Search results

1 – 10 of over 7000
To view the access options for this content please click here
Article
Publication date: 4 November 2014

Hongxia Zhang, Jin Sun, Fang Liu and John G. Knight

This research aims to examine the use of emotional and rational advertising appeal regarding service options that differ in terms of their experience and credence…

Abstract

Purpose

This research aims to examine the use of emotional and rational advertising appeal regarding service options that differ in terms of their experience and credence properties and exploring the moderating role of individual difference in affect intensity on the consumers’ varying reliance on rational vs emotional appeals.

Design/methodology/approach

Study 1 is a 2 (service type: restaurant vs dentist) × 2 (advertising appeal: emotional vs rational) between-subjects design. In total, 137 undergraduate students took part in this study. Study 2 is a 2 (service type: airline vs hospital) × 2 (advertising appeal: emotional vs rational) between-subjects design. In total, 84 MBA students were randomly assigned to each of the experimental conditions. Study 3 is a 2 (service type: airline vs hospital) × 2 (advertising appeal: rational vs emotional appeal) × 2 (affect intensity: high vs low) between-subjects design. The sample size was 170 undergraduates.

Findings

The results of the first two studies provided support that an emotional advertising appeal led to a higher purchase intention in the experience service condition, while a rational message generated higher purchase intention in the credence service condition. Study 3 showed the moderating role of individual difference in affect intensity. High affect intensity individuals reported higher levels of brand favorability than did their low affect intensity counterparts when exposed to ads using emotional appeal. Conversely, subjects showed no significant differences in the intensity of their emotional responses when exposed to rational appeals.

Practical implications

Our results suggest a strong need to tailor ads to fit different service categories. An emotional appeal would be more effective for experience services, and a rational appeal would be more effective for credence services. Besides, individual traits may also need to be considered when matching the appeal to the service type.

Originality/value

This study makes an important contribution to the limited existing research by providing a more comprehensive understanding of the relationship between advertising appeal and the type of service across different sub-categories, themes, individual trait and effectiveness measures. Specifically, the present research seeks to illuminate the relative effectiveness of emotional vs rational appeals in services advertising. In addition, the current research reveals new knowledge about the role that affect intensity plays in determining consumer responses to advertising.

Details

European Journal of Marketing, vol. 48 no. 11/12
Type: Research Article
ISSN: 0309-0566

Keywords

To view the access options for this content please click here
Article
Publication date: 8 March 2013

Erik Devos, William B. Elliott and Mohammad A. Karim

Prior literature suggests that managers have an incentive to increase stock prices prior to stock‐based acquisitions. This article aims to examine if there is any…

Abstract

Purpose

Prior literature suggests that managers have an incentive to increase stock prices prior to stock‐based acquisitions. This article aims to examine if there is any relationship between product market advertising and method of payments in mergers.

Design/methodology/approach

To examine the hypotheses the paper uses ordinary least squares (OLS) regressions and regressions based on a propensity score matching approach, which controls for the possibility that differences in firm characteristics are driving the results.

Findings

The paper finds that managers of firms that use stock to finance bids increase advertising intensity in the pre‐merger period and find that advertising is high prior to stock‐based mergers, relative to that of cash‐based acquirers. It also finds that managerial ownership in stock based acquiring firms is positively related to pre‐merger advertising intensity.

Research limitations/implications

Although this paper examines whether stock‐based acquirers increase their advertising intensity in the pre‐merger period to gain economic benefit it does not discuss in detail through which mechanism advertising affects stock price.

Practical implications

The paper provides a new perspective on the relationship between product market advertising of the acquirer and the method of payment in mergers. The results shown in this paper may motivate investors of the target firms to re‐evaluate the acquirers offer if the medium of payment is acquirers own stock.

Originality/value

To the authors' knowledge this paper is the first to document the link between advertising prior to a merger and the method of payment used in that merger.

