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MARKETING PARTNERSHIPS: IMPACT OF MONITORING SCHEMES AND COOPERATIVE ADVERTISING AGREEMENTS
Title
MARKETING PARTNERSHIPS: IMPACT OF MONITORING SCHEMES AND COOPERATIVE ADVERTISING AGREEMENTS.
Creator
Chennamaneni, Pavan, Desiraju, Ramarao, University of Central Florida
Abstract / Description
Marketing partnerships may involve either horizontal relationships (e.g., a co-marketing alliance between firms selling different products) or vertical relationships (e.g., between an upstream manufacturer and its downstream retailers). Either type of partnership often includes multiple members and the marketing efforts (e.g., level of advertising) of any member typically affect the profitability of the other members. When selecting their effort levels, however, the individual members of the...
Show moreMarketing partnerships may involve either horizontal relationships (e.g., a co-marketing alliance between firms selling different products) or vertical relationships (e.g., between an upstream manufacturer and its downstream retailers). Either type of partnership often includes multiple members and the marketing efforts (e.g., level of advertising) of any member typically affect the profitability of the other members. When selecting their effort levels, however, the individual members of the partnership do not account for such externalities. Consequently, the overall effort on behalf of the partnership is not optimal. This dissertation investigates the value of contractual mechanisms such as monitoring schemes (for horizontal partnerships) and cooperative advertising programs (for vertical partnerships) that may provide better incentives to the partners to invest into the relationship. The first part of this dissertation focuses on horizontal marketing partnerships and examines the relative effectiveness of outcome- and action-based contracts in providing the alliance partners with the incentives to invest appropriately. A mathematical model is developed in which a focal firm (e.g., Sony) contracts with two partners (e.g., McDonald's and Old Navy), when each of these partners is privately informed about the impact of the alliance on its demand. The analysis evaluates the strengths and weaknesses of outcome- (or output-) and action- (or input-) based contracts in several settings including those with no demand externality, a positive externality and a negative externality. The analysis shows that when there is (a) no externality, (b) negative externality, or (c) a relatively weak positive externality, there is a strict preference for output-based contracts; that preference, however, is reversed with a sufficiently strong positive externality. The rationale for these findings, along with the implications and directions for further work are discussed. The second part of this dissertation focuses on a vertical marketing relationship where multiple retailers sell the products from a common manufacturer. Here, each retailer's level of advertising affects the demand for the other retailers. This positive externality, however, allows any retailer to free-ride on the other retailers' efforts and leads to an overall reduction in the level of advertising by all the retailers. In this context, a manufacturer can use a cooperative advertising contract to reimburse part of the advertising expenses of its retailers in order to induce them to raise their levels of advertising. Observed terms in a cooperative advertising contract include either a participation rate, a participation rate and a variable accrual rate, or a participation rate and a fixed accrual rate. This dissertation analyzes the relative effectiveness of the above three types of cooperative advertising contracts in minimizing or eliminating the free-riding problem. More specifically, a mathematical model is developed to analyze the relative impact of these contractual terms when the downstream retailers face either symmetric or asymmetric demand and cost structures. The analysis shows that with symmetric retailers, the three types of contracts are equally effective. With asymmetric retailers, though, including some form of accrual stipulations typically adds value to a contract that specifies only a participation rate. Further, using a variable accrual stipulation may be preferred to the fixed accrual stipulation under certain conditions and vice versa. The two types of accrual stipulations affect retail prices and efforts in distinct ways and these differences may tip the scale in favor of one contract versus the other under the appropriate circumstances. These conditions and the intuition behind the results are discussed. Overall, this dissertation contributes to the literature on horizontal and vertical marketing relationships and enhances our understanding of distinct contractual mechanisms that can help align the actions of various members involved in such partnerships.
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Date Issued
2009
Identifier
CFE0002770, ucf:48122
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0002770
A CONSUMER-BASED ASSESSMENT OF ALLIANCE PERFORMANCE: AN EXAMINATION OF CONSUMER VALUE, SATISFACTION AND POST-PURCHASE BEHAVIOR
Title
A CONSUMER-BASED ASSESSMENT OF ALLIANCE PERFORMANCE: AN EXAMINATION OF CONSUMER VALUE, SATISFACTION AND POST-PURCHASE BEHAVIOR.
