Don T. Johnson

Marketing Renaissance: Opportunities and Imperatives for Improving Marketing Thought, Practice, and Infrastructure

My three-year term as editor of Journal of Marketing concludes with the October 2005 issue. On the basis of my interactions with various people in the marketing community, I believe that marketing science and practice are in transition, bringing change to the content and boundaries of the discipline. Thus, I invited some distinguished scholars to contribute short essays on the current challenges, opportunities, and imperatives for improving marketing thought and practice. Each author chose his or her topic and themes. However, in a collegial process, the authors read and commented on one anothers essays, after which each author had an opportunity to revise his or her essay. The result is a thoughtful and constructive set of essays that are related to one another in interesting ways and that should be read together. I have grouped the essays as follows: •What is the domain of marketing? This question is addressed in four essays by Stephen W. Brown, Frederick E. Webster Jr., Jan-Benedict E.M. Steenkamp, and William L. Wilkie. •How has the marketing landscape (i.e., content) changed? This question is addressed in two essays, one coauthored by Jagdish N. Sheth and Rajendra S. Sisodia and the other by Roger A. Kerin. •How should marketing academics engage in research, teaching, and professional activities? This question is addressed in five essays by Debbie MacInnis; Leigh McAlister; Jagmohan S. Raju; Ronald J. Bauerly, Don T. Johnson, and Mandeep Singh; and Richard Staelin. Another interesting way to think about the essays, as Jan-Benedict E.M. Steenkamp suggests, is to group the essays according to whether they address issues of content, publishing, or impact (see Table 1). These 11 essays strike a common theme: They urge marketers—both scientists and practitioners—to expand their horizontal vision. What do I mean by horizontal vision? In The Great Influenza, Barry (2004) describes the enormous strides that were made in medical science early in the twentieth century. His depiction of William Welch, an extremely influential scientist who did not (as a laboratory researcher) generate important findings, includes a characterization of the “genius” that produces major scientific achievements. The research he did was first-rate. But it was only first-rate—thorough, rounded, and even irrefutable, but not deep enough or provocative enough or profound enough to set himself or others down new paths, to show the world in a new way, to make sense out of great mysteries…. To do this requires a certain kind of genius, one that probes vertically and sees horizontally. Horizontal vision allows someone to assimilate and weave together seemingly unconnected bits of information. It allows an investigator to see what others do not see and to make leaps of connectivity and creativity. Probing vertically, going deeper and deeper into something, creates new information. (p. 60) At my request, each author has provided thoughtful and concrete suggestions for how marketing academics and practitioners, both individually and collectively (through our institutions), can work to improve our field. Many of their suggestions urge people and institutions to expand their horizontal vision and make connections, thereby fulfilling their potential to advance the science and practice of marketing. In his essay, Richard Staelin writes (p. 22), “I believe that it is possible to influence directly the generation and adoption of new ideas.” I agree. I ask the reader to think about the ideas in these essays and to act on them. Through our actions, we shape our future. —Ruth N. Bolton

An Evaluation of Journals Used in Doctoral Marketing Programs

Studies that rank the relative quality of scholarly marketing journals have relied primarily on expert opinion surveys and citation analyses. The authors use a new approach that combines elements of these two alternatives and compile a database of 6,294 citations (representing 3,423 different articles) from 109 syllabi obtained from a broad sampling of AACSB-International-accredited schools with marketing doctoral programs. The five most citedjournals (Journal of Marketing, Journal of Consumer Research, Journal of Marketing Research, Marketing Science, andJournal of the Academy of Marketing Science) account for 66.5 percent of citations in the syllabi. Rankings of journals other than the top five vary markedly from previous journal quality studies. Few articles are cited in common across programs, and the authors find considerable variation even within individual seminar types. The findings provide a new basis for assessing the quality of journals and provide new insights about the content of doctoral programs.

The turn‐of‐the‐month effect in real estate investment trusts (REITs)

Purpose – This study seeks to examine the market returns of five domestic real estate investment trust (REIT) indices to determine whether they exhibit a turn-of-the-month (TOM) effect. Design/methodology/approach -A test is carried out for the TOM effect by employing a battery of parametric and non-parametric statistical tests that address the concerns of distributional assumption violations. An OLS regression model compares the TOM returns with the rest-of-the-month (ROM) returns and an ANOVA model examines the TOM period while controlling for monthly seasonalities. A non-parametric t-test examines whether the TOM returns are greater than the ROM returns and a Wilcoxon signed rank test examines the matched-pairs of TOM and ROM returns. Findings -A TOM effect in all five domestic REIT indices is found: real estate 50 REIT, all-REIT, equity REIT, hybrid REIT, and mortgage REIT. More specifically, the six-day TOM period, on average, accounts for over 100 per cent of the monthly return for the three non-mortgage REITs, while the ROM period generates a negative return. Additionally, the TOM returns are greater than the ROM returns in 75 per cent of the months. Research limitations/implications - The data are limited to five-years of daily returns and five different indices. Thus, the results could be biased on the selected time period. Practical implications -These results are important to REIT portfolio managers and investors. Domestic REIT markets experience a TOM effect from which investors and portfolio managers can benefit. Originality/value -The daily returns of all five major domestic REIT indices are examined. Data are evaluated which include daily returns after the passage of the REIT Modernization Act of 1999 that resulted in numerous changes for REITs. Whether the TOM effect can be detected with both parametric and non-parametric tests is examined.

