Search results

Previous research and logic indicate that capital markets generally value spending for advertising and promotion; however, empirical results from these studies are far from consistent. While most studies find a positive relationship between a firm's advertising spending and its market value (Hirschey, 1985; Jose, Nichols and Stevens, 1986; Lustgarten and Thomadakis, 1987;Morck, Shleifer and Vishny, 1988; and Morck and Yeung, 1991), others find a negative relationship when control variables are added to the empirical model (Erickson and Jacobson, 1992). Differences in model specification may explain these conflicting results. Previous studies have included a variety of control variables such as return on investment, market share, research and development (R&D) spending, and book value (Erickson and Jacobson, 1992; Chauvin and Hirschey, 1993; Hirschey, 1982) when testing the relationship between promotional expenses and market value. Different firm characteristics (e.g. sales, total assets, book value of equity and price) have been selected as scalers for empirical measures of both the dependent and independent variables. Although these studies investigated an essentially identical theoretical relationship, variation in model specifications renders interpretations different.

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.

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.

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.

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.

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.

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.

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.

While service brands are conceptualised as being both the company’s presented brand and the customer’s relationship experience, most research to date has supported the central role of the latter over the former in creating customer value and developing loyalty. Studies supporting the central role of relationship experience have relied on classification schemes that have been developed around the role of employees. In contrast, the purpose of this paper is to propose and test the effect of two new moderators, namely advertising spending- and labour-intensity (LI), in predicting the impact of company image and employee trust.

Four contexts (banking, internet provider, insurance and hairdressing) were selected based on their advertising spending- and LI, and a multi-group structural equation modelling technique was employed to test for differences between contexts.

Company image and employee trust were found to have a significant impact on customer value and loyalty perceptions, with considerable differences in patterns across the chosen contexts. This study has confirmed that differences in advertising spending intensity can explain discrepancies in the relative influence of customer value and loyalty drivers across multiple service industries.

The findings of this study shed new light on the results of previous studies that relied solely on classification schemes and which supported the primary importance of employee-customer interactions for service brands. Ultimately, this research can help managers better understand the driving forces of their business.

The purpose of this study is to explore the cross‐cultural generalizability of Yoo et al.’s brand equity creation process model. A two‐step approach is introduced and used to test the factorial invariance of the model cross‐culturally. The results reveal which marketing efforts and brand equity dimensions have invariant effects on brand equity across the US and Korean samples. Specifically, brand loyalty and perceived product quality do not have an invariant effect on brand equity, while brand awareness/associations have an equivalent effect. Price and store image show an equivalent, positive effect on perceived quality; distribution intensity has an equivalent, positive effect on both perceived quality and brand loyalty; and price deals have an equivalent, negative effect on both perceived quality and brand awareness/associations. But advertising has a quite different effect on brand equity. The between‐group differences in the brand equity formation process are explained from a cultural perspective.

The purpose of this article is to examine whether the design of chief executive officer (CEO) compensation generates incentives to engage in managerial behavior that enhances customer satisfaction and whether these incentives, in turn, lead to higher firm value.

A unique dataset combining customer satisfaction and executive compensation data was used, and the relationship between option sensitivity, customer satisfaction and performance was modeled using simultaneous equations modeling with industry and year fixed effects.

Findings suggest that CEO compensation plays an important role in explaining the variation in customer satisfaction and firm value. Specifically, CEO short-term compensation (salary or bonus) has no affect on customer satisfaction or firm value; the sensitivity of CEO wealth from long-term incentive compensation to stock price changes is positively related and also exhibits an inverted U-shaped relationship with customer satisfaction; the sensitivity of CEO wealth from long-term incentive compensation to stock price changes interacts negatively with CEO longevity and industry concentration but positively with advertising expenses in affecting customer satisfaction; the sensitivity of CEO wealth from long-term incentive compensation to both stock price changes and customer satisfaction positively affect firm value; and the sensitivity of CEO wealth from long-term incentive compensation to stock price changes interacts positively with customer satisfaction to affect firm value.

This study suffers from several limitations. First, the sample is limited to firms with ACSI scores available. Second, this study is limited to only publicly traded firms, which limits our ability to generalize regarding customer satisfaction, option sensitivity and firm value.

This study has several important implications for researchers and managers. The first is that the corporate board appears to view investment in customer satisfaction as similar to an investment in other intangible assets or technology, in that they reward managers with a nonlinear payoff profile. To encourage managers to invest discretionary funds wisely, incentive compensation is important. Second, compensation committees of corporate boards should not allow the option sensitivity to reach extreme levels because, at some point, managers’ incentives appear to shift more toward short-term earnings objectives and away from investment in intangibles, which have a longer-term payoff. Third, if boards are concerned about customer satisfaction and market value, when designing compensation packages, they should shift their focus from the structure of pay to the sensitivity of pay to performance. The exception to this is that for CEOs with very long tenures (or for those close to retirement), high levels of option sensitivity may distort incentives away from a focus on customer satisfaction. Finally, our results indicate that strategies that enhance customer satisfaction provide an incremental benefit in terms of firm value, beyond incentive compensation strategies.

