in cricket, Indian Premier League (IPL)was strategically chosen for the study. Indian Premier League, having the most interesting franchisees that the worldhas seen recently, provides marketers with seemingly endless marketing opportunities. It is the only sporting event inIndia to catch the attention of the people and corporate houses to a greater extent. People are seeing internationalcelebrity players drafted into city-based franchises and playing with Indian players and it is thus greatlyacknowledged by the people. So, the application of the concept of brand-equity to the teams of the Indian PremierLeague is justified.In the first phase of the research a pilot study was conducted and data was collected from 210 respondents agedbetween 12 to 55 years having awareness about IPL and who watch IPL matches on television. The main purpose ofthis pilot study was to select a team out of the various teams of IPL. The respondents were asked to recall threeteams playing in the IPL. Mumbai Indians followed by Chennai Super Kings were found to be the top two recalledteams of the IPL respectively. The decision to select Mumbai Indians was arrived at after finding that MumbaiIndians was the most recalled team with 67 (30.5 %) respondents followed by Chennai Super Kings with 49 (22.2%) respondents.SampleHaving considered that the youth comprises the major target customers for sport organizations and for sport relatedconsumption (Dickson et al., 2004), the target population was defined as the university and college students andemployees who watch Indian Premier League on television and are aware of the teams playing in Indian PremierLeague. This group of youth is willing to spend more time watching sports on television, thus, representing the mostimportant segment for the sports team(s). Questionnaires were distributed to 430 university and college students inJammu having interest in IPL and were asked to fill the questionnaire. The participation of the students was entirelyvoluntary. Two hundred forty (240) questionnaires were returned and after data screening, and omitting outliers, 220were kept for data analysis, for a response rate of 51.2%.Instrument and MeasuresThe spectator based brand equity model (SBBE) of Ross, Russell and Bang (2008) was used for validation andmeasuring the brand equity of Mumbai Indians. For making the SBBE model more suited for television viewers, itwas subjected to minor modifications. For this purpose, a qualitative study was conducted in the second phase of theresearch for identifying appropriate associations of peoples with respect to IPL. Data was collected from 40respondents through online survey and personal interview to find out different associations regarding the teamsplaying in IPL. It was observed that most of the associations were covered in the SBBE model but none of therespondent talked about team concessions and stadiums as the appropriate associations. The concessions andstadium/home constructs were then removed from the original model as we believed both these constructs will beirrelevant for the viewers watching the sport on television. It was also observed during the qualitative study thatpeople also associate a team with its sponsor(s) and celebrity player(s).The model which was finally tested in context of television viewers, thus, consisted of two second order latentvariables as brand awareness and brand associations. The brand awareness construct consisted of two latent variablesas team identification (4 items) and team internalization (3 items). The brand association construct consisted of eightlatent variables as brand mark (3 items), team history (3 items), team success (3 items), non-player personnel (3items), team rivalry (3 items), team commitment (3 items), organizational attributes (2 items) and socialization (3items).A 33-item questionnaire was drafted to measure the brand-equity construct of Mumbai Indians using the modifiedSBBE model. Initial 30-items in the questionnaire were used for the validation of the SBBE model. In addition to the30-items, extra 3-items were included in the questionnaire to measure the brand associations with respect to thesponsor(s) and celebrity player(s) as observed during the qualitative study. The questionnaire also includeddemographic information and some multiple choice questions for assessing the information processing habits of therespondents, frequency of watching IPL matches and most importantly their main reason for watching IPL. Thequestionnaire was pretested with a small sample of 30 respondents to look for any error or loop hole. After somemore modifications a final questionnaire was devised in English language as it is known to the university and college

students. These items were measured on a 7-point likert type scale with response categories as strongly disagree (1)and strongly agree (7).ResultsSample Characteristics94% of the respondents were between the age group of 17-27 years and only 6% were between the age group of 28to 43 years. The average age of the respondents was 21 years. All the respondents were well qualified and 83% ofthe respondents were having a graduate degree. 62% of the respondents were males whereas 38% respondents werefemales. Out of the total respondents 48% get the information about IPL and Mumbai Indians from electronic media,15% from online media, 14% from newspapers, 16% from their friends, and only 7% of the respondents visit theteam websites for knowing about the teams. 78% respondents were not willing to travel to distant places to watch thematches of their favorite team. When asked about the frequency of watching IPL matches, 39% agree to watch thematches of their favorite teams only whereas 21% of the respondents watch all the matches of the IPL. 50%respondents watch IPL matches because they view IPL as full of entertainment while 37% people were of the viewthat celebrity player (s), with a mean of 5.98, do have an impact on the image of the team and some people has alsochosen Mumbai Indians as their favorite team because of the presence of celebrity players (Sachin Tendulkar,Kireon Pollard, Lasith Mallinga etc).Measurement modelsA ten-factor measurement model was set up to check the validity and reliability of the modified SBBE model. Aconfirmatory factor analysis (CFA) was conducted to test the measurement model. The values of comparative fitindex (CFI), Tucker-Lewis coefficient (TLI), goodness-of-fit (GFI), adjusted goodness-of-fit (AGFI) and root meansquare error of approximation (RMSEA) were used for evaluating the goodness-of-fit of the model. Results of theCFA indicated the values of CFI, TLI, GFI, AGFI as 0.924, 0.907, 0.946, and 0.915 respectively and these all metthe recommended criteria for acceptable levels (Kelloway, 1998; and Kline, 1998). The value of RMSEA was 0.048which was below the 0.05 criterion (Kelloway, 1998).On the other hand, while checking for the convergent validity of the scale it was observed that the average varianceextracted (AVE) of all the latent variables was well above the cut-off level of 0.5 excluding organizational attribute,organizational commitment, and non-player personnel as 0.17, 0.43, and 0.24 respectively. Also, the constructreliability (CR) of these latent variables was well below the recommended value of 0.7. It was also found that thehighest standardized factor loading for organizational attribute, organizational commitment and non-playerpersonnel was 0.442, 0.437, and 0.376 respectively which was well below the cut-off level of 0.50. These latentvariables were thus dropped from the modified SBBE model. Also, one item each from team history and teamsuccess had the standardized factor loading, 0.464 and 0.406 respectively, which was below the cut-off level, sothese individual items were also dropped from the scale.Organizational attribute was dropped because people do not believe a two-sided loyalty in IPL. They were of theview that the IPL teams (s) are professional and the player (s) playing for them are also professional. Money is theonly thing they crave for rather than being loyal to the fans thus expecting loyalty from team (s) towards their fans isvery rare. Organizational commitment was dropped as we found that people are not aware of the corporate socialresponsibility (CSR) programmes undertaken by the team (s) for paying back to the community. Mumbai Indians isthe team in the IPL which is supporting the „education for all‟ campaign as a part of its CSR but awareness about itamong the people was found very low. The reason for dropping non-player personnel was supported by thequalitative research. People believe that television viewers do not care much about the coach/management or thecheerleaders of the teams as there is no face-to-face or direct interaction between the television viewer (s) and thenon-player personnel of the teams and also advertisements on the television during break-times and too muchchannel switching can be considered responsible for this behavior of the television viewer (s).A seven-factor measurement model was again set up after dropping organizational attribute, organizationalcommitment and non-player personnel and one individual measured items from team history and team successrespectively. CFA was performed again and this time the measurement model was found to be satisfactory. Themodel fit results showed that the measurement model fit the data quite well [chi-square = 212.366, p < 0.001 giventhat df = 149]; importantly CFI, TLI, GFI, AGFI, and RMSEA were found to be 0.964, 0.954, 0.911, 0.942, and0.045 respectively which were as per the recommended values. The average variance extracted and construct

eliability values were also found to be satisfactory which helps us to conclude that the scales are also reliable. Thestandardized factor loadings of each of the measured variables was as per the recommended value and greater than0.5. These empirical results support for the convergent validity of the scales. For checking the discriminant validityof the scales, the square root of the average variance extracted of each latent variable was taken and it was found tobe larger than the correlation coefficients of the same indicating the discriminant validity of the scales.Overall, the measurement model after modifications was believed to be appropriate given the proof of good modelfit, reliability, convergent validity and discriminant validity. After validating the reliability and validity of themeasurement model we proceeded with the specification of the structural model.Structural ModelThe structural model was specified based on the spectator based brand equity theory. We hypothesized brandassociations (5 dimensions) and brand awareness (2 dimensions) as the higher-order constructs which consists ofseven dimensions as brand mark, social interaction, team success, team history, and team rivalry for brandassociations and team identification and team internalization for brand awareness. The structural linkages are freedand the factor loading of one indicator per construct to a value of unity is fixed for testing the structural model. Errorterms are not allowed to correlate with each other and all the measured items are allowed to load on only oneconstruct each.Assessing Structural Model ValidityThe structural model was tested with the same sample (n = 220) resulting in the following model fit results: chisquare value (df = 161) = 246.50; CFI = 0.951; TLI = 0.942; GFI = 0.841; AGFI = 0.898; and RMSEA = 0.051. Itwas observed that the social interaction was found to be statistically insignificant (P>0.05) and the standardizedfactor loading for two of the measured variable of social interaction was below the cut-off level of 0.5. It wassuggested for making some modifications in the existing SBBE model.Model ModificationsIt was decided to drop social interaction from the SBBE model and emphasis thus shift for finding a better fittingmodel, which we believe to exist. During the qualitative study we had observed that though people love to watchtheir favorite teams and favorite players playing inQuickTime and adecompressorare needed to see this picture.IPL though they don‟t feel like being a very important part of the team nor do they believe that the team (s) givesthem a reason to spend time with their friends or relatives. The results for the modified model shows that the modelfits the data as all the model fit indices were as per the recommended values. The goodness of fit indices for themodified SBBE model, as shown in table 1, were: chi square value (df = 111) = 155.629; CFI = 0.971; TLI = 0.964;GFI = 0.959; AGFI = 0.932; and RMSEA = 0.044. Figure 1 shows the structural model for the modified SBBEmodel.

QuickTime and adecompressorare needed to see this picture.Figure 1:Structural Model for Modified SBBETable 2 shows the statistical values of mean, standard deviation, average variance extracted (AVE), constructreliability (CR) and the standardized factor loadings for the measurement items of the second order latent variables.From table 2 we can show that that the scales are reliable and valid as the values of AVE and construct reliability forall the latent variables are acceptable and as per the recommended values. All the factor loadings were alsostatistically significant.

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QuickTime and adecompressorare needed to see this picture.Overall, the modified structural model fit the sample data as it satisfies the goodness of fit, reliability, convergentvalidity, and discriminant validity criteria.Discussion of the ResultsThe purpose of this research was to validate the SBBE model in context of television viewers and it represents oneof the first efforts to validate the SBBE model in context of television viewers in IPL. It was found that the SBBEmodel could not be applied directly to measure the brand equity of sports teams in context of television viewers as itneeds some modifications. We focused on brand equity from services perspective in this research and the use ofstructural equation modeling indicated a reasonable fit of the data to the modified SBBE model. Importantly, thisempirical research supports for brand associations and brand awareness as the important constructs for assessing thespectator based brand equity as suggested by Ross (2006) and Ross, Russell and Bang 2008). Many dimensionspredict their respective second order latent variables. Brand associations dimension was strongly predicted by teamrivalry (0.83) and team success (0.77). Interestingly, the unity and co-ordination between the players of the team andthe determination and passion of the players for winning the matches for their teams can be suggested for predictingthe reliability of the team. The past performance of the team and previous records of the team also help in buildingbrand-equity. However, brand mark (0.44) was not found to be a strong predictor of brand associations. This is asper the results of Ross, Russell, and Bang (2008) where the logo of the team was found to be a weak predictor ofbrand associations. It may be due to the fact that television viewers are interested only in the three-hourentertainment rather than being very particular about the brand logos‟ or the brand mark of the teams.The important thing to note here is that the organization has control over the decision regarding the brand mark,which we found to be insignificant for television viewers but the management does not have any control overdecisions regarding team success, and team rivalry which were significant predictors of brand associations. Themanagement of the team(s) should select their players very cautiously and the coaches and managers should alwaystry to cultivate harmonious relations between the players who happen to be from different countries or regions. Theteam (s) should look like a single and united team during and after the matches. Also, there should exist a strongbonding between the player (s) and this bonding should be reflected inside as well as outside the stadiums. Aspredicted earlier by Ross, Russell and Bang (2008) the two factors, brand identification and internalization werefound to be highly predictive of brand awareness.Findings of this study can be used for better managing and marketing the team(s) as a sport brand. The managementof the IPL team (s) can gain important insights from the research and can take wise management decisions fordeveloping the brand equity of the team(s) e.g buying celebrity players and developing a close bonding betweenthem inside and outside the stadiums would make it easy for the people to associate the team as a strong and unitedteam. Efforts of the management should be made to select, recruit, train, and make the player(s) learn the importanceof knowing each other and playing as a team. This will result in improving the performance of the team whichultimately influences the success in the long-term.Another important finding that came out of the research was that television viewers don‟t bother about the owner (s)of the team (s). Their presence or absence from the team does not have any impact on the brand-equity of the teambut the presence of the celebrity player(s) in the team can make a big difference. The mere inclusion of the celebrityplayer (s) can create positive word-of-mouth/publicity for the team, thus, making the team as one of the topcontender to be in the consideration set of the favorite team(s) of the viewers. It does not matter much whether thecelebrity player is playing for the team or not but his mere presence in the team gives a new energy to the team e.gduring the champions trophy of T-20 cricket, the only presence of sachin tendulkar in the team stands boosted theplayers and the team emerged as the winner of the tournament contributing to the brand-equity of the team in thelong-term.

Limitations and Future researchIt is always important to highlight the limitations of any research. Like any other research, this research too hadsome limitations. First, we use a sample of respondents only from professional sport and examined one segment ofthe sport consumer base i.e the television viewers. Future researches should be undertaken involving other samplesto further asses the brand-equity of teams in other levels of sport and other sport consumer markets (e.g Olympicsports, formula 1 team (s), and women sports). Another limitation is from geographical point of view. Data wascollected from respondents who were from a particular state and no team from that state is playing in the IPL. Thiswas having some serious impacts on the team identification and internalization factors. The sample of the futureresearches, thus, should include respondents from states whose teams are playing in the IPL.ConclusionThis research came out with a conclusion that the spectator-based brand equity model cannot be applied to spectatorsports in India directly. SBBE model needs some modifications for measuring the brand-equity of sports teams ofany sporting event. Dimensions such as team rivalry, team success and team history are important predictors of thebrand associations. Though brand mark contributes to the brand association but the contribution is quite insignificantas compared to above mentioned dimensions. Emphasis of the managers should be on developing the threedimensions. The role of the celebrity players and sponsor (s) is also important in building the brand-equity of theteams. Both of them should be chosen wisely and strategically to have a synergetic advantage. The mere presence ofcelebrity players in the team helps to bring the team into the consideration of people for their best team. This willultimately have an impact on the brand equity of the teams which will affect the revenues of the teams.References:Aaker, D.A. (1991), Managing Brand Equity, Free Press, New York, NY.Bauer, H.H., Stokburger-Sauer, N.E. and Exler, S. (2008), ―Brand Image and Fan Loyalty in Professional TeamSport: A Refined Model and Empirical Assessment‖, Journal of Sport Management, Vol. 22, pp. 205-226.Bauer, H.H., Stokburger-Sauer, N.E. and Schmitt, P. (2005), ―Customer-based brand equity in the team sportindustry‖, European Journal of Marketing, Vol. 39, No. 5/6, pp. 496-513.Berry, L. L. (2000), ―Cultivating Service Brand Equity‖, Journal of the Academy of Marketing Science, Vol. 28,No.1, pp. 128-137.Blackston, M. (1992), ―Observations: Building brand equity by managing the brand‟s relationship‖, Journal ofAdvertising Research, Vol. 32, No.3, pp. 79-83.Cobb-Walgren, C.J., Beal, C. and Donthu, N. (1995), ―Brand equity, brand preferences, and purchase intent‖,Journal of Advertising, Vol. 24, No. 3, pp. 25-40.Dickson, M.A., Lennon, J.S., Montalto, C.P., Shen, D. and Zhang, D. (2004), ―Chinese consumer market segmentsfor foreign apparel products‖, The Journal of Consumer Marketing, Vol. 21, No. 4/5, pp. 301-315.Farquhar, P.H., Han, J.Y. and Ijiri, Y. (1991), ―Recognizing and measuring brand assets marketing science instituteworking paper series‖, working paper (report No. 91-119),Marketing Science Institute, Cambridge, MA.Ferguson, R.J., Paulin, M. and Bergeron, J. (2010), ―Customer sociability and the total service experience:Antecedents of Positive Word-of-mouth intentions‖, Journal of Service Management, Vol. 21, No.1, pp. 25-44.Funk, D.C. and James, J.D. (2006), ―Consumer loyalty: the meaning of attachment in the development of sport teamallegiance‖, Journal of Sport Management, Vol. 20, No. 2, pp. 119-150.

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Impact of Sensory Branding on Consumers along with Purchase Decision InvolvementAuthor 1 : Ms. Pallavi ShettyStudent, PGP-2Mudra Institute of CommunicationsShela, Ahmedabad – 380058Indiapallavi10@micamail.inAuthor 2: Dr. Varsha Jain (Correspondence Author)Research Fellow, Head Division of Integrated Marketing communicationMudra Institute of Communications ResearchShela, Ahmedabad – 380058IndiaPhone: 09714621155varsha.micore@micamail.in, varsha8075@yahoo.co.inProfile of the AuthorsAuthor 1: Ms. Pallavi Shetty Pallavi Shetty is a student at Mudra Institute of Communication, Ahmedabad and ispursuing her PGDMC (majored in Brand Management). She holds a B.A. degree from St. Xavier‘s college inEconomics and Statistics and M.A. in Economics from Mumbai University. Her other works include a ruralimmersion project for developing communication plan and a tribal based study that was conducted to understandconsumption patterns.Author 2: Dr. Varsha JainDr. Varsha Jain is a Research Fellow and division head of Integrated Marketing Communication at the MudraInstitute of Communications Research in Ahmedabad. She has 26 publications in international, national and tradejournals and book chapters to her credit in the last 4 years. Her papers are published in International Journal ofMobile Marketing, Young Consumers (Emerald), Vikalpa (IIM-A Journal), Media Asia (NTU, Singapore), WARC(World Advertising Research Council, UK) etc. She reviewed papers of AMIC conference in 2009, 2010 and 2011,Vikalpa (IIM-A‘s journal), Journal of Creative Communications (Sage Publication) and book chapters on integratedmarketing communication for Oxford University Press and on brand management for Sage Publications. She haspresented 18 research papers within 4 years at national and international conferences such as Asian MediaInformation Centre (NTU, Singapore in 2009, 2010 and 2011), IIM Lucknow, IIM Indore, IMT Ghaziabad ICFAI,Hyderabad etc. She was chairperson at AMIC (Singapore) international conference in 2010. Her papers were amongthe best papers at many conferences and got published by the conference organizers such as AMIC in 2009. Shedoes research in the area of advertising and branding.Introduction:Bolstered by sturdy global competition and highly saturated markets, brand marketers have been intentionally gazingfor unique and dynamic ways of communication to foster stronger consumer base and higher financial returns.Sensory Branding – attaching senses to built brands – is one such concept that advertisers prominently use to sell

