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To introduce the concept of cultural equity and provide a theoretical framework for managing cultural equity in multi-cultural markets.

Recent research on the social psychology of globalization, cross-cultural consumer behavior, consumer culture, and global branding is reviewed to develop a theoretical framework for building, leveraging, and protecting cultural equity.

Provides an actionable definition for a brand’s cultural equity, discusses consumer responses to brands that relate to cultural equity, identifies the building blocks of cultural equity, and develops a framework for managing cultural equity.

Research conducted mainly in large cities in North and South America, Europe, the Middle East, and East Asia. Generalizations to less developed parts of the world might be limited.

A very useful theoretical framework for managers interested in building cultural equity into their brands and for leveraging this equity via new products and the development of new markets.

The paper integrates past findings across a variety of domains to develop a parsimonious framework for managing cultural equity in globalized markets.

The case illustrates the challenges of managing JVs in emerging markets. specifically, after going through the case, students should be able to: i.Analyze the contexts in which firms need to form JVs and evaluate this need in the context of emerging markets such as India; ii.Understand how multinational corporations can achieve success in emerging markets, specifically the role of strategic (broader than the product) adaptation in success; iii.Evaluate the impact of conflict between partners on the short-term and long-term performance of a JV; and iv.Create alternatives, evaluate each alternative’s pros and cons, and recommend appropriate decisions to address the situation after a JV unravels and the organization is faced with quality and other challenges.

McDonald’s, the global giant in the quick service industry, entered India in 1993 and formed two JVs in 1995 one with Vikram Bakshi (Connaught Plaza Restaurants Ltd or CPRL) to own and operate stores in the northern and eastern zones, and another with Amit Jatia (Hardcastle Restaurants Private Limited or HRPL) to own and operate stores in the western and southern zones. Over the next 12 years, both the JVs made steady progress by opening new stores while also achieving better store-level metrics. Though CPRL was ahead of HRPL in terms of the number of stores and total revenues earned in 2008, the year marked the beginning of a long-running dispute between the two partners in CPRL, Bakshi and McDonald’s. Over the next 11 years, Bakshi and McDonald’s tried to block each other, filed court cases against each other and also exchanged recriminations in media. The feud hurt the performance of CPRL, which fell behind HRPL in terms of growth and other metrics. On May 9, 2019, the feuding partners reached an out-of-court settlement under which McDonald’s would buy out Bakshi’s shares in CPRL, thus making CPRL a subsidiary. Robert Hunghanfoo, who had been appointed head of CPRL after Bakshi’s exit, announced a temporary shutdown of McDonald’s stores to take stock of the current situation. He had to make a number of critical decisions that would impact the company’s performance in the long-term.

MBA, Executive MBA and executive development programs.

Teaching Notes are available for educators only.

CSS 11: Strategy.

India embarked on economic reforms in July 1991, in the wake of a balance of payments crisis. In this article, an attempt is made to review two books and a set of World Bank reports concerning the progress of these reforms. Issues concerning economic policy, impact of the reforms on poverty, sectoral issues relating to agriculture, industry and infrastructure are briefly discussed. As reforms enter a more difficult phase, several challenges remain. Some of these fall under the “economic agenda” of measures needed to maintain economic growth; others can be termed the “development agenda” – of improving human development. Progress with regard to the former is not sufficient to produce results concerning the latter.

This study aims to examine the effect of private label brand (PLB) products’ negative publicity (NP) events on PLB general image and retailer’s store image, because of the suggested interdependency between retailer’s store image and PLB image.

Three empirical studies were conducted to test the NP effect – Studies 1 and 2, respectively; and test the occurrence of moderate and extreme NP events regarding the functional PLB product category. Study 3 replicates prior studies conducted on the hedonic product category. In these studies, participants were randomly assigned to treatment and control groups. The studies use factor analysis methods following t-tests and paths analyses, using structural equation modeling (SEM).

Findings show that both moderate and extreme NP have an influence on the PLB’s image dimensions. These effects “spilled over” to the entire range of PLB products, regardless of the category of the damaged product. Regarding retailer’s store image, the effect of NP was retained in the product-related image context and did not exceed that of the store-related image. However, in relation to functional products, when NP is very extreme, the effect on PLB image exceeds that of retailer’s store image.

Retailers should invest more efforts in their PLB product selection, quality maintenance and supervision to eliminate potential damage from events related to their PLB products.

The originality of this study is in the association of two streams of research: NP effects and the relationship between PLB image and retailer’s store image.

Most poverty research has explored monetary poverty. This chapter presents and analyzes the global multidimensional poverty index (MPI) estimations for China. Using China Family Panel Studies (CFPS), we find China’s global MPI was 0.035 in 2010 and decreased significantly to 0.017 in 2014. The dimensional composition of MPI suggests that nutrition, education, safe drinking water, and cooking fuel contribute most to overall non-monetary poverty in China. Such analysis is also applied to subgroups, including geographic areas (rural/urban, east/central/west, provinces), as well as social characteristics such as gender of the household heads, age, education level, marital status, household size, migration status, ethnicity, and religion. We find the level and composition of poverty differs significantly across certain subgroups. We also find high levels of mismatch between monetary and multidimensional poverty at the household level, which highlights the importance of using both complementary measures to track progress in eradicating poverty.

