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Article
Publication date: 21 November 2016

Laurent Tournois

Reverse innovation has been claimed to be the new emerging paradigm on how to succeed in emerging markets before spreading to more mature ones. This study aims to…

Abstract

Purpose

Reverse innovation has been claimed to be the new emerging paradigm on how to succeed in emerging markets before spreading to more mature ones. This study aims to investigate how the BB cream, a concept that gave birth to one of the recent most impressive worldwide breakthrough products in cosmetics, was successfully integrated into a growth-through reverse innovation strategy by a Western leading brand, Garnier, in its domestic market.

Design/methodology/approach

Using a single case study design that combines brand and product levels of analysis, this paper examines how reverse innovation/BB cream contributed to (re)build perceptions of brand superiority. Data were extracted from the IRI Census Database (retail panel data) and from various other market sources. Additional insights were collected through semi-structured interviews with top executives. Some data, as they remain confidential, are not included in the paper.

Findings

Reverse innovation, although counter-intuitive regarding one of its fundamental assumptions (i.e. a low-cost/low-price strategy targeting price-sensitive consumers), can be used within a niche strategy to help brands develop a radically new offer that justifies a price premium. In this regard, it has to be managed step-by-step, from appropriation to exploitation and, finally, “extinction” in a given market segment.

Research limitations/implications

Evidence is scarce on how Western companies/brands can integrate reverse innovation into their growth strategies. Further investigation is required on this emerging paradigm.

Practical implications

The case of Garnier BB cream invites marketing managers to think differently about where to look for opportunities and how to grow in stagnant markets. Moreover, the inherent latent value of a reverse innovation can serve to trade up the brand with both volume and value benefits, despite the common claim that it is related to a volume strategy. Thus, it opens the range of possibilities to escape commoditization and price wars.

Originality/value

This paper demonstrated that reverse innovation is not limited to the bottom of the market. The story of the BB cream concept, which has been appropriated and valorized by the leading cosmetic brand Garnier through a niche strategy, supports this argument. In addition, instead of viewing the niche strategy as a methodological/theoretical stage within the segmentation–targeting–positioning process, this case study highlights it as a creative process linked to innovation, which helps a brand and/or company to define a new territory within its market.

Details

Journal of Business Strategy, vol. 37 no. 6
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 15 January 2018

Laurent Tournois and Jean-Jacques Chanaron

In mature industries, downward vertical (line) extension has become an increasingly popular strategy, particularly for automobile manufacturers aiming at expanding their…

Abstract

Purpose

In mature industries, downward vertical (line) extension has become an increasingly popular strategy, particularly for automobile manufacturers aiming at expanding their consumer bases and/or avoiding competition in higher market segment. This paper aims to examine how Mercedes-Benz (MB) practiced a downward vertical line extension within the same product category. When commercialized as a product line innovation, the MB A-Class was the first and most symbolic move made by a premium brand in the automobile industry.

Design/methodology/approach

This paper investigates the microfoundations of a vertical downward extension strategy. To do so, the authors adopt a narrative style to analyze the story of the MB A-Class from its inception to its commercialization. Secondary data sources, such as company websites, annual reports, internal documents, books, public relations and press releases, were used. Qualitative as well as quantitative performance outcomes were assessed using market and product sales in Western Europe (1997-2016) and the results of an MB brand image survey conducted in 1998 following the accident faced by the A-Class.

Findings

The case illustrates that contrary to initial assumptions, lower-quality extensions may be relevant for prestige brands under certain conditions and identifies four strategy components that may drive a successful downward stretch: combine organizational, product, process and marketing innovation with the support of dynamic capabilities; manage paradoxes/contradictions in terms of product development; target the high-end of a lower consumer segment; and adopt a “brand humility talk scheme”.

Research limitations/implications

Existing studies primarily focus on consumers’ evaluations of vertical step-down extensions. Rare are the articles that adopt the company’s perspective. Moreover, additional research is needed to assess the short- and long-term impacts of vertical downward extension on performance outcomes.

Practical implications

The case of the MB A-Class encourages top executives to consider the trade-offs inherent to a down-market strategic move: keeping the (premium) brand’s standards high within a reduced cost/price envelope while learning the codes of the new/bottom of the market. In addition, the A-Class may serve as a fundamental school case for marketing managers and creative advertising agencies on what should and should not be done, whether at the product or at the advertising level.

Originality/value

This paper demonstrates that a premium brand that practiced a vertical downward line extension can expand its sales in a mass market, by targeting a small but growing segment with a high willingness to pay for more expensive products. This adds to the contention that it is not the downscale extension product price per se that negatively affects the parent brand but rather where it stands in the hierarchy of the market segment considered and the ability of the premium brand to integrate the downscale extension to its own history (i.e. combining its original values with tangible product benefits while backing the cause of the new market). Finally, the story of the A-Class strongly suggests that any company needs to upgrade its capabilities as part of the learning process of a new market to convert a business opportunity into a market success.

