Csilla Horváth

Managing brands and customer engagement in online brand communities

Purpose – Given the dramatic technology‐led changes that continue to take place in the marketplace, researchers and practitioners alike are keen to understand the emergence and implications of online brand communities (OBCs). The purpose of this paper is to explore OBCs from both consumer and company perspectives.Design/methodology/approach – The study provides a synthesis of the extant OBC literature to further our understanding of OBCs, and also puts forth future priorities for OBC research.Findings – A conceptual framework is provided that extends our understanding of OBCs and consumer engagement. Four key OBC dimensions (brand orientation, internet‐use, funding and governance) are identified and three antecedents (brand‐related, social and functional) are proposed of consumer‐OBC engagement.Originality/value – This study is the first to explore key dimensions of OBCs, and the differing but related perspectives of the consumers and organizations involved.

A Hierarchical Bayes Error Correction Model to Explain Dynamic Effects of Price Changes

The authors put forth a sales response model to explain the differences in immediate and dynamic effects of promotional prices and regular prices on sales. The model consists of a vector autoregression that is rewritten in error correction format, which allows the authors to disentangle the immediate effects from the dynamic effects. In a second level of the model, the immediate price elasticities, the cumulative promotional price elasticity, and the long-term regular price elasticity are correlated with various brand-specific and category-specific characteristics. The model is applied to seven years of data on weekly sales of 100 different brands in 25 product categories. The authors find many significant moderating effects on the elasticity of price promotions. Brands in categories that are characterized by high price differentiation and that constitute a lower share of budget are less sensitive to price discounts. Deep price discounts increase the immediate price sensitivity of customers. The authors also find significant effects for the cumulative elasticity. The immediate effect of a regular price change is often close to zero. The long-term effect of such a regular price decrease usually amounts to an increase in sales. This is especially true in categories that are characterized by a large price dispersion and frequent price promotions and for hedonic, nonperishable products.

The effect of recessions on gambling expenditures.

This article examines the influence of the business cycle on expenditures of three major types of legalized gambling activities: Casino gambling, lottery, and pari-mutuel wagering. Empirical results are obtained using monthly aggregated US per capita consumption time series for the period 1959.01–2010.08. Among the three gambling activities only lottery consumption appears to be recession-proof. This series is characterized by a vast and solid growth that exceeds the growth in income and the growth in other gambling sectors. Casino gambling expenditures show a positive growth during expansions and no growth during recessions. Hence, the loss in income during recessions affects casino gambling. However, income shocks which are not directly related to the business cycle do not influence casino gambling expenditures. Pari-mutuel wagering displays an overall negative trend and its average growth rate is smaller than the growth in income, especially during recessions. The findings of this article provide important implications for the gambling industry and for local governments.

Moderating Factors of Immediate, Gross, and Net Cross-Brand Effects of Price Promotions

This article examines cross-price promotional effects in a dynamic context. Among other things, we investigate whether previously established findings hold when consumer and competitive dynamics are taken into account. Five main influential effects asymmetric price effect, neighborhood price effect, asymmetric share effect, neighborhood share effect, and private label versus national brand asymmetry appear jointly in the second layer of a pooled HB-VEC-VARX model, together with brand-and category-specific variables. This study tests the relative importance of these key factors across three scenarios: with no market dynamics, when only consumer dynamics are considered, and when competitive reactions are also taken into account. The results confirm all five influential effects, even if they are jointly estimated, and consumer and competitive dynamics are taken into account. National brand/private label asymmetry has the strongest influence on the cross-price promotional effects and becomes significantly stronger when consumer and competitive dynamics are taken into account. Dynamic consumer responses and competitive reactions both affect cross-brand price elasticities, and contrary to expectations, competitive reactions accumulate rather than diminish cross-price elasticities. Preemptive switching does occur; i.e., a brands promotion in period t hurts a competitors sales in subsequent periods. Our findings are based on an extensive data set. To attain generalizable results, we analyze 33 categories in five stores---that is, 165 store/category combinations.

The role of brands in the behavior and purchase decisions of compulsive versus noncompulsive buyers

Purpose – This article investigates the role that brands play in influencing the behavior and purchase decisions of compulsive buyers and whether this role differs for noncompulsive buyers, resulting in four research propositions. Design/methodology/approach – In-depth interviews, conducted with ten compulsive and ten noncompulsive buyers, reveal several interesting differences between the groups. Findings – The findings reveal several interesting differences between compulsive buyers and noncompulsive buyers. Noncompulsive buyers seem to appreciate and focus mainly on functional benefits of branded products and avoid buying unbranded products, whereas compulsive buyers value emotional and social benefits but often decide to buy “more and cheaper” items to achieve variety in their purchases. Noncompulsive buyers develop brand trust in, attachment to and higher willingness to pay for their favorite brand than for other brands, whereas compulsive buyers even struggle to name a favorite brand. Furthermore, c...

Canonical correlation analysis and Wiener-Granger causality tests: Useful tools for the specification of VAR models

Dynamic multivariate models have become popular in analyzing the behavior of competitive marketing systems because they are capable of incorporating all the relationships in a competitive marketing environment. In this paper we consider VAR models, the most frequently used dynamic multivariate models. The drawback of VAR models is that a large number of parameters have to be estimated. The problem has been addressed in several articles and the usual solution is to treat only the variables of interest as endogenous while the other variables are usually included exogenously without dynamic effects. This treatment imposes restrictions on the marketing system, which requires preliminary analysis. We propose to use canonical correlation for this purpose. Canonical correlation analysis and its associated Wiener-Granger causality testing based on the canonical correlation coefficients are useful tools to test the existence of structural relationships between (lagged) consumer response and (lagged) marketing instruments. The tools are applied on data of market shares and marketing instruments in a market of a frequently purchased consumer goods.

Seasonal patterns in slot-machine gambling in Germany

Although several aspects of gambling have been thoroughly investigated, little is known about the effect of seasonality on gambling. This study investigated the seasonal patterns in slot-machine usage, based on a unique data set of slot-machine usage from a German gambling centre using time series analysis. Knowledge of seasonal slot-machine usage patterns provides useful insights for researchers, gambling centre managers and legal authorities. Slot-machine gambling activity appears to be highest in November, when poor weather is compounded with lack of entertainment activities and lowest in December, when ample entertainment possibilities may distract people from gambling. The estimated daily and weekly seasonal patterns support the self-control literature, which suggests that self-regulatory failures are more likely when people are more tired; after work, or late in the evening. The high variation in gambling during winter implies that the availability of alternative entertainment activities may have an important influence on slot-machine usage.

The Effect of Brand Communication Style on Brand Engagement in Online Brand-Based Communities

Social media, and specifically brand-based online communities, have revolutionized consumer-brand interactions. For the first time ever, the brand itself can converse with consumers. Hence a key question emerges: how should brands communicate with their fans in these communities? The existing literature provides insufficient guidance for brands about how to communicate in this new situation. We know especially little about what communication style brands should chose to approach consumers on these online platforms. Existing studies focus nearly exclusively on language in the context of advertising, an inherently one-way communication channel. However, marketers now seek best practices in communication for contexts in which one-way communication research is largely inapplicable.