their services and goods. The five senses - see, hear, touch, smell and taste conjure powerful memories andemotions. Incorporating such sensory appeals, enhances the flavour of a product, thereby improving customerexperiences and optimistically guaranteeing repeat purchase. Thus, it can be noted that sensory branding providesample opportunities due to its nature of delivering multi-sensory brand experiences and promise to the consumer(Genuario, 2007).However, it‘s true that not all five senses can be leveraged in a brand, but each stimulus prominently holdsimportance and is important element of successful sensory branding campaigns. Out of the five sensory, sense ofsound and sight seems to be greatly emphasised for its basic explicit appeals and effects. However, amongst others,smell is also one of the popular ways to capitalize consumer attentions. According to Lindstrom (2005), smellinfluences 75% of all the emotions experienced by an individual in a day. The sense of smell acts directly on thelimbic system which controls emotions and memories (Bell, 2007). Smell is the most powerful and advanced form ofhuman interaction and should be looked as a potential medium of communication.Literature Review:The effective use of smelling sense undoubtedly provides better opportunities for creating a sale and buildingmemorable and lasting relationships with the consumer (Portas, 2008).However, the relevance of smell must be studied within the context of the marketplace where it is important tounderstand the level of involvement that a consumer has in the purchase decision.Literature review also supported the judgement that measuring the level of Purchase Decision Involvement (PDI) isinstrumental in understanding the impact of smell on consumer Purchase Involvement (PI). This was establishedwith the help of the Elaboration Likelihood Model (Cacioppo, 1983). According to the Elaboration LikelihoodModel, there are various processes of attitude formation and these can be classified into two main categories i.e., theCentral Route and the Peripheral Route. The Central route involves those processes that entail cognitive resourcesand considerable effort whereas the Peripheral route involves the other processes where the individual is absorbed inthinking for a shorter period of time. According to Vaidyanathan and Aggarval (2001) when the level ofinvolvement is high, then the consumer takes the central processing route and uses data driven signals for theevaluation of the offer. For example, the consumer would be more likely to consider price and other numerical datafor assessing the product and the associated information. However, low-involvement consumers consider theperipheral route and give more importance to the simple inferences and cues such as the type of brand ownership orthe kind of non-price promotional offers (Kristina Maiksteniene, 2008).H1: There is no linear relationship between consumer PDI and impact of smell on consumer PI.H2: There exists a negative linear relationship between consumer PDI and impact of smell on consumer PI.Research Methodology:The study is empirical in nature and uses survey method for data collection. The sample consisted of respondentsbetween ages of 18-30. All the respondents belonged to SEC A and A+. This segment of consumers was selected asthey are the most brand conscious individuals in India. Shampoo, was identified as an appropriate product categoryas it clearly qualifies as a ―functional product‖ i.e., a product where smell plays an implicit role.Initially data was collected through a pilot study with 25 respondents where the top ten parameters that consumerswere interested in while purchasing a shampoo were identified. In the second stage of the study, Mittal‘s (1995)modified PDI was selected and was adopted to measure the level of consumer PDI during the empirical study.Similarly, for measuring the impact of smell on PI, probabilistic scales were adapted and modified from pastresearch (Ajzen, I. (1985); Fishbein, M., Ajzen, I. (1975); Miniard, P. W., Obermiller, C., Page, T. J. (1982);Miniard, P. W., Obermiller, C., Page, T. J. (1983); Morwitz, V. G., Steckel, J., Gupta, A. (2007); Warshaw, P. R.(1980); Goldsmith et al., 2000). These two scales were used in the final questionnaire. A total of 200 respondentsparticipated in the study. The questionnaire were filled using stratified sampling technique (on the basis of age andgender) to reduce the biasness.The analysis included frequency tabulations and simple bivariate linear regression modelling.Results:There were ten parameters that emerged from the pilot study - packaging, colour of the shampoo, fragrance, price,brand, lathering ability, conditioning, hair fall control, dandruff control, damage repair. The top three parameters that

were selected by the consumers with low and high levels of PDI were drastically different as consumers with highlevels of PDI considered damage repair, hair fall control and dandruff control as the important parameters and theconsumers with low levels of PDI preferred fragrance, brand and conditioning as the crucial dimensions. It wasobserved that fragrance as a dimension performed considerably better than the other parameters as 72 out of 90respondents with low PDI scores gave it higher ranking.Regression analysis confirmed the hypothesis. The following basic regression equation was derived: Impact ofsmell on consumer PI = 4.965 – 0.598 (consumer PDI)The standard error or standard deviation of b was estimated as 0.048, and the value of the t statistic was - 12.446,with 198 (n-2) degrees of freedom. The critical value of t with 198 degrees of freedom and Level of Significance at5% is 1.9720 for a two-tailed test. The modulus of the calculated value of t was larger than the critical value andtherefore the null hypothesis was rejected. Hence there exists a significant linear relationship between consumer PDIand impact of smell on consumer PI. The negative sign of the slope (- 0.598) further established the accuracy of thealternative hypothesis. Therefore, consumers who have low levels of PDI while buying shampoos have a greaterimpact of the Fragrance of the shampoo on their PI as compared to consumers who have high levels of PDI whilebuying shampoos.The value of F statistic was 154.903 with 1 and 198 degrees of freedom. The calculated F statistic far exceeded thecritical value of 3.8889 determined at 5 % Level of Significance (LOS) with 1 and 198 degrees of freedom.Therefore, the relationship between consumer PDI and impact of smell on consumer PI was significant at 5% LOS,corroborating the results of the t test. Since the relationship between the two variables is significant, it can beconcluded that the values of impact of smell on consumer PI can be predicted on the basis of consumer PDI. In thiscase the R Square was 0.439. Adjusted R Square was 0.436. Thus, it can be concluded that almost 40% of thevariation in impact of smell on consumer PI can be explained by the variation in consumer PDI.Conclusion:Consumers with low levels of PDI showed higher impact of smell on their PI. It was also found that consumers withhigher levels of PDI had hair problems such as damage, dandruff and hair fall. Therefore, they desired a shampoothat would provide a solution for these problems and hence fragrance becomes secondary for them. However,consumers with low levels of PDI considered a shampoo mainly as a cleansing and conditioning agent. Fragrancewas found to be an important dimension for such respondents while purchasing shampoos.Implications:The findings of this empirical research contributed to the academia as well as practitioners. It was found thatconsumer PDI can serve as an important parameter for consumer segmentation. Based on the findings, there can betwo segments of consumers for shampoos: the Conscious Hair Segment that has sensitive hair and the Not-So-Conscious Hair Segment that has normal hair. Conscious Hair Segment consists of consumers who have higherlevels of PDI while buying shampoos where as the Not-So- Conscious Hair Segment has low PDI levels.Organizations can target both the segments and can position the product accordingly. The Hair conscious segmenthas sensitive hair and they are deeply involved while purchasing the shampoo. They have problems such as damagedhair, hair fall and dandruff. Hence they look at shampoo as a solution to tackle these problems. Thus positioning forthese consumers should be based on presenting various shampoos as a solution to solving various problemsassociated with this group of consumers. Not so Hair Conscious Consumers are involved at a low level while makingthe purchase decision. These set of consumers look at shampoos as merely cleansing and conditioning agents.Furthermore, the research concluded that fragrance is an important parameter for this segment of consumers and thusmust be included in the positioning strategy. Moreover, it was found that this segment is brand conscious and henceit is necessary to highlight the brand in the communication strategy along with fragrance (Refer Figure 1).

QuickTime and adecompressorare needed to see this picture.QuickTime and adecompressorare needed to see this picture.Moreover, smell in the shampoo category remains exploited at the implicit level of perception. The findings fromthis study clearly make a case for exploring the opportunity of bringing the fragrance of the shampoo at the explicitlevel of perception. This translates into movement of shampoos from ―Functional Products‖ to ―FragranceProducts‖. This means that smell should no longer play a mere secondary role in the case of shampoo but should bemarketed as an important product attribute on the lines of products such as perfumes, colognes, body deodorants,room fresheners, toilet fresheners, etc. This has several implications for product development for shampoosprimarily focussed on the attribute of smell.Furthermore, smell can also be used as a prominent part of packaging where innovative smell sensors such asscented labels can help to give the consumer a clear idea of the fragrance of the shampoo.References:References:Ajzen, I. (1985). From intentions to actions: a theory of planned behavior. In J. Kuhl & J. Beckmann (Eds.), Actioncontrol: from cognition to behavior (pp. 11–39). Berlin: Springer.Cacioppo, J. T., Petty, R. E., Morris, K. (1983). Effects of need for cognition on message evaluation, recall, andpersuasion. Journal of Personality and Social Psychology, 45, 805-818.Fishbein, M., Ajzen, I. (1975). Belief, attitude, intention, and behavior. Reading: Addison-Wesley.Goldsmith, R. E., Lafferty, B. A. and Newell, S.J. (2000), ―The Impact of Corporate Credibility on Consumer

Reaction to Advertisements and Brands‖, Journal of Advertising, 29 (3), 43-54.Kristina Maiksteniene, V. A. (2008). Manufacturer and Retailer Brand Acceptance under Different Levels ofPurchase Involvement. Engineering Economics, Commerce of Engineering Decisions, 56 (1).Lindstrom, M. (2005). Brand Sense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound. FreePress.Malhotra N., Dash S., Marketing Research: An Applied Orientation. PearsonMiniard, P. W., Obermiller, C., Page, T. J. (1982). Predicting behavior with intentions: a comparison of conditionalversus direct measures. In A. Mitchell (Ed.), Advances in consumer research (pp. 461–464). Ann Arbor: Associationfor Consumer Research.Miniard, P. W., Obermiller, C., Page, T. J. (1983). A further assessment of measurement influences on the intention–behaviour relationship. Journal of Marketing Research, 20 (1), 206–212.Mittal, B. (1989). Measuring Purchase-Decision. Psychology & Marketing , 6 (1), 147-162.Mittal, B. (1995). A Comparative Analysis of Four Scales of Involvement . Psychology & Marketing , 12 (1) , 147-162.Morwitz, V. G., Steckel, J., Gupta, A. (2007). When do purchase intentions predict sales? International Journal ofForecasting, 23 (1), 347–364.Portas, K. B. (2008). The power of emotions - influence of multisensory marketing strategies. ESOMAR, LatinAmerican Conference, Mexico City.Sengupta (2011), India: Country Pulse, Euromonitor International.Vaidyanathan R. , Aggarval P. (2001). Use of Internal Reference Prices for Deal Evaluation: Decision Structure andRole of Involvement. Marketing Management Journal, 11 (2), 108-12.Warshaw, P. R. (1980). Predicting purchase and other behaviors from general and contextually specific intentions.Journal of Marketing Research, 17 (1), 26–33.Genuario, L. (2007, March). Sensory Packaging: Branding That Makes Sense(S). Brandpackaging, 4-10.Bell, S. (2007, Autumn). Future sense: defining brands through scent. Market Leader, 60-62.

EXPLORING A NEW DIMENSION OF CUSTOMER SERVICE AND ITS IMPACT ON SALESGROWTH AND LOYALTYProf. Krishna K. Havaldar1Prof. Jacob Alexander2Prof. Mihir Dash3Introduction“Forget about the sales you hope to make and concentrate on the service you want to render.”-Harry BullisToday's customers are becoming harder to please. They are smarter, more demanding and less forgiving. Thechallenge for any marketer is to make these customers delighted, and delivering superior quality products andservices is an essential ingredient to achieve this.Superior customer service drives customer satisfaction and loyalty. Satisfied customers tend to stay longer with thecompany and spread positive word-of-mouth to other customers, while dissatisfied customers tend to leave theorganization and further damage the image of the company through negative word-of-mouth. Customer service isone of the critical touch points that need to be taken care of to increase the level of customer satisfaction. Inparticular, the complaint handling mechanism is a crucial component of superior customer service, reinstatingcustomer confidence in the event of complaint. This enhances customer satisfaction and loyalty towards thecompany.The Oxford Dictionary defines „service‟ as an assistance or benefit given to someone. Kotler (2002) refers to

„service‟ as ―an act or performance that one party can offer to another that is essentially intangible and does notresult in the ownership of anything.‖The term „customer service‟ is defined as ―anything to do for the customer that enhances the customer experience‖(Harris, 2000). To understand the new dimension of „basic customer service,‟ we need to distinguish the terms„service‟ (singular) and „services‟ (plural) which are not purely synonymous. Although service and services sharecommon characteristics, such as intangibility and perishability, as discussed by Levitt (1981), Zeithaml et al (1985),and Parasuraman (1998), they also differ in a fundamental way. The term „services‟ (e.g. courier, legal, and softwareservices) is used for „intangible activities‟ which suppliers market to their customers or clients. Both „tangiblegoods‟ (e.g. furniture, refrigerator and salt) and „intangible services‟ (e.g. health-care, insurance and banking) areconsidered as „core offerings,‟ which require traditional marketing strategies, such as the 4P‟s for the marketing ofproducts, and the 8P‟s for the marketing of services.On the other hand, a „service‟ accompanies the core offering, regardless of whether the core offering is a tangiblegood or an intangible service. In this regard, „basic customer service‟ is defined as a service that accompanies thecore product or service offering and is provided free of charge to customers.QuickTime and adecompressorare needed to see this picture.This definition is similar to the „supplementary service‟ defined by Parasuraman (1998), but the point ofdisagreement is mainly for the use of the word „supplementary service,‟ as it can mean an additional service, such asinstallation of a machine or delivery of a product, for which a supplier may charge an extra amount to the customer.To understand the difference between core service/product, basic customer service, and supplementary service, let usconsider three different industries, as illustrated in the table below.

QuickTime and adecompressorare needed to see this picture.Some more examples of basic customer service are as follows:A customer service department receives telephone calls and letters from dissatisfied customers and these areanswered free of charge.A waiter or waitress delivers the food promptly and pleasantly as per the order.A construction company builds new houses and hands them over to its customers on schedule.A customer wants information about a product‟s price and availability from a supplier, who provides theinformation without charging any amount to the customer.If the basic customer services offered by suppliers are of superior quality as compared to those offered by theirrespective competitors, then they are referred to as ‗superior basic customer service,‘ otherwise they are called‗average/inferior basic customer service.‘ To gain customer loyalty and growth in sales, a supplier should not onlyoffer superior quality of core goods/services, but also superior quality of supplementary and basic customer services.Customers have varying degrees of loyalty to a brand, a company and a retail store. Loyalty is defined by Oliver(1997) as ―a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despitesituational influences and marketing efforts having potential to cause switching behavior.‖Literature ReviewService quality and its impact on customer loyalty and retention are well-studied areas in marketing. There areseveral studies addressing these issues and the following is a review of some of the relevant research studies.Early writings, including Gronroos (1982), Lowis and Booms (1983), and Parasuraman et al (1985), suggested thatperceived service quality was caused by a gap between the customers‘ expectations and the sellers‘ actual serviceperformance. Several authors, including Sasser et al (1978), Granroos (1982), and Lehtinen and Lehtinen (1982),

proposed attributes that customers use as criteria in evaluating quality of service. Crosby (1979) defined quality as―conformance to requirements.‖Garvin (1983) measured quality by counting the incidence of ‗internal‘ and ‗external‘ failures. However, a majorbreakthrough was achieved in developing an instrument to measure the quality of service when Parasuraman et al(1988, 1991) conducted empirical studies in several sectors to develop and refine a multi-item instrument (calledSERQUAL) to quantify the gap between the customer‘s service expectation and perception about actualperformance along five generic dimensions in the order of importance:(1) Reliability: The ability to perform the promised service dependably and accurately.(2) Responsiveness: The willingness to help customers and to provide prompt service.(3) Assurance: The knowledge and courtesy of employees and their ability to inspire trust and confidence.(4) Empathy: The provision of caring and individualized attention the firm provides to its customers.(5) Tangibles: The appearance of physical facilities, equipment, personnel, communication materials.Padhy and Swar (2009) examined salient features of service quality in retail banking using SERQUAL model. Theyfound that the SERQUAL model could adequately capture the improvement in service quality. Ranaweera and Neely(2003) showed that perceptions of service quality have a direct linear relationship with customer retention even inmass services with low customer contacts like telephone users in England. In another study, Nam et al (2007) founda direct effect of service quality on rental usage and termination behavior data from the launch of a new video ondemand type service.Nobrega et al (2010) studied customer service in higher education institutions. They identified central service asteaching and ancillary services having two components – viz. complementary and supplementary services. Thecomplementary services were library services, snack services and photocopying services. The supplementaryservices were computer laboratory services and information services. The basis of segregation of ancillary servicesinto two components of complementary and supplementary services was not clear. However, the main finding of thestudy was that the central service (viz. teaching) had the largest contribution to students‘ retention in highereducation institution. Complementary and supplementary services also contributed in a balanced way.Customer service aspect was studied by Parasuraman (1998) in the context of business-to-business markets. In thisstudy, the author defines ―core offerings‖ which include tangible products (e.g. computer and textile machines) andintangible services (such as legal and courier) that call for traditional marketing activities like pricing and promotion.The customer service aspect is called as ―supplementary service‖ (e.g. information to customers and trainingcustomer firm‘s personnel) that accompanies the core offering. According to the author, if such supplementaryservices are marketed as ―fee add-ons‖, they become a sort of ―pseudo‖ core offerings and hence not considered as―customer service‖. This aspect of ―supplementary service‖ stated by Parasuraman (1998) is not clear andconvincing.Lovelock et al (2010) describe a firm‘s market offerings as being divided into core product elements andsupplementary service elements. Supplementary services facilitate and enhance use of core offering and mayinclude consultation, finance, shipping, installation and maintenance. The authors further state that thesesupplementary services may be offered ‗free‗ (meaning effectively that their cost is bundled with the price of theinitial product purchase) or charged for separately.None of the earlier studies and texts have considered the basic or fundamental expectations of customers, forexample getting prompt and accurate information and service from suppliers about various aspects of core goods andservices as well as supplementary services that accompany them. These basic or fundamental service expectations ofcustomers for which sellers do not charge customers is now conceptualized as ‗basic customer service,‘ which isdifferent than core product/service and supplementary service.

This study divides customer service into two components: basic customer service that accompanies the coreproduct/service but not charged to customers, and supplementary service that accompanies the core product andservice but charged to the customer. Basic customer service is a new dimension or concept of customer servicewhich is defined for the first time in this study. Customer service aspects defined by Parasuraman (1998) andNobrega et al. (2010) lack clarity and hence it is now conceptualized in this paper as having two components (viz.basic and supplementary services) that accompany a seller‘s core offering of tangible product and intangible servicein business as well as consumer markets.MethodologyThe objectives of the present study are1. To examine the characteristics of organizations (specifically their customer complaint handling systems andtheir organizational culture) providing superior basic customer service as opposed to organizationsdelivering average/inferior basic customer service.2. To analyze the impact of basic customer service on sales growth and loyalty.The study is based on primary data collected using a structured questionnaire from a sample of one hundred andtwenty-four business organizations in Bangalore, India. The sample supplier companies were elicited from a panel ofconsumers who were asked to identify organizations providing superior basic customer service as opposed toorganizations delivering average/inferior basic customer service, and which characteristics distinguish these twogroups. Overall, 48.4% of the sample supplier companies were perceived to deliver superior basic customer service,while 51.6% of the sample supplier companies were perceived to deliver average/inferior basic customer service.The questionnaire was developed based on some of the characteristics identified by the panel of consumers. Thevariables considered were the sample supplier companies‘ self-assessment of basic customer service, the frequencywith which they reviewed customer complaints, the speed with which they informed customers about the status oftheir complaints, their basic customer service delivery systems, their customer-centric culture including topmanagement support, their perception of whether superior basic customer service would result in improvement ofcustomer loyalty and/or sales performance, their sales growth over the last three years, and their percentage of repeatcustomers over the last two years. The supplier companies perceived to provide superior basic customer service werecompared with those perceived to provide average/inferior basic customer service along these dimensions.Analysis & FindingsThere were several elements of basic customer service systematized by the supplier companies. Informationdisseminationhas been revolutionized by Internet, and almost all the sample supplier companies had detailedproduct profiles on their websites. Many of the supplier companies which were perceived to deliver superior basiccustomer service provided online customer support, with customer login facility, and regular updates through e-mailas well as SMS. Several of them also had call centers providing customer guidance and support. Along withinformation-dissemination, these networks allow for customer feedback and review. More importantly, they alsoallow for real-time handling of customer complaints, and periodic tracking/review of complaint resolution. Propercommunication, a cornerstone of basic customer service, has thus been increasingly embodied into the suppliercompanies‘ delivery systems. On the other hand, supplier companies which were perceived to deliveraverage/inferior basic customer service failed to achieve the same extent of customer networking, especially in termscustomer complaint handling.The overall self-assessment of the sample supplier companies of their basic customer service delivery is presented inTable 1 below.

QuickTime and adecompressorare needed to see this picture.The overall level of self-assessment of basic customer service was high, with mean value of 1.91, and standarddeviation 0.796, with 79.9% of the sample supplier companies perceiving their basic customer service to be excellentor very good. Thus, self-assessment of basic customer service by the sample supplier companies was much higher at79.9% in comparison with their customers‟ perceptions of superior basic customer service of 48.4% for the same setof supplier organizations.In fact, supplier companies which were perceived to deliver superior basic customer service had a significantlyhigher level of self-assessment of basic customer service (with a mean value of 1.60, and a standard deviation of0.643) than supplier companies which were perceived to deliver average/inferior basic customer service (with amean value of 2.20, and a standard deviation of 0.820) [F-cal = 20.586, p-value = 0.000].In terms of supplier companies‟ perception of the impact of superior basic service on customer retention, 79.8%perceived that superior basic customer service would definitely result in improvement of customer loyalty, 18.5%perceived that superior basic customer service would probably result in improvement of customer loyalty, while1.6% were uncertain of the impact of superior basic customer service on customer loyalty.In terms of supplier companies‟ perception of the impact of superior basic service on sales performance, 68.5%perceived that superior basic customer service would definitely result in improvement in sales performance; 19.4%perceived that superior basic customer service would probably result in improvement in sales performance, while12.1% were uncertain of the impact of superior basic customer service on sales performance. However, salesperformance of an organization may depend on many factors such as price, promotional expenditure, competitors‟strategies and tactics, environmental elements, and so on. The respondents‟ perceptions suggest that superior basiccustomer service is also a driver of sales performance.