This purpose of this study was to investigate the negative impact of service failures on customer loyalty. More specifically, we examined the moderating role of affective commitment on post‐failure attitudes and loyalty intentions under two service failure conditions: a successful and poor service recovery. Our findings indicate that emotionally‐bonded customers might feel “betrayed” when a service failure occurs, thus resulting in sharp decrease in post‐recovery attitudes. Conversely, this negativity effect was limited to poor service recovery among consumers with low affective commitment. Customers with lower levels of emotional bonding with the service provider were more “forgiving” when the service recovery was effectively handled. Poor service recovery led to more ambivalent post‐failure attitudes irrespective of the degree of affective commitment between the customer and the service provider. Finally, the results suggest that affective commitment might reduce the spill‐over effects of service failures to future loyalty behaviors. The implications for retention management strategies are briefly discussed.

Moral transgressions committed by person-brands can negatively impact consumers through the transgression’s diagnosticity (severity, centrality and consistency). This paper aims to test how a transgression’s centrality and consistency impact important consumer perceptions and behavioral intentions toward a person-brand, holding constant the transgression in question. These outcomes are crucial for person-brands to understand how to minimize and manage the impact of a given transgression.

This paper uses three online consumer experiments to manipulate transgression diagnosticity via centrality and consistency and identifies the resulting impact on consumer-brand identification, trustworthiness and consumer digital engagement intentions through PROCESS models.

High-diagnosticity transgressions lower consumer digital engagement intentions regarding the person-brand and their endorsed products. This effect is serially mediated by consumer-brand identification, as predicted by social identity theory, and by perceived trustworthiness of the person-brand.

Person-brands should emphasize the nondiagnostic nature of any transgressions in which they are involved, including a lack of centrality and consistency with their brand, and guard against the appearance of diagnostic transgressions.

This paper shows that transgression diagnosticity impacts consumer engagement through the pathway of consumer-brand identification and trustworthiness. It also manipulates aspects of diagnosticity that can be influenced by the person-brand (centrality and consistency) while holding the transgression constant. As such, this paper extends the literature on transgressions, on person-branding strategy, and on social identity theory.

As an alternative to straight rhetorical questions, questions using analogies that invite the reader to think about the frame of reference to answer the target have been used in advertising to persuade. This paper aims to investigate consumer responses to the use of analogical questions in ads for incrementally new products and the important variables moderating those responses.

Four between-subjects experiments examined how product evaluations in response to analogical questions differ from non-analogical variants as a function of consumers’ persuasion awareness (Studies 1 and 2) and also tested if the effectiveness of an analogical question among potential consumers who are more aware of persuasion attempts might be enhanced only when it is proposed with a strong rather than a weak frame of reference (Study 3), and when the frame of reference and the target share underlying similarities (Study 4).

Analogical questions are more persuasive than non-analogical variants for participants who are more aware of persuasion attempts. Inferential fluency mediates the results. Furthermore, the positive impact of analogical questions for participants high in persuasion awareness is diminished when the frame of reference is weak or from a dissimilar domain. The same patterns are not evident for participants who are less aware of persuasion attempts.

Drawing on the concepts of inferential fluency, this study offers an empirically-based view of how the analogical questions in advertising may bias the responses exhibited by individuals who demonstrate either a high or low level of persuasion awareness.

The inclusion of an analogy can lower consumers’ tendency to behave in a defensive manner by facilitating inferences about intended claims that are implicitly stated in a rhetorical question and achieve higher levels of persuasion.

This study contributes to prior study on rhetorical questions within a persuasion communication by adopting inferential fluency as an underlying mechanism for analyzing the impact of analogical questions and individual’s awareness of persuasion.

The purpose of this paper is to investigate the relationship between economic development and income distribution for Iran. Using time series data for the period 1967‐1993, it is found that there is no significant relationship between the Gini coefficient for household expenditure and per capita income. This result means there is no evidence in Iran, for the period analysed here, of there being a U‐relationship between these two variables as suggested by Kuznets. However, the empirical econometric results lend support for the view that institutional or structural variables affect income distribution. This paper has four policy messages for Iranian decision makers. First, income inequality can be reduced by stimulating the goods‐producing sectors of the economy such as agriculture, manufacturing etc. Second, expansion of most of the service sectors, such as trade, real estate etc., in Iran, because of the association in such sectors with rent seeking behaviour, is found to be positively related to inequality. Third, government subsidies and transfers have not decreased income inequality in Iran. On the contrary, the empirical evidence indicates that government transfers have exacerbated inequality. Fourth, government per capita expenditures (current and capital) have played an important role in alleviating relative poverty.