Faced with demand uncertainty and heterogeneity in a nascent industry, entrants often consider which customer segments to serve by tailoring the usage breadth and coherence of their product portfolios. Portfolio usage breadth is the extent to which products in a portfolio collectively span distinct customer segments, whereas portfolio coherence is the extent to which targeted customer segments of products in a portfolio overlap with each other’s customer segments. We suggest that when entrants have prior use experience in contexts that are potential users of the new product, their portfolios exhibit low usage breadth and high coherence, due to demand-oriented cognition and knowledge. The relationship is moderated by whether they are startups or diversifying entrants. The empirical context is the U.S. commercial drone industry.
{"title":"Zooming In or Zooming Out: Entrants' Product Portfolios in the Nascent Drone Industry","authors":"Anavir Shermon, Mahka Moeen","doi":"10.2139/ssrn.3720370","DOIUrl":"https://doi.org/10.2139/ssrn.3720370","url":null,"abstract":"Faced with demand uncertainty and heterogeneity in a nascent industry, entrants often consider which customer segments to serve by tailoring the usage breadth and coherence of their product portfolios. Portfolio usage breadth is the extent to which products in a portfolio collectively span distinct customer segments, whereas portfolio coherence is the extent to which targeted customer segments of products in a portfolio overlap with each other’s customer segments. We suggest that when entrants have prior use experience in contexts that are potential users of the new product, their portfolios exhibit low usage breadth and high coherence, due to demand-oriented cognition and knowledge. The relationship is moderated by whether they are startups or diversifying entrants. The empirical context is the U.S. commercial drone industry.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121322453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pricing in a complex environment is difficult for individual sellers. Whereas the platform tries to aid seller pricing, its different objectives might steer seller behavior towards the platform’s goal. This paper empirically studies pricing frictions on Airbnb and explores the equilibrium consequence of different platform designs. I first show that pricing frictions are prevalent. Then, leveraging natural variation in the platform’s interface design, I demonstrate that sellers’ price-setting costs and cognitive constraints are plausible drivers of the frictions. I then estimate a structural equilibrium model and find that pricing frictions lead to a 14% consumer welfare loss and a 0–15% seller-profit loss. Finally, I ask: How to ameliorate these frictions? The platform’s revenue-maximizing algorithm does not lead to market-clearing prices because it fails to internalize sellers’ high opportunity costs of time. However, a simple platform design, where the platform sets price variation but gives sellers the final decision right to determine the price levels, will eliminate almost all frictions.
{"title":"Pricing Frictions and Platform Remedies: The Case of Airbnb","authors":"Yufeng Huang","doi":"10.2139/ssrn.3767103","DOIUrl":"https://doi.org/10.2139/ssrn.3767103","url":null,"abstract":"Pricing in a complex environment is difficult for individual sellers. Whereas the platform tries to aid seller pricing, its different objectives might steer seller behavior towards the platform’s goal. This paper empirically studies pricing frictions on Airbnb and explores the equilibrium consequence of different platform designs. I first show that pricing frictions are prevalent. Then, leveraging natural variation in the platform’s interface design, I demonstrate that sellers’ price-setting costs and cognitive constraints are plausible drivers of the frictions. I then estimate a structural equilibrium model and find that pricing frictions lead to a 14% consumer welfare loss and a 0–15% seller-profit loss. Finally, I ask: How to ameliorate these frictions? The platform’s revenue-maximizing algorithm does not lead to market-clearing prices because it fails to internalize sellers’ high opportunity costs of time. However, a simple platform design, where the platform sets price variation but gives sellers the final decision right to determine the price levels, will eliminate almost all frictions.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121524585","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Xingyu Chen, Li Ji, Ling Jiang, Sentao Miao, Cong Shi
With the rising of social media, firms seek to contract with key opinion leaders (KOLs) who have strong influence on their social media followers, to promote products of the firms by making videos. This paper studies the problem of how to select KOLs and schedule their advertising campaigns in order to maximize advertising effectiveness. This research augments the existing literature by investigating the distinctive KOL marketing in social media context. For practitioners, this paper provides firms with insights and practical tools for KOL selection and scheduling with varying levels of advertising budget. Based on a dataset from a popular short-video platform in Brazil, this study proposes what we call a multinomial logit model with decaying utility (MNL-DU) to model viewers' choices of consuming the promotion videos. Using this model, we develop a heuristic to solve the selection and scheduling of KOLs' advertising campaigns. Theoretically, we prove that the performance of our proposed heuristic is near-optimal and analyze its asymptotic behavior. Empirically, we estimate this structural model with real data, and further obtain several important empirical results derived from the heuristic, which provide managerial insights for practitioners. According to our empirical results, popular KOLs (who have a larger number of video views but a higher cost to contract with) have significant influence on the viewers. However, we find that only contracting with them will lead to significant loss in revenue even with relatively large budget. Our results suggest that a number of alternative factors are crucial in selecting who to contract with, such as whether the KOL has unique styles, how positive the KOL is rated, and how active the KOL is. These factors also affect the scheduling of the selected KOLs.