The frequency of review of customer complaints by the two groups of supplier companies is presented in Table 2below.QuickTime and adecompressorare needed to see this picture.Daily review of customer complaints was higher for sample supplier companies which were perceived to deliversuperior basic customer service (56.7%) than for those which were perceived to deliver average/inferior basiccustomer service (46.9%). This indicates that sample supplier companies which were perceived to deliver superiorcustomer service had a higher frequency of review of customer complaints. On the other hand, 6.7% of the samplesupplier companies which were perceived to deliver superior basic customer service, and 9.4% of sample suppliercompanies which were perceived to deliver average/inferior customer service had no specific schedule of review ofcustomer complaints, indicating a scope for establishing a formal customer review system [Pearson Chi-square =1.834, p-value = 0.383]. The overall frequency of review of customer complaints was high, with 80.6% of thesample supplier companies reviewing customer complaints either daily or once a week. Also, 8.1% of the samplesupplier companies had no specific schedule of review of customer complaints, indicating a scope for establishing aformal customer review system.In terms of an inbuilt system for corrective action for handling complaints, 88.3% of the sample supplier companieswhich were perceived to deliver superior customer service had such a system. However, only 76.6% of the samplesupplier companies which were perceived to deliver average/inferior basic customer service had such a system; andthe difference was statistically significant [Pearson Chi-square = 2.940, p-value = 0.043]. Overall, 82.3% of thesample supplier companies had an inbuilt system for corrective action for handling complaints, while 17.7% of thesample supplier companies did not, indicating a scope for establishing a formal system of corrective action forhandling complaints.The speed of informing customer about the status of complaints by the two groups of supplier companies ispresented in Table 3 below.

QuickTime and adecompressorare needed to see this picture.In terms of the speed of informing customer about the status of complaints, 58.3% of the sample supplier companieswhich were perceived to deliver superior basic customer service informed customers about the status of complaintswithin a day or within half a week, while 42.2% of the sample supplier companies which were perceived to deliveraverage/inferior basic customer service informed customers about the status of complaints within a day or withinhalf a week, and the difference was statistically significant [Pearson Chi-square = 9.668, p-value = 0.0425]. On theother hand, 30.0% of the sample supplier companies which were perceived to deliver superior basic customerservice, and 23.4% of sample supplier companies which were perceived to deliver average/inferior basic customerservice had no particular timeframe of informing customers about the status of complaints. This indicates a scope forestablishing a formal system for informing customers about status of complaints. The overall speed ofcommunication of information to customers about complaints was relatively quick, with 50.0% of the samplesupplier companies informing customer about complaints within a day or within half a week. Also, 26.6% of thesample supplier companies had no specific timeframe for intimating customers about complaints, and 7.3% of thesample supplier companies did not inform their customers at all about complaints, indicating a scope for establishinga formal system for informing customers about complaints.There were several cultural elements of basic customer service inculcated by the supplier companies. Suppliercompanies which were perceived to deliver superior basic customer service inculcated customer-centricity at alllevels, from the front-line employees, who were trained to deal with customers in a courteous, empathetic manner,all the way to the top management, which were involved in periodic review of customer complaints. In fact,customer-centric culture was a pre-requisite for proper customer handling systems. On the other hand, suppliercompanies which were perceived to deliver average/inferior basic customer service did not show so strong acommitment to customer-centricity, and often did not have adequate systems in place to provide customer supportand/or handle customer complaints.The sales growth over the last three years and the percentage of repeat customers over the last two years for the twogroups of supplier companies are presented in Tables 4 and 5, respectively.

QuickTime and adecompressorare needed to see this picture.There were statistically significant differences in the sales growth over the last three years between the samplesupplier companies which were perceived to deliver superior basic customer service and the sample suppliercompanies which were perceived to deliver average/inferior basic customer service. Particularly, the sales growthtwo years ago was affected by the global recession. The mean and standard deviation of sales growth of both groupsof the sample companies showed an increasing trend over the last three years, with the current year sales growthbeing significantly higher than last years‟ sales growth, which could also be due to the global recession. The meanand standard deviation of percentage of repeat customers of both groups of the sample supplier companies alsoshowed an increasing trend, though not statistically significant.Discussion of Findings:Some of the observations and recommendations based on the key findings of the study are as follows:Organizations providing superior basic customer service had a higher frequency of daily reviewing of customercomplaints (58.2%) than organizations delivering average/inferior basic customer service (43.9%), but this gapnarrows down when considering weekly review (82.1% and 79.0%, respectively). Thus, establishing a proper andtimely customer complaint review system would enable organizations to provide superior basic customer service.Organizations providing superior basic customer service had inbuilt corrective processes and/or actions forhandling customer complaints (88.1%), as opposed to organizations delivering average/inferior basic customerservice (75.4%). Thus, instituting an inbuilt corrective process for handling customer complaints would definitelyprovide greater satisfaction to the customers and would thereby enable organizations to increase customer loyalty.Organizations providing superior basic customer service had a higher frequency of informing customersregarding customer complaint resolution within a day (32.8%) than organizations delivering average/inferior basiccustomer service (24.3%), and this gap widens when considering weekly information (55.2% and 32.5%,respectively). Streamlining the process of communication to customers on their complaint status would furtherenable organizations to provide superior basic customer service.Organizations providing superior basic customer service fostered a customer-centric culture amongst itsemployees, and in many such organizations it was the top management‟s involvement through periodic review ofcustomer complaints that made the difference. In particular, organizations providing superior basic customer servicestrongly believe that customer service must be backed with top management commitment, and full employeeinvolvement.Organizations providing superior basic customer service had a higher rate of customer loyalty (51.08%) thanorganizations delivering inferior basic customer service (33.18%). However, customer loyalty/repeat purchase variedconsiderably with quality of core product/service; but superior basic customer service has contributed to customerretention by providing a solid foundation for customer satisfaction.The study indicates that systems for frequent reviewing of customer complaints, with inbuilt corrective processes forhandling customer complaints, providing adequate and timely information to customers on their complaints status, acustomer-centric organizational culture, and top management support are crucial in delivering superior basiccustomer service, thereby enhancing customer satisfaction and loyalty.

There are some limitations inherent in the study. The sample size used for the study is relatively low. Also, thesample supplier companies were quite heterogeneous. More careful selection of sample companies would haveimproved the quality of findings.There is a scope for further research in this area. The role and impact of basic customer service should be examinedacross different industries. Further, the impact of basic customer service can be compared with that of other factors,such as price and quality of core product/service and other ancillary services. Based on the results of the study, thefollowing model for the role of basic customer service in perceived service quality is proposed.QuickTime and adecompressorare needed to see this picture.Word-of-MouthCommunicationPast ExperiencePersonal NeedsExpected CustomerServiceGap BetweenPerceivedServicePerceivedServiceExpected andQuality of Supplier‟s OfferingQuality of Core OfferingGoods/ServicesQuality of Basic CustomerServiceQuality of SupplementaryServiceCustomerCustomer

The model shown in the above figure is a modification of the „Service Quality Model' developedby Parasuraman et al. (1985). The model explains the gap between the 'expected customerservice,' which is determined by personal needs, past experience and word-of-mouthcommunication, and the 'perceived customer service'. The gap can be minimized by a supplier byimproving the perceived service quality of the offering, which means enhancing the quality ofcore goods or services, basic customer service, and supplementary service. The role of quality ofbasic customer service is important in improving the overall quality of the supplier's offering.This aspect is highlighted in the model and the study, and should be taken up for testing insubsequent studies.References:Crosby, P.B. (1979), Quality is Free: The Art of Making Quality Certain, NY: New AmericanLibrary.Garvin, D.A. (1983), ―Quality on the Line,‖ Harvard Business Review, 61 (Sept-Oct), 65 - 73.Gronroos, C (1982), ―Strategic Management and Marketing in the service sector‖, SwedishSchool of Economics and Business Administration.Harris, E. K. (2000), Customer Service -A Practical Approach, 2nd Ed., Upper Saddle River, NJ:Prentice Hall.Kotler, P. (2002), Marketing Management, 11th Ed., Prentice-Hall of India.Lehtinen U. and Lehtinen J.R.(1982), ―Service Quality : A Study of Quality Dimensions,―Service Management Group OY, Finland.Levitt, T. (1981), ―Marketing Intangible Products and Product Intangibles,‖ Harvard BusinessReview, May-June 1981, pp. 94-102.Lewis R.C. and Booms B.H. (1983), ―The Marketing Aspects of Service Quality : EmergingPerspectives in Services Marketing‖, American Management Association, Chicago, IL.Lovelock C., Wirtz J., and Chatterjee J, (2010), Services Marketing, Sixth Edition, PearsonPrentice Hall.Nobrega, K.C., Mendonca, C.M.C., De Souza, T., and Campos, D.F. (2010), ―The Importance ofCentral, Complementary and Supplementary Services Offered by a University in Students‟Retention,‖ Working Paper, Universidade Potiguar, Natal – RN/ Brazil.Oliver Richard L. (1997), Satisfaction: A Behavioral Perspective on the Consumer, New York:McGraw-Hill.Padhy, P.K., and Swar, B.N. (2009), ―A Study on Customer Satisfaction and Service Gaps inSelected Private, Public and Foreign Banks,‖ presented at the 3rd IIMA Conference, MarketingParadigms for Emerging Economies, Indian Institute of Management, Ahmedabad, India; alsoavailable at: http://ssrn.com/abstract=1525555.Parasuraman A, Zeithaml V.A. and Berry LL. (1985), ―A Conceptual Model of Service Qualityand its Implication for Further Research,‖ Journal of Marketing, 49, 41-50.Parasuraman A, Zeithaml V.A. and Berry LL. (1988), ―SERQUAL: A Multiple-Item Scale forMeasuring Customer Perceptions of Service Quality,‖ Journal of Retailing.Parasuraman A, Zeithaml V.A and Berry L.L.(1991), ―Refinement and Reassessment of the

SERQUAL Scale‖, Journal of Retailing, pp.420-50Parasuraman, A. (1998), ―Customer Service in Business-to-Business Markets: An Agenda forResearch,‖ Journal of Business & Industrial Marketing 13(4/5), pp. 309-321.Ranaweera, C. and Neely, A. (2003), ―Some moderating effects on the service quality-customerretention link,‖ International Journal of Operations & Production Management 23(2).Sasser. W.E., Olsen, P.R., and Wycko, D.D. (1978), Management of Service Operations: Textand Cases, Allyn & Bacon, Boston, MA.Zeithaml, V.A., Parasuraman, A., and Berry, L.L. (1985), ―Problems and Strategies in ServicesMarketing,‖ Journal of Marketing 49, pp. 33-46The cost of misaligned capabilities, strategies and governance: The case of HIV/AIDSrelatedSocial Marketing efforts in IndiaLuis Escobar and Sameer Deshpande

This study employs strategic management concepts to analyze social marketing efforts, toidentify gaps, and to propose solutions so that the effectiveness of the marketing efforts isenhanced in the future. Specifically, our study investigates how the nation‘s capacity orgovernance impacts its ability to manage an infectious disease. To do so we move away from theearly conception of the nation‘s capacity that focused on elements such as sovereign integrity,financial resources, loyal and skilled officials, and stable administrative-military control(Skocpol, 1985). Our understanding of nation‘s capacity or governance is in line with more recentdevelopments which argues that the governance is dependent on four interlinked capacities(Grindle, 1996): institutional, technical, administrative and political. The institutional capacityembodies the rules and enforceable mechanism that guide the nation‘s political and economicactivity. The technical capacity is the ability to design and implement macro policies. Theadministrative capacity is the bureaucratic system that allows the state to administer itsinfrastructure for development and social welfare. Finally, the political capacity entails themechanism through which stakeholders can manifest their claims and resolve their issues.We focused on technical and administrative capabilities as they relate to the design andimplementation of social marketing programmes and initiatives related to the fight againstHIV/AIDS in India. Specifically, they relate to our main concern, the governance structureadopted by the Government of India (GOI) and the set of capabilities needed to properly run it.This has been overlooked by previous social marketing studies as well as by those pertaining toHIV/AIDS. Our approach is both managerial and theoretical, for which we relied on twomainstream strategic management theories, transaction cost (Williamson, 1991) and resourcebasedview (Barney, 1991; Wernerfelt, 1984). We argue that these theories, although developedfor the firm, are useful in the study of the GOI and HIV/AIDS as the social marketingprogrammes undertaken by the GOI consist of economic transactions in which otherorganizations (e.g. social marketing organizations [SMOs] and community-based organizations[CBOs]) are invited to participate. Our managerial contributions stem from the need to develop

capabilities for stakeholder engagement, monitoring and control of NGOs. Regarding theory, weargue that neither transaction cost nor resource-based view offer a complete explanation of thedeficiencies of the current governance structure against HIV/AIDS. However, these theories cancomplement each other in offering a more holistic explanation of the phenomenon.Our analysis based on 53 in-depth interviews with managers working in government andnongovernment sector as well as policy documents shows that the government adopts agovernance structure that is a hybrid of hierarchical and market structures. The hierarchy comesfrom the power imbedded in National AIDS Control Organization (NACO) as 1) an importantsources of funds for its implementers—States/UTs (Union Territories) and NGOs and 2) as thedriver of national policies on HIV/AIDS. The market component allows responsiveness to localfactors in the various states/UTs in India. We conclude that the various government entitiesparticipating in every National AIDS Control Program (NACP) phase lack the capabilities torecognize the set of skills required by NGOs to perform the various tasks they have beendelegated. In addition, the government lacks the capabilities to monitor the progress towards acomplex but key objective in the fight against HIV/AIDS—behaviour change. While the threephases of NACP have reasonable objectives and explicit demands for different governancestructures; NACO‘s lack of the appropriate capabilities to govern and monitor key stakeholderresults in misalignment or governance failure (Williamson, 1991).MethodWe used an inductive approach to infer patterns of order and structure from empiricaldata collected through public reports and interviews (Robinson, 1951). We interviewed 53 seniorofficials representing 30 government and nongovernment organizations mostly based in Delhiand Mumbai. These included the GOI, Indian and international nonprofit social marketingagencies, Indian and international NGOs, international funding agencies, United Nations bodies,

allied services such as advertising agencies, and social research organisations. Each interviewlasted between 90 to 120 minutes. For a summary of organizational profile see Table 1.Table 1. List of organizations participating in the studyOrganization Type Sector Domain# ofinformantsNGO/Implementer Research & Consulting International 2Program National 3NGO/Implementer Communication International 3NGO Funding International 2SMO/Implementer Marketing International 6NGOCapacity Building2InternationalServicesSMO/Implementer Communication National 3SMO/Implementer Marketing National 2NGO Funding International 1NGO Research International 1Institute Research National 2NGO/Implementer Marketing International 1InstituteCommunication1InternationalConsultingGovernment Planning National 1NGO/Implementer Education National 1Government Planning Federal 1Government Planning National 1NGO Funding International 1Media Communication Services National 1NGO/Implementer Education National 1SMO/Implementer Marketing International 6SMO/Implementer Marketing National 3Firm Research & Consulting National 1NGO Technical Services National 1NGO Community Organization National 1Firm Research & Consulting National 1NGO Technical Services National 1UN Body Funding International 1UN Body Funding International 1UN Body Research & Consulting International 1Interviews were audio recorded and transcribed by one of the authors. The secondarydata, such as NACO‘s and UNAIDS‘ reports were converted into electronic documents. All thisdata was then uploaded into NVIVO, the qualitative research software that was used to codify andanalyze our data. We independently read the transcripts, assigned codes, discussed themes and

arrived at a consensus. Independent coding and discussion by authors enhanced thetrustworthiness of findings. Codes helped us to understand the relationship between transactionparticulars associated with the HIV/AIDS pandemic, governance structure imbedded in eachNACP phase and NACO‘s capabilities to achieve its objectives.ResultsThe caseSeveral stakeholders participate in the fight against HIV/AIDS in India. There are fourbroad categories, first, the implementer of initiatives in the field (national and international SMOssuch as Population Foundation of India and DKT, respectively, and CBOs). Second categorybelongs to the funding organizations such as Bill and Melinda Gates Foundation, Hope, andPackard who channel financial resources for specific project during a set timeframe. In theinterface of the implementers and the funding organizations there are a group of organizationswho conduct research studies that guide policy and practices; and are consulted by implementers,funding organizations and the government. In this group we find both for-profit and not-for-profitorganizations such as International Centre for Research on Women, John Hopkins University, andQuantum. The final category is NACO, set up in 1992 under the Ministry of Health and FamilyWelfare, who forms policies and overlooks all programmes and initiatives.Three phases of NACO effortsTo address HIV/AIDS, NACO developed NACP and implemented it in three phases. Thefirst phase, covered the period from 1992 to 1999 and it was funded by World Bank‘s US$ 84million credit (Kartikeyan, Bharmal, Tiwari, & Bisen, 2007). This phase was dominated by twofactors: the ABC strategies (observe abstinence, be faithful, and use condoms) strongly advocatedby USAID; and by the perception, among government officials, that the prevalence of the diseasewas overestimated. Therefore, most of NACP-I efforts were focused on surveillance in the

epicentre of the epidemic—high risk groups such as international business travellers, commercialsex workers, men having sex with men, professional blood donors, and injecting drug users.Other initiatives were oriented towards creating awareness in the high risk groups through massmedia (e.g. TV and radio talk shows), interpersonal media (e.g. family health awarenesscampaigns), and outdoor media (e.g. wall painting and kiosks, street plays and mela festivals)(NACO, 2004).The second phase was launched during the period 1999-2006 and focused on thereduction of the spread of the infection across the country and the enhancement of India‘scapacity to respond to the epidemic. NACP-II was decentralized to the state level with theestablishment of the SACS (State AIDS Prevention and Control Societies). Another strategicdecision was to target not only the high risk groups but the general public as well. Although therewere efforts to bring low cost care (home-base and community-base care), voluntary testing,strengthening the technical, managerial and the financial sustainability of various levels ofgovernments participating in the programme; the reality was that many of these services andinitiatives failed to reach villages. As one senior official with an international capacity-buildingservices agency put it ―…unfortunately what has happened is the epidemic has moved faster than[decentralization]. So you have people right in the villages who require services but the servicedelivery has only reached the district hospitals‖. For NACP-II, World Bank provided US$191million, USAID funded the AVERT project in Maharashtra; the Department for InternationalDevelopment of U.K. funded with US$30 million the implementation of projects in AndhraPradesh, Gujarat, Kerala and Orissa (Kartikeyan et al., 2007; Ramamurthy, 2003).The third phase of NACP is currently being implemented and covers the period from2007 to 2012. Its primary objective is to halt and reverse the epidemic by integrating programmesfor prevention, care, support, and treatment (NACO, 2006). Four pillars are considered toaccomplish these objectives: prevention in high risk groups and general population, expandingthe care support and treatment of those living with HIV/AIDS, strengthening the ability at

different levels of government to provide care, support and treatment of the disease; anddeveloping a nation-wide strategic medical treatment information management system. There arefour fundamental differences between NACP-II and NACP-IIII. First, the latter was developedunder an open consultation among experts and key stakeholders. Second, NACO decided torestrict to few funding agencies to have more control and a more consistent strategy acrossprojects and initiatives. Third, the target population is narrower to include only commercial sexworkers, men having sex with men, transgender and injecting drug users. Finally, NACP-III isgiving greater importance to condom promotion.At the core of the NACO‘s strategy is the access to condoms. There are three waysthrough which, the general population but mainly the target group, could access condoms: freedistribution program in all public health facilities, at cost in the open market, and through SMOs,as a senior government official put it ―people generally cannot afford the expensivecontraceptives which were available in the open market. So the government of India used tosubsidize the contraceptives…[and they were] made available through normal shops in thevillages‖. In this regard, NACO enlisted the help of many SMOs to ensure availability ofcondoms across the country.However, there were signs (e.g. uncoordinated national plans, condom‘s brand drivencompetition among SMOs) that NACO‘s strategy and implementation created conflict andunnecessary tensions among key stakeholders in detriment of the main objective. For example, atthe time NACO decided to strongly promote condoms to tackle HIV/AIDS; there was already asister organization, the National Rural Health Mission (NRHM), that promoted condoms as afamily planning option. While both organizations work under the Ministry of Health and FamilyWelfare, they work independently. The result was not only an inefficient use of resources but alsoconfusion with two different messages to promote condoms.NACO‘s approach to increase access to condoms by subsidizing them and empoweringSMOs to promote and distribute has made small cities and villages less attractive; unless SMOs

have a contract with NACO to do so. The problem lies in the method of subsidization. The GOIgives subsidies to the SMOs based on number of condoms sold, i.e. the bigger the volume themore funds the SMO gets from the government. Under this scenario, and with volume ofcondoms sold as the only incentive, SMOs make use of their already established distributionnetworks to achieve economies of scale. SMOs have thus focused on brand competition (asopposed to category expansion) and overlooked the rural areas by concentrating their efforts inthe bigger cities and village. As one representative of the international NGO puts it, ―Governmentnever told SMOs where you need to sell these condoms. Therefore if I sell this condom in Delhi, Iget one rupee [amount provided to make a point], if I sell this condom in Kanpur I get one rupee,and if I sell this condom in Meerut I get one rupee. Tell me why will I go to an E-class village[50% of villages in India are E-class] where to sell one condom I may need to spend Rs. 700[amount provided to make a point]‖.Transaction Particulars, Governance Structure, and CapabilitiesFor NACO to succeed, it needs the right solution (core transaction and being aware of thetransaction particulars); an appropriate governance structure and matching capabilities. The coretransaction that NACO seems to value the most has shifted from surveillance to condomdistribution and more recently to empowering CBOs—to do that, then, appropriate governanceand necessary capabilities need to be present. We discuss these issues in more detail.To accomplish its objective to reduce and prevent HIV/AIDS incidence, NACO adopteda centralized approach in NACP-I and moved to a more decentralized structure in NACP-II withthe participation and more responsibility assigned to government organizations at the state level.In NACP-III NACO moved further, by empowering CBOs to be the agents of change. SinceNACP-I, in a period of 20 years NACO has changed the governance structure. According to thetheory of transaction cost (Williamson, 1973, 1998), NACO moved from a pure hierarchicalsystem into a more market driven system in which several activities are carried out by SMOs,

