Rick L. Andrews and Peter Ebbes
This paper aims to investigate the effects of using poor-quality instruments to remedy endogeneity in logit-based demand models. Endogeneity problems in demand models occur when…
Abstract
Purpose
This paper aims to investigate the effects of using poor-quality instruments to remedy endogeneity in logit-based demand models. Endogeneity problems in demand models occur when certain factors, unobserved by the researcher, affect both demand and the values of a marketing mix variable set by managers. For example, unobserved factors such as style, prestige or reputation might result in higher prices for a product and higher demand for that product. If not addressed properly, endogeneity can bias the elasticities of the endogenous variable and subsequent optimization of the marketing mix. In practice, instrumental variables (IV) estimation techniques are often used to remedy an endogeneity problem. It is well-known that, for linear regression models, the use of IV techniques with poor-quality instruments can produce very poor parameter estimates, in some circumstances even worse than those that result from ignoring the endogeneity problem altogether. The literature has not addressed the consequences of using poor-quality instruments to remedy endogeneity problems in non-linear models, such as logit-based demand models.
Design/methodology/approach
Using simulation methods, the authors investigate the effects of using poor-quality instruments to remedy endogeneity in logit-based demand models applied to finite-sample data sets. The results show that, even when the conditions for lack of parameter identification due to poor-quality instruments do not hold exactly, estimates of price elasticities can still be quite poor. That being the case, the authors investigate the relative performance of several non-linear IV estimation procedures utilizing readily available instruments in finite samples.
Findings
The study highlights the attractiveness of the control function approach (Petrin and Train, 2010) and readily available instruments, which together reduce the mean squared elasticity errors substantially for experimental conditions in which the theory-backed instruments are poor in quality. The authors find important effects for sample size, in particular for the number of brands, for which it is shown that endogeneity problems are exacerbated with increases in the number of brands, especially when poor-quality instruments are used. In addition, the number of stores is found to be important for likelihood ratio testing. The results of the simulation are shown to generalize to situations under Nash pricing in oligopolistic markets, to conditions in which cross-sectional preference heterogeneity exists and to nested logit and probit-based demand specifications as well. Based on the results of the simulation, the authors suggest a procedure for managing a potential endogeneity problem in logit-based demand models.
Originality/value
The literature on demand modeling has focused on deriving analytical results on the consequences of using poor-quality instruments to remedy endogeneity problems in linear models. Despite the widespread use of non-linear demand models such as logit, this study is the first to address the consequences of using poor-quality instruments in these models and to make practical recommendations on how to avoid poor outcomes.
Details
Keywords
Wayne S. DeSarbo, Peter Ebbes, Duncan K.H. Fong and Charles C. Snow
Customer value has recently become a primary focus among many strategy researchers and practitioners as an essential element of a firm's competitive strategy. Many firms are…
Abstract
Purpose
Customer value has recently become a primary focus among many strategy researchers and practitioners as an essential element of a firm's competitive strategy. Many firms are engaged in some form of customer value analysis (CVA), which involves a structural analysis of the antecedent factors of perceived value (i.e. perceived quality and perceived price) to assess their relative importance in the perceptions of their buyers. Previous CVA research has focused upon using aggregate market or market segment level analyses. The purpose of this paper is to expose the limitations of implementing CVA on either an aggregate or market segment level basis, and propose an alternative individual level approach.
Design/methodology/approach
The paper develops an extended hierarchical Bayesian approach for cross‐sectional data with one observation per response unit, which allows for estimation at the individual firm level to make CVA more useful. This paper demonstrates the utility of the proposed Bayesian methodology involving a CVA study conducted for a large electric utility company. It also compares the empirical results from aggregate, market segment, and the proposed individual level analyses, and show how traditional approaches mask underlying price and quality importance.
Findings
Marketing and management strategy researchers need to exhibit care when conducting such CVA analyses as underlying heterogeneity can be masked when aggregate market or segment level analyses are conducted.
Originality/value
This paper provides a new hierarchical Bayes recursive simultaneous model formulation for CVA analyses to provide individual level insights with cross‐sectional data.