{"title":"More Bang for Your Buck: Effective Kol Marketing Campaign in Emerging Short-Video Markets","authors":"Xingyu Chen, Li Ji, Ling Jiang, Sentao Miao, Cong Shi","doi":"10.2139/ssrn.3655819","DOIUrl":"https://doi.org/10.2139/ssrn.3655819","url":null,"abstract":"With the rising of social media, firms seek to contract with key opinion leaders (KOLs) who have strong influence on their social media followers, to promote products of the firms by making videos. This paper studies the problem of how to select KOLs and schedule their advertising campaigns in order to maximize advertising effectiveness. This research augments the existing literature by investigating the distinctive KOL marketing in social media context. For practitioners, this paper provides firms with insights and practical tools for KOL selection and scheduling with varying levels of advertising budget. Based on a dataset from a popular short-video platform in Brazil, this study proposes what we call a multinomial logit model with decaying utility (MNL-DU) to model viewers' choices of consuming the promotion videos. Using this model, we develop a heuristic to solve the selection and scheduling of KOLs' advertising campaigns. Theoretically, we prove that the performance of our proposed heuristic is near-optimal and analyze its asymptotic behavior. Empirically, we estimate this structural model with real data, and further obtain several important empirical results derived from the heuristic, which provide managerial insights for practitioners. According to our empirical results, popular KOLs (who have a larger number of video views but a higher cost to contract with) have significant influence on the viewers. However, we find that only contracting with them will lead to significant loss in revenue even with relatively large budget. Our results suggest that a number of alternative factors are crucial in selecting who to contract with, such as whether the KOL has unique styles, how positive the KOL is rated, and how active the KOL is. These factors also affect the scheduling of the selected KOLs.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114346144","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Problem defi nition: Startups are emerging in many industries, and many startups have to compete with an existing fi rm in the market. The most critical decisions for a startup include what product should be developed and how to nance the company. Academic/practical relevance: Although they are interrelated decisions, the joint product development (in terms of product design and pricing) and fi nancing (in terms of internal or external financing) decisions of a startup, especially in the presence of a market incumbent, have not been studied in the prior literature. Methodology: We study the problem using a stylized model under the framework of vertical product differentiation where consumers differ in their willingness-to-pay for quality and market uncertainty exists for the startup product. Results: We fi nd that it is optimal for a startup to pursue pure internal financing, even if external financing is available, when the startup product's market uncertainty is either very small or very large. Otherwise, the startup benefi ts from a combination of internal self- financing and external debt financing, and the optimal debt leverage first increases then decreases with the market uncertainty. We characterize conditions for when the startup should launch a high-end or low-end product relative to the incumbent's. Surprisingly, having fewer (resp., more) financial resources|when external financing is inaccessible (resp., accessible) to the startup|does not always lead to a poorer (resp., better) product offering from the startup. Managerial implications: Our work provides guidance for how a startup should make joint product development and financing decisions in the presence of a market incumbent and shows the impact of the startup's accessibility to external financing on the firms and the consumers.
