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Article
Publication date: 8 May 2017

Devanathan Sudharshan and Andreas Mild

At the core of the success of any firm is its ability to satisfy customer preferences. It has also been part of managerial wisdom that it is good management practice to treat a…

Abstract

Purpose

At the core of the success of any firm is its ability to satisfy customer preferences. It has also been part of managerial wisdom that it is good management practice to treat a market as that comprising several market segments and to serve each segment with a different marketing mix. It thus goes without saying that market segments are believed to be very important to profitability. The purpose of this paper is to contend that preference-based segments form and evolve through social interactions between customers. This argument puts forth the questions: How do they form? How do they evolve?

Design/methodology/approach

The authors used controlled computer simulations to study the patterns of segments that emerge in markets as consumers in them engage in social interactions.

Findings

The simulation results show that market segments emerge across a wide set of assumptions. Further, the paper offers a number of conjectures and propositions for both research and managerial applications, based on the patterns of the emergent segments that were observed.

Research limitations/implications

A research program could/should be developed based on the empirical measurement of preferences, longitudinally, over the life cycle of a product for a fixed sample group, and on the collection of factors about social interaction (ν), social intervention (β) and the propensity to differentiate (α). The results of this study also indicate that further computational work may be able to find the points of criticality where patterns of behavior will change. With the availability of internet data, close empirical examination and operationalization, and refinement of the authors' initial attempts has become possible. For example, data sets that may be applicable are Zafarani and Liu (2009), Leskovec (2012), Newman (2011), and Arenas (2012).

Practical implications

The findings of the study have implications for product line management, conditions under which a first-mover advantage may prevail, and the critical measurements needed to understand segment evolution.

Originality/value

To the authors' knowledge, this paper is the first to study the patterns of emergence of segments over several scenarios.

Details

Journal of Modelling in Management, vol. 12 no. 2
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 5 April 2022

Ruiyang Hong, Zhe Zhang, Chun Zhang and Zuohao Hu

The purpose of this study is to investigate hybrid brand positioning strategies for emerging market brands based on two positioning elements: brand country-of-origin (COO) and…

1494

Abstract

Purpose

The purpose of this study is to investigate hybrid brand positioning strategies for emerging market brands based on two positioning elements: brand country-of-origin (COO) and brand globalness.

Design/methodology/approach

Researchers conducted two studies. In Study 1, a survey of 128 brand managers of emerging market brands were used to examine whether asymmetric positioning strategies improve brand preference more than symmetric strategies, and if so, which type of asymmetric strategies improves brand preference more. In Study 2, a consumer experiment in the USA was conducted to identify the positioning strategy for emerging market brands that improve brand preference the most.

Findings

For emerging market brands, at any given value of COO or global elements, asymmetric strategies outperform symmetric strategies in terms of brand preference. On average, the best hybrid positioning strategy is the one that highlights brand COO and de-emphasizes brand globalness.

Originality/value

A large body of branding literature examines COO and globalness separately without considering their co-presence in the same brand positioning strategy. Few studies that examine the joint influence of brand COO and globalness focus on established brands from developed markets and do not examine whether highlighting both brand COO and global elements equally is an effective positioning strategy for emerging market brands. This study introduces a framework to systematically examine the various combinations of COO and global elements in a brand’s positioning strategies for emerging market brands. By conducting two studies, the authors empirically test the influence of various combinations of COO and global elements on brand preference for emerging market brands from both firm and consumer perspectives.

Details

International Marketing Review, vol. 40 no. 1
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 1 January 2006

Josef Mazanec

To evaluate the comparative effectiveness of perceptions‐based market segmentation strategies: to what extent do consumers' choice rules and the distinctness and variability of…

3094

Abstract

Purpose

To evaluate the comparative effectiveness of perceptions‐based market segmentation strategies: to what extent do consumers' choice rules and the distinctness and variability of consumer preferences determine the success or failure of PBMS strategies?

Design/methodology/approach

The computer simulation is run on an artificial consumer market. Its firm and consumer agents enjoy a certain extent of autonomy and a limited capability of learning. Strategies for incorporating the choice information into the firms' segmentation schemes, consumers' brand choice rules, initial preference patterns and their variability over time are factors in the experimental design.

Findings

The market factors “brand choice rule” and “distinctness” and “adaptivity” of preferences significantly influence the profit performance of the segmentation and positioning strategies. The distinctness of the initial pattern of consumer preferences turns out to be least influential while the choice rule is most important.

Research limitations/implications

Computer simulation cannot replace analyses of real‐world data. When, however, advanced explanatory models are made to fit to empirical data the results sometimes are disappointing (and then do not get published). Computer simulation on artificial markets assists in exploring the reasons for success or failure.