Creator
Mouri, Nacef, Ganesh, Jai, University of Central Florida
Abstract / Description
Strategic alliances have become a recognized strategy used by firms in the pursuit of their diverse organizational objectives. Consequently, the literature on alliances is replete with research investigating the value strategic alliances generate for participating organizations. Strategic alliances have been shown to contribute to firm value through numerous sources, including scale economies, effective risk management, cost efficient market entries, and learning from partners. Largely...
Show moreStrategic alliances have become a recognized strategy used by firms in the pursuit of their diverse organizational objectives. Consequently, the literature on alliances is replete with research investigating the value strategic alliances generate for participating organizations. Strategic alliances have been shown to contribute to firm value through numerous sources, including scale economies, effective risk management, cost efficient market entries, and learning from partners. Largely overlooked in the literature however, are issues investigating the relationship between strategic alliances and one of the organization's most important constituents, the consumer. Questions such as how the consumer reacts to inter-firm alliances, how strategic alliances impact consumer value, satisfaction, and customer post-purchase behavior have yet to be answered. This lacuna has been recently highlighted by prominent researchers in the discipline (Rindfleisch and Moorman 2003). Focusing on marketing alliances, the present dissertation attempts to address this gap in the alliance literature by advancing and testing a theoretical framework examining consumers' cognitive, affective, and behavioral reactions to organizational strategic alliances. The dissertation also contributes to the satisfaction literature. Scholars in this area have traditionally viewed satisfaction as a cognitive response to the comparison of actual consumption experiences with some comparison standard (confirmation/disconfirmation paradigm). Recently however, there have been increasing calls for satisfaction measures to capture not just how the customer thinks the product performed relative to the comparison standard, but also the resulting customer emotion. The study provides additional support of an affective route to customer satisfaction, particularly when customer hedonic value is enhanced. Moreover, the association between customer satisfaction and behavioral outcomes is also examined. While prior research shows that satisfaction is positively related to loyalty and word of mouth and negatively related to intentions to switch, it was found that these relationships are even stronger in the presence of alliances. The results of this dissertation provide important theoretical and managerial insights. The strategic alliance literature is enhanced insofar as this is the first effort aimed at investigating the impact of strategic alliances on the consumer. The study examines the relationship between marketing alliances and customer value, particularly utilitarian and hedonic value, as well as the moderating role of alliance type (functional or symbolic) in this relationship. From a managerial perspective, engaging in strategic alliances is strategically critical and costly. By providing insight into how alliances enhance consumer value, and how in turn value enhancement is related to customer satisfaction and behavioral outcomes, the present research will help managers make more appropriate and better-informed alliance decisions.
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Date Issued
2005
Identifier
CFE0000744, ucf:46594
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0000744
MARKET-BASED ASSET MANAGEMENT AND SHAREHOLDER VALUE: INVESTIGATING THE ROLES OF HUMAN CAPITAL AND FACTOR MARKETS IN MAXIMIZING RETURNS ON CUSTOMER RELATIONSHIPS
Title
MARKET-BASED ASSET MANAGEMENT AND SHAREHOLDER VALUE: INVESTIGATING THE ROLES OF HUMAN CAPITAL AND FACTOR MARKETS IN MAXIMIZING RETURNS ON CUSTOMER RELATIONSHIPS.
Creator
Milewicz, Chad, Echambadi, Raj, University of Central Florida
Abstract / Description
The accountability of marketing investments continues to be a key area of concern for researchers and practitioners (MSI Research Priorities, 2008). In particular, market-based assets, specifically customer relationships, and their potential impact on firm performance are a significant source of interest. Though research in this area continues to grow, little is understood about how investments in human capital and the acquisition of alliance partners through factor markets relate to customer...