Details
Keywords
Abstract
Details
Keywords
Andreas Hesse, Holger J. Schmidt, Ronja Bosslet, Mariella Häusler and Aileen Schneider
Though employees are important stakeholders of a brand, their role in building brand equity has long been neglected. This study aims to deepen the understanding of employees’…
Abstract
Purpose
Though employees are important stakeholders of a brand, their role in building brand equity has long been neglected. This study aims to deepen the understanding of employees’ brand co-creation efforts and their contribution to employee-based brand equity (EBBE).
Design/methodology/approach
The study analyses implicit and explicit communication activities by employees on the social media network LinkedIn and quantifies the contribution of their posts to EBBE. Data has been gathered from more than 1,300 posts and 130 private accounts, representing different employee groups of five corporate brands.
Findings
The investigation illustrates the high importance of brand co-creation in social networks by employees and helps practitioners to better understand the underlying processes.
Research limitations/implications
Case-study research has limitations of generalisability. However, the authors unveil important limits to exploiting the autonomy of employees’ word-of-mouth communication.
Practical implications
Under a co-creative perspective, every social media activity of an employee can be a positive contribution to a brand’s equity. Therefore, companies should closely monitor EBBE.
Originality/value
The authors draw on basic conceptual insights and empirical work by other researchers but extend and interpret them in a new context. The study provides initial indications of key antecedents of and barriers to successful management of employees’ brand co-creation activities.
Details
Keywords
The primary purpose of this research is to conceptualise and validate the comprehensive framework for effectively measuring and managing employee-based brand equity (EBBE…
Abstract
Purpose
The primary purpose of this research is to conceptualise and validate the comprehensive framework for effectively measuring and managing employee-based brand equity (EBBE) benefits. The study endeavours to integrate professional and socio-emotional facets of employees' into the proposed model, lending it a more holistic approach.
Design/methodology/approach
The study focusses on the banking sector in Kosovo, employing structural equation modelling to analyse data from a sample of 325 employees.
Findings
Both professional and socio-emotional perspectives significantly influenced brand knowledge, positively impacting EBBE benefits such as employee satisfaction, retention and positive word of mouth (WOM). These findings provide empirical support for the theoretical assumptions concerning the role of professional and socio-emotional perspectives in building EBBE.
Research limitations/implications
Theoretically, this research could bridge marketing and organisational behaviour theories by highlighting employees' role in building brand equity. Moreover, it might expand the social identity theory within an organisational context, emphasising employees' identification with the brand as a crucial element.
Practical implications
The study offers practical implications for the banking industry and similar contexts, suggesting robust internal marketing strategies prioritising professional development and socio-emotional connectivity. Theoretically, this research could bridge marketing and organisational behaviour theories by highlighting employees' role in building brand equity. Moreover, it might expand the social identity theory within an organisational context, emphasising employees' identification with the brand as a crucial element.
Originality/value
The paper presents an original contribution to the field of brand equity research by proposing and validating a novel framework for EBBE that uniquely integrates both professional and socio-emotional dimensions of employees' experiences. This approach is particularly innovative within the context of the banking sector, offering new empirical insights.
Details
Keywords
Dilip K. Das and Peter C. Kratcoski
This paper focuses on the main discussion points of the 4th International Police Executive Symposium in Vienna, 1997. The symposium’s theme was international police co‐operation…
Abstract
This paper focuses on the main discussion points of the 4th International Police Executive Symposium in Vienna, 1997. The symposium’s theme was international police co‐operation and particular attention was paid to current co‐operation projects, plans for the future and the lessons that can be drawn from their experiences. The results of a questionnaire covering the issues raised by the symposium are examined in light of the discussions which ensued in Vienna. It was found that the subject of international police co‐operation has strong support and that the views expressed by the participants are very widely held. The results of the questionnaire, although reflecting the views of the symposium, suggested that there are a significant number of people who have little or no knowledge of international police co‐operation.