Details

Managerial Finance, vol. 39 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Book part
Publication date: 11 August 2016

Konpanas Dumrongwong

This research investigated the market conditions caused by IPO advertising by examining the impact of IPO advertising, based on the US stock market from 1986 to 2009. The…

Abstract

This research investigated the market conditions caused by IPO advertising by examining the impact of IPO advertising, based on the US stock market from 1986 to 2009. The relationship between advertising intensity in the IPO year and the degree of IPO underpricing was examined. It was found that an increase in advertising intensity around an IPO event increases the initial returns. Simultaneously, however, advertising intensity around an IPO event also increases the degree of overvaluation, which raises the question as to whether advertising serves primarily as a mechanism to convey a firm’s true value to investors. The theoretical valuation of IPO and the relation between IPO advertising and the degree of stock overvaluation are discussed. Based on the Peasnell’s (1982) residual-income valuation framework (henceforth RIV), IPO advertising was proved to cause stock price to be more overvalued in the secondary market: a positive relationship was found between advertising and the degree of stock overvaluation relative to its theoretical value. Accordingly, an alternative hypothesis, that advertising inflates the short-run stock price, was proposed. The results of this study are consistent with the view of Purnanandam and Swaminathan (2004), namely that the stock price of newly listed firms can be overvalued.

Details

The Spread of Financial Sophistication through Emerging Markets Worldwide
Type: Book
ISBN: 978-1-78635-155-5

Keywords

To view the access options for this content please click here
Article
Publication date: 21 November 2011

Kabir C. Sen

The present paper aims to understand the underpinnings of the variations in brand level direct‐to‐consumer (DTC) advertising through a two‐part study. First, it seeks to…

Abstract

Purpose

The present paper aims to understand the underpinnings of the variations in brand level direct‐to‐consumer (DTC) advertising through a two‐part study. First, it seeks to examine the various influences on advertising intensity (operationalized by advertising to sales ratios) in the context of DTC advertising. Second, it aims to analyze how changes in share of voice impact changes in market share.

Design/methodology/approach

Data on brand level advertising as well as sales were collected from different government and industry sources. This is used to compute the ratio of DTC advertising to sales as well as changes in share of voice, market share and average drug prices. A log‐log model is used to find parameter estimates based on OLS regression.

Findings

Market share has a negative influence on the ratio of advertising to sales. Drugs which have a greater degree of innovation (as judged by the FDA) appear to spend more on DTC advertising relative to sales. The paper also finds that an increase in share of voice is not associated with increased average drug prices, but is related to a growth of market share because of a change in the share of total prescriptions dispensed.

Originality/value

The paper is one of the few to examine the factors influencing advertising to sales ratios in the context of DTC advertising. It is also one of the first to investigate the relationship of changes in the share of voice with changes in market share.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 5 no. 4
Type: Research Article
ISSN: 1750-6123

Keywords

To view the access options for this content please click here
Article
Publication date: 25 May 2012

Enrique Manzur, Rodrigo Uribe, Pedro Hidalgo, Sergio Olavarrieta and Pablo Farías

The purpose of this study is to test the viability of comparative advertising in Chile.

Abstract

Purpose

The purpose of this study is to test the viability of comparative advertising in Chile.

Design/methodology/approach

Data were collected via controlled experimentation. The study employed a 3 (comparative advertising intensity: noncomparative, indirect comparative, and direct comparative)×2 (product category involvement: low, high)×2 (sponsor brand's relative market share: market leader, other brand) between‐subjects factorial design.

Findings

The results suggest that direct and indirect comparative advertisements are not more effective than noncomparative advertisements in Chile. Additionally, data do not support the idea that the effect of comparative advertising intensity is moderated by the product category involvement and/or by the sponsor brand's relative market share. Since comparative advertising was not shown to be more effective than noncomparative advertising, the authors hypothesize that it is due to cultural biases and the novelty of comparative advertising in Latin America, as expressed through negative message believability.

