Sales and Merchandising Commons^™

Disambiguating The Role Of Ambiguity In Perceptual Assimilation And Contrast Effects, Michelle P. Lee, Kwanho Suk

Research Collection Lee Kong Chian School Of Business

We examine how perceptions of a product are affected by the presence of extreme exemplars and find that ambiguity of the product is an important moderator. When the target is a novel one, perceptions assimilate to the context, whereas when it is highly familiar, perceptions are immune to the influence of context. This is as predicted by the interpretation-comparison model. Contrary to this model, however, we find that effects on perceptions are not always assimilative in nature. When product ambiguity falls between the extremes of novel and highly familiar, a contrast effect in perception can occur. This is consistent with …

Don't Be Undersold!, Jan-Benedict E.M. Steenkamp, Nirmalya Kumar

Research Collection Lee Kong Chian School Of Business

"Aldi" is a word that strikes fear in the hearts of brand managers across Europe. A chain of low-budget retail stores with sales of $73.5 billion in 2008, Aldi invented what is commonly referred to as the hard-discount store, a format that is destroying between a quarter and a half trillion dollars in brand sales annually.Brand executives at major consumer packaged goods companies have mostly been caught off guard by this success, The authors' research identified four key misconceptions that explain why: (1) Hard discounters can succeed only in Europe; (2) they attract only the poor; (3) they offer inferior …

Opportunity Cost Neglect, Shane Frederick, Nathan Novemsky, Jing (Jane) Wang, Ravi Dhar, Stephen Nowlis

Research Collection Lee Kong Chian School Of Business

To properly consider the opportunity costs of a purchase, consumers must actively generate the alternatives that it would displace. The current research suggests that consumers often fail to do so. Even under conditions promoting cognitive effort, various cues to consider opportunity costs reduce purchase rates and increase the choice share of more affordable options. Sensitivity to such cues varies with chronic dispositional differences in spending attitudes. We discuss the implications of these results for the marketing strategies of economy and premium brands.

Retaining Customers With Shopping Convenience, Sabine Moeller, Martin Fassnacht, Andreas Ettinger

Research Collection Lee Kong Chian School Of Business

Our empirical research investigates the impact of dimensions of shopping convenience (decision, access, search, transaction, and after-sales convenience) on customer retention, including customer behavioral loyalty (shares of wallet and visits) and attitudinal loyalty (exit intention). Our findings show that for utilitarian shopping, behavioral and attitudinal loyalty are partly affected by different dimensions. Decision and access convenience, dimensions that come into play prior to the purchase, are most important for share of visits and share of wallet. Apart from decision convenience, exit intention is very much affected by transaction convenience, which is an in-store dimension. Furthermore, comparing our results with results …

Differential Reliance On Feelings In The Present Vs. The Future (Or Past): Affect As A Decision Making System Of The Present, Hanwen Hannah Chang, Michel Tuan Pham

Research Collection Lee Kong Chian School Of Business

We posit that compared to the cognitive system, the affective system of judgment and decision making is relatively more engaged in the present. Specifically, we hypothesize that even if their accessibility is held constant, affective feelings are weighted more heavily in consumer judgments and decisions set in the present than in equivalent judgments and decisions set in the future or in the past. Consistent with this proposition, results from six experiments show that (a) compared to a more distant future, a nearer future increases consumers’ relative preferences for options that are superior in terms of integral affect over options that …

Seeking Emotion Enhancement Or Uncertainty Resolution? A Dual-System Approach To Examining Post-Purchase Information Search, Hanwen Hannah Chang, Cecile Cho, Leonard Lee

Research Collection Lee Kong Chian School Of Business

Product information search is typically assumed to follow the recognition of a purchase need and to occur before decision making. Once a sale transaction is completed, searching for information (e.g. price) on the purchased product seems futile and even irrational. Real-life observation and prior research (e.g. Russo and Leclerc 1994), however, suggest that such post-purchase search behavior is pervasive among consumers despite having no apparent consequence.

Who I Am And How I Think: The Impact Of Self-Construal On The Roles Of Internal And External Reference Prices In Price Evaluations, Yi, Cathy Chen

Research Collection Lee Kong Chian School Of Business

Drawing from self-construal studies on cognitive styles as well as reference price literature, this research investigates the impact of independent versus interdependent self-construal on consumers' use of internal reference prices (IRPs) and external reference prices (ERPs) during price evaluations. Three experiments reveal that IRPs have a larger impact on price evaluations for participants who are primed with an independent (vs. interdependent) self-construal, whereas ERPs have a larger impact for participants who are primed with an interdependent (vs. independent) self-construal. The differential impact of self-construal on the use of IRPs and ERPs seems to be mediated by a generalized, perceived sense …

Defensive Relationship Marketing: Avoiding Decreasing Sales From Customers In Consumer Goods Mass Markets, Sabine Moeller, Martin Fassnacht, Sonja Klose

Research Collection Lee Kong Chian School Of Business

Enhancing customers' positive attitude towards a company does not exploit the whole potential of what can be done to increase sales. A more defensive approach focuses on the avoidance of customers' negative attitudes and behavior of withdrawal. Since research on this approach is scarce we aim to contribute by developing a model of how retailers can avoid decreasing sales in consumer goods mass markets. According to our aim we focus on customers who have already begun to decrease their sales. Our results show that core performance and trust in the future performance are the silver bullets to avoid decreasing sales.

