A bounded rationality model of information search and choice in preference measurement


Journal of Marketing Research

avril 2015, vol. 52, n°2, pp.166-183

Départements : Marketing

Mots clés : Eye tracking, Preference measurement, Dynamic discrete choice models

It is becoming increasingly easier for researchers and practitioners to collect eye-tracking data during online preference measurement tasks. The authors develop a dynamic discrete choice model of information search and choice under bounded rationality, which they calibrate using a combination of eye-tracking and choice data. Their model extends Gabaix et al.'s (2006) directed cognition model by capturing fatigue, proximity effects, and imperfect memory encoding and by estimating individual-level parameters and partworths within a likelihood-based hierarchical Bayesian framework. The authors show that modeling eye movements as the outcome of forward-looking utility maximization improves out-of-sample predictions, enables researchers and practitioners to use shorter questionnaires, and allows better discrimination between attributes

Attribute-Level Heterogeneity


Management Science

avril 2015, vol. 61, n°4, pp.885-897

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Heterogeneity, Mixture models, Hierarchical Bayes, Conjoint analysis, Reversible-jump MCMC, Segmentation

Modeling consumer heterogeneity helps practitioners understand market structures and devise effective marketing strategies. In this research we study finite mixture specifications for modeling consumer heterogeneity where each regression coefficient has its own finite mixture—that is, an attribute finite mixture model. An important challenge of such an approach to modeling heterogeneity lies in its estimation. A proposed Bayesian estimation approach, based on recent advances in reversible-jump Markov chain Monte Carlo methods, can estimate parameters for the attribute-based finite mixture model, assuming that the number of components for each finite mixture is a discrete random variable. An attribute specification has several advantages over traditional, vector-based, finite mixture specifications; specifically, the attribute mixture model offers a more appropriate aggregation of information than does the vector specification facilitating estimation. In an extensive simulation study and an empirical application, we show that the attribute model can recover complex heterogeneity structures, making it dominant over traditional (vector) finite mixture regression models and a strong contender compared to mixture-of-normals models for modeling heterogeneity

Behavioral Reasons for New Product Failure: Does Overconfidence Induce Overforecasts?


Journal of Product Innovation Management

septembre 2015, vol. 32, n°5, pp.825-841

Départements : Marketing

Efforts to organize and integrate research findings on new product performance determinants have lagged since the last significant overview paper appeared over a decade ago. Importantly, this literature has not considered entire categories of factors that are known to affect managerial decisions and behavior, namely those that pertain to decision-makers' cognitive limitations and incentive structures. This research empirically investigates one specific cognitive distortion heretofore neglected in studies of new product commercialization—overconfidence, commonly defined in the literature as excessive belief in one's own abilities to generate superior performance. To lay the groundwork for subsequent exploration, the paper first introduces a behavioral model that both organizes well-understood new product performance determinants and illuminates others heretofore not studied, namely incentive alignment and cognitive limitations and biases. The model summarizes extant research and allows development of research hypotheses related to overconfidence. The hypotheses and empirical investigation motivated by the model address two questions about the impact of overconfidence on new product commercialization activities. First, the study explores whether overconfidence is associated with overforecasting new product demand. Second, it evaluates two complementary mechanisms that may account for overconfidence-induced overforecasts. The empirical findings are based on data generated in the course of management simulation workshops conducted among graduate students at three leading business schools in India. Three hundred thirty participants played individually four rounds of a computer-based simulation game that involved decisions pertaining to new product development (including product formulation) and commercialization strategies. The decisions were captured and analyzed using statistical techniques. The results reveal that decision-makers' overconfidence is associated with a higher likelihood of overforecasting new product sales. The observed effect is fully mediated by flawed tactical decisions that dampen demand, namely elevated product pricing. Sensitivity analyses show that these results are robust to a number of alternative explanations. However, the study finds no evidence implicating overconfident individuals as poor “innovators”—overconfident and nonoverconfident decision-makers experienced comparable market demand for their new products. The paper concludes with a discussion of the results and provides specific recommendations for practice

Communicating product size using sound and shape symbolism


Journal of Product and Brand Management

2015, vol. 24, n°5, pp.472-480

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Brand name, Children, Brand meaning

Purpose– The purpose of this paper is to investigate children’s perception of a product’s physical attribute (size) when presented with brand elements (brand name and brand logo) manipulated using sound and shape symbolism principles (brand name sounds and brand logo shape), across children of different developmental ages.Design/methodology/approach– The relationship between sounds and shapes was examined in a pilot study. A 2 × 2 experiment was then undertaken to examine the effect of brand name characteristics (front vowel sound versus back vowel sound) and brand logo design (angular versus curved) on children’s (from 5 to 12 years) product-related judgments.Findings– Older children use non-semantic brand stimuli as a means to infer physical product attributes. Specifically, only older children are able to perceive a product to be smaller (larger) when the product is paired with a brand name containing a front (back) vowel sound or an angular (curved) brand logo (single symbolic cue). We illustrate that brand logo-related shape symbolism effects are weaker and appear later in age when compared with brand name-related sound symbolism effects. Further, younger children are able to infer product attribute meaning when exposed to two symbolic cues (that is, brand name and brand logo).Practical implications– When selecting an inventive brand element, consideration should be given to the relationship between the vowel sounds contained in a brand’s name and product attributes, and also the shape of the brand’s logo and product attributes.Originality/value– This is the first experiment undertaken to examine the combination of brand name- and brand logo-related symbolism effects in the context of children. We demonstrate that age-based bounds may be overcome through the provision of multiple symbolic cues