Practical implications

While experimental research is not sufficient to establish the generalized non‐superiority of comparative advertising in the region, the results support the idea that comparative advertising might not be more effective than noncomparative advertising for many marketing campaigns in Latin America.

Originality/value

Several recent studies have investigated international differences in advertising practices. Most of these address advertising in general, leaving the transferability of comparative advertising practices largely unexplored (White Nye et al.). Analyzing the case of Latin America is highly relevant due to the limited development that exists with respect to comparative advertising in the region.

To view the access options for this content please click here
Article
Publication date: 7 August 2018

Atanas Nik Nikolov and Yuan Wen

This paper brings together research on advertising, family business, and the resource-based view (RBV) of the firm to examine performance differences between publicly…

Abstract

Purpose

This paper brings together research on advertising, family business, and the resource-based view (RBV) of the firm to examine performance differences between publicly traded US family vs non-family firms. The purpose of this paper is to understand the heterogeneity of family vs non-family firm advertising after such firms become publicly traded.

Design/methodology/approach

The authors draw on the RBV of the firm, as well as on extensive empirical literature in family business and advertising research to empirically examine the differences between family and non-family firms in terms of performance.

Findings

Using panel data from over 2,000 companies across ten years, this research demonstrates that family businesses have higher advertising intensity than competitors, and achieve higher performance returns on their advertising investments, relative to non-family competitors. The results suggest that the “familiness” of public family firms is an intangible resource that, when combined with their advertising investments, affords family businesses a relative advantage compared to non-family businesses.

Research limitations/implications

Family involvement in publicly traded firms may contribute toward a richer resource endowment and result in creating synergistic effects between firm “familiness” and the public status of the firm. The paper contributes toward the RBV of the firm and the advertising literature. Limitations include the lack of qualitative data to ground the findings and potential moderating effects.

Practical implications

Understanding how family firms’ advertising spending influences their consequent performance provides new information to family firms’ owners and management, as well as investors. The authors suggest that the “familiness” of public family firms may provide a significant advantage over their non-family-owned competitors.

Social implications

The implications for society include that the family firm as an organizational form does not need to be relegated to a second-class citizen status in the business world: indeed, combining family firms’ characteristics within a publicly traded platform may provide firm performance benefits which benefit the founding family and other stakeholders.

Originality/value

This study contributes by highlighting the important influence of family involvement on advertising investment in the public family firm, a topic which has received limited attention. Second, it also integrates public ownership in family firms with the family involvement–advertising–firm performance relationship. As such, it uncovers a new pathway through which the family effect is leveraged to increase firm performance. Third, this study also contributes to the advertising and resource building literatures by identifying advertising as an additional resource which magnifies the impact of the bundle of resources available to the public family firm. Fourth, the use of an extensive panel data set allows for a more complex empirical investigation of the inherently dynamic relationships in the data and thus provides a contribution to the empirical stream of research in family business.

Details

Journal of Family Business Management, vol. 8 no. 3
Type: Research Article
ISSN: 2043-6238

Keywords

To view the access options for this content please click here
Article
Publication date: 1 February 2003

Salvador del Barrio‐García and Teodoro Luque‐Martínez

In order to analyse consumer response to differing levels of comparative advertising, we have designed a causal model that includes various measurements of advertising

Abstract

In order to analyse consumer response to differing levels of comparative advertising, we have designed a causal model that includes various measurements of advertising effectiveness (cognitive, affective and connative), along with some of the main moderating factors considered in prior academic research. Thus, we carried out an experimental study in Spain using a total sample of 720 consumers spread out over four large geographical areas of the country. The results drawn from estimating the proposed model indicate that the greater the comparative advertising intensity, the lower the consumer’s perception of believability. Likewise, the number of counter‐arguments presented by the consumer increases, which negatively affects both attitudes and purchase intentions. However, the less well‐known brands on the market are those that benefit most from this advertising strategy, increasing the audience’s attention and improving purchase intentions.