{"title":"Startup Product Development and Financing Decisions against a Market Incumbent","authors":"Shiliang Cui, Lei Fang, Sai Zhao","doi":"10.2139/ssrn.3601522","DOIUrl":"https://doi.org/10.2139/ssrn.3601522","url":null,"abstract":"Problem defi nition: Startups are emerging in many industries, and many startups have to compete with an existing fi rm in the market. The most critical decisions for a startup include what product should be developed and how to nance the company. Academic/practical relevance: Although they are interrelated decisions, the joint product development (in terms of product design and pricing) and fi nancing (in terms of internal or external financing) decisions of a startup, especially in the presence of a market incumbent, have not been studied in the prior literature. Methodology: We study the problem using a stylized model under the framework of vertical product differentiation where consumers differ in their willingness-to-pay for quality and market uncertainty exists for the startup product. Results: We fi nd that it is optimal for a startup to pursue pure internal financing, even if external financing is available, when the startup product's market uncertainty is either very small or very large. Otherwise, the startup benefi ts from a combination of internal self- financing and external debt financing, and the optimal debt leverage first increases then decreases with the market uncertainty. We characterize conditions for when the startup should launch a high-end or low-end product relative to the incumbent's. Surprisingly, having fewer (resp., more) financial resources|when external financing is inaccessible (resp., accessible) to the startup|does not always lead to a poorer (resp., better) product offering from the startup. Managerial implications: Our work provides guidance for how a startup should make joint product development and financing decisions in the presence of a market incumbent and shows the impact of the startup's accessibility to external financing on the firms and the consumers.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130992361","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-07-30DOI: 10.34218/jom.6.4.2019.003
G. Chaturvedi, Dr Manasranjan Dashmishra, Dr Ajit Upadhyaya
Modern world is facing a virtual crisis with human diseases surpassing the immune system of the body and Allopathic system of medicine finding it hard to keep pace with the changes in the contemporary malignant bacteria. The world is now gradually turning towards nature for the cures rather than the chemical therapy, which according to the masses leads to uninvited side effects. The natural therapy assures of almost no side effects, but the recovery is always gradual albeit permanent.
Ayurveda is a form of alternative medicine that finds its history thousands of years ago in the Indian culture. According to Merriam Webster, Ayurveda can be defined as seeking to treat and integrate body, mind and spirit using a comprehensive approach by emphasizing on diet, herbal remedies, exercise, meditation and breathing therapy. India being the origin place of ‘Ayurveda’ finds its theories in the ancient ‘Vedas’, thus is more than a thousand years old. Fragrance of Ayurveda has been commercialized by certain Indian companies like Dabur, Patanjali and Himalayan etc. These companies like Patanjali and Himalayan find their origin in 1930s in the form of trust for human services.
This research is an empirical study that would analyze major Indian Ayurvedic companies and study the role of Product and Services in case of Ayurveda product sales. The study has been conducted with the primary data collected in the form of a structured questionnaire from various company executives, and statistical tools were applied for the analysis of the data. Multiple linear regression was the major tool applied and the impact of product mix was studied on the sales growth of the Ayurvedic companies.
The results implied positive effect of certain elements of product mix on the sales growth of the Ayurvedic companies, thus concluding major role of product line, service quality and packaging on the increase in the sales aspect.