Practical implications

Boundedly rational consumers; product classes which are technologically homogeneous and subject to communications‐driven differentiation; consumer preferences that are directly inaccessible and must be inferred from actual brand choice; consumers' perceptions and preferences evolving over time are realistic settings.

Originality/value

Controlling for conditions such as the consumers' choice rules and the distribution and variability of preferences in real markets demands a prohibitive research effort. No empirical study so far has tried to systematically relate the profit performance of marketing strategies to choice rules and preference distinctness and variability.

Details

Journal of Modelling in Management, vol. 1 no. 1
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 7 December 2018

Gustavo Barboza

This paper’s main objective is to expand the demand-driven strategic field by developing a model where endogenization of consumers’ preferences for clean(er) products becomes the…

Abstract

Purpose

This paper’s main objective is to expand the demand-driven strategic field by developing a model where endogenization of consumers’ preferences for clean(er) products becomes the driver of the firm green corporate social responsible (GCSR) profit maximization behavior.

Design/methodology/approach

The model proposes that in undifferentiated markets, firms using a conventional technology manage production-related negative externalities via information asymmetries. In turn, when consumer socially responsible individuals (CnSR) discover the nature of the information asymmetries, they then reveal their preferences. The building block of the model is that CnSR derive value both from intrinsic as well as extrinsic product features, and derive negative satisfaction from the production negative externalities. In turn, CnSR preferences offer a higher willingness to pay for a combined intrinsic (private good and direct utility) and extrinsic (public good and feel good–do good utility) product.

Findings

The model demonstrates that the firm’s GCSR behavior is a technological-driven process directly affecting the extrinsic component of the product through the development of a safe technology, and exclusively targeting CnSR type of consumers. The corollary of the model is that for the firm pursuing a GCSR behavior, the development of a competitive advantage with higher firm performance leads to profit maximization when exclusively serving the GCSR segment of the market. Thus, GCSR is the result of unusual innovation efforts.

Originality/value

This paper presents a model that expands the field of strategic management through the demand-driven incorporation and respective modeling. To the best of the author’s knowledge, this is the first model to explicitly develop this relationship in this format.

Article
Publication date: 3 April 2017

James R. DeLisle and Terry V. Grissom

The purpose of this paper is to investigate changes in the commercial real estate market dynamics as a function of and conditional to the shifts in market state-space environment…

1006

Abstract

Purpose

The purpose of this paper is to investigate changes in the commercial real estate market dynamics as a function of and conditional to the shifts in market state-space environment that can influence agent responses.

Design/methodology/approach

The analytical design uses a comparative computational experiment to address the performance of property assets in the current market based on comparison with prior structural patterns. The latent variables developed across market sectors are used to test agent behavior contingent on the perspectives of capital asset pricing conditionals (CAPM) and a behavioral momentum/herd construct. The state-space momentum analysis can assist the comparative analysis of current levels and shifts in property asset performance given the issues that have arisen with the financial crisis of 2007-2009.

Findings

An analytic approach is employed framed by a situation-dependent model. This frame considers risk profiles characterizing the perspectives and preferences guiding a delineated market state. This perspective is concerned with the possibility of shifts in market momentum and representativeness conditioning investor expectations. It is observed that the current market (post-crisis) has changed significantly from the prior operations (despite the diversity observed in prior market states). The dynamics of initial findings required an additional test anchored to the performance of the general capital market and the real economy across time. This context supports the use of a modified CAPM model allowing the consideration of opportunity cost in a space-time dynamic anchored with the consideration of equity, debt, riskless asset and liquidity options as they varied for the representative agents operating per market state.

Research limitations/implications

This paper integrates neoclassical and behavioral economic constructs. Combines asset pricing with prospect theory and allows the calculation of endogenous time-preferences, risk attitudes and formulation and testing of hyperbolic discounting functions.

Practical implications

The research shows that market structure and agent behavior since the financial crisis has changed from the investment and valuation perspectives operating as observed and measured from 1970 up to 2007. In contradiction to the long-term findings of Reinhart and Rogoff (2008), but in compliance with common perspectives and decision heuristics often employed by investors, this time things have changed! Discounting and expected rates of return are dynamic and are hyperbolic and not constant. Returns and investment for property assets are situational (market state-space specific) and offer a distinct asset class, not appropriately estimated by many of the traditional financial models.

Social implications

Assist in supporting insights to measure in errors and equations that result in inefficient resource allocation and beta discounting that supports the financial crisis created by assets subject to long-term decision needs (delta function).