NGOs and CBOs. In addition, the core transaction between NACO and the implementers (SMOs,NGOs and CBOs) has shifted from the early surveillance initiatives, to information andeducation, to condom distribution and more recently to behaviour change — to the distinctivecharacteristics of these core transactions we refer to as transaction particulars. The change in thegovernance structure and the transaction particulars should have been accompanied by thedevelopment or acquisition of a new set of capabilities by NACO (Madhok, 2002). On this wefocus next.Transaction particularsHIV/AIDs-related policies are driven by the projections of spread and mortality in agiven population. Therefore it is important to assess the validity of such projections. In India,estimations by the US‘s National Intelligence Council (National Intelligence Council, :4)concluded that ―India is likely to have 20 to 25 million [HIV/AIDS cases] by 2010—the highestestimate for any country‖. GOI did not have a good system of its own to question these estimates,and these estimates put pressure on the GOI to act. In response, NACO created more than 1,000sentinel sites in the country, most of them antenatal clinics which test blood every month or twomonths in a year of anyone who visits that clinic; and, initiated a population-based nationallyrepresentative National Family Health Survey (NFHS-3) in 2005-2006 to measure HIVprevalence. These activities proved the estimates were much lower. The surveillance also madeclear two distinctive scenarios. The first one corresponds to the north-eastern states (e.g.Manipur) where the epidemic is driven by drug injection and where HIV prevalence has beenbetween 50 to 70 percent since the mid 1990s. In other states (e.g. Maharashtra and Tamil Nadu)the epidemic is driven by commercial sex. In these states there has not been a significant drop inHIV prevalence among sex workers (MAP, 2004).The surveillance findings also convinced NACO the importance to commit to makingcondoms accessible to the general population especially among the high risk groups. For this,NACO relied on SMOs and NGOs during the NACP-II phase. NACO met with success in states

like Tamil Nadu, where condom use with sex workers increased (MAP, 2004). Despiteachievements in education and condom distribution there still remain several nodes, especially inrural areas, that seem to have been resistant to change and/or NACO‘s initiatives have to fullyreach them.In NACP-III, NACO is empowering SMOs and CBOs to becomes agents of behaviourchange and effectively distribute and promote condoms (NACO, 2007). This new approachacknowledges that social interactions (e.g. between sex workers and clients or among sexworkers) when addressed appropriately can facilitate the adoption of new and safer behaviours(Low-Beer & Stoneburner, 2004).Governance structuresNACO by way of developing the three different phases of NACP changed thegovernance structure from hierarchy in NACP-I to a more market oriented system in NACP-III inwhich key responsibilities in the fight against HIV/AIDS are delegated to the SACS but moreimportantly to CBOs. Understanding the changes in governance structure, more importantly theimplications of such changes, is important because social objectives may be compromised ifindependent goals pursued by stakeholders (e.g. funding agencies, quasi-governmentalinstitutions, NGOs, SMOs and local governments) contradict with each other,. Thus, to overcomethis divergence between individual organizations and society, the GOI needs to properly governthe interactions between the issue (HIV/AIDS) and the stakeholders.To this end, we made use of the transaction cost theory to understand the governancestructure required by the three NACP phases and influenced by transaction particulars.Transaction cost theorists argue there are three governance structures: hierarchies, markets andhybrid (a combination of market and hierarchy).Hierarchy works under centralized information and constrains managerial discretion ofsocial organization (e.g. type of initiatives to be funded) out of a fear that the autonomousbehaviour may jeopardize the central organization‘s objective. Under this governance structure

the information generated at each level is channelized to a central party which assimilates,processes, and in turn re-transmits the information to a lower rank in the form of strategies,directives and/or guidelines (Moran & Ghoshal, 1996; Williamson, 1973, 1998). In our case, thecentral organization was NACO and the primary source of information was gathered by the vastsentinel surveillance system. As mentioned previously, the policies and initiatives were imposedon the states which on paper had discretion on health issues. It is worth mentioning as well thatthe WHO was instrumental in launching the NACP by providing technical support in theformulation of strategies and plans for HIV/AIDS prevention and control.By contrast, under a market system, information is decentralized; each party collects itsown information and is rewarded by its results measured at market prices. As an output-basedsystem in the sense that results and rewards are correlated, behaviour constraints are unnecessarybecause it is assumed that lower levels of the organization knows better than the upper level whatneeds to be done. So, opportunistic behaviour of stakeholders is reduced by linking output torewards (Moran & Ghoshal, 1996; Williamson, 1973, 1998). Our data indicates that NACO hasadopted a hybrid system. This is, NACO is delegating responsibility and empowering CBOs toparticipate in behavioural change in rural areas and among high risk groups that belong todifferent contextual situations (i.e. in north-eastern states the epidemic is driven by druginjections while in the rest it is driven by commercial sex). For this, NACO relies on theparticipation of lower levels of government (e.g. SACS), NGOs, SMOs, and CBOs, which havebetter understanding of the wider influence that local factors have on the success of HIV/AIDSprograms and initiatives (Campbell & Cornish, 2010).Each system indulges in different cost structures and therefore may produce differentresults. A contract relationship implies that the more costly the governance structure to police thecontracting parties, the less efficient the relationship. It follows that inefficient or costlycontracting relationships provide fewer opportunities for increasing social welfare—in our casean attempt to control the HIV/AIDS epidemic. Regardless of the governance structure NACO

incurs three types of costs (Williamson, 1973): agency costs, transaction costs and teamproduction costs. Agency costs are incurred by NACO when it is unable to detect opportunisticbehaviour by lower ranking organizations (e.g. SACS) and other stakeholder such as CBOs andSMOs. Transaction costs arise out of a need to negotiate, monitor and enforce contracts amongthe parties involved. Finally, team production costs arise either because NACO fails to detect theunderperformance of organizations who are assigned key responsibilities, or NACO allocatesresources in excess of these organizations‘ needs.Since each governance structure incurs different costs, the best organizational structure isone that ensures increased efficiency and higher effectiveness in achieving the proposedobjective. For example, transactions costs (e.g. monitoring) of using a hierarchical organizationare likely to rise with the increase in number of parties involved and how these parties aregeographically dispersed, as it seems to be the case in NACP-III. These costs may be lower in aprice system; however agency costs are likely to rise as NACO may not be able to identifyopportunistic behaviours within a geographically dispersed set of SMOs and CBOs.Intuitively, transaction costs can explain not only the firm‘s boundaries, but also thecontrol of the central government over each state and other lower level governments and NGOs inits actions against HIV/AIDS. That is, if the state/UT‘s performance is difficult to measure andNACO believes it knows best what actions need to be taken, then hierarchical control needs to beimplemented. This seems to have been the case in NACP-I. However, if the central governmentlacks the capabilities to effectively and efficiently reach all the HIV/AIDS target groups, then amarket system would be the most suitable as selected NGOs assume the responsibility on behalfof the central government. This takes us then to our final theme, the capabilities required by thegovernment to successfully move from a hierarchical governance structure to a hybrid structurewith the implementation of NACP-III.Gaps in capabilities

A nation‘s capacity embodies the ability of the nation, in our case the GOI, to carry outspecific governmental functions such as the fight against HIV/AIDS. This conception of nation‘scapacity is embodied in NACO‘s approach to HIV/AIDS; specifically the technical andadministrative capacities as they relate to the GOI‘s ability to implement macro policies (i.e.technical capacity) and the ability to manage several stakeholders for increased social welfare.Our analysis shows that through the first two NACP phases, the GOI developed a set ofcapabilities that to a great extent seem to have been developed organically; this is at the core ofthe resource-based view theory (Barney, 1986; Dierickx & Cool, 1989). While resource-basedview theorists are concerned with capability heterogeneity across firms, our focus is on the typesof capabilities as they could explain the deficiencies on the governance structure adopted byNACO in the fight against HIV/AIDS. More specifically, our analysis shows that as a result ofNACP-I and NACP-II, NACO developed tangible (i.e. technical) and intangible (i.e.administrative) capabilities which were not aligned and as result we observed governancedeficiencies.Tangible capabilities are easier to codify and transfer (at minimal cost) from thecapability holder to the final user. These are, for example, capabilities imbedded in manuals andprocedures or even in technology. More specifically, these are capabilities associated withsurveillance and blood testing. On the contrary, intangible capabilities (such as monitoring ofbehaviour, producing research and managerial reports and so on) are difficult to codify and thetransfer from the capability holder to the final user is very expensive. These are often capabilitiesdeveloped for specific set of circumstances which may not be duplicated and that may involvemany stakeholders in its development.Table 2. Capabilities and NACPNACP-I1992-1999Tangible capabilities developedduring this phase Surveillance by centralgovernment (focused on high riskgroups)Intangible capabilities developed duringthis phase Capacity building (with regards tocoordination for surveillance) at thecentral government level.

NACP-II1999-2006NACP-III*2007-2012 Screening blood and bloodproducts Surveillance-state level (beyondhigh risk groups) Home and community care Voluntary testing Medical treatment Information management system Simple communication to high riskgroups. Communication focused on awarenesscreation Capacity building at different levels ofgovernment (for knowledge transferfrom the central government to thestate/UTs)Stakeholder engagement (different levelsof government and NGOs)*This phase is currently being implemented. The capabilities listed here are expected in thefuture.As presented in Table 2, each NACP resulted in the development of different set ofcapabilities. Initially, as mentioned before, NACP put much emphasis on monitoring the spreadof HIV/AIDS. Thus, tangible capabilities around surveillance and blood testing were developed.Minimal attempt was made to develop the administrative capability (and intangible capability).The policy was guided by its emphasis on high-risk groups as opposed to risky behaviours (e.g.unsafe sex). This resulted in administrative and financial waste of resources. This waste is anindication of a governance problem. We conclude that NACP reflects problems not only ofgovernance but that this governance problem is rooted in the lack of intangible capabilities aswell as in the lack of complementarily between these capabilities and the technical capabilities.Following quote from a representative of an U.N. agency enumerates the lack of intangiblecapabilities.―...there is so much data available and nobody is analyzing. (The) particular skill set topresent (all) this data into clear information and messages for policy, that gap is there…peoplecan collect data and make tables and whatever but turning the data into information and messages- that‘s the skill set which is required.‖Inability to monitor behaviour change is another manifestation of lack of administrativecapability. An informant from a health communication agency discusses this issue,

―…there is a lot of good work being done but (the communication campaign are) notalways strategic. It‘s very ad hoc and tactical.…Because much of communication is still in theold model of awareness generation, it really does not understand how behaviour change needs tobe looked at. So I would say there is a lot happening but it requires more support.‖From our analysis of NACP policy documents and professional interviews, it is clear thatas the infectious disease spread in India, the government shifted its governance structure fromhierarchical to a hybrid structure where it granted more responsibility and discretion to states/UTsbut still controlled the finances through NACO. However, due to its lack of intangiblecapabilities, the GOI incurs heavy transaction cost.For example, the government tried to use a hybrid system to incorporate SMOs forcondom distribution and behaviour change in sectors that were difficult or too costly for thegovernment to reach. The problem comes as the NACO seem to have very little control of thetarget population and the incentives to make it work. For example a representative from the healthcommunication agency acknowledges how they get full discretion to decide whom to target…―We decided to focus on youth because in the HIV/AIDS context the data forMaharashtra showed us that (younger individuals) do not see themselves as being at risk forHIV/AIDS. Multiple-partner (pre-marital) sex was far more common than most people wanted tobelieve. So we decided to focus on the 15 to 19 age group because the data we had from thebehavioural sentinel survey was scary and also the data we had from NACO said that 33% ofHIV/AIDS infection is in the 15 to 24 age group. 33% is huge, it surprised us, so we said, okaylet‘s do it.‖In addition, within this hybrid system NACO lacks the core administrative capabilitiesthat would have rendered a market system less attractive as mentioned by a SACS representative:―There are 50 Targeted Intervention NGOs in Maharashtra and there is only one personto coordinate all the activities. Each NGO gets around 10,000 to 50,000 condoms. State levelwarehouses don‘t exist, so SACS cannot store condoms. They are shipped directly from

manufacturer/stockist to NGOs and a pre-determined quota is sent to them irrespective of theircapacity or demand.‖Additionally, the government lacked the monitoring capabilities (i.e. intangiblecapability) to ensure the social marketing agencies delivered on their part of the deal. Theproblem associated with monitoring is that it is difficult to measure. Responding to a questionrelated to challenges in creating and implementing contraceptive social marketing policies inIndia, a central government official discussed,―…they [social marketing agencies] will tell you what efforts have been made inbehaviour change communication programmes. (They) sell a family planning product or give itfor free, (I always wonder) how do they ensure that (condoms/pills) are used, how do theymotivate (consumers) that (condoms/pills) are used?‖The lack of capabilities to resolve these measurement problems resulted in ameasurement system that was disconnected from the transaction particulars of the NACP andfrom the governance structures that NACO required based on the NACP stages. A clear exampleof this is the distribution of free and subsidized condoms through social marketing organizations.The indicator used by the government to measure the success of the program is the number ofcondoms distributed regardless of where they are distributed. In this respect, a representativefrom an international SMO argues,―I subscribe to this Freakonomics theory of incentives, that everyone has incentives to actin a different way. If you ask NGOs that work with sex workers, how many sex workers they areworking with, that number tends to be high. And that‘s partially because they are paid by thenumber of sex workers they work with, and when we go to the same spot and try to count we getmuch lower numbers.‖In addition, this approach to monitoring creates another challenge - lack of stakeholderengagement and coordination. Lack of coordination and monitoring of stakeholders gets

manifested in many forms. Following quote from representative of an international NGO reflectsthis sentiment,―…social marketing became much more of a business proposition and the real marketingagencies were looking to use social marketing opportunity to increase their product visibility andalso to latch on to use it as a vehicle for other products tomorrow. That‘s how I see it. So bigplayers would have a social marketing component with a view to promote their mainstreamproducts, because (their) name gets out…‖The result was that most of the behaviour change communications that SMO‘s ended updoing were about brands as opposed to category promotions. This lack of coordination can occurat a higher level as well, as one representative from research and consulting services mentioned:―Frankly, for the consumers today where he or she is receiving information from multiplatforms,through the net, through different channels in satellite TV‘s, they tend to get differentinformation. You will have a USAID or a NACO or a Gates Foundation doing totally differentcampaigns from each other.‖ConclusionThe biggest challenge GOI faces is the lack of administrative or intangible capabilitiesthat allow GOI to properly monitor the progress of the social marketing actions to prevent andcurtail HIV/AIDS in India. Due to NACO‘s focus on tangible capabilities and neglect ofintangible capabilities, it has created a misalignment between the transaction particulars, in ourcase NACO‘s objective that have moved from surveillance to behaviour change; and thegovernance structure required by the recent NACP-III. The literature (Madhok, 2002) shows thatthe success of such governance structure is correlated to the ability of the government to properlycontrol the associated cost, in this case - monitoring.Although the hybrid structure seems to be the most appropriate for an epidemic that hasspread viciously in society and is imbedded in different behaviour patterns with subtledifferences, it still requires the participation of local stakeholders. This call for a decentralized

system but coordinated at the national level, appropriately acknowledged by NACO throughNACP-III is, to certain extent, a call for a hybrid system in which SMOs and CBOs participateactively in the fight against HIV/AIDS. This hybrid system fosters social organizations tocollaborate and participate in initiatives for which they have the appropriate set of capabilities(Williamson, 1998) and that are required by a central coordinating body—NACO. The variousgovernment entities participating in every NACP phase lack the capabilities to recognize the setof minimal skills required by these social organizations to perform the various tasks they havebeen delegated. In addition, the government in general lacks the capabilities to monitor theprogress towards a complex objective—behaviour change.The increased agency cost and monitoring cost compromised the administrativecapability of the government and explains the lack of synergy between the solid technicalcapabilities developed by NACO through each NACP phase. In other words, if the hybridgovernance structure adopted by NACO is to succeed, then the GOI must invest in thedevelopment of the above-mentioned intangible capabilities - mainly monitoring capabilitiesrelated to behaviour change and communication.From a theoretical perspective we found that neither transaction cost nor resource-basedview individually offer a complete explanation of the deficiencies of the current governancestructure against HIV/AIDS. We found that when these theories are combined, that is, whencapabilities or the lack thereof explain the functioning of the chosen governance structure, then itis possible, as we did, to offer a holistic explanation of the phenomenon.ReferencesBarney, J. 1986. Strategic factor markets: Expectations, luck, and business strategy. ManagementScience: 1231-1241.Barney, J. B. 1991. Firm resources and sustained competitive advantage. Journal ofManagement, 17: 99-120.Campbell, C., & Cornish, F. 2010. Towards a fourth generation of approaches to HIV/AIDSmanagement: creating contexts for effective community mobilisation. AIDS care, 22(1):1569-1579.Dierickx, I., & Cool, K. 1989. Asset stock accumulation and the sustainability of competitiveadvantage: Reply. Management Science, 35: 1514.

Grindle, M. 1996. Challenging the State: Crisis an Innovation in Latin America and Africa.Cambridge: Cambridge University Press.Kartikeyan, S., Bharmal, R., Tiwari, R., & Bisen, P. 2007. Response to the HIV Epidemic inIndia, HIV and AIDS: Basic Elements and Priorities: 373-382.Low-Beer, D., & Stoneburner, R. 2004. Uganda and the challenge of AIDS. In P. K. Nana, & A.Whiteside (Eds.), The Political Economy of AIDS in Africa: 165-190. Aldershot:Ashgate.Madhok, A. 2002. Reassesing the fundamentals and beyond: Ronald Coase, the transaction costand resource-based theories of the firm and the institutional structure of production.Strategic Management Journal, 23(6): 535-550.MAP. 2004. AIDS in Asia : face the facts. In H. Marais (Ed.), MAP Report. Washingtong: DC:Monitoring the AIDS Pandemic (MAP) Network.Moran, P., & Ghoshal, S. 1996. Theories of economic organization: The case for realism andbalance. Academy of Management Review, 21: 58-72.NACO. 2004. National IEC/BCC Strategic Framework for HIV/AIDS Programme. New Delhi,India: National AIDS Control Organisation and Ministry of Health and Family Welfare.NACO. 2006. National AIDS Control Programme Phase III :Strategy and Implementation Plan:National AIDS Control Organization, Ministry of Health & Family Welfare of India.NACO. 2007. Targeted Interventions Under NACP III: Operational guidelines.National Intelligence Council. 2002. The Next Wave of HIV/AIDS: Nigeria, Ethiopia, Russia,India, and China: National Intelligence Council.Ramamurthy, V. 2003. Combating HIV/AIDS in India, HIV/AIDS vulnerability in South Asia45-110. Delhi: Authospress.Robinson, W. S. 1951. The Logical Structure of Analytic Induction. American SociologicalReview, 16(6): 812-818.Skocpol, T. 1985. Bringing the State Back In: Strategies for Analysis in Current Research. In P.Evans, D. Rueschemeyer, & T. Skocpol (Eds.), Bringing the State Back In: 3-43. NY:Cambridge University Press.Wernerfelt, B. 1984. A resource-based view of the firm. Strategic Management Journal, 5: 171-180.Williamson, O. E. 1973. Markets and hierarchies: Some elementary considerations. TheAmerican Economic Review, 63: 316-325.Williamson, O. E. 1991. Strategizing, economizing, and economic organization. StrategicManagement Journal, 12: 75-94.Williamson, O. E. 1998. Transaction cost economics: How it works: Where it is headed. DeEconomist, 146(1): 23-59.