Details
Keywords
Jan F. Klein, Yuchi Zhang, Tomas Falk, Jaakko Aspara and Xueming Luo
In the age of digital media, customers have access to vast digital information sources, within and outside a company's direct control. Yet managers lack a metric to capture…
Abstract
Purpose
In the age of digital media, customers have access to vast digital information sources, within and outside a company's direct control. Yet managers lack a metric to capture customers' cross-media exposure and its ramifications for individual customer journeys. To solve this issue, this article introduces media entropy as a new metric for assessing cross-media exposure on the individual customer level and illustrates its effect on consumers' purchase decisions.
Design/methodology/approach
Building on information and signalling theory, this study proposes the entropy of company-controlled and peer-driven media sources as a measure of cross-media exposure. A probit model analyses individual-level customer journey data across more than 25,000 digital and traditional media touchpoints.
Findings
Cross-media exposure, measured as the entropy of information sources in a customer journey, drives purchase decisions. The positive effect is particularly pronounced for (1) digital (online) versus traditional (offline) media environments, (2) customers who currently do not own the brand and (3) brands that customers perceive as weak.
Practical implications
The proposed metric of cross-media exposure can help managers understand customers' information structures in pre-purchase phases. Assessing the consequences of customers' cross-media exposure is especially relevant for service companies that seek to support customers' information search efforts. Marketing agencies, consultancies and platform providers also need actionable customer journey metrics, particularly in early stages of the journey.
Originality/value
Service managers and marketers can integrate the media entropy metric into their marketing dashboards and use it to steer their investments in different media types. Researchers can include the metric in empirical models to explore customers' omni-channel journeys.
Details
Keywords
Chong King Tan, Ramayah T., Ai Ping Teoh and Jun-Hwa Cheah
Virtual teams had become a fundamental way to conduct business for organizations to remain competitive and sustain in a global environment. Organizations which willing to…
Abstract
Purpose
Virtual teams had become a fundamental way to conduct business for organizations to remain competitive and sustain in a global environment. Organizations which willing to understand what makes virtual teams more effective can likely accrue positive results from virtual teams. Hence, the purpose of this paper is to investigate what are the factors that impact the performance of virtual team. This study highlights factors that influence virtual team performance, which not been widely studied in developing countries (i.e. Malaysia). This study tests the impact of six factors (coordination, communication, relationship building, cohesion, trust and reward) on team performance.
Design/methodology/approach
A quantitative approach via self-administered questionnaire was adopted. A total of 205 questionnaires were successfully collected at the end of the data collection. Structural equation modelling using partial least squares approach (i.e. ADANCO 2.0 software) was then used to assess the relationships among variables in the virtual team.
Findings
After ensuring the data have acceptable reliability and validity, structural model assessment was performed to test the hypotheses. The results indicated that a significant and positive relationship exists between communication, relationship building, cohesion and trust towards team performance. On the other hand, no significant relationship was found between coordination and reward towards team performance.
Research limitations/implications
First, the study may be slightly biased due to the differences in the size of the multinational companies. The result might tend to represent the bigger companies where more virtual teams are available for sampling of this study. Second, the duration of virtual team (long-term and short-term) and the number of sites in the team should be clearly identified. The respondents might have very different experiences and perceptions in different settings of virtual team environment. Therefore, taking care of these characteristics would have provided a more detailed and comprehensive understanding of factors influencing virtual team performance in Malaysia.
Practical implications
The findings from this study can serve as guideline for managers to manage the virtual teams effectively, as well as to optimizes the resources usage and implement the most efficient tools of communication, and subsequently improve the overall efficiency of the teams. This study is useful for researchers, managers and organizations to highlight the factors that contribute to virtual team performance.
Originality/value
The present study has not only extended the use of Media Richness Theory in the context Virtual Team Performance in a developing country but also broadened the previous study through inclusion of other crucial factor, namely, Reward. Given the significant role in the Global marketplace, the understanding of factors influencing virtual team performance in Malaysia using the extended theory of Media Richness would contribute knowledge not only to technology management but also to manufacturing service industry.