Identity-Based Motivations and Anticipated Reckoning: Contributions to Gift-Giving Theory from an Identity-Stripping Context


Journal of Consumer Psychology

juillet 2015, vol. 25, n°3, pp.431-448

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Identity-Based Motivation, Gift giving, Personal identity, Social identity

We utilize the Identity-Based Motivation (IBM) model to examine gift giving within the identity-stripping context of Nazi concentration camps, as reported in the memoirs of Holocaust survivors. By exploring gift giving in this crisis-laden context, we demonstrate the fundamental role gifts can play in reestablishing personal and social identities. In doing so, we provide insights into the motivations for giving that go beyond the existing paradigms that emphasize social exchange, economic exchange, or agapic giving. Further, we introduce the construct of anticipated reckoning, in which people self-regulate their behavior through an imagined future self whom they perceive to judge their current actions

Reaching the Rich World's Poorest Consumers


Harvard Business Review

mars 2015, vol. 93, n°3, pp.46-53

Départements : Marketing, Stratégie et Politique d’Entreprise

Remanufactured Products in Closed-Loop Supply Chains for Consumer Goods


Production and Operations Management

mars 2015, vol. 24, n°3, pp.488-503

Départements : Marketing

Mots clés : Closed-Loop Supply Chains;Sustainability;Remanufacturing;Consumer Products

This work empirically investigates consumer perceptions of remanufactured consumer products in closed-loop supply chains. A multi-study approach led to increasing levels of measure refinement and facilitated examination of various assumptions researchers have made about the consumer market for remanufactured products. Based in part on the measure building studies, an experimental study examined remanufactured product perceptions from a national panel of consumers. The consumers responded to remanufactured product descriptions that manipulated price discount and brand equity. The results indicate that discounting had a consistently positive, linear effect on remanufactured product attractiveness. Curiously, the brand equity manipulation proved less important to consumers than specific remanufactured product quality perceptions. The results also show that green consumers and consumers who consider remanufactured products green typically found remanufactured products significantly more attractive. Finally, the findings introduce the concept of negative attribute perceptions, such as disgust, that had a significantly detrimental effect on remanufactured product attractiveness

Social Control in Online Communities of Consumption: A Framework for Community Management


Psychology and Marketing

mars 2015, vol. 32, n°3, pp.250-264

Départements : Marketing, GREGHEC (CNRS)

Online communities of consumption (OCCs) represent highly diverse groups of consumers whose interests are not always aligned. Social control in OCCs aims to effectively manage problems arising from this heterogeneity. Extant literature on social control in OCCs is fragmented as some studies focus on the principles of social control, while others focus on the implementation. Moreover, the domain is undertheorized. This article integrates the disparate literature on social control in OCCs providing a first unified conceptualization of the topic. The authors conceptualize social control as a system, or configuration, of moderation practices. Moderation practices are executed during interactions operating under different governance structures (market, hierarchy, and clan) and serving different purposes (interaction initiation, maintenance, and termination). From this conceptualization, important areas of future research emerge and research questions are developed. The framework also serves as a community management tool for OCC managers, enabling the diagnosis of social control problems and the elaboration of strategies and tactics to address them

Suppliers caught in supermarket price wars: Victims or victors? Insights from a Dutch Price War


Journal of Marketing Research

décembre 2015, vol. 52, n°6, pp. 784-800

Départements : Marketing

Mots clés : Retailing, Price wars, Retailer–supplier relationships, Consumer packaged goods

During retailer-initiated price wars (PWs), hundreds of brands are involved simultaneously, affecting brands’ and retailers’ positioning and ultimately making the performance outcome for individual brands difficult to predict. Likewise, the impact on brand performance after the PW, when prices are restored, is unclear. The authors use a natural-experiment approach to track brand sales and shares before, during, and after a long-lasting supermarket PW in the Dutch grocery market. They find that PWs are not truly revenue, sales, or share generators for most brands unless prices remain reduced permanently by the retailer. Only after the PW, when rivals’ prices are restored and the focal brand’s reduced retail price is maintained, can substantial sales, revenues, and share gains be realized. Moreover, restoring prices without additional price promotion support can severely damage brands’ performance. Overall, national brands can gain share, sales, and revenue, but at the cost of not restoring regular prices, while private labels can benefit even when prices are restored after the PW ends

The Chief Marketing Officer Matters!


Journal of Marketing

mai 2015, vol. 79, n°3, pp.1-22

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Chief marketing officer performance implications, Marketing–finance interface, Panel data, Endogeneity, Instrumental variable

Marketing academics and practitioners alike remain unconvinced about the Chief Marketing Officer's (CMO's) performance implications. While some propose that firms benefit financially from having a CMO in the C-Suite, others conclude that the CMO has little or no effect on firm performance. Accordingly, strong calls for additional academic research regarding the CMO's performance implications exist. In response to these calls, we employ model specifications with varying identifying assumptions (i.e., rich data models, unobserved effects models, instrumental variable models, and panel internal instruments models) and use data from up to 155 publically traded firms over a 12 year period (i.e., 2000 – 2011) to find that firms can indeed expect to benefit financially from having a CMO at the strategy table. Specifically, our findings suggest that the performance (measured in terms of Tobin's q) of the sample firms that employ a CMO is, on average, about 15% greater than that of the sample firms that do not employ a CMO. This result appears to be quite robust to the type of model specification used. Marketing academics and practitioners should find our results intriguing given the existing uncertainty surrounding the CMO's performance implications. We also contribute to the methodology literature by collating diverse empirical model specifications, which can be used to model causal effects with observational data, into a coherent and comprehensive framework