{"title":"The Influence of Product Mix on Sales Growth of Ayurvedic Products in India","authors":"G. Chaturvedi, Dr Manasranjan Dashmishra, Dr Ajit Upadhyaya","doi":"10.34218/jom.6.4.2019.003","DOIUrl":"https://doi.org/10.34218/jom.6.4.2019.003","url":null,"abstract":"Modern world is facing a virtual crisis with human diseases surpassing the immune system of the body and Allopathic system of medicine finding it hard to keep pace with the changes in the contemporary malignant bacteria. The world is now gradually turning towards nature for the cures rather than the chemical therapy, which according to the masses leads to uninvited side effects. The natural therapy assures of almost no side effects, but the recovery is always gradual albeit permanent.<br><br>Ayurveda is a form of alternative medicine that finds its history thousands of years ago in the Indian culture. According to Merriam Webster, Ayurveda can be defined as seeking to treat and integrate body, mind and spirit using a comprehensive approach by emphasizing on diet, herbal remedies, exercise, meditation and breathing therapy. India being the origin place of ‘Ayurveda’ finds its theories in the ancient ‘Vedas’, thus is more than a thousand years old. Fragrance of Ayurveda has been commercialized by certain Indian companies like Dabur, Patanjali and Himalayan etc. These companies like Patanjali and Himalayan find their origin in 1930s in the form of trust for human services.<br><br>This research is an empirical study that would analyze major Indian Ayurvedic companies and study the role of Product and Services in case of Ayurveda product sales. The study has been conducted with the primary data collected in the form of a structured questionnaire from various company executives, and statistical tools were applied for the analysis of the data. Multiple linear regression was the major tool applied and the impact of product mix was studied on the sales growth of the Ayurvedic companies.<br><br>The results implied positive effect of certain elements of product mix on the sales growth of the Ayurvedic companies, thus concluding major role of product line, service quality and packaging on the increase in the sales aspect.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128032998","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Advancements in information technology is known for enabling new business models and new market mechanisms. Online crowdfunding is one such new mechanism through which entrepreneurs can advertise their potential products and attract investors from the mass. In this study, we advance the existing theory on online crowdfunding markets by recognizing that online crowdfunding provides not only a venue of fundraising to entrepreneurs but also a venue for them to obtain demand information before production and to signal their intention. We formulate a spatial competition model between profit-driven entrepreneurs and product-driven entrepreneurs. We find that, while, on average, profit-driven entrepreneurs earn higher profits than product-driven ones, their advantage is constrained by the mechanism of the crowdfunding campaign, and product-driven entrepreneurs earn a significant fraction of the market. We also discuss model implications on consumer satisfaction and crowdfunding platform design.
{"title":"Product-Driven Entrepreneurs and Online Crowdfunding Campaign","authors":"Lin Hu, Zhenhua Wu, B. Gu","doi":"10.2139/ssrn.3364073","DOIUrl":"https://doi.org/10.2139/ssrn.3364073","url":null,"abstract":"Advancements in information technology is known for enabling new business models and new market mechanisms. Online crowdfunding is one such new mechanism through which entrepreneurs can advertise their potential products and attract investors from the mass. In this study, we advance the existing theory on online crowdfunding markets by recognizing that online crowdfunding provides not only a venue of fundraising to entrepreneurs but also a venue for them to obtain demand information before production and to signal their intention. We formulate a spatial competition model between profit-driven entrepreneurs and product-driven entrepreneurs. We find that, while, on average, profit-driven entrepreneurs earn higher profits than product-driven ones, their advantage is constrained by the mechanism of the crowdfunding campaign, and product-driven entrepreneurs earn a significant fraction of the market. We also discuss model implications on consumer satisfaction and crowdfunding platform design.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120946448","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The BoP is an ideological paradox that has become a compelling and emerging area of research interest representing on one hand the unserved, unreached base of the population billion market and on the other hand a mammoth development conundrum. A preponderant number of studies have established the economic and commercial market potentials of the BoP emphasizing the critical role of multinational companies in addressing the poverty at the base of the pyramid primarily through inclusive capitalism. However, many other studies have equally focused on the humongous development needs of the BoP Segment, with particular reference to the role of state actors and policy instrument in addressing the development and poverty challenges of the BoP. Such studies frowned at the BoP mischaracterization as a compelling viable market rather than a social development project imperative. Consequently, studies conducted on the BoP have strongly reflected the ideological divergence of researchers in terms of their conceptual view of the BoP as a consumer market or a development imperative. The objective of this study is to deconstruct and highlight the critical points of difference between these ideological positions on the BoP and establish an imperative for research focus on more integrated approach that combines both the inclusive capitalism and social development approaches to examining and dealing with the BoP.