Has the Security and Exchange Commission’s Rule 421 made mutual fund prospectuses more accessible?

A mutual fund must provide prospectuses to each potential investor before the fund may accept monies from that individual. The prospectuses are a major source of information about the fund and yet they have historically been largely unreadable by the public. While the poor readability has been a problem in the past, it is becoming a greater problem as the number of individuals responsible for their own investment decision making increases. Recognising this problem, the Securities and Exchange Commission (SEC) adopted Rule 421 in 1998, requiring that prospectuses be made more readable as measured by a subjective reading of the document. This study applies four objective tests to mutual fund prospectuses from both preand post‐Rule 421 periods and finds substantial evidence that mutual fund companies have complied with Rule 421 and are producing prospectuses that are much more readable and accessible by the general public.

The operating performance of preferred stock issuers

We examine the operating performance of preferred stock issuers using the sample of preferred stock issues during 1991–2000. We find the median profit margin and Return On Assets (ROA) of the preferred stock issuers deteriorate until the year of preferred issuance, hit the bottom in the year of issuance and gradually recover after the issue. Our finding is in contrast to the Loughran and Ritters (1997) report of Seasoned Equity Offering (SEO) firms’ operating performance; improvement before the issuance and deterioration after the offering. Our finding of the operating performance behaviour of preferred stock issuers is consistent with the common stock performance behaviour of preferred stock issuers found in Howe and Lee (2006), where preferred stock issuers show only transient (1 year post-issue) common stock underperformance and no longer-term (2 and 3 years post-issue) underperformance.

Are mutual fund prospectuses written in plain English

Notes US efforts to make documents easier to read and reviews previous research on readability. Presents a study of the readability of the investment objective sections of two mutual fund prospectuses, using a sample of college students, the Cloze Readability Procedure and the Flesch readability analysis. Finds the Cloze test scores well below the “moderately readable” level of the Flesch assessment “difficult”. Analyses the relationships between students’ understanding and their training, investment experience, financial information, gender etc.; and notes that they misjudged their ability to read the prospectuses accurately. Calls for pressure to make the mutual funds improve their literature and for universities to provide training impersonal finance.

Using Syllabi to Determine the Core Journal and Monographic Literature in Doctoral Finance Programs

Using course syllabi from 66 active Association to Advance Collegiate Schools of Business–accredited doctoral programs, the investigators determined a core journal and monographic collection in doctoral finance programs. The results are compared to previous studies, such as that of Corrado and Ferris (1997), and implications for collection development and liaison librarians are considered.

Public Sector Land Banking: A Decision Model for Local Governments

Local governments frequently face land banking decisions concerning real properties that they may acquire now in open market transactions or later via their power of eminent domain. After construction of a practical local government land banking example, a theoretically correct cash flow and cost-benefit analysis is presented. Then a buy-now or buy-later decision model is developed explaining when to exercise the free American Call Option provided to governments through their power of eminent domain.

Achieving superior performance with the Morningstar’s Tortoise and Hare portfolios

Morningstar offers two stock portfolios known as the Tortoise and the Hare portfolios with the stocks included in each portfolio published and updated in the Morningstar StockInvestor monthly newsletter. This study examines the performance of these two portfolios using the Sharpe, Treynor and Sortino ratios along with the single-factor capital asset pricing model (CAPM) and the four-factor Fama–French–Carhart (FFC) model. Results examining the Tortoise and Hare portfolios indicate both portfolios outperform the market when using the Sharpe, Treynor and Sortino ratios; however, neither portfolio shows statistically significant abnormal returns when evaluated using the CAPM and FFC model. A third portfolio is created by using equal weights of the Tortoise and Hare portfolios. This combined portfolio exhibits a significant abnormal return of 3.6% per year even after accounting for systematic risk, small-firm effect, book-to-market effect and the momentum effect.

Real estate investing

Purpose - Aims to explain the rationale for producing an issue on the topic of real estate investing and how these articles fit together. Design/methodology/approach - Essay format. Findings - Real estate is probably the largest category of assets for investors and the works in this issue will assist in the decision making processes of real estate investors. Research limitations/implications - Each of these papers covers only a limited topic and more research in the area is needed. Practical implications - These papers could change how asset allocation studies are conducted; allow investors to make superior returns around the turn of the month on real estate investment trusts (REITs); alter the capital structure of REITs; seek out real estate mutual funds with higher management fees (because they were associated with higher returns); invest directly in real estate properties. Originality/value - All five of these papers either examine areas that have not been reviewed by researchers previously, or find results that may result in different investment decisions.