MESSAGE CONCRETENESS: WHEN DOES THE PERSUASION PERSISTYi HeAssistant Professor of MarketingCollege of Business and Economics,California State University, East Bay25800 Carlos Bee Boulevard,Hayward, CA 94542Phone: (510) 885-3534Email: yi.he@csueastbay.eduQimei ChenShidler Distinguished ProfessorChair/Professor of MarketingShidler College of Business2404 Maile Way, Honolulu, HI 96822Phone: (808) 956-8921Email: qimei@hawaii.eduDana L. AldenWilliam R. Johnson, Jr. Distinguished ProfessorProfessor of MarketingShidler College of Business2404 Maile Way, Honolulu, HI 96822Phone: (808) 956-8565Email: dalden@hawaii.eduLinlin ZhuPh.D candidateFudan University,670 Guoshun Road,Yangpu District,ShanghaiTel:13564704607Email: zhulinlin@fudan.edu.cnABSTRACTCentral to designing persuasive message is the determination of how the information should bepresented, i.e., in concrete or abstract terms. However, little is known regarding the persuasive

impacts of message concreteness in conjunction with other potential communication tactics. Twostudies address this limitation and show that congruency between message concreteness andprimed temporal orientation (imagery processing mode) enhances message effectiveness. Theresults also uncover the processing mechanisms underlying the congruency effects, that is,processing fluency alone explains the congruency effect on behavioral intention, whereasprocessing fluency and flow jointly accounts for the congruency effect on attitude.MESSAGE CONCRETENESS: WHEN DOES THE PERSUASION PERSISTInvestigations of the effects of message strategies on persuasion have differentiated betweenabstract and concrete messages (Morgan and Reichert 1999; Lee, Keller and Sternthal 2010).Concrete messages employ familiar, tangible concepts that are easily linked to direct or indirectsensory-based experiences stored in memory (Morgan and Reichert 1999). Consider an antismokingwebsite that negatively frames cigarettes as "one weapon that kills from both ends." Thisweb advertisement seeks to convince consumers of the dangers of smoke through the use of aconcrete message. Abstract messages, on the other hand, employ more conceptual and lessimagistic concepts that facilitate relatively fewer connections to stored sensory-based images(McCabe 1988). Consider another anti-smoking web advertisement that uses ―infect truth,knowledge is contagious." Although most consumers have had direct experience with infections,mapping infection and contagion on truth and knowledge respectively is likely to activate fewermental imagery linkages. As such, "infect truth, knowledge is contagious" is a concrete message.Within a healthcare marketing context, both abstract and concrete messages appear to holdpromise for enhancing the effectiveness of communications. Under a broader marketingcommunication context, message concreteness is often considered one of the central issues indeveloping persuasive messages (Lee, Keller and Sternthal 2010). Recognizing the importance ofthis subject, a large body of literature have examined the processing and persuasiveness ofconcrete versus abstract messages (e.g., Petrova and Cialdini 2005; Sherman et al. 1985). Morerecently, Lee, Keller and Sternthal (2010) have examined the effect of fit between messageconcreteness and an individual‘s regulatory orientation on consumer attitude.While these investigations provide a meaningful foundation for effective use of concrete versusabstract messages in persuasive communications .Some issues need further study. First, thepersuasive impacts of the congruency between concreteness and other communication tacticsparticularly important to persuasive healthful communication, such as primed temporal goalorientation (Bergadaa 1990) have yet to be established. Second, although prior research hasidentified the cognitive pathways through which the congruency effects occur, e.g., processingfluency (Aaker and Lee 2006) or engagement (Lee, Keller and Sternthal 2010), the theoreticalcomplexity of these pathways remains under-explored.Our research seeks to address these issues and thereby build a more complete nomological netregarding the effective use of message concreteness in marketing communications and in healthrelatedpromotion. To this end, we report on two experiments that examine the impact of concreteversus abstract messages on processing of a persuasive anti-smoking website. In study 1, we testhypotheses predicting persuasive enhancement associated with congruency between concreteversus abstract message and primed temporal orientation. We also examined the underlyingpathways for the congruency effects on attitude and behavioral intention. Study 2 seeks tovalidate the persuasive effects and cognitive pathways identified in study 1, when congruencyeffects are operationalized differently. Specifically, we examine the congruency effects betweenmessage concreteness and processing instructions. The conceptual framework is provided infigure 1. We continue on reviewing the literature on the focal constructs and discussing thetheoretical development of the hypotheses to be tested in study 1

QuickTime and adecompressorare needed to see this picture.Temporal Orientation and Temporal Construal TheoryTemporal orientation, akin to temporal focus (Liu and Aaker 2006), refers to an individual's focuson immediate gains or distant rewards (Bergadaa 1990). For example, temporal orientation hasbeen found to influence the persuasiveness of healthcare messages and willingness to engage inhealthful behaviors (Orbell and Hagger 2006). Cotte and Ratneshwar (1998) suggest thatalthough some individuals focus on either the long-term or short-term, both orientations typicallyco-exist in the same person. Situational priming can enhance or lessen one's long-term orientation(Liu and Aaker 2007). A key question for the current study is how such temporal priminginteracts with message concreteness in an online health communication.According to the Temporal Construal Theory (Trope and Liberman 2003), people constructdifferent representations of the same information depending on whether the information pertainsto the near or distant future. In particular, Trope and Liberman proposes that individuals useabstract mental models to represent information about the distant future. These models consist ofgeneral, superordinate, decontextual, and essential features of events. In contrast, individuals useconcrete mental models to present information from the near future. Such models tend to includedetailed, subordinate, contextual, and incidental features of events. Supporting this proposition,Kardes, Cronley, and Kim (2006) found that the mere presence of a set of target brandsencourages individuals to present the brand using concrete mental models, which in turn affectsspontaneous preference formation, preference-behavior consistency. Based upon the samepremise, Trope and Liberman (2003) contend that the reverse causal path should also hold. Thatis, information presented in abstract terms will make an individual envision the action in thedistant future, while information presented in concrete terms will make an individual picture theaction in the near future (Trope and Liberman 2003). In sum, according to temporal construaltheory (Trope and Liberman 2003), information presented in concrete (abstract) terms tends toshorten (lengthen) temporal distance. In the current context, it is expected that congruency will beperceived when short- (long-) term orientation is primed and concrete (abstract) message is thenviewed in the context of an online anti-secondhand smoke website.Regulatory Fit, Processing Fluency and FlowProcessing fluency is defined as the experienced ease or fluency of ongoing processing(Unkelbach 2007). A regulatory fit between an individual‘s regulatory orientation andinformation will lead to more fluent processing ,which in turn accounts for the persuasioneffects (Lee and Aaker 2004). Supporting this argument, a burgeoning literature has demonstratedthe effect of regulatory fit on message persuasion (e.g., Aaker and Lee 2006; Lee and Aaker

2004; Lee, Keller, and Sternthal 2010). However, these studies usually operationalized regulatoryorientation as promotion versus prevention strategies. Yet, regulatory orientation, as the basicprinciple underlying distinct self-regulatory strategies and needs (Higgins 1997), may refer to anygoal-related psychological orientation (Aaker and Lee 2006). For example, it may involve eitherlong-term regulatory goals (e.g., family security) or short-term regulatory goals (e.g., winning aball game Aaker and Lee 2006). Responding to repeated calls for broadening the scope ofregulatory orientation (Aaker and Lee 2006), this research examines the regulatory orientationthat is focused on the long-term(short-term), the pursuit of distant rewards andachievement(immediate gains and returns),. Following the regulatory fit hypothesis, one mayexpect that when there is congruency between an individual‘s regulatory orientation (e.g., longtermversus shot-term) and communication message (e.g., abstract versus concrete messages), theideas conveyed in the message are conceptually more fluent, and hence are more effective.Prior research has also suggested distinct processing mechanisms by which it influences attitudeor behavioral intention. The mechanism that may help explain the congruency effect on consumerattitude is related to an ―it-just-feels-right‖ experience (Higgins et al. 2003). Such an experiencemay occur when an individual receives information or feedback that enables one to progresstoward achieving that goal. Consistent with this premise, Higgins and colleagues (2003) suggestthat people ―feel right‖ when the information they receive fits with their regulatory orientation.Further, this perception of feeling right can be transferred to the message argument as the resultof source confusion (Camacho, Higgins, and Luger 2003; Higgins et al. 2003), and in turn leadsto more favorable attitude toward the message.Flow is defined as an intrinsic fulfilling experience, in which there is a balance between anindividual‘s skills and challenges at hand, as such one is totally captivated by the ongoing activity(Csikszentmihalyi 2000; Hoffman and Novak 1996). Flow is believed to be one of the centralconstructs in online communication due to its impacts on website stickiness and future repeatedwebsite visits (Hoffman and Novak1996; Sicilia, Ruiz, and Munuera 2005; Smith and Sivakumar2004). Prior research suggests that the intrinsic fulfilling flow experience is conceptually similarto the regulatory fit experience of ―it just feel right‖ (Aaker and Lee 2006; Higgins et al. 2003).Investigations of regulation fit suggest that due to regulatory fit, every piece of information thatan individual receives tends to support and sustain one‘s goal, as a result, it leads to a balancebetween challenge and skills that characterizes flow (Aaker and Lee 2006). In summary, aregulatory fit between time orientation and communication message will lead to higherprocessing fluency, and more intense flow experience, and thereafter more favorable attitudetowards the message.Alternatively, the mechanism, by which congruency between regulatory orientation andcommunication message may lead to stronger behavioral intention, is related to an increase inperceived self-efficacy regarding the future behavioral change as a result of processing fluency(Aaker and Lee 2006). Most healthcare messages encourage behavioral changes that requiresignificant willpower (e.g., quitting smoking),.For the individuals who experience suchcongruency, those behaviors will seem easier to master. That is, congruency between regulatoryorientation and the message correlates with increased confidence and motivation inaccomplishing these behavioral goals (Aaker and Lee 2006).. Thus, a regulatory fit between timeorientation and communication message will enhance behavioral intention. Formally, wehypothesize that:H1: Congruency (versus incongruency) between primed temporal goal orientation (shortterm/long-term)and message concreteness (concrete/abstract) will lead to more positive attitudetoward the webpage and higher intention to avoid secondhand smoke.H2: Processing fluency and flow will jointly mediate the effects of congruency between messageconcreteness and primed temporal orientation on attitude toward the webpage.H3: Processing fluency alone will mediate the effects of congruency between messageconcreteness and primed temporal orientation on intention to avoid secondhand smoke.

MethodStudy 1 featured a 2 (concrete versus abstract message) by 2 (short-term versus long-term primedtemporal goal orientation) full-factorial MANOVA design. To ensure external validity, themessage arguments were examined by two independent coders. Only messages that consistentlyfeatured concrete or abstract messages were considered for the study. Actual content from twowebsites was then selected by researchers for pre-testing.Stimuli. The message concreteness manipulation featured a secondhand smoking context.Manipulation was undertaken using a fictional ―beta-version‖ anti-smoking webpage. Participantswere told that the anti-smoking website, sponsored by a healthcare organization, was underconstruction and would soon be online. The participants in the concrete (abstract) messagecondition browsed a web page with the headline, ―Tobacco companies sell time bombs (healthrisks)!‖ followed by the message, ―Every time people smoke a cigarette, they implant a timebomb in (spread health risks to) those close to them. Every time people breathe next to smokers,they inhale time bombs (health risks). Secondhand smoke kills. It‘s only a matter oftime…Remember, tobacco companies sell time bombs (health risks).‖ The stimuli (i.e., timebomb and health risks) held similar in denotative meaning. For example, both implied a certaindegree of uncertainty regarding a future negative event, but were designed to differ onconcreteness.Based on Liu and Aaker (2007), temporal orientation was manipulated by asking participants toenvision their life in the near or distant future (Liu and Aaker 2007). The participants in the longterm(short term) orientation condition received the following instructions:In this study, we are interested in people‘s long-term (short-term) projection for themselves.Please think about what your life might be like 50 years from now (next week). Then in the boxbelow, please write a brief description of how you envision your life in 50 years (in next week)(e.g., what might you be like; what might you be doing, etc.). Please note that there are not rightor wrong answers here. Please provide honest and sincere answers.Subjects and Procedure. One-hundred and eighteen undergraduate business students from a majorAmerican university participated in the study 1 for partial course credit. Research shows thatregular smokers usually react to anti-smoking advertisements differently from nonsmokers andoccasional smokers. Regular smokers tend to counterargue anti-smoking messages (Romer andJamieson 2001). Given that such difference may confound the persuasion attempts in thisresearch, regular smokers were excluded, reducing the sample to 111 (male = 42%; nonsmokers =83%; occasional smokers = 17%). Participants completed the 20-minute online survey task in acomputer lab. The four-item scale used by Menon, Block, and Ramanathan (2002) was adapted tomeasure attitude toward the webpage. Six items gauged participants‘ intention to avoidsecondhand smoke (e.g., ―During the coming few months, you will avoid secondhand smoke atany time‖). Processing fluency was gauged using four items on ease of processing (Lee andAaker 2004; Thompson and Hamilton 2006). Flow was directly measured using a two-item scalefollowing a narrative description of flow developed by Novak, Hoffman, and Yung (2000). Allmeasures employed seven-point scales. Scale reliabilities ranged from .70 to .94. Items wereaveraged to obtain composite scores for the main constructs.ResultsManipulation Checks. First, the effectiveness of message concreteness manipulation wasexamined. As desired, the webpage containing a concrete message was rated to be significantlymore vivid than the webpage with an abstract message (MAbstract= 4.05 and MConcrete = 4.65, t(109) = -2.25, p < .03). Then, the subjects‘ recall of the webpage information was coded by twoindependent judges who were blind to the manipulation (inter-coder reliability = .94). Analysis ofthese data showed that in the abstract(concrete) message condition, 69%(89%) of the participantscorrectly recalled that the message contained ―health risks,‖(―time bomb‖) Therefore, themessage concreteness manipulation was successful.

Second, to examine the manipulation of temporal orientation priming, the participants were askedto recall the exercise that they had completed prior to reading the webpage. As desired, theparticipants in the long-term priming condition were more likely to recall that they were asked todescribe their life in 50 years (MLongTerm = 6.72 and MShortTerm = 1.67, t (109) = 21.35, p

temporal orientation priming was significant on processing fluency (β = .40; t[109] = 4.55, p .33), indicating full mediation. The effect of processing fluency, meanwhile,remained significant (p < .02). As such, H3 was supported.DiscussionStudy 1 demonstrates that congruency between message concreteness and primed temporalorientation matters. Priming short-term orientation enhances (reduces) persuasiveness whenconcrete (abstract) message is featured. The results uncover different mediating pathways throughwhich congruency effects occur. In particular, processing fluency was found to mediate thecongruency effects on intention to avoid secondhand smoke, whereas processing fluency and theflow were chain-mediators of congruency effect on attitude toward the webpage. These findingsraise the question of how generalizable the congruency effect is. And, it is important to determinewhether the underlying processing mechanisms are consistent when the congruency isoperationalized differently. So study 2 examines congruency between message concreteness and aprimed processing mode. The primed mode of interest in this case is high versus low imageryprocessing due to its relevance to health-related theory and behavior (Keller and Lehmann 2008)and because of its linkages to broader bodies of advertising theory (Chowdhury et al. 2008; Bollsand Muehling 2007).STUDY 2: CONGRUENCY EFFECTS BETWEEN MESSAGE CONCRETENESS ANDIMAGERY PROCESSING MODEPrior theory suggests that processing fluency may be induced by a variety of stimuli ranging fromrepeated exposure (e.g., Janiszewski and Meyvis 2001; Lee 2001), to enhanced contextual clarity(Reber, Winkielman, and Schwarz 1998), and to message framing (Lee and Aaker 2004).Processing fluency appears likely to be increased due to congruency between 1) the informationand organization of information, and 2) the type of processing being done (Thompson andHamilton 2006). Advertising researchers have conceptualized low and high imagery informationprocessing mode (MacInnis and Price 1987). Low-imagery processing involves processingsymbols through mental activities such as encoding (retrieving) information into (from) aknowledge schema. High-imagery processing is activated as a mental sensory experienceinvolving a concrete representation of ideas and feelings that facilitates direct recovery of pastexperiences from memory (MacInnis and Price 1987). Prior research has repeated demonstratedthat concrete (abstract) messages are more congruent with high (low) imagery processing (e.g.,Petrova and Claldini 2005). In sum, the extant literature suggests that higher levels of processingfluency when message concreteness and processing mode are congruent (incongruent) will lead tomore (less) favorable attitude and enhanced (reduced) persuasion. Bearing these thoughts inmind, we formally hypothesize that:H4: Congruency (versus incongruency) between imagery processing mode (high/low) andmessage concreteness (concrete/abstract) will lead to more positive attitude toward the webpageand lower cigarette trial intention.H5: Processing fluency and flow will jointly mediate the effects of congruency between messageconcreteness and imagery processing mode on attitude toward the webpage.H6: Processing fluency alone will mediate the effects of congruency between messageconcreteness and imagery processing mode on cigarette trial intention.MethodStudy 2 employed a 2 (concrete versus abstract message) X 2 (high versus low imageryprocessing mode) between-subjects factorial design. One-hundred and seventeen undergraduatebusiness students from a major American university participated. As in study 1, participants werescreened to exclude regular smokers. This resulted in a sample of 96 participants (male = 52%;nonsmokers = 95%; occasional smokers = 5%).

The message concreteness manipulation from study 1 was slightly modified to feature a firsthandsmoking context. Imagery processing mode was primed using written instructions (Thompsonand Hamilton 2006). The participants in the high imagery (low imagery) condition received thefollowing instructions:We do request that you read the information on the webpage carefully. Try your best to useimagination (reason and logic) as you get a sense of what is being presented. DON‘T let yourlogical thinking get in the way (your imagination gets the better of you). Rather, utilize the powerof imagination to help you visualize the situation described in the message (try to objectivelyunderstand the content of the webpage).The measures for attitude toward the webpage, flow and processing fluency were the same asthose used in study 1. Future cigarette trial intention was gauged by three items from Pechmannet al. 2003. All measures employed seven-point scales. Scale reliabilities ranged from .79 to .95.Items were averaged to obtain composite scores for the main constructs.Results and DiscussionManipulation Checks. The concreteness manipulation was tested with a seven-point vividnessscale (Petrova and Cialdini 2005). The webpage with concrete (versus abstract) messages wererated as significantly more vivid (MConcrete= 4.46 and MAbstract = 3.71, t (94) = -3.21, p < .01).Recall of the webpage information was coded by two independent judges who were blind to themanipulation. Results showed that 90% (67%) correctly recalled ―time bombs‖ ("health risks") inthe concrete (abstract) condition (inter-coder reliability = .92). The message concretenessmanipulation was therefore successful.Second, to examine the manipulation of processing mode, participants were asked to recall theinstructions that they had received prior to viewing the webpage. Subjects in the low-imagerymode condition were more likely to recall that they were asked to be objective while reading thewebpage (MLowImageryMode = 5.81 and MHighImageryMode = 3.24, t (94) = 6.90, p < .001).Those in the high-imagery mode were more likely to recall that they were told to visualizeeverything on the webpage (MHighImageryMode = 5.38 and MLowImageryMode = 3.67 and t(94) = -4.36, p < .001). Thus, the processing mode manipulation also appeared successful.Hypotheses Testing. To test H4, a 2 message concreteness (concrete versus abstract) X 2processing mode (high versus low imagery) full-factorial MANOVA was performed .Multivariateanalysis revealed that a two-way interaction effect involving message concreteness andprocessing mode was significant (Wilks‘ λ: F [2, 91] = 2.50, p < .05, one-tailed). No othermultivariate effect was significant. Univariate analyses indicated that the interaction effectbetween message concreteness and imagery processing mode was significant on attitude towardthe webpage (F[1, 92] = 4.89, p < .04). However, the same interaction effect was not significanton cigarette trial intention (p > .88). Treatment means are reported in table 2.Further analysis revealed that, in high-imagery primed processing mode, compared with abstractmessages, concrete messages produced significantly more favorable attitude toward the webpage(MConcrete = 4.22 and MAbstract= 3.24, t[40] = 3.29, p < .01). However, the effect was notsignificant on cigarette trial intention (p > .75). Contrary to the predictions, in the low-imageryprocessing mode, abstract (versus concrete) message produced no significant differences onoutcome measures. Hence, congruency effects on outcome measures were partially found forconcrete but not abstract message, providing preliminary support for H4.