Details

European Journal of Marketing, vol. 37 no. 1/2
Type: Research Article
ISSN: 0309-0566

Keywords

To view the access options for this content please click here
Article
Publication date: 4 July 2009

A. Vlachvei, O. Notta and I. Ananiadis

The purpose of this paper is to focus on promotional strategies, on which there has been relatively little research. The aim of this paper is twofold: first to review…

Abstract

Purpose

The purpose of this paper is to focus on promotional strategies, on which there has been relatively little research. The aim of this paper is twofold: first to review promotional strategies used by Greek wine producers to differentiate their products and second to develop and test a model that evaluates the relative importance of advertising expenses and other promotional expenses in explaining profit rates across Greek wine firms.

Design/methodology/approach

An extensive literature review relative to the question under investigation is presented. A survey among 43 Greek wine firms was carried out to identify the main categories of promotional expenses and their contribution to the total promotional expenditures for 2000. Annual balance sheet and income statements data for these firms were collected for the period 1993‐2000. The fixed effects method is used to estimate the coefficients of the specified empirical model using time series cross‐section panel data for the 43 Greek wine firms over the period 1993‐2000.

Findings

The non advertising promotional expenses were found to be the major part of promotional expenses, in the case of the Greek wine firms. For the Greek wine firms promotional expenses include promotion through the development of new informational labelling referred to origin and specific wine attributes, coupons, free samples, catalogues, new market channels through “wine routes”. These ways of promotion seem to be more effective to create goodwill for the company and to increase consumer loyalty than advertising. The fixed effects results show that total promotional expenses along with market share affect profitability.

Originality/value

This paper provides an outline of promotional strategies (advertising and non advertising) – a topic that has not been widely discussed in the literature.

Details

British Food Journal, vol. 111 no. 7
Type: Research Article
ISSN: 0007-070X

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 1990

ROBERT J. TOKLE

There are two basic theoretical views of how advertising affects competition. One school of thought suggests that advertising decreases competition. Kaldor (1950) argued…

Abstract

There are two basic theoretical views of how advertising affects competition. One school of thought suggests that advertising decreases competition. Kaldor (1950) argued that through economies of scale in advertising, advertising increases market concentration. Also, Bain (1956) suggested that advertising causes strong product differentiation and brand loyalty, which are barriers to entry and will lead to higher concentration.

Details

Studies in Economics and Finance, vol. 13 no. 1
Type: Research Article
ISSN: 1086-7376

To view the access options for this content please click here
Article
Publication date: 7 September 2012

Lee Li, Gongming Qian and Zhengming Qian

The purpose of this paper is to investigate the early internationalization and the performance of small firms in technology‐intensive industries.

Abstract

Purpose

The purpose of this paper is to investigate the early internationalization and the performance of small firms in technology‐intensive industries.

Design/methodology/approach

Using a sample of 278 small US firms in technology‐intensive industries, this paper employs quantitative methodologies to test hypotheses.

Findings

The findings indicate that such organizational variables as firm size and international experience have a non‐linear, inverted U‐shaped relationship with these firms’ early internationalization. Some strategic variables, such as R&D intensity, have significant impacts, whereas others, such as advertising intensity and strategic alliances, have none. However, the interactions between these strategic variables have a more significant influence upon these firms’ early internationalization than do the individual strategic variables in isolation. Moreover, early internationalization has significant and positive impacts on the performance of these firms.

Practical implications

The paper’s findings have important managerial implications. The paper identifies the driving forces for the early globalization of small firms and provides useful guidelines for managers to manage these factors in their efforts to maximize firm performance.

Originality/value

The paper differentiates organizational factors from strategic factors against the background of small “born globals” in technology industries and investigates the interactions among these internal factors and external factors, i.e. the environments of technology industries. Findings of non‐linear relationships among these factors shed light on the strategy determinants of a unique group of small to medium‐sized enterprises and their performance.

Details

International Marketing Review, vol. 29 no. 5
Type: Research Article
ISSN: 0265-1335

Keywords

1 – 10 of over 7000