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Article
Publication date: 12 June 2019

Laurent Tournois and Damien Forterre

Franchising has become an increasingly popular overseas expansion strategy for companies in various industries. A successful development in a transition economy such as…

Abstract

Purpose

Franchising has become an increasingly popular overseas expansion strategy for companies in various industries. A successful development in a transition economy such as Serbia has been exclusively associated with McDonald’s, which raises concerns about the ability of other international franchises to penetrate the Serbian market. The purpose of this paper is to explore the customer-based constraints that may hamper the spread of franchising in a post-communist country. Specifically, factors such as country-of-origin (COO) effects, longevity and brand localness/globalness that may affect consumers’ preferences are considered.

Design/methodology/approach

This paper uses mixed methods, that is to say a combination of qualitative and semi-quantitative approaches. Primary data were collected using (45) semi-structured interviews with local customers. The (success) story of McDonald’s in Serbia serves as the reference point.

Findings

The findings suggest that COO and localness are both relevant in explaining consumer preferences. Longevity signals the ability to adhere to international standards as well as regular local engagement. The results also stress that, contrary to widespread belief, global franchise names do not have an advantage over local players.

Research limitations/implications

Further investigation is needed to empirically examine the relationships between several key variables identified in the present study (longevity, COO, tradition, patriotism, trust, emotional attachment, perceived quality, authenticity, satisfaction, behavioral intentions). These may influence franchise system penetration and, ultimately, its performance.

Practical implications

Although post-communist countries have become highly appealing for international fast-food and coffee-shop chains, these countries are hard-to-please environments for setting-up and operating a franchise business. These findings advocate franchises to find the right balance between their global name and a quick integration of indigenous attributes to compensate for their late entry. Franchise marketing managers must develop a brand narrative that includes both local brand associations and global/international standards to increase franchise brand awareness and generate a positive consumer attitude.

Originality/value

Despite the call for more studies on franchising in emerging markets and their realities, not much attention has been paid to (local) customer-related constraints. The inclusion of a temporal perspective appeared to be highly relevant in investigating the potential effect of longevity on the local development of the franchise system. Moreover, there is a scarcity of scholarly branding research in the franchising sector. Local competition, although a neglected dimension in prior studies, has been examined through consumer preferences toward global and local brands. The chosen research methodology responds to the recent call of scholars for more diverse approaches. Finally, as a post-communist, transition and emerging economy, Serbia serves as a stimulating and yet uncovered research setting, given its tumultuous history with Western countries, as well as the long successful history of the McDonald’s franchise.

Details

Journal of Business Strategy, vol. 41 no. 3
Type: Research Article
ISSN: 0275-6668

Keywords

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Article
Publication date: 5 March 2018

Laurent Tournois

Cities from developing countries strive to compete on a global scale and hence try to attract and retain their residents in offering higher liveability. The purpose of…

Abstract

Purpose

Cities from developing countries strive to compete on a global scale and hence try to attract and retain their residents in offering higher liveability. The purpose of this study is to examine the extent to which liveability influences resident’s sense of place and determines residents’ behavioural intentions.

Design/methodology/approach

A survey was carried out to test the hypotheses using a sample of 362 residents from the city of Dubai (United Arab Emirates). Structural equation modelling and the method suggested by Hayes and Preacher (2010) for mediation analysis were used.

Findings

Findings show that residents’ preferences for different types of liveability attributes (included in seven dimensions) influence their sense of place that in return shapes their behavioural intentions towards their place of residence. Results also reveal the importance of non-economic attributes of the urban environment. Moreover, residents’ sense of place mediates the relationship between liveability and residents’ behavioural intentions.

Research limitations/implications

Future research could more deeply investigate the social functioning of a place and particularly the role of place identity, as it is recognized to affect residents’ attitudes and behaviours. In addition, further developments may contribute to the ongoing debate on the relationship between liveability and growth.

Practical implications

From a public policy standpoint, this study suggests that local authorities need to identify a distinct set of economic and non-economic characteristics that will encourage residents to stay longer in the place they live. As such, enhancing liveability represents a critical strategic initiative for cities from developing countries to make them a great place to live.

Originality/value

Compared to developed countries’ cities, few attempts have been made to investigate the attitudes of residents towards a place and the role of liveability in the context of emerging countries fast-growing urban areas. In addition, findings revealed the importance of place-based meanings, i.e. sense of place, which played a pivotal role in the development of place-protective behaviours.