QuickTime and adecompressorare needed to see this picture.Mediation Analyses. To examine H5, further mediation analysis was performed. Analysis showedthat the interaction effect between message concreteness and processing instructions wassignificant on processing fluency (β = .30; t (94) = 3.06, p < .01). The effect of processing fluencyon flow was significant (β = .28; t (94) = 1.97, p < .05). The interaction effect was significant onattitude toward the webpage (β = .20; t (92) = 2.85, p < .01). Finally, when processing fluencyand the flow were entered as covariates in the third equation, the interaction effect betweenmessage concreteness and processing instructions and the effect of processing fluency on attitudetoward the webpage became non-significant (p > .13), whereas the effect of flow remainedsignificant (p < .001). This indicated that the interaction effect between message concreteness andprocessing instructions on attitude toward the webpage was fully mediated by process fluencyand flow. Thus, H5 was supported. As the interaction effect was not significant on cigarette trialintention, H6 was not supported.GENERAL DISCUSSIONTheoretical and Managerial ImplicationsNot surprisingly, message concreteness has been studied extensively in marketingcommunications (Phillips and McQuarrie 2002). The superiority of concrete messages as apersuasive message strategy relative to abstract messages is well-established (e.g., Block andKeller 1995, 1997; Igartua, Cheng, and Lopes 2003). These findings have provided interestinginsights into designing healthcare messages, little is known regarding the persuasive impacts ofmessage concreteness in conjunction with other potential communication tactics particularlyimportant to persuasive healthful communication, such as primed temporal orientation (Bergadaa1990). Close this theoretical gap, study 1 showed that congruency between message concretenessand temporal orientation priming enhanced message effectiveness. This research identifies theunique opportunity of combining temporal orientation and message concreteness in deliveringhealthcare messages.More generally, this research offer insights into the pathways of congruency effects betweenmessage concreteness and priming. Prior research suggests that processing fluency mediatescongruency effects (Petrova and Cialdini 2005; Thompson and Hamilton 2006). Extending priorresearch, this research uncovered that the processing mechanism underlying the congruencyeffect varies depending on communication goals, attitude or behavioral intention change. Inparticular, processing fluency alone explains the congruency effects on behavioral intention,whereas processing fluency and flow jointly accounts for the congruency effects on attitude. Bydeveloping a more precise processing model for the congruency effects, this research sheds lightson the theoretical richness and complexity of the congruency effects.Interesting insights and implications can be drawn from this research to guide healthcaremarketers. First, there is a tendency in advertising to combine message strategies with nonmessagestrategy (e.g., sensory cues that elicit high-imagery or prime short-term orientation). Byexamining the match or mismatch of temporal orientation priming (or imagery processing

instructions) to different kinds of messages, this research helps identify additional ways tooptimize blending of linguistic and non-linguistic advertising elements.Further, this research also provides important managerial insights into how temporal orientationinteracts with message concreteness on message effectiveness. For example, healthcarecampaigns targeting a population segment known to have shorter-term orientations (e.g.,adolescences) are more likely to succeed if concrete messages are employed. Further, the resultpoints to the importance of timing the appearance of healthcare messages on various mediachannels. For instance, abstract messages are likely to be more effective when introduced afterstimuli (e.g. news report, cover story etc.) that help prime long-term orientation. Finally, astemporal orientation mirrors an important culture dimension - time orientation (Hofstede 1991),the positive congruency effects should assist marketers in answering important strategic questionsrelated to international strategy. For example, abstract (concrete )messages might work better inlong-term(short term) oriented cultures (e.g., China / U.S).Limitations and Future ResearchOne limitation of the three studies is the use of a fictitious anti-smoking webpage as the stimuli.While this approach avoids possible confounding effects of prior knowledge and experience,future research should apply more realistic stimuli. A second limitation is that the findings arebased on laboratory experiments of non-smoking college students, further replications of theseresults findings among other populations are needed . It might be partially due to the selectedpopulation that the effects on cigarette trial intention were not supported in study 2. As such,further replications may consider recruiting participants from smokers to examine the effects oncigarette trail intention. A third limitation is that the congruency effects on attitude toward thewebpage and cigarette trial intention were not supported in the low-imagery instructionscondition in study 2. One explanation may be related to the nature of low- versus high-imageryprocessing. According to Miller (1979), one distinction between low- and high-imageryprocessing is that low-imagery processing is selective, while high-imagery processing isconstructive. It seems plausible to argue that low-imagery processing may be associated withhigher level of cognitive flexibility and better tolerance for incongruency than high-imageryprocessing. However, further empirical research is needed to examine these relationships.In addition, this research may offer preliminary insights into possible culture-based moderatingeffects. For example, in cultures with stronger long-term orientations, abstract messages may begenerally more persuasive than in cultures with weaker long-term orientations. Thus, futureexploration should examine the relative effectiveness of concreteness of messages across culturalgroups of individual consumers Regarding the imagery instructions. Further research may applymessage executional cues to elicit an individual‘s processing mode or temporal orientation (e.g.,Thompson and Hamilton 2006). In sum, congruency effect between message concreteness andother communication tactics (e.g., temporal orientation priming and imagery instructions) areeffective marketing strategies for researchers and marketers attempting to identify measures thatpromote preventative or proactive actions toward a healthy lifestyle.REFERENCESAaker, Jennifer L. and Angela Y. Lee (2006), ―Understanding Regulatory Fit,‖ Journal ofMarketing Research, 43 (1), 15-19.Andrews, J. Craig, Richard G. Netemeyer, Scot Burton, D. Paul Moberg, and Ann Christiansen(2004), ―Understanding Adolescent Intentions to Smoke: An Examination of RelationshipsAmong Social Influence, Prior Trial Behavior, and Antitobacco Campaign Advertising,‖ Journalof Marketing, 68 (3), 110-23.Baron, Reuben M. and David A. Kenny (1986), ―The Moderator-Mediator Variable Distinction inSocial Psychological Research: Conceptual, Strategic, and Statistical Considerations,‖ Journal ofPersonality & Social Psychology, 51 (6), 1173-82.

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Thompson, Debora Viana and Rebecca W. Hamilton (2006), ―The Effects of InformationProcessing Mode on Consumers‘ Responses to Comparative Advertising,‖ Journal of ConsumerResearch, 32 (4), 530-40.Trope, Yaacov and Nira Liberman (2003), ―Temporal Construal,‖ Psychological Review, 110 (3),403-21.Unkelbach, Christian (2007), ―Reversing the Truth Effect: Learning the Interpretation ofProcessing Fluency in Judgments of Truth,‖ Journal of Experimental Psychology: Learning,Memory, and Cognition, 33 (1), 219-30.Zaltman, Gerald and Lindsay Zaltman (2008), Marketing Metaphoria : What Deep MetaphorsReveal About the Minds of Consumers, Cambridge, MA: Harvard Business School Press.Affective Responses To Images in Print Advertising.Full Text Available By: Chowdhury, RafiM. M. I.; Olsen, G. Douglas; Pracejus, John W.. Journal of Advertising, Fall2008, Vol. 37 Issue3, p7-18, 12p, 4 Charts; (AN 34462402)The Effects of Dual Task Processing on Consumers‘ Responses to High and Low Imagery RadioAdvertisements Full Text AvailableBy: Bolls, Paul D.; Muehling, Darrel D.. Journal ofAdvertising, Winter2007, Vol. 36 Issue 4, p35-47, 13p, 3 Charts, 2 Graphs; (AN 27956239)Designing Effective Health Communications: A Meta-Analysis.Full Text AvailableBy: Keller,Punam Anand; Lehmann, Donald R. Journal of Public Policy & Marketing, Fall2008, Vol. 27Issue 2, p117-130, 14p, 7 Charts; DOI: 10.1509/jppm.27.2.117.Pre-Purchase Experiences and Value-based Pricing:An Issue of Tacit KnowledgeLillian L. Cheng, Bainbridge Island, WAaKent B. Monroe, Richmond, VAb

May, 2012a. Lillian L. Cheng, Cheng, Monroe & Associates, Inc.: lilcheng@me.com; 1(206) 979-6338; 321High School Rd NE, Suite D3, #138, Bainbridge Island, WA 98110b. Kent B. Monroe, Cheng, Monroe & Associates, Inc.: kentmonroe@verizon.net; 1(804)716-2395; 4905 Old Millrace Place, Glen Allen, VA 23059This is a working paper. Please do not quote or copy without prior approval of the authors.An important determinant of corporate profitability, sustainability and survivability is a firm‘spricing strategy. It is, therefore, surprising to note the relative lack of attention paid to thisimportant element of marketing strategy. Among the key approaches to developing pricingstrategies are cost-based pricing, competition-based pricing and value-based pricing. However,cost-based and competition-based pricing strategies are reactive whereas value-based pricingstrategy is proactive (Ross 1984; Monroe 2003). Although the benefits of value-based pricingstrategy have been articulated (Monroe 1990), relatively few companies practice pricing to value(Hinterhuber 2008).There are obvious difficulties in implementing value-based pricing, not the least of which isdetermining customers‘ value perceptions, and importantly, communicating a product/service‘svalue to current and potential customers. Also, firms frequently are constrained by how thecompetition prices their products in the same categories. Since buyers use reference prices tointerpret prices they encounter (Monroe 1971a), competitors‘ prices may limit implementingprices that truly reflect actual value. This reference price typically is within buyers‘ acceptableprice range (Monroe 1971b). An essential step in a value-based pricing strategy is tocommunicate the value proposition of the firm‘s product/service offerings to its buyers. Thiscommunication is particularly critical in situations when the firm‘s target price is at or above theupper price thresholds of its customers. In this paper, we argue that marketing channels play avital role in communicating product/service value through customer pre-purchase experiencesthat influence buyers‘ acceptable prices.Acceptable Price RangeBuyers have a range of acceptable prices that form a judgment scale for assessing prices in aproduct category (Monroe 1971b). this range of acceptable prices is part of the buyers knowledgeof the products and market and is formed from their prior experiences. Buyers have, therefore, anupper and a lower price threshold. These price limits shift as buyers obtain more informationabout the product and the distribution of prices for the product category in the market. Positivebuyer product perceptions move their range of price acceptability upwards (Monroe 2003) withthe upper price limit increasing more leading to a wider acceptable price range (Rao and Sieben1992). Understanding the process by which buyers learn through experiences and decide topurchase is, therefore, key in examining how this acceptable price range may be widened and theupper price threshold lifted.BUYERS LEARNING AND DECISION PROCESSESAs buyers shop, how do they process the bewildering array of information on attributes, benefits,price, quality and ―learn‖ about the products so as to make their choices? What role doesmarketing play in aiding buyer information search and decision-making? It is our thesis thatbuyers obtain information and ―learn‖ through their experiences. Some of this learning isintentional or explicit including fact learning, immersed learning or learning by doing. Otherlearning is incidental or implicit in that neither the experience nor the knowledge acquired is

consciously known (Monroe and Lee 1999). Previous research suggests that a buyer‘s directexperience with a product or service is more effective in establishing buyers‘ emotionalattachments to a brand and/or its products and services than advertising or other forms ofcommunications (Goering 1985; Wright and Lynch 1995). Moreover, affect and feelings areinformation (Zajonc 1980; Schwarz and Clore 1988) and influence the learning process. Buyersuse feelings in decision-making (Pham 1998; Slovic et al. 2007) In fact, affective reactions oftenoccur first automatically and guide a buyer‘s information processing (Zajonc 1980). Amidstvoluminous information, buyers rely on affect and emotion for quicker, easier, and more efficientways to navigate in a complex, uncertain and sometimes dangerous world (Epstein 1994). Inessence, quite often, if not usually, buyers decide, and then they rationalize their decisions.CUSTOMER EXPERIENCESBuyers form perceptions based on available information gained through experiences. We definecustomer experience as the customers‘ ―total take away impressions and feelings formed by theirencounters with products, brands, services and the atmospheric aspects of the encounters.‖ Theseencounters include direct (shopping, trial and use) as well as indirect (exposure to advertising andother marketing communications) experiences that affect perceptions of value, purchase and repurchaseintentions (Brakus, Schmitt, and Zarantonello 2009). The more engaged/involved acustomer is, the more intense the customer‘s experience. Strong engagement makes positive andnegative experiences more intense (Higgins and Scholer 2009).People‘s judgments are a weighted average of first impressions and their evaluations of thebenefits of the products and services under consideration (Anderson 1971). First impressionshave the largest weight in this averaging process (Adaval 2003). Behavioral researchers frommultiple perspectives agree that the initial response to any environment is affective (positive andnegative), and that the images marked by these affective feelings guide subsequent customerjudgments and decisions within that environment (Davidson 2012; Lehrer 2007; Machleit andEroglu 2000; Slovic et al. 2007).Buyers decide to purchase products based on perceived value gained versus perceived monetarysacrifices made (Monroe 2003). Pham (1998) found that buyers‘ affective responses to productscorrelated directly with their perceptions of the products‘ values. Nevertheless, the difficulty ofcognitively integrating positive information of product attributes and benefits with negativeinformation of monetary cost or price to determine the relative value of a particular alternativecan be overwhelming (Anderson 1971; Adaval 2003). These judgments involve both feelings andaffect influences (Slovic et al 2007). Further, purchase decisions are consciously or nonconsciouslyinfluenced by the marker signals coming from bio-regulatory processes, expressingthemselves in emotions and feelings (Bechara and Damasio 2005).TYPES OF INFORMATION AND DIMENSIONS OF KNOWLEDGEThe information setting influences the process of a buyer‘s information acquisition (learning).People can attain knowledge about products that enables them to deal with a relatively complexenvironment intentionally as well as without awareness (Reber 1989; Whittlesea and Wright1997; Xia and Monroe 2005). There are two distinct types of information for consumers toencode, store and eventually retrieve. Declarative information includes attributes and factswhereas experiential information includes all environmental cues and emotions involved inbuyers‘ learning and knowledge development. Knowledge is the dynamic accumulation ofpersonal assimilation and interpretation of data and contextual information acquired through

senses from experiences. It is a basis for evaluating and integrating new experiences andinformation. As such, all knowledge is personal.We argue that there are three dimensions of knowledge: explicit, implicit and tacit. Explicitknowledge results from a specific intention to acquire facts or other information that can bearticulated or codified. This knowledge can be expressed explicitly.Implicit knowledge comes from the passive acquisition of information and knowledge is attainedwithout awareness or intention. The implicit knowledge that results from this non-consciousprocessing is almost entirely stimulus driven (Whittlesea and Wright 1989). While individualsmay not be able to recall how or where they may have acquired this knowledge, nevertheless theyknow and may be able to express it. ―Implicit knowledge results from the induction of an abstractrepresentation of the structure that the stimulus environment displays, and this knowledge isacquired in the absence of conscious, reflective strategies to learn‖ (Reber 1989, p. 219).Tacit knowledge comes from a deeper level of learning by ―doing,‖ that is, through experience.This knowledge is acquired through a person‘s active participation but may not be the objectiveof that action. Tacit knowledge, therefore, may result from explicit or implicit learning.We contend that instead of being a trichotomy, knowledge can be characterized by these threedimensions in that there is an explicit aspect of the knowledge that individuals can explicate.There is the implicit dimension that individuals may know but do not remember how they knowor how it has been acquired. This knowledge can be articulated with effort. The tacit dimension ofknowledge, however, cannot be articulated. The individual ―knows‖ how to do certain things ormake certain judgments but cannot expressly impart that knowledge to another. Tacit knowledgeis most often transferred by apprenticeship, as in ―showing‖ someone how something is done.The person may have the tacit knowledge of liking something but does not know why (Field2000). It is also the dimension of knowledge that allows for gut feelings and conviction. The tacitdimension of knowledge is the least studied but it is essential in understanding how to buildconsumer knowledge. The more tacit the knowledge, the more deeply rooted it is and the moredifficult it is to be dislodged by other pieces of information (Mlodinow 2012).THE ROLE OF MARKETING CHANNELSBuyers obtain product and service experience most directly from marketing channels which havebeen defined as ―an organized network of agencies and institutions (that) perform … functions(linking) producers with end customers to accomplish the marketing task" (Frazier, AMAdefinition). Yet the role of marketing channels as "gatekeepers between a seller and its buyers"(Coughlan et al. 2006) and as important bi-directional information conduits between sellers andbuyers has been largely ignored by researchers. In addition to providing delivery, productassortment, financial transactions and other logistical functions, as the customer ―touch-points‖,or the retail settings in the case of consumer goods, marketing channels furnish the direct prepurchaseexperiences from which buyers obtain first-hand information of the product in question.Buyers form product and brand associations when they interact with the product. Primarily,previous marketing and consumer research has focused on buyers‘ post-purchase experiences,such as various forms of satisfaction and re-purchase intentions research. Yet, positive prepurchaseexperiences provide powerful motivation for instant purchases, future purchases and/orconvincing word-of-mouth communications. By providing opportunities for buyers to learn andacquire pre-purchase experiential knowledge about products, marketing channels can provide theopportunities for customers to develop a deeper level of tacit knowledge as compared to eitherexplicit or implicit knowledge. The more that customers‘ product knowledge comes from

experiences, the more it will be tacit. It is this tacit knowledge that leads to more sustainablecompetitive advantage. Buyers will know that they like the experiences they have had but maynot be able to articulate exactly why. Moreover, these emotional feelings about the product willinfluence their acceptable price range for the product, lifting the upper price threshold.Managing customer pre-purchase experiences at the customer touch-points are of paramountimportance as they form their first impressions, frame future decision-making and create word-ofmouthcommunication. The impact of the first impression is particularly important in an era ofinformation overload. We can shape customers‘ value perceptions and price acceptability byproviding positive experiences that build their favorable tacit knowledge of the brand, product orservice.REFERENCESAdaval, Rashmi (2003), ―How Good Gets Better and Bad Gets Worse: Understanding the Impactof Affect on Evaluations of Known Brands,‖ Journal of Consumer Research, 30 (December),352-67.0Anderson, Norman H. (1971), ―Integration Theory and Attitude Change,‖ Psychological Review,78 (May), 171-206.Bechara, Antoine and Antonio R. Damasio (2005), ―The Somatic Marker Hypothesis: A NeuralTheory of Economic Decision,‖ Games and Economic Behavior, 52 (2), 336-72.Brakus, J. Josko, Bernd H. Schmitt, and Lia Zarantonello (2009), ―Brand Experience: What Is It?How Is It Measured? Does It Affect Loyalty?‖ Journal of Marketing, 73 (May), 52-68.Coughlan, Anne T., Erin Anderson, Louis Stern and Adel El-Ansary (2006), Marketing Channels,7th ed., Englewood Cliffs, New Jersey: Prentice-Hall.Davidson, Richard. J. (2012), The Emotion Life of the Brain, New York: Hudson Street Press.Epstein, Seymour (1994), "Integration of the Cognitive and the Psychodynamic Unconscious"American Psychologist, 49 (August), 709-724Field, Andy (2000), ―I Like It, But I Am Not Sure Why: Can Evaluative Conditioning OccurWithout Conscious Awareness,‖ Consciousness and Cognition, 9 (1), 13-36.Goering, Patricia A. (1985), ―Effects of Product Trial on Consumer Expectations, Demand andPrices,‖ Journal of Consumer Research, 12 (June), 74-82.Higgins, E. Tory and Abigail A. Scholer (2009), ―Engaging the Consumer: The Science and Artof the Value Creation Process,‖ Journal of Consumer Psychology, 19 (2), 100-14.Hinterhuber, Andreas (2008), ―Customer Value-based Pricing Strategies: Why CompaniesResist,‖ Journal of Business Strategy, 29 (4), 41-50.Lehrer, Jonah (2007), How We Decide, New York: Houghton Mifflin Harcourt.Machleit, Karen A. and Sevgin A. Eroglu (2000), ―Describing and Measuring EmotionalResponse to Shopping Experience,‖ Journal of Business Research, 49 (2), 101–11.Mlodinow, Leonard (2012), Subliminal: How Your Unconscious Mind Rules Your Behavior, NewYork: Pantheon Books.Monroe, Kent B. (1971a), ―The Information Content of Prices: A Preliminary Model ForEstimating Buyer Response,‖ Management Science, 17 (April), B-519-32.____ (1971b), ―Measuring Price Thresholds by Psychophysics and Latitudes of Acceptance,‖Journal of Marketing Research, 8 (November), 460-64.____(1990), Pricing: Making Profitable Decisions, 2nd ed., New York: McGraw-Hill.(2003), Pricing: Making Profitable Decisions, 3rd ed., Burr Ridge, IL: McGraw-Hill/Irwin.____ and Angela Y. Lee (1999), ―Remembering vs. Knowing: Issues In Buyers‘ Processing ofPrice Information,‖ Journal of the Academy of Marketing Science, 27 (April), 207-25Pham, Michel Tuan (1998), ―Representatives, Relevance, and the Use of Feelings in DecisionMaking,‖ Journal of Consumer Research, 25 (September), 144-58.Rao, Akshay R. and Wanda Sieben (1992), ―The Effect of Prior Knowledge on Price

Acceptability and the Type of Information Examined,‖ Journal of Consumer Research, 19(September), 256-70.Reber, Arthur S. (1989), ―Implicit Learning and Tacit Knowledge,‖ Journal of ExperimentalPsychology: General, 118 (No. 3), 219-35.Ross, Elliot B. (1984), ―Making Money with Proactive Pricing,‖ Harvard Business Review, 62(November-December), 145-55.Schwarz, Norbert and Gerald L. Clore (1988), ―How Do I Feel about It? The InformativeFunction of Affective States," in Affect, Cognition, and Social Behavior, ed. Klaus Fiedler andJoseph Forgas, Toronto: Hogrefe, 44-62.Slovic, Paul, Melissa L. Finucane, Ellen Peters, and Donald G. MacGregor (2007), ―The AffectHeuristic,‖ European Journal of Operational Research, 177 (2), 1333-52.Whittlesea, Bruce W. A. and Richard L. Wright (1997), ―Implicit (and Explicit) Learning: ActingAdaptively Without Knowing the Consequences,‖ Journal of Experimental Psychology:Learning, Memory, and Cognition, 23 (No. 1), 181-200.Wright, Alice A. and John G. Lynch, Jr. (1995), ―Communication Effects of Advertising versusDirect Experience When both Search and Experience Attributes Are Present,‖ Journal ofConsumer Research, 21 (March), 708-18.Xia, Lan and Kent B. Monroe (2005), ―Consumer Information Acquisition: A Review andExtension,‖ in Review of Marketing Research, Vol 1, Naresh K. Malhotra, ed., Armonk, NY: M.E. Sharpe, 101-52.Zajonc, Robert B. (1980), "Feeling and Thinking: Preferences Need No Inferences," AmericanPsychologist, 35 (February), 151-75.Localisation of Global Design: Branded Servicescapes of Retail Banks in Bangladesh andSingaporeMing Lim 1Dept. of Marketing and ManagementUniversity of LeicesterSchool of ManagementLeicester LE1 7RHUnited KingdomT: +44-0116-2523999E: m.lim@le.ac.uk1 Author and address for correspondence