Customer Integration: A Key To An Implementation Perspective Of Service Provision, Sabine Moeller

Research Collection Lee Kong Chian School Of Business

A paradigm shift in marketing seems to be underway. Inspired by Vargo and Lusch's (2004a) proposal of service dominant logic, customer integration is proposed as a key component of marketing. Three stages of service provision are identified: facilities, transformation. and usage. The stages differ in terms of resource origin (company or customer), autonomy of decision-making (integrative or autonomous), and value (potential value, value-in-transformation. and value-in-use). These perspectives, which are synthesized in the study framework, shed light on the process of service provision and direct or indirect knowledge application (Vargo and Lusch 2004a). The author aims to show that in the …

Become A Value Merchant, James Anderson, Nirmalya Kumar, James A. Narus

Research Collection Lee Kong Chian School Of Business

Increasingly held accountable for reducing costs, purchasing and other customer managers don't have the luxury of simply believing suppliers' claims of cost savings. A relatively easy and quick way to obtain savings is for purchasing managers to focus on price and obtain price concessions from suppliers. To enhance their negotiating power, purchasing managers attempt to convince suppliers that their offerings are the same as their competitors, so that they could be easily replaced. In the face of such pressure, suppliers cave in and match competitor prices. Doing business based on demonstrating and documenting superior value is, indeed, a rare commodity. …

Certified Value Sellers, James Anderson, Nirmalya Kumar, James A. Narus

Research Collection Lee Kong Chian School Of Business

Some companies think that offering deep discounts to buyers is the only way to sell their products in business markets. The authors propose a better way.

Business Market Value Merchants, James Anderson, Nirmalya Kumar, James A. Narus

Research Collection Lee Kong Chian School Of Business

To get a fair return on the superior value that their offerings deliver to customers, progressive B-to-B companies transform their sales forces from value spendthrifts into value merchants. These companies foster value merchants in more ways than simply compensating salespeople on profitability. As a result, their salespeople become value merchants, making business with customers more profitable by finding value drains and value leaks--rather than by seeking price cuts to retain or gain business.

A Trust-Based Consumer Decision-Making Model In Electronic Commerce: The Role Of Trust, Perceived Risk, And Their Antecedents, Dan J. Kim, Donald L. Ferrin, H. Raghav Rao

Research Collection Lee Kong Chian School Of Business

Are trust and risk important in consumers' electronic commerce purchasing decisions? What are the antecedents of trust and risk in this context? How do trust and risk affect an Internet consumer's purchasing decision? To answer these questions, we i) develop a theoretical framework describing the trust-based decision-making process a consumer uses when making a purchase from a given site, ii) test the proposed model using a Structural Equation Modeling technique on Internet consumer purchasing behavior data collected via a Web survey, and iii) consider the implications of the model. The results of the study show that Internet consumers' trust and …

Nation Equity: Incidental Emotions In Country-Of-Origin Effects, Durairaj Maheswaran, Cathy Yi Chen

Research Collection Lee Kong Chian School Of Business

Different from past research on country-of-origin effects that has focused on cognitive factors, this article examines the impact of incidental emotions and cognitive appraisals associated with these emotions on country-of-origin effects. Experiment 1 compared anger and sadness and demonstrated that country of origin influenced evaluations only in the angry (vs. sad) condition where human (vs. situation) control was high. Experiment 2 further identified the effects of agency control using a different emotion, frustration. Based on these observations, this article suggests that, like brands, countries also have equity associated with them, termed nation equity, that has both performance and emotional components. …

Fashion Sense, Nirmalya Kumar, Sophie Linguri

Research Collection Lee Kong Chian School Of Business

The article focuses on Zara store, which was opened in La Coruña, in Northwest Spain. The stores of Zara had a selling area of 811,100 square meters in 56 countries. Zara had become the best-known fashion brand in Spain and the flagship brand of 5.7 billion euros holding group Inditex, with sales of 3.8 billion euros in the financial year 2004. Among the keys to the success of Zara is its approach to the supply chain. Half of the garments of Zara is sourced around from third parties in low-cost manufacturing locations, including Asia. Basic collection items or wardrobe "staples," …