Details

Journal of Place Management and Development, vol. 11 no. 1
Type: Research Article
ISSN: 1753-8335

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Article
Publication date: 26 July 2019

Laurent Tournois and Chiara Rollero

This study aims to investigate how residents’ perceptions of the image of their place of living influence their level of commitment toward it. The mediating role of human…

Abstract

Purpose

This study aims to investigate how residents’ perceptions of the image of their place of living influence their level of commitment toward it. The mediating role of human place bonds (place attachment and place identity) and the moderating effect of the socio-demographic characteristics of the host community in this relationship is specifically examined.

Design/methodology/approach

The theoretical direct–indirect–moderation relationships are examined using structural equation modeling and moderated-mediation or condition process analysis (Hayes and Preacher, 2013). Data were collected from 472 residents living in Belgrade (Serbia).

Findings

The findings support the contention that place attachment and place identity mediate the relationship between place image and commitment. The study further shows that the conditional indirect relationship of place image with commitment through place attachment and place identity is significant for age. Age and place of birth are found to moderate the relationship between place image and place attachment.

Research limitations/implications

A stimulating avenue for future research is to explore the effect of culture (individualist, short-term oriented and low on power distance vs collectivist, long-term oriented and high on power distance cultures) on model’s relationships as well as on commitment specifically.

Practical implications

To enhance their residents’ commitment, place marketers should focus on two levels of action. The first lever is to assess how residents perceive the image of the place where they live as it can serve as a strategic outline to explore their level of support and address the possible negative feelings they may have toward any development project. The second level of action is developing bottom up strategies that are likely to enhance residents’ commitment which aims at transforming residents into active place ambassadors and actors of the public life of the city.

Originality/value

To the best of authors’ knowledge, this study is one of the first in the place branding research domain to examine the role of human place bonds in the relationship between place image and commitment using mediation, moderation, and moderated-mediation analyses. Moreover, place branding literature is underdeveloped regarding the current issues most post-communist countries face.

Details

Journal of Product & Brand Management, vol. 29 no. 1
Type: Research Article
ISSN: 1061-0421

Keywords

Content available
Article
Publication date: 13 July 2012

Kay Gallagher and James Pounder

Abstract

Details

Education, Business and Society: Contemporary Middle Eastern Issues, vol. 5 no. 2
Type: Research Article
ISSN: 1753-7983

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Article
Publication date: 13 July 2012

Laurent Tournois and Isabelle Aoun

The purpose of this paper is to explore the foundations of an Islamic market oriented cultural approach regarding its possible implementation by non‐Muslim firms.

Abstract

Purpose

The purpose of this paper is to explore the foundations of an Islamic market oriented cultural approach regarding its possible implementation by non‐Muslim firms.

Design/methodology/approach

The paper is based on a critical review of existing literature on Islamic marketing and branding. Related market oriented strategies (from a cultural perspective) are discussed regarding their possible implementation by non‐Muslim firms, particularly in the context of Lebanon.

Findings

It is found that the theoretical foundations and the results of existing research hold back the understanding and implementation by Western firms and marketers of Islamic marketing principles.

Research limitations/implications

The paper presents only conceptual arguments; it does not include empirical examination at this stage. A quadrad is finally proposed in order to validate these arguments.

Practical implications

Western businesses are faced with many dilemmas when it comes to taking decisions based, in particular, on the understanding and the implementation of marketing with an Islamic root. The major challenge lies in responding successfully to the needs and requirements of Muslim customers through complying with Islamic principles and practices without alienating non‐Muslim customers.

Originality/value

Most of the existing research on Islamic marketing concerns Muslim firms, but few Western firms, when targeting both Muslim and non‐Muslim populations. The paper stresses the importance of expanding the frontiers of recent work on Islamically‐rooted market oriented strategies with reference to conceptual foundations of “traditional” marketing strategies through the value creation goal. Finally, the paper questions the relevance of the traditional dichotomy between global standardization and localization.

Details

Education, Business and Society: Contemporary Middle Eastern Issues, vol. 5 no. 2
Type: Research Article
ISSN: 1753-7983

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Article
Publication date: 1 January 2013

Laurent Tournois

The purpose of this paper is to describe how one company built and sustained market leadership by implementing a market‐oriented business strategy involving defensive and

Abstract

Purpose

The purpose of this paper is to describe how one company built and sustained market leadership by implementing a market‐oriented business strategy involving defensive and offensive management.

Design/methodology/approach

With an historical approach, this article examines how L'Oréal's Consumer Products Division increased its dominance in its domestic cosmetics industry. Data were extracted from the IRI Census Database (retail panel data). Some data, as they remain confidential, were not included in the paper.

Findings

The transition from an offensive to a defensive management style (and vice versa) is part of the dialectic in relations between the company and its environment, including consumers (demand), competitors (their behaviour in the market) and market conditions (growth, stability, decline) in an extended sense (see Kohli and Jaworski).

Research limitations/implications

The joint management of offensive and defensive market‐oriented strategies leads to enhanced competitive positioning and increased market share of a portfolio of brands and products.