Shamim Ehsanul HaqueDept. of MarketingBRAC Business School, BRAC University,Dhaka,Bangladesh6 Mohakhali, Dhaka 1212, BangladeshE-mail: sehaq@bracu.ac.bdMizanLincoln Business SchoolUniversity of LincolnLincoln LN6 7TST: +44-1522-835628E: mrahman@lincoln.ac.ukRahman

IntroductionRetail banking is an essential service all over the world. It represents a huge market in its ownright, with a reported net income of €1,280 billion in 2006 and an income projection of €1,900billion by 2017 (World Retail Banking Report, 2008). The global landscape for retail banking isalso changing rapidly with the entry of global players into emerging markets and the introductionof technology-driven services such as contactless payments and mobile banking (World RetailBanking Report, 2008). In an era of fiscal and monetary volatility and regulatory tightening indeveloped markets since the global financial crisis in 2007/8, banks have sought to grow moreorganically in their local markets, competing on the basis of pricing, product diversification,cross-selling and market segmentation to increase client value and retention.Unlike institutional or investment banking, retail banking remains a local business (WorldBanking Report, 2008), with most of its activities focused on day-to-day, transaction-basedproducts and services. As customers become more demanding, however, banks have to lookbeyond the technical, logistical, technological and sales-driven model of marketing in order toachieve organic market growth and to ward off increasing competition. These challenges areparticularly acute in the case of local banks who seek to offer standardized levels of service to itscustomers.In recent years, there has been increasing interest in the role of local culture in shaping consumerservice delivery (Zhang et al., 2008). To what extent should local banks offer a ‗global‘servicescape? What are the features of such a servicescape in the case of retail banks and how doconsumers and employees perceive it?Despite a growing body of research into these issues in various contexts, there is relatively littleresearch into the servicescape of retail banks. Specifically, there is, to the best of our knowledge,no in-depth research into the localization or globalization of servicescapes in retail banking.Further, systematic research into consumers‘ perspectives and input into servicescape design isunder-developed. This paper is intended to expand our understanding of these two gaps in theliterature. We focus our research on several banks which have extensive retail bankingoperations in two Asian markets: Bangladesh and Singapore. In Bangladesh we focus on onestate owned retail bank and two privately owned banks and in Singapore we cover two privatelyowned banks with substantial retail banking operations. On the face of it, these two sites representtwo opposite ends of the development spectrum: Bangladesh is a developing country which,despite many political and economic hurdles, has shown promising prospects of becoming a

middle-income country (―What are middle-income countries?,‖ 2012) in the next decade from itscurrent status of a low-income country. For over a decade Bangladesh has had a consistent GDPgrowth rate of 5% to 6%. The nation experienced a 6.2% average real GDP growth rate in the2006-2010 period and the forecasted real GDP growth rate for the 2012-2016 period is 6% (PRSCountry Report, 2011). This has induced the successive governments of Bangladesh who heldoffice in the last 15 years to entice many foreign investors and global banks to set-up operationsin the country (Ahmed, 2011). The financial sector of Bangladesh is dominated by banks.Banking sector alone accounts for 95% assets of the financial system. The growth in the sectorhas been marked by many privately owned commercial banks entering the industry after thegovernment liberalized the banking sector in early 1980s. The privately held commercial banksnow command most of market share. As of 2009 62.9% of total deposits were with private sectorbanks, 22.75% with state owned banks and 7% with foreign banks operating in Bangladesh(Bahar, 2009). Today the country has a total of 48 banks comprising state owned, private andforeign banks. The improved service quality, better products and focused promotional drives aresome of the obvious reasons for the popularity and growth of private commercial banks inBangladesh (Jahiruddin and Haque, 2009). However, the studies carried out so far on theconsumer experience and their perception of services offered by Bangladeshi retail banks havemainly covered attributes of products sold by these banks, their financial performance and thecustomer satisfaction of these banks utilizing the SERVQUAL model (Khondaker and Mir, 2011;Jahiruddin and Haque, 2009). No paper exists that discuss the servicescape of retail banks inBangladesh or a developing country; nor is there any extant literature that covers how retailbanking consumers in a developing country perceives and interacts with the salient designelements of the servicescape. The localization of design or how international ideas of design andservicescape layout (or concepts) are being utilized is also not addressed in the extant literaturethat exists regarding the servicescape of financial institutions (including banks).Singapore is currently the world‘s sixth richest nation, measured by GDP per capita. It is one ofthe four Tiger Economies of Asia and its citizens enjoy prosperity and an advanced economy(IMF, 2011) that supersedes many Western countries. According to Singapore‘s Ministry ofTrade and Industry Press Release Singapore Economy is to grow around 1% to 3% in 2012,which is a good growth rate for a developed economy. Singapore has a world class financialservices sector and its banking industry is vibrant, international and big. In 2011 Singapore‘sfinancial services sector grew at 10.5% on a year on year basis and for 2012 the forecast is alsooptimistic (MTI Singapore, 2011). Singapore‘s highly evolved and well developed banks have asubstantial retail operation. However, marketing research or extant marketing literature on the

servicescape of retail banks in Singapore, especially in connection to the servicescape design isnon-existent.Our paper, therefore, is aimed at contributing to cross-cultural research in both the global designas well as services marketing literature.Literature review:The Servicescape‗Servicescape‘ refers to the physical environment in which consumers interact with products andservices (Bitner, 1992). It is the setting in which products and/or services are produced, deliveredand consumed (Zeithaml et al., 1990). There is increasing evidence that local banks arethemselves undergoing a paradigmatic shift: from offering only ‗goods‘ to a much more serviceintensiveexchange, mirroring a shift in the marketing discipline itself (Vargo and Lusch, 2004).Key to the construct is the notion of ‗place‘ as a defining characteristic of the consumer‘sexperience. According to Kotler (1973)―the place where (a product or service) is bought orconsumed (can be) more influential than the product itself in the purchase decision …‖Consumers' perceptions of service are culturally bound (Zeithaml et al., 2002). de Ruyter et al.(1998, p. 189) argue that ―[i]n order to market services effectively to international consumers,service providers must have a thorough knowledge of their target group(s)‖. A solidunderstanding of the role of culture in the service delivery process is more crucial than ever forservice firms operating globally.Despite growing research in consumer service experiences, relatively little research has examinedthe role of culture in regards to these experiences, with little attempt aimed at synthesizing it. AsMaheswaran and Shavitt (2000) point out in regard to global consumer psychology research,systematic research in consumer services is in its infancy. In this article, we attempt to reviewcross-cultural servicescape research that focuses on the role of design in shaping the consumer‘sexperience. First, we introduce our conceptual framework and its components. Second, we reviewexisting literature using the framework. Third, we present findings from fieldwork undertaken inBangladesh and Singapore. Fourth, we discuss the theoretical and managerial implications of ourfindings. Finally, we address overall methodological issues and point to future researchdirections.Atmosphere:

The careful, systematic and deliberate manipulation of ‗atmosphere‘ in retail settings is wellestablishedin the corporate branding literature. Decades ago, Kotler (1973) argued thatatmosphere was a vital marketing tool for businesses seeking a competitive advantage. In recentyears, researchers and practitioners have continued to build upon the theory and implementationof the components of ‗atmosphere‘ in order to increase product differentiation, servicememorability and ensure long-lasting brand memories for stakeholders. Although the retailsector, unsurprisingly perhaps, has been the focus of research on the use of atmosphere as amarketing tool since its raison d‘etre appears to be entirely geared to the seduction of theconsumer via multisensory means -- aesthetic, visual, sonic and olfactory, among others –scholars have begun to make welcome inroads into other sectors such as hospitality (Heide,Lærdal and Grønhaug, 2009) and a host of retail settings.The financial services sector may not appear to be an obvious site for the use of atmosphere toenhance the brand experience and brand identity. Traditionally regarded as serious, evenintimidating, places where customers visit only to conduct pecuniary business with a bank officer,manager or other officer, we argue that retail banks, like other sectors, are beginning to develop arange of multisensory marketing tools to influence the ways in which they are perceived andaccepted by stakeholders. To date, there has been no literature, however, which examines howthe retail banking sector uses various tools of this kind to cultivate brand image and to carve out adifferent corporate identity in the minds of shareholders, customers and the media. Moreempirical studies are, therefore, needed in this area. Relatedly, there has been no in-depthinvestigation of how retail banks may be innovating -- rather than simply taking the lead fromother sectors -- in the area of brand atmospherics. Our paper aims to address these gaps in theliterature by presenting the findings of a study into a retail banking group in Singapore and itsinnovative use of ‗atmosphere‘ in its branches.One of the purposes of our paper, therefore, is to investigate how Asian retail banks aretransforming the ways in which they manage their brand identity through the innovative use ofatmosphere and other multi-sensory marketing tools, in line with changing consumer tastes. Theoverall objective is to gain insights into how they exploit atmospheric strategies to appeal toconsumers‘ changing tastes and preferences, enhance the experience of banking, manage first andlast impressions and generally create a highly positive brand image and identity in the minds ofcustomers. While the researchers and academics in general claim that there has been littleempirical research on the ‗atmospherics‘ of retail service settings and its impact on consumers‘service experience (Hutton and Richardson, 1995; Hoffman and Turly, 2002) research into

specific aspects of service environments (including service atmospherics) led to manyimprovements and changes in the service environment. A visit to the supermarket often envelopsthe customers in the smell of baking bread; restaurant operators carefully adjust and tailor theirlighting and music so that the context of the dining setting is congruent to the customers‘expectations (Ezeh and Harris, 2007). Consumer behaviour is thus expected to be altered andinfluenced to the advantages of the retailers. For retail banking the same maybe true. It isanticipated that the bank‘s use of multisensory marketing techniques and tools may yield newinsights for the field of experiential brand marketing in other fields.In a commentary on the improvement and a more robust construction of the servicescapeconstruct we see that ‗atmospherics‘ fall under the Ambient Dimension of the overall perceivedservicescape (Hightower, 2010). When consumers are asked questions regarding the ambientconditions that prevails in a servicescape they are usually able to highlight one or two aspects ofthe servicescape that is directly related to atmospherics. However one of the limitations ofstudying atmospherics to predict consumer behaviour in the servicescape setting is that‗atmospherics‘ is a simple stimulus-response model which assumes that certain target groups willreact the same way to a particular stimulus, and this response is an involuntary response. Owingto this limitation atmospherics does not explain how consumers are able to selectively screen outspecific stimuli and form impression about the service based on few characteristics(Paninchukunnath, 2009).We report the findings of an exploratory study conducted to gather insights into how two groupsof participants – customers as well as bank employees – perceive the atmosphere in the bank as aset of multisensory categories and their views of how the atmosphere at their banks contributes tocorporate identity and image. Employees‘ views were included because they are key stakeholdersfor corporate branding initiatives (Balmer and Gray, 2003; King, 1991). A synthesis of recentliteratures on atmosphere in corporate settings, retail image management, impressionmanagement and corporate brand image and identity is developed in the next section. This isfollowed by a discussion of our research methodology. The findings from our empiricalinvestigation are then reported. We analyse and draw out the implications of these findingsbefore making key managerial as well as theoretical recommendations. Finally, some caveats ofour paper and directions for future research are proposed.Corporate Branding and IdentityCorporate branding and identity are essential components of how institutions present themselvesto a range of stakeholders (Balmer, 1998). This process is deliberate, systematic and carefully-

planned by a range of actors within and without an organization (Einwiller and Will, 2002). Itenhances the reputation of a firm by ―sending signals to all stakeholders by managing behavior,communication and symbolism‖ (p. 101). All efforts by the organization to communicate adistinctive brand are aimed at convincing stakeholders of its ability to deliver on a set of promises(Harris and de Chernatony, 2001).Essentially, therefore, corporate branding is a communicative process aimed at differentiation anddistinction based on relevance and performance. This is not the full picture, however. There isalso increasing evidence to suggest that firms can actually predict consumers‘ responses based ontheir patterns of multisensory stimulation, further supporting the view that brands rely more andmore on using interesting and multi-dimensional experiences in order to help customers feel fullysatisfied with products and services (Zarantonello and Schmitt, 2010; Schmitt, 1999). When welook at ‗servicescape‘ the visual identity of the corporation as emanating by visual cues anddesigns (that are incorporated within the servicescape) becomes an area of interest. Corporatevisual identity is an array of visual cues designed by the organization so that it may differentiateitself from competition and at the same time project an image of quality and stature to thestakeholders (Melewar et al., 2005). Corporate visual identity has a positive association with thecompany (Henderson and Cote, 1998; Van Heerden and Puth, 1995) and this lends support to theaffirmation that Corporate Visual Identity is at the centre of a business‘s projected image(Melewar and Saunders, 1998). Bartholmé and Melewar‘s (2009) proposed ‗Corporate SensoryIdentity Construct‘ has Corporate Visual Identity as one of its important constituents. Visualidentity is defined as consisting five elements- logo, name, typography, color, slogan. Inconveying corporate identity these are applied to brochures, stationary and clothing (Melewar andSaunders 2000; Van den Bosch et al., 2006 in Melewar and Jenkins, 2002). But these are alsoprominently applied to the interior walls, décor, furniture style and spatial layout of theservicescape or corporate office. Architecture and location are one of the subconstructs ofCommunication and Visual Identity, which in its turn is a subconstruct of Corporate Identity(Melewar and Jenkins, 2002). Therefore architecture and interior are exclusively linked to thevisual perspective and conceptualized as important part of the visual identity construct (Melewaret al., 2006 in Bartholmé and Melewar, 2009). Apart from logo, slogan, corporate color schemes,typography and symbol, the interior design, architecture and location of the office building arefrequently used as a means of conveying an identity (Melewar and Saunders, 2000; Schmitt et al.,1995). Interior of retail banking operations have been very potent means of conveying the rightcorporate image and the banks made a conscious effort to utilize the interior for many years. Wefind an architect responsible for the interior décor of a retail bank branch in New York City

commenting in 1970 that ―For branch office design, he (the architect) must keep attuned to thechanging attitudes of bank customers and create an environment that not only reflects thecorporate image of his banking client, but that will also accommodate the changing marketingand promotional operations of the bank‖ (Lowery, 1970). The architect had been essentiallyreferring to the servicescape of the branch as he elaborated that the bank‘s ―office layouts,furnishings, color schemes, and decoration should create a climate conducive to their (the bank‘semployees‘ and customers‘) successful performance‖ (Lowery, 1970). How the retail bankconsumers read the visual corporate identity of the banks and what meanings they attach to themcan give us a hitherto untapped idea as to the impact of servicescape on consumers with relationto corporate visual identity. The symbolic elements of the servicescape may also becommunicated through visual identity just as well its design. Finally there is the question ofethnic, religious and cultural perception of the servicescape. In a servicescape study carried out inthe US it was found that a particular ethnic community or religious denomination maybe attunedto responding to servicescape elements that they interpret as being welcoming to them(Rosenbaum, 2005). A congruency between ethnic identity and built environment could be avariable that may be explored further for influencing behaviour of certain target customers.One other important aspect of corporate branding and identity is also the issue of industry identitythat influences corporate identity. It is posited that the industry identity of a particular sector canhave a profound effect on a company‘s ability to project its individual corporate identity(Melewar et al., 2005). In the US the oil companies had a hard time changing their corporateidentities in the 1970s despite their best efforts as the public viewed negatively the whole industry(Winters, 1986, 1988). Considering the banking industry of developing countries like Bangladeshand India the ‗Industry Identity‘ has a bearing on the image of the government owned banks.Collectively the government owned banks are perceived as staid, lacking modernity and advancedprocesses as well as up to date servicescapes. In a survey on retail customer satisfaction in Indianbanks the clients of banking services unanimously agreed that the government owned banks didnot have visually appealing physical facilities, stimulating signs, symbols, and advertisementdisplays. They also complained that the bank staff were not well dressed and frequently illmannered(Bedi, 2010).Atmosphere(s): How and Why it Matters‗Atmosphere‘ is a concept which is both immediately understood by consumers and alsonotoriously difficult to define. However, it is well-recognized as a determinant and antecedent ofconsumer behavior in many contexts, including, but not limited to, retail and/or service settings

(Bitner, 1992). Its multifarious effects have been studied extensively in the marketing andmanagement literature. The applications of multisensory marketing are many and diverse andhave been studied in both physical as well as virtual environments. Their applications in webretailing environments (e.g. Manganari, Siomkos and Vrechopoulous, 2009; Cheng, Wu and Yen,2009) show that ambient effects such as light, colour and sound have a noticeable impact uponconsumers‘ moods and their capacity for pleasure and arousal.Environmental variables have noticeable effects on individuals‘ behavior (Mehrabian andRussell, 1974) and affect their propensity to make purchasing decisions (Donovan and Rossiter,1982; Wirtz, Mattila and Tan, 2000; Menon and Kahn, 2001; Eroglu, Machleit and Davis, 2003).Multisensory stimuli such as music (Yalch and Spangenberg, 2000; Wilson, 2003), colors and(Babin, Hardesty and Suter, 2003) and smells, odors and olfactory cues (Spangenberg et al.,1996; Chebat and Michon, 2003) also play a significant role in shaping consumers‘ behavior. Todate, however, there has been no research on how these multisensory cues are used systematicallyas part of a corporate branding and identity programme within organizations.Conceptual Frameworks:Keillor, Hult and Kandemir (2004) used a servicescape construct to study service encounter ineight countries. This study was undertaken in order to understand service encounters on aninternational basis as half the world‘s multinational companies are engaged in service provisions(Lovelock and Yip, 1996) in Keillor, Hult and Kandemir, 2004). This servicescape construct wasbased on Baker‘s servicescape construct which is premised on servicescapes comprising ambient,functional, and social elements (Baker, 1986 in Keillor, Hult and Kandemir, 2004). Keillor, Hultand Kandemir incorporated the Nordic School of Service Marketing‘s (NSSM) ideas on serviceencounter. According to NSSM functional elements (service quality and servicescape) of theservice encounter has an effect on the behavioral intentions of the customers. Based on theNSSM theory they hypothesized that ―servicescape is positively associated with customers‘behavioral intentions.‖ The research was conducted in eight countries across two industries: FastFood and Grocery. In most of the countries they found their hypothesis to be true: the consumers‘behavioral intentions were positively associated with servicescape (Keillor, Hult and Kandemir,2004). In the extant literature there could not be found any study of servicescape research thatwas carried out across different countries except the one done by Keillor, Hult and Kandemir.Thus their servicescape construct was deemed to be robust for assessing consumer behaviour inour study. However, Hightower (2010) found that Keillor, Hult and Kandemir (2004) utilizes theservicescape construct less effectively and their reliance on Baker and Cameron‘s (1996) work as

well as NSSM theory leaves significant gaps in the servicescape construct‘s conceptualizationthat they used (Hightower, 2010). Hightower (2010) argues that the ‗International Servicescape‘construct has three hierarchical levels: a) Overall Servicescape Level, b) a Dimension Level andc) a Subdimension Level. In his critique of the servicescape construct used by Keillor, Hult andKandemir (2004) Hightower (2010) points out that they confine their construct at the Dimensionlevel, and is ―therefore incapable of appropriately capturing the entire servicescape as well asempirically indicating its proper influence on consumer behavioral intentions.‖Hightower proposes a more comprehensive ‗International Servicescape ConstructConceptualization‘ wherein in a service encounter the customer perceives the servicescape in ahierarchical fashion. Upon encountering the servicescape he or she perceives the overallservicescape first, then at the dimension level the Social, Ambient and Design dimensions areperceived; finally at the subdimensional level the client/customer perceives the subdimensions ofthe dimensions -Social and Design. Thus Hightower claims his ‗International Servicescape‘construct to be a more comprehensive model for understanding the service clients‘ behavioralintentions as it depicts the entire servicescape construct as opposed to Keillor, Hult andKandemir‘s (2004) ―investigation of a small portion of a single dimension‖ (Hightower, 2010).Based on this International Servicescape construct Hightower has come up with an internationalservicescape assessment instrument (as depicted in Figure 1) (Hightower, 2010). We found thatmore items could be added to Hightower‘s items and make it more amenable to capture nuancesexperienced by customers in a servicescape for a particular service in a particular country (i.e.retail banking in Bangladesh). In line with Hightower‘s recommendation that in order to getcritical insight on consumer behaviour intentions as affected by the servicescape, we thereforeutilized his template to conduct a qualitative research: utilizing open ended questions that seek touncover new insights on the servicescape of retail banks of a developing country. Based on theitems of this scale we have developed an open-ended qualitative questionnaire which covers theitems of the scale; and recorded responses from the respondents pertaining to the overallservicescape of the retail bank, its servicescape at the dimension and the subdimension levels.Pursuant to Hightomwer‘s suggestion we added more issues to dimension and subdimesionlevels. We wanted the consumers to probe more deep and consider more items that they perceiveand experience within the servicescape. We asked questions with regards to their perceptions ofdepicted brand colors, logo, employee uniform and dress code as well as the body posture andgesture of the employees whom they deal with within the servicescape. The manners, behaviourand dress codes of the customers were also enquired on. With respect to the aesthetic dimensionof the servicescape we wanted to know how they perceived it: the cultural interpretation of the

