Bram Foubert

Shopper response to bundle promotions for packaged goods

Bundle promotions—the practice of granting consumers a discount when they buy a certain number of units from a designated range of stockkeeping units—have gained popularity among manufacturers and retailers. In this research, the authors investigate the purchase effects of bundle promotions for a category of packaged goods. Contrary to intuition, they find that promotional bundles are far more effective at inducing switching than at boosting category sales. The strong switching effects result from two mechanisms: (1) Stockkeeping units that are part of a bundle promotion appear to reinforce each others choice probability, and (2) the bundle discount tends to attract consumers even if they do not buy enough to qualify for the price reduction. The weak category effects follow from the notion that the purchase quantity requirement is often too stringent to make consumers buy earlier and/or more in the category. The authors develop incidence, quantity, and choice models that incorporate the intricate bundle mechanisms, and they use simulations to contrast the sales impact of bundle and traditional per-unit promotions. On the basis of the model estimates, they present managerial implications and tentative guidelines for optimal bundle design.

Extreme makeover: short- and long-term effects of a remodeled servicescape

Using survey and transaction data from a natural experiment in a fast-food chain, the authors investigate the effects of store remodeling. They test (1) short- and long-term effects on customers’ cognitions, affect, and behavioral intentions; (2) the moderating impact of spontaneous versus planned and group versus single-customer store visits; and (3) the differential effects on two store performance measures: average customer spending and store traffic. The results show that, in line with adaptation-level theory, short-term remodeling effects lose strength in the long run (i.e., after six months). Furthermore, customers on a spontaneous trip or in a group tend to be more responsive to store remodeling than customers on a planned trip or alone. Finally, whereas average spending increases in the short run and then returns to the baseline, store traffic initially remains unaffected and even shows a dip in the long run. These findings imply that ignoring the time-variant character of remodeling effects, the nature of customers’ store visits, or the impact on store traffic may lead to inappropriate allocation of marketing resources.

Antismoking Messages for the International Teenage Segment: The Effectiveness of Message Valence and Intensity Across Different Cultures

Based on an experiment among more than 2000 students in nine culturally diverse countries, this article investigates how the cultural characteristic of uncertainty avoidance moderates the impact of valence and intensity on the effectiveness of antismoking messages. The results show that adolescents with high uncertainty avoidance respond more favorably to loss-framed advertisements than to benefit-framed advertisements, whereas the opposite holds for those with low uncertainty avoidance.

The Challenge of Retaining Customers Acquired with Free Trials

Many service firms acquire customers by offering free-trial promotions. However, a crucial challenge is to retain the customers acquired with these free trials. To address this challenge, firms need to understand how free-trial customers differ from regular customers in terms of their decisions to retain the service. This article conceptualizes how marketing communication and usage behavior drive customers’ retention decisions and develops hypotheses about the impact of free-trial acquisition on this process. To test the hypotheses, the authors model a customers retention and usage decisions, distinguishing usage of a flat-rate service and usage of a pay-per-use service. The model allows for unobserved heterogeneity and corrects for selection effects and endogeneity. Using household panel data from a digital television service, the authors find systematic behavioral differences that cause the average customer lifetime value of free-trial customers to be 59% lower than that of regular customers. However, free-trial customers are more responsive to marketing communication and usage rates, which offers opportunities to target marketing efforts and enhance retention rates, customer lifetime value, and customer equity.

Teenagers' response to self- and other-directed anti-smoking messages: a cross-cultural study

While the de-marketing of smoking among teenagers has received wide attention in the literature, few have examined the issue of whether messages should be uniform across cultures. Globally, the vast majority of anti-smoking messages are based on fear appeals to the negative effects on the (potential) smoker him/herself. This research suggests that such a global strategy may be suboptimal. Specifically, while ads portraying the negative consequences of smoking to oneself may work for teens from individualist cultures, they are less effective in collectivist cultures. In contrast, messages orientated towards the adverse effects on other people are more effective in collectivist environments. Given the astronomical amounts spent on anti-tobacco advertising, this finding offers significant advantages for creating effective anti-smoking messages.

Try It, You'll Like It-Or Will You? The Perils of Early Free-Trial Promotions for High-Tech Service Adoption

The proliferation of free trials for high-tech services calls for a careful study of their effectiveness, and the drivers thereof. On one hand, free trials can generate new paying subscribers by allowing consumers to become acquainted with the service free of charge. On the other hand, a disappointing trial experience might alienate potential customers, when they decide not to adopt the system and are lost for good. This dilemma is particularly worrisome in early periods, when service quality has not been “tried and tested” in the field, and breakdowns occur. We accommodate these phenomena in a model of consumers’ free-trial and regular adoption decisions. Among other effects, it incorporates usage- and word-of-mouth-based learning about quality in a setting where quality itself is evolving. Consumers are forward-looking in that they account for changes in quality and anticipate uncertainty reduction due to trial usage. We estimate our model and run simulations on the basis of a rich and unique data set that incorporates customers’ trial subscription, adoption, and usage behavior for an interactive digital television service. The results underscore that free trials constitute a double-edged sword, and that timing and consumers’ usage intensity during the trial are key to the effectiveness of these promotions. Implications for managers are also discussed.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0973 .

Usage Rates, Facebook Likes, and Online Piracy: Using Big Data to Manage Entertainment Products

The rapid digitization of the entertainment industry urges managers to find new ways to improve marketing effectiveness and combat online piracy. Smart devices and innovative online services generate brand-related tracking data that reflect consumers’ brand engagement (e.g., digital usage rates, Facebook Likes), yet managers are unaware of how to use these big data to improve brand performance. We therefore propose a model to assess how digitally tracked engagement behaviors, namely consumer brand usage (CBU, measured by digital usage rates) and consumer brand endorsement (CBE, measured by Facebook Likes), drive the impact of promotion and new product releases and affect the role of piracy. We apply our framework to the U.S. music industry, and develop web scrapers and API mining scripts to collect data for 569 music artists over 66 weeks. Both CBU and CBE enhance marketing effectiveness and positively mediate the sales impact of piracy, thereby offsetting piracy’s cannibalization effect by 55%. However, CBU exerts a systematically stronger influence in these relationships than CBE. Using simulations, we show how our findings can help managers to improve the allocation of their marketing efforts across brands and reduce the detrimental sales impact of piracy.