{"title":"Imperative for an Integrated Ideological Approach for Addressing the Wealth and Poverty Paradox at the Bottom of the Pyramid in Emerging Economies.","authors":"O. Oladapo","doi":"10.2139/ssrn.3209822","DOIUrl":"https://doi.org/10.2139/ssrn.3209822","url":null,"abstract":"The BoP is an ideological paradox that has become a compelling and emerging area of research interest representing on one hand the unserved, unreached base of the population billion market and on the other hand a mammoth development conundrum. A preponderant number of studies have established the economic and commercial market potentials of the BoP emphasizing the critical role of multinational companies in addressing the poverty at the base of the pyramid primarily through inclusive capitalism. However, many other studies have equally focused on the humongous development needs of the BoP Segment, with particular reference to the role of state actors and policy instrument in addressing the development and poverty challenges of the BoP. Such studies frowned at the BoP mischaracterization as a compelling viable market rather than a social development project imperative. Consequently, studies conducted on the BoP have strongly reflected the ideological divergence of researchers in terms of their conceptual view of the BoP as a consumer market or a development imperative. The objective of this study is to deconstruct and highlight the critical points of difference between these ideological positions on the BoP and establish an imperative for research focus on more integrated approach that combines both the inclusive capitalism and social development approaches to examining and dealing with the BoP.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131588465","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-05-07DOI: 10.30880/JTMB.2018.05.02.007
Jeremy Hoe, Omkar Dastane, Karthik Selvaraj
The objective of this study is to investigate the effects of customer perceived value on customer purchase intention in the residential property market in Malaysia. The research proposes extension of Seth et al., 1991 model for property market by including relational aspect of the value as an added new parameter. Explanatory research design approach is used in this study with primary data collection through questionnaire survey of 172 respondents using convenience sampling method. The collected data and results are then analysed using SPSS 22 for Demographic analysis, Normality and Reliability test, Data Distribution. Finally, Pearson correlation analysis and Regression test is done to find the correlation between any two variables and relationship among the variables. The analysis indicated overall positive significant relationship with epistemic value being the highest among all. Regression analysis indicated functional value, social value, relational value, conditional value, and epistemic value shows positive significant effects on customer purchase intention while emotional value shows positive insignificant effect on customer purchase intention.The research is useful for marketers and researchers to understand perceived value based customer purchase intention for residential property sector among Malaysians and the tested model will be of great utility to property developers to devise appropriate value proposition based on consumer perceived value.
{"title":"Predicting Consumer Perception and Its Impact on Purchase Intention for Residential Property Market","authors":"Jeremy Hoe, Omkar Dastane, Karthik Selvaraj","doi":"10.30880/JTMB.2018.05.02.007","DOIUrl":"https://doi.org/10.30880/JTMB.2018.05.02.007","url":null,"abstract":"The objective of this study is to investigate the effects of customer perceived value on customer purchase intention in the residential property market in Malaysia. The research proposes extension of Seth et al., 1991 model for property market by including relational aspect of the value as an added new parameter. Explanatory research design approach is used in this study with primary data collection through questionnaire survey of 172 respondents using convenience sampling method. The collected data and results are then analysed using SPSS 22 for Demographic analysis, Normality and Reliability test, Data Distribution. Finally, Pearson correlation analysis and Regression test is done to find the correlation between any two variables and relationship among the variables. The analysis indicated overall positive significant relationship with epistemic value being the highest among all. Regression analysis indicated functional value, social value, relational value, conditional value, and epistemic value shows positive significant effects on customer purchase intention while emotional value shows positive insignificant effect on customer purchase intention.The research is useful for marketers and researchers to understand perceived value based customer purchase intention for residential property sector among Malaysians and the tested model will be of great utility to property developers to devise appropriate value proposition based on consumer perceived value.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115202937","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-03-30DOI: 10.26493/1854-6935.16.79-94
Matej Rus, Maja Konečnik Ruzzier, Mitja Ruzzier
Branding seems to be an important issue among all companies, also among newly established and young companies with high growth potential or so-called startups. This was also confirmed in our empirical research, conducted among 195 Slovenian startups. Startup founders/CEOs see branding as the most important business strategy in their companies. Separated startup branding building blocks were evaluated as similarly important, from brand vision and context building blocks to brand development and its implementation. These findings bring important managerial implications not only for startups, but also for other companies that want to treat and maintain their brands as dynamic and evolving entities.