Show moreThe accountability of marketing investments continues to be a key area of concern for researchers and practitioners (MSI Research Priorities, 2008). In particular, market-based assets, specifically customer relationships, and their potential impact on firm performance are a significant source of interest. Though research in this area continues to grow, little is understood about how investments in human capital and the acquisition of alliance partners through factor markets relate to customer relationship management and the impact of customer relationships on performance. This dissertation presents two studies which, together, investigate how investments in market-based assets influence on abnormal stock returns. In the first study, the resource-based view of the firm (Barney 1991) is used to posit several hypotheses related to investments in human capital. The hypotheses are tested using ten years of data from the U.S. airline industry and analyzed using a mixed-effects methodology. Results indicate that investments in customer service personnel impact abnormal stock returns through their impact on customer relationships. Moreover, these investments tend to have decreasing returns in terms of their impact on customer relationships, and the relative strength of this relationship is shown to be contingent upon a firm's service delivery capabilities, advertising expenditures, and operating focus. This study helps clarify how market-based assets are managed, how investments in specific resources used to manage them relate to stock returns, and why the same dollar invested in human capital by different firms can lead to different levels of returns. The second study also takes a resource-based view of the firm and the management of market-based assets. From this perspective, alliances are considered as external resources acquired in strategic factor markets (Barney 1986) for the purpose of complimenting a focal firm's strategy and performance. This study investigates the long-term impact of alternative types of alliances and the potential impact of alliance partners' customer relationship management capabilities on a focal firms' performance. Just as in study one, ten years of U.S. airline data are used, and a mixed-effects methodology is implemented to test hypotheses. Results indicate that the direct benefits of horizontal marketing alliances tend to be positive, but dependent upon the extensiveness of the alliance. Furthermore, it is revealed that the impact of a partner's customer relationship management capabilities on a focal firm's performance is contingent upon whether the partner's capabilities are similar or dissimilar relative to the focal firm. In short, results indicate that when differences exist, the positive impact of a focal firm's customer relationship management capabilities can be reduced to almost zero if that firm allies with a less competent partner. Taken together, these studies tend to suggest that firms which learn to successfully manage investments in customer relationships may risk nullifying expected positive returns if they simultaneously select alliance partners which are less successful at managing such investments. Similarly, firms which are not able to improve their own management of customer relationships can potentially limit the potential negative consequences by allying with more able firms. In all, this dissertation helps address the accountability issue for marketers.
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Date Issued
2009
Identifier
CFE0002769, ucf:48119
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0002769
Dual Branding: An Investigative Look into Dual Branding's Position within the Concept of Brand Alliance in the Hotel Industry
Title
Dual Branding: An Investigative Look into Dual Branding's Position within the Concept of Brand Alliance in the Hotel Industry.
Creator
Ronzoni, Giulio, Fyall, Alan, Torres Areizaga, Edwin, Singh, Dipendra, Weinland, Jeffrey, Smith, Scott, University of Central Florida
Abstract / Description
The purpose of this dissertation was to investigate, in an exploratory way, the state of the art of the application of brand alliances, with a particular focus on the practice of dual branding, in the field of lodging. More precisely, this research aimed at identifying and evaluating the determinants of industry adoption of, and customer satisfaction with, intra-company dual branding strategies in the US lodging industry.The primary purpose of this study is to determine the efficacy of dual...
Show moreThe purpose of this dissertation was to investigate, in an exploratory way, the state of the art of the application of brand alliances, with a particular focus on the practice of dual branding, in the field of lodging. More precisely, this research aimed at identifying and evaluating the determinants of industry adoption of, and customer satisfaction with, intra-company dual branding strategies in the US lodging industry.The primary purpose of this study is to determine the efficacy of dual branding in the field of the lodging industry, a phenomenon that is still insufficiently explored in the literature. In fact, the scarcity of literature pertaining to the lodging industry has forced this study to consider the research related to other segments and industries where dual branding strategies have been studied. Therefore, this study intended to expand the existing body of knowledge, advancing the theory of brand alliance from an industry and consumer perspective, as well as adapt, refine, and utilize a scale suitable for the measurement of dual branded hotels' customer satisfaction. This dissertation used an exploratory sequential mixed method approach. In the first qualitative phase, face-to-face and telephone interviews with operational hotel managers, corporate hotel managers, real estate development and management companies' managers, owners, and presidents, as well as hotel and lodging associations' professionals have been conducted. In addition to relevant and significant findings and results obtained through the hotel industry professionals interviewed, themes, constructs, and variables useful in the refinement and adaptation of a dual branding customer satisfaction scale were attained. Consequently, the second quantitative phase consisted of an online administration of a scenario-based questionnaire to dual branded hotels' customers of a dual branded lodging property aimed at identifying and evaluating the determinants of customer satisfaction.The ultimate purpose of this research has been to understand the main issues of implementation of dual branding practices and strategies in the lodging context. In particular, it has been to highlight and provide managerial, theoretical, methodological, and practical implications and recommendations for the US lodging industry, in the adoption of intra-company dual branding strategies. The suggestions offered in the study are relevantly timed to what is happening within the lodging industry, offering implications for both academia and industry.
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Date Issued
2019
Identifier
CFE0007716, ucf:52411
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0007716