The results indicate that a “stakeholder focus” which includes customers is value adding for shareholders as well. The results also imply that perhaps using a “balanced scorecard” approach to assessing performance in terms of customer satisfaction outcomes, or at least acknowledging the drives of customer satisfaction explicitly, could be an alternative to using highly sensitive incentive-based compensation when such compensation schemes are less desirable.

Prior research has found that the structure of fixed versus incentive-based compensation impacts customer satisfaction. However, this is one of the first papers to investigate the relationship between the sensitivity of CEO compensation and customer satisfaction. Findings have important implications for boards who seek to structure CEO pay so that CEOs have incentives to enact policies that benefit customers and, in turn, firm performance.

The purpose of this paper is to investigate how value‐based messaging affects brand associations within a durable goods category.

Brand associations are conceptualized in this paper as brand image, brand attitudes, and consumer quality perceptions. A 2×2 factorial design was employed with cognitive involvement (high/low) and advertising message (brand/value) as the experimental factors.

Results suggest that promotional‐based messaging is detrimental to all three brand associations, with quality ratings witnessing the most significant declines. In addition, the current study observed no significant effects of involvement, as measured by attention to the message, on brand association measures for value‐based messaging when compared with brand messaging.

The current study suggests that promotional‐messaging can be detrimental to brand association measures, compared with non‐value‐based brand messaging within a durable goods category. More research is needed to understand the long‐term effects of different levels of usage of promotional‐based messaging as part of the marketing mix.

The purpose of this paper is to examine whether retailer brand equity levels vary between department store and specialty clothing store categories.

Retailer brand equity is conceptualized in this paper as a four‐dimensional construct comprising retailer awareness, retailer associations, retailer perceived quality and retailer loyalty. Categorization theory is used to explain the differences in retailer equity across the two different store categories. A doubly multivariate design is incorporated in a structured questionnaire used to collect data via mall‐intercepts in an Australian state capital city.

Results suggest that retailer brand equity varies significantly between department store and specialty store categories. Department store brands yielded significantly higher ratings for all the retailer brand equity dimensions than specialty store brands.

Researchers have argued that retailers possess brand equity. However, extant research does not provide any specific guidance in relation to the question of whether retailer brand equity levels vary from one store category to another. The present research fills an important gap by demonstrating that retailer brand equity levels vary significantly between department store and specialty clothing store categories.

In the literature on product branding, significant attention is given to brand equity in the consumer context, but relatively little attention is paid to the application of the concept in the business-to-business (B2B) context. Even less research exists on the role of brand equity in the retailing context. Retailers are often seen as irrelevant to the source of brand value, resulting in manufacturers not targeting retailers to help them build stronger brands. Potential occurs, therefore, for some channel conflict to exist between manufacturers and retailers. On the one hand, retailers tend to focus on building their own, private brands to differentiate themselves from other retail competitors and to increase their power in relation to manufacturer brands. At the same time, most retailers still need to create a good image in the consumer marketplace by selling famous, manufacturer-branded products. In other words, retailers often have to sell famous brands even if they would prefer to sell other brands including their own. Manufacturers tend to focus their brand-building efforts on the consumer market to entice consumers to insist that retailers stock their brands, rather than placing any real emphasis on building a strong and positive brand relationship with the retailer directly.

The purpose of this study is to develop an analytical comparison between the impact of social media communication (both user-generated and firm-created) and the effects of traditional media communication. In particular, the components of customer-based brand equity and any difference in the effects according to brand origin associations are investigated. The target group consisted of fans and followers of beer brands on social media.

In all, 192 questionnaires were collected a survey link that was posted on beer brand pages that operate in the Italian market. Structural equation modeling was developed to investigate the impact of social and traditional media communication on brand equity and a multi-group analysis to examine the differences according to the brand names’ origin associations.

Results show that fans and followers cannot be considered as a collective unit. Additionally, consumers make a clear distinction between firm-created/user-generated social media and traditional media communication. Specifically, they distinguish how the effects of the two media outlets differ in relation to the brand origin associations. International brands should concentrate on both firm-created and user-generated communication, whereas national (Italian) brands should foster their firm-created communications. In both cases, however, traditional media communication loses its effectiveness on the brand equity components.

Contrary to existing literature, this project compares the effect of 2.0 and traditional media on various social media platforms, pointing out two different models according to the brands’ origin associations. This study develops interesting insights both for international companies with huge brand portfolios and for national firms in a complex market like those for beer.

Evaluating the consequences of brand equity management is one of the most important measurement issues for intangible assets in the new economy. Studies have validated the effect of brand equity on the value of the firm and addressed the capital market effects of intangible associations such as brand value. Yet, there is not sufficient evidence on which dimensions of brand equity should be measured and monitored to support financial performance. Using regression analysis on a sample of managers in Austrian organizations, this study investigates the effect of perceived brand equity on brand profitability, brand sales volume, and perceived customer value. Results indicate strong support for measures of perceived quality, brand loyalty, and brand awareness as antecedents of firm performance, customer value and willingness to buy.