{"title":"Startup Branding: Empirical Evidence Among Slovenian Startups","authors":"Matej Rus, Maja Konečnik Ruzzier, Mitja Ruzzier","doi":"10.26493/1854-6935.16.79-94","DOIUrl":"https://doi.org/10.26493/1854-6935.16.79-94","url":null,"abstract":"Branding seems to be an important issue among all companies, also among newly established and young companies with high growth potential or so-called startups. This was also confirmed in our empirical research, conducted among 195 Slovenian startups. Startup founders/CEOs see branding as the most important business strategy in their companies. Separated startup branding building blocks were evaluated as similarly important, from brand vision and context building blocks to brand development and its implementation. These findings bring important managerial implications not only for startups, but also for other companies that want to treat and maintain their brands as dynamic and evolving entities.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131911782","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we explore the determinants of profitability for coalition loyalty programs. We consider a setting in which each of two firms competing in one market may form a coalition loyalty program with one of two firms in a different market. Firms in the same program jointly set the reward to consumers who buy from both coalition partners, but they set their own prices independently. We find that these programs are profitable for all firms, even when no value is created by the mere existence of rewards (i.e., when firms and consumers value $1 worth of rewards equally). The intuition is that joint loyalty programs allow each participating firm to leverage its partner’s market power and charge higher prices. This result, however, depends crucially on several design elements of the program. First, rewards must be structured so that consumers earn more when they shop broadly across firms in the coalition than when they shop at only a single firm. Second, the reward program manager must be able to take into account the prices of individual firms when setting the value of rewards. Third, firms joining a coalition must be able to negotiate the share of program costs they will carry; firms must be charged according to their value added to the coalition (e.g., firms with greater market power will bear a lower share of program costs) and not taxed as a proportion of their revenues. Our theoretical findings provide insight into the forces underlying coalition loyalty programs in competitive settings and are suggestive of the impact of practical design decisions on program profitability.
{"title":"Coalition Loyalty Program Not Working? Perhaps You’re Doing It Wrong","authors":"Pedro M. Gardete, J. Lattin","doi":"10.2139/ssrn.3137383","DOIUrl":"https://doi.org/10.2139/ssrn.3137383","url":null,"abstract":"In this paper we explore the determinants of profitability for coalition loyalty programs. We consider a setting in which each of two firms competing in one market may form a coalition loyalty program with one of two firms in a different market. Firms in the same program jointly set the reward to consumers who buy from both coalition partners, but they set their own prices independently. We find that these programs are profitable for all firms, even when no value is created by the mere existence of rewards (i.e., when firms and consumers value $1 worth of rewards equally). The intuition is that joint loyalty programs allow each participating firm to leverage its partner’s market power and charge higher prices. This result, however, depends crucially on several design elements of the program. First, rewards must be structured so that consumers earn more when they shop broadly across firms in the coalition than when they shop at only a single firm. Second, the reward program manager must be able to take into account the prices of individual firms when setting the value of rewards. Third, firms joining a coalition must be able to negotiate the share of program costs they will carry; firms must be charged according to their value added to the coalition (e.g., firms with greater market power will bear a lower share of program costs) and not taxed as a proportion of their revenues. Our theoretical findings provide insight into the forces underlying coalition loyalty programs in competitive settings and are suggestive of the impact of practical design decisions on program profitability.","PeriodicalId":344620,"journal":{"name":"Entrepreneurship & Marketing eJournal","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121891506","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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