Originality/value

The paper offers a combination and comparison of neoclassic asset pricing using a modified CAPM (two-pass) approach within the structural frame of Kahneman and Tversky’s (1979) prospect theory. This technique allows the consideration of the effects of present bias, beta-delta functions and the operation of the Allais Paradox in market states that are characterized by gains and losses and thus risk aversion and risk seeking behavior. This ability for differentiation allows for the development of endogenous time-preferences and hyperbolic discounting factors characteristic of commercial property investment.

Details

Journal of Property Investment & Finance, vol. 35 no. 3
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 22 September 2022

Tai-Guang Gao, Qiang Ye, Min Huang and Qing Wang

This paper mainly focuses on how to induce all members to represent members' true preferences for supply and demand matching of E-commerce platform in order to generate stable…

Abstract

Purpose

This paper mainly focuses on how to induce all members to represent members' true preferences for supply and demand matching of E-commerce platform in order to generate stable matching schemes with more social welfare of Multi-agent Matching Platform (MMP) and individually stable advantages than traditional methods.

Design/methodology/approach

An MMP is designed. Meanwhile, a true preference inducing method, Lower-Bid Ranking (LBR), is proposed to reduce the number of false preferences, which is helpful to solve the problem that too much false preferences leads to low efficiency of platform operation and supply and demand matching. Then, a systematic model of LBR-based Stable Matching (SM-LBR) is proposed.

Findings

To obtain an ideal transaction partner, the adequate preference ordering and modifying according to market environment is needed for everyone, and the platform should give full play to the platforms' information advantages and process historical transaction and cooperation data. Meanwhile, the appropriate supply and demand matching is beneficial to improve the efficiency and quality of platform operation, and the design of matching guidance mechanism is essential.

Originality/value

The numerical experiments show that, the proposed model (SM-LBR) can induce members to represent the model's true preferences for stable matching and generate effective matchings with more social welfare of MMP and individually stable advantages than traditional methods, which may provide necessary method and model reference for the research of stable matching and E-commerce platform operation.

Details

Kybernetes, vol. 52 no. 12
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 16 February 2021

David Blake and John Pickles

The purpose of this paper is to portray the valuation of financial investments as mental time travel.

Abstract

Purpose

The purpose of this paper is to portray the valuation of financial investments as mental time travel.

Design/methodology/approach

In a series of thought investments, $1 invested in an investment fund is mentally projected forward in time and then discounted back to the present – with no objective time passing. The thought investments feature symmetric valuation (in which discount rates exactly match projection rates) and asymmetric valuation (in which discount rates and projection rates happen to differ). They show how asymmetric valuation can result in differences between the current personal value and market value of an investment and, by way of real-world illustration, between a closed-end investment fund's net asset value and its market value. The authors explore possible reasons for asymmetric valuation.

Findings

Thought investments illustrating mental time travel can be used to help understand both financial investment valuation generally and, more specifically, established explanations of the closed-end investment fund puzzle. The authors show how different expectations, different perceptions of time and risk and different risk and time preferences might help determine value.

Originality/value

There are vast literatures on prospection, discounting and future-orientated or intertemporal decision-making. The authors’ innovation is to illustrate how these mental activities might combine to facilitate financial investment valuation. In particular, the authors show that a low personal discount rate could be a consequence of a shortened perception of future time and vice versa.

Details

Review of Behavioral Finance, vol. 14 no. 3
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 9 January 2023

Leilei Shi, Xinshuai Guo, Andrea Fenu and Bing-Hong Wang

This paper applies a volume-price probability wave differential equation to propose a conceptual theory and has innovative behavioral interpretations of intraday dynamic market

542

Abstract

Purpose

This paper applies a volume-price probability wave differential equation to propose a conceptual theory and has innovative behavioral interpretations of intraday dynamic market equilibrium price, in which traders' momentum, reversal and interactive behaviors play roles.

Design/methodology/approach

The authors select intraday cumulative trading volume distribution over price as revealed preferences. An equilibrium price is a price at which the corresponding cumulative trading volume achieves the maximum value. Based on the existence of the equilibrium in social finance, the authors propose a testable interacting traders' preference hypothesis without imposing the invariance criterion of rational choices. Interactively coherent preferences signify the choices subject to interactive invariance over price.

Findings

The authors find that interactive trading choices generate a constant frequency over price and intraday dynamic market equilibrium in a tug-of-war between momentum and reversal traders. The authors explain the market equilibrium through interactive, momentum and reversal traders. The intelligent interactive trading preferences are coherent and account for local dynamic market equilibrium, holistic dynamic market disequilibrium and the nonlinear and non-monotone V-shaped probability of selling over profit (BH curves).