servicescape was one issue that we wanted to learn more. We found the Hightower construct tobe the most prescient construct given the limited items of the servicescape that other modelscover. Thus the modified (by addition of more items to the construct) Hightower constructbecame our framework that guided our interview protocol. This instrument has good reliabilityand validity results across ten industries and Hightower assertions that the researchers andpractitioners may creatively utilize his template and customize it to assess the servicescape of thefirm or industry across different cultures and nations (Hightower and Shariat, 2009 in Hightower,2010) was congruent with our development of the modified framework.One of the interesting aspects of servicescape that came about in our literature review is the verylimited number of work that was undertaken in order to understand the symbolic aspect ofservicescapes: how consumers symbolically interpret various artifacts of the servicescape, itsspatial layout and the culture that they encounter within. Sociosemiotic research undertaken inunderstanding consumer behaviour in the service atmospherics of shopping malls, hypermarkets,company stores and museums offer parallels that maybe applied to banks (Sherry, 1998 inHarmon, 2005). Extant literature reveals that semiotic retail research addresses a) what are thedominant signs selected for acquisition sites and how they are arranged; and b) what influence dosigns have on consumer meanings and behaviour (Harmon, 2005). The most prescient academicwork on Semiotics and consumption experience of consumers in the ‗location of consumption‘(which we took as an apposite surrogate for the term ‗servicescape‘) is the work Umiker-Sebeokhad done on museum visitors using American philosopher C.S. Peirce‘s triadic semiosis (Umiker-Sebeok, 1991; Mick, 1986). Following Peirce‘s model of semiosis it was found that usingPeirce‘s taxonomy of signs the museum visitors went through Peirce‘s stage of interpretants:firstly visitors experienced objects similar to those they have seen before (icons), in the next stagethey reflected on the newness of other exhibits (index) and finally the visitors translated exhibitsas symbols representing ideas based on their own cultural background, experiences and habits(Umiker-Sebeok, 1991; Mick, 1986 and Harmon, 2005). One interesting finding of Umiker-Sebeok‘s (1991) work had been how museum visitors ‗act upon the museum‘ where they‗dynamically build meaningful ―spaces‖ in which they move and maneuver to their ownadvantage‘ (Harmon, 2005).We wanted to incorporate Peirce‘s triadic semiosis model in Hightower‘s ‗InternationalServicescape Construct‘ by positing that the retail bank consumers interpret the elements in theAmbient, Social and Design dimensions of the servicescape in a symbolic manner resemblingC.S. Peirce‘s Icons, Indexes and Symbols (Mick, 1986). Thus the retail baking consumers‘

experience inside the servicescape of the bank is also a symbolically mediated experience; notjust a result of the direct influence of the servicescape – its dimensions and artifacts that arewithin the dimensions.Thus as suggested by Hightower (2010) we modify and expand his International ServicescapeConstruct to incorporate C.S. Peirce‘s Icons, Indexes and Symbols (as depicted in Figure 2).Upon concluding the questions regarding the dimensions of the servicescape our open endedquestions (based on this model) therefore delves more deeply and enquires what the specificitems of the dimensions symbolize to the retail banking customer. For example with reference tothe ambient dimension what does brightly lit interior and spotless waiting area meanssymbolically to the customers. What meaning does the prominently displayed logo convey? Whatdoes the consumer read about the socio-economic background of the retail banking customersthat queue up in front of the tellers? What culture does the interior design and layout make thecustomers think about? This model is more comprehensive as it takes into cognizance thesymbolic facet of the servicescape and the consumers‘ (or the interpreters‘) reaction to the signsand their transmission through the social environment (Umiker-Sebeok, 1976; Mick, 1986). Thismodel also captures the consumers‘ past experience- his tendency to compare and contrast in linewith his socioculturally learned habit and memory as he interprets the symbolic side of theservicescape.

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QuickTime and adecompressorare needed to see this picture.Research Design and Method:Two privately owned banks and one government owned bank were chosen as the site for thisstudy. This study on servicescape was an exploratory study and since qualitative research lendsitself particularly well to exploratory and descriptive research enquiries we decided on obtaininginsight through qualitative interviews of key informants (McGivern, 2006). The interviewprotocol was guided purely by the modified International Servicescape Construct of Hightower(2010) and Service Consumers‘ Symbolically Mediated Perception of Servicescape (Figure 1 andFigure 2). The Bangladesh study is exploratory in nature. Because it was necessary that theresearchers obtain detailed information regarding the individual retail bank client‘s attitude andbehaviour with respect to various attributes of the servicescape, thirty (30) mini-depth interviewswere conducted. Out of the 30 interviews 24 were conducted with retail banking clients and 6were done with the bank employees. The mini-depth interviews lasted for approximately 20minutes with each client as is the norm in conducting mini-depth interviews (McGivern, 2006).The recruitment of the interviewees was done on site: inside the premises of the retail banksunder study. This convenience sampling is also known as ‗outcropping‘ and was used to

encapsulate the reaction to the characteristics of the servicescape (our topic) as observed andexperienced by the banks‘ clients and employees. Permission was obtained in written form fromthe three banks which were the site of the interviews. The two private banks were EBL BankLimited and AB Bank Limited; and the government owned bank was BASIC Bank Limited. Allthe interviewees were interviewed in the Gulshan business district of Dhaka, the capital and thelargest city in Bangladesh. The bank branches were all situated in the same business district andwere located within a 10 minute walking distance of each other. Each of the bank branches hadwell developed servicescapes and highly visible interior and exterior branding. With theexception of Basic Bank Limited (which is a Bangladesh government owned bank) all the banksutilized the brand colors to good effect: the furniture and walls of the interior layout and serviceareas sported the brand colors in a manner which will not fail to make the customers considerthese colors along with the prominently displayed (often highly stylized) logo of the brand. Of the24 clients of the bank who responded 16 were male and 8 were female. In case of the employees4 employees were female and 2 were male (of the 6 bank employees who were interviewed). Themale interviewees were aged between 26 and 57 whilst the female were aged between 30 and 43.Researchers were provided with a quiet sitting area at the location of each bank branches whereinthey conducted the mini-depth interviews on a one to one basis. Written consent was obtainedfrom the interviewees and prior to that they were provided a brief on the purpose of the interviewand how it would be conducted. The interviews were conducted over a period of four weeks withactive assistance of three graduate students of BRAC University who helped in conducting theinterviews.Each interviewee were prompted on the items of the servicescape construct in the Hightowerframework and requested to comment on the item. When it came to questions of symbolicinterpretation and researchers wanted to delve deep, they asked probing questions such as ‗Whatdo you mean by ―interesting‖?‘ and ‗Why did you think that this place would not be ―chaotic‖?‘etc.Research Design and Method (Singapore)Two retail banks were chosen as the empirical site for this study because this sector is underrepresentedin the literature at present. To keep the research tractable, the study was limited to asingle country. Desk-based reviews of the literature were undertaken; at the same time, it wasnoted by the researchers that corporate branding and image within retail banking sector waschanging in practical terms. Our project is thus a first step towards addressing gaps in theliterature as well as in practice.

Several observational visits were paid to the banks by one of the researchers over a period of ayear and a half, during which distinct changes in the physical layout of the site were observed. Itwas then decided to initiate informal conversations with staff in order to get a sense or ‗feel for‘how such changes were developing and why. Based on these conversations, the bank wascontacted to arrange interviews with staff. We also asked permission to interview customers whodropped into the branch. All employees contacted were enthusiastic and open to beinginterviewed. We decided to interview marketing and customer service managers whose role itwas to ensure that a consistent ‗fit‘ between customer experiences and the banking experienceand environment, as well as frontline customer service staff. Notes were taken and all interviewswere tape-recorded and transcribed, with the full agreement of the participants. Due to bankprotocols, interviews lasted between 30 and 45 minutes instead of the usual hour to hour and ahalf and were semi-structured according to an interview guide. Questions included the length oftime the employee had been with the company, his or her job role and educational background.They were also asked about how they perceived the corporate brand and image of theorganization. Some simple definitions of ‗atmosphere‘ were given to staff to read before theinterviews commenced something which the respondents said they appreciated very much. Theinterviews ended with questions about how physical design as well as other elements (smell,sound, etc.) can be improved in future. Customers were asked similar questions but questionsabout their background and so on were obviously neither relevant nor appropriate to the projectand so these were left out.The two banks are called Bank A and Bank B, for research purposes. Bank A is a local bank inSingapore with many branches located all over the island. Bank B is a multinational bank with astrong presence in Asia. In total, 12 bank employees were interviewed, 5 of them at Bank A and7 of them in Bank B. In addition, 15 customers (10 for Bank A and 5 for Bank B) wereinterviewed.Findings (Bangladesh):In response to the question about the overall servicescape of the bank all the respondentsanswered that the servicescape was an important aspect of their patronage of the particular bankin question. To many of the respondents retail banking was seen as a routine, often timeconsuming and tedious activity. While these clients waited in queue before a teller could helpthem or the bank‘s Relationship Manager filled in a form for them, they expected theenvironment to be clean and non-chaotic. Typical response from the bank clients with regards tothe overall servicescape of the bank were:

―Dhaka is a very crowded city and coming to the bank to encash a cheque or make a deposit isoften a hassle. But I am happy to see that the interior of the bank is relaxing and quiet- not ashectic as it is outside from where you just stepped in‖. (Hasan Rahman, 27, EBL Bank client)―These private banks have invested a lot of money in making sure that modern and clean sofasand marble topped reception desks are in place to entice the customer. I think the interior of thesebanks look expensive. This was not so even in the 1990s and the banks use to be damp andsweaty during busy hours of the summer months.‖ (Lima Nuzhat, 36, EBL Bank client)―I like the fact that these banks are spacious and look like banks that are common in Westerncountries such as America and Canada. Once inside I could not tell if I was in Toronto or Dhaka‖.(Montu Sen, 57, AB Bank client)All the clients gave a lot of credence to the assertion that a proper ambient condition in theservicescape of the bank was important for conducting their business in a satisfactory manner. Onseveral occasions customers were found to compare the private banks‘ servicescape to that ofgovernment owned scheduled banks which frequently did not have a well designed servicescape(like the ones that were studied for this research). Some outstanding remarks regarding theambient dimension of the banks‘ servicescape are:―If you go to Sonali Bank (a government owned bank) you will find that the branch is dark inside,there is no running air conditioning system and the bank teller windows are so tall that you cannotsee the teller with whom you are dealing. It is very much in the 1970s, even today!‖ (HarunChowdhury, 45, EBL Bank client)―Ah! Walking into any branch of EBL Bank here in Dhaka city, a client will find that all the airconditioningunits are running inside- the interior is cool, smells of freshly cut flowers and youhave flower bouquets in the reception and key service areas.‖ (Mahzabin Hasan, 28, AccountOpening Officer, EBL Bank)Private bank customers of Bangladesh think that the smartly dressed employees of the bank whooften switched to English (instead of the native Bengali) to communicate to their clients wereindicative of a more professional and hence effective service provider. They used the word‗smart‘ repeatedly to describe the employees of EBL and AB Bank which they did not use todefine and label the employees of the government owned banks -BASIC Bank Limited.―EBL employees wear a uniform that exudes professionalism; they look good in their greybusiness suit and golden and blue (brand colored) ties.‖ (Shabana Khan, 32, EBL Bank client)―These are young and well dressed people who know English that are serving you, not somemiddle aged irritated clerk that you find in government owned banks. You do not feel like

spending your time there. I don‘t mind paying the higher fees here at AB Bank.‖ (Fazlul Karim,49, AB Bank customer).―BASIC bank is a good government owned bank, certainly better than most other governmentowned banks; but I do think it could do better if it had employees who were smart and prompt.‖(Rahima Begum, 30, BASIC Bank client)Interviewees were almost unanimously of the view that the banks that had well developedservicescape attracted high net worth individuals and more educated retail banking clientele.They referred to the fact that EBL and AB Bank customers were well behaved, did not createmuch noise and did not demand much time or assistance either from the bank employees or othercustomers of the bank. Thus customers had a perception that other customers that were formingpart of the servicescape were conducive to the sustenance of a good service environment,especially in private banks such as EBL and AB Bank. They did not hold this opinion about thegovernment owned banks. One of the BASIC Bank managers comments ―You have all sorts ofpeople opening an account over here. There are those who are noisy and are not educated enoughto understand even the simplest of banking products. They are hard to handle. (ImranChowdhury, 38, Assistant Manager, BASIC Bank, Gulshan).The design of the servicescape and its aesthetics were perceived as Western design by thecustomers. They compared the well designed servicescapes of EBL and AB Bank to internationalbanks, interiors and brand spaces that they had seen in movies and western soaps. The contrastingof the planned, well designed servicescape of the private local banks to that of the governmentowned local banks made them see the ‗Western‘ and ‗International‘ design aspect of theservicescape more acutely. On the aesthetics of the EBL Bank brand and servicescape theCustomer Services Manager of EBL Bank responds ―We deliberately try to bring an internationaldimension to our products and services; especially our bank interiors are carefully designed toimpress upon the clients that they are experiencing world-class ambience and an excellentatmosphere. They would be telling you that once inside they were unable to say whether theywere in Dhaka or in New York, Hong Kong or Singapore, where some of the best designed bankservicescape could be found. That is also the reason all our employees, regardless of gender, weara Western outfit- business jackets and trousers. We consciously eschew local attire and ethniccostume which can take away from our brand promise and confuse the customer.‖ (SheguftaAfrin, 32, EBL Bank Manager)The interviewees had a heightened sense of brands. All the clients responded that they noticedthat the EBL and AB Bank had a logo which was well designed and were akin to internationalbrands. This positive opinion was not accorded to the logo design of BASIC bank. They also

expressed their opinion that servicescape of EBL and AB Bank were more properly branded. Acustomer responds ―AB Bank has the brand logos in the right walls and it has not excessivelybranded the interior; I like the subtlety of it. It is sophisticated.‖ (Fazlul Karim, 49, AB Bankcustomer)―EBL bank has everything very cleverly dipped in its brand colors. You even find the waste paperbaskets tastefully colored in blue and gold. I think the bank has good taste.‖ (Alpona Haque, 30,EBL Bank client).We this can conclude that the well designed servicescape of private retail banks in Bangladeshare seen by consumers to be exuding an international feel. Good spatial design is symbolic ofefficient service and order. Dhaka being one of the most populous city‘s of the world is verycrowded and it is hard to escape from chaos and crowd that animate everyday life; this has abearing, especially on service encounter scenarios in various sectors. Customers compare thechaos of the streets and the chaos that are experienced in government owned banks to thetranquil, well designed and ordered spaces that are offered by private retail banks such as EBLand AB Bank. Thus good servicescape branding, spatial design and atmospherics symbolizeorder, efficiency and effectiveness in terms of functionality to these customers. This aspect of theservicescape lends credence to the International Servicescape Construct and C.S. Peirce‘s TriadicSemiosis model (Figure 2) wherein customers compare the branded servicescape (icon) tosomething they already know and are familiar to (indexes) and then they infer what it stands for(symbols).Findings (Singapore)In Singapore one outstanding finding from our interviews with bank managers, employees andcustomers is that expectations of banks‘ environments, services and overall experience –atmosphere, in other words – were changing. It was the general consensus among managers andemployees at both banks that the role of banks was changing, and, with it, customers‘expectations. A few spoke of the locations in which banks chose for their premises. Several keybranches, interestingly, were located with Starbucks coffee outlets, premium bakeries,supermarkets and even high-fashion stores.As a result, the corporate image of banks was changing from being ‗merely‘ highlyprofessionalized, business-oriented and profit-driven to a servicescape in which customer servicein all its different aspects was embraced. The appetite for ‗change‘ was also a recurring theme forrespondents:

‗Our bank is located in the central business district, as you can see, but we don‘t just want toportray a ‗strictly business‘ atmosphere. Why not change our image? Many of our clients drop infor coffee at Starbucks and we are part of that jazzy feel…‘ (Assistant marketing director, BankA).Bank A‘s employees tended to feel they were part of a changing trend in how banking institutionswere perceived.Actually, we don‘t feel constrained by our image at all. People already know our brand. Theytrust us. They know we are not going to go away tomorrow (laugh). So, we can befriendly….(Marketing Manager, Bank A).Our bank looks more like a shop…you know, glam shop where you can drink coffee, tastecookies, local food, have a cup of tea. We are thinking about introducing new services all thetime. We change the music about…I don‘t know…about every few months. We like to changeaccording to special festivals and events. We have installed special plasma screens to show musicvideos, not just the same old boring news…our customers are hip and young (at least they want tobe, so why not….?). We have special rooms to help mature customers feel pampered as well(Customer Relations Manager, Bank B).We get very good training. Customer service, product training, everything…I think atmosphere ispart of the training, actually. Atmosphere helps us enjoy our jobs and we pass this on to ourcustomers. Of course, when things go wrong, nothing helps! But we have to control our emotionsand atmosphere does that also…(Relationship Manager, Bank B).I like this bank. It doesn‘t feel intimidating. I also get very good service. Everything is welldesigned,I think. The couches are so, so, so comfortable – they‘re designer (couches), Ithink…(Customer, Bank B).Actually, banking is an experience, isn‘t it? So, why shouldn‘t it be like…quite fun? We used tohave to queue…which I didn‘t like much, but now we sit down instead and someone comes to askus what we want, sometimes they even offer drinks, tea, coffee…it‘s still professional but lessscary…(Customer, Bank A).Singapore, being a developed country and one of the key Asian hubs for financial servicesalready had a long standing tradition of retail banks that had established and well designedservicescapes. For Singaporean banks an international servicescape design that included all thetrappings of the best in design and layout was not adding much value and differentiation. Onapplying Hightower‘s (2010) ―International Servicescape Construct‖ we find that the Singaporean

clientele are able to recognize well the value and benefits that must be accorded by a world-classservicescape design. But ‗servicescape‘ as a manifestation of global design had come to beaccepted as ‗standard‘ and ‗necessary‘; something the retail banks must possess as part of theirproduct; an imperative for any retail bank which none of the competitors can do without. Hencethe point of difference in the servicescape must be created by introducing other elements in theglobal design: ―Starbucks Coffee‖ feel, ―Jazz Music‖, ―local shows‖ and ―Local food‖ are justsome of the interesting departures that they have successfully tried. The staid global image is castaside in favor of ―localizations‖ where it is appropriate and tenable for the bank to introduce.Hence inside the bank‘s LCD and Plasma screens local programs and entertainment programs areshown as instead of the conventional business programs that are the norm in any given bankaround the world.Thus Singaporean retail banks are re-calibrating their servicescape design in terms of broadeningthe proposition of design: introducing cultural elements in the atmospherics, blurring the retailbanking space in the traditional sense of the word ―bank‖ by bringing in either a café or a retailspace feel to it. Authentic café or a shopping/retail sense is expected to induce the retail bankingcustomer perceive the banking service more favorably, and in a less business-like manner. Onceagain we find the state of affairs in the Singaporean retail banking customers‘ perception andexperience of branded servicescape very amenable to C.S. Peirce‘s Triadic Semiosis model(Figure 2). Here also customers are found to be comparing and contrasting the servicescape andits branded artifacts (icon) to something that they know (such as Starbucks Coffee) (icon). Andthen there is the symbolic (symbols) interpretation of it: fun, hedonism etc.Conclusion and Discussions

That servicescape can be utilized strategically in order to convey the right brand and corporateimage to the service customers, and harnessed as a source of competitive advantage, is an issuethat is equally recognized in developed as well as developing economies. The degree ofinvestments and thoughts that went in servicescape design of retail banking is a testament to that.Our study reveals that there appears to be a directional difference in the way servicescape designis evolving in developing countries in contrast to the developed countries. Our cross nationalcomparative study of servicescape design of retail banking in Bangladesh and Singapore clearlydelineates that.While in developed countries well designed servicescape and well planned service atmosphericsare standard essentials for the retail banks, this is not so for the developing country. Considerablevalue addition in terms of customer loyalty, attention and inspiration as well as experiential valuecan still be generated through well designed servicescapes. In this case global design andinternational design is clearly connoted to high quality and advanced service qualities by the retailbanking consumers (as evinced in the Bangladesh case). In Singapore there is an attempt to makethe servicescape different by ―localization‖ or bringing in elements from other strands ofconsumer interest and activities (such as retail and café). Whilst in Bangladesh sharpening theglobal image in terms of designing and arranging all the elements of the servicescape (such asatmospherics, employees and their uniforms, décor and branding) seems to contribute to thepower, prestige and ability of the bank.The cultural issue and traditional history of the service sector in question (that is how evolved theparticular sector is in a given country) is certainly areas that contribute to the servicescapeperception of customers. In future further research on culture, semiosis and historical dimensionof the service sector in question may result in valuable insights on servicescape literature asservicescape studies gain more and more credence in the canon of Services Marketing discipline.ReferencesAhmed, A. (2011). Potential for Progress Opportunities for Economic Growth in BangladeshHarvard International Review Fall 28-31.Anon (2011). Bangladesh Country Report. New York Political Risk Services 52.

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