The Impact Of Certain And Uncertain Store Promotions On The Decision-Making Process In Product Choices, Cathy Yi Chen

Research Collection Lee Kong Chian School Of Business

Various store promotions ranging from dollar-off discounts to sweepstakes can induce different affects among consumers. Built on recent studies on the uncertainty of incidental affect, this research examines how promotions differ in the feeling of uncertainty elicited, which, in turn, influence the decision-making process of product choices. Specifically, we demonstrate that “uncertain” promotions (e.g., sweepstakes) can increase the extent of systematic decision-making in a subsequent product choice relative to “certain” promotions (e.g., discount) when the choice is easy. But the pattern is reversed when the choice is difficult. The implications to the incidental affect and promotion research are discussed.

The Relationship Among Export Assistance, Pricing Strategy Adaptation To The Foreign Market, And Performance Improvement, Luis Filipe Lages, David B. Montgomery

Research Collection Lee Kong Chian School Of Business

The increasing amount of export assistance provided to firms of rich and poor countries shows the high priority given by national and international policy makers to the encouragement of international trade. Despite this, relatively few international marketing researchers have discussed the effectiveness of such export assistance. This exploratory study provides an empirical foundation for simultaneously analyzing the effects of export assistance on the decision to adapt or standardize the domestic pricing strategy to the main foreign market and ultimately improve a firm’s short-term export performance. Surprisingly, the findings reveal that the total effects of export assistance on short-term export performance …

The Effects Of Customer Personality Traits On The Display Of Positive Emotions, Hwee Hoon Tan, Maw Der Foo, Min Hui Kwek

Research Collection Lee Kong Chian School Of Business

Evidence is presented that customers shape their own service experiences through their traits and through the display of positive emotions by service providers. It is proposed that customer personality traits play a role in service experience, since customer scan affect service delivery process and outcomes. It is theorized that both the service provider and the customer affect each service interaction. It is asserted that brief encounters can affect outcomes meaningful to service organizations. The relationship for both customer traits that promote the display of positive emotions and those that inhibit these displays are explored. The trait of agreeableness in customers …

Metaheuristics With Local Search Techniques For Retail Shelf-Space Optimization, Andrew Lim, Brian Rodrigues, Xingwen Zhang

Research Collection Lee Kong Chian School Of Business

Efficient shelf-space allocation can provide retailers with a competitive edge. While there has been little study on this subject, there is great interest in improving product allocation in the retail industry. This paper examines a practicable linear allocation model for optimizing shelf-space allocation. It extends the model to address other requirements such as product groupings and nonlinear profit functions. Besides providing a network flow solution, we put forward a strategy that combines a strong local search with a metaheuristic approach to space allocation. This strategy is flexible and efficient, as it can address both linear and nonlinear problems of realistic …

Procedural Priming Effects On Spontaneous Inference Formation, Kirmani Amma, Michelle P. Lee, Carolyn Yoon

Research Collection Lee Kong Chian School Of Business

Procedural priming refers to how the frequent or recent use of certain cognitive procedures on one task can lead to a greater propensity to use the same procedures on a subsequent task. In this paper, we demonstrate how procedural priming may be used to assess spontaneous inference formation in situations where the inference involves a relationship or rule. We do so in the context of the advertising cost–product quality rule, i.e., that higher advertising expense implies higher product quality. Prior research suggests that underlying the advertising cost–quality rule is a basic human attribution (the effort investment rule) that says, if …

An Investigation Of Consumer Online Trust And Purchase-Repurchase Intentions, Dan J. Kim, Donald Ferrin, Raghav Rao

Research Collection Lee Kong Chian School Of Business

There is little research on trust and satisfaction in the electronic commerce from a longitudinal (pre- and postpurchase) perspective. Based on previous frameworks and theories, this study developed a combined model of consumer trust and satisfaction in the context of Internet shopping. From the valance framework and expectation-confirmation theory, several prepurchase and post-purchase factors such as risk, benefit, consumer trust, expectation, confirmation, and satisfaction are investigated as research variables affecting consumer repurchase intention.

The results of the study show that trust is the strongest predictor of the consumer’s purchase intention. In addition, as in traditional consumer satisfaction studies, it holds …

Modularity And The Product Lifecycle, Peter Cebon, Oscar Hauptman, Chander Shekhar

Research Collection Lee Kong Chian School Of Business

Product lifecycle theory, which underlies theories of technical innovation in economics, strategy, marketing, and operations management, is based implicitly on the assumption that products are integrated wholes. The modularization of products undermines the specific synergies which drive the product lifecycle, and this undermining has impacts spanning from the structure of individual organizations to the structure of economies and the definition of industries.