Research limitations/implications

The authors will understand investors' behaviors and dynamic markets through more empirical execution in the future, suggesting a unified theory available in social finance.

Practical implications

The authors can apply the subjects' intelligent behaviors to artificial intelligence (AI), deep learning and financial technology.

Social implications

Understanding the behavior of interacting individuals or units will help social risk management beyond the frontiers of the financial market, such as governance in an organization, social violence in a country and COVID-19 pandemics worldwide.

Originality/value

It uncovers subjects' intelligent interactively trading behaviors.

Details

China Finance Review International, vol. 13 no. 4
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 2 November 2018

Teck Ming Tan, Jari Salo, Jouni Juntunen and Ashish Kumar

The study aims to investigate the psychological mechanism that motivates consumers to pay more for a preferred brand that reflects their actual or ideal self-concept, by examining…

2552

Abstract

Purpose

The study aims to investigate the psychological mechanism that motivates consumers to pay more for a preferred brand that reflects their actual or ideal self-concept, by examining the shift in attention between consumer’s present, future, and past moments.

Design/methodology/approach

First, in a survey setting, the study identifies the relationship between temporal focus and self-congruence. Subsequently, we conduct three experiments to capture the effects of temporal focus on brand preference and willingness to pay (WTP). In these experiments, we manipulate consumers’ self-congruence and temporal focus.

Findings

The findings show that consumers with a present focus (distant future and distant past foci) tend to evaluate a brand more preferably when the brand serves to reflect their actual (ideal) selves. However, in the absence of present focus consumers’ WTP is more for a brand that reflects their ideal selves.

Research limitations/implications

The study does not have an actual measure on consumers’ WTP; instead we use single-item measure.

Practical implications

This study sheds new light on branding strategy. The results suggest that authentic and aspirational branding strategies are relevant to publicly consumed products. Brand managers could incorporate consumers’ temporal focus into branding strategy that could significantly influence consumer preference and WTP for their brands.

Originality/value

This study expands our understanding of brand usage imagery congruity by showing that temporal focus is an important determinant of self-congruence. In this regard, this study empirically investigates the relationship of temporal focus, self-congruence, brand preference, and WTP. It further reveals that mere brand preference does not necessarily lead consumers to pay more for symbolic brands.

Details

European Journal of Marketing, vol. 53 no. 1
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 4 December 2019

Pui-Yee Ho, Sheau-Ting Low, Siaw-Chui Wee and Weng-Wai Choong

The purpose of this paper is to propose a short-term renters’ preference profile for peer-to-peer (P2P) accommodation selection in the housing market in Kuala Lumpur, Malaysia…

Abstract

Purpose

The purpose of this paper is to propose a short-term renters’ preference profile for peer-to-peer (P2P) accommodation selection in the housing market in Kuala Lumpur, Malaysia. The emergence of P2P accommodation was initiated by the concept of a sharing economy, allowing the peer provider to share personal properties with the peer end-users. As the housing market has become more competitive, understanding the preference profile among short-term renters is advantageous to offer a matching marketing mix to the targeted customers.

Design/methodology/approach

This study uses qualitative method associated with thematic analysis. A total of 10,509 reviews on Airbnb were gathered from 377 properties in Kuala Lumpur Federal Territory from 2013 to 2017. Thematic analysis assisted by NVivo software was applied to analyse the empirical data. In total, 14 attributes were identified which could be categorised into 5Ps. The concept of 5Ps adopted from modern marketing is commonly used to categorise the strategies in the marketing process. In the current context, 5Ps is used to categorise the preference of the short-term renter in their selection of P2P accommodation including product, price, promotion, process and people.

Findings

This paper has developed a preference profile for P2P accommodation selection in Malaysia’s housing market. In total, 14 attributes were identified and categorised into the 5Ps of marketing mix. The results showed that the majority of short-term renters were concerned mostly with product (73.2 per cent), followed by people (14.5 per cent), process (10.1 per cent), price (2.0 per cent) and promotion (0.2 per cent).

Originality/value

This study contributes to existing literature with a novel case in Malaysia’s housing market by identifying the short-term renter’s preference in the P2P accommodation selection in the Malaysian housing market, specifically in Kuala Lumpur. The preference profile provides guidance for property owners and developers in the housing market to offer the right product in enhancing the marketability and rentability of the property.

Details

International Journal of Housing Markets and Analysis, vol. 13 no. 5
Type: Research Article
ISSN: 1753-8270

Keywords

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