Cleo Schmitt Silveira, Marta Olivia Rovedder de Oliveira, Rodrigo Heldt and Fernando Bins Luce
Managers face the challenge of balancing resources needed to support value creation and value appropriation. In this study the authors analyze the impacts of innovation…
Abstract
Purpose
Managers face the challenge of balancing resources needed to support value creation and value appropriation. In this study the authors analyze the impacts of innovation investments (i.e. value creation: VC) on advertising expenditures (i.e. value appropriation: VA), and vice versa, and verify the effects of these options on short- and long-term performance.
Design/methodology/approach
The effects of these two activities on short- and long-term performance were analyzed observing a panel of 4,090 companies of Standard and Poor's Compustat database from a 40-year period. The authors adopted the panel vector autoregressive (VAR) approach, using the generalized method of moments (GMM).
Findings
Although there is a trade-off between the strategic emphases on creating and appropriating value, there is also a synergy between them. The results from the impulse response functions support the argument for a virtuous business circle: companies that choose to intensify their investments in R&D tend to increase advertising expenditures, and vice versa.
Practical implications
Managers, rather than having to deal with a trade-off between allocating resources either on VC or VA activities, can capitalize on synergetic benefits resulting from the interaction among them.
Originality/value
The relationship between the VC and VA activities transcends the trade-off imposed by resource restrictions, since the interaction between them creates additional benefits afforded by the synergy of these activities.
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Keywords
Marta Olivia Rovedder de Oliveira, Rodrigo Heldt, Cleo Schmitt Silveira and Fernando Bins Luce
Although brand equity (BE) is a widely accepted concept, its definition is still elusive, and researchers have not reached a consensus about which measures provide the best…
Abstract
Purpose
Although brand equity (BE) is a widely accepted concept, its definition is still elusive, and researchers have not reached a consensus about which measures provide the best estimates of this complex and multi-faceted construct. Hence, the authors propose a BE chain that incorporates consumer-based BE (CBBE) and firm-based BE (FBBE) measurement approaches, advocating in favor of a holistic approach and encouraging theoretical and empirical studies that assess the BE chain.
Design/methodology/approach
The methodology entailed an extensive literature review on the subject. The authors included many different sources and the most accepted ones for measuring CBBE and FBBE.
Findings
The authors present 10 propositions to build the BE chain, encompassing the different approaches of BE and including its antecedents and consequences.
Originality/value
Conceptualizing BE is a complex problem given the different viewpoints describing several aspects of this intangible marketing asset. Thus, this study aims to foster discussions about such viewpoints and provide a framework to support the sedimentation of BE conceptualization.
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Keywords
Rodrigo Heldt, Cleo Schmitt Silveira and Fernando Bins Luce
Customer, product and brand (CPB) management constitute relevant and inextricably linked levels of decision-making that marketers should manage to drive business success. However…
Abstract
Purpose
Customer, product and brand (CPB) management constitute relevant and inextricably linked levels of decision-making that marketers should manage to drive business success. However, they are generally treated separately in extant research. It leads to a disconnected assessment and management of customers and products/brands, preventing marketers to take advantage of the positive implications of managing them simultaneously. This paper aims to propose a conceptual framework to unify these perspectives: the CPB bottom-up approach.
Design/methodology/approach
The paper draws on a range of extant literature on customer equity, brand equity and product performance to identify how financial performance is assessed in each of these perspectives and support the conceptual proposition to unify these different levels of decisions-making.
Findings
The proposed framework allows predicting and managing the expected values of these three intertwined perspectives together, providing a unified forward-looking metric to more effectively drive marketing efforts.
Research limitations/implications
The proposed framework opens the path for future discussion concerning possible models that can be adopted to implement it.
Practical implications
The proposed framework allows managers to make decisions having a holistic assessment of CPB performance.
Originality/value
In practice, marketing managers have to deal with brand and product as well as customer levels of decision-making simultaneously. Besides this, adopting customer centricity does not decrease the importance of managing the performance of brands and products. Therefore, the proposition of a solution able to bridge the gap between these levels of decision-making enhances both the marketing practice and literature.
Propósito
A gestão de clientes, produtos e marcas constituem níveis relevantes e interrelacionados de tomada de decisão que os profissionais de marketing devem gerenciar para impulsionar o sucesso dos negócios. No entanto, eles são geralmente tratados separadamente na literatura. Isso leva a uma avaliação e gestão desconectada de clientes e produtos/marcas, impedindo os profissionais de marketing de aproveitar as implicações positivas de gerenciá-los simultaneamente. Neste artigo, propomos uma estrutura conceitual para unificar essas perspectivas: a abordagem bottom-up de cliente, produto e marca.
Design/metodologia/abordagem
O artigo sustenta-se em uma variedade de pesquisas passadas sobre valor do cliente, valor da marca e desempenho do produto para identificar como o desempenho financeiro é avaliado em cada uma dessas perspectivas e apoiar a proposta conceitual para unificar esses diferentes níveis de tomada de decisão.
Descobertas
A estrutura proposta permite prever e gerenciar os valores esperados dessas três perspectivas interligadas, fornecendo uma métrica preditiva unificada para impulsionar os esforços de marketing de forma mais eficaz.
Limitações/implicações da pesquisa
A estrutura proposta abre caminho para futuras discussões sobre possíveis modelos que podem ser adotados para implementá-lo.
Implicações práticas
A estrutura proposta permite que os gerentes tomem decisões com uma avaliação holística do desempenho do cliente, do produto e da marca.
Originalidade
Na prática, os gerentes de marketing precisam lidar simultaneamente com os níveis de tomada de decisão de marca e de produto, bem como de clientes. Além disso, adotar foco no cliente não diminui a importância de gerenciar o desempenho de marcas e produtos. Portanto, a proposição de uma solução capaz de preencher a lacuna entre esses níveis de tomada de decisão aprimora tanto a prática de marketing quanto a literatura.
Details
Keywords
- Customer centricity
- Customer equity
- Customer lifetime value
- Brand equity
- Product management
- Centralidade no cliente
- Valor da base de clientes
- Valor vitalício do cliente
- Valor da marca
- Gestão de produtos
- M310
- Marketing
- M300
- Marketing and Advertising: General
- M310
- Marketing
- M300
- Marketing and Advertising: General
Cleo Schmitt Silveira, Marta Olivia Rovedder de Oliveira and Fernando Bins Luce
The purpose of this paper is to explore the differences and similarities between two methods/models for estimating customer equity (CE): one using behavior-based data and one…
Abstract
Purpose
The purpose of this paper is to explore the differences and similarities between two methods/models for estimating customer equity (CE): one using behavior-based data and one using market-based data.
Design/methodology/approach
Two separate analyses of the same market scenario (telecom industry) were conducted, by applying the CE estimation method from Rust et al. (2004) and the CE model from Gupta et al. (2004).
Findings
Different methods/models can produce similar estimates, which corroborates the defense of an integrated multi-method approach to evaluating CE. In addition, they each provide different benefits. The behavioral data model provides identification of CE drivers and assists in the task of marketing resource allocation, the market-based data model is simple and easy to implement and is recommended in cases when CE is used as a financial indicator.
Originality/value
This paper contributes to the CE literature in the following ways. First, it demonstrates the possibility of obtaining similar estimates of CE using distinct types of data and data collection procedures, and with two different estimation methods/models. Second, it confirms that either model allows firms to compute the expected market capitalization at any given time using customer and financial information. Third, it demonstrates the convergent validity of these two methods/models for estimating CE for either public or private companies, thus legitimizing the comparison of their respective CE values, regardless of the type of source data or estimation formula used.