Reading The Voice Of The Customer: A Content Analysis Of Consumer Reviews, Seshan Ramaswami, Susheela Abraham Varghese

Research Collection Lee Kong Chian School Of Business

Online consumer reviews are an increasingly prominent source of interpersonal influence on consumer preferences. We discuss similarities and differences between these reviews and conventional word-of- mouth sources. A content analysis of 180 online consumer reviews reveals important insights for both academics and managers into the consumer search and influence processes.

Investigating The Effects Of Store-Brand Introduction On Retailer Demand And Pricing Behavior, Pradeep K. Chintagunta, Andre Bonfrer, Inseong Song

Research Collection Lee Kong Chian School Of Business

The effects of the introduction of a store-brand into a particular product category are studied. The paper focuses on the effect of store-brand introduction on the demand as well as on the supply side. On the demand side, the changes in preferences for the national brands and price elasticities in the category are investigated. On the supply side, the effects of the new entrant on the interactions between the national brand manufacturers and the retailer introducing the store brand are studied, including how these interactions influence the retailer's pricing behavior. In doing so, it is possible to test whether the …

Barriers To The Advancement Of Modern Food Retail Formats: Theory And Measurement, Arieh Goldman, Seshan Ramaswami, Robert E. Krider

Research Collection Lee Kong Chian School Of Business

The recent expansion of global food retailers into emerging economies has made the study of food retail modernization especially relevant at this time. We present a framework to analyze limitations to market share growth of retail formats based on diffusion across consumer segments and by product category. We then propose a measurement approach, based on consumer surveys, that quantifies the impact of these processes on supermarket market share. Food retail modernization is then examined in Hong Kong by this approach for two points in time. In a 1995 diagnostic study, we find that geographic and economic segment diffusion of supermarkets …

The Persistent Competitive Advantage Of Traditional Food Retailers In Asia: Wet Markets' Continued Dominance In Hong Kong, Arieh Goldman, Robert E. Krider, Seshan Ramaswami

Research Collection Lee Kong Chian School Of Business

The focus of this article is the persistent continued strength of wet markets in Hong Kong and the weakness of supermarkets in the fresh food area. This phenomenon is surprising because, based on the experiences in North America and Western Europe and given the well-developed economy of Hong Kong, one would have expected supermarkets to dominate fresh food retailing and wet markets to be in retreat. In this article, the authors explain the reasons for the continued dominance of wet markets. They argue that consumers’shopping and consumption culture, the effectiveness of wet markets in handling consumers’needs, and the appropriateness of …

Contextual Effects On The Revision Of Evaluative Judgements: An Extension Of The Omission Detection Framework, A. V. Muthukrishnan, Seshan Ramaswami

Research Collection Lee Kong Chian School Of Business

When consumers are presented with negative information about a brand that they have evaluated positively earlier, the extent to which they change their initial evaluation may depend on the formats in which information is presented (non-comparative vs. comparative) at the two stages. In four experiments, we manipulate the format in which information is presented at an initial and at a challenge stage and investigate their effects on the degree of revision in evaluative judgments. The results of the four experiments suggest that when consumers receive initial information in a noncomparative format, a comparative challenge causes a greater degree of revision …

Brand Extensions In A Competitive Context: Effects Of Competitive Targets And Product Attribute Typicality On Perceived Quality, Jin K. Han

Research Collection Lee Kong Chian School Of Business

Brand extensions have proliferated over the past decade, and the rationale behind endowing a new product with a well-known brand name is to provide consumers--and the trade--with a sense of familiarity and security by leveraging positive brand characteristics in a new product category. Although brand extensions have become a standard strategy for new product introductions in today's fiercely competitive marketplace, the extant literature has examined brand extensions as if they occur in a competitive vacuum. This study attempts to fill this void by examining brand extensions in a competitive context. Specifically, brand-extension strategy in a competitive context includes two key …

The Revolution In Retailing: Introduction To The Special Issue, Nirmalya Kumar

Research Collection Lee Kong Chian School Of Business

No abstract provided.

The Revolution In Retailing: From Market Driven To Market Driving, Nirmalya Kumar

Research Collection Lee Kong Chian School Of Business

The first image aroused by 'retailing' for many of us, especially those of us who are somewhat older, is that of the corner grocery store. Not so long agb retailing was, and it still is in some parts of the world, a fragmented, local, unsophisticated, traditional business run by vulnerable owner-operators. Yet, here we are talking about a revolution in retailing. Why? What has changed? Fundamentally retailers have grown up over the past 25 years into large, global, technology-intensive, powerful, fast-growth corporations managing their own brands. Several retailers have become the darlings of their stock markets. Hennes and Mauritz, the …