Practical implications

The trade‐off between offensive and defensive management, involving whether managers are influenced by or influence the structure and the behaviour of market players, depends on their mental disposition toward challenges in increasingly competitive mass markets.

Originality/value

Prior discussions of offensive and defensive management approaches have remained mainly theoretical. Through the illustration of the undisputable leader of the cosmetics sector, this study offers a practical example that can help companies reconsider how they differentiate themselves from competitors with respect to market conditions. This case offers an initial investigation of offensive and defensive management.

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Article
Publication date: 9 September 2014

Laurent Tournois

The purpose of this article is to describe the rationale behind and analyze the results of a strategy in regards to changing conditions and market share dominance. For…

Abstract

Purpose

The purpose of this article is to describe the rationale behind and analyze the results of a strategy in regards to changing conditions and market share dominance. For more than 20 years, with the growth in available product varieties, product and brand proliferation have become increasingly evident in many consumer markets.

Design/methodology/approach

This article examines how three L’Oréal mass market businesses, i.e. L’Oréal Paris, Lascad and Gemey-Maybelline-Garnier (GMG), managed proliferation activities between 1988 and 2012 on their domestic market. Data were extracted from the information resources, inc. (IRI) Census and Sample Databases (retail panel data), and information was collected from internal sources and semi-structured interviews with top executives. Brand performance was assessed using panel data structure analysis, as recommended by IRI and Nielsen. Some data, as they remain confidential, were not included in the paper.

Findings

The study reveals that when opportunities are lacking, demand is declining, and competition is fierce – the situation that marks most mature markets – a proliferation strategy actually can yield diminishing results and reduced brand dominance.

Research limitations/implications

Offering broader lines appears to generate confusion and to be counterproductive in relation to theoretical assumptions. Additional research on proliferation strategies is needed, particularly in declining market conditions, which implies diminished demand and market saturation due to increased competition and isomorphic practices.

Practical implications

When deciding to extend product lines, managers should take into account competition and more qualitative factors than those included in the models developed by and for store brands. The respective positioning and marketing strategy (i.e. challenger and leader) of the brands involved have also to be considered.

Originality/value

Prior research on proliferation strategies has relied on strong assumptions such as increase in demand and unsaturated markets. Through these case studies, this article shows that making the shelf space denser affects brand dominance, particularly when market conditions change. These results challenge current thinking as, in facing internal and external contingencies, managers might think which scenario is most favorable for maintaining a dominant position: changing the structure of the market by reducing (i.e. concentration) or increasing the number of brands/products in the market.

Details

Journal of Business Strategy, vol. 35 no. 5
Type: Research Article
ISSN: 0275-6668

Keywords

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Article
Publication date: 9 March 2015

Isabelle Aoun and Laurent Tournois

Branding in faith-based consumer markets, in which marketing practices, religion, and consumption intersect, is largely unexplored. The purpose of this paper is to…

Abstract

Purpose

Branding in faith-based consumer markets, in which marketing practices, religion, and consumption intersect, is largely unexplored. The purpose of this paper is to investigate how brands integrate religious concerns into their strategies through Halal branding. The central logic of authors’ view is that branding applied in a particular consumer market (i.e., Muslim) could enrich dominant (Western) branding theory.

Design/methodology/approach

Although challenging, qualitative research offers a valuable lens in international marketing research in allowing researchers to study organizations and contexts in their natural settings, enabling a more holistic approach, instead of imposing one’s culturally informed pre-conceptions (Boyacigiller and Adler, 1991). In this regard, a multiple case study approach considering Halal cosmetic brands is used. A replication logic is applied in interpreting the data.

Findings

Holistic branding is a broader concept than what mainstream theory acknowledges; brand attributes go beyond the functional and emotional, offering insights into a spiritual dimension. The proposed model identifies attributes that reflect the brand’s worldview and contribute to holistic branding: spiritual ethos and belief system, sustainable and eco-ethical philosophy, wholesomeness and inclusiveness.

Research limitations/implications

This exploratory research represents the initial step for faith-based/Halal branding; the discussion is confined to the cases under study. The results are not conclusive and require further empirical research to validate their broader applicability.

Practical implications

The study highlights the need for a comprehensive approach to branding of faith-based products. The Halal market (cosmetics and toiletries) may be attractive to companies that seek to widely develop products targeting faith-based Muslim consumer markets.

Originality/value

The study contributes to an area of growing concern from an academic point of view (i.e. Halal branding) by proposing to add a spiritual dimension to holistic branding. Several questions remain and should stimulate further research. Hence, researchers would be able to understand more clearly the meaning of the religious environment and the impact that environmental forces are likely to exert on business decisions.

Details

Journal of Islamic Marketing, vol. 6 no. 1
Type: Research Article
ISSN: 